Illustrative Ifrs Hkfrs Dec2014

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Illustrative IFRS/
HKFRS Consolidated
Financial Statements
31 December 2014
International/
Hong Kong Financial
Reporting Standards
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IFRS Manual of Accounting - Volume 4: Share-based payment
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IFRS Manual of Accounting - Volume 7: Property, plant and equipment, investment property and lease accounting
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Illustrative IFRS/HKFRS Consolidated Financial Statements

Specimen Holdings Limited
Introduction
This publication provides an illustrative set of consolidated financial statements, prepared in accordance with International
Financial Reporting Standards (IFRS)/ Hong Kong Financial Reporting Standards (HKFRS), for a fictional manufacturing,
wholesale and retail group (Specimen Holdings Limited).
Specimen Holdings Limited is an existing preparer of IFRS/HKFRS consolidated financial statements; IFRS/HKFRS 1,
First-time adoption of International/Hong Kong Financial Reporting Standards, is not applicable.
This publication is based on the requirements of IFRS/HKFRS standards and interpretations for financial years beginning
on or after 1 January 2014.
This publication includes the disclosures required by the predecessor Hong Kong Companies Ordinance (Cap. 32) and the
Rules Governing the Listing Securities on The Stock Exchange of Hong Kong Limited and the Rules Governing the Listing
of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the Listing Rules)
published up to and including November 2014. Their related disclosures are marked in red and orange respectively. This
publication has not included all the disclosures required by the Listing Rules. For example, the disclosure of corporate
governance has not been included as it is expected to vary significantly from one company to another company and should
be tailored to suit the particular circumstances of the company. Please refer to Appendix 14 of Main Board Listing rules /
Appendix 15 of GEM Listing rules for detailed disclosure requirements of corporate governance report.
PricewaterhouseCoopers commentary has been provided, in boxes, to explain the detail behind the presentation of a
number of challenging areas. These commentary boxes relate to the presentation in: the consolidated balance sheet, the
balance sheet, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated
statement of changes in equity, the consolidated statement of cash flows, the summary of significant accounting policies,
and financial risk management.
Areas in which presentation has changed significantly since 2013 have been highlighted in grey. For 2014, the
significant changes include disclosures of the offsetting of financial assets and liabilities under IFRS/HKFRS 7,
enhanced impairment disclosures under IAS/HKAS 36 and enhanced disclosures for IFRS/HKFRS 13 fair value
disclosures, including prior year comparative amounts.
We have attempted to create a realistic set of financial statements for a corporate entity. Certain types of transaction have
been excluded, as they are not relevant to the groups operations. The example disclosures for some of these additional
items have been included in Appendices V to VI. The new and amended standards and interpretations, which are effective
for financial year ended 31 December 2014, are summarised in the below section. The forthcoming IFRS/HKFRS
requirements are outlined in a table in Appendix VII.
The example disclosures should not be considered the only acceptable form of presentation. The form and content of each
reporting entitys financial statements are the responsibility of the entitys management. Alternative presentations to those
proposed in this publication may be equally acceptable if they comply with the specific disclosure requirements prescribed
in IFRS/HKFRS.
These illustrative financial statements are not a substitute for reading the standards and interpretations, the Hong Kong
Companies Ordinance and the Listing Rules themselves, or for professional judgement as to the fairness of presentation.
They do not cover all possible disclosures that IFRS/HKFRS, the Hong Kong Companies Ordinance and the Listing Rules
require. Further specific information may be required in order to ensure fair presentation under IFRS/HKFRS depending
on the circumstances. Additional disclosures may be required in order to comply with local laws and/or stock exchange
regulations if the subject company is incorporated overseas and/or listed in an overseas stock exchange.
The new Hong Kong Companies Ordinance (Cap. 622) came into effect on 3 March 2014 and replaces certain provisions in
the predecessor Companies Ordinance (Cap. 32) governing the formation, operation and financial reporting obligations of
companies.
For Hong Kong incorporated companies with financial year ending on or after 3 March 2014 but before 2 March 2015 , in
accordance with the transitional and saving arrangements for Part 9 of the Hong Kong Companies Ordinance (Cap. 622),
Accounts and Audit as set out in sections 76 to 87 of Schedule 11 to the Hong Kong Companies Ordinance (Cap. 622), they
should continue to prepare their annual financial statements and directors report in accordance with the applicable
requirements of the predecessor Companies Ordinance (Cap. 32) for this financial year and the comparative period.
For Hong Kong incorporated companies with financial year ending on or after 2 March 2015 (for example, 31 March 2015,
30 June 2015 and 30 September 2015), the new disclosure required by the new Hong Kong Companies Ordinance (Cap.
622) in the financial statements and directors report is illustrated in two separate appendices (Appendix VIII and
Appendix IX, respectively). These appendices should be read in conjunction with the full set of Illustrative IFRS/HKFRS
Consolidated Financial Statements - 31 December 2014.
ii

Introduction (Continued)
Companies incorporated overseas and listed in Hong Kong can still prepare their consolidated financial statements and
directors report for the financial year ending on or after 2 March 2015 but before 31 December 2015 in accordance with the
disclosure requirements of the predecessor Hong Kong Companies Ordinance (Cap. 32). If they would like to prepare the
consolidated financial statements and directors report for the financial years ending on or after 2 March 2015 but before 31
December 2015 in accordance with the disclosure requirements of the New CO, they should refer to the illustrative
disclosures in the Appendix VIII and Appendix IX, respectively.
Readers should refer to PricewaterhouseCoopers industry illustrative financial statements for industry specific
transactions and presentations, including:
Illustrative financial statements : Investment funds
Illustrative financial statements : Investment property
Illustrative financial statements : Private equity
Illustrative financial statements : Insurance
Illustrative financial statements for authorised institutions in Hong Kong
New and amended standards that have been issued and are effective for periods commencing
on 1 January 2014
Standards
Key requirements
Early adoption and

transition provision, if any
(I) Changes effective for annual periods beginning on or after 1 January 2014
Amendment to
These amendments are to the application guidance in
IAS/HKAS 32 Financial
IAS/HKAS 32, Financial instruments: Presentation, and clarify
instruments: Presentation on
some of the requirements for offsetting financial assets and
asset and liability offsetting
financial liabilities on the balance sheet.
Amendments to
These amendments mean that many funds and similar entities
IFRS/HKFRS 10, 12 and
will be exempt from consolidating most of their subsidiaries.
IAS/HKAS 27
Instead, they will measure them at fair value through profit or
To be applied retrospectively.
Early adoption is permitted.
Consolidation for investment loss. The amendments give an exception to entities that meet an
entities
investment entity definition and which display particular

characteristics. Changes have also been made IFRS/HKFRS 12
to introduce disclosures that an investment entity needs to
make.
Amendment to IAS/HKAS This amendment addresses the disclosure of information about

36, 'Impairment of assets' on
the recoverable amount of impaired assets if that amount is
recoverable amount disclosures based on fair value less costs of disposal.
Amendment to IAS/HKAS This amendment provides relief from discontinuing hedge
39
accounting when novation of a hedging instrument to a central
Financial Instruments:
counterparty meets specified criteria.
This is an interpretation of IAS/HKAS 37, 'Provisions,
Recognition and Measurement

- Novation of derivatives
IFRIC/HK(IFRIC) 21
'Levies'
contingent liabilities and contingent assets'. IAS/HKAS 37 sets

out criteria for the recognition of a liability, one of which is the
requirement for the entity to have a present obligation as a
result of a past event (known as an obligating event). The
interpretation clarifies that the obligating event that gives rise
to a liability to pay a levy is the activity described in the relevant
legislation that triggers the payment of the levy.
iii

New and amended standards that have been issued and are effective for periods commencing
on 1 January 2014 (continued)
Standards
Key requirements
Early adoption and

(II) Changes effective for transactions with transaction date on or after 1 July 2014
Annual improvements
These amendments include changes from the 2010-2012 cycle
2012
of the annual improvements project, that affect 7 standards,

only the below are effective for relevant transactions on or after
1 July 2014 :
IFRS/HKFRS2, Share-based payment
The amendment to
IFRS/HKFRS2 is prospectively
The amendment clarifies the definition of a vesting
applied to share-based payment

condition and separately defines performance condition transactions for which the grant
and service condition.
date is on or after 1 July 2014.
Earlier application is permitted.
IFRS/HKFRS3, Business combinations and consequential

amendments to IFRS/HKFRS9, Financial instruments,
IAS/HKAS37, Provisions, contingent liabilities and
contingent assets, and IAS/HKAS39, Financial
instruments Recognition and measurement
The standard is amended to clarify that an obligation to
pay contingent consideration which meets the definition of
a financial instrument is classified as a financial liability
or as equity, on the basis of the definitions in IAS/HKAS
32,Financial instruments: Presentation. All non-equity
contingent consideration, both financial and nonfinancial, is measured at fair value at each reporting date,
with changes in fair value recognised in profit and loss.
The amendment to
IFRS/HKFRS3 IFRS/HKFRS9,
IAS/HKAS37 and IAS/HKAS39
are prospectively applied to
business combinations where
the acquisition date is on or
after 1 July 2014. Earlier
application is permitted. An
entity may apply the
amendment earlier provided
that IFRS/HKFRS 9,
IAS/HKAS 37 and
IAS/HKAS39 (all as amended
by Annual Improvements to
IFRS/HKFRSs 20102012
Cycle) have also been applied.
iv

The references in the left-hand margin of the financial statements represent the paragraph of the International/Hong Kong
Financial Reporting Standards, Companies Ordinance or the Listing Rules in which the disclosure appears. The
designation DV (disclosure voluntary) indicates that disclosure is encouraged but not required and, therefore, represents
best practice.
List of abbreviations used
Abbreviations
International/Hong Kong Accounting Standard No. 1, paragraph 1
1p1
International/Hong Kong Accounting Standard No. 1, paragraph 81, footnote
1p81*
The Guidance on Implementing of International/Hong Kong Accounting Standard No. 1,

paragraph 5
1IG5
International/Hong Kong Accounting Standard No. 1, Basis for Conclusions, paragraph 21
1BC 21
International/Hong Kong Financial Reporting Standard No. 2, paragraph 6
FRS2p6
International/Hong Kong Financial Reporting Standard No. 7, Appendix B, paragraph 1
FRS7AppxB1
SIC/HK(SIC) Interpretation No. 13, paragraph 4
SIC13p4
IFRIC/HK(IFRIC) Interpretation No. 6, paragraph 4
FRIC6p4
The Companies Ordinance (Cap. 32), Section 129D(1)
S129D(1)
The Companies Ordinance (Cap. 32), Tenth Schedule, paragraph 17(5)
10Sch17(5)
For listed companies only

References to Listing Rules relating to Main Board:
The Listing Rules, Practice Note No. 5, paragraph 5(3)
PN5.5(3)
The Listing Rules, Appendix 16, paragraph 4(1)(a)
A4(1)(a)
The Listing Rules, Chapter 14, paragraph 8
MB14.08
The Listing Rules, Appendix 14, paragraph C.1.2
MB Code C.1.2
Reference to Listing Rules relating to Growth Enterprise Market:

GEM18.15
The Listing Rules, Appendix 16, paragraph 1
GEM Appendix 16(1)
GEM Code C.1.2

Contents
Page
Appendices
Auditors report
1 142
143
Appendix I
Report of the directors
144 157
Appendix Ia
Corporate governance report under the Code (for listed companies

only)
158 162
Appendix II
Other information in the annual report (for listed companies only)
163 164
Appendix III
Operating and financial review
165 169
Appendix IV
Alternative presentation of primary statements

1. Consolidated income statement by nature of expense
2. Consolidated statement of comprehensive income single statement, by
function of expense and income tax effect presented on an aggregate basis
3. Consolidated statement of cash flows direct method
170 174
Appendix V
Policies and disclosures for areas not relevant to Specimen Holdings

Limited
1. Construction contracts
175 198
2. Leases: accounting by lessor

3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Investments: held-to-maturity financial assets

Government grants
Oil and gas exploration assets
Revenue recognition: multiple-element arrangements
Defaults and breaches of loans payable
Financial guarantee contracts
Properties under development and held for sale
Customer loyalty programmes
Biological assets
Put option arrangements
Share-based payments: modification and cancellation
Appendix VI
Critical accounting estimates and judgements not relevant to

- Critical accounting estimates
Useful lives of technology divisions plant and equipment
Warranty claims
- Critical accounting judgements
Held-to-maturity investments
Appendix VII
Forthcoming requirements
200 209
Appendix VIII
Illustrative disclosure required by the new Hong Kong Companies

Ordinance (Cap. 622) for financial year ending on or after 2 March
2015 (Financial Statement Section)
210 290
Appendix IX

2015 (Directors Report Section)
291 307
vi
199

Index to the illustrative IFRS/HKFRS consolidated financial statements

Note
Consolidated income statement by function of

expense
Consolidated statement of comprehensive
income
Consolidated balance sheet
Balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
General information
Summary of significant accounting policies:

2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Basis of preparation
Subsidiaries
Associates
Joint arrangements
Segment reporting
Foreign currency translation
Property, plant and equipment
Investment property
Intangible assets
Impairment of non-financial assets
2.11
2.16
Non-current assets (or disposal groups)

held-for-sale and discontinued
operations
Financial assets
Offsetting financial instruments
Impairment of financial assets
Derivative financial instruments and
hedging activities
Inventories
2.17
2.18
Trade and other receivables

Cash and cash equivalents
2.19
2.20
2.21
2.22
2.23
2.24
2.25
2.26
2.27
2.28
2.29
2.30
Share capital
Trade payables
Borrowings
Borrowing costs
Compound financial instruments
Current and deferred Income tax
Employee benefits
Share-based payments
Provisions
Revenue recognition
Interest income
Dividend income
2.31
Leases
2.12
2.13
2.14
2.15
2.32 Dividend distribution

2.33 Exceptional items
Financial risk management
3.1
Financial risk factors
3.2
Capital management
3.3
Fair value estimation
3.4
Offsetting financial assets and financial
liabilities
Critical accounting estimates and judgements
4.1
Critical accounting estimates and
assumptions
4.2
Critical judgements in applying the
companys accounting policies
Page
1-2
3-8
9-12
13-14
15-17
18-21
22
Note
5
Segment information
6
7
8
9
10
11
12a
12b
22-24
25-26
26-27
27
27
27-28
28-29
29
29-30
30
13
14
15
15a
16
16a
17
18
19a
31
19b
31-32
32
32-33
33-34
Exceptional items
Other income
Other gains net
Expenses by nature
Employee benefit expense
Finance income and costs
Investments in and loans to subsidiaries
Company
Investments accounted for using the equity
method Group
Income tax expense
Earnings per share
Net foreign exchange gains
Page
64-69
70
70
70
71
71-73
74
74-77
77-82
83-84
85
86
Profit attributable to owners of the company

Leasehold land and land use rights Group
Property, plant and equipment Group
Investment properties Group
Intangible assets Group
Financial instruments by category Group and
Company
Credit quality of financial assets Group and
Company
86
86
87-88
89-96
97-100
100-102
20
21
22
23
Available-for-sale financial assets Group

Derivative financial instruments Group
Trade and other receivables Group
Inventories Group
104-105
106-107
107-109
109
35
24
35
35
25
26
35
35
36
36
36
37
38-39
39
39-40
40-41
41
41
27
27a
28
29
30
31
32
33
34
41
35
41
41
44-60
36
37
38
39
40
41
Financial assets at fair value through profit or

loss Group
Cash and bank balances Group and Company
Non-current assets held for sale and discontinued
operations Group
Share capital Group and Company
Buy-back of shares
Share-based payments Group and Company
Retained earnings Group and Company
Other reserves Group and Company
Trade and other payables Group
Borrowings Group and Company
Deferred income tax Group and Company
Post employment benefits Group
(a)Defined benefit pension plans
(b)Post - employment medical benefits
(c)Post - employment benefits (pension and
medical)
Provisions for other liabilities and charges
Group
Dividends
Cash generated from operations
Contingencies
Commitments
Transactions with non-controlling interests
Business combinations
42
43
Related-party transactions
Events after the balance sheet date
61-62
62-63
vii
102-103
109
110
110-111
112
112
113
114
115-117
118
118-121
122-123
124-127
127-128
129-130
131-132
132
133
134
134
135
136-137
138-140
141-142

Consolidated income statement by function of expense

1p81(b), 84
1p10(b), 12
Note
1p113, 1p38, A4(1)(n),

A2(2)&(5)
GEM18.50B(1)(o)
GEM18.07(2)&(5)
S124, 10Sch17(6)
Year ended 31 December

2014
2013
HK$000
HK$000
Continuing operations
1p82(a), A4(1)(a),
GEM18.50B(1)(a)
Revenue
1p99, 103, A4(1)(i)

GEM18.50B(1)(d)
Cost of sales
211,034
112,360
6, 9
(80,707)
(50,305)
Gross profit
Distribution expenses
Administrative expenses
9
9
130,327
(54,814)
(31,990)
62,055
(22,155)
(11,946)
Other income
Other gains net
7
8
2,437
7,810
764
6,063
1p82(b)
Operating profit1
Finance income
Finance expenses
11
11
53,770
1,730
(8,173)
34,781
1,609
(12,197)
1p85
Finance expenses net
11
(6,443)
(10,588)
1p82(c), A4(1)(m)
GEM18.50B(1)(n)
Share of profit of investments accounted for using the equity method
12b
1,293
1,022
13
48,620
(14,298)
25,215
(8,175)
34,322
17,040
100
120
34,422
17,160
31,874
16,304
2,548
856
34,422
17,160
1p99103
1p99,103
1p99, 103, A4(1)(h)
GEM18.50B(1)(b)
1p85
1p85
1p85
1p85, A4(1)(b)
GEM18.50B(1)(g)
1p82(d), 12p77,
A4(1)(c)
GEM18.50B(1)(h)
1p85
FRS5p33(a)
1p81A(a)
Profit before income tax

Income tax expense
Profit for the year from continuing operations

Discontinued operations
Profit for the year from discontinued operations
Profit for the year
26
Profit attributable to:

1p81B(a)(ii), A4(1)(e),
GEM18.50B(1)(j)
Owners of the company
1p81B(a)(i),FRS12p12
(e), A4(1)(d),
GEM18.50B(1)(i)
Non-controlling interests
Profit attributable to owners of the company arises from:

31,794
80
16,184
120
31,874
16,304
IAS/HKAS 1 does not prescribe the disclosure of operating profit on the face of the income statement. However, entities are not prohibited from
disclosing this or a similar line item.

Note

2014
2013
Earnings per share from continuing and discontinued

operations attributable to owners of the company for the
year (expressed in HK$ per share)
Basic earnings per share
33p66, A4(1)(g),
GEM18.50B(1)(m)
14
33p68
From continuing operations

From discontinued operations2
1.35
0.01
0.79
0.01
33p66
From profit for the year
1.36
0.80
33p66
33p68
Diluted earnings per share

From discontinued operations
1.22
0.01
0.74
0.01
33p66
1.23
0.75
14
The notes on pages x to x are an integral part of these consolidated financial statements.
10Sch13(1)(j)
2
3
Dividends3
36
2014
HK$000
12,945
EPS of discontinued operations may be given in the notes to the financial statements instead in the income statement.
IAS/HKAS 1 p107 requires an entity to present the amount of dividends recognised as distributions to owners during the period either in the
statement of changes in equity or in the notes, because dividends are distributions to owners in their capacity as owners and the statement of
changes in equity presents all owner changes in equity. In the basis of conclusion of IAS/HKAS, the Board concluded that an entity should not
present dividends in the income statement because that statement presents non-owner changes in equity. However, HKCO Tenth Sch. para 13(1)
(j)) requires the disclosure of the aggregate amount of the dividends paid and proposed in the profit and loss account. The disclosure above only
illustrated the disclosure requirements of the Ordinance for reference purpose.
2013
HK$000
10,102

Consolidated statement of comprehensive income
Note
1p82A
19p120(c)
1p82A
FRS7p20(a)(ii)
FRS3p42
1p85
FRS7p23(c)
1p85
21p52(b)
1p82A
Profit for the year

Other comprehensive income:
Item that will not be reclassified subsequently to profit or loss
Remeasurements of post-employment benefit obligations
Items that may be reclassified to profit or loss

Change in value of available-for-sale financial assets
Reclassification of revaluation of previously held interest in ABC
Group
Impact of change in [country name] tax rate on deferred tax
Cash flow hedges
Net investment hedge
Currency translation differences
Share of other comprehensive income of investments accounted
for using the equity method
Year ended 31
December
2014
2013
HK$000 HK$000
34,422
17,160
83
(637)
362
62
(850)
(10)
64
(45)
3,011
(3)
40
(13)
(12)
(14)
2,520
72
2,603
(565)
29,13
30
7, 30, 41
29,13
30
30
30
30
Other comprehensive income for the year, net of tax4

1p81A
Total comprehensive income for the year
37,025
16,595
1p81B(b)(ii)
Attributable to:
34,225
2,800
15,779
816
37,025
16,595
34,145
80
15,659
120
34,225
15,779
1p81B(b)(i)
FRS5p33(d)
Total comprehensive income attributable to owners of

the company arises from5:
26
4
5
Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in
note 13.
IFRS/HKFRS 5p33 (d) requires the disclosure of the amount of income from continuing operations and from discontinued operations attributable to
owners of the company. These disclosures may be presented either in the notes or in the income statement.

Commentary income statement and statement of comprehensive income

The commentary that follows explains some of the key requirements in IAS/HKAS1, Presentation of financial statements,
and other requirements that impact the income statement/statement of comprehensive income.
1p10A
1.
1p81A
2.
The statement of profit and loss and other comprehensive income shall include:
(a)
profit or loss
(b)
total other comprehensive income
(c)
comprehensive income for the period, being the total of (a) and (b)
1p83
3.
The following items are disclosed as allocations for the period:

(a)
Profit or loss attributable to:
(i)
non-controlling interests; and
(ii)
owners.
(b)
Total comprehensive income for the period attributable to:
(i)
non-controlling interests; and
(ii)
owners.
(c)
The amount of income attributable to owners of the company from:
(i)
continuing operations; and
(ii)
discontinued operations.
FRS5p33(d)
1p82
4.
1p82A
5.
Entities have a choice of presenting a statement of profit and loss and other comprehensive income:
(a)
An entity may present a single statement of profit or loss and other comprehensive income, with
profit or loss and other comprehensive income presented in two sections. The sections shall be
presented together, with the profit or loss section presented first followed directly by the other
comprehensive income section; or
(b)
An entity may present the profit or loss section in a separate statement of profit or loss. If so, the
separate statement of profit or loss shall immediately precede the statement presenting
comprehensive income, which shall begin with profit or loss.
The main difference between these two options is that in option (a), profit for the year is shown as
a sub-total rather than the 'bottom line', and the statement continues down to total comprehensive
income for the year.
The profit or loss section or the statement of profit and loss includes, as a minimum, the following line items:
(a)
revenue;
(b)
finance costs;
(c)
share of the profit or loss of associates and joint ventures accounted for using the equity method;
(d)
tax expense
(e)
a single amount for the total of discontinued operations.
The other comprehensive income section shall present items classified by nature (including share of the other
comprehensive income of associates and joint ventures accounted for using the equity method) and grouped
in those that, in accordance with other IFRSs/HKFRSs:
(a)
(b)
1p85
6.
will not be reclassified subsequently to profit or loss; and

will be reclassified subsequently to profit or loss when specific conditions are met.
Additional line items, headings and subtotals are presented in the statement of comprehensive income and the
income statement (where presented) when such presentation is relevant to an understanding of the entitys
financial performance.

7.
Additional sub-headings should be used with care. The apparent flexibility in IAS/HKAS 1 can only be
used to enhance users understanding of the GAAP-compliant numbers. It cannot be used to detract from
the GAAP numbers. Set out below are overall principles that entities should apply when additional line
items, headings, sub-totals and alternative performance measures:
(a) GAAP numbers should be given at least equal prominence to non-GAAP numbers.
(b) Additional line items, sub-totals and columns may be used, but only if they do not detract from the
GAAP numbers by introducing bias or by overcrowding the income statement.
(c) Each additional line item or column should contain all the revenue or expenses that relates to the
particular line item or column inserted.
(d) Each additional line item or column should contain only revenue or expense that is revenue or
expense of the entity itself.
(e) Items may be segregated (for example, by use of columns or sub-totals), where they are different in
nature or function from other items in the income statement.
(f) It is generally not permissible to mix natural and functional classifications of expenses where these
categories of expenses overlap.
(g) Terms used for additional line items and sub-totals should be defined if they are not terms
recognised in IFRS/HKFRS.
(h) Additional line items, columns and sub-totals should only be presented when they are used internally
to manage the business.
(i) Various presentations will be acceptable individually, but consideration should be given to the
aggregate effect of these presentations, so that the overall message of the income statement is not
distorted or confused.
(j) The presentation method should generally be consistent from year to year.
(k) The presentation method should comply with any local regulatory rules.
8.
Earnings before interest and tax (EBIT) may be an appropriate sub-heading to show in the income
statement. This line item usually distinguishes between the pre-tax profits arising from operating
activities and those arising from financing activities.
9.
In contrast, a sub-total for earnings before interest, tax, depreciation and amortisation (EBITDA) can only
be included as a sub-total where the entity presents its expenses by nature and provided the sub-total does
not detract from the GAAP numbers either by implying that EBITDA is the real profit or by overcrowding
the income statement so that the reader cannot determine easily the entitys GAAP performance. Where
an entity presents its expenses by function, it will not be possible to show depreciation and amortisation as
separate line items in arriving at operating profit, because depreciation and amortisation are types of
expenses, not functions of the business. In this case, EBITDA can only be disclosed by way of
supplemental information in a box, in a footnote, in the notes or in the review of operation.
Material items of income and expense

1p97
10.
When items of income and expense are material, their nature and amount is disclosed separately either
the income statement or in the notes. In the case of Specimen Holdings Limited these disclosures are
made in Note 6. Some entities produce this information on the face of the income statement in the form
of additional analyses, boxes or columns. Further discussion is available in PwCs IFRS manual of
accounting.
1p85,97
11.
IAS/HKAS 1 does not provide a specific name for the types of items that should be separately disclosed.
Where an entity discloses a separate category of exceptional, significant or unusual items either in the
income statement or in the notes, the accounting policy note should include a definition of the chosen
term. The presentation and definition of these items should be applied consistently from year to year.
Analysis of expenses by nature or function

12.
Where an entity classifies its expenses by nature, it must take care to ensure that each class of expense
includes all items related to that class. Material restructuring cost may, for example, include redundancy
payments (employee benefit cost), inventory write-downs (changes in inventory) and impairments in
property, plant and equipment. It is not normally acceptable to show restructuring costs as a separate line
item in an analysis of expenses by nature where there is an overlap with other line items.
13.
Entities that classify their expenses by function will have to include the material items within the function
to which they relate. In this case, material items can be disclosed as footnotes or in the notes to the
financial statements.

Operating profit
1BC56
14.
An entity may elect to include a sub-total for its result from operating activities. This is permitted, but care
should be taken that the amount disclosed is representative of activities that would normally be
considered to be operating. Items that are clearly of an operating nature (for example, inventory
write-downs, restructuring and relocation expenses) are not excluded simply because they occur
infrequently or are unusual in amount. Nor can expenses be excluded on the grounds that they do not
involve cash flows (for example, depreciation or amortisation). As a general rule, operating profit is the
subtotal after other expenses that is, excluding finance expenses and the share of profits of equityaccounted investments although in some circumstances it may be appropriate for the share of profits of
equity-accounted investments to be included in operating profit (see paragraph 16 below).
Re-ordering of line items

1p86
FRS7p20
15.
This line items and descriptions of those items are re-ordered where this is necessary to explain the
elements of performance. However, entities are required to make a fair presentation and should not
make any changes unless there is a good reason to do so.
16.
The share of profit of associates is normally shown after finance expenses; this recognises that the share of
profits from associates arises from what is essentially an investing activity, rather than part of the groups
operating activities. However, were associates (and joint ventures) are an integral vehicle for the conduct
of the groups operations and its strategy, it may be more appropriate to show finance expenses after the
share of profit of associates and joint ventures. In such cases, it may be appropriate either to insert a subtotal profit before finance expenses or to include the share of profits from associates and joint ventures in
arriving at operating profit (if disclosed). It would not, however, be appropriate to include the share of
associates and joint ventures within revenue (and, therefore, within gross profit).
17.
Finance income cannot be netted against finance expenses; it is included in other revenue/other income
or shown separately in the income statement. Where finance income is an incidental benefit, it is
acceptable to present finance income immediately before finance expenses and include a sub-total of net
finance expenses in the income statement. However, where earning interest income is one of the entitys
main line of business, it is presented as revenue.
1p82(ea)
FRS 5p33(a),(b)
18.
As stated in paragraph 4(e) above, entities disclose a single amount in the statement of comprehensive
income (or separate income statement), comprising the total of discontinued operations. Paragraph 33 of
IFRS/HKFRS 5, 'Non-current assets held for sale and discontinued operations', also requires an analysis
of this single amount. This analysis may be presented in the notes or in the statement of comprehensive
income (separate income statement). If it is presented in the income statement, it should be presented in a
section identified as relating to discontinued operations that is, separate from continuing operations.
The analysis is not required for disposal groups that are newly acquired subsidiaries that meet the criteria
to be classified as held for sale on acquisition.
Earnings per share

33p66
19.
IAS/HKAS 33, Earnings per share, requires an entity to present in the statement of comprehensive
income basic and diluted earnings per share (EPS) for profit or loss from continuing operations
attributable to the ordinary equity holders of the parent entity and for total profit or loss attributable to
the ordinary equity holders of the parent entity for each class of ordinary shares. Basic and diluted EPS are
disclosed with equal prominence for all periods presented.
33p67A
20.
If an entity presents a separate income statement, basic and diluted earnings per share are presented at
the end of that statement.
33p73
21.
Earnings per share based on alternative measures of earnings may also be given if considered necessary
but should be presented in the notes to the financial statement only. The basis on which the numerator
has been determined and whether the amounts per share are before or after tax should be given.
33p67
22.
If diluted EPS is reported for at least one period, it should be reported for all periods presented, even if it
equals basic EPS. If basic and diluted EPS are equal, dual presentation can be accomplished in one line in
the statement of comprehensive income.
33p68
23.
An entity that reports a discontinued operation discloses the basic and diluted amounts per share for the
discontinued operation either in the statement of comprehensive income or in the notes to the financial
statements.
33p69,41,43
24.
Basic and diluted EPS are disclosed even if the amounts are negative (that is, a loss per share). However,
potential ordinary shares are only dilutive if their conversion would increase the loss per share. If the loss
decreases, the shares are anti-dilutive.

33p4
25.
When an entity presents both consolidated financial statements and separate financial statements
prepared in accordance with IAS/HKAS 27, Consolidated and separate financial statements, the
disclosures required by IAS/HKAS 33 are presented only on the basis of the consolidated information. An
entity that chooses to disclose EPS based on its separate financial statements presents such EPS
information only in its separate statement of comprehensive income.
Components of other comprehensive income

1p7
26.
Components of other comprehensive income (OCI) are items of income and expense (including
reclassification adjustments) that are not recognised in profit or loss as required or permitted by other
IFRS/HKFRSs. They include: changes in the revaluation surplus relating to property, plant and equipment
or intangible assets; measurements of post-employment defined benefit obligations; gains and losses
arising from translating the financial statements of a foreign operation; gains and losses on re-measuring
available-for-sale financial assets; and the effective portion of gains and losses on hedging instruments in
a cash flow hedge.
1p91
1p90
27.
Entities may present components of other comprehensive income either net of related tax effect or before
related tax effects. Specimen Holdings Limited has chosen to present the items net of tax. In this case the
amount of income tax relating to each component of OCI, including reclassification adjustments, is
disclosed in the notes.
1p92,94
28.
An entity discloses separately any reclassification adjustments relating to components of other

comprehensive income either in the statement of comprehensive income or in the notes.
1p7,95
29.
Reclassification adjustments are amounts reclassified to profit or loss in the current period that were
recognised in other comprehensive income in the current or previous periods. They arise, for example, on
disposal of a foreign operation, on derecognition of an available-for-sale financial asset and when a
hedged forecast transaction affects profit or loss.
1p82A
30.
IAS/HKAS 1 has been amended, effective for annual periods beginning on or after 1 July 2012. The
amendment requires items of OCI, classified by nature (including share of the other comprehensive
income of associates and joint ventures accounted for using the equity method) , to be grouped into those
that will be reclassified subsequently to profit or loss when specific conditions are met and those that will
not be reclassified to profit or loss. The amendment also requires entities that present items of OCI before
related tax effects with the aggregate tax shown separately to allocate the tax between the items that might
be reclassified subsequently to the profit or loss section and those that will not be reclassified.
1p107
31.
The amount of dividends recognised as distributions to owners during the period, and the related amount
per share are presented either in the statement of changes in equity or in the notes. Dividends cannot be
displayed in the statement of comprehensive income or income statement.
However, HKCO Tenth Sch. para 13(1) (j)) requires the disclosure of the aggregate amount of the
dividends paid and proposed in the profit and loss account.
Consistency
1p45
32.
The presentation and classification of items in the financial statements is retained from one period to
the next unless:
(a)
it is apparent, following a significant change in the nature of the entitys operations or a
review of its financial statements, that another presentation or classification would be more
appropriate, addressing the criteria for the selection and application of accounting policies in
IAS/HKAS 8, Accounting policies, changes in accounting estimates and errors; or
(b)
IFRS/HKFRS requires a change in presentation.
Materiality and aggregation

1p29
33.
Each material class of similar items is presented separately in the financial statements. Items of a
dissimilar nature or function are presented separately unless they are immaterial.
Offsetting
1p32
1p34(a)
34.
Assets and liabilities, and income and expenses, are not offset unless required or permitted by an
IFRS/HKFRS. Examples of income and expenses that are required or permitted to be offset are as
follows:
(a)
Gains and losses on the disposal of non-current assets, including investments and operating
assets, are reported by deducting from the proceeds on disposal the carrying amount of the asset
and related selling expenses.

1p34(b)
(b)
Expenditure related to a provision that is recognised in accordance with IAS/HKAS 37, Provisions,
contingent liabilities and contingent assets and reimbursed under a contractual arrangement with
a third party (for example, a suppliers warranty agreement) may be netted against the related
reimbursement.
1p35
(c)
Gains and losses arising from a group of similar transactions are reported on a net basis (for
example, foreign exchange gains and losses or gains and losses arising on financial instruments
held for trading). However, such gains and losses are reported separately if they are material.
Summary
35.
The requirements surrounding components of other comprehensive income (OCI) can be summarised
as follows:
Requirement
in standard
Presentation in Specimen
Holdings Limited
IAS/HKAS 1
p82(A)
Statement of
comprehensive
income
Statement of comprehensive
income
Reclassification adjustments during the

period relating to components of other
comprehensive income
IAS/HKAS 1 p92
Statement of
comprehensive
income or notes
Note 30
Tax relating to each component of other

comprehensive income, including
reclassification adjustments
IAS/HKAS 1 p90
Statement of
comprehensive
income or notes
Note 13
Reconciliation for each component of

equity, showing separately
Profit/loss
Other comprehensive income
Transactions with owners.
IAS/HKAS 1
p106(d)
Statement of
changes in
equity
Statement of changes in equity
For each component of equity, an analysis

of other comprehensive income by item
IAS/HKAS 1
p106A
Statement of
changes in
equity or notes
Statement of changes in equity
Item
Each component of other comprehensive
income recognised during the period,
classified by nature and grouped into those
that:
Reference
- will not be reclassified subsequently to

profit and loss; and
- may be reclassified subsequently to profit
and loss.


Note
1p10(a), 1p54, 1p113,
1p38, A2(1)&(5),
GEM18.07(1)&(5)
10Sch4, S124
1p60, 1p66
1p54(a), A4(2)(a)
GEM18.50B(2)(a)
1p54(b)
1p54(c)
1p54(e), 28p38
1p54(o), 1p56
1p54(d), FRS7p8(d),
10Sch8,
1p54(d), FRS7p8(a)
1p54(h), FRSp8(c)
1p60, 1p66,A4(2)(b)
GEM18.50B(2)(b)
1p54(g), A4(2)(b)(i),
GEM18.50B(2)(b)(i)
1p54(h), FRS7p8(c),
A4(2)(b)(ii),
GEM18.50B(2)(b)(ii)
1p54(d), FRS7p8(d)
1p54(d), FRS7p8(a)
1p54(d), FRS7p8(a)
1p54(i), FRS7p8,
A4(2)(b)(iii),
GEM18.50B(2)(b)(iii)
1p55, FRS7p8
FRS5p38, 40,
1p54(j)
Assets
Non-current assets
Leasehold land and land use rights
16
16a
59,129
70,008
11,800
70,300
17
18
12b
25,000
26,272
18,649
17,000
20,700
17,053
33
20
3,546
17,420
3,383
14,910
21
22
395
2,322
222,741
245
1,352
156,743
Inventories
23
24,700
18,132
22
19,765
18,330
Available-for-sale financial assets

Derivative financial instruments
Financial assets at fair value through
profit or loss
Cash and cash equivalents (excluding
bank overdrafts)
20
21
24
1,950
1,069
11,820
951
7,972
25
14,928
32,062
Restricted cash
25
Assets of disposal group classified as

held for sale
26
3,000
77,232
3,333
2,000
79,447
80,565
303,306
79,447
236,190
27
27
21,000
10,494
27
30
29
36
42,444
14,426
31,494
6,665
12,945
58,761
128,576
7,188
10,102
41,603
89,864
1,766
Total equity
135,764
91,630
Investment properties
Intangible assets
Investments accounted for using the
equity method
Deferred income tax assets
Current assets
Total assets
1p54(r), A4(2)(g)
GEM18.50B(2)(g)
1p78(e) ,
1p78(e), 1p55
1p78(e)
1p78(e), 1p55
10Sch9(1)(e)
1p54(q), A4(2)(h),
GEM18.50B(2)(h)
5a
As at 31 December
2014
2013
HK$000
HK$000
Equity and liabilities

Equity attributable to owners of
the company
Share capital: nominal value
Other statutory capital reserves
Share capital/[and other statutory
capital reserves]5a
Other reserves
Retained earnings
- Proposed final dividend
- Others
The Company is incorporated in Hong Kong. As the Hong Kong Companies Ordinance (Cap. 622) was effective on 3 March 2014, the transition to
the no-par regime should be reflected for the year ended 31 December 2014.

Note
1p60, 1p69, A4(2)(f),

GEM18.50B(2)(f)
1p54(m), FRS7p8(f),
A4(2)(f)(i)
GEM18.50B(2)(f)(i)
1p54(m), FRS7p8(e)
1p54(o), 1p56,
10Sch8
1p54(l), 1p78(d)
1p54(l), 1p78(d)
Liabilities
Non-current liabilities
Borrowings
32
115,121
96,346

Deferred income tax liabilities
21
33
135
11,188
129
8,184
Retirement benefit obligations

34
35
5,116
1,320
132,880
2,611
274
107,544
31
17,478
2,566
11,716
12,973
2,771
18,258
460
2,222
34,442
220
618
2,396
37,016
Total liabilities
Total equity and liabilities
Net current assets
34,662
167,542
303,306
45,903
37,016
144,560
236,190
42,431
Total assets less current liabilities
268,644
199,174
1p60, 1p69, A4(2)(c)

GEM18.50B(2)(c)
1p54(k), FRS7p8(f)
1p54(n)
1p54(m), FRS7p8(f),
A4(2)(c)(i)
GEM18.50B(2)(c)(i)
1p54(m), FRS7p8(e)
1p54(l)
Current liabilities
FRS5p38, 1p54(p)
A4(2)(d),
GEM18.50B(2)(d)
A4(2)(e),
GEM18.50B(2)(e)
As at 31 December
2014
2013
HK$000
HK$000
Trade and other payables

Current income tax liabilities
Borrowings
32

21
35
Liabilities of disposal group classified as

held-for-sale
26
10p17
The notes on pages x to x are an integral part of these consolidated financial

statements.
S129B(1), 10p17
The financial statements on pages x to x were approved by the Board of Directors on [DATE] and were
signed on its behalf 6
_________________________
Director
____________________________
Director
Every balance sheet of a company shall be approved by the board by directors of the company and signed on behalf of the board by two of the
directors or, in the case of private company having only one director, by the sole director.
10

Commentary balance sheet

The commentary explains some of the key requirements in IAS/HKAS 1, Presentation of financial statements,
which impact the balance sheet/statement of financial position.
1p10
1BC21
1.
IAS/HKAS 1 refers to the balance sheet as the statement of financial position. This title is not mandatory,
so Specimen Holdings Limited has elected to retain the better-known title of balance sheet.
1p54,55
2.
Paragraph 54 of IAS/HKAS 1 sets out the line items that are, as a minimum, required to be presented in
the balance sheet. Additional line items, headings and subtotals are presented in the balance sheet when
such presentation is relevant to an understanding of the entitys financial position.
1p77,78
3.
An entity discloses, either in the balance sheet or in the notes, further sub-classifications of the line items
presented, classified in a manner appropriate to the entitys operations. The detail provided in
sub-classifications depends on the requirements of IFRSs/HKFRSs requirements and on the size, nature
and function of the amounts involved.
Current/non-current distinction
1p60
4.
An entity presents current and non-current assets, and current and non-current liabilities, as separate
classifications in its balance sheet except when a presentation based on liquidity provides information that
is reliable and is more relevant. When that exception applies, all assets and liabilities are presented
broadly in order of liquidity.
1p61
5.
Whichever method of presentation is adopted, an entity discloses the amount expected to be recovered or
settled after more than 12 months for each asset and liability line item that combines amounts expected to
be recovered or settled (a) no more than 12 months after the reporting period, and (b) more than 12
months after the reporting period.
1p66-70
6.
Current assets include assets (such as inventories and trade receivables) that are sold, consumed or
realised as part of the normal operating cycle even when they are not expected to be realised within 12
months after the reporting period. Some current liabilities, such as trade payables and some accruals for
employee and other operating costs, are part of the working capital used in the entitys normal operating
cycle. Such operating items are classified as current liabilities even if they are due to be settled more than
12 months after the reporting period.
1p68
7.
The operating cycle of an entity is the time between the acquisition of assets for processing and their
realisation in the form of cash or cash equivalents. When the entitys normal operating cycle is not clearly
identifiable, its duration is assumed to be 12 months.
Consistency
1p45
8.
The presentation and classification of items in the financial statements is retained from one period to the
next unless:
(a)
it is apparent, following a significant change in the nature of the entitys operations or a review
of its financial statements, that another presentation or classification would be more
appropriate according to the criteria for selecting and applying accounting policies in
(b)
an IFRS/HKFRS requires a change in presentation.

1p29
9.
Each material class of similar items is presented separately in the financial statements. Items of a dissimilar
nature or function are presented separately unless they are immaterial.
Current and deferred tax assets and liabilities

1p54,56
10.
Current and deferred tax assets and liabilities are presented separately from each other and from other
assets and liabilities. When a distinction is made between current and non-current assets and liabilities in
the balance sheet, deferred tax assets and liabilities are presented as non-current.
Offsetting
1p32
11.
An entity does not offset assets and liabilities unless required or permitted to by an IFRS/HKFRS.
Measuring assets net of valuation allowances for example, obsolescence allowances on inventories and
doubtful debt allowances on receivables is not offsetting.
11

Three balance sheets required in certain circumstances

1p40A-40D
12.
If an entity has applied an accounting policy retrospectively, restated items retrospectively or reclassified
items in its financial statements, it provides a third balance sheet as at the beginning of the preceding period
presented. However, where the retrospective change in policy or the restatement has no effect on this earliest
statement of financial position, we believe that it would be sufficient for the entity merely to disclose that
fact.
12

Balance sheet
Note
1p10(a), 1p54, 1p113, 1p38,
A2(1)&(5),GEM18.07(1)&(5)
10Sch4, S124
1p60, 1p66
FRS7p8(c)
1p60, 1p66, A4(2)(b)
As at 31 December
2014
2013
HK$000
HK$000
Assets
Non-current assets
Investments in subsidiaries
Loans to subsidiaries
12a
12a
67,206
89,794
66,310
25,000
157,000
91,310
5,039
7,230
162,039
98,540
Current assets
GEM18.50B(2)(b)
1p54(i), FRS7p8
25
A4(2)(b)(iii)
Total assets
1p54(r), A4(2)(g)
GEM18.50B(2)(g)
1p78(e),
1p78(e), 1p55
1p78(e)
1p78(e), 1p55
10Sch9(1)(e)

Equity attributable to owners of the
company
27
27
21,000
10,494
Share capital/[and other statutory reserves]

Other reserves
Retained earnings
- Others
27
30
29
36
42,444
5,433
31,494
-
12,945
26,260
10,102
26,944
87,082
68,540
Total equity
Liabilities
1p60, 1p69, A4(2)(f)
GEM18.50B(2)(f)
1p54 (m), FRS7p8(f)
A4(2)(f)(i)
GEM18.50B(2)(f)(i)
1p54(o), 1p56, 10Sch8
Borrowings
32
72,822
30,000
33
2,135
74,957
30,000
162,039
98,540
5,039
7,230
162,039
98,540
Total liabilities
A4(2)(d), GEM18.50B(2)(d)
Net current assets
A4(2)(e), GEM18.50B(2)(e)
10p17
The notes on pages x to x are an integral part of these financial statements.

The financial statements on pages x to x were approved by the Board of Directors on [DATE]
and were signed on its behalf.7
S129B(1), 10p17
Director
7
Director
Every balance sheet of a company shall be approved by the board by directors of the company and signed on behalf of the board by two of the
directors or, in the case of a private company having only one director, by the sole director.
13

Commentary balance sheet (continued)
27p38A
36p12(h)
10Sch18(4),
27p16(a)
An investor is required to recognise dividends received from a subsidiary, joint venture or associate in its separate
financial statements as income. The receipt of a dividend from a subsidiary, joint venture or associate may be an
internal indicator that the related investment could be impaired. The investor is, therefore, required to test the
related investment for impairment where a dividend is received and:
there is evidence available that the carrying amount of the investment exceeds the carrying amount in the
consolidated financial statements of the investees net assets including associated goodwill; or
the dividend exceeds the total comprehensive income of the subsidiary, joint venture or associate in the
period that the dividend is declared.
Dealt with / not dealt with

The following disclosure is required if the company has taken advantage of the exemption* under IFRS/HKFRS 10 para
4(a) from the requirement to prepare consolidated financial statements.
The company has taken advantage of the exemption under IAS27 [HKAS27] from the requirement to prepare
consolidated financial statements as it and its subsidiaries are included in the consolidated financial statements of its
parent, M Limited. M Limited was incorporated in Hong Kong. It has prepared the consolidated financial statements
for public use in accordance with IFRS [HKFRS]. The registered office of the company is 21/F Nice Building, City Plaza
Three, 14 Taikoo Wan Road, Taikoo Shing, Island East, Hong Kong. The consolidated financial statements of M
Limited are obtainable at the companys registered office.
The net profits of the subsidiaries attributable to owners of the company are as follows:
Dealt with in the companys financial statements

Not dealt with in the companys financial statements
2014
HK$000
XX
XX
XX
Previous years
HK$000
XX
XX
XX
* Please note that if the company prepares its financial statements under HKFRS but its ultimate or immediate parent
entity prepares its financial statements under IFRS or HKFRS, the exemption for the preparation of the consolidated
financial statements under IAS/HKAS27 applies.
However if the company prepares its financial statements under IFRS but its ultimate or immediate parent entity
prepares their financial statements under HKFRS, the exemption for the preparation of the consolidated financial
statements under IAS/HKAS27 does not apply.
In addition, a Hong Kong incorporated parent company can only take advantage of the exemption under IFRS/HKFRS
10 para 4(a) if it is a wholly-owned subsidiary of another company at the end of its financial year satisfying the
exemption allowed under section 124(2) of the Hong Kong Companies Ordinance.
14


Note
1p10(c),106,108,
109, 113
A2(4)&(5),
GEM18.07(4)&
(5)
HK$000
Balance at 1 January
2013
1p106(d)(i)
1p106(d)(ii)
FRS7p20(a)(ii)
1p82(h)
19p120(c)
1p82(g), FRS
7p23(c)
1p82(g),39p102
(a)
1p82(g),21p52
(b)
1p106(a)
FRS2p50
FRS2p50
1p106(d)(iii)
1p106(d)(iii)
Comprehensive
income
Profit for the year
Other
comprehensive
income9
Available-for-sale
financial assets
Share of other
of investments
accounted for using the
equity method
Remesurements of postemployment benefit
obligations
Cash flow hedges
Attributable to owners of the company

Other
Share
Retained
premium reserves8
earnings
HK$000
HK$000
Total
Noncontrolling
interests
Total equity
HK$000
HK$000
HK$000
HK$000
20,000
10,424
6,553
50,932
87,909
1,500
89,409
16,304
16,304
856
17,160
30
62
62
62
30
(14)
(14)
(14)
29, 13
(637)
(637)
(637)
30
(3)
(3)
(3)
30
40
40
40
Currency translation
differences
- Group
- Associates
30
(78)
105
(78)
105
(40)
(118)
105
Total other
comprehensive income,
net of tax
112
(637)
(525)
(40)
(565)
Total comprehensive
income
112
15,667
15,779
816
16,595
Employees share option

scheme:
Value of employee
services
Proceeds from shares
issued
Tax credit relating to
share option scheme
Dividends relating to
2012
Total transactions
with owners,
recognised directly
in equity
Balance at 31
December 2013
Share
capital
29
822
822
822
27
1,000
70
1,070
1,070
29
20
20
20
36
(15,736)
(15,736)
(550)
(16,286)
1,000
70
(14,894)
(13,824)
(550)
(14,374)
21,000
10,494
6,665
51,705
89,864
1,766
91,630
Individual reserves can be grouped into other reserves in the statement of changes in equity if these are similar in nature and can be regarded as a
component of equity. If the individual reserves are not shown in the statement of changes in equity, an analysis should be given in the notes.
Under the amendment to IAS/HKAS 1 arising from Improvements to IFRSs issued in 2010, companies can implement this by either (a) showing
each line item of other comprehensive income separately in the above statement (as shown above); or (b) by having a single-line presentation of
other comprehensive income plus a separate note showing an analysis of each item of other comprehensive income for each component of equity. In
these illustrative financial statements, we put this information in the statement of changes in equity.
15

Note
1p106,108,109
A2(4)&(5),
GEM18.07(4)&(5)
1p106(d)(i)
1p106(d)(ii)
1p82(h),
FRS7p20(a)(ii)
19p120(c)
1p82(g),
FRS 7p23(c)
1p82(g),
39p102(a)
1p82(g), 21p52(b)
12p80(d), 81(ab)
FRS3p42
1p82(g)
1p106(a)
FRS2p50
FRS2p50
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
9a
Share
capital

Other
Retained
Share
premium reserves
earnings
HK$000
HK$000
31,874
31,874
2,548
34,422
30
362
362
362
30
(12)
(12)
(12)
29,
13
83
83
83
30
64
64
64
30
(45)
(45)
(45)
differences
- Group
- Associates
Impact of the change in the
tax rate of [country name]
on deferred tax
Reclassification of
revaluation of previously
held interest in ABC Group
30
2,833
(74)
(10)
2,833
(74)
(10)
252
3,085
(74)
(10)
(850)
(850)
(850)
Total other comprehensive

income, net of tax
2,278
73
2,351
252
2,603
Total comprehensive
income
2,278
31,947
34,225
2,800
37,025
29
690
690
690
27
750
200
950
950
Comprehensive income
Profit or loss
Other comprehensive
income9b
Available-for-sale financial
assets
Share of other
comprehensive income of
investments accounted for
using equity method
obligations
Cash flow hedges
Employee share option

scheme:
Value of employee
services
issued
share option scheme
Issue of ordinary shares
related to business
combination
Transition to no par value
regime on 3 March 2014
Buy-back of shares
Convertible bond equity
component, net of tax
Dividends relating to 2013
Total contributions by
and distributions to
owners of the company,
recognised directly in
equity
arising on business
combination
Changes in ownership
interests in subsidiaries
without change of control
Total changes in
ownership interests in
subsidiaries that do not
result in a loss of control
HK$000
29,
13
30,
41
HK$000
9a
HK$000
HK$000
29
30
30
30
27
3,550
6,450
10,000
10,000
27
17,144
(17,144)
27(a)
30
5,433
(2,564)
(2,564)
5,433
(2,564)
5,433
36
(10,102)
(10,102)
(1,920)
(12,022)
21,444
(10,494)
5,433
(11,946)
4,437
(1,920)
2,517
41
3,592
3,592
40
50
50
950
1,000
50
50
4,542
4,592
Individual reserves can be grouped into other reserves in the statement of changes in equity if these are similar in nature and can be regarded as a component of equity.
If the individual reserves are not shown in the statement of changes in equity, an analysis should be given in the notes.
the amendment to IAS/HKAS 1 arising from Improvements to IFRSs issued in 2010, companies can implement this by either (a) showing each line item of other
comprehensive income separately in the above statement (as shown above); or (b) by having a single-line presentation of other comprehensive income plus a separate
note showing an analysis of each item of other comprehensive income for each component of equity. In these illustrative financial statements, we put this information
in the statement of changes in equity.
9b Under
9c
Total
Total equity
Noncontrolling
interests
HK$000
9c
Share premium/ [other statutory reserves, shown individually, e.g. capital redemption reserve.]
16

Note
1p106(d)(iii)
Total transactions with

owners, recognised
directly in equity
Balance at 31 December
2014
Share
capital
Share
premium
Other
reserves
Retained
earnings
Total
HK$000
21,444
HK$000
(10,494)
HK$000
5,483
HK$000
(11,946)
HK$000
4,487
42,444
14,426
71,706
Noncontrolling
interests
HK$000
2,622
128,576
7,188
Commentary statement of changes in equity

The commentary that follows explains some of the key requirements in IAS/HKAS 1, Presentation of financial
statements, and other aspects that impact the statement of changes in equity.
Disclosures
1p106
1.
Information to be included in the statement of changes in equity includes:

(a)
Total comprehensive income for the period, showing separately the total amounts attributable to
owners of the Company and to non-controlling interests.
(b)
For each component of equity, the effects of retrospective application or retrospective restatement
recognised in accordance with IAS/HKAS 8.
(c)
For each component of equity, a reconciliation between the carrying amount at the beginning and the
end of the period, separately disclosing changes resulting from:
(i) profit or loss;
(ii) each item of other comprehensive income; and
(iii) transactions with owners in their capacity as owners, showing separately contributions by and
distributions to owners and changes in ownership interests in subsidiaries that do not result in a
loss of control.
2.
For each component of equity, the analysis of other comprehensive income by item may be presented either in
the statement of changes in equity or disclosed within the notes.
Dividends
1p107
3.
The amount of dividends recognised as distributions to owners during the period and the related amount per
share are now disclosed either in the statement of changes in equity or in the notes. Dividends cannot be
However, HKCO Tenth Sch. para 13(1) (j) requires the disclosure of the aggregate amount of the dividends paid
and proposed in the profit and loss account.
17
Total
equity
HK$000
7,109
135,764


7p10, 18(b),
1p38, A2(3)&(5),
GEM
18.07(3)&(5)
Year ended 31
December
Note
2014
2013
HK$000
HK$000
1p113
7p31
7p35
Cash flows from operating activities

Interest paid
Income tax paid
37
Net cash generated from operating activities
59,334
(7,835)
(12,317)
41,776
(14,773)
(10,526)
39,182
16,477
(3,750)
7p21, 7p10
Cash flows from investing activities
7p39
Acquisition of subsidiaries, net of cash acquired
41
7p16(a)
Purchases of property, plant and equipment (PPE)
16a
(4,755)
(6,042)
Purchases of leasehold land and land use rights
16
(4,929)
Proceeds from sale of PPE
37
6,354
2,979
Purchases of investment properties (including interest capitalised)
17
(100)
7p16(a)
Purchases of intangible assets
18
(3,050)
(700)
7p16(c)
Purchases of available-for-sale financial assets
20
(2,781)
(1,150)
7p16(e)
Loans granted to related parties
42
(1,343)
(112)
7p16(f)
Loan repayments received from related parties
42
63
98
7p7, 7p16
Restricted bank deposits
25
(1,000)
500
7p31
Interest received
983
1,217
7p31
Dividends received
1,180
1,120
(13,128)
(2,090)
7p16(b)
Net cash used in investing activities

7p21, 7p10
Cash flows from financing activities
7p17(a)
Proceeds from issuance of ordinary shares
27
950
1,070
7p17(b)
Buy-back of shares
29
(2,564)
7p17(c)
Proceeds from issuance of convertible bonds
32(b)
50,000
7p17(c)
Proceeds from issuance of redeemable preference shares
32(c)
30,000
7p17(c)
Proceeds from borrowings
8,500
18,000
7p17(d)
Repayments of borrowings
7p31
Dividends paid to companys shareholders
7p31
Dividends paid to holders of redeemable preferences shares
7p31
36
(83,117)
(34,674)
(10,102)
(15,736)
(1,950)
(1,950)
Acquisition of interest in a subsidiary
40
(500)
Sale of interest in a subsidiary
40
1,500
(1,920)
(550)
(39,203)
(3,840)
Dividends paid to non-controlling interests

Net cash used in financing activities
18

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of year
Year ended 31
December
Note
2014
2013
HK$000
HK$000
(13,149)
10,547
25
Exchange gains/(losses) on cash and cash equivalents

Cash and cash equivalents at end of year
25
25,598
15,087
(171)
(36)
12,278
25,598
19

Commentary Statement of cash flows

The commentary as follows explains some of the key requirements in IAS/HKAS 7, Statements of cash flows.
Reporting cash flows
7p18
1.
Cash flows from operating activities are reported using either:

(a)
(b)
7p19
2.
The direct method, whereby major classes of gross cash receipts and gross cash payments are
disclosed; or
The indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of
income or expense associated with investing or financing cash flows.
Specimen Holdings Limited continues to use the indirect method. For an illustration of a statement of
cash flows presented using the direct method, refer to Appendix IV.
Cash flows from investing and financing activities

7p21
3.
Major classes of gross cash receipts and gross cash payments arising from investing and financing activities
are reported separately, except to the extent that cash flows described in paragraphs 22 and 24 of
IAS/HKAS 7 are reported on a net basis.
Sale of property, plant and equipment held for rental to others

7p14
4.
Cash flows from the sale of property, plant and equipment are normally presented as cash flows from
investing activities. However, cash payments to manufacture or acquire assets that will be held for rental to
others and subsequently for sale are cash flows from operating activities. The cash receipts from rents and
subsequent sales of such assets are also therefore cash flows from operating activities.
Reporting on a net basis

7p22,23
5.
Cash flows arising from the following operating, investing or financing activities may be reported on a net
basis:
(a)
Cash receipts and payments on behalf of customers when the cash flows reflect the activities of
the customer rather than those of the entity (for example, rents collected on behalf of, and paid
over to, the owners of properties), and
(b)
7p24
6.
Cash receipts and payments for items in which the turnover is quick, the amounts are large,
and the maturities are short (for example, advances made for, and repayment of, principal
amounts relating to credit card customers).
Cash flows arising from each of the following activities of a financial institution may be reported on a net
basis:
(a)
cash receipts and payments for the acceptance and repayment of deposits with a fixed maturity
date;
(b)
the placement of deposits with, and withdrawal of deposits from, other financial institutions;
and
cash advances and loans made to customers and the repayment of those advances and loans.
(c)
Interest and dividends

7p31
7.
Cash flows from interest and dividends received and paid are each disclosed separately. Each is classified in
a consistent manner from period to period as either operating, investing or financing activities.
7p33
8.
Interest paid and interest and dividends received are usually classified as operating cash flows for a
financial institution. However, there is no consensus on the classification of these cash flows for other
entities. Interest paid and interest and dividends received may be classified as operating cash flows because
they enter into the determination of net profit or loss. Alternatively, interest paid and interest and
dividends received may be classified as financing cash flows and investing cash flows respectively, because
they are costs of obtaining financial resources or returns on investments.
7p34
9.
Dividends paid may be classified as financing cash flows because they are a cost of obtaining financial
resources. Alternatively, they may be classified as operating cash flows to assist users to determine the
ability of an entity to pay dividends out of operating cash flows.
20

Income taxes
7p35
10.
Cash flows arising from income taxes are separately disclosed and classified as cash flows from operating
activities unless they can be specifically identified with financing and investing activities.
Effects of exchange rate changes

7p28
11.
Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows.
However, the effect of exchange rate changes on cash and cash equivalents held or due in a foreign
currency are reported in the statement of cash flows in order to reconcile cash and cash equivalents at the
beginning and the end of the period. This amount is presented separately from cash flows from operating,
investing and financing activities. It also includes the differences, if any, had those cash flows been
reported at period-end exchange rates.

7p6, 7p46
12.
7p7, 7p16, 7p11
13.
Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for
investment or other purposes. For an investment to qualify as a cash equivalent it must be readily
convertible to a known amount of cash and be subject to an insignificant risk of changes in value. Therefore,
an investment normally qualifies as a cash equivalent only when it has a short maturity of, say, three months
or less from the date of acquisition. IAS/HKAS 7 requires an entity to disclose the policy that it adopts in
determining the composition of its cash equivalents.
Changes to cash and cash equivalents arising from changes to and deposits that do not meet the definition of
cash and cash equivalents generally meet the definition of an investing activity because they relate to the
acquisition or disposal of assets other than cash equivalents or financial instruments held for trading.
However, there might be circumstances when classification within investing activities does not reflect the
nature of the transaction, and classification within operating or financing might be more appropriate.
Additional recommended disclosures

7p50
14.
Additional information may be relevant to users in understanding the financial position and liquidity of an
entity. Disclosure of this information, together with a commentary by management, is encouraged and may
include:
7p50(a)
(a)
The amount of undrawn borrowing facilities that may be available for future operating
activities and to settle capital commitments, indicating any restrictions on the use of these
facilities.
7p50(c)
(b)
The aggregate amount of cash flows that represent increases in operating capacity separately
from those cash flows that are required to maintain operating capacity.
7p50(d)
(c)
The amount of the cash flows arising from the operating, investing and financing activities of
each reportable segment (see IFRS/HKFRS 8, Operating segments).
21


1
General information
1p138(b), (c)
1p51(a)(b)
Specimen Holdings Limited (the company) and its subsidiaries (together the group) manufacture,
distribute and sell shoes through a network of independent retailers. The group has manufacturing
plants around the world and sells mainly in Hong Kong, the UK and the US. During the year, the group
acquired control of ABC Group, a shoe and leather goods retailer operating in the US and most western
European countries.
1p138(a)
The company is a limited liability company incorporated in Hong Kong. The address of its registered
office is 21/F Nice Building, City Plaza Three, 14 Taikoo Wan Road, Taikoo Shing, Island East, Hong
Kong.
The company has its primary listing on The Stock Exchange of Hong Kong Limited.
These financial statements are presented in HK dollars, unless otherwise stated.
10p17
Summary of significant accounting policies

Commentary accounting policies
The following note is a complete reiteration of a large number of possible accounting policies.
Management should only present information that relates directly to the business and should avoid
boilerplate disclosure.
1p112(a)
1p117(b), 1p119
A2(6), A2.2
GEM18.07(6)
GEM18.04
The principal accounting policies applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the years presented, unless
otherwise stated.
2.1 Basis of preparation

1p116
1p117(a)
A2.1, A5
GEM18.19
GEM18.20
GEM18.04
The consolidated financial statements of Specimen Holdings Limited have been prepared in accordance
with International/Hong Kong Financial Reporting Standards (IFRS/HKFRS). The consolidated
financial statements have been prepared under the historical cost convention, as modified by the
revaluation of available-for-sale financial assets, and financial assets and financial liabilities (including
derivative instruments) at fair value through profit or loss and investment properties, which are carried
at fair value.
In accordance with the transitional and saving arrangements for Part 9 of the Hong Kong Companies
Ordinance (Cap. 622), Accounts and Audit as set out in sections 76 to 87 of Schedule 11 to the Hong
Kong Companies Ordinance (Cap. 622), the consolidated financial statements are prepared in
accordance with the applicable requirements of the predecessor Companies Ordinance (Cap. 32) for this
financial year and the comparative period.10
The preparation of financial statements in conformity with IFRS/HKFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process of
applying the groups accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 4.
2.1.1 Going concern
The group meets its day-to-day working capital requirements through its bank facilities. The current
economic conditions continue to create uncertainty particularly over (a) the level of demand for the
groups products; and (b) the availability of bank finance for the foreseeable future. The groups forecasts
and projections, taking account of reasonably possible changes in trading performance, show that the
group should be able to operate within the level of its current facilities. After making enquiries, the
directors have a reasonable expectation that the group has adequate resources to continue in operational
existence for the foreseeable future. The group therefore continues to adopt the going concern basis in
preparing its consolidated financial statements. Further information on the groups borrowings is given
in Note 32.
10 For
non- Hong Kong incorporated companies, it is recommended to use this paragraph: The consolidated financial statements are prepared in
accordance with the applicable requirements of the predecessor Companies Ordinance (Cap. 32) for this financial year and the comparative period.
22

2.1.2 Changes in accounting policy and disclosures10a

8p28
(a)
New and amended standards adopted by the group
The following standards have been adopted by the group for the first time for the financial year beginning
on or after 1 January 2014:
Amendment to IAS/HKAS 32, 'Financial instruments: Presentation' on offsetting financial assets and
financial liabilities. This amendment clarifies that the right of set-off must not be contingent on a future
event. It must also be legally enforceable for all counterparties in the normal course of business, as well as
in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms.
The amendment did not have a significant effect on the group financial statements.
Amendments to IAS/HKAS 36, 'Impairment of assets', on the recoverable amount disclosures for nonfinancial assets. This amendment removed certain disclosures of the recoverable amount of CGUs which
had been included in IAS/HKAS 36 by the issue of IFRS/HKFRS 13. It also enhanced the disclosures of
information about the recoverable amount of impaired assets if that amount is based on fair value less
costs of disposal.
Amendment to IAS/HKAS 39, 'Financial instruments: Recognition and measurement' on the novation of
derivatives and the continuation of hedge accounting. This amendment considers legislative changes to
'over-the-counter' derivatives and the establishment of central counterparties. Under IAS/HKAS 39
novation of derivatives to central counterparties would result in discontinuance of hedge accounting. The
amendment provides relief from discontinuing hedge accounting when novation of a hedging instrument
meets specified criteria. The group has applied the amendment and there has been no significant impact
on the group financial statements as a result.
IFRIC/HK (IFRIC) 21, 'Levies', sets out the accounting for an obligation to pay a levy if that liability is
within the scope of IAS/HKAS 37 'Provisions'. The interpretation addresses what the obligating event is
that gives rise to the payment a levy and when a liability should be recognised. The Group is not currently
subjected to significant levies so the impact on the Group is not material.
Other standards, amendments and interpretations which are effective for the financial year beginning on 1
January 2014 are not material to the group.
10a A detailed list of IFRSs/HKFRSs and IFRIC/HK(IFRIC) interpretations effective first time for the financial year beginning 1 January 2014 is
included in pages iii to iv of the introduction and of the forthcoming requirements that are effective for periods after 1 January 2014 is included in
appendix VII.
23

(b)
New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual
periods beginning after 1 January 2014, and have not been applied in preparing these consolidated
financial statement. None of these is expected to have a significant effect on the consolidated financial
statements of the group, except the following set out below:
IFRS/HKFRS 9, Financial instruments, addresses the classification, measurement and recognition of
financial assets and financial liabilities. The complete version of IFRS/HKFRS 9 was issued in July 2014.
It replaces the guidance in IAS/HKAS 39 that relates to the classification and measurement of financial
instruments. IFRS/HKFRS 9 retains but simplifies the mixed measurement model and establishes three
primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value
through P&L. The basis of classification depends on the entity's business model and the contractual cash
flow characteristics of the financial asset. Investments in equity instruments are required to be measured
at fair value through profit or loss with the irrevocable option at inception to present changes in fair value
in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss
impairment model used in IAS/HKAS 39. For financial liabilities there were no changes to classification
and measurement except for the recognition of changes in own credit risk in other comprehensive income,
for liabilities designated at fair value through profit or loss. IFRS/HKFRS 9 relaxes the requirements for
hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic
relationship between the hedged item and hedging instrument and for the hedged ratio to be the same as
the one management actually use for risk management purposes.
Contemporaneous documentation is still required but is different to that currently prepared under
IAS/HKAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018.
Early adoption is permitted. The group is yet to assess IFRS/HKAS 9s full impact.
IFRS/HKFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and establishes
principles for reporting useful information to users of financial statements about the nature, amount,
timing and uncertainty of revenue and cash flows arising from an entitys contracts with customers.
Revenue is recognised when a customer obtains control of a good or service and thus has the ability to
direct the use and obtain the benefits from the good or service. The standard replaces IAS/HKAS 18
'Revenue' and IAS/HKAS 11 'Construction contracts' and related interpretations. The standard is effective
for annual periods beginning on or after 1 January 2017 and earlier application is permitted. The group is
assessing the impact of IFRS/HKAS 15.
There are no other IFRSs/HKFRSs or IFRIC/HK (IFRIC) interpretations that are not yet effective that
would be expected to have a material impact on the group.
(c)
New Hong Kong Companies Ordinance (Cap.622)
In addition, the requirements of Part 9 "Accounts and Audit" of the new Hong Kong Companies
Ordinance (Cap. 622) come into operation as from the Company's first financial year commencing on or
after 3 March 2014 in accordance with section 358 of that Ordinance. The group is in the process of
making an assessment of expected impact of the changes in the Companies Ordinance on the consolidated
financial statements in the period of initial application of Part 9 of the new Hong Kong Companies
Ordinance (Cap. 622). So far it has concluded that the impact is unlikely to be significant and only the
presentation and the disclosure of information in the consolidated financial statements will be affected.
24

2.2 Subsidiaries
1p119
2.2.1 Consolidation
FRS10p7,
A subsidiary is an entity (including a structured entity) over which the group has control. The group
controls an entity when the group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries
are consolidated from the date on which control is transferred to the group. They are deconsolidated
from the date that control ceases.
FRS10p20,
FRS10p25
(a) Business combinations

FRS3p5
FRS3p37
FRS3p39
FRS3p18
The group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the group. The
consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date.
FRS3p19
The group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition

basis. Non-controlling interests in the acquiree that are present ownership interests and entitle their
holders to a proportionate share of the entitys net assets in the event of liquidation are measured at
either fair value or the present ownership interests proportionate share in the recognised amounts of
the acquirees identifiable net assets. All other components of non-controlling interests are measured at
their acquisition date fair value, unless another measurement basis is required by IFRS/HKFRS.
FRS3p53
Acquisition-related costs are expensed as incurred.
FRS3p42
If the business combination is achieved in stages, the acquisition date carrying value of the acquirers
previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any
gains or losses arising from such re-measurement are recognised in profit or loss.
FRS3p58
Any contingent consideration to be transferred by the group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to
be an asset or liability is recognised in accordance with IAS/HKAS 39 either in profit or loss or as a
change to other comprehensive income. Contingent consideration that is classified as equity is not
remeasured, and its subsequent settlement is accounted for within equity.
FRS3p32,
FRS3 B63(a),
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of
the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred,
non-controlling interest recognised and previously held interest measured is less than the fair value of
the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised
directly in the income statement (Note2.9).
36p80
Intra-group transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries
have been adjusted to conform with the groups accounting policies
(b) Changes in ownership interests in subsidiaries without change of control
FRS10p23
Transactions with non-controlling interests that do not result in a loss of control are accounted for as
equity transactions that is, as transactions with the owners of the subsidiary in their capacity as
owners. The difference between fair value of any consideration paid and the relevant share acquired of
the carrying amount of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
25

(c) Disposal of subsidiaries

FRS10p25,
FRS10pB98,
FRS10pB99
When the group ceases to have control, any retained interest in the entity is re-measured to its fair
value at the date when control is lost, with the change in carrying amount recognised in profit or loss.
The fair value is the initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
2.2.2 Separate financial statements
27p42(c)
Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable
costs of investment. The results of subsidiaries are accounted for by the company on the basis of
dividend received and receivable.
36p12(h)
Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these
investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the
dividend is declared or if the carrying amount of the investment in the separate financial statements
exceeds the carrying amount in the consolidated financial statements of the investees net assets
including goodwill.
1p119
2.3 Associates
28p5
An associate is an entity over which the group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates
are accounted for using the equity method of accounting. Under the equity method, the investment is
initially recognised at cost, and the carrying amount is increased or decreased to recognise the
investors share of the profit or loss of the investee after the date of acquisition. The group's
investments in associates include goodwill identified on acquisition. Upon the acquisition of the
ownership interest in an associate, any difference between the cost of the associate and the groups
share of the net fair value of the associates identifiable assets and liabilities is accounted for as
goodwill.
28p10
28p25
If the ownership interest in an associate is reduced but significant influence is retained, only a
proportionate share of the amounts previously recognised in other comprehensive income is
reclassified to profit or loss where appropriate.
28p38
The group's share of post-acquisition profit or loss is recognised in the income statement, and its share
of post-acquisition movements in other comprehensive income is recognised in other comprehensive
income with a corresponding adjustment to the carrying amount of the investment. When the group's
share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables, the group does not recognise further losses, unless it has incurred legal or
constructive obligations or made payments on behalf of the associate.
28p39
28p40
28p42
The group determines at each reporting date whether there is any objective evidence that the
investment in the associate is impaired. If this is the case, the group calculates the amount of
impairment as the difference between the recoverable amount of the associate and its carrying value
and recognises the amount adjacent to share of profit of investments accounted for using equity
method in the income statement.
26

28p28
28p34
Profits and losses resulting from upstream and downstream transactions between the group and its
associate are recognised in the groups financial statements only to the extent of unrelated investors
interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of
an impairment of the asset transferred. Accounting policies of associates have been changed where
necessary to ensure consistency with the policies adopted by the group.
Gain or losses on dilution of equity interest in associates are recognised in the income statement.
2.4 Joint arrangements
The group has applied IFRS/HKFRS 11 to all joint arrangements. Under IFRS/HKFRS 11 investments
in joint arrangements are classified as either joint operations or joint ventures depending on the
contractual rights and obligations each investor. The group has assessed the nature of its joint
arrangements and determined them to be joint ventures. Joint ventures are accounted for using the
equity method.
28p10
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and
adjusted thereafter to recognise the groups share of the post-acquisition profits or losses and
movements in other comprehensive income. The group's investments in joint ventures include goodwill
identified on acquisition. Upon the acquisition of the ownership interest in a joint venture, any
difference between the cost of the joint venture and the groups share of the net fair value of the joint
ventures identifiable assets and liabilities is accounted for as goodwill. When the groups share of
losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any longterm interests that, in substance, form part of the groups net investment in the joint ventures), the
group does not recognise further losses, unless it has incurred obligations or made payments on behalf
of the joint ventures.
FRS11pC2-3
28p28
Unrealised gains on transactions between the group and its joint ventures are eliminated to the extent
of the groups interest in the joint ventures. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures
have been changed where necessary to ensure consistency with the policies adopted by the group.
1p119
2.5 Segment reporting
FRS8p5(6)
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the steering
committee that makes strategic decisions.
1p119,
10Sch12(14)
2.6 Foreign currency translation
1p119
(a) Functional and presentation currency
21p17
21p9, 18
1p51(d)
Items included in the financial statements of each of the groups entities are measured using the
currency of the primary economic environment in which the entity operates (the functional currency).
The consolidated financial statements are presented in HK dollars (HK$), which is the companys
functional and the groups presentation currency.
1p119
(b) Transactions and balances
21p21, 28
21p32
39p95(a)
39p102(a)
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
the income statement, except when deferred in other comprehensive income as qualifying cash flow
hedges and qualifying net investment hedges.
27

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the income statement within finance income or expenses. All other foreign exchange
gains and losses are presented in the income statement within other gains net.
39AG83
Changes in the fair value of debt securities denominated in foreign currency classified as available for
sale are analysed between translation differences resulting from changes in the amortised cost of the
security and other changes in the carrying amount of the security. Translation differences related to
changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are
recognised in other comprehensive income.
21p30
Translation differences on non-monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial assets, such as equities classified as available for
sale, are included in other comprehensive income.
1p119
(c) Group companies
21p39
The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
21p39(a)
(a)
21p39(b)
(b)
1p79(b),
21p39(c)
(c)
21p47
assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet;
income and expenses for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the rate
on the dates of the transactions); and
all resulting currency translation differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets
and liabilities of the foreign entity and translated at the closing rate. Currency translation differences
arising are recognised in other comprehensive income.
(d) Disposal of foreign operation and partial disposal
21p48, 48A,
48B, 48C
On the disposal of a foreign operation (that is, a disposal of the groups entire interest in a foreign operation,
or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving
loss of joint control over a joint venture that includes a foreign operation, or a disposal involving loss of
significant influence over an associate that includes a foreign operation), all of the currency translation
differences accumulated in equity in respect of that operation attributable to the owners of the company are
reclassified to profit or loss.
In the case of a partial disposal that does not result in the group losing control over a subsidiary that
includes a foreign operation, the proportionate share of accumulated currency translation differences are reattributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals
(that is, reductions in the groups ownership interest in associates or joint ventures that do not result in the
group losing significant influence or joint control), the proportionate share of the accumulated exchange
difference is reclassified to profit or loss.
1p119
2.7 Property, plant and equipment
16p73(a)
16p35(b)
16p15
16p17
39p98(b)
Land and buildings comprise mainly factories, retail outlets and offices. Leasehold land classified as finance
lease and all other property, plant and equipment is stated at historical cost less depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. Cost may also include
transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of
property, plant and equipment.
16p12, 13
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
group and the cost of the item can be measured reliably. The carrying amount of the replaced part is
derecognised. All other repairs and maintenance are charged to the income statement during the financial
period in which they are incurred.
28

16p73(b), 50
16p73(c)
Leasehold land classified as finance lease commences amortisation from the time when the land interest
becomes available for its intended use. Amortisation on leasehold land classified as finance lease and
depreciation on other assets is calculated using the straight-line method to allocate their cost to their
residual values over their estimated useful lives, as follows:
Leasehold land classified as finance

lease
Buildings
Machinery
Vehicles
Furniture, fittings and equipment
Shorter of remaining lease term of 30-40 years

or useful life
25-40 years
10-15 years
3-5 years
3-8 years
16p51
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
36p59
An assets carrying amount is written down immediately to its recoverable amount if the assets carrying
amount is greater than its estimated recoverable amount (Note 2.10).
16p68, 71
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within Other gains net in the income statement.
2.8 Investment property
40p75(a), (b)
Investment property, principally comprising leasehold land and buildings, is held for long-term rental yields
or for capital appreciation or both, and that is not occupied by the group. It also includes properties that are
being constructed or developed for future use as investment properties. Land held under operating leases are
accounted for as investment properties when the rest of the definition of an investment property is met. In
such cases, the operating leases concerned are accounted for as if they were finance leases. Investment
property is initially measured at cost, including related transaction costs and where applicable borrowing
costs. After initial recognition, investment properties are carried at fair value, representing open market
value determined at each reporting date by external valuers. Fair value is based on active market prices,
adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If the
information is not available, the group uses alternative valuation methods such as recent prices on less active
markets or discounted cash flow projections. Changes in fair values are recorded in the income statement as
part of a valuation gain or loss in other gains net.
2.9 Intangible assets
1p119
(a) Goodwill
FRS3p32
FRS3pB63(a)
Goodwill arises on the acquisition of subsidiaries represents the excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the identified net assets acquired.
36p80
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the
cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the
combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within
the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the
operating segment level.
36p10(b)
36p104
36p124
38p108
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of the CGU containing the goodwill is
compared to the recoverable amount, which is the higher of value in use and the fair value less costs of
disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.
29

1p119
(b) Trademarks and licences
38p74
38p97
38p118(a)(b)
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in
a business combination are recognised at fair value at the acquisition date. Trademarks and licences have a
finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost of trademarks and licences over their estimated useful lives of 15 to 20
years.
38p4
38p118(a)(b)
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to
use the specific software. These costs are amortised over their estimated useful lives of three to five years.
1p119
(c) Contractual customer relationships
Contractual customer relationships acquired in a business combination are recognised at fair value at the
acquisition date. The contractual customer relations have a finite useful life and are carried at cost less
accumulated amortisation. Amortisation is calculated using the straight-line method from three to five years
over the expected life of the customer relationship.
1p119
(d) Computer software
38p57
Costs associated with maintaining computer software programmes are recognised as an expense as
incurred. Development costs that are directly attributable to the design and testing of identifiable and
unique software products controlled by the group are recognised as intangible assets when the following
criteria are met:
It is technically feasible to complete the software product so that it will be available for use;
Management intends to complete the software product and use or sell it;
There is an ability to use or sell the software product;
It can be demonstrated how the software product will generate probable future economic benefits;
Adequate technical, financial and other resources to complete the development and to use or sell the
software product are available; and
The expenditure attributable to the software product during its development can be reliably
measured.
38p66
Directly attributable costs that are capitalised as part of the software product include the software
development employee costs and an appropriate portion of relevant overheads.
38p68,71
Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent
period.
38p97
38p118(a)(b)
Computer software development costs recognised as assets are amortised over their estimated useful
lives, which does not exceed three years.
1p119
2.10 Impairment of non-financial assets11
36p9
36p10
Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to
amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
11
An entity may be required to recognise impairment in an interim period, but by the end of the financial year the impairment may have reversed
either in full or partially. IFRIC/HK (IFRIC) 10 Interim reporting and impairment states that an impairment loss recognised in an interim period on
goodwill should not be reversed.
30

1p119
2.11 Non-current assets (or disposal groups) held-for-sale and discontinued operations
FRS5p6, 15
Non-current assets (or disposal groups) are classified as held for sale when their carrying amount is to be
recovered principally through a sale transaction and a sale is considered highly probable. The non-current
assets (except for certain assets as explained below), (or disposal groups), are stated at the lower of carrying
amount and fair value less costs to sell. Deferred tax assets, assets arising from employee benefits, financial
assets (other than investments in subsidiaries and associates) and investment properties, which are classified
as held for sale, would continue to be measured in accordance with the policies set out elsewhere in Note 2.
FRS5p31, 32
A discontinued operation is a component of the groups business, the operations and cash flows of which can
be clearly distinguished from the rest of the group and which represents a separate major line of business or
geographic area of operations, or is part of a single co-ordinated plan to dispose of a separate major line of
business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale.
FRS5p33
When an operation is classified as discontinued, a single amount is presented in the income statement, which
comprises the post-tax profit or loss of the discontinued operation and the post-tax gain or loss recognised on
the measurement to fair value less costs to sell, or on the disposal, of the assets or disposal group(s)
constituting the discontinued operation.
1p119
2.12 Financial assets

2.12.1 Classification
FRS7p21
39p9
The group classifies its financial assets in the following categories: at fair value through profit or loss,
loans and receivables, and available for sale. The classification depends on the purpose for which the
financial assets were acquired. Management determines the classification of its financial assets at initial
recognition.
(a) Financial assets at fair value through profit or loss
39p9
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives
are also categorised as held for trading unless they are designated as hedges. Assets in this category are
classified as current assets if expected to be settled within 12 months; otherwise, they are classified as
non-current.
(b) Loans and receivables
39p9
1p66, 68
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for the amounts that are
settled or expected to be settled more than 12 months after the end of the reporting period. These are
classified as non-current assets. The group's loans and receivables comprise trade and other receivables
and cash and cash equivalents' in the balance sheet (Notes 2.17 and 2.18).
(c) Available-for-sale financial assets
39p9
1p66, 68
FRS7
AppxB5(b)
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless the investment
matures or management intends to dispose of it within 12 months of the end of the reporting period.
31

2.12.2 Recognition and measurement

39p38
FRS7 AppxBp5
39p43
39p16
39p46
39p55(a),
FRS7
AppxB5(e)
39p55(b),
FRS7
AppxB5(e),
39AG83,
1p79(b)
39p67
Regular way purchases and sales of financial assets are recognised on the trade-date the date on which
the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus
transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets
carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are
expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows
from the investments have expired or have been transferred and the group has transferred substantially
all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value
through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently
carried at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or
loss category are presented in the income statement within Other (losses)/gains net in the period in
which they arise. Dividend income from financial assets at fair value through profit or loss is recognised
in the income statement as part of other income when the groups right to receive payments is
established.
Changes in the fair value of monetary and non-monetary securities classified as available for sale are
recognised in other comprehensive income.
When securities classified as available for sale are sold or impaired, the accumulated fair value
adjustments recognised in equity are included in the income statement as gains and losses from
investment securities.
Interest on available-for-sale securities calculated using the effective interest method is recognised in the
income statement as part of other income. Dividends on available-for-sale equity instruments are
recognised in the income statement as part of other income when the group's right to receive payments is
established.
2.13 Offsetting financial instruments
32p42
AG38B
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal course of business and in the event of
default, insolvency or bankruptcy of the company or the counterparty.
2.14 Impairment of financial assets
(a) Assets carried at amortised cost
39p58
39p59
The group assesses at the end of each reporting period whether there is objective evidence that a financial
asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired
and impairment losses are incurred only if there is objective evidence of impairment as a result of one or
more events that occurred after the initial recognition of the asset (a loss event) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets
that can be reliably estimated.
FRS7
AppxB5(f)
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency in interest or principal payments, the probability
that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that
there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
32

FRS7p16
39p63
39AG84
For loans and receivables category, the amount of the loss is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the financial asset's original effective interest rate. The
carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated
income statement. If a loan or held- to-maturity investment has a variable interest rate, the discount rate
for measuring any impairment loss is the current effective interest rate determined under the contract. As
a practical expedient, the group may measure impairment on the basis of an instrument's fair value using
an observable market price.
FRS7
AppxB5(d)
39p65
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the
debtors credit rating), the reversal of the previously recognised impairment loss is recognised in the
consolidated income statement.
(b) Assets classified as available for sale
The group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or a group of financial assets is impaired.
39p67, 68, 70
For debt securities, if any such evidence exists the cumulative loss measured as the difference between
the acquisition cost and the current fair value, less any impairment loss on that financial asset previously
recognised in profit or loss is removed from equity and recognised in profit or loss. If, in a subsequent
period, the fair value of a debt instrument classified as available for sale increases and the increase can
be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the
impairment loss is reversed through the consolidated income statement.
39p67, 68, 69
For equity investments, a significant or prolonged decline in the fair value of the security below its cost is
also evidence that the assets are impaired. If any such evidence exists the cumulative loss measured as
the difference between the acquisition cost and the current fair value, less any impairment loss on that
financial asset previously recognised in profit or loss is removed from equity and recognised in profit
or loss. Impairment losses recognised in the consolidated income statement on equity instruments are
not reversed through the consolidated income statement.
1p119
2.15 Derivative financial instruments and hedging activities
FRS7p21
FRS7p22
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. The method of recognising the resulting gain or loss
depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged. The group designates certain derivatives as either:
(a)
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value
hedge);
(b)
hedges of a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction (cash flow hedge); or
(c)
hedges of a net investment in a foreign operation (net investment hedge).
33

39p88
The group documents at the inception of the transaction the relationship between hedging instruments
and hedged items, as well as its risk management objectives and strategy for undertaking various hedging
transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes
in fair values or cash flows of hedged items.
FRS7p23, 24
The fair values of various derivative instruments used for hedging purposes are disclosed in Note 21.
Movements on the hedging reserve in shareholders equity are shown in Note 30. The full fair value of a
hedging derivative is classified as a non-current asset or liability when the remaining hedged item is
more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item
is less than 12 months. Trading derivatives are classified as a current asset or liability.
39p89
(a) Fair value hedge

Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded
in the income statement, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk. The group only applies fair value hedge accounting for hedging fixed
interest risk on borrowings. The gain or loss relating to the effective portion of interest rate swaps
hedging fixed rate borrowings is recognised in the income statement within finance expenses. The gain
or loss relating to the ineffective portion is recognised in the income statement within other gains net.
Changes in the fair value of the hedge fixed rate borrowings attributable to interest rate risk are
recognised in the income statement within finance expenses.
39p92
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of
a hedged item for which the effective interest method is used is amortised to profit or loss over the period
to maturity.
39p95
(b) Cash flow hedge
1p79(b)
The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow
hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is
recognised immediately in the income statement within other gains net.
39p99, 100
39p98(b)
Amounts accumulated in equity are reclassified to profit or loss in the period when the hedged item affects
profit or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the
effective portion of interest rate swaps hedging variable rate borrowings is recognised in the income statement
within revenue. However, when the forecast transaction that is hedged results in the recognition of a nonfinancial asset (for example, inventory or plant and equipment), the gains and losses previously deferred in
equity are transferred from equity and included in the initial measurement of the cost of the asset. The
deferred amounts are ultimately recognised in cost of goods sold in the case of inventory or in depreciation in
the case of fixed assets.
39p101
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is
no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred
to the income statement within other gains - net.
39p102(a)(b)
(c) Net investment hedge

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
1p79(b)
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other
comprehensive income. The gain or loss relating to the ineffective portion is recognised in the income
statement.
Gains and losses accumulated in equity are included in the income statement when the foreign operation is
partially disposed of or sold.
34

1p119
2.16 Inventories
2p36(a), 9
2p10, 25
23p6, 7
2p28, 30
39p98(b)
10Sch12(13)
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, firstout (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials,
direct labour, other direct costs and related production overheads (based on normal operating capacity). It
excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business,
less applicable variable selling expenses. Costs of inventories include the transfer from equity of any
gains/losses on qualifying cash flow hedges for purchases of raw materials12.
1p119
FRS7p21
2.17 Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in
the normal operating cycle of the business if longer), they are classified as current assets. If not, they are
presented as non-current assets.
39p43
39p46(a)
39p59
FRS7 Appx B5(f)
FRS7
Appx B5(d)
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less allowance for impairment.
1p119
2.18 Cash and cash equivalents
FRS7p21
7p46
In the consolidated statement of cash flows, cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments with original maturities of three months or less,
and bank overdrafts. In the consolidated and entity balance sheet, bank overdrafts are shown within
borrowings in current liabilities.
1p119
2.19 Share capital
FRS7p21
32p18(a)
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities
(Note 2.21).
32p37
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
1p119
2.20 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within one year
or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current
liabilities.
FRS7p21
39p43
12
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
Management may choose to keep these gains/ (loss) in equity until the acquired asset affects profit or loss. At this time, management should reclassify the gains/ (loss) into profit or loss.
35

1p119
2.21 Borrowings
FRS7p21
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the income statement over the period of the borrowings using
the effective interest method.
39p43
39p47
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and
amortised over the period of the facility to which it relates.
32p18(a)
32p35
Preference shares, if mandatorily redeemable at a specific date or redeemable at the option of the holder,
are classified as liabilities. The dividends on these preference shares are recognised in the income
statement as interest expense.
1p69,71
Borrowings are classified as current liabilities unless the group has an unconditional right to defer
settlement of the liability for at least 12 months after the end of the reporting period.
1p119
2.22 Borrowing costs
23p8
General and specific borrowing costs directly attributable to the acquisition, construction or production
of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
23p12
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
1p119
2.23 Compound financial instruments
32p28
Compound financial instruments issued by the group comprise convertible notes that can be converted to
share capital at the option of the holder, and the number of shares to be issued does not vary with changes in
their fair value.
32AG31
The liability component of a compound financial instrument is recognised initially at the fair value of a
similar liability that does not have an equity conversion option. The equity component is recognised initially
at the difference between the fair value of the compound financial instrument as a whole and the fair value of
the liability component, which is included in shareholders equity in other reserves. Any directly attributable
transaction costs are allocated to the liability and equity components in proportion to their initial carrying
amounts.
32p36
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The equity component of a compound financial
instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
1p69,71
The liability component of a convertible instrument is classified as current unless the group has an
unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting
period.
36

1p119
2.24 Current and deferred income tax
12p58
12p61A
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
(a) Current income tax
12p12
12p46
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the balance sheet date in the countries where the companys subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
(b) Deferred income tax
Inside basis differences
12p24
12p15
12p47
Deferred income tax is recognised, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill,
the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantively enacted by the balance sheet date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
12p24
12p34
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
Outside basis differences
12p39
Deferred income tax liabilities are provided on taxable temporary differences arising from investments
in subsidiaries, associates and joint arrangements, except for deferred income tax liability where the
timing of the reversal of the temporary difference is controlled by the group and it is probable that the
temporary difference will not reverse in the foreseeable future. Generally the group is unable to control
the reversal of the temporary difference for associates. Only when there is an agreement in place that
gives the group the ability to control the reversal of the temporary difference in the foreseeable future,
deferred tax liability in relation to taxable temporary differences arising from the associates
undistributed profits is not recognised.
12p44
Deferred income tax assets are recognised on deductible temporary differences arising from investments
in subsidiaries, associates and joint arrangements only to the extent that it is probable the temporary
difference will reverse in the future and there is sufficient taxable profit available against which the
temporary difference can be utilised.
(c) Offsetting
12p74
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income tax assets and liabilities
relate to income taxes levied by the same taxation authority on either the taxable entity or different
taxable entities where there is an intention to settle the balances on a net basis.
37

1p119
2.25 Employee benefits
A26(1),
(2)&(4),
GEM18.34(1),
(2) &(4)
The group operates various post-employment schemes, including both defined benefit and defined
contribution pension plans and post-employment medical plans.
(a) Pension obligations
19p26
1927
19p28
A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate
entity. The group has no legal or constructive obligations to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior
periods. A defined benefit plan is a pension plan that is not a defined contribution plan.
19p30
Typically defined benefit plans define an amount of pension benefit that an employee will receive on
retirement, usually dependent on one or more factors such as age, years of service and compensation.
19p57,19p58,
19p59,19p60,
19p67,19p68,
19p83
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The
defined benefit obligation is calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of
the related pension obligation. In countries where there is no deep market in such bonds, the market rates
on government bonds are used.
The current service cost of the defined benefit plan, recognised in the income statement in employee benefit
expense, except where included in the cost of an asset, reflects the increase in the defined benefit obligation
results from employee service in the current year, benefit changes, curtailments and settlements.
19p103
Past-service costs are recognised immediately in income statements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the income
statement.
19p57(d)
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive income in the period in which they arise.
19p51
For defined contribution plans, the group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The group has no further payment
obligations once the contributions have been paid. The contributions are recognised as employee benefit
expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund
or a reduction in the future payments is available.
1p119
(b) Other post-employment obligations
19p155
Some group companies provide post-retirement healthcare benefits to their retirees. The entitlement to
these benefits is usually conditional on the employee remaining in service up to retirement age and the
completion of a minimum service period. The expected costs of these benefits are accrued over the period of
employment using the same accounting methodology as used for defined benefit pension plans. Actuarial
gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they arise. These obligations are
valued annually by independent qualified actuaries.
1p119
(c) Termination benefits
19p159
Termination benefits are payable when employment is terminated by the group before the normal
retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The
group recognises termination benefits at the earlier of the following dates: (a) when the group can no longer
withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is
within the scope of IAS/HKAS 37 and involves the payment of termination benefits. In the case of an offer
made to encourage voluntary redundancy, the termination benefits are measured based on the number of
employees expected to accept the offer. Benefits falling due more than 12 months after the end of the
reporting period are discounted to their present value.
38

1p119
(d) Profit-sharing and bonus plans
19p19
The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula
that takes into consideration the profit attributable to the company's shareholders after certain
adjustments. The group recognises a provision where contractually obliged or where there is a past
practice that has created a constructive obligation.
(e) Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made
for the estimated liability for annual leave as a result of services rendered by employees up to the balance
sheet date.
Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.
1p119, MB17.08,
GEM23.08
2.26 Share-based payments

(a) Equity-settled share-based payment transactions
FRS2p15(b)
FRS2p19
FRS2p21
FRS2p20
FRS2p21A
FRS2p15
FRS2p20
The group operates a number of equity-settled, share-based compensation plans, under which the entity
receives services from employees as consideration for equity instruments (options) of the group. The fair
value of the employee services received in exchange for the grant of the options is recognised as an
expense. The total amount to be expensed is determined by reference to the fair value of the options
granted:
including any market performance conditions (for example, an entity's share price);
excluding the impact of any service and non-market performance vesting conditions (for example,
profitability, sales growth targets and remaining an employee of the entity over a specified time
period); and
including the impact of any non-vesting conditions (for example, the requirement for employees to
save or holding shares for a specified period of time).
At the end of each reporting period, the group revises its estimates of the number of options that are
expected to vest based on the non-marketing performance and service conditions. It recognises the
impact of the revision to original estimates, if any, in the income statement, with a corresponding
adjustment to equity.
In addition, in some circumstances employees may provide services in advance of the grant date and
therefore the grant date fair value is estimated for the purposes of recognising the expense during the
period between service commencement period and grant date.
When the options are exercised, the company issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (and share premium).
(b) Share-based payment transactions among group entities
The grant by the company of options over its equity instruments to the employees of subsidiary
undertakings in the group is treated as a capital contribution. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an
increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent
entity accounts.
(c) Social security contributions on share options gains
The social security contributions payable in connection with the grant of the share options is considered
an integral part of the grant itself, and the charge will be treated as a cash-settled transaction.
1p119
2.27 Provisions
37p14
37p72
37p63
Provisions for environmental restoration, restructuring costs and legal claims are recognised when:
the group has a present legal or constructive obligation as a result of past events; it is probable that an
outflow of resources will be required to settle the obligation; and the amount has been reliably
estimated. Restructuring provisions comprise lease termination penalties and employee termination
payments. Provisions are not recognised for future operating losses.
39

37p24
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be small.
37p45
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision due to passage of time is
recognised as interest expense.
1p119
2.28 Revenue recognition
18p35(a)
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts
receivable for goods supplied, stated net of discounts returns and value added taxes. The group
recognises revenue when the amount of revenue can be reliably measured; when it is probable that future
economic benefits will flow to the entity; and when specific criteria have been met for each of the groups
activities, as described below. The group bases its estimates of return on historical results, taking into
consideration the type of customers, the type of transactions and the specifics of each arrangement.
18p14
(a) Sales of goods wholesale

The group manufactures and sells a range of footwear products in the wholesale market. Sales of goods
are recognised when a group entity has delivered products to the wholesaler, the wholesaler has full
discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could
affect the wholesalers acceptance of the products. Certain wholesale customers are given a right of return
if the goods are not accepted by their customers. Revenue is adjusted for the value of expected returns.
Delivery does not occur until the products have been shipped to the specified location, the risks of
obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the
products in accordance with the sales contract, the acceptance provisions have lapsed, or the group has
objective evidence that all criteria for acceptance have been satisfied.
The footwear products are often sold with volume discounts; customers have a right to return faulty
products in the wholesale market. Sales are recorded based on the price specified in the sales contracts,
net of the estimated volume discounts and returns at the time of sale. Accumulated experience is used to
estimate and provide for the discounts and returns. The volume discounts are assessed based on
anticipated annual purchases. No element of financing is deemed present as the sales are made with a
credit term of 60 days, which is consistent with the market practice.
18p14
(b) Sales of goods retail

The group operates a chain of retail outlets for selling shoes and other leather products. Sales of goods are
recognised when a group entity sells a product to the customer. Retail sales are usually in cash or by credit
card.
It is the groups policy to sell its products to the retail customer with a right to return within 28 days.
Accumulated experience is used to estimate and provide for such returns at the time of sale. Revenue is
adjusted for the value of expected returns. The group does not operate any loyalty programmes.
18p14
(c) Internet revenue

Revenue from the sale of goods on the internet is recognised at the point that the risks and rewards of the
inventory have passed to the customer, which is the point of dispatch. Transactions are settled by credit or
payment card.
Provisions are made for internet credit notes based on the expected level of returns, which in turn is based
upon the historical rate of returns.
40

18p20
(d) Sales of services

The group sells design services and transportation services to other shoe manufacturers. For sales of
services, revenue is recognised in the accounting period in which the services are rendered, by reference
to stage of completion of the specific transaction and assessed on the basis of actual services provided as a
proportion of the total service to be provided.
18p30(b)
(e) Royalty income

Royalty income is recognised in the income statement on an accruals basis in accordance with the
substance of the relevant agreements.
17p50
(f) Rental income

Rental income from investment property is recognised in the income statement on a straight-line basis
over the term of the lease.
18p30(a)
2.29 Interest income
39p63
Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the
group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and continues unwinding the discount as interest
income. Interest income on impaired loans and receivables is recognised using the original effective interest
rate.
1p119
2.30 Dividend income
18p30(c)
Dividend income is recognised when the right to receive payment is established.
1p119
2.31 Leases
17p33
SIC-15p5
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from the
lessor) are charged to the income statement on a straight-line basis over the period of the lease.
17p27
The group leases certain property, plant and equipment. Leases of property, plant and equipment where the
group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases
are capitalised at the leases commencement at the lower of the fair value of the leased property and the
present value of the minimum lease payments.
17p20
17p27
Each lease payment is allocated between the liability and finance charges. The corresponding rental
obligations, net of finance charges, are included in other long-term payables. The interest element of the
finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each period. The property, plant and equipment
acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.
1p119
10p12
Dividend distribution to the companys shareholders is recognised as a liability in the groups and the
companys financial statements in the period in which the dividends are approved by the companys
shareholders or directors, where appropriate.
1p119

Exceptional items are disclosed and described separately in the financial statements where it is necessary to
do so to provide further understanding of the financial performance of the group. They are material items of
income or expense that have been shown separately due to the significance of their nature or amount.
41

Commentary Summary of significant accounting policies

Statement of compliance with IFRS/HKFRS
1p16
1.
2.
An entity whose financial statements and notes comply with IFRS/HKFRS makes an explicit and unreserved statement
of such compliance in the notes. The financial statements and notes are not described as complying with IFRS/HKFRS
unless they comply with all the requirements of IFRS/HKFRS.
Where an entity can make the explicit and unreserved statement of compliance in respect of only:
(a)
the parent financial statements and notes, or

the consolidated financial statements and notes,
(b)
it clearly identifies to which financial statements and notes the statement of compliance relates.
Summary of accounting policies
3.
A summary of significant accounting policies includes:
1p117(a)
(a) The measurement basis (or bases) used in preparing the financial statements; and
1p117(b)
(b) The other accounting policies used that are relevant to an understanding of the financial statements.
1p116
4.
The summary may be presented as a separate component of the financial statements.
1p119
5.
In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure
would assist users in understanding how transactions, other events and conditions are reflected in the reported
financial performance and financial position. Some IFRS/HKFRSs specifically require disclosure of particular
accounting policies, including choices made by management between different policies they allow. For example,
IAS/HKAS 16, Property, plant and equipment, requires disclosure of the measurement bases used for classes of
property, plant and equipment.
Changes in accounting policies

Initial application of IFRS/HKFRS
8p28
6.
When initial application of an IFRS/HKFRS:

(a) has an effect on the current period or any prior period,
(b) would have such an effect except that it is impracticable to determine the amount of the adjustment, or
(c) might have an effect on future periods, an entity discloses:
i.
the title of the IFRS/HKFRS;
ii.
when applicable, that the change in accounting policy is made in accordance with its transitional provisions;
iii.
the nature of the change in accounting policy;
iv.
when applicable, a description of the transitional provisions;
v.
when applicable, the transitional provisions that might have an effect on future periods;
vi.
for the current period and each prior period presented, to the extent practicable, the amount of the
adjustment
- for each financial statement line item affected;
- if IAS/HKAS 33, Earnings per share, applies to the entity, for basic and diluted earnings per share,
vii.
the amount of the adjustment relating to periods before those presented, to the extent practicable; and
viii.
if retrospective application required by paragraph 19(a) or (b) of IAS/HKAS 8, Accounting policies, changes
in accounting estimates and errors, is impracticable for a particular prior period, or for periods before those
presented, the circumstances that led to the existence of that condition and a description of how and from
when the change in accounting policy has been applied.
Financial statements of subsequent periods need not repeat these disclosures.
42

Voluntary change in accounting policy

8p29
7.
When a voluntary change in accounting policy:

(a)
has an effect on the current period or any prior period,
(b)
would have an effect on that period except that it is impracticable to determine the amount of the
adjustment, or
(c)
might have an effect on future periods,

an entity discloses:
(i) the nature of the change in accounting policy;
(ii) the reasons why applying the new accounting policy provides reliable and more relevant information;
(iii) for the current period and each prior period presented, to the extent practicable, the amount of the
adjustment:
for each financial statement line item affected, and
if IAS/HKAS 33 applies to the entity, for basic and diluted earnings per share;
(iv) the amount of the adjustment relating to periods before those presented, to the extent practicable;
and
(v)
if retrospective application is impracticable for a particular prior period, or for periods before those
presented, the circumstances that led to the existence of that condition and a description of how and
from when the change in accounting policy has been applied.
Financial statements of subsequent periods need not repeat these disclosures.

Change during interim periods
1p112(c)
8.
There is no longer an explicit requirement to disclose the financial effect of a change in accounting policy that
was made during the final interim period on prior interim financial reports of the current annual reporting
period. However, where the impact on prior interim reporting periods is significant, an entity should consider
explaining this fact and the financial effect.
IFRS/HKFRSs issued but not yet effective

8p30
8p31
9.
10.
11.
When an entity has not applied a new IFRS/HKFRS that has been issued but is not yet effective, it discloses:
(a)
this fact, and
(b)
known or reasonably estimable information relevant to assessing the possible impact that application of
the new IFRS/HKFRS will have on the entitys financial statements in the period of initial application.
An entity considers disclosing:

(a)
the title of the new IFRS/HKFRS;
(b)
the nature of the impending change or changes in accounting policy;
(c)
the date by which application of the IFRS/HKFRS is required;
(d)
the date as at which it plans to apply it initially; and
(e)
either:
(i)
a discussion of the impact that initial application of the IFRS/HKFRS is expected to have on the
entitys financial statements, or
(ii)
if that impact is not known or reasonably estimable, a statement to that effect.
Our view is that disclosures in the paragraph above are not necessary in respect of standards and
interpretations that are clearly not applicable to the entity (for example industry-specific standards) or that are
not expected to have a material effect on the entity. Instead, disclosure should be given in respect of the
developments that are, or could be, significant to the entity. Management will need to apply judgement in
determining whether a standard is expected to have a material effect. The assessment of materiality should
consider the impact both on previous transactions and financial position and on reasonably foreseeable future
transactions. For pronouncements where there is an option that could have an impact on the entity, the
management expectation on whether the entity will use the option should be disclosed.
43

3.

3.1 Financial risk factors
FRS7p31
The group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value
interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The group's overall
risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the group's financial performance. The group uses derivative financial
instruments to hedge certain risk exposures.
Risk management is carried out by a central treasury department (group treasury) under policies approved
by the board of directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the group's operating units. The board provides written principles for overall risk
management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate
risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and
investment of excess liquidity.
(a) Market risk
(i) Foreign exchange risk
FRS7p33(a)
The group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the US dollar and the UK pound. Foreign exchange risk arises from
future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
FRS7p33(b), 22(c)
Management has set up a policy to require group companies to manage their foreign exchange risk against
their functional currency. The group companies are required to hedge their entire foreign exchange risk
exposure with the group treasury. To manage their foreign exchange risk arising from future commercial
transactions and recognised assets and liabilities, entities in the group use forward contracts, transacted
with group treasury. Foreign exchange risk arises when future commercial transactions or recognised assets
or liabilities are denominated in a currency that is not the entity's functional currency.
FRS7p22(c)
The group treasury's risk management policy is to hedge between 75% and 100% of anticipated cash flows
(mainly export sales and purchase of inventory) in each major foreign currency for the subsequent 12
months. Approximately 90% (2013: 95%) of projected sales in each major currency qualify as `highly
probable' forecast transactions for hedge accounting purposes.
FRS7p33(a)(b)
FRS7p22(c)
The group has certain investments in foreign operations, whose net assets are exposed to foreign currency
translation risk. Currency exposure arising from the net assets of the group's foreign operations is managed
primarily through borrowings denominated in the relevant foreign currencies.
FRS7p40
FRS7 IG36
At 31 December 2014, if Hong Kong dollar had weakened/strengthened by x13% against the US dollar with
all other variables held constant, post-tax profit for the year would have been HK$362,000 (2013:
HK$51,000) higher/lower, mainly as a result of foreign exchange gains/losses on translation of US dollardenominated trade receivables, financial assets at fair value through profit or loss, debt securities classified
as available-for-sale and foreign exchange losses/gains on translation of US dollar-denominated
borrowings. Profit is more sensitive to movement in Hong Kong dollar/US dollar exchange rates in 2014
than 2013 because of the increased amount of US dollar-denominated borrowings. Similarly, the impact on
equity would have been HK$6,850,000 (2013: HK$6,650,000) higher/lower due to an increase in the
volume of cash flow hedging in US dollars.
IFRS/HKFRS 7p40 requires a sensitivity analysis to be disclosed, showing how profit or loss and equity would have been affected by reasonably
possible changes in the relevant risk variable (e.g. foreign exchange risk). Please refer to IFRS/HKFRS 7B19 for guidance on how to estimate the
reasonably possible change in the risk variable.
13
44

At 31 December 2014, if Hong Kong dollar had weakened/strengthened by x14a% against the UK pound with
all other variables held constant, post-tax profit for the year would have been HK$135,000 (2013:
HK$172,000) lower/higher, mainly as a result of foreign exchange losses/gains on translation of UK pounddenominated trade receivables, financial assets at fair value through profit or loss, debt securities classified
as available-for-sale and foreign exchange losses/gains on translation of UK pound-denominated
borrowings.
(ii) Price risk
FRS7p33(a)(b)
The group is exposed to equity securities price risk because of investments held by the group and classified
on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss. The
group is not exposed to commodity price risk. To manage its price risk arising from investments in equity
securities, the group diversifies its portfolio. Diversification of the portfolio is done in accordance with the
limits set by the group.
The group's investments in equity of other entities that are publicly traded are included in one of the
following three equity indexes: DAX equity index, Dow Jones equity index and FTSE 100 UK equity index.
FRS7p40
FRS7IG36
The table below summarises the impact of increases/decreases of the three equity indexes on the group's
post-tax profit for the year and on equity. The analysis is based on the assumption that the equity indexes
had increased/decreased by x14a% with all other variables held constant and all the group's equity
instruments moved according to the historical correlation with the index:
Impact on other
Impact on post-tax components of equity in
profit in HK$000
HK$000
Index
2014
2013
2014
2013
DAX
Dow Jones
FTSE 100 UK
200
150
60
120
120
30
290
200
160
290
70
150
Post-tax profit for the year would increase/decrease as a result of gains/losses on equity securities classified
as at fair value through profit or loss. Other components of equity would increase/decrease as a result of
gains/losses on equity securities classified as available-for-sale.
(iii) Cash flow and fair value interest rate risk
FRS7p33(a)(b),
FRS7p22(c)
The group's interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates
expose the group to cash flow interest rate risk which is partially offset by cash held at variable rates.
Borrowings obtained at fixed rates expose the group to fair value interest rate risk. Group policy is to
maintain approximately 60% of its borrowings in fixed rate instruments. During 2014 and 2013, the group's
borrowings at variable rate were denominated in the HK dollar and the UK pound.
FRS7p33(a)(b),
FRS7p22(c)
The Companys long-term borrowings and loans to subsidiaries were issued at fixed rates and interest free
respectively, and expose the Company to fair value interest rate risk.
FRS7p22(b)(c)
The group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these
scenarios, the group calculates the impact on profit and loss of a defined interest rate shift. For each
simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that
represent the major interest-bearing positions.
Based on the simulations performed, the impact on post-tax profit of a x14a% shift would be a maximum
increase of HK$41,000 (2013: HK$37,000) or decrease of HK$34,000 (2013: HK$29,000), respectively.
The simulation is done on a quarterly basis to verify that the maximum loss potential is within the limit
given by the management.
14a IFRS/HKFRS 7p40 requires a sensitivity analysis to be disclosed, showing how profit or loss and equity would have been affected by reasonably possible
changes in the relevant risk variable (e.g. foreign exchange risk). Please refer to IFRS/HKFRS 7B19 for guidance on how to estimate the reasonably possible
change in the risk variable.
45

FRS7p22(b)(c)
Based on the various scenarios, the group manages its cash flow interest rate risk by using floating-to-fixed
interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating
rates to fixed rates. Generally, the group raises long-term borrowings at floating rates and swaps them into
fixed rates that are lower than those available if the group borrowed at fixed rates directly. Under the interest
rate swaps, the group agrees with other parties to exchange, at specified intervals (primarily quarterly), the
difference between fixed contract rates and floating-rate interest amounts calculated by reference to the
agreed notional amounts.
FRS7p22(b)(c)
Occasionally the group also enters into fixed-to-floating interest rate swaps to hedge the fair value interest
rate risk arising where it has borrowed at fixed rates in excess of the 60% target.
FRS7p40
FRS7IG36
At 31 December 2014, if interest rates on Hong Kong dollar-denominated borrowings had been x14b basis
points higher/lower with all other variables held constant, post-tax profit for the year would have been
HK$22,000 (2013: HK$21,000) lower/higher, mainly as a result of higher/lower interest expense on
floating rate borrowings; other components of equity would have been HK$5,000 (2013: HK$3,000)
lower/higher mainly as a result of a decrease/increase in the fair value of fixed rate financial assets classified
as available-for-sale.
At 31 December 2014, if interest rates on UK pound-denominated borrowings at that date had been x14bbasis
points higher/lower with all other variables held constant, post-tax profit for the year would have been
HK$57,000 (2013: HK$38,000) lower/higher, mainly as a result of higher/lower interest expense on
floating rate borrowings; other components of equity would have been HK$6,000 (2013: HK$4,000)
lower/higher mainly as a result of a decrease/increase in the fair value of fixed rate financial assets classified
as available-for-sale.
(b) Credit risk
FRS7p33(a)(b)
FRS7p34(a)
Credit risk is managed on group basis, except for credit risk relating to accounts receivable balances. Each
local entity is responsible for managing and analysing the credit risk for each of their new clients before
standard payment and delivery terms and conditions are offered. Credit risk arises from cash and cash
equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as
credit exposures to wholesale and retail customers, including outstanding receivables and committed
transactions. For banks and financial institutions, only independently rated parties with a minimum rating
of A are accepted. If wholesale customers are independently rated, these ratings are used. If there is no
independent rating, risk control assesses the credit quality of the customer, taking into account its financial
position, past experience and other factors. Individual risk limits are set based on internal or external ratings
in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Sales to
retail customers are settled in cash or using major credit cards. See Notes 19b and 22 for further disclosure
on credit risk.
No credit limits were exceeded during the reporting period, and management does not expect any losses
from non-performance by these counterparties.
(c) Liquidity risk
FRS7p33(a)(b)
FRS7p34(a)
Cash flow forecasting is performed in the operating entities of the group in and aggregated by group
finance. Group finance monitors rolling forecasts of the group's liquidity requirements to ensure it has
sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn
committed borrowing facilities (Note 32) at all times so that the group does not breach borrowing limits or
covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration
the group's debt financing plans, covenant compliance, compliance with internal balance sheet ratio
targets and, if applicable external regulatory or legal requirements for example, currency restrictions.
IFRS/HKFRS 7p40 requires a sensitivity analysis to be disclosed, showing how profit or loss and equity would have been affected by reasonably possible
changes in the relevant risk variable (e.g. foreign exchange risk). Please refer to IFRS/HKFRS 7B19 for guidance on how to estimate the reasonably possible
change in the risk variable.
14b
46

FRS7p33(a)(b)
39(c)
FRS7 B11E
Surplus cash held by the operating entities over and above balance required for working capital
management are transferred to the group Treasury. Group Treasury invests surplus cash in time deposits,
money market deposits and marketable securities, choosing instruments with appropriate maturities or
sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts. At
the reporting date, the group held cash and cash equivalents of HK$14,928,000 (2013: HK$32,062,000)
(Note 25) and trade receivables of HK$18,065,000 (2013: HK$17,102,000) (Note 22) that are expected to
readily generate cash inflows for managing liquidity risk. In addition, the group holds listed equity
securities for trading of HK$11,820,000 (2013: HK$7,972,000) (Note 24), which could be readily realised
to provide a further source of cash if the need arose.
FRS7p39(a)(b)
The table below analyses the groups and the companys non-derivative financial liabilities and net-settled
derivative financial liabilities into relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the
analysis if their contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows14c.
Between 3
Less than 3 months and 1
months
year15
HK$000
Group
At 31 December 2014
Borrowings (exclude finance
lease liabilities)16
Finance lease liabilities
Trading and net settled
derivative financial
instruments (interest rate
swaps)
Financial guarantee contracts17
At 31 December 2013
Borrowings (excluding finance
lease liability)16
Trading and net settled
derivative financial
instruments (interest rate
swaps)
Financial guarantee contracts17
Company
At 31 December 2014
Borrowings
At 31 December 2013
Borrowings
14c
15
16
17
HK$000
Between 1
and 2
years15
Between 2
and 5
years15
Over 5 years15
HK$000
HK$000
HK$000
5,112
15,384
22,000
67,457
38,050
639
2,110
1,573
4,719
2,063
280
10
116
41
12,543
-
2,12516
-
4,061
697
12,197
2,506
11,575
1,790
58,679
5,370
38,103
2,891
317
15
81
50
9,214
-
2,30416
-
58,620
31,600
35,240
IFRS/HKFRS7 p39 (a) (b) The amounts included in the table are the contractual undiscounted cash flows, except for trading derivatives, which are
included at their fair value (see below). As a result, these amounts will not reconcile to the amounts disclosed on the balance sheet except for shortterm payables where discounting is not applied. Entities can choose to add a reconciling column and a final total that ties into the balance sheet, if
they wish.
The specific time-buckets presented are not mandated by the standard but are based on a choice by management based on how the business is
managed. Sufficient time buckets should be provided to give sufficient granularity to provide the reader with an understanding of the entitys
liquidity.
The maturity analysis applies to financial instruments only and therefore non-financial liabilities and statutory liabilities are not included.
The line item of financial guarantee contracts is shown for illustrative purpose. For details of the disclosure of financial guarantee contracts, please
refer to Appendix V, note 8.
47

FRS7 B10A(a)
Of the HK$67,457,000 disclosed in the 2014 borrowings time band Between 2 and 5 years the group intends
to repay HK$40,000,000 in the first quarter of 2015 (2013: nil).
FRS7p39(b)
The groups trading portfolio derivative instruments with a negative fair value have been included at their fair
value of HK$268,000 (2013: 298,000) within the less than 1 year time bucket. This is because the contractual
maturities are not essential for an understanding of the timing of the cash flows. These contracts are managed
on a net-fair value basis rather than by maturity date. Net settled derivatives comprise interest rate swaps
used by the group to manage the groups interest rate profile.
FRS7p39(b)
All of the non-trading groups gross settled derivative financial instruments are in hedge relationships and are
due to settle within 12 months of the balance sheet date. These contracts require undiscounted contractual
cash inflows of HK$78,756,000 (2013: HK$83,077,000) and undiscounted contractual cash outflows of
HK$78,241,000 (2013: HK$83,366,000).
48

1p134,135,
IG10
3.2 Capital management

The groups objectives when managing capital are to safeguard the groups ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the group monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and
non-current borrowings as shown in the consolidated balance sheet) less cash and cash equivalents. Total
capital is calculated as equity as shown in the consolidated balance sheet plus net debt.
During 2014, the groups strategy, which was unchanged from 2013, was to maintain the gearing ratio within
45% to 50% and a BB credit rating. The BB credit rating has been maintained throughout the period. The gearing
ratios at 31 December 2014 and 2013 were as follows:
2014
HK$000
2013
HK$000
126,837
114,604
(14,928)
(32,062)
Net debt
111,909
82,542
Total equity
135,764
91,630
Total capital
247,673
174,172
45%
47%
Total borrowings (Note 32)

Less: cash and cash equivalents (Note 25)
Gearing ratio
The decrease in the gearing ratio during 2014 resulted primarily from the issue of share capital as part of the
consideration for the acquisition of a subsidiary (Notes 27 and 41).
49

3.3 Fair value estimation

FRS13p93(b)
The table below analyses the groups financial instruments carried at fair value as at 31 December 2014 by
level of the inputs to valuation techniques used to measure fair value. Such inputs are categorised into
three levels within a fair value hierarchy as follows:
FRS13p76
FRS13p81
FRS13p86
FRS13p93(b)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
See Note 17 for disclosures of the investment properties that are measured at fair value and Note 26 for
disclosures of the disposal groups held for sale that are measured at fair value.
Level 1
Level 2
HK$000 HK$000
Assets
profit or loss
Trading derivatives
-Foreign exchange contracts
Trading securities
-Real estate industry
- Retail industry
Derivatives used for hedging
- Interest rate contracts
- Foreign exchange contracts
Equity securities
- Real estate industry
- Retail industry
Debt investments
- Debentures
- Preferred shares
- Debt securities with fixed interest rates
Total assets
Liabilities
Financial liabilities at fair value through
profit or loss
Trading derivatives
Level 3
HK$000
Total
HK$000
250
111
361
8,522
3,298
8,522
3,298
408
695
408
695
13,369
5,366
13,369
5,366
210
78
-
347
210
78
347
30,843
1,700
111
32,654
268
268
Contingent consideration
1,500
1,500
147
180
147
180
Total liabilities
595
1,500
2,095
50

The following table presents the groups assets and liabilities that are measured at fair value at 31
December 2013.
Level 1
Level 2
HK$000 HK$000
Level 3
HK$000
Total
HK$000
Assets
Financial assets at fair value through profit
or loss
Trading derivatives
Trading securities
- Real estate industry
- Retail industry
321
321
4,348
3,624
4,348
3,624
269
606
269
606
8,087
6,559
8,087
6,559
22,618
264
1,460
264
24,078
298
298

Equity securities
- Real estate industries
- Retail industry
Debt investments
- Debt securities with fixed interest rates
Total assets
Liabilities
Financial liabilities at fair value through
profit or loss
Trading derivatives
FRS13p93(c)

132
132

Total liabilities
317
747
317
747
There were no transfers between levels 1 and 2 during the year

(a) Financial instruments in level 1
FRS13p91
The fair value of financial instruments traded in active markets is based on quoted market prices at the
balance sheet date. A market is regarded as active if quoted prices are readily and regularly available
from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm's length basis. The quoted
market price used for financial assets held by the group is the current bid price. These instruments are
included in level 1. Instruments included in level 1 comprise primarily DAX, FTSE 100 and Dow Jones
equity investments classified as trading securities or available-for-sale.
(b) Financial instruments in level 2
FRS13p93(d)
The fair value of financial instruments that are not traded in an active market (for example, over-thecounter derivatives) is determined by using valuation techniques. These valuation techniques maximise
the use of observable market data where it is available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.
51

Specific valuation techniques used to value financial instruments include:
Quoted market prices or dealer quotes for similar instruments.

The fair value of interest rate swaps is calculated as the present value of the estimated
future cash flows based on observable yield curves.
The fair value of forward foreign exchange contracts is determined using forward exchange
rates at the balance sheet date, with the resulting value discounted back to present value.
Other techniques, such as discounted cash flow analysis, are used to determine fair value
for the remaining financial instruments.
Note that all the resulting fair value estimates are included in level 2 except for certain forward foreign
exchange contracts as explained below.
(c) Financial instruments in level 3
FRS13 p93(e)
The following table presents the changes in level 3 instruments for the year ended 31 December 2014.
Contingent
consideration
in a business
combination
HK$000
Trading derivative
at fair value
through profit or
loss
HK$000
Total
HK$000
Opening balance
Acquisition of ABC group
Transfers into level 3
Gains and losses recognised in profit or loss
1,000
500
115
(4)
1,000
115
496
Closing balance
1,500
111
1,611
FRS 13p93(e)(i)
Total gains or losses for the year included in

profit or loss for assets held at the end of
the year, under Other gains - net
500
(4)
496
FRS 13p93(f)
Changes in unrealised gains or losses for

the year included in profit or loss at the end
of the year
500
(4)
496
52

The following table presents the changes in level 3 instruments for the year ended 31 December 2013.
Trading derivative at fair
value through profit or loss
Opening balance
Settlements
Gains and losses recognised in profit or loss
Closing balance
62
(51)
(11)
-
FRS 13p93(e)(i)
Total gains or losses for the year included in profit or loss for assets
held at the end of the year, under Other gains - net
(11)
FRS 13p93(f)
Changes in unrealised gains or losses for the year included in profit

or loss at the end of the year
See Note 41 for disclosures of the measurement of the contingent consideration.
FRS13p93(h)(i)
In 2014, the group transferred a held-for-trading forward foreign exchange contract from level 2 into level
3. This is because the counterparty for the derivative encountered significant financial difficulties, which
resulted in a significant increase to the discount rate due to increased counterparty credit risk, which is not
based on observable inputs.
FRS13p93(h)(ii)
If the change in the credit default rate would be shifted by 12%, the impact on profit or loss would be
HK$20,000.
53

3.4 Offsetting financial assets and financial liabilities

(a) Financial assets
FRS7p13C
The following financial assets are subject to offsetting, enforceable master netting arrangements and similar
agreements.
Related amounts not set
off in the balance sheet
As at 31
December 2014
Gross
amounts of
recognised
financial
assets
Gross
Net
amounts of amounts of
recognised
financial
financial
assets
liabilities set
presented
off in the
in the
balance
balance
Financial
sheet
sheet instruments
Cash
collateral
received
Net
amount
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
Derivative
financial assets
1,939
(475)
1,464
(701)
763
Cash and cash

equivalents
15,953
(1,025)
14,928
(5,033)
9,895
Trade receivables
18,645
(580)
18,065
(92)
17,973
Total
36,537
(2,080)
34,457
(5,826)
28,631
Gross
Net
recognised
financial
financial
assets
liabilities set
presented
off in the
in the
balance
balance
Financial
sheet
sheet instruments
Cash
collateral
received
Net
amount
As at 31
December 2013
Derivative
financial assets
Cash and cash
equivalents
Trade receivables
Total
Gross
amounts of
recognised
financial
assets
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
1,801
(605)
1,196
(535)
661
32,927
(865)
32,062
(2,905)
29,157
17,172
(70)
17,102
(58)
17,044
51,900
(1,540)
50,360
(3,498)
46,862
54

(b) Financial liabilities

FRS7p13C
The following financial liabilities are subject to offsetting, enforceable master netting arrangements and
similar agreements
Related amounts not set
off in the balance sheet
As at 31
December 2014
Cash
collateral
pledged
Net
amount
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
Derivative
financial liabilities
1,070
(475)
595
(276)
319
Bank overdrafts
3,675
(1,025)
2,650
2,650
Trade payables
10,371
(580)
9,791
(62)
9,729
Total
15,116
(2,080)
13,036
(338)
12,698
Gross Gross amounts

amounts of
of recognised
recognised financial assets
financial
set off in the
liabilities
balance sheet
Net amounts
of financial
liabilities
presented in
the balance
sheet
Financial
instruments
As at 31 December
2013
Cash
collateral
pledged Net amount
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
Derivative
financial liabilities
1,352
(605)
747
(182)
565
Bank overdrafts
7,329
(865)
6,464
(2,947)
3,517
10,060
(70)
9,990
(28)
9,962
18,741
(1,540)
17,201
(3,157)
14,044
Trade payables
Total
FRS7p13E
Gross
amounts of
recognised
financial
liabilities
Gross
Net
recognised
financial
financial
liabilities
assets set off
presented
in the
in the
balance
balance
Financial
sheet
sheet instruments
For the financial assets and liabilities subject to enforceable master netting arrangements or similar
arrangements above, each agreement between the group and the counterparty allows for net settlement of the
relevant financial assets and liabilities when both elect to settle on a net basis. In the absence of such an
election, financial assets and liabilities will be settled on a gross basis, however, each party to the master
netting agreement or similar agreement will have the option to settle all such amounts on a net basis in the
event of default of the other party. According to the terms of each agreement, an event of default includes
failure by a party to make payment when due; failure by a party to perform any obligation required by the
agreement (other than payment) if such failure is not remedied within periods of 30 to 60 days after notice of
such failure is given to the party; or bankruptcy.
55

Commentary disclosure of offsetting of financial assets and financial liabilities

Amendments to IFRS 7/HKFRS, Disclosures Offsetting financial assets and financial liabilities require additional
disclosures to enable users of financial statements to evaluate the effect or the potential effects of netting arrangements,
including rights offset-off associated with an entitys recognised financial assets and recognised financial liabilities, on the
entitys financial position. The disclosures in these amendments are required for all recognised financial instruments that
are set off in accordance with paragraph 42 of IAS/HKAS 32. These disclosures also apply to recognised financial
instruments that are subject to an enforceable master netting arrangement or similar agreements, irrespective of whether
they are set off in accordance with paragraph 42 of IAS/HKAS 32 [IFRS/HKFRS 7 paragraph 13A, B40]. The
amendments do not provide a definition of master netting arrangement however paragraph 50 of IAS/HKAS 32
identifies the following characteristics, which a master netting arrangement would have:
provides for a single net settlement of all financial instruments covered by the agreement in the event of default on,
or termination of, any one contract.
used by financial institutions to provide protection against loss in the event of bankruptcy or other circumstances
that result in a counterparty being unable to meet its obligations.
creates a right of set-off that becomes enforceable and affects the realisation or settlement of individual financial
assets and financial liabilities only following as specified event of default or in other circumstances not expected to
arise in the normal course of business.
Because of the broad scope of the new offsetting requirements, these disclosures are relevant to not only financial
institutions but also corporate entities.
Per IFRS/HKFRS 7 paragraphs B51 and B52, entities may group the quantitative disclosures by type of financial
instrument or by counterparty. The above example only illustrates the disclosures by type of financial instrument. When
disclosure is provided by counterparty, amounts that are individually significant in terms of total counter party amounts
shall be separately disclosed and the remaining individually insignificant counterparty amounts shall be aggregated into
one line item.
56

Commentary financial risk management

Accounting standard for presentation and disclosure of financial instruments
FRS7p3
1.
IFRS/HKFRS 7, Financial instruments: Disclosures, applies to all reporting entities and to all types of financial
instruments except:
Those interests in subsidiaries, associates and joint ventures that are accounted for under IAS/HKAS 27,
`Consolidated and separate financial statements', or IAS 28, Ìnvestments in associates and joint ventures'.
However, entities should apply IFRS 7 to an interest in a subsidiary, associate or joint venture that according
to IAS/HKAS 27 or IAS/HKAS 28 is accounted for under IAS/HKAS 39, `Financial instruments:
Recognition and measurement'. Entities should also apply IFRS/HKFRS 7 to all derivatives on interests in
subsidiaries, associates or joint ventures unless the derivative meets the definition of an equity instrument in
IAS/HKAS 32.
Employers rights and obligations under employee benefit plans, to which IAS/HKAS 19, Employee
benefits, applies.
Insurance contracts as defined in IFRS/HKFRS 4, Insurance contracts. However, IFRS/HKFRS 7 applies to

derivatives that are embedded in insurance contracts if IAS/HKAS 39 requires the entity to account for them
separately. It also applies to financial guarantee contracts if the issuer applies IAS/HKAS 39 in recognising
and measuring the contracts.
Financial instruments, contracts and obligations under share-based payment transactions to which
IFRS/HKFRS 2, Share-based payment, applies, except for contracts within the scope of paragraphs 5-7 of
IAS/HKAS 39, which must be disclosed under IFRS/HKFRS 7.
Puttable financial instruments that are required to be classified as equity instruments in accordance with
paragraphs 16A and 16B or 16C and 16D of IAS/HKAS 32.
Parent entity disclosures

FRS7
2.
Where applicable, all disclosure requirements outlined in IFRS/HKFRS 7 should be made for both the parent
and consolidated group.
Classes of financial instruments

FRS7p6, B1-B3
3.
Where IFRS/HKFRS 7 requires disclosures by class of financial instrument, the entity groups its financial
instruments into classes that are appropriate to the nature of the information disclosed and that take into
account the characteristics of those financial instruments. The entity should provide sufficient information to
permit reconciliation to the line items presented in the balance sheet. Guidance on classes of financial
instruments and the level of required disclosures is provided in Appendix B of IFRS/HKFRS 7.
Level of detail and selection of assumptions information through the eyes of management
FRS7p34(a)
4.
The disclosures in relation to an entitys financial risk management should reflect the information provided
internally to key management personnel. As such, the disclosures that will be provided by an entity, their
level of detail and the underlying assumptions used will vary greatly from entity to entity. The disclosures in
this illustrative financial statement are only one example of the kind of information that may be disclosed; the
entity should consider carefully what may be appropriate in its individual circumstances.
Nature and extent of risks arising from financial instruments

FRS 7p31, 32
5.
The financial statement should include qualitative and quantitative disclosures that enable users to evaluate
the nature and extent of risks arising from financial instruments to which the entity is exposed at the end of
the reporting period. These risks typically include, but are not limited to, credit risk, liquidity risk and market
risk.
Qualitative disclosures
FRS 7p33
6.
An entity should disclose for each type of risk:

(a) The exposures to the risk and how they arise;
(b) The entitys objectives, policies and processes for managing the risk and the methods used to measure
the risk; and
(c) Any changes in (a) or (b) from the previous period.
57

Quantitative disclosures
FRS7
7.
An entity should provide for each type of risk, summary quantitative data on risk exposure at the end of the
reporting period, based on information provided internally to key management personnel and any
concentrations of risk. This information can be presented in narrative form as is done in this publication.
Alternatively, entities could provide the data in a table that sets out the impact of each major risk on each type
of financial instruments. This table could also be a useful tool for compiling the information that should be
disclosed under paragraph 34 of IFRS/HKFRS 7.
8.
If not already provided as part of the summary quantitative data, the entity should also provide the
information in paragraphs 9-15 below, unless the risk is not material.
p34(a), (c)
FRS7p34(b)
Credit risk
FRS7p36, 37
9.
For each class of financial instrument, the entity should disclose:

(a) the maximum exposure to credit risk and any related collateral held;
(b) information about the credit quality of financial assets that are neither past due nor impaired;
(c) the carrying amount of financial assets that would otherwise be past due or impaired whose terms have
been renegotiated;
(d) an analysis of the age of financial assets that are past due but not impaired; and
(e) an analysis of financial assets that are individually determined to be impaired including the factors in
determining that they are impaired.
Liquidity risk
FRS7
p34(a), 39
10.
Information about liquidity risk shall be provided by way of;

(a) a maturity analysis for non-derivative financial liabilities (including issued financial guarantee contracts
but excluding statutory liabilities) that shows the remaining contractual maturities;
(b) a maturity analysis for derivative financial liabilities (see paragraph 12 below for details); and
(c) a description of how the entity manages the liquidity risk inherent in (a) and (b).
FRS7B11F
11.
In describing how liquidity risk is being managed, an entity should consider discussing whether it:
(a) has committed borrowing facilities or other lines of credit that it can access to meet liquidity needs;
(b) holds deposits at central banks to meet liquidity needs;
(c) has very diverse funding sources;
(d) has significant concentrations of liquidity risk in either its assets or its funding sources;
(e) has internal control processes and contingency plans for managing liquidity risk;
(f) has instruments that include accelerated repayment terms (for example, on the downgrade of the entitys
credit rating);
(g) has instruments that could require the posting of collateral (for example, margin calls for derivatives);
(h) has instruments that allow the entity to choose whether it settles its financial liabilities by delivering cash
(or another financial asset) or by delivering its own shares; and
(i) has instruments that are subject to master netting agreements.
Maturity analysis
FRS7 B11B
12.
The maturity analysis for derivative financial liabilities should disclose the remaining contractual maturities if
these maturities are essential for an understanding of the timing of the cash flows. For example, this will be
the case for interest rate swaps in a cash flow hedge of a variable rate financial asset or liability and for all
loan commitments. Where the remaining contractual maturities are not essential for an understanding of the
timing of the cash flows, the expected maturities may be disclosed instead.
FRS7p39, B11D
13.
For derivative financial instruments where gross cash flows are exchanged and contractual maturities are
essential to understanding, the maturity analysis should disclose the contractual amounts that are to be
exchanged on a gross basis. The amount disclosed should be the amount expected to be paid in future
periods, determined by reference to the conditions existing at the end of the reporting period. However,
IFRS/HKFRS 7 does not specify whether current or forward rates should be used. We therefore recommend
that entities explain which approach has been chosen. This approach should be applied consistently.
FRS7 B11
14.
The specific time buckets presented are not mandated by the standard but are based on what is reported
internally to the key management personnel. The entity uses judgement to determine the appropriate number
of time bands.
FRS7 B11D
15.
If the amounts included in the maturity tables are the contractual undiscounted cash flows, these amounts
will not reconcile to the amounts disclosed on the balance sheet for borrowings, derivative financial
instruments and trade and other payables. Entities can choose to add a column with the carrying amounts
that ties into the balance sheet and a reconciling column if they so wish, but this is not mandatory.
FRS 7 B10A
16.
If an outflow of cash could occur either significantly earlier than indicated or be for significantly different
amounts from those indicated in the entitys disclosures about its exposure to liquidity risk, the entity should
state that fact and provide quantitative information that enables users of its financial statements to evaluate
the extent of this risk. This disclosure is not necessary if that information is included in the contractual
maturity analysis.
58

Financing arrangements
7p50(a),
FRS7p39(c)
17.
Committed borrowing facilities are a major element of liquidity management. Entities should therefore
consider providing information about their undrawn facilities. IAS/HKAS 7, Statements of cash flows, also
recommends disclosure of undrawn borrowing facilities that may be available for future operating activities
and to settle capital commitments, indicating any restrictions on the use of these facilities.
Market risk
FRS7p40(a), (b)
18.
Entities should disclose a sensitivity analysis for each type of market risk (currency, interest rate and other
price risk) to which an entity is exposed at the end of the reporting period, showing how profit or loss and
equity would have been affected by reasonably possible changes in the relevant risk variable, as well as the
methods and assumptions used in preparing such an analysis.
FRS7p40(c)
19.
If there have been any changes in methods and assumptions from the previous period, this should be disclosed
together with the reasons for the change.
Foreign currency risk

FRS7 B23
20.
Foreign currency risk can only arise on financial instruments that are denominated in a currency other than
the functional currency in which they are measured. Translation related risks are therefore not included in the
assessment of the entitys exposure to currency risks. Translation exposures arise from financial and
non-financial items held by an entity (for example, a subsidiary) with a functional currency different from the
groups presentation currency. However, foreign currency denominated inter-company receivables and
payables that do not form part of a net investment in a foreign operation are included in the sensitivity analysis
for foreign currency risks, because even though the balances eliminate in the consolidated balance sheet, the
effect on profit or loss of their revaluation under IAS/HKAS 21 is not fully eliminated.
Interest rate risk

21.
Sensitivity to changes in interest rates is relevant to financial assets or financial liabilities bearing floating
interest rates due to the risk that future cash flows will fluctuate. However, sensitivity will also be relevant to
fixed rate financial assets and financial liabilities that are re-measured to fair value.
Fair value disclosures

Financial instruments carried at other than fair value
FRS7p25,29
22.
An entity should disclose the fair value for each class of financial assets and financial liabilities (see paragraph
3 above) in a way that permits it to be compared with its carrying amount. Fair values do not need to be
disclosed for the following:
(a) when the carrying amount is a reasonable approximation of fair value.
(b) investments in equity instruments (and derivatives linked to such equity instruments) that do not have a
quoted market price in an active market and that are measured at cost in accordance with IAS/HKAS 39
because their fair value cannot be measured reliably; or
(c) a contract containing a discretionary participation feature (as described in IFRS/HKFRS 4, Insurance
contracts) where the fair value of that feature cannot be measured reliably.
23.
The information about the fair values can be provided either in a combined financial instruments note or in the
individual notes. However, fair values should be separately disclosed for each class of financial instrument (see
paragraph 3 above), which means that each line item in the table would have to be broken down into individual
classes. For that reason, Specimen Holdings Limited has chosen to provide the information in the relevant
notes.
Methods and assumptions in determining fair value

FRS13p91
24.
An entity shall disclose information that helps users of its financial statements assess both of the following:
(a) for assets and liabilities that are measured at fair value on a recurring or non-recurring basis in the
statement of financial position after initial recognition, the valuation techniques and inputs used to develop
those measurements.
(b) for recurring fair value measurements using significant unobservable inputs (Level 3), the effect of the
measurements on profit or loss or other comprehensive income for the period.
Financial instruments measured at cost where fair value cannot be determined reliably
FRS 7p30
25.
If the fair value of investments in unquoted equity instruments, derivatives linked to such equity instruments
or a contract containing a discretionary participation feature (as described in IFRS/HKFRS 4, Insurance
contracts) cannot be measured reliably, the entity should disclose:
(a) the fact that fair value information has not been disclosed because it cannot be measured reliably;
(b) a description of the financial instruments, their carrying amount and an explanation of why fair value
cannot be measured reliably;
(c)
information about the market for the instruments;
(d) information about whether and how the entity intends to dispose of the financial instruments; and
(e) if the instruments are subsequently derecognised, that fact, their carrying amount at the time of
derecognition and the amount of gain or loss recognised.
59

Fair value measurements recognised in the balance sheet
FRS13p93
26.
For fair value measurements recognised in the balance sheet, the entity should also disclose for each class of
financial instruments:
(a)
the level in the fair value hierarchy into which the fair value measurements are categorised;
(b)
any significant transfers between level 1 and level 2 of the fair value hierarchy and the reasons for those
transfers;
(c)
for fair value measurements in level 3 of the hierarchy, a reconciliation from the beginning balances to
the ending balances, showing separately changes during the period attributable to the following:
(i) total gains or losses for the period recognised in profit or loss and the line item(s) which they are
recognised, together with a description of where they are presented in the statement of
comprehensive income or the income statement (as applicable);
(ii) total gains or losses recognised in other comprehensive income;
(iii) purchases, sales issues and settlements (each type disclosed separately); and
(iv) transfers into or out of level 3 and the reasons for those transfers;
FRS13p93(b)
27.
(d)
for recurring fair value measurements categorised within Level 3 of the fair value hierarchy, the amount
of the total gains or losses for the period included in profit or loss that is attributable to the change in
unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period,
and the line item(s) in profit or loss in which those unrealised gains or losses are recognised.
(e)
for recurring fair value measurements in level 3:

(i)
for all such measurements, a narrative description of the sensitivity of the fair value measurement
to changes in unobservable inputs if a change in those inputs to a different amount might result in
a significantly higher or lower fair value measurement. If there are interrelationships between
those inputs and other unobservable inputs used in the fair value measurement, an entity shall also
provide a description of those interrelationships and of how they might magnify or mitigate the
effect of changes in the unobservable inputs on the fair value measurement. To comply with that
disclosure requirement, the narrative
description of the sensitivity to changes in
unobservable inputs shall include, at a minimum, the unobservable inputs disclosed.
(ii)
for financial assets and financial liabilities, if changing one or more of the unobservable inputs to
reflect reasonably possible alternative assumptions would change fair value significantly, an entity
shall state that fact and disclose the effect of those changes. The entity shall disclose how the effect
of a change to reflect a reasonably possible alternative assumption was calculated. For that
purpose, significance shall be judged with respect to profit or loss, and total assets or total
liabilities, or, when changes in fair value are recognised in other comprehensive income, total
equity.
Entities should classify fair value measurements using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy should have the following levels:
(a)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b)
Level 2: inputs other than quoted prices that are observable for the asset or liability, either directly (for
example, as prices) or indirectly (for example, derived from prices).
(c)
Level 3: inputs for the asset or liability that are not based on observable market data.
The appropriate level is determined on the basis of the lowest level input that is significant to the fair value
measurement.
Additional information where quantitative data about risk exposure is unrepresentative

FRS7p35, 42
28.
If the quantitative data disclosed under paragraphs 7, 9, 10 and 14 above is unrepresentative of the entitys
exposure to risk during the period, the entity should provide further information that is representative. If the
sensitivity analyses are unrepresentative of a risk inherent in a financial instrument (for example, where the
year-end exposure does not reflect the exposure during the year), the entity should disclose that fact and the
reason why the sensitivity analyses are unrepresentative.
60


Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
1p125
4.1 Critical accounting estimates and assumptions

The group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are addressed below.
(a) Estimated impairment of goodwill
The group tests annually whether goodwill has suffered any impairment, in accordance with the
accounting policy stated in Note 2.6. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of estimates (Note18).
1p129,
36p134(f)(i)-(iii)
An impairment charge of HK$4,650,000 arose in the wholesale CGU in Step-land (included in the
Russian operating segment) during the course of the 2014 year, resulting in the carrying amount of the
CGU being written down to its recoverable amount. If the budgeted gross margin used in the value-in-use
calculation for the wholesale CGU in Step-land had been 10% lower than managements estimates at 31
December 2014 (for example, 46% instead of 56%), the group would have recognised a further impairment
of goodwill by HK$100,000 and would need to reduce the carrying value of property, plant and equipment
by HK$300,000.
If the estimated cost of capital used in determining the pre-tax discount rate for the wholesale CGU in
Step-land had been 1% higher than managements estimates (for example, 13.8% instead of 12.8%), the
group would have recognised a further impairment against goodwill of HK$300,000 and would need to
reduce the carrying value of property, plant and equipment by HK$400,000.
(b) Income taxes
The group is subject to income taxes in numerous jurisdictions. Significant judgement is required in
determining the worldwide provision for income taxes. There are many transactions and calculations for
which the ultimate tax determination is uncertain. The group recognises liabilities for anticipated tax audit
issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the current
and deferred income tax assets and liabilities in the period in which such determination is made.
Were the actual final outcome (on the judgement areas) of expected cash flows to differ by 10% from
managements estimates, the group would need to:
Increase the income tax liability by HK$120,000 and the deferred tax liability by HK$230,000, if
unfavourable; or
Decrease the income tax liability by HK$110,000 and the deferred tax liability by HK$215,000, if
favourable.
(c) Fair value of derivatives and other financial instruments

FRS13p91
The fair value of financial instruments that are not traded in an active market (for example, over-thecounter derivatives) is determined by using valuation techniques. The group uses its judgement to select a
variety of methods and make assumptions that are mainly based on market conditions existing at the end
of each reporting period. The group has used discounted cash flow analysis for various foreign exchange
contracts that are not traded in active markets.
The carrying amount of foreign exchange contracts would be an estimated HK$12,000 lower
orHK$15,000 higher were the discount rate used in the discount cash flow analysis to differ by 10% from
management's estimates.
(d) Fair value of investment properties
40p46(c)
40p75(d)
The fair value of investment properties is determined by using valuation technique. Details of the
judgement and assumptions have been disclosed in Note 17.
61

(e) Revenue recognition

The group uses the percentage-of-completion method in accounting for its fixed-price contracts to deliver
design services. Use of the percentage-of-completion method requires the group to estimate the services
performed to date as a proportion of the total services to be performed. Were the proportion of services
performed to total services to be performed to differ by 10% from managements estimates, the amount of
revenue recognised in the year would be increased by HK$1,175,000 if the proportion performed were
increased, or would be decreased by HK$1,160,000 if the proportion performed were decreased.
(f) Pension benefits
The present value of the pension obligations depends on a number of factors that are determined on an
actuarial basis using a number of assumptions. The assumptions used in determining the net cost
(income) for pensions include the discount rate. Any changes in these assumptions will impact the
carrying amount of pension obligations.
The group determines the appropriate discount rate at the end of each year. This is the interest rate that
should be used to determine the present value of estimated future cash outflows expected to be required to
settle the pension obligations. In determining the appropriate discount rate, the group considers the
interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits
will be paid, and that have terms to maturity approximating the terms of the related pension obligation.
Other key assumptions for pension obligations are based in part on current market conditions. Additional
information is disclosed in Note 34.
Were the discount rate used to differ by x% from managements estimates, the carrying amount of pension
obligations would be an estimated HK$425,000 lower or HK$450,000 higher.
1p122
4.2 Critical judgements in applying the companys accounting policies

(a) Revenue recognition
The group has recognised revenue amounting to HK$950,000 for sales of goods to L&Co in the UK during
2014. The buyer has the right to return the goods if their customers are dissatisfied. The group believes
that, based on past experience with similar sales, the dissatisfaction rate will not exceed 3%. The group
has, therefore, recognised revenue on this transaction with a corresponding provision against revenue for
estimated returns. If the estimate changes by x%, revenue will be reduced/increased by HK$10,000.
(b) Impairment of available-for-sale equity investments
The group follows the guidance of IAS/HKAS 39 to determine when an available-for-sale equity
investment is impaired. This determination requires significant judgement. In making this judgement, the
group evaluates, among other factors, the duration and extent to which the fair value of an investment is
less than its cost; and the financial health of and short-term business outlook for the investee, including
factors such as industry and sector performance, changes in technology and operational and financing
cash flow.
If all of the declines in fair value below cost were considered significant or prolonged, the group would
suffer an additional loss of HK$1,300,000 in its 2013 financial statements, being the transfer of the
accumulated fair value adjustments recognised in equity on the impaired available-for-sale financial assets
to the income statement.
(c) Consolidation of entities in which the group holds less than 50%
Management consider that the group has de facto control of Delta Inc. even though it has less than 50% of
the voting rights. The group is the majority shareholder of Delta Inc. with a 40% equity interest, while all
other shareholders individually own less than 1% of its equity shares. There is no history of other
shareholders forming a group to exercise their votes collectively.
62

(d) Investment in Alfa Limited

Management has assessed the level of influence that the Group has on Alfa Limited and determined that it
has significant influence even though the shareholding is below 20% because of the board representation
and contractual terms. Consequently, this investment has been classified as an associate.
(e) Joint arrangements
The group holds 50% of the voting rights of its joint arrangement. The group has joint control over this
arrangement as under the contractual agreements, unanimous consent is required from all parties to the
agreements for all relevant activities.
The groups joint arrangement is structured as a limited company and provides the group and the parties
to the agreements with rights to the net assets of the limited company under the arrangements. Therefore,
this arrangement is classified as a joint venture.
Commentary critical accounting estimates and judgements

Goodwill acquired in a business combination is allocated to a CGU or groups of CGUs, from the acquisition date, that is
expected to benefit from the synergies of the combination, for impairment assessment purpose. Goodwill is tested for
impairment at a level that reflects the way an entity manages its operations and with which the goodwill would be
naturally associated. The allocation of goodwill can be an area of judgement depends on facts and circumstances. If it is a
critical judgement, disclosure of the basis on which management make these judgements should be disclosed in the
financial statements in accordance with IAS/HKAS 1 para. 122.
63

Segment information
A4(3), A7
GEM18.50B(3)
GEM18.08
FRS8
p22(a)
The strategic steering committee is the groups chief operating decision-maker. Management has determined the
operating segments based on the information reviewed by the strategic steering committee for the purposes of
allocating resources and assessing performance.
FRS8
p22(a)(b)
The strategic steering committee considers the business from both a geographic and product perspective.
Geographically, management considers the performance in HK, UK, US, China and Russia. From a product
perspective, management separately considers the wholesale and retail activities in these geographies. The group
only has retail activities in the HK and US. The wholesale segments derive their revenue primarily from the
manufacture and wholesale sale of the group's own brand of shoes, Footsy Tootsy. The HK and US retail segments
derive their revenue from retail sales of shoe and leather goods including the group's own brand and other major
retail shoe brands.
FRS8
p22(a)
Although the China segment does not meet the quantitative thresholds required by IFRS/HKFRS 8 for reportable
segments, management has concluded that this segment should be reported, as it is closely monitored by the
strategic steering committee as a potential growth region and is expected to materially contribute to group
revenue in the future.
FRS8
p18
During 2013, US retail did not qualify as a reportable operating segment. However, with the acquisition in 2014 of
ABC group (see Note 41), US retail qualifies as a reportable operating segment; the comparatives have been
restated.
FRS8p16
All other segments primarily relate to the sale of design services and goods transportation services to other shoe
manufacturers in the UK and HK and wholesale shoe revenue from the Central American region. These activities
are excluded from the reportable operating segments, as these activities are not reviewed by the strategic steering
committee.
FRS8
p27(b), 28
The strategic steering committee assesses the performance of the operating segments based on a measure of
adjusted EBITDA. This measurement basis excludes discontinued operations and the effects of non-recurring
expenditure from the operating segments such as restructuring costs, legal expenses and goodwill impairments
when the impairment is the result of an isolated, non-recurring event. The measure also excludes the effects of
equity-settled share-based payments and unrealised gains/losses on financial instruments. Interest income and
expenditure are not allocated to segments, as this type of activity is driven by the central treasury function, which
manages the cash position of the group.
Revenue
FRS8p27(a)
Sales between segments are carried out at arm's length. The revenue from external parties reported to the strategic
steering committee is measured in a manner consistent with that in the income statement.
2014
2013 (Restated)
Inter-
Revenue from
Total
Inter-
Total segment
segment
external
segment
segment
external
revenue
revenue
customers
revenue
revenue
customers
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
HK wholesale
46,638
(11,403)
35,235
57,284
(11,457)
45,827
HK retail
43,257
43,257
1,682
1,682
US wholesale
28,820
(7,364)
21,456
33,990
(6,798)
27,192
US retail
42,672
42,672
2,390
2,390
Russia
26,273
(5,255)
21,018
8,778
(1,756)
7,022
China
5,818
(1,164)
4,654
3,209
(642)
2,567
40,273
(8,055)
32,218
26,223
(5,245)
20,978
UK
All other segments
Total
Revenue from
13,155
(2,631)
10,524
5,724
(1,022)
4,702
246,906
(35,872)
211,034
139,280
(26,920)
112,360
64

FRS8 p28(b)
Adjusted EBITDA
2014
HK$000
Adjusted
EBITDA
17,298
9,550
9,146
9,686
12,322
2,323
16,003
3,291
79,619
(24,654)
(1,900)
(1,986)
(737)
(4,650)
7,900
102
(690)
(6,443)
2,059
48,620
HK wholesale
HK retail
US wholesale
US retail
Russia
China
UK
All other segments
Total
Depreciation
Amortisation
Restructuring costs
Legal expenses
Goodwill impairment
Fair value gains on investment properties - net
Unrealised financial instrument gains
Share options granted to directors and employees
Other
Profit before tax and discontinued operations
FRS8p23
2013
(Restated)
HK$000
Adjusted
EBITDA
17,183
800
10,369
1,298
3,471
1,506
10,755
1,973
47,355
(16,248)
(765)
(855)
6,000
101
(822)
(10,588)
1,037
25,215
Other profit and loss disclosures18
Year ended 31 December 2014
Year ended 31 December 2013 (Restated)

Share of
Share of profit
Depreciation
from
and
Goodwill
Restructuring
amortisation
impairment
costs
expense
HK$000
HK$000
HK$000
HK wholesale
(4,617)
HK retail
(5,481)
US wholesale
(2,711)
US retail
Russia
China
UK
profit from
Income tax associates and
associates
Depreciation and
Income tax
joint ventures
amortisation
expense
and joint
ventures
HK$000
HK$000
HK$000
HK$000
HK$000
(2,550)
200
(6,323)
(2,772)
155
(2,780)
(334)
(650)
(1,395)
(4,072)
(1,212)
(5,423)
(3,040)
(331)
(489)
(3,512)
(4,650)
(1,986)
(1,591)
(754)
(509)
(552)
(365)
(476)
(150)
(3,873)
(2,490)
1,078
(4,493)
(2,201)
877
All other
segments
Total
FRS8p23(i)
FRS8p27(f)
18
(385)
(87)
15
(230)
(192)
(10)
(26,554)
(4,650)
(1,986)
(14,298)
1,293
(17,013)
(8,175)
1,022
See Note 18 for details of the impairment of goodwill of HK$4,650,000 in the Russian operating segment in
2014 relating to the decision to reduce manufacturing output. There has been no further impact on the
measurement of the groups assets and liabilities. See note 35 for details of the restructuring costs incurred
in the Russia wholesale segment. There was no impairment charge or restructuring costs recognised in 2013.
Due to the UK operations utilising excess capacity in certain Russian assets that are geographically close to
the UK region, a portion of the depreciation charge of HK$197,000 (2013: HK$50,000) relating to the
Russian assets has been allocated to the UK segment to take account of this.
IFRS/HKFRS 8 para 23 requires disclosures of interest revenue and expense, even if not included in the measure of segment profit and loss. This disclosure
has not been included in the illustrative because these balances are not allocated to segments.
65

FRS8p23,24,
28(c)
Assets 19
HK wholesale
HK retail
US wholesale
US retail
Russia
China
UK
All other segments
Total
Unallocated
Deferred income tax
Available-for-sale
financial assets
Financial assets at fair
value through the
profit and loss
Derivative financial
instruments
Assets of disposal
group classified as
held for sale
Total assets per the
balance sheet
FRS8p27(c)
Total
assets
HK$000
45,201
24,495
41,195
13,988
15,067
24,899
33,571
65,357
263,773
2014
Investments
accounted
for using
equity
method
HK$000
18,649
18,649
2013 (Restated)
Additions to
non-current
assets20
HK$000
35,543
39,817
11,380
1,500
88,240
Total assets
HK$000
43,320
9,580
32,967
8,550
5,067
20,899
36,450
51,896
208,729
3,546
3,383
19,370
14,910
11,820
7,972
1,464
1,196
3,333
303,306
236,190
Investments
accounted for
using equity
method
HK$000
17,053
17,053
Additions to
non-current
assets20
HK$000
47
46
2,971
3,678
6,742
The amounts provided to the strategic steering committee with respect to total assets are measured in a
manner consistent with that of the financial statements. These assets are allocated based on the operations
of the segment and the physical location of the asset.
Investment in shares (classified as available-for-sale financial assets or financial assets at fair value through
profit or loss) held by the group are not considered to be segment assets but rather are managed by the
treasury function. The measure of assets reviewed by the CODM does not include assets held for sale. The
groups interest-bearing liabilities are not considered to be segment liabilities but rather are managed by the
treasury function.
The measures of assets and liabilities have been disclosed for each reportable segment as they are regularly provided to the chief operating decision-maker. If
the chief operating decision-maker does not review a measure of assets or liabilities, they need not be disclosed. These disclosures are for illustrative purposes.
20 The additions to non-current assets excludes financial instruments, deferred tax assets, net defined benefit assets and rights arising under insurance contracts.
19
66

FRS8 p28(d)
Liabilities21a
HK wholesale
HK retail
US wholesale
US retail
Russia wholesale
China wholesale
Europe wholesale
All other segments
Total
Unallocated
Deferred income tax
Borrowings (exclude finance leases)
Liabilities of disposal group classified as held for sale
Total liabilities per the balance sheet
2014
HK$000
2013
HK$000
7,459
2,651
9,110
3,254
5,806
2,583
1,241
5,596
37,700
6,857
2,094
7,783
3,565
4,086
1,971
624
4,643
31,623
11,188
117,839
595
220
167,542
8,184
104,006
747
144,560
The groups borrowings, excluding finance leases and derivative financial liabilities are not considered to
be segment liabilities for reporting to the strategic steering committee as they are managed by the
central treasury function.
21a The measures of assets and liabilities have been disclosed for each reportable segment as they are regularly provided to the chief operating decision-maker. If
the chief operating decision-maker does not review a measure of assets or liabilities, they need not be disclosed. These disclosures are for illustrative purposes.
67

Entity-Wide information
FRS8p32
Breakdown of the revenue from all services is as follows:

2014
HK$000
202,884
8,000
150
211,034
Analysis of revenue by category

Sales of goods
Revenue from services
Royalty income
FRS8p33(a)
2013
HK$000
104,495
7,800
65
112,360
Revenue from external customers by country, based on the destination of the customer:
2014
HK$000
50,697
46,843
21,148
7,233
14,365
10,655
35,949
24,144
211,034
HK
US
Russia
China
Germany
France
Other European countries
Other countries
Total
2013
HK$000
48,951
8,403
8,039
3,840
13,717
6,999
14,168
8,243
112,360
Revenues from the individual countries included in Other European countries and Other countries are not
material.
FRS8p33(b)
Non-current assets, other than financial instruments and deferred income tax assets (there are no
employment benefit assets and rights arising under insurance contracts), by country:
2014
HK$000
61,855
69,037
7,531
4,523
19,526
15,179
8,652
15,077
201,380
HK
US
Russia
China
Germany
France
Other countries
Total
2013
HK$000
39,567
34,055
4,269
4,983
17,459
15,757
7,372
14,743
138,205
Non-current assets in the individual countries included in Other European countries and Other countries are
not material.
FRS8p34
Revenues of approximately HK$32,023,000 (2013: HK$28,034,000) are derived from a single external
customer. These revenues are attributable to the US retail and HK wholesale segments.
10Sch16(2)
A4(1)(a)
GEM18.50B
(1)(a)
Turnover consists of sales from wholesale and retail segments, which are HK$202,884,000 and
HK$104,495,000 for the years ended 31 December 2014 and 2013 respectively21.
21
10 Sch 16(2) Turnover should consist of revenues from principal activities and should not usually include items of revenues and gains that arise incidentally.
68

Commentary Segment information

The commentary that follows explains the entity-wide information requirements in IFRS/HKFRS8, Operating
segments .
FRS 8p31-34
The standard requires all entities that report in accordance with IFRS/HKFRS 8 to make certain entity-wide
disclosures, that is disclosures for the entity as a whole rather than by segment. This requirement also applies to
those entities with only one reportable segment. The reason for requiring this additional information is that some
entities business activities are not organised on the basis of differences in products and services or differences in
geographical areas of operations. For example, an entity might be organised around markets and those markets
might encompass different types of products or different geographical areas. Similarly several of the entitys
reportable segments might provide similar products and services (if the reportable segments are based on
geographical areas) or several reportable segments might cover the same geographical areas (if the entitys reportable
segments are based on different products and services). [IFRS/HKFRS 8p31].
The types of entity wide disclosures are mainly information on the entitys products and services and information on
the entitys geographical areas of operation. These are the types of information that analysts and other users find
useful for assessing trends in performance, concentrations of risk or other purposes.
Entity-wide information should be comparable from period to period. For example, where a previously material
product grouping becomes immaterial, it would continue to be reported in the current period and then reassessed as
to whether it is material in the next period.
The disclosures required in IFRS/HKFRS8p32-34 are not required if they are otherwise provided as part of the
reportable segment information required by the standard. [IFRS/HKFRS 8 p31]. For example, an entity whose
operating segments are based on products and services is not required to provide additional information on its
products and services. The disclosures are also not required where the necessary information is not available and the
cost to develop it would be excessive, but in such a situation that fact must be disclosed. [IFRS/HKFRS 8 p32, 33].
IFRS/HKFRS 8 does not prescribe how revenue should be allocated to geographic areas. An entity may choose to
allocate revenue on the basis of either the customer's location, the location to which the product is shipped (which
may differ from the location in which the customer resides) or the location in which the sale originated. An entity
must disclose the basis it has selected for attributing revenue to geographic areas.
The standard does not define the term material for the purpose of determining whether an individual countrys
revenue or non-current assets should be separately disclosed. The entity should consider materiality from both
quantitative and qualitative perspectives. When considering quantitatively, as the standard uses the threshold of ten
percent or more in determining whether an operating segment is a reportable segment or not, it seems reasonable to
apply the same test to determine whether an individual countrys revenue or assets are material for the purpose of
separate disclosure.
IFRS/HKFRS8p33 requires the disclosure of revenue and non-current asset information to be analysed by (a) the
entitys country of domicile and (b) all foreign counties in total. There is no further explanation as to the meaning of
the entitys country of domicile when the disclosures are made on a consolidated basis. In our view, if a parent
company is an investment holding company incorporated in an overseas jurisdiction at where the group does not
have any activities, the required disclosure may be referred to the country which the group regards as its home
country, for example, where it has the majority of its operations, workforce and/ or central of management. Further
disclosure should be given about how the entity has identified its country of domicile if the determination of the
country of domicile is not that straightforward.
69

Exceptional items
An analysis of the amount presented as an exceptional item in these financial statements is given below.
Operating items
Inventory write-down
2014
HK$000
2013
HK$000
6,117
The inventory write-down of HK$6,117,000 relates to leather accessories that have been destroyed by fire
in an accident. This amount is included within cost of sales in the income statement.
Other income
18p35(b)(v)
18p35(b)(v)
2014
HK$000
2013
HK$000
Gain on remeasuring existing interest in ABC Group on acquisition

(Note 41)
Dividend income on available-for-sale financial assets
Dividend income on financial assets at fair value through profit or loss
850
1,100
487
388
310
Investment income
Insurance reimbursement
2,437
698
66
2,437
764
The insurance reimbursement relates to the excess of insurance proceeds over the carrying values of goods
damaged.
10Sch13(1)(g)
The investment income from listed and unlisted investments for the year ended 31 December 2014 are
HK$1,542,000 (2013: 253,000) and HK$895,000 (2013: HK$445,000) respectively.
Other gains net
FRS7p20(a)(i),
A4(1)(h),
GEM18.50B(1)(b)
FRS7p20(a)(i)
21p52(a)
FRS7p24(a)
FRS7p24(b)
Financial assets at fair value through profit or loss (Note 24):

Fair value losses
Fair value gains
Foreign exchange forward contracts:
Held for trading
Net foreign exchange (losses)/ gains (Note 15)
Ineffectiveness on fair value hedges (Note 21)
Ineffectiveness on cash flow hedges (Note 21)
Net gains from fair value adjustment on investment properties (Note 17)
70
2014
HK$000
2013
HK$000
(508)
593
(238)
86
(277)
(1)
17
7,900
88
200
(1)
14
6,000
7,810
6,063

Expenses by nature
1p104
1p104
1p104
1p104,
10Sch13(1)(a),
A4(1)(k),
GEM18.50B(1)(f)
1p104
1p104
1p104,
10Sch13(1)(i),
10Sch15
10Sch15
1p104
2014
HK$000
2013
HK$000
Changes in inventories of finished goods and work in progress

Raw materials and consumables used
Inventory write-down (Note 6)
Employee benefit expense (Note 10)
6,950
47,185
6,117
40,310
(2,300)
31,845
15,577
Depreciation, amortisation and impairment charges (Notes 16, 16a and

18)
Transportation expenses
Advertising costs
31,204
8,584
12,759
17,013
6,112
6,000
10,604
8,500
1,000
500
1,187
1,111
1,000
300
359
167,511
84,406
Operating lease payments (Note 16a)

Auditors remuneration
- Audit services
- Non-audit services
Other restructuring costs (Note 35)
Other expenses
Total cost of sales, distribution expenses and administrative
expenses
10 Employee benefit expense
19p171
FRS2p51(a)
19p53,A26(3),
GEM18.34(3)
19p141 A26(3),
GEM18.34(3)
19p141
1p104
2014
HK$000
2013
HK$000
28,363
9,369
690
10,041
3,802
822
Pension costs defined contribution plans
756
232
Pension costs defined benefit plans (Note 34)

Other post-employment benefits (Note 34)
948
184
561
119
40,310
15,577
Wages and salaries, including restructuring costs HK$799,000 (2012: nil)

(Note 35) and other termination benefits HK$1,600,000 (2012: nil)
Social security costs
Share options granted to directors and employees (Notes 28 and 29)
Total employee benefit expense
(a) Pensions defined contribution plans

A26(4),
GEM18.34(4)
Forfeited contributions totalling HK$56,000 (2013: HK$15,000) were utilised during the year leaving
HK$nil available at the year-end to reduce future contributions.
Contributions totalling HK$65,000 (2013: HK$20,000) were payable to the fund at the year-end.
71

(b) Directors and chief executives23 emoluments

A24(1)-(6)
GEM18.28(1)(6)
S161
The remuneration22 of every director26aand the chief executive23for the year ended 31 December 2014 is set
out below:
Fees
HK$000
Name
Salary
HK$000
Discretionary
bonuses24
HK$000
Employers
Other contribution Compensation
Inducement
benefits
to pension for loss of office
fees
(a)
scheme25
as director
HK$000 HK$000
HK$000
HK$000
Total
HK$000
Director26a
Mr. A
15
400
25
440
(b)
Mr. B
75
4,800
1,000
25
5,900
Mr. C
75
2,050
500
25
2,650
(c)
Mr. D
40
1,250
25
1,315
Mr. E
30
30
Mr. F
75
1,500
200
25
1,800
Mr. G
30
30
Mr. H
30
30
30
30
Chief
executive23
Mr. J
Notes:
(a) Other benefits include leave pay, share option, insurance premium and club membership.
(b) Resigned on [Date].
(c) Appointed on [Date].
S161
The remuneration of every director26aand the chief executive23 for the year ended 31 December 2013 is set out
below:
Fees
HK$000
Name
23
24
25
26a
Discretionary
bonuses24
HK$000
Total
HK$000
Director26a
Mr. A
75
4,400
Mr. B
75
4,800
800
43
5,718
Mr. C
75
2,050
600
25
2,750
Mr. E
30
30
Mr. F
75
1,500
300
1,875
Mr. G
30
30
Mr. H
30
30
30
30
Chief
executive23
Mr. J
22
Salary
HK$000
Employers
Inducement
benefits
fees
(a)
scheme25
as director
HK$000 HK$000
HK$000
HK$000
4,475
In making the above disclosures, reference can be made to AB 3 which discusses the minimum disclosure that directors remuneration would include
remuneration from the companys holding companies, fellow subsidiaries, associates or any other company and also that directors remuneration be
apportioned between the parent company and subsidiaries.
The disclosure refers to the remuneration of a chief executive who is not a director. If the director who is also the chief executive, no separate disclosure in
respect of the remuneration of the chief executive is required, but a note should be added to indicate that the director is also the chief executive.
In addition to discretionary bonus payments, all bonus payments to which a director is contractually entitled and which are not fixed in amount, together
with the basis upon which they are determined must be disclosed here.
Pension does not include payments from a pension scheme when contributions to the pension scheme are substantially adequate to maintain the scheme.
This is because contributions made to such pension schemes would already have been included under directors emoluments at the time the contributions
were made.
In the case of a PRC issuer, references to directors or past directors shall also mean and include supervisors and past supervisors (as appropriate).
72

[In addition to the directors26b emoluments disclosed above, directors26b A and B of the company receive emoluments
from the parent company, amounting to HK$1,25 million each (2012: HK$1 million each), part of which is in respect of
their services to the company and its subsidiaries. No apportionment has been made as the directors26b consider that it is
impracticable to apportion this amount between their services to the group and their services to the companys parent
company.]
A24A
GEM18.29
During the year, Mr. B waived emoluments of HK$1 million and has agreed to waive 2013 emoluments of
HK$1 million.
(c) Five highest paid individuals
The five individuals whose emoluments were the highest in the group for the year include three (2012: four)
directors whose emoluments are reflected in the analysis presented above. The emoluments payable to the
remaining two (2013: one) individuals during the year are as follows:
A25(1)-(5)
GEM18.30(1)-(5)
A25(6)
GEM18.30(6)
Basic salaries, housing allowances, share options, other

allowances and benefits in kind
Contribution to pension scheme
Bonuses
Inducement fee
Compensation for loss of office:
- contractual payments
- other payment
2014
HK$000
2013
HK$000
1,500
1,850
25
600
20
250
-
1,000
10
3,155
2,100
The emoluments fell within the following bands:

Number of individuals
2014
2013
Emolument bands (in HK dollar)
HK$1,000,001 - HK$1,500,000
HK$2,000,000 - HK$2,500,000
26b
2
-
In the case of a PRC issuer, references to directors or past directors shall also mean and include supervisors and past supervisors (as appropriate).
73

11
A4(1)(j),
GEM18.50B(1)(e)
21p52(a)
Interest expense:
Bank borrowings wholly repayable within 5 years
Dividend on redeemable preference shares wholly repayable within 5 years
(Note 32)
Convertible bond wholly repayable within 5 years (Note 32)
Provisions: unwinding of discount (Note 35)
Allowance for impairment of trade receivables: unwinding of discount (Note
22)
Net foreign exchange gains on financing activities (Note 15)
FRS7p23(d)
Fair value gains on financial instruments:

Interest rate swaps: cash flow hedges, transfer from equity
FRS7
p24(a)(i)
Interest rate swaps: fair value hedges
FRS7
p24(a)(ii)
Fair value adjustment of bank borrowings attributable to interest rate risk
FRS7p20(b)
10Sch2(b)
10Sch13(1)(b)
37p84(e)
Finance expenses
Less: amounts capitalised on qualifying assets
Total finance expenses
Finance income:
Interest income on short-term bank deposits
Interest income on available-for-sale financial assets
Interest income on loans to related parties (Note 42)
FRS7p20(b)
Finance income
Net finance expenses
2014
HK$000
2013
HK$000
(5,314)
(10,644)
(1,950)
(3,083)
(550)
(44)
(1,950)
(648)
(37)
(3)
2,594
(2)
996
102
88
16
31
(16)
(31)
(8,248)
75
(8,173)
(12,197)
(12,197)
550
963
217
489
984
136
1,730
1,609
(6,443)
(10,588)
2014
HK$000
2013
HK$000
37,650
29,177
379
37,650
28,454
206
67,206
66,310
148,000
126,000
12a Investments in and loans to subsidiaries Company

10Sch18
(a) Investments in subsidiaries
10Sch9(1)(a)
27p16(c)
Investments, at cost:
Shares listed overseas
Unlisted shares
Capital contribution relating to share-based payment
10Sch12(11)
Market value of listed shares
27p16(c)
Investments in group undertakings are recorded at cost, which is the fair value of the consideration paid.
Refer to Notes 40 and 41 for the additions of investments in subsidiaries for the year.
DV
The capital contribution relating to share based payment relates to options on 1,210 shares granted by the
company to employees of subsidiary undertakings in the group. Refer to Note 28 for further details on the
group's share option schemes.
74

FRS12
p10(a),
12(a-c)
The following is a list of the principal subsidiaries at 31 December 2014:

Name
S128
(1)-(2)
S128
(4)-(5)
A9,
GEM
18.10
27p16
(b)
Place of
incorporation
and kind of legal
entity26
Principal activities and

place of operation27
Particulars of issued share

capital and debt
securities28
Black
Limited
Hong Kong,
Limited liability
company
Investment holding and

shoes manufacturing in
Hong Kong
10,000 Ordinary shares
Blue
Limited
Hong Kong,
limited liability
company
Shoes manufacturing in
Hong Kong and
Mainland China
2,000,000 Ordinary
shares
Proportion
of ordinary
shares
directly held
by parent
(%)
Proportion
of ordinary
shares held
by the
group (%)
100%
100%
100%
60%
40%
30%
Proportion of
ordinary
shares held by
noncontrolling
interests
(%)
Proportion
of
preference
shares held
by the group
(%)
100%
2,000 Preference shares

Red
Limited
Shoes wholesale and

retailing in Canada and
the United States
U.S.A., limited
liability
company
Shoes wholesale and

retailing in the United
Kingdom
10,000 Ordinary shares of

1 UK pound each.
70%
Pink
Limited
United
Kingdom,
limited liability
company
Shoes wholesale and

Kingdom

1 UK pound each.
100%
Green
Limited
Japan, limited
liability
company
Shoes wholesales and

retailing in Mainland
China, Japan and
Singapore
1,000,000 ordinary
shares of 10,000
Renminbi each
40%
60%
U.S.A limited
liability
company
Shoe and leather goods

retailer
1,000,000 Ordinary
shares of 1 US dollar each
40%
60%
ABC
Group
Delta
Inc.
27p17
2,000,000 Ordinary
U.S.A., limited
liability
company
Debenture of
US$500,000 repayable
from 1 January 2013 to 31
December 2014.
Although the group owns less than half of the equity interests in Green Ltd and Delta Inc., it is able to gain power over more than one half of the voting
rights by virtue of an agreement with other investors. Consequently, the group consolidates Green Ltd and Delta Inc.
A9(1),
GEM18.10(1)
26
27
28
10Sch18(3)
For a MB listed parent company the kind of legal entity information is required only for its subsidiaries established in the PRC. For a
GEM listed parent company, the kind of legal entity information and nature of business is required to be shown for each subsidiary.
Unlisted companies need not disclose the place of operation of subsidiaries.
Unlisted companies need not disclose the particulars of subsidiaries debt securities and classes of issued share capital not held by them.
Other disclosures
Where the companys shares (or debentures) are held by its subsidiaries other than as security for an ordinary business transaction, notes
along the following lines should be disclosed:At 31 December 2014, the companys subsidiaries held directly or indirectly x fully paid 10% preference shares of the company.
Where subsidiaries are not audited by the principal auditor, that fact is recommended to be disclosed by notes along the following lines,
with an asterisk marked against the appropriate subsidiary:-
PN600.1(17)
Subsidiaries not audited by PricewaterhouseCoopers. The aggregate net assets of subsidiaries not audited by PricewaterhouseCoopers
amounted to approximately x% of the groups total assets/turnover/profits.
27p40(e)
Disclose the reporting date of the financial statements of a subsidiary when such financial statements are used to prepare consolidated
financial statements and are as of a reporting date or for a period that is different from that of the parent, and the reason for using a
different reporting date or period.
75

1p77,
10Sch18(2)
(b) Loans to subsidiaries29
FRS7p31
10Sch9(4)
The loans to subsidiaries are unsecured, interest free, denominated in HK dollar and repayable on [date]. The fair
values of loans to subsidiaries are HK$90.2 million (2013: HK$25.4 million), which are based on cash flows
discounted using a rate based on the borrowing rate of 7.2% (2013: 7.2%). The discounted rate equals to HIBOR plus
appropriate credit rating.
(c) Material non-controlling interests
FRS12p12 (f)
The total non-controlling interest for the period is HK$7,188,000 (2013: HK$1,766,000), of which
HK$5,327,000 (2013: nil) is for ABC Group and HK$2,466,000 (2013: HK$2,392,000) is attributed to Delta
Inc. The non-controlling interests in respect of Red Limited and Green Limited are not material.
Significant restrictions
FRS12p10(b)
(i)
Cash and short-term deposits of HK$1,394,000 (2013: HK$1,006,000) are held in China and are subject to local
exchange control regulations. These local exchange control regulations provide for restrictions on exporting
capital from the country, other than through normal dividends.
Summarised financial information on subsidiaries with material non-controlling interests
FRS12p12(g)
, B10(b)
Set out below are the summarised financial information for each subsidiary that has non-controlling interests
that are material to the group. See Note 40 for transactions with non-controlling interests.
Summarised balance sheet
Delta Inc.
ABC Group
2014
2013
2014
2013
HK$000
HK$000
HK$000
HK$000
Current
Assets
Liabilities
5,890
4,828
16,935
14,742
(3,009)
(2,457)
(4,514)
(3,686)
2,881
2,371
12,421
11,056
3,672
2,357
10,008
8,536
(2,565)
(1,161)
(3,848)
(1,742)
Total current net assets

Non-current
Assets
Liabilities
Total non-current net assets
Net assets
1,107
1,196
6,160
6,794
3,988
3,567
18,581
17,850
Summarised income statement

Delta Inc.
2014
2013
2014
2013
HK$000
HK$000
HK$000
HK$000
19,602
17,883
29,403
26,825
Revenue
4,218
3,007
6,327
6,611
(1,692)
(1,411)
(2,838)
(2,667)
2,526
1,596
3,489
3,944
23
19
369
(203)
554
495
Total comprehensive income
2,895
1,393
4,066
4,458
Total comprehensive income allocated to NonControlling Interests
1,737
836
1,138
Dividends paid to Non-Controlling Interests
1,770
550
150
Income tax expense/income

Post-tax profit from continuing operations
Post-tax profit from discontinued operations
29
ABC Group
Credit risk disclosures should be included, where appropriate (IFRS/HKFRS7p36, 37)
76

Summarised cash flows

Delta Inc.
Delta
Inc.
2014
2013
2014
2013
HK$000 HK$000
HK$000
HK$000
ABC Group ABC Group

6,854
5,350
6,586
5,523
Interest paid
(134)
(82)
(86)
(78)
(1,534)
(1,256)
(2,748)
(2,589)
5,186
4,012
3,752
2,856
(1,218)
(1,745)
(1,225)
(1,567)
(3,502)
(2,643)
(478)
(691)
Net increase in cash and cash equivalents
466
(376)
2,049
598
Cash, cash equivalents and bank overdrafts at beginning

of year
576
997
1,576
933
Exchange (losses)/gains on cash and cash equivalents
(56)
(45)
38
45
Cash and cash equivalents at end of year
986
576
3,663
1,576
Income tax paid

FRS12pB11
The information above is the amount before inter-company eliminations.
12b Investments accounted for using the equity method

The amounts recognised in the balance sheet are as follows:
2014
2013
HK$000
HK$000
13,373
13,244
5,276
3,809
18,649
17,053
2014
2013
HK$000
HK$000
Associates
(174)
145
Joint ventures
1,467
877
For the year ended 31 December
1,293
1,022
Associates
Joint ventures
At 31 December
The amounts recognised in the income statement are as follows:
77

Investment in associates
FRS 12p21(a)
Set out below are the associates of the group as at 31 December 2014, which, in the opinion of the
directors, are material to the group. The associates as listed below have share capital consisting solely of
ordinary shares, which are held directly by the group; the country of incorporation or registration is also
their principal place of business.
Nature of investment in associates as at 31 December 2014 and 2013
Place of
business/country
of incorporation
% of ownership
interest
Nature of the
relationship
Measurement
method
Alpha Limited
Cyprus
18
Note 1
Equity
Beta SA
Greece
30
Note 2
Equity
Name of
entity
Note 1: Alpha Limited provides products and services to the footwear industry. Alpha is a strategic
partnership for the group, providing access to new customers and markets in Europe.
Note 2: Beta SA manufactures parts for the footwear industry and distributes its products globally. Beta
SA is strategic for the groups growth in the European market and provides the group with access to
expertise in efficient manufacturing processes for its footwear business and access to key fashion trends.
FRS 12p21(b)(iii)
As at 31 December 2014, the fair value of the groups interest in Beta SA, which is listed on the Euro
Money Stock Exchange, was HK$13,513,000 (2013: HK$12,873,000) and the carrying amount of the
group's interest was HK$11,997,000 (2013: HK$11,240,000).
Alpha Limited is a private company and there is no quoted market price available for its shares.
FRS12p23(b)
There are no contingent liabilities relating to the group's interest in the associates.
Summarised financial information for associates
Set out below are the summarised financial information for Alpha Limited and Beta SA which are
accounted for using the equity method.
Alpha Limited
2014
2013
Beta SA
2014
Total
2013
2014
2013
HK$000 HK$000 HK$000 HK$000 HK$000 HK$000

Current
DV
1,170
804
5,171
8,296
6,341
9,100
DV
Other current assets

(excluding cash)
2,433
2,635
7,981
9,722
10,414
12,357
Total current assets
3,603
3,439
13,152
18,018
16,755
21,457
Financial liabilities
(excluding trade payables)
(808)
(558)
(8,375)
(8,050)
(9,183)
(8,608)
Other current liabilities

(including trade payables)
(2,817)
(2,635)
(6,017)
(14,255)
(8,834)
(16,890)
Total current liabilities
(3,625)
(3,193)
(14,392)
(22,305)
(18,017)
(25,498)
FRS12pB12(b)(i)
DV
DV
FRS12pB12(b)(iii)
Non-current
FRS12pB12(b)(ii)
Assets
13,340
14,751
53,201
54,143
66,541
68,894
DV
(4,941)
(3,647)
(9,689)
(8,040)
(14,630)
(11,687)
DV
Other liabilities
(733)
(217)
(2,282)
(4,349)
(3,015)
(4,566)
FRS12Pb12(b)(iv)
Total non-current liabilities
(5,674)
(3,864)
(11,971)
(12,389)
(17,645)
(16,253)
DV
Net assets
7,644
11,133
39,990
37,467
47,634
48,600
78

Summarised statement of comprehensive income

Alpha Limited
2014
Beta SA
2013
2014
Total
2013
2014
2013
HK$000 HK$000 HK$000 HK$000 HK$000 HK$000

FRS12pB12(b)(v)
Revenue
DV
11,023
15,012
26,158
23,880
37,181
38,892
Depreciation and
amortisation
(2,576)
(1,864)
(3,950)
(3,376)
(6,526)
(5,240)
income30
DV
Interest
DV
Interest expense
(1,075)
(735)
(1,094)
(1,303)
(2,169)
(2,038)
FRS12pB12(b)(vi)
Profit or loss from

continuing operations
(3,531)
(2,230)
3,443
2,109
(88)
(121)
175
208
(713)
(412)
(538)
(204)
(3,356)
(2,022)
2,730
1,697
(626)
(325)
DV
Income tax expense
FRS12pB12(b)(vi)
Post-tax profit from

continuing operations
FRS12pB12(b)(vii)
Post-tax profit from

discontinued
operations30
FRS12pB12(b)(viii)
Other comprehensive
income
(40)
(47)
(40)
(47)
(3,356)
(2,022)
2,690
1,650
(666)
(372)
FRS12pB12(b)(ix)
FRS12pb12(a)
FRS12pB14
Total comprehensive
income
Dividends received from
associate30
The information above reflects the amounts presented in the financial statements of the associates (and
not Specimen Holdings Limiteds share of those amounts) adjusted for differences in accounting policies
between the group and the associates.
Commentary - summarised financial information
Summarised financial information is required for the group's interest in material associates; however,
Specimen Holdings Limited has provided the total amounts voluntarily.
30Some
of the line items above have a nil balance but have still been included for illustrative purpose only.
79

Reconciliation of summarised financial information

FRS12 pB14(b)
Reconciliation of the summarised financial information presented to the carrying amount of its interest
in associates
Alpha Limited
Summarised
financial information
2014
Beta SA
2013
2014
2013
HK$000 HK$000 HK$000 HK$000
HK$000
HK$000
Opening net assets 1

January
2013
2014
Total
11,133
12,977
37,467
35,573
48,600
48,550
(3,356)
(2,022)
2,730
1,697
(626)
(325)
(40)
(47)
(40)
(47)
differences
(133)
178
(167)
243
(300)
421
Closing net assets
7,644
11,133
39,990
37,466
47,634
48,599
Interest in associates
(18%; 30%)
1,376
2,004
11,997
11,240
13,373
13,244
1,376
2,004
11,997
11,240
13,373
13,244
(Loss)/profit for the

period
Other Comprehensive
Income
Goodwill31
Carrying value
Investment in joint venture
At 1 January
Share of profit
Other comprehensive
income31
At 31 December
FRS 12p21(a)
31
2014
2013
HK$000
HK$000
3,809
2,932
1,467
877
5,276
3,809
The joint venture listed below has share capital consisting solely of ordinary shares, which is held
directly by the group.
Some of the line items above have a nil balance but have still been included for illustrative purposes only.
80

Nature of investment in joint ventures 2013 and 2012
Name of entity
% of
Nature of
Place of
the
business/country ownership
interest relationship Measuremen
of incorporation
t method
Gamma Ltd
United Kingdom
50
Note 1
Equity
Note 1: Gamma Ltd provides products and services to the footwear industry in the UK. Gamma Ltd is a
strategic partnership for the group, providing access to new technology and processes for its footwear
business.
FRS 12p21(b)(iii)
Gamma Ltd is a private company and there is no quoted market price available for its shares.
Commentary fair value of interest in joint venture
Where there is a quoted market price for an entitys investment in a joint venture, the fair value of that
interest should be disclosed.
Commitments and contingent liabilities in respect of joint ventures

FRS12p23(a)
The group has the following commitments relating to its joint ventures.
Commitment to provide funding if called

FRS12p23(b)
2014
2013
HK$000
HK$000
100
100
There are no contingent liabilities relating to the groups interest in the joint venture. Gamma Ltd has a
contingent liability relating to an unresolved legal case relating to a contract dispute with a customer. As
the case is at an early stage in proceedings it is not possible to determine the likelihood or amount of
any settlement should Gamma Ltd not be successful.
Summarised financial information for joint ventures
FRS12p21(b)(ii)
Set out below are the summarised financial information for Gamma Ltd which is accounted for using
the equity method.
2014
2013
HK$000
HK$000
Current
FRS12pB13(a)
1,180
780
DV
Other current assets (excluding cash)
7,368
4,776
FRS12pB12(b)(i)
Total current assets
8,548
5,556
FRS12pB13(b)
Financial liabilities (excluding trade payables)
(1,104)
(1,094)
DV
Other current liabilities (including trade payables)
(890)
(726)
FRS12pB12(b)(iii)
Total current liabilities
(1,994)
(1,820)
11,016
9,786
(6,442)
(5,508)
(576)
(396)
Non-current
FRS12pB12(b)(ii)
Assets
FRS12pB13(c)
DV
Other liabilities
FRS12pB12(b)(iv)
Total non-current liabilities
(7,018)
(5,904)
DV
Net assets
10,552
7,618
81

Summarised statement of comprehensive income

2014
2013
HK$000
HK$000
23,620
23,158
206
648
(1,760)
(2,302)
5,750
5,206
(2,816)
(3,452)
2,934
1,754
FRS12pB12(b)(v)
Revenue
FRS12pB13(d)
Depreciation and amortisation
FRS12pB13(e)
Interest income
FRS12pB13(f)
Interest expense
FRS12pB12(b)(vi)
Profit or loss from continuing operations
FRS12pB13(g)
Income tax expense
FRS12pB12(b)(vi)
FRS12pB12(b)(vii)
Post-tax profit from discontinued operations32a
FRS12pB12(b)(viii)
Other comprehensive income32a
FRS12pB12(b)(ix)
2,934
1,754
FRS12pb12(a)
Dividends received from joint venture or associate
FRS12pB14
The information above reflects the amounts presented in the financial statements of the joint ventures,
adjusted for differences in accounting policies between the group and the joint ventures, and not
Specimen Holdings Limiteds share of those amounts.
Reconciliation of summarised financial information
FRS12 pB14(b)
Reconciliation of the summarised financial information presented to the carrying amount of its interest
in the joint venture.
2014
2013
HK$000
HK$000
Opening net assets 1 January
7,618
5,864
Profit for the period
2,934
1,754
10,552
7,618
5,276
3,809
5,276
3,809
Summarised financial information
Other comprehensive
income32a
Closing net assets

Interest in Joint Venture @50%
Goodwill32a
Carrying value
32a
Some of the line items above have a nil balance but have still been included for illustrative purposes only.
82

13
Income tax expense
10Sch17(3),
10Sch12(5),
A4(1)(c),
GEM18.50B(
1)(h)
12p80(a),
12p80(b),
10Sch17(4)
12p80(c),
12p80(d),
10Sch17(4)
Hong Kong profits tax has been provided at the rate of 16.5% (2013: 16.5%) on the estimated assessable profit
for the year. Taxation on overseas profits has been calculated on the estimated assessable profit for the year at
the rates of taxation prevailing in the countries in which the group operates.
2014
HK$000
2013
HK$000
Current tax:
Current tax on profits for the year
Adjustments in respect of prior years
14,046
6,050
150
Total current tax
14,196
6,050
199
2,125
(97)
102
14,298
2,125
8,175
Deferred tax (Note 33):

Origination and reversal of temporary differences
Impact of change in the [country name] tax rate
Total deferred tax
Income tax expense
12p81(c)
10Sch12(12)
The tax on the groups profit before tax differs from the theoretical amount that would arise using the
weighted average tax rate applicable to profits of the consolidated entities as follows:
2014
HK$000
2013
HK$000
Profit before tax
48,620
25,215
Tax calculated at domestic tax rates applicable to profits in the respective

countries
Tax effects of:
Associates and Joint Ventures results reported net of tax
Income not subject to tax
Expenses not deductible for tax purposes
Utilisation of previously unrecognised tax losses
Tax losses for which no deferred income tax asset was recognised
Re-measurement of deferred tax change in the [country name] tax rate
Adjustment in respect of prior years
15,924
7,709
(414)
(1,385)
1,540
(1,450)
30
(97)
150
(278)
(707)
1,104
347
Tax charge
14,298
8,175
12p81(d)
The weighted average applicable tax rate was 33% (2013: 31%). The increase is caused by a change in the
profitability of the groups subsidiaries in the respective countries partially offset by the impact of the
reduction in the tax rate of [country name] (see below).
12p81(d)
During the year, as a result of the change in the corporation tax rate of [country name] from 30% to 28% that
was substantively enacted on 26 June 2014 and that will be effective from 1 April 2015, the relevant deferred
tax balances have been re-measured. Deferred tax expected to reverse in the year to 31 December 2015has
been measured using the effective rate that will apply in [country name] for the period (28.5%)32.
1p125
10p22(h)
Further reductions to the [country name] tax rate have been announced. The changes, which are expected to
be enacted separately each year, propose to reduce the rate by 1% per annum to 24% by 1 April 2018. The
changes had not been substantively enacted at the balance sheet date and, therefore, are not recognised in
these financial statements.
32 If the effect of the proposed changes is material, disclosure should be given of the effect of the changes, either as disclosure of events after the reporting period
or as future material adjustment to the carrying amounts of assets and liabilities. This disclosure needs to be tailored but does not need to be reconciled to the
income statement.
83

12p81(ab)
The tax (charge)/credit relating to components of other comprehensive income is as follows:

2014
Tax
Before (charge/
tax
credit After tax
HK$000 HK$000
1p90
1p90
1p90
1p90
1p90
1p90
1p90
FRS3 p42
Fair value gains on available-for-sale

financial assets
Share of other comprehensive income of
investments accounted for using equity
method
Remeasurements of post-employment
benefit obligations (Note 34)
Impact of change in the [country name]
tax rate on deferred tax33
Cash flow hedges
Reclassification of revaluation of
previously held interest in ABC Group
HK$000 HK$000 HK$000
HK$000
524
(162)
362
185
(123)
62
(12)
(12)
(14)
(14)
119
(36)
83
(910)
273
(637)
97
(45)
3,011
(10)
(33)
(10)
64
(45)
3,011
(3)
40
(13)
(3)
40
(13)
(850)
(850)
2,844
(241)
2,603
(715)
150
(565)
Current tax34
Deferred tax (Note 33)
12p81(a)
2013
Tax
Before (charge)/
tax
credit
After tax
(241)
150
(241)
150
The income tax (charged)/credited directly to equity during the year is as follows:
Current tax35:
Share option scheme
Deferred tax:
Share option scheme (Note 29)
Convertible bond equity component36 (Note 30)
2014
HK$000
2013
HK$000
30
(2,328)
20
(2,298)
20
The impact of change in tax rate is shown for illustrative purposes. Companies will need to consider the impact of future reductions in tax rates in their tax
disclosures.
34 IAS/HKAS 12 requires disclosure of current tax charged/credited to other comprehensive income, in addition to deferred tax. There are no current tax items
relating to other comprehensive income in these financial statements, but the line item is shown for illustrative purposes.
35 IAS/HKAS 12 requires disclosure of current tax charged/credited to equity, in addition to deferred tax. There are no current tax items shown in equity in
these financial statements, but the line items are shown for illustrative purposes.
36 It is assumed that the tax base on the convertible bond is not split between the debt and equity elements. If the tax base were split, this would impact the
deferred tax position.
33
84

14 Earnings per share

(a) Basic
Basic earnings per share is calculated by dividing the profit attributable to owners of the company by the weighted
average number of ordinary shares in issue during the year excluding ordinary shares purchased by the company
and held as treasury shares (Note 27a).
33p70(a)
33p70(b)

Profit from discontinued operation attributable to owners of the company
Weighted average number of ordinary shares in issue (thousands)
2014
HK$000
2013
HK$000
31,794
80
16,184
120
31,874
16,304
23,454
20,500
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The company has two categories of
dilutive potential ordinary shares: convertible debt and share options. The convertible debt is assumed to have
been converted into ordinary shares, and the net profit is adjusted to eliminate the interest expense less the
tax effect. For the share options, a calculation is done to determine the number of shares that could have been
acquired at fair value (determined as the average annual market share price of the companys shares) based on
the monetary value of the subscription rights attached to outstanding share options. The number of shares
calculated as above is compared with the number of shares that would have been issued assuming the exercise
of the share options.
33p70(a)
2014
HK$000
2013
HK$000
Earnings
Interest expense on convertible debt (net of tax)
31,794
2,158
16,184
Profit used to determine diluted earnings per share

Profit from discontinued operations attributable to owners of the company
33,952
80
16,184
120
34,032
16,304
23,454
20,500
3,030
1,213
1,329
27,697
21,829
Weighted average number of ordinary shares in issue (thousands)

Adjustments for:
Assumed conversion of convertible debt (thousands)
Share options (thousands)
33p70(b)
Weighted average number of ordinary shares for diluted earnings per share
(thousands)
85

15
21p52(a)
The exchange differences (charged)/credited to the income statement are included as follows:
Other (losses)/gains net (Note 8)

Net finance expenses (Note 11)
2014
HK$000
2013
HK$000
(277)
2,594
200
996
2,317
1,196
15a Profit attributable to owners of the company

S123(5)(b)(ii)
The profit attributable to owners of the company is dealt with in the financial statements of the company to
the extent of HK$14,135,000 (2013: HK$10,026,000).
16 Leasehold land and land use rights Group

The groups interests in leasehold land and land use rights represent prepaid operating lease payments and
their net book value are analysed as follows:
17p35
10Sch12(9)(b)
10Sch31(b)-(d)
37The
2013
HK$000
29,148
29,981
11,800
59,129
11,800
Outside Hong Kong, held on:

Leases37 of over 50 years
Leases37 of between 10 to 50 years
16p74(a)
10Sch12(4)
2014
HK$000
Bank borrowings are secured on land for the carrying amount of HK$29,148,000 (2013: Nil) (Note 32).
2014
HK$000
2013
HK$000
At 1 January
Additions
Acquisition of subsidiaries (Note 41)
Amortisation of prepaid operating lease payment
11,800
4,929
43,500
(1,100)
12,000
(200)
At 31 December
59,129
11,800
above refers to remaining lease periods.
86

16a Property, plant and equipment - Group

1p78(a)
Land and
buildings
HK$000
16,450
(1,333)
71,072
(17,524)
20,025
(3,690)
107,547
(22,547)
Net book amount
15,117
53,548
16,335
85,000

Opening net book amount
Additions
Disposals (Note 37)
Depreciation charge (Note 9)
15,117
(381)
1,588
(436)
53,548
(703)
2,970
(2,607)
(7,576)
16,335
(423)
1,484
(380)
(8,236)
85,000
(1,507)
6,042
(2,987)
(16,248)
Closing net book amount
15,888
45,632
8,780
70,300
At 31 December 2013
Cost
Accumulated depreciation
17,648
(1,760)
68,125
(22,493)
20,026
(11,246)
105,799
(35,499)
Net book amount
15,888
45,632
8,780
70,300

Additions
Disposals (Note 37)
Transfers
Transferred to disposal group
classified as held for sale (Note 26)
15,888
1,601
5,572
1,126
(2,000)
500
(3,445)
45,632
1,280
5,513
427
(3,729)
(7,768)
8,780
342
13,199
2,202
(608)
(13,441)
1,000
(500)
-
70,300
3,223
24,284
4,755
(6,337)
(24,654)
(341)
(1,222)
(1,563)
18,901
40,133
10,474
500
70,008
At 31 December 2014
Cost
23,546
(4,645)
58,268
(18,135)
26,927
(16,453)
500
-
109,241
(39,233)
Net book amount
18,901
40,133
10,474
500
70,008
38
16p73(d)
16p73(e)
16p73(e)(viii)
16p73(e)(i)
16p73(e)(ix)
16p73(e)(vii)
16p73(d)
16p73(d)
16p73(e)(viii)
16p73(e)(iii)
16p73(e)(i)
16p73(e)(ix)
16p73(e)(vii)
FRS5p38
16p73(d)
38
Furniture,
fittings
and Construction
equipment
in progress
HK$000
HK$000
Vehicles
and
machinery
HK$000
At 1 January 2013
Cost
Total
HK$000
If the company chooses the revaluation model to measure its buildings, add the following disclosures.
16p77(e)
If buildings were stated on the historical cost basis, the amounts would be as follows:
Cost
Net book amount
2014
HK$000
2013
HK$000
xxx
(xxx)
xxx
(xxx)
xxx
xxx
The analysis of the cost or valuation at 31 December 2014 and 2013 of the above assets is as follows:
At cost
At valuation
10Sch12(7)
87
Buildings
HK$000
Vehicles and
machinery
HK000
Furniture, fittings
and equipment
HK$000
Total
HK$000
xxx
xxx
xxx
-
xxx
-
xxx
xxx
xxx
xxx
xxx
xxx

The net book value of the groups interests in leasehold land classified as finance lease are analysed as
follows:
2014
2013
HK$000
HK$000
10Sch12(9)(b)
10Sch31(b)(d)
In Hong Kong, held on:

11,000
11,000
DV
Property, plant and equipment transferred to the disposal group classified as held-for-sale amounts to
HK$1,563,000 and relates to assets which are used by Shoes Limited (part of the wholesale segment). See
Note 26 for further details regarding the disposal group held for sale.
DV 1p104
Depreciation expense of HK$10,295,000 (2013: HK$8,675,000) has been charged in 'cost of goods sold',
HK$8,242,000 (2013: HK$4,138,000) in 'selling and marketing costs' and HK$6,117,000 (2013:
HK$3,435,000) in 'administrative expenses'.
17p35(c)
Lease rentals amounting to HK$1,172,000 (2013: HK$895,000) and HK$9,432,000 (2013:

HK$7,605,000) relating to the lease of machinery and property, respectively, are included in the income
statement (Note 9).
Construction work in progress as at 31 December2014 mainly comprises new shoe manufacturing
equipment being constructed in the UK.
23p26
During the year, the group has capitalised borrowing costs amounting to HK$75,000 (2013: nil) on
qualifying assets. Borrowing costs were capitalised at the weighted average rate of its general borrowings
of 7.5%.
16p74(a),
10Sch12(4),
Bank borrowings are secured on buildings for the value of HK$8,532,000 (2013: HK$Nil) (Note 32).
Vehicles and machinery includes the following amounts where the group is a lessee under a finance lease:
17p31(a)
Cost capitalised finance leases

Net book amount
17p31(e)
39The
2014
HK$000
2013
HK$000
13,996
(5,150)
14,074
(3,926)
8,846
10,148
The group leases various vehicles and machinery under non-cancellable finance lease agreements. The lease
terms are between 3 and 15 years, and ownership of the assets lie within the group.
above refers to remaining lease periods.
88

17 Investment properties - Group
40p76(a)
40p76(a)
40p76(c)
40p76(d)
40p76(f)
At fair value
Opening balance at 1 January
Acquisitions
Capitalised subsequent expenditure
Classified as held for sale or disposals40
Net gains from fair value adjustment (Note 8)
Transfer (to)/from inventories and owner-occupied property40
40p76
Closing balance at 31 December
40p75(f)
(a) Amounts recognised in profit and loss for investment properties
40p76
40p75(f)(i)
40p75(f)(ii)
40p75(f)(iii)
Rental income
Direct operating expenses from property that generated rental
income
Direct operating expenses from property that did not generate rental
income
10Sch13(1)(h)
40p75(h)
2014
HK$000
2013
HK$000
17,000
90
10
7,900
-
11,000
6,000
-
25,000
17,000
2014
HK$000
2013
HK$000
180
165
(7)
(6)
(3)
(3)
170
156
As at 31 December 2014, the group had no unprovided contractual obligations for future repairs and
maintenance (2012: Nil).
The Group's investment properties are held within a business model whose objective is to consume
substantially all of the economic benefits embodied in the investment properties through sale. The Group
has measured the deferred tax relating to the temporary differences of these investment properties using
the tax rates and the tax bases that are consistent with the expected manner of recovery of these investment
properties (Note 33).
An independent valuation of the groups investment properties was performed by the valuer, ABC
Property Surveyors Limited, to determine the fair value of the investment properties as at 31
December 2014 and 2013. The revaluation gains or losses is included in Òther gains - net' in income
statement (Note 8). The following table analyses the investment properties carried at fair value, by
valuation method.
FRS13p93(a),( b)
Fair value measurements at

31 December 2014 using
Description
Recurring fair value

measurements
Investment properties:
- Office units- UK
- Shopping malls - US
- Shopping malls - Asia
Pacific
Quoted
prices in
active
markets for
identical
assets
(Level 1)
HK$000
Significant
other
observable
inputs
(Level 2)
HK$000
Significant
unobservable
inputs (Level 3)
HK$000
Total
HK$000
3,678
-
14,519
3,678
14,519
6,803
6,803
21,322
25,000
40
The line items are shown for illustrative purpose only.
89
3,678

FRS13p93(a),( b)

Description

measurements
- Office units- UK
Pacific
FRS13p93c,
e(iv)
FRS13p93c,
e(iv)
Quoted
prices in
active
markets for
identical
assets
(Level 1)
HK$000
Significant
other
observable
inputs
(Level 2)
HK$000
Significant
unobservable
inputs (Level 3)
HK$000
Total
HK$000
1,872
-
8,573
1,872
8,573
6,555
6,555
1,872
15,128
17,000
The groups policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the
date of the event or change in circumstances that caused the transfer.
There were no transfers between Levels 1, 2 and 3 during the year.
90

FRS13p93e
Fair value measurements using significant unobservable inputs (Level 3)

31 December 2014
Shopping malls
Asia
US
Pacific
HK$000 HK$000
FRS13p93e(iii)
FRS13p93e(i)
FRS13p93f
Opening balance
Additions
Net gains from fair value adjustment
Closing balance
Total gains or losses for the year included in profit
or loss for assets held at the end of the year, under
Other gains - net
Change in unrealised gains or losses for the year
included in profit or loss for assets held at the end
of the year
8,573
5,946
14,519
6,555
90
10
148
6,803
Total
HK$000
15,128
90
10
6,094
21,322
5,946
148
6,094
5,946
148
6,094
31 December 2013
Shopping malls
Asia
US
Pacific
HK$000 HK$000
FRS13p93e(iii)
FRS13p93e(i)
FRS13p93f
Opening balance
Additions
Net gains from fair value adjustment
Closing balance
Total gains or losses for the year included in profit
or loss for assets held at the end of the year, under
Other gains - net
Change in unrealised gains or losses for the year
included in profit or loss for assets held at the end
of the year
5,621
2,952
8,573
4,507
2,048
6,555
Total
HK$000
10,128
5,000
15,128
2,952
2,048
5,000
2,952
2,048
5,000
FRS13p93g
Valuation processes of the group
FRS13.IE65
The groups investment properties were valued at 31 December 2014 and 2013 by independent
professionally qualified valuers who hold a recognised relevant professional qualification and have
recent experience in the locations and segments of the investment properties valued. For all
investment properties, their current use equates to the highest and best use.
The groups finance department includes a team that review the valuations performed by the
independent valuers for financial reporting purposes. This team reports directly to the chief
financial officer (CFO) and the audit committee (AC). Discussions of valuation processes and results
are held between the CFO, AC, the valuation team and valuers at least once every six months, in
line with the groups interim and annual reporting dates. As at 31 December 2014 and 2013, the
fair values of the properties have been determined by ABC Property Surveyors Limited.
At each financial year end the finance department:
Verifies all major inputs to the independent valuation report;

Assess property valuations movements when compared to the prior year valuation report;
Holds discussions with the independent valuer.
Changes in Level 2 and 3 fair values are analysed at each reporting date during the bi-annual
valuation discussions between the CFO, AC and the valuation team. As part of this discussion, the
team presents a report that explains the reasons for the fair value movements.
91

FRS13p93d
Valuation techniques
For UK office units, the valuation was determined using the sale comparison approach. Sales prices
of comparable properties in close proximity are adjusted for differences in key attributes such as
property size. The most significant input into this valuation approach is price per square foot.
For completed shopping malls in US, the valuation was determined using discounted cash flow
(DCF) projections based on significant unobservable inputs. These input include:
Future rental cash inflows
Discount rates
Estimated vacancy rates
Maintenance costs
Capitalisation rates
Terminal value
Based on the actual location, type and quality of the properties and
supported by the terms of any existence lease, other contracts and
external evidence such as current market rents for similar
properties;
Reflecting current market assessments of the uncertainty in the
amount and timing of cash flows;
Based on current and expected future market conditions after expiry
of any current lease;
Including necessary investment s to maintain functionality of the
property for its expected useful life;
Based on actual location, size and quality of the properties and
taking into account market data at the valuation date;
Taking into account assumptions regarding maintenance costs,
vacancy rates and market rents.
For completed shopping malls in Asia Pacific, the valuations were based on income capitalisation
approach (term and reversionary method) which largely used observable inputs (e.g. market rent,
yield, etc.) and taking into account the significant adjustment on term yield to account for the risk
upon reversionary and the estimation in vacancy rate after expiry of current lease.
For shopping mall in Asia Pacific which is still under redevelopment, the valuation was based on
a DCF model taking into account the following estimates (in addition to the inputs
noted above):
Costs to complete
Completion dates
These are largely consistent with internal budgets developed by the

groups finance department, based on managements experience and
knowledge of market conditions. Costs to complete also include a
reasonable profit margin;
Properties under construction require approval or permits from
oversight bodies at various points in the development process,
including approval or permits in respect of initial design, zoning,
commissioning, and compliance with environmental regulations.
Based on managements experience with similar developments, all
relevant permits and approvals are expected to be obtained.
However, the completion date of the development may vary
depending on, among other factors, the timeliness of obtaining
approvals and any remedial action required by the group.
There were no changes to the valuation techniques during the year.
92

FRS13p93d,h(i)
Information about fair value measurements using significant unobservable

inputs (Level 3)
Description
Shopping
malls - US
Shopping
malls Asia
Pacific
Shopping
malls Asia
Pacific (under
development)
Fair value at 31
Dec 2014
(HK$000)
14,519
5,256
1,547
Valuation
technique(s)
Discounted
cash flow
Income
approach (term
and
reversionary
method)
Discounted
cash flows
with
estimated
costs to
complete
Range of
unobservable
inputs Relationship of
(probability- unobservable
weighted inputs to fair
Unobservable
average)
value
inputs41
The higher the
Rental value
HK$175-HK$235
per month per
rental value, the
square
higher the fair
meter(HK$195 per
value
month per square
meter)
Discount rate
5%-7 %( 6%)
The higher the
discount rate, the
lower the fair
value
Capitalisation
5.5%-7.5% (6.5%)
The higher the
rate
capitalisation
rate, the lower the
fair value
Vacancy rate
9-11 %( 10%)
The higher the

vacancy rate, the
lower the fair
value
Adjustment on
term yield
0.5% to 2 %( 1%)
The higher the

reversionary yield
, the lower the fair
value
The higher the
rental value, the
higher the fair
value
Rental value
Discount rate
Capitalisation
rate
Estimated costs
to completion
Estimated profit
margin required
to hold and
develop
property to
completion
HK$520-HK$700
per month per
square
meter(HK$595 per
month per square
meter)
6.25%-7.25 %(
The higher the
6.75%)
discount rate, the
lower the fair
value
4%-4.5% (4.25%)
The higher the
capitalisation
rate, the lower the
fair value
HK$409,000
The higher the
HK$474,000
estimated costs,
(HK$427,000)
the lower the fair
value.
10%-15% (14%) of
The higher the
property value
profit margin
required, the
lower the fair
value.
41There were no significant inter-relationships between unobservable inputs that materially affect fair values, except for those stated in these financial
statements.
93

Fair value at 31
Dec 2013
Valuation
Description
(HK$000) technique(s)
Shopping malls 8,573
Discounted
US
cash flow
Unobservable
inputs42
Rental value
Discount rate
Capitalisation
rate
Shopping malls
Asia Pacific
Shopping malls
Asia Pacific
(under
development)
5,156
1,399
Income
approach (term
and
reversionary
method)
Discounted
cash flows
with
estimated
costs to
complete
Vacancy rate
5%-7% (6%)
8-10% (9%)
Adjustment on
term yield
0.5% to 1%
(0.75%)
Rental value
HK$520-HK$680
per month per
square
meter(HK$570
per month per
square meter)
6.5%-7.5% (7%)
Discount rate
Capitalisation
rate
FRS13p93h(i)
Range of
unobservable
inputs
(probabilityweighted
average)
HK$165-HK$225
per month per
square
meter(HK$185 per
month per square
meter)
5%-7 %( 6%)
3.5%-4.5% (4%)
Estimated costs
to completion
HK$400,000
HK$450,000
(HK$420,000)
Estimated profit
margin required
to hold and
develop
property to
completion
8%-12% (10%) of
property value
Relationship
of
unobservable
inputs to fair
value
The higher the
rental value, the
higher the fair
value
The higher the
discount rate, the
lower the fair
value
The higher the
capitalisation
rate, the lower the
fair value
The higher the
vacancy rate, the
lower the fair
value
The higher the
reversionary yield
, the lower the fair
value
The higher the
rental value, the
higher the fair
value
The higher the
discount rate, the
lower the fair
value
The higher the
capitalisation
rate, the lower the
fair value
The higher the
estimated costs,
the lower the fair
value.
The higher the
profit margin
required, the
lower the fair
value.
There are inter-relationships between unobservable inputs. Expected vacancy rates may impact
the yield with higher vacancy rates resulting in higher yields. For investment property under
construction, increases in construction costs that enhance the propertys features may result in an
increase of future rental values. An increase in future rental income may be linked with higher
costs. If the remaining lease term increases, the yield may decrease.
Commentary
IFRS/HKFRS 13 does not explicitly require a quantitative sensitivity analysis, however, such a
sensitivity analysis may be necessary in order to satisfy the requirements of IAS/HKAS1 paragraph
129 in relation to the sources of estimation uncertainty.
42There were no significant inter-relationships between unobservable inputs that materially affect fair values, except for those stated in these financial
statements.
94

Commentary
You are recommended to refer to A practical guide to amended IAS 40 Accounting for investment
properties under construction for more guidance.
http://www.pwc.com/gx/en/asset-management/assets/practical-guide-to-amended-ias-40.pdf
Definition
40p5
1.
An investment property is property (land or a building or part of a building or both) held (by the
owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather
than for:
(a) use in the production or supply of goods or services or for administrative purposes, or
(b) sale in the ordinary course of business
40p6
2.
A property interest that is held by a lessee under an operating lease may be classified and accounted
for as investment property if, and only if, the property would otherwise meet the definition of an
investment property above and the lessee uses the fair value model.
Reconciliation
40p76
3.
An entity that applies the fair value model in IAS/HKAS 40 Investment Property shall disclose a
reconciliation between the carrying amounts of investment property at the beginning and end of
the period, showing the following:
(a) additions, disclosing separately those additions resulting from acquisitions and those
resulting from subsequent expenditure recognised in the carrying amount of an asset
(b) additions resulting from acquisitions through business combinations
(c) assets classified as held for sale or included in a disposal group in accordance with
IFRS/HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations and other
disposals
(d) net gains or losses from fair value adjustments
(e) the net exchange differences arising on the translation of the financial statements into a
different presentation currency, and on translation of a foreign operation into the
presentation currency of the reporting entity
(f) transfers to and from inventories and owner-occupied property, and
(g) other changes.
Disclosures not illustrated: not applicable
40p75(c)
4.
Where classification is difficult

When it is difficult to determine whether a property qualifies for classification as an investment
property, disclosure is required of the criteria used to distinguish investment property from
owner-occupied property and property held for sale in the ordinary course of business.
40p75(f)(iv)
5.
Sale of investment property between pools of assets measured using different models
An entity shall disclose the amounts recognised in profit or loss for the cumulative change in fair
value recognised in profit or loss on a sale of an investment property from a pool of assets in which
the cost model is used into a pool in which the fair value model is used (refer to paragraph 32C of
IAS/HKAS 40).
40p77
6.
Where valuation adjusted for financial statements

When a valuation obtained for investment property is adjusted significantly for the purposes of
the financial statements, for example to avoid double-counting of assets or liabilities that are
recognised as separate assets and liabilities as described in paragraph 50 of IAS/HKAS 40, the
entity shall disclose a reconciliation between the valuation obtained and the adjusted valuation
included in the financial statements, showing separately the aggregate amount of any recognised
lease obligations that have been added back, and any other significant adjustments.
95

4p78
7.
Where fair value not reliably determinable on a continuing basis

In exceptional cases, referred to in paragraph 53 of IAS/HKAS 40, there may be clear evidence that
the fair value of the investment property is not reliably determinable on a continuing basis. The entity
then measures investment property using the cost model in IAS/HKAS 16 Property, Plant and
Equipment. In these cases, the reconciliation required by paragraph 76 of IAS/HKAS 40 shall
disclose amounts relating to that investment property separately from amounts relating to other
investment property. In addition, an entity shall disclose:
(a) a description of the investment property
(b) an explanation of why fair value cannot be determined reliably
(c) if possible, the range of estimates within which fair value is highly likely to lie, and
(d) on disposal of investment property not carried at fair value:
(i) the fact that the entity has disposed of investment property not carried at fair value
(ii) the carrying amount of that investment property at the time of sale, and
(iii) the amount of gain or loss recognised.
40p79(a)-(e)
8.
Use of cost model

An entity that applies the cost model in paragraph 56 of IAS/HKAS 40 shall not apply the disclosure
requirements of paragraphs 76 to 78 of IAS/HKAS 40. Instead it shall disclose:
(a) the depreciation methods used
(b) the useful lives or the depreciation rates used
(c) the gross carrying amount and the accumulated depreciation (aggregated with accumulated
impairment losses) at the beginning and end of the period
(d) a reconciliation of the carrying amount of investment property at the beginning and end of
the period, showing the following:
(i) additions, disclosing separately those additions resulting from acquisitions and those
resulting from subsequent expenditure recognised as an asset
(ii) additions resulting from acquisitions through business combinations
(iii) assets classified as held for sale or included in a disposal group in accordance with
IAS/HKAS 5 and other disposals
(iv) depreciation
(v) the amount of impairment losses recognised, and the amount of impairment losses
reversed, during the period in accordance with IAS/HKAS 36 Impairment of Assets
(vi) the net exchange differences arising on the translation of the financial statements into a
different presentation currency, and on translation of a foreign operation into the
presentation currency of the reporting entity
(vii) transfers to and from inventories and owner-occupied property, and
(viii) other changes, and
(e) the fair value of the investment property (refer to paragraph 14 below for the requirements in
circumstances where this cannot be determined reliably).
40p79(e)
12p51C
9.
In the exceptional cases described in paragraph 53 of IAS/HKAS 40, where an entity cannot
determine the fair value of the investment property reliably, it shall disclose:
(a) a description of the investment property
(b) an explanation of why fair value cannot be determined reliably, and
(c) if possible, the range of estimates within which fair value is highly likely to lie.
10.
Deferred tax arising from investment properties measured at fair value

There is a rebuttable presumption that the carrying amount of the investments property that is
measured using the fair value model in IAS/HKAS 40, will be recovered entirely through sale. This
presumption is rebutted if the investment property is depreciable and is held within a business model
whose objective is to consume substantially all of the economic benefits embodied in the investment
properties over time, rather than through sale. Sufficient details should be provided to reader with an
understanding of the entity's business model.
As of 31 December 2014, investment properties located in [location A] amounted to HK$[x] (2013:
HK$[x]) are held by certain subsidiaries with a business model to consume substantially all of the
economic benefits embodied in the investment properties over time, rather than through sale. The
investment properties located in [location B] amounted to HK$[x] (2013: HK$[x]) are held by
certain subsidiaries and expected to be recovered entirely through sale. The group has measured the
deferred tax relating to the temporary differences of these investment properties using the tax rates
and the tax bases that are consistent with the expected manner of recovery of these investment
96

18 Intangible assets - Group
Trademarks
Goodwill and licences
HK$000
HK$000
38p118
38p118(c)
Contractual
customer
relationships
HK$000
Internally
generated
software
development
costs
HK$000
Total
HK$000
At 1 January 2013
Cost
Accumulated amortisation and impairment
12,546
8,301
(330)
1,455
(510)
22,302
(840)
Net book amount
12,546
7,971
945
21,462
38p118(e)(vi)

Additions
Amortisation charge (Note 9)
12,546
(546)
7,971
(306)
700
(365)
945
(45)
(200)
21,462
(897)
700
(565)
10Sch9(1)(b)
12,000
8,000
700
20,700
38p118(c)
At 31 December 2013
Cost
12,000
8,710
(710)
1,400
(700)
22,110
(1,410)
Net book amount
12,000
8,000
700
20,700
12,000
341
4,501
(4,650)
8,000
96
684
3,000
(402)
1,000
(278)
700
134
2,366
(120)
20,700
571
3,050
8,501
(4,650)
(800)
(100)
(1,000)
(1,100)
12,092
10,378
722
3,080
26,272
38p118(e)
38p118(e)(vii)
38p118(e)(i)
38p118(e)
FRS5p38,
38p118(e)(ii)

Additions
Impairment charge (Note 9)
Transferred to disposal group classified as held
for sale (Note 26)
10Sch9(1)(b)
38p118(e)(vii)
38p118(e)(i)
38p118(e)(i)
38p118(e)(iv)
38p118(e)(vi)
38p118(c)
At 31 December 2014
Cost
16,742
(4,650)
11,480
(1,102)
1,000
(278)
3,900
(820)
33,122
(6,850)
Net book amount
12,092
10,378
722
3,080
26,272
36p126(a)
The carrying amount of the segment (Russia - wholesale) has been reduced to its recoverable amount through
recognition of an impairment loss against goodwill. This loss has been included in cost of goods sold in the
income statement.
38p118(d)
Amortisation of HK$40,000 (2013: HK$100,000) is included in the cost of goods sold the income statement;
HK$680,000 (2013: HK$365,000) in distribution expenses; and HK$80,000 (2013: HK$100,000) in
administrative expenses.
97

DV
The trademark transferred to the disposal group classified as held for sale relates to the Shoes Limited trademark
(part of the wholesale segment), which was previously recognised by the group on the acquisition of the entity in
2006. A further net book amount of HK$100,000 transferred to the disposal group relates to software that was
specifically developed for Shoes Limited. See Note 26 for further details regarding the disposal group held-forsale.
Impairment tests for goodwill
36p130(d)
Management reviews the business performance based on geography and type of business. It has identified HK,
UK, US, China and Russia as the main geographies. There are both retail and wholesale segments in HK and the
US. In all other geographies, the group has only wholesale business. Goodwill is monitored by the management
at the operating segment level. The following is a summary of goodwill allocation for each operating segment:
36p134(a)
2014
HK wholesale
Opening
HK$000
Addition
HK$000
Transferred
to disposal
group
classified as
held for sale Impairment
HK$000
HK$000
Other
adjustments
HK$000
Closing
HK$000
5,970
(100)
285
6,155
HK retail
120
120
US wholesale
125
125
30
3,597
3,627
705
904
1,609
100
US retail
UK wholesale
Russia wholesale
4,750
(4,650)
China wholesale
100
46
146
All other segments
200
10
210
12,000
4,501
(100)
(4,650)
341
2013 (Restated)
Opening
HK$000
Addition
HK$000
Transferred
to disposal
group
classified as
held for sale Impairment
HK$000
HK$000
Other
adjustments
HK$000
12,092
Closing
HK$000
6,270
(300)
5,970
HK retail
120
120
US wholesale
125
125
US retail
131
(101)
30
HK wholesale
705
705
4,750
4,750
China wholesale
175
(75)
100
All other segments
270
(70)
200
12,546
(546)
12,000
UK wholesale
Russia wholesale
98

During 2013, as US retail did not qualify as a reportable operating segment. However, with the acquisition in
2014 of ABC Group (Note 41), US retail qualifies as a separate reportable operating segment, and therefore the
comparatives have been restated to be consistent.
36p130(e)
36p134(c)
36p134(d)(iii)
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use
pre-tax cash flow projections based on financial budgets approved by management covering a five-year period.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The
growth rate does not exceed the long-term average growth rate for the shoe business in which the CGU
operates.
36p134(d)(i),
(iv),(v), 130(e)
For each of the CGUs with significant amount of goodwill the key assumptions, long term growth rate and
discount rate used in the value-in-use calculations in 2014 are as follows. In addition, where there has been an
impairment loss in a CGU, the recoverable amount is also disclosed below.
Wholesale
36p134(d)(i)
36p134(d)(i)
36p134(d)(i)
36p134(d)(i)
36p134(d)(i)
36p134 (d)(iv)
36p134 (d)(v)
36p130(g)
36p130(e)
36p134(d)(i)
Sales volume (% annual growth rate)

Sales price (% annual growth rate)
Gross margin (% of revenue)
Other operating costs (HK$000)
Annual capital expenditure (HK$000)
Long term growth rate43
HK
UK
Russia
US Retail
2.7%
3.5%
56%-60%
10,500
N/A
1.8%
3.2%
3.5%
58%-62%
9,200
N/A
1.8%
1.7%
5.2%
59%-63%
5,250
N/A
2.0%
4.1%
N/A
65%-68%
18,500
1,200
2.3%
12.5%
N/A
12.7%
N/A
13.8%
22,659
14.0%
N/A
Pre-tax discount rate

Recoverable amount of the CGU
For each of the CGUs with significant amount of goodwill the key assumptions, long term growth rate and
discount rate used in the value-in-use calculations in 2013 are as follows.
Wholesale
36p134 (d)(iv)
Sales volume (% annual growth rate)

Sales price (% annual growth rate)
Gross margin (% of revenue)
Other operating costs (HK$000)
Long term growth rate43
36p134 (d)(v)
36p130(g)
Pre-tax discount rate
36p134(d)(i)
36p134(d)(i)
36p134(d)(i)
36p134(d)(i)
HK
UK
Russia
2.6%
3.5%
56%-59%
10,300
2.0%
3.0%
3.2%
59%-61%
9,000
2.0%
2.5%
6.2%
60%-65%
5,000
2.5%
12.0%
12.1%
13.5%
36p134(d)(ii)
These assumptions have been used for the analysis of each CGU within the operating segment.
36p134(d)(ii)
Sales volume is the average annual growth rate over the five-year forecast period. It is based on past
performance and management's expectations of market development.
36p134(d)(ii)
Sales price is the average annual growth rate over the five-year forecast period. It is based on current industry
trends and includes long term inflation forecasts for each territory.
36p134(d)(ii)
Gross margin is the average margin as a percentage of revenue over the five-year forecast period. It is based on
the current sales margin levels and sales mix, with adjustments made to reflect the expected future price rises
in leather, a key raw material, which management does not expect to be able to pass on to customers through
price increases. Leather prices are expected to increase over the five year period by an average of 4.4% per year.
43
Weighted average growth rate used to extrapolate cash flows beyond the budget period.
99

36p134(d)(ii)
36p134(d)(ii)
Other operating costs are the fixed costs of the CGUs, which do not vary significantly with sales volumes or
prices. Management forecasts these costs based on the current structure of the business, adjusting for
inflationary increases and these do not reflect any future restructurings or cost saving measures. The amounts
disclosed above are the average operating costs for the five-year forecast period.
Annual capital expenditure is the expected cash costs in the US Retail segment for refurbishing stores. This is
based on the historical experience of management in the ABC group and the planned refurbishment
expenditure required post acquisition. No incremental revenue or cost savings are assumed in the value-in-use
model as a result of this expenditure.
36p134(d)(ii)
The long term growth rates used are consistent with the forecasts included in industry reports. The discount
rates used are pre-tax and reflect specific risks relating to the relevant operating segments.
36p130(a)
The impairment charge arose in a wholesale CGU in Step-land (included in the Russian operating segment)
following a decision in early 2014 to reduce the manufacturing output allocated to these operations (Note 35).
This was a result of a redefinition of the groups allocation of manufacturing volumes across all CGUs in order
to benefit from advantageous market conditions. Following this decision, the group reassessed the depreciation
policies of its property, plant and equipment in this country and estimated that their useful lives would not be
affected. No other class of asset other than goodwill was impaired. The pre-tax discount rate used in the
previous years for the wholesale CGU in Step-land was 13.5%.
36p134(f)
In European Wholesale, the recoverable amount calculated based on value in use exceeded carrying value by
C705. An annual sales volume growth rate of 1.5%, an annual sales price rate of 1.2%, a gross margin of 55%,
annual operating costs of HK$8,900,000, a fall in long term growth rate to 1.6% or a rise in discount rate to
14.9%, all changes taken in isolation, would remove the remaining headroom.
Commentary
IAS/HKAS 36 paragraph 134 requires disclosure of information for CGUs for which the carrying
amount of goodwill or intangible assets is significant in relation to the entity's total goodwill or
intangible assets.
IAS/HKAS 36 paragraph 134(d) (i) requires disclosure of each of the key assumptions on which
management has based its forecasts and to which the recoverable amounts are most sensitive and
IAS/HKAS 36 paragraph 134(f) (iii) requires disclosure of the amounts by which these values must
change for the recoverable amount to be equal to the carrying amount.
The relevant assumptions will vary for each reporting entity dependent upon the individual facts and
circumstances of the reported cash-generating units. The disclosures of key assumptions have been
enhanced in these illustrative financial statements.
19a Financial instruments by category Group and Company

(a) Group
Assets at fair
value Derivatives
used for
Loans and through the
receivables profit & loss
hedging
HK$000
HK$000
HK$000
FRS7p6
31 December 2014
Assets as per balance sheet
Trade and other receivables excluding
prepayments44
profit or loss
Restricted cash
Total
44
AvailableTotal
for-sale
HK$000 HK$000
361
1,103
19,370
19,370
1,464
20,787
20,787
14,928
3,000
11,820
11,820
14,928
3,000
38,715
12,181
1,103
19,370
71,369
Prepayments are excluded from the trade and other receivables balance as this analysis is required only for financial instruments.
100

Other
Liabilities at
financial
fair value Derivatives liabilities at
through the
used for
amortised
profit & loss
hedging
cost
Total
HK$000
HK$000
HK$000 HK$000
Liabilities as per balance sheet
Borrowings (excluding finance lease
liabilities)45
Finance lease liabilities45
Trade and other payables excluding
non-financial liabilities46
268
327
117,839
8,998
117,839
8,998
595
15,668
15,668
Total
268
327
142,505
143,100
Assets at
fair value
through Derivatives
the profit
used for Availablefor-sale
& loss
hedging
HK$000
HK$000 HK$000
Total
HK$000
Loans and
receivables
HK$000
31 December 2013
prepayments45a
profit or loss
Restricted cash
Total
321
875
14,910
14,910
1,196
18,536
18,536
32,062
2,000
7,972
7,972
32,062
2,000
52,598
8,293
875
14,910
76,676
Liabilities
Other
at fair
financial
value
liabilities
through Derivatives
at
the profit
used for amortised
and loss
hedging
cost
HK$000
HK$000 HK$000
Total
HK$000

Borrowings (excluding finance lease
liabilities)45
Finance lease liabilities45
Trade and other payables excluding
non-financial liabilities46
298
449
104,006
10,598
104,006
10,598
747
11,518
11,518
Total
298
449
126,122
126,869
45a
Prepayments are excluded from the trade and other receivables balance as this analysis is required only for financial instruments.
45
The categories in this disclosure are determined by IAS/HKAS 39. Finance leases are mostly outside the scope of IAS/HKAS 39, but they remain within the
46
Non-financial liabilities are excluded from the trade payables balance, as this analysis is required only for financial instruments.
scope of IFRS/HKFRS 7. Therefore, finance leases have been shown separately.
101

(b) Company
Loans and receivables

2014
2013
HK$000
HK$000

89,794
5,039
25,000
7,230
Total
94,833
32,230
Financial liabilities at
amortised cost
2014
2013
HK$000 HK$000
Borrowings
72,822
30,000
72,822
30,000
19b Credit quality of financial assets- Group and Company

FRS7p36(c)
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates:
Group
2014
2013
HK$000 HK$000
Trade receivables
Counterparties with external credit rating (Moodys)
A
BB
BBB
5,895
3,200
1,500
5,757
3,980
1,830
10,595
11,567
Group
2014
2013
HK$000 HK$000
Counterparties without external credit rating
Group 1
Group 2
Group 3
Total unimpaired trade receivables
102
750
4,832
1,770
555
3,596
1,312
7,352
5,463
17,947
17,030

Cash at bank and short-term bank deposits47

Group
AAA
AA
A
2014
HK$000
8,790
5,300
3,038
2013
HK$000
13,890
7,840
9,832
17,128
31,562
Company
2014
2013
HK$000 HK$000
3,711
4,981
1,026
2,004
4,737
6,985
Group
2014
2013
HK$000 HK$000
Available-for-sale debt securities
AA
DV
Derivative financial assets

AAA
AA
DV
347
264
347
264
1,046
418
826
370
1,464
1,196
Group
2014
2013
HK$000 HK$000
Loans to related parties
Group 2
Group 3
2,501
167
2,668
Group 1 new customers/related parties (less than 6 months).

Group 2 existing customers/related parties (more than 6 months) with no defaults in the past.
Group 3 existing customers/related parties (more than 6 months) with some defaults in the past. All
defaults were fully recovered.
Note: None of the loans to related parties is past due but not impaired.
47
1,301
87
1,388
The rest of the balance sheet item cash and cash equivalents is cash on hand.
103

20 Available-for-sale financial assets48 - Group

2014
HK$000
2013
HK$000
14,910
646
473
4,887
(1,256)
(130)
14,096
(459)
1,150
(152)
(850)
690
275
19,370
(17,420)
14,910
(14,910)
1,950
1p79(b)
At 1 January
Additions
Disposals
Net losses transfer from equity (Note 30)
Reclassification of revaluation of previously held interest in ABC Group (Note
30)
Net gains transfer to equity (Note 30)
1p66
At 31 December
Less: non-current portion
1p66
Current portion
FRS7p20(a)(ii)
The group removed profits of HK$217,000 (2013: HK$187,000) and losses HK$87,000 (2013: HK$35,000)
from equity into the income statement. Losses in the amount of HK$55,000 (2013: HK$20,000) were due to
impairments.
FRS7p31, 34,
10Sch9(1)(a)
10Sch9(3)
48
Available-for-sale financial assets include the following:
Listed securities:
Equity securities UK
Equity securities Europe
Equity securities US
Debentures with fixed interest of 6.5% and maturity date of 27 August 2014
Non-cumulative 9.0% non-redeemable preference shares
Unlisted securities:
Debt securities with fixed interest ranging from 6.3% to 6.5% and maturity
dates between July 2015 and May 2017
2014
HK$000
2013
HK$000
8,335
5,850
4,550
210
78
8,300
2,086
4,260
347
264
19,370
14,910
It is presumed that where an investor holds less than 20% of the voting power of an entity, either directly or indirectly, it does not have significant influence
over that entity. However, despite the investors interest in an entitys voting shares, this presumption can be rebutted where an investor can demonstrate
that it has significant influence, e.g. with representation on the board of directors or equivalent governing body of the investee.
104

2014
HK$000
10Sch12(II)
Market value of listed securities
FRS7p34(c)
Available-for-sale financial assets are denominated in the following currencies:
2013
HK$000
19,023
14,646
2014
HK$000
2013
HK$000
7,897
5,850
4,550
1,073
8,121
2,086
4,260
443
19,370
14,910
HK dollar
UK pound
US dollar
Other currencies
FRS13p93(b), (d)
The fair values of unlisted securities are based on cash flows discounted using a rate based on the market
interest rate and the risk premium specific to the unlisted securities (2013: 6%; 2012: 5.8%). The fair
values are within level 2 of the fair value hierarchy (see Note 3.3).
FRS7p36(a)
The maximum exposure to credit risk at the reporting date is the carrying value of the debt securities
classified as available-for-sale.
FRS7p36(c)
None of these financial assets is either past due or impaired.
10Sch19(1)
Available-for-sale financial assets of aggregated carrying amount of HK$200,000 are in shares of fellow
subsidiaries.
10Sch12(4)
Listed securities of aggregate carrying amount of HK$1.2 million have been pledged to a bank to secure
loan and overdraft facilities for XX Limited, a fellow subsidiary.
At 31 December 2014, the carrying amounts of interests in each of the following companies (if any) exceed
10% of total assets of the company and the group.
Name
Place of
incorporation
Particulars of
Principal activities issued shares held Interest held
xx
xx
xx
S129(2)
xx
105
xx

21

2014
2013
Assets Liabilities
Assets Liabilities
HK$000 HK$000 HK$000 HK$000
FRS7p22(a)(b)
FRS7p22(a)(b)
FRS7p22(a)(b)
Interest rate swaps cash flow hedges

Interest rate swaps fair value hedges
Forward foreign exchange contracts cash flow
hedges
Forward foreign exchange contracts held-for-trading
Total
1p66, 69
1p66, 69
Less non-current portion:

Current portion
351
57
110
37
220
49
121
11
695
361
180
268
606
321
317
298
1,464
595
1,196
747
345
50
100
35
200
45
120
9
395
135
245
129
1,069
460
951
618
Derivatives holding for trading purpose are classified as a current asset or liability. The full fair value of a
hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged
item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less
than 12 months.
FRS7p24
The ineffective portion recognised in the profit or loss that arises from fair value hedges amounts to a loss
of HK$1,000 (2013: loss of HK$1,000) (Note 8). The ineffective portion recognised in the profit or loss
that arises from cash flow hedges amounts to a gain of HK$17,000 (2013: a gain of HK$14,000) (Note 8).
There was no ineffectiveness to be recorded from net investment in foreign entity hedges.
39p91(a),101(a)
During the year, the Group's derivative financial instruments were novated to a central counterparty
following a change in the law. This had no impact on the Group's hedge accounting.
(a) Forward foreign exchange contracts
FRS7p31
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December
2014 were HK$92,370,000 (2013: HK$89,689,000).
FRS7p23(a)
39p100, 1p79(b)
The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at
various dates during the next 12 months. Gains and losses recognised in the hedging reserve in equity
(Note 30) on forward foreign exchange contracts as of 31 December 2014 are recognised in the income
statement in the period or periods during which the hedged forecast transaction affects the income
statement. This is generally within 12 months from the end of the reporting period unless the gain or loss is
included in the initial amount recognised for the purchase of fixed assets, in which case recognition is over
the lifetime of the asset (five to ten years).
(b) Interest rate swaps
FRS7p31
The notional principal amounts of the outstanding interest rate swap contracts at 31 December 2014 were
HK$4,314,000 (2013: HK$3,839,000).
FRS7p23(a),
1p79(b)
At 31 December 2014, the fixed interest rates vary from 6.9% to 7.4% (2013: 6.7% to 7.2%), and the main
floating rates are EURIBOR and LIBOR. Gains and losses recognised in the hedging reserve in equity (Note
30) on interest rate swap contracts as of 31 December 2014 will be continuously released to the income
statement until the repayment of the bank borrowings (Note 32).
(c) Hedge of net investment in foreign entity
FRS7p22, 1p79(b)
A proportion of the groups US dollar-denominated borrowing amounting to HK$321,000 (2013:

HK$321,000) is designated as a hedge of the net investment in the groups US subsidiary. The fair value of
the borrowing at 31 December 2014 was HK$370,000 (2013: HK$279,000). The foreign exchange loss of
HK$45,000 (2013: gain of HK$40,000) on translation of the borrowing to currency at the end of the year
is recognised in other comprehensive income.
106

FRS7p36(a)
The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the
balance sheet.
22 Trade and other receivables Group
FRS7p36,
1p77
10Sch6
1p78(b)
1p78(b)
1p78(b),
24p18(b)
1p78(b),
24p18(b)
2014
HK$000
2013
HK$000
Trade receivables
Less: allowance for impairment of trade
receivables
18,174
17,172
(109)
(70)
Trade receivables net

Prepayments
18,065
1,300
17,102
1,146
54
46
2,668
1,388
22,087
19,682
(2,322)
(1,352)
19,765
18,330
Receivables from related parties (Note 42)

Loans to related parties (Note 42)
1p78(b), 1p66 Less non-current

1p66
portion: loans to related parties
Current portion
All non-current receivables are due within five years from the end of the year.
FRS7p25
The fair values of trade and other receivables are as follows:

Group
Trade receivables
Receivables from related parties
2014
HK$000
2013
HK$000
18,065
54
2,722
17,102
46
1,398
20,841
18,546
FRS13p93(b), The fair values of loans to related parties are based on cash flows discounted using a rate based on the borrowings
(d),
rate of 7.5% (2013: 7.2%). The discount rate equals to LIBOR plus appropriate credit rating. The fair values are
FRS13p97
within level 2 of the fair value hierarchy.
24p18(b)(i)
The effective interest rates on non-current receivables were as follows:
FRS7p14,
10Sch12(4)
2014
2013
6.5-7.0%
6.5-7.0%
Certain UK subsidiaries of the group transferred receivable balances amounting to HK$1,014,000 to a bank in
exchange for cash during the year ended 31 December 2014. The transaction has been accounted for as a
collateralised borrowing (Note 32). In case the entities default under the loan agreement, the bank has the right to
receive the cash flows from the receivables transferred. Without default, the entities will collect the receivables
and allocate new receivables as collateral.
107

GEM18.50B
(2)(b)(ii)
A4(2)(b)(ii)
The majority of the groups sales are on letter of credit or documents against payment. The remaining
amounts are with credit terms of 60 days and which are mostly covered by customers standby letters of credit
or bank guarantees. At 31 December 2014 and 2013, the ageing analysis49 of the trade receivables based on
invoice date were as follows:
Up to 3 months
3 to 6 months
Over 6 months
2014
2013
HK$000
HK$000
17,881
297
50
16,997
187
34
18,228
17,218
DV
As of 31 December 2014, trade receivables of HK$17,670,000 (2013: HK$16,595,000) were fully performing.
FRS7 p37(a)
As of 31 December 2014, trade receivables of HK$277,000 (2013: HK$207,000) were past due but not
impaired. These relate to a number of independent customers for whom there is no significant financial
difficulty and based on past experience, the overdue amounts can be recovered. The ageing analysis of these
trade receivables is as follows:
Up to 3 months
3 to 6 months
FRS7 p37(b)
2014
HK$000
2013
HK$000
177
100
108
99
277
207
As of 31 December 2014, trade receivables of HK$227,000 (2013: HK$142,000) were impaired. The amount
of the provision was HK$109,000 as of 31 December 2014 (2013: HK$70,000). The individually impaired
receivables mainly relate to wholesalers, which are in unexpectedly difficult economic situations. It was
assessed that a portion of the receivables is expected to be recovered. The ageing of these receivables is as
follows:
3 to 6 months
Over 6 months
2014
HK$000
2013
HK$000
177
50
108
34
227
142
The carrying amounts of the groups trade and other receivables are denominated in the following currencies:
HK dollar
UK pound
US dollar
Other currencies
49
2014
HK$000
2013
HK$000
9,846
5,987
6,098
156
8,669
6,365
4,500
148
22,087
19,682
The disclosure requirement of the Listing Rules for ageing analysis of trade debtors should include the amounts due by related companies which are trading
in nature. Moreover, it is recommended that the ageing analysis should be presented on the basis of the date of the relevant invoice and categorised into
time-bands that are appropriate for the business (e.g. where the credit period is 30 days from the date of invoice, the ageing analysis could be categorised into
30 days, 60 days, 90 days, 120 days, etc.)
108

Movements on the groups allowance for impairment of trade receivables are as follows:
FRS7p16
FRS7p20(e)
At 1 January
Provision for receivables impairment
Receivables written off during the year as uncollectible
Unused amounts reversed
Unwind of discount
At 31 December
2014
HK$000
2013
HK$000
70
74
(28)
(10)
3
38
61
(23)
(8)
2
109
70
The creation and release of provision for impaired receivables have been included in other expenses in the
income statement (Note 9). Unwind of discount is included in finance expenses in the income statement
(Note 11). Amounts charged to the allowance account are generally written off, when there is no expectation of
recovering additional cash.
FRS7p16
The other classes within trade and other receivables do not contain impaired assets.
FRS7p36(a)
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable
mentioned above. The group does not hold any collateral as security.
23 Inventories Group
2p36(b), 1p78(c)
Raw materials
Work in progress
Finished goods50
2014
HK$000
2013
HK$000
7,622
1,810
15,268
7,562
1,796
8,774
24,700
18,132
2p36(d), 38
The cost of inventories recognised as expense and included in cost of sales amounted to HK$60,252,000
(2013: HK$29,545,000), which included inventory write-down of HK$6,117,000 (2013: Nil).
2p36 (f),(g)
As at 31 December 2013, a batch of finished goods with cost of HK$1,003,000 was considered as obsolete.
A provision of HK$603,000 was made as at 31 December 2013. The group reversed HK$603,000 of a
previous inventory write-down in July 2014. The group has sold all the goods that were written down to an
independent retailer in Australia at original cost. The amount reversed has been included in cost of sales
in the income statement.
24 Financial assets at fair value through profit or loss - Group
FRS7p8(a), 31,
34(c)
10Sch9(1)(a)
10Sch9(3)
10Sch12(11)
Listed securities held-for-trading

2014
HK$000
2013
HK$000
5,850
4,250
1,720
3,560
3,540
872
11,820
7,972
7p15
Financial assets at fair value through profit or loss are presented within 'operating activities' as part of
changes in working capital in the statement of cash flows (Note 37).
FRS7p20(a)(i)
Changes in fair values of financial assets at fair value through profit or loss are recorded in other gains
net in the income statement (Note 8).
FRS13p91
The fair value of all equity securities is based on their current bid prices in an active market.
50Separate
disclosure of finished goods at fair value less cost to sell is required, where applicable.
109

25 Cash and bank balances Group and Company

(a) Cash and cash equivalents
Group
Company
2014
2013
2014
2013
HK$000
HK$000
HK$000 HK$000
Cash at bank and on hand
Short-term bank deposits
Cash and cash equivalents (excluding bank overdrafts)
7p45
8,398
6,530
26,648
5,414
5,039
7,230
14,928
32,062
5,039
7,230
Cash, cash equivalents and bank overdrafts include the following for the purposes of the statement of cash flows:
Group
2014
HK$000
7p8
2013
HK$000
(Restated)

Bank overdrafts (Note 32)
14,928
(2,650)
32,062
(6,464)
12,278
25,598
(b) Restricted cash

As at 31 December 2014, HK$3,000,000 (2013: HK$2,000,000) are restricted deposits held at bank as reserve
for serving of debt for revolving loans provided by the bank.
26 Non-current assets held-for-sale and discontinued operations Group

FRS5p41
(a)(b)(d)
The assets and liabilities related to Company Shoes Limited(part of the UK wholesale segment),a 80% owned
subsidiary of the company, have been presented as held for sale following the approval of the groups
management and shareholders on 23 September 2014 to sell Company Shoes Limited in the UK. The completion
date for the transaction is expected by May 2015.
FRS5p38
(a) Assets of disposal group classified as held for sale
FRS5p38
2014
HK$000
2013
HK$000

Goodwill
Other intangible assets
Inventory
1,563
100
1,000
442
228
Total
3,333
(b) Liabilities of disposal group classified as held for sale

2014
HK$000
2013
HK$000

Provisions
104
20
96
Total
220
110

(c) Cumulative income or expense recognised in other comprehensive income relating to disposal group
classified as held for sale
FRS5p38
2014
HK$000
2013
HK$000
Foreign exchange translation adjustments51
Total
FRS13p93(a),(b),
(d)
In accordance with IFRS/HKFRS 5, the assets and liabilities held for sale were written down to their fair
value less costs to sell of HK$3,113,000. This is a non-recurring fair value which has been measured using
observable inputs, being the prices for recent sales of similar businesses, and is therefore within level 2 of
the fair value hierarchy. The fair value has been measured by calculating the ratio of transaction price to
annual revenue for the similar businesses and applying the average to Shoes Limited.
FRS5p33 (b)
Analysis of the result of discontinued operations, and the result recognised on the re-measurement of
assets or disposal group, is as follows52:
2014
HK$000
2013
HK$000
1,200
(960)
1,150
(950)
240
(96)
200
(80)
Profit after tax of discontinued operations
144
120
Pre-tax loss recognised on the re-measurement of assets of disposal group

Tax
(73)
29
After tax loss recognised on the re-measurement of assets of disposal group
(44)
100
120
80
20
120
-
100
120
Revenue
Expenses
12p81(h)(ii)
12p81(h)(ii)
Profit before tax of discontinued operations

Tax
Profit for the year from discontinued operations attributable to:

- Owners of the company
- Non-controlling interests
(d) Cash flows
FRS5p33(c)
FRS5p33(c)
FRS5p33(c)
Operating cash flows53

Investing cash flows53
Financing cash flows53
Total cash flows
51
52
53
2014
HK$000
2013
HK$000
300
(103)
(295)
190
(20)
(66)
(98)
104
IFRS/HKFRS 5 requires the separate presentation of any cumulative income or expense recognised in other comprehensive income relating to a non-current
asset (or disposal group) classified as held for sale. There are no items recognised in equity relating to the disposal group classified as held-for-sale, but the
line items are shown for illustrative purposes.
These disclosures can also be given on the face of the primary financial statements.
Under this approach, the entity presents the statement of cash flows as if no discontinued operation has occurred and makes the required IFRS/HKFRS 5
para 33 disclosures in the notes. It would also be acceptable to present the three categories separately on the face of the statement of cash flows and present
the line-by-line breakdown of the categories, either in the notes or on the face of the statement of cash flows. It would not be acceptable to present all cash
flows from discontinued operations in one line either as investing or operating activity.
111

27
1p79,
Authorised: (Note (a))

Ordinary shares of HK$1 each (Note (b))
31 December 2014
31 December 2013
Number of
Number of
shares
shares
(thousands)
HK$000 (thousands)
HK$000
-
100,000
100,000
Ordinary shares, issued and fully paid:
Number of shares
(thousands)
Share capital
HK$000
At 1 January 2013
Employee share option scheme:
Proceeds from shares issued (Note 28)
20,000
20,000
1,000
1,000
At 31 December 2013
21,000
21,000
750
3,550
-
750
3,550
17,144
25,300
42,444
1p79,A2(4)&(5),
GEM18.07(4)&(5)
1p106,(d)(iii)
1p106(d)(iii)
FRS3pB64(f)(iv)
1p79(a)

Acquisition of subsidiaries (Note (c)) (Note 41)
Transition to no-par regime on 3 March 2014 (Note (d))
At 31 December 2014
(a)
Under the Hong Kong Companies Ordinance (Cap. 622), which commenced operation on 3 March
2014, the concept of authorised share capital no longer exists. [Consider adding further disclosure
if the number of shares that the company may issue is constrained in other ways, such as through
the companys articles of association]
(b)
In accordance with section 135 of the Hong Kong Companies Ordinance (Cap. 622), the Companys
shares no longer have a par or nominal value with effect from 3 March 2014. There is no impact on
the number of shares in issue or the relative entitlement of any of the members as a result of this
transition.
(c)
The group issued 3,550,000 shares on 1 March 2014 (14.0% of the total ordinary share capital
issued) to the shareholders of ABC Group as part of the purchase consideration for an additional
65% of its ordinary share capital. The ordinary shares issued have the same rights as the other
shares in issue. The fair value of the shares issued amounted to HK$10,050,000 (HK$2.83 per
share). The related transaction costs amounting to HK$50,000 have been netted off with the
deemed proceeds.
(d)
In accordance with the transitional provisions set out in section 37 of Schedule 11 to Hong Kong
Companies Ordinance (Cap. 622), on 3 March 2014, any amount standing to the credit of the share
premium account has become part of the Companys share capital.
27a Buy-back of shares

1p79(a),
A10(4), GEM18.14
10Sch13(1)(d)
54
The Company acquired 875,000 of its own shares through purchases on the Hong Kong Stock Exchange
on 18 April 2014. The total amount paid to acquire the shares was HK$2,564,000 and has been deducted
from retained earnings54 within shareholders equity (Note 29).
In accordance with section 257 of the Hong Kong Companies Ordinance (Cap. 622), the payment for buy-back of shares of companies incorporated and listed
in Hong Kong from the stock market may be made (a) out of the Companys distributable profits; (b) out of the proceeds of a fresh issue of shares made for
the purpose of the buy-back.
112

28 Share-based payments Group and Company

FRS2p45(a),
10Sch12(2),A10(1)&
(2),
GEM18.11&18.12
Share options are granted to directors and to selected employees. The exercise price of the granted
options is equal to the market price of the shares less 15% on the date of the grant. Options are
conditional on the employee completing three years service (the vesting period). The options are
exercisable starting three years from the grant date, subject to the group achieving its target growth in
earnings per share over the period of inflation plus 4%; the options have a contractual option term of
five years. The group has no legal or constructive obligation to repurchase or settle the options in cash.
Movements in the number of share options outstanding and their related weighted average exercise
prices are as follows:
2014
2013
Average
exercise
price in Number of
HK$ per
share
share
options
option (thousands)
Average
exercise
price in
HK$ per
Number of
share share options
option (thousands)
FRS2p45 (b)(v)
At 1 January
Granted
Forfeited
Exercised
Expired
1.73
2.95
2.30
1.28
-
4,744
964
(125)
(750)
-
1.29
2.38
0.80
1.08
2.00
4,150
1,827
(33)
(1,000)
(200)
FRS2p45 (b)(vi)
At 31 December
2.03
4,833
1.73
4,744
FRS2p45 (b)(i)
FRS2p45 (b)(ii)
FRS2p45 (b)(iii)
FRS2p45 (b)(iv)
FRS2p45 (b)(vii),
FRS2p45(c)
Out of the 4,833,000 outstanding options (2013: 4,744,000), 1,875,000 options (2013: 1,400,000) were
exercisable. Options exercised in 2014 resulted in 750,000 shares (2013: 1,000,000 shares) being issued at
a weighted average price of HK$1.28 each (2013: HK$1.08 each). The related weighted average share price
at the time of exercise was HK$2.85 (2013: HK$2.65) per share. The related transaction costs amounting
to HK$10,000 (2013: HK$10,000) have been netted off with the proceeds received.
FRS2p45(d)
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Exercise price
in HK$ per
share option
Expiry date 1 July

2013
2013
2014
2015
2016
2017
FRS2p46
FRS2p47(a)
1.10
1.20
1.35
2.00
2.38
2.95
Number of share
options (thousands)
2014
2013
800
1,075
217
1,777
964
500
900
1,250
267
1,827
4,833
4,744
The weighted average fair value of options granted during the period determined using the Black-Scholes
valuation model was HK$0.86 per option (2013: HK$0.66). The significant inputs into the model were
weighted average share price of HK$3.47 (2013: HK$2.8) at the grant date, exercise price shown above,
volatility of 30% (2013: 27%), dividend yield of 4.3% (2013: 3.5%), an expected option life of three years,
and an annual risk-free interest rate of 5% (2013: 4%). The volatility measured at the standard deviation of
continuously compounded share returns is based on statistical analysis of daily share prices over the last
three years. See Note 10 for the total expense recognised in the income statement for share options granted
to directors and employees.
113

29 Retained earnings Group and Company

A2(4)&(5),
GEM18.07(4)&(5)
1p106(d)
1p106(d)
FRS2p50
12p68C
19p120(c)
At 1 January 2013
Profit for the year
Dividends paid relating to 2012
Value of employee services55
Tax credit relating to share option scheme
Remeasurements of post-employment benefit liabilities net of tax
At 31 December 2013
1p106(d)
1p106(d)
FRS2p50
12p68C
1p97(a)
19p120(c)
12p81(a), (d)
At 1 January 2014
Profit for the year
Value of employee services55 (Note 10)
Buy-back of shares56
Impact of change in [country name] tax rate on deferred tax57
At 31 December 2014
55
56
57
Group
HK$000
50,932
16,304
(15,736)
822
20
(637)
Company
HK$000
41,934
10,026
(15,736)
822
51,705
37,046
51,705
31,874
(10,102)
690
30
(2,564)
83
(10)
37,046
14,135
(10,102)
690
(2,564)
71,706
39,205
The credit entry to equity in respect of the IFRS/HKFRS 2 charge should be recorded in accordance with local company law and practice. This may be a
specific reserve, retained earnings or share capital.
The accounting treatment of buy-back of shares should be recorded in accordance with local company law and practice. National law may require to deduct
distributable profits. In the absence of any legal requirement, the amount is debited to a separate component of equity. Paid-in capital is not reduced.
In accordance with section 257 of the Hong Kong Companies Ordinance (cap. 622), the payment for buy-back of shares of companies incorporated and listed
in Hong Kong from the stock market may be made (a) out of the Companys distributable profits; (b) out of the proceeds of a fresh issue of shares made for
the purpose of the buy back.
Solely for illustrative purposes, a change in tax rates has been assumed to have taken place in 2014.
114

30 Other reserves Group and Company

S48B, 10Sch4(1),
10Sch6-7,
10Sch13(1)(e),A2(
4)&(5),
GEM18.07(4)&(5),
GEM18.50B(1)(l)
FRS7p20(a)(ii)
12p61A, 81(ab)
28p10
FRS7p23(c)
12p61A, 81(ab)
FRS7p23(d)
12p61A, 81(ab)
FRS7p23(e)
12p61A, 81(ab)
39p102(a)
21p52(b)
21p52(b), 28p10
(a) Group
Availablefor-sale
Hedging
reserve Investments
HK$000
HK$000
Convertible
bond
HK$000
Translation
HK$000
Total
HK$000
At 1 January 2013
Revaluation gross (Note 20)
Revaluation transfer gross
(Note 20)
Revaluation tax (Note 13)
Revaluation associates (Note
12b)
Cash flow hedges:
Fair value gains
Tax on fair value gains (Note
13)
Transfers to sales
Tax on transfers to sales
(Note 13)
Transfers to inventory
Tax on transfers to inventory
(Note 13)
Net investment hedge (Note
21)
differences:
Group
Associates
65
1,320
275
5,168
6,553
275
(152)
(61)
(152)
(61)
(14)
(14)
300
300
(101)
(236)
(101)
(236)
79
(67)
79
(67)
22
22
40
40
(78)
105
(78)
105
At 31 December 2013
62
1,368
5,235
6,665
115

S48B, 10Sch4(1),
10Sch6-7,
10Sch13(1)(e),
A2(4)&(5),
GEM18.07(4)&(5),
GEM18.50B(1)(l) (a) Group
FRS7p20(a)(ii)
12p61A, 81(ab)
28p10
FRS7p23(c)
12p61A, 81(ab)
FRS7p23(d)
12p61A, 81(ab)
FRS7p23(e)
12p61A, 81(ab)
39p102(a)
21p52(b)
21p52(b), 28p10
1p106(d)(iii)
FRS3p42
32p28
12p61A
At 1 January2014
Revaluation gross (Note
20)
Revaluation transfer
gross (Note 20)
Revaluation associates
(Note 12b)
Cash flow hedges:
Fair value gains
Tax on fair value gains
(Note 13)
Transfers to sales
(Note 13)
Tax on transfers to
inventory (Note 13)
(Note 21)
differences:
Group
Associates
Reclassification of
(Note 41)
component (Note 32b)
Tax on equity component
on convertible bond (Note
13)
At 31 December 2014
Available-forConvertible
Hedging
sale
bond
reserve
investments
Capital
HK$000
HK$000
62
HK$000
1,368
HK$000
690
690
(130)
(198)
(130)
(198)
(12)
(12)
368
368
(123)
(120)
(123)
(120)
40
(151)
40
(151)
50
50
(45)
(45)
2,833
(74)
2,833
(74)
50
50
(850)
(850)
7,761
7,761
(2,328)
5,433
126
868
50
7,949
(2,328)
14,426
reserve Translation
Total
HK$000 HK$000
5,235
6,665
(b) Company
Convertible bonds
HK$000
12p61A
58
Balance at 1 January and 31 December 2013

Convertible bonds equity component58 (Note 32b)
Tax on equity component (Note 13)
Balance at 31 December 2014
7,761
(2,328)
5,433
Temporary taxable difference for the liability component of the convertible bond is determined in accordance with para 23 of IAS/HKAS 12. It is assumed that
the tax base on the convertible bond in note 32b is not split between the debt and equity elements. If the tax base were split, this would impact the deferred
tax position.
116

Other comprehensive income, net of tax
Group
Other
reserves
Retained
earnings
Total
HK$000 HK$000 HK$000

DV
19p120(c)
DV
FRS3p42
28p10
39p102(a)
21p52(b)
31 December 2014
Items that will not be reclassified to profit
or loss
Remeasurement of post-employment
benefit obligations
Items that may be subsequently
reclassified to profit or loss
Change in value of available-for-sale
financial assets
Reclassification of revaluation of
previously held interest in ABC Group
method
Impact of change in [country name] tax
rate on deferred tax
Cash flow hedges
DV
DV
19p102(c)
DV
28p10
39p102(a)
21p52(b)
Total
31 December 2013
Items that will not be reclassified to profit
or loss
Remeasurement of post-employment
benefit obligations
Items that may be subsequently
reclassified to profit or loss
Change in value of available-for-sale
financial assets
method
Cash flow hedges
DV
Total
FRS7p20,
1p106A
NonTotal other
controlling comprehensive
interests
income
HK$000
HK$000
83
-
83
-
83
-
362
362
362
(850)
(850)
(850)
(12)
(12)
(12)
64
(45)
2,759
2,278
(10)
(10)
(10)
64
(45)
2,759
2,268
252
252
(10)
64
(45)
3,011
2,520
2,278
73
2,351
252
2,603
(637)
(637)
(637)
62
62
62
(14)
(3)
40
27
(14)
(3)
40
27
(40)
(14)
(3)
40
(13)
112
112
(637)
112
(525)
(40)
(40)
72
(565)
Commentary
Entities are allowed to show the disaggregation of changes in each component of equity arising from transactions
recognised in other comprehensive income in either the statement of changes in equity or in the notes. In these illustrative
financial statements, we present this information in the notes.
117

31

Group
2014
2013
HK$000
HK$000
1p77
24p18
A4(2)(c)(ii),
GEM18.50B
(2)(c)(ii)
Trade payables
Amounts due to related parties (Note 42)
Social security and other taxes
Other liabilities contingent considerations (Note 41)
Accrued expenses
9,791
2,202
2,002
1,500
1,983
9,990
1,195
960
828
17,478
12,973
At 31 December 2014, the ageing analysis59 of the trade payables (including amounts due to related parties of
trading in nature) based on invoice date were are follows:
2013
2014
HK$000
HK$000
[insert ageing, e.g.]
0-30 days
9,808
10,099
31-60 days
1,120
1,080
61-90 days
1,065
6
11,993
11,185
32 Borrowings Group and Company

Group
2014
2013
HK$000
HK$000
Non-current
Bank borrowings
Convertible bond
Debentures and other loans
Redeemable preference shares
32,193
42,822
3,300
30,000
6,806
40,244
18,092
30,000
8,010
42,822
30,000
30,000
115,121
96,346
72,822
30,000
2,650
1,014
3,368
2,492
2,192
6,464
4,598
4,608
2,588
11,716
18,258
126,837
114,604
72,822
30,000
Current
Collateralised borrowings (Note 22)
Bank borrowings
Total borrowings
59
Company
2014
2013
HK$000
HK$000
The disclosure requirement of the Listing rule for ageing analysis of trade payables should include the amounts due to related companies which are trading in
nature. Moreover, it is recommended that the ageing analysis should be presented on the basis of the date of the relevant invoice and categorised into timebands that are appropriate for the business (e.g. where the credit period is 30 days from the date of invoice, the ageing analysis could be categorised into 30
days, 60 days, 90 days, 120 days, etc.)
118

FRS7p31,
A22(1),
GEM18.21
(a) Borrowings
Bank borrowings mature until 2018 and bear average coupons of 7.5% annually (2013: 7.4% annually).
At 31 December 2014, the groups borrowings were repayable as follows:
Group
Bank borrowings
and overdrafts
Other loans
2014
2013
2014
2013
HK$000 HK$000 HK$000
HK$000
Within 1 year
6,018
11,062
3,506
4,608
Between 1 and 2 years
3,870
35,238
2,000
5,059
28,323
5,006
43,122
9,900
Over 5 years
31,000
33,133
38,211
51,306
79,628
52,700
10Sch9(1)(d)
Wholly repayable within

5 years
Wholly repayable after 5
years
Company
Other loans
2014
2013
HK$000
HK$000
42,822
30,000
30,000
72,822
30,000
Group
Bank borrowings
and overdrafts
Other loans
2014
2013
2014
2013
HK$000 HK$000 HK$000
HK$000
Company
Other loans
2014
2013
HK$000
HK$000
38,211
51,306
46,328
4,608
42,822
38,211
51,306
33,300
79,628
48,092
52,700
30,000
72,822
30,000
30,000
FRS7p14
10Sch10
Total borrowings include secured liabilities (bank and collateralised borrowings). Bank borrowings are
secured by the land and buildings of the group of HK$37,680,000 (2013: Nil) (Notes 16 and 16a).
Collateralised borrowings are secured by trade receivables of HK$1,014,000 (2013: Nil) (Note 22).
FRS7p31
The exposure of the groups borrowings to interest rate changes and the contractual repricing dates at the end
of the year are as follows:
Group
6 months or less
6-12 months
1-5 years
Over 5 years
FRS7p25
Company
2014
HK$000
2014
HK$000
2013
HK$000
(Restated)
2013
HK$000
10,496
36,713
47,722
31,906
16,748
29,100
38,555
30,201
42,822
30,000
30,000
126,837
114,604
72,822
30,000
The carrying amounts and fair value of the non-current borrowings are as follows:
Group
Company
Carrying amount
Fair Value
Carrying amount
Fair Value
2014
2013
2014
2013
2014
2013
2014
2013
HK$000
HK$000 HK$000
HK$000 HK$000 HK$000 HK$000 HK$000
Bank borrowings
Redeemable
preference shares
Debentures and
other loans
Convertible bond
Finance lease
liabilities
32,193
40,244
32,590
39,960
30,000
30,000
28,450
28,850
30,000
30,000
28,450
28,850
3,300
42,822
18,092
-
3,240
42,752
17,730
-
42,822
42,752
6,806
8,010
6,205
7,990
115,121
96,346
113,237
94,530
72,822
30,000
71,202
28,850
FRS13p93(b),(d) The fair value of current borrowings equals their carrying amount, as the impact of discounting is not
, FRS13p97,
significant. The fair values are based on cash flows discounted using a rate based on the borrowing rate
FRS7p25
7.5% (2013: 7.2%) and are within level 2 of the fair value hierarchy.
119
of

FRS7p31, 34(c)
The carrying amounts of the groups borrowings are denominated in the following currencies:
Group
2014
2013
HK$000
HK$000
HK dollar
UK pound
US dollar
Other currencies
DV, 7p50(a)
Company
2014
2013
HK$000
HK$000
80,100
28,353
17,998
386
80,200
16,142
17,898
364
72,822
-
30,000
-
126,837
114,604
72,822
30,000
Group
2014
HK$000
2013
HK$000
The group has the following undrawn borrowing facilities:
Floating rate:
Expiring within one year
Expiring beyond one year
Fixed rate:
6,150
14,000
4,100
8,400
18,750
12,500
38,900
25,000
The facilities expiring within one year are annual facilities subject to review at various dates during 2014.
The other facilities have been arranged to help finance the proposed expansion of the groups activities in
UK.
(b) Convertible bonds
FRS7p17,
The company issued 500,000 5.0% convertible bonds at a par value of HK$50 million on 2 January 2014.
1p79(b), 32p28,
The bonds mature five years from the issue date at their nominal value of HK$50 million or can be
32p31, 10Sch9(4),
converted into shares at the holders option at the maturity date at the rate of 33 shares per HK$500. The
A10(1)&(2),
GEM18.11& 18.12 values of the liability component and the equity conversion component were determined at issuance of the
bond.
The convertible bond recognised in the balance sheet is calculated as follows:

Group and Company
2014
2013
HK$000
HK$000
32p28
Face value of convertible bond issued on 2 January 2014

Equity component (Note 30)
50,000
(7,761)
Liability component on initial recognition at 2 January 2014

Interest expense (Note 11)
Interest paid
42,239
3,083
(2,500)
42,822
Liability component at 31 December 2014

FRS13p93(b),
(d), FRS13p97
The fair value of the liability component of the convertible bond at 31 December 2014 amounted to
HK$42,617,000. The fair value is calculated using cash flows discounted at a rate based on the borrowings
rate of 7.5% and are within level 2 of the fair value hierarchy.
120

(c) Redeemable preference shares

32p15, 32p18(a)
The company issued 30 million cumulative redeemable preference shares with a par value of HK$1 per share
on 4 January 2013. The shares are mandatorily redeemable at their par value on 4 January 2018, and pay
dividends at 6.5% annually.
(d) Finance lease liabilities
The rights to the leased asset are reverted to the lessor in the event of default of the lease liabilities by the
Group.
2014
2013
HK$000
HK$000
17p31(b)
Gross finance lease liabilities minimum lease payments

No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years
2,749
6,292
2,063
3,203
7,160
2,891
11,104
(2,106)
13,254
(2,656)
Present value of finance lease liabilities
8,998
10,598
The present value of finance lease liabilities is as follows:

Later than 5 years
2,192
4,900
1,906
2,588
5,287
2,723
8,998
10,598
Future finance charges on finance leases
17p31(b)
121

33

The analysis of deferred tax assets and deferred tax liabilities is as follows:
Group
2013
2014
HK$000
HK$000
1p61
Deferred tax assets:

Deferred tax asset to be recovered after more
than 12 months
Deferred tax asset to be recovered within 12
months
Deferred tax liabilities:

Deferred tax liability to be recovered after
more than 12 months
Deferred tax liability to be recovered within
12 months
Deferred tax liabilities (net)
Company
2014
2013
HK$000
HK$000
(2,899)
(3,319)
(647)
(64)
(3,546)
(3,383)
9,561
7,147
2,135
1,627
1,037
11,188
8,184
2,135
7,642
4,801
2,135
The gross movement on the deferred income tax account is as follows:

Group
2014
HK$000
At 1 January
Income statement charge/(credit)
(Note 13)
Tax charge/(credit) relating to
components of other comprehensive
income (Note 13)
Tax charged/(credited) directly to
equity (Note 13)
2013
HK$000
Company
2014
2013
HK$000
HK$000
4,801
(1,753)
1,953
3,000
(154)
102
2,125
(193)
241
(150)
2,298
(20)
2,328
7,642
4,801
2,135
At 31 December
122

12p81(g)(i)
12p81(g)(ii)
The movement in deferred income tax assets and liabilities during the year, without taking into consideration
the offsetting of balances within the same tax jurisdiction, is as follows:
Deferred tax liabilities
Group
Accelerated tax Fair value Convertible
depreciation
gains
bond
Other
HK$000 HK$000
HK$000 HK$000
Company
Convertible
bond
HK$000
Total
HK$000
At 1 January 2013
Charged to the income statement
Charged to other comprehensive
income
Charged directly to equity
6,058
1,786
272
237
304
6,567
2,090
241
61
100
61
341
12p81(g)(i)
At 31 December 2013
8,085
433
541
9,059
12p81(g)(ii)
Charged/(credited) to the income

statement
250
(193)
57
(193)
12p81(ab)

income
Acquisition of subsidiaries (Note
41)
231
2,328
231
2,328
2,328
553
(571)
1,375
(263)
275
(123)
2,203
(957)
8,317
1,776
2,135
693
12,921
2,135
12p81(g)(ii)
12p81(ab)
12p81(a)
12p81(a)
12p81(g)(i)
At 31 December 2014
Deferred tax assets
12p81(g)(ii)
12p81(ab)
12p81(a)
At 1 January 2013
statement
Credited to other comprehensive income
Credited directly to equity
12p81(g)(i)
12p81(g)(ii)
12p81(ab)
12p81(a)
At 31 December 2013
(Credited)/charged to the income
statement
Charged to other comprehensive income
Group
Retirement
benefit
Impairment
obligation Provisions
losses
Tax losses
HK$000
HK$000
HK$000
HK$000
Other
HK$000
Total
HK$000
(428)
(962)
(732)
(1,072)
(373)
(3,567)
(211)
181
(146)
(20)
35
(211)
(20)
(35)
(460)
(495)
(639)
(816)
(732)
(1,532)
(539)
(4,258)
10
(250)
(538)
(125)
(322)
(85)
1,000
(350)
(95)
(30)
(236)
45
10
(30)
(250)
(796)
(879)
(1,479)
(1,139)
(882)
(900)
(5,279)
12p81(g)(i)
At 31 December 2014
12p81(e)
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the
related tax benefit through future taxable profits is probable. The group did not recognise deferred income tax
assets of HK$333,000 (2013: HK$1,588,000) in respect of losses amounting to HK$1,000,000 (2013:
HK$5,294,000) that can be carried forward against future taxable income. Losses amounting to HK$900,000
(2013: HK$5,294,000) and HK$100,000 (2013: nil) expire in 2015 and 2016 respectively.
12p81(f)
Deferred income tax liabilities of HK$3,141,000 (2013: HK$2,016,000) have not been recognised for the
withholding tax and other taxes that would be payable on the unremitted earnings of certain subsidiaries. Such
amounts are permanently reinvested. Unremitted earnings totalled HK$30,671,000 at 31 December 2014
(2013: HK$23,294,000).
123

34 Post-employment benefits
The table below outlines where the group's post-employment amounts and activity are included in the financial
statements.
2014
2013
HK$000
HK$000
Balance sheet obligations for:
- Defined pension benefits
3,684
1,900
- Post-employment medical benefits
1,432
711
Liability in the balance sheet
5,116
2,611
Income statement charge included in operating profit for [1]:
948
561
184
119
1,132
680
Remeasurements for:
(84)
(35)
(119)
717
193
910
[1] The income statement charge included within operating profit includes current service cost, interest cost, past
service costs and gains and losses on settlement and curtailment.
34(a) Defined benefit pension plans
DV, 19p136,
19p138
19p139
The group operates defined benefit pension plans in the UK and US under broadly similar regulatory frameworks.
All of the plans are final salary pension plans, which provide benefits to members in the form of a guaranteed level
of pension payable for life. The level of benefits provided depends on members length of service and their salary in
the final years leading up to retirement. In the UK plans, pensions in payment are generally updated in line with
the retail price index, whereas in the US plans, pensions generally do not receive inflationary increases once in
payment. With the exception of this inflationary risk in the UK, the plans face broadly similar risks, as described
below. The majority of benefit payments are from trustee-administered funds; however, there are also a number of
unfunded plans where the company meets the benefit payment obligation as it falls due. Plan assets held in trusts
are governed by local regulations and practice in each country, as is the nature of the relationship between the
group and the trustees (or equivalent) and their composition. Responsibility for governance of the plans - including
investment decisions and contribution schedules - lies jointly with the company and the board of trustees. The
board of trustees must be composed of representatives of the company and plan participants in accordance with the
plans regulations.
19p140(a)
The amounts recognised in the balance sheet are determined as follows:
Present value of funded obligations

Fair value of plan assets
Deficit of funded plans
Present value of unfunded obligations
Total deficit of defined benefit pension plans
Impact of minimum funding requirement/asset ceiling
124
2014
HK$000
2013
HK$000
6,155
(5,211)
944
2,426
3,370
314
3,684
2,943
(2,797)
146
1,549
1,695
205
1,900

19p140
(a),
141(a-h)
The movement in the defined benefit liability over the year is as follows:
At 1 January 2013
Current service cost
Interest expense/(income)
Impact of
minimum
funding
requirement/
Total asset ceiling
HK$000
HK$000
Present
value of
obligation
HK$000
Fair value
of plan
assets
HK$000
3,479
498
214
(2,264)
(156)
1,215
498
58
120
5
1,335
498
63
712
(156)
556
561
(85)
(85)
(85)
20
61
641
20
61
641
20
61
641
80
80
Remeasurements:
- Return on plan assets, excluding amounts
included in interest income
- Loss from change in demographic
assumptions
- Loss from change in financial assumptions
- Experience losses
- Change in asset ceiling, excluding amounts
included in interest expense
Total
HK$000
722
(85)
637
80
717

Contributions:
- Employers
- Plan participants
Payments from plans:
- Benefit payments
(324)
22
(302)
(302)
30
(411)
(30)
(411)
-
(411)
-
(127)
127
At 31 December 2013
4,492
(2,797)
1,695
205
1,900
125

At 1 January 2014
Past service cost and gains and losses on
settlements
Remeasurements:
- Return on plan assets, excluding amounts
included in interest income
- Loss from change in demographic
assumptions
- Experience gains
- Change in asset ceiling, excluding amounts
included in interest expense
Present
value of
obligation
HK$000
Fair value
of plan
assets
HK$000
4,492
751
431
(2,797)
(308)
Impact of
minimum
funding
requirement/
Total asset ceiling
HK$000
HK$000
1,695
751
123
205
9
Total
HK$000
1,900
751
132
65
65
65
1,247
(308)
939
948
(187)
(187)
(187)
32
121
(150)
32
121
(150)
32
121
(150)
100
100
(187)
(184)
100
(84)
(61)
(25)
(86)
(86)

Contributions:
- Employers
- Plan participants
- Benefit payments
- Settlements
Acquired in a business combination (Note 41)
55
(908)
(55)
(908)
-
(908)
-
(566)
(280)
3,691
566
280
(1,777)
1,914
1,914
At 31 December 2014
8,581
(5,211)
3,370
314
3,684
19p141
One of our US plans has a surplus that is not recognised on the basis that future economic benefits are not available to the
entity in the form of a reduction in future contributions or a cash refund.
19p139
(c)
In connection with the closure of a factory, a curtailment loss was incurred and a settlement arrangement agreed with the
plan trustees, effective December 30, 2013, which settled all retirement benefit plan obligations relating to the employees
of that factory.
19p138
(a)
The defined benefit obligation and plan assets are composed by country as follows:
2014
2013
UK
US
Total
UK
US
HK$000 HK$000 HK$000 HK$000 HK$000
Present value of obligation
Impact of minimum funding
requirement/asset ceiling
Total
19p137(a)
Total
HK$000
4,366
(3,109)
1,257
4,215
(2,102)
2,113
8,581
(5,211)
3,370
3,442
(2,403)
1,039
1,050
(394)
656
4,492
(2,797)
1,695
1,257
314
2,427
314
3,684
1,039
205
861
205
1,900
As at the last valuation date, the present value of the defined benefit obligation was comprised of approximately
HK$3,120,000 relating to active employees, HK$3,900,000 relating to deferred members and HK$1,560,000 relating to
members in retirement.
126

19p144
The significant actuarial assumptions were as follows:

2014
UK
Discount rate
Inflation
Salary growth rate
Pension growth rate
5.1%
3.0%
4.0%
3.0%
2013
UK
US
5.2%
4.0%
4.5%
2.8%
US
5.5%
3.5%
4.5%
3.1%
5.6%
4.2%
4.0%
2.7%
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and
experience in each territory. These assumptions translate into an average life expectancy in years for a pensioner retiring
at age 65:
2014
UK
Retiring at the end of the year:
- Male
- Female
Retiring 20 years after the end of the year
- Male
- Female
19p145
(a)
2013
US
UK
US
22
25
20
24
22
25
20
24
24
27
23
26
24
27
23
26
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Impact on defined benefit obligation
Change in
Increase in
assumption
assumption
Decrease in assumption
Discount rate
Salary growth rate
Pension growth rate
0.50%
0.50%
0.25%
Life expectancy
19p145
(b)
19p145
(c)
Decrease by 8.2%
Increase by 1.8%
Increase by 4.7%
Increase by 1 year in
assumption
Increase by 2.8%
Increase by 9.0%
Decrease by 1.7%
Decrease by 4.4%
Decrease by 1 year in assumption
Decrease by 2.9%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the pension liability recognised within the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous
period.
34(b) Post-employment medical benefits
DV,
19p144
The group operates a number of post-employment medical benefit schemes, principally in the US. The majority of these
plans are unfunded. The method of accounting, significant assumptions and the frequency of valuations are similar to
those used for defined benefit pension schemes set out above with the addition of actuarial assumptions relating to the
long-term increase in healthcare costs of 8.0% a year (2013:7.6%) and claim rates of 6% (2013: 5.2%).
127

19p140
(a)
The amounts recognised in the balance sheet are determined as follows:

2014
HK$000
2013
HK$000
727
(605)
122
1,310
1,432
350
(294)
56
655
711
Present value Fair value of

of obligation
plan assets
HK$000
HK$000
Total
HK$000
Present value of funded obligations

Deficit of the funded plans
Present value of unfunded obligations
19p140
(a),
The movement in the defined benefit liability over the year is as follows:
141(a-h)
At 1 January 2013
Remeasurements:
- Return on plan assets, excluding amounts included in interest
income
- Loss from change in demographic assumptions
- Experience losses
Contributions/premiums paid:
- Employers
- Benefit payments
At 31 December 2013
At 1 January 2014
Remeasurements:
- Return on plan assets, excluding amounts included in interest
income
- Loss from change in demographic assumptions
- Experience gains
Contributions/premiums paid:
- Employers
- Benefit payments
Acquired in a business combination (Note 41)
At 31 December 2014
128
708
107
25
132
(207)
(13)
(13)
501
107
12
119
3
7
194
(11)
-
(11)
3
7
194
204
(31)
(11)
2
193
(29)
(73)
(73)
(8)
1,005
8
(294)
711
1,005
153
49
202
(294)
(18)
(18)
711
153
31
184
4
10
(16)
(33)
-
(33)
4
10
(16)
(2)
37
(33)
(5)
(35)
32
(185)
(185)
(7)
802
2,037
7
(77)
(605)
725
1,432

34(c)
Post-employment benefits (pension and medical)
19p142
Plan assets are comprised as follows:
Quoted
HK$000
2014
Unquoted
Total
HK$000 HK$000
Equity instruments
Information
technology
Energy
Manufacturing
Other
1,824
502
557
746
-
19
916
900
68
Property
in US
in UK
Qualifying insurance
policies
Cash and cash
equivalents
Investment funds
Total
31%
502
557
746
19
1,216
39%
28
994
194
28
916
321
321
900
99
99
277
345
41
110
151
697
246
943
697
246
31%
800
247
1,047
800
247
18%
496
496
9%
190
190
6%
177
111
3,977
1,839
177
3%
111
2%
5,816 100%
94
77
1,820
1,271
2,161
994
194
-
Debt instruments
Government
Corporate bonds
(Investment
grade)
Corporate bonds
(Non-investment
grade)
2013
%
Quoted Unquoted
Total
HK$000 HK$000 HK$000
37%
571
18%
94
3%
77
2%
3,091 100%
19p143
Pension and medical plan assets include the company's ordinary shares with a fair value of HK$136,000 (2013:
HK$126,000) and US real estate occupied by the group with a fair value of HK$612,000 (2013: HK$609,000).
19p139(b)
Through its defined benefit pension plans and post-employment medical plans, the group is exposed to a number
of risks, the most significant of which are detailed below:
Asset
volatility
The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if
plan assets underperform this yield, this will create a deficit. Both the UK and US plans hold a
significant proportion of equities, which are expected to outperform corporate bonds in the long-term
while providing volatility and risk in the short-term.
As the plans mature, the group intends to reduce the level of investment risk by investing more in
assets that better match the liabilities. The first stage of this process was completed in FY12 with the
sale of a number of equity holdings and purchase of a mixture of government and corporate bonds.
The government bonds represent investments in UK and US government securities only. The
corporate bonds are global securities with an emphasis on the UK and US.
However, the group believes that due to the long-term nature of the plan liabilities and the strength of
the supporting group, a level of continuing equity investment is an appropriate element of the groups
long term strategy to manage the plans efficiently. See below for more details on the group's assetliability matching strategy.
129

Changes in A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by
bond yields an increase in the value of the plans bond holdings.
Inflation
risk
The some of the group pension obligations are linked to inflation, and higher inflation will lead to
higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to
protect the plan against extreme inflation). The majority of the plans assets are either unaffected by
(fixed interest bonds) or loosely correlated with (equities) inflation, meaning that an increase in
inflation will also increase the deficit.
In the US plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life
The majority of the plans obligations are to provide benefits for the life of the member, so increases in
expectancy life expectancy will result in an increase in the plans liabilities. This is particularly significant in the
UK plan, where inflationary increases result in higher sensitivity to changes in life expectancy.
19p146
In case of the funded plans, the group ensures that the investment positions are managed within an asset-liability
matching (ALM) framework that has been developed to achieve long-term investments that are in line with the
obligations under the pension schemes. Within this framework, the Group's ALM objective is to match assets to the
pension obligations by investing in long-term fixed interest securities with maturities that match the benefit
payments as they fall due and in the appropriate currency. The company actively monitors how the duration and
the expected yield of the investments are matching the expected cash outflows arising from the pension obligations.
The group has not changed the processes used to manage its risks from previous periods. The group does not use
derivatives to manage its risk. Investments are well diversified, such that the failure of any single investment would
not have a material impact on the overall level of assets. A large portion of assets in 2014 consists of equities and
bonds, although the group also invests in property, bonds, cash and investment (hedge) funds. The group believes
that equities offer the best returns over the long term with an acceptable level of risk. The majority of equities are in
a globally diversified portfolio of international blue chip entities, with a target of 60% of equities held in the UK and
Europe, 30% in the US and the remainder in emerging markets.
19p147(a)
The group has agreed that it will aim to eliminate the pension plan deficit over the next nine years. Funding levels
are monitored on an annual basis and the current agreed contribution rate is 14% of pensionable salaries in the UK
and 12% in the US. The next triennial valuation is due to be completed as at 31 December 2015. The group
considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the
agreed period and that regular contributions, which are based on service costs, will not increase significantly.
19p147(b)
Expected contributions to post-employment benefit plans for the year ending 31 December 2015 are HK$1,150.
19p147(c)
The weighted average duration of the defined benefit obligation is 25.2 years.
19p147(c)
Expected maturity analysis of undiscounted pension and post-employments medical benefits:
At 31 December 2014
Less than a Between 1- Between 2year

2 years
5 years
HK$000
HK$000
HK$000
Pension benefits
Post-employment medical benefits
Total
628
127
755
130
927
174
1,101
2,004
714
2,718
Over 5 years
Total
HK$000 HK$000
21,947
4,975
26,922
25,506
5,990
31,496

35
Provisions for other liabilities and charges Group
1p78(d)
10Sch13(1)(f)
37p84(a)
37p84(b)
37p84(d),
10Sch13(1)(f)
37p84(e)
37p84(c)
FRS5p38
37p84(a)
Contingent
Profitliability
sharing arising on a
Legal
Environmental
and
business
restoration Restructuring
claims bonuses combination
HK$000
HK$000 HK$000 HK$000
HK$000
Total
HK$000
At 1 January 2014
Charged/(credited) to the
income statement:
Additional provisions
On acquisition of ABC Group
842
828
1,000
2,670
316
1,986
2,405
500
1,000
5,207
1,000

Unwinding of discount (Note
11)
Used during year
Transferred to disposal
group/classified as held for sale
(15)
(15)
(10)
(40)
40
(233)
(7)
(886)
(3,059)
(68)
(990)
44
(5,168)
(75)
(96)
(96)
847
1,100
91
500
1,004
3,542
At 31 December 2014
Analysis of total provisions:
2014
2013
HK$000 HK$000
1p69
1p69
Non-current (environmental restoration)

Current
1,320
2,222
274
2,396
3,542
2,670
(a) Environmental restoration

37p85
(a)-(c)
The group uses various chemicals in working with leather. A provision is recognised for the present value of costs
to be incurred for the restoration of the manufacturing sites. It is expected that HK$531,000 will be used during
2015 and HK$320,000 during 2016. Total expected costs to be incurred are HK$880,000 (2013: HK$760,000).
DV
The provision transferred to the disposal group classified as held for sale amounts to HK$96,000 and relates to an
environmental restoration provision for Shoes Limited (part of the wholesale segment). See Note 26 for further
details regarding the disposal group held for sale.
(b) Restructuring
37p85(a)-(c)
The reduction of the volumes assigned to manufacturing operations in Step-land (a subsidiary) will result in the
reduction of a total of 155 jobs at two factories. An agreement was reached with the local union representatives
that specifies the number of staff involved and the voluntary redundancy compensation package offered by the
group, as well as amounts payable to those made redundant, before the financial year-end. The estimated staff
restructuring costs to be incurred are HK$799,000 at 31 December 2014 (Note 10). Other direct costs attributable
to the restructuring, including lease termination, are HK$1,187,000. These costs were fully provided for in 2014.
The provision of HK$1,100,000 at 31 December 2014 is expected to be fully utilised during the first half of 2015.
36p130
A goodwill impairment charge of HK$4,650,000 was recognised in the cash-generating unit relating to Step-land
as a result of this restructuring (Note 18).
131

(c) Legal claims

37p85(a)-(c)
The amounts represent a provision for certain legal claims brought against the group by customers of the
wholesale segment. The provision charge is recognised in profit or loss within administrative expenses. The
balance at 31 December 2014 is expected to be utilised in the first half of 2015. In the directors opinion, after
taking appropriate legal advice, the outcome of these legal claims will not give rise to any significant loss
beyond the amounts provided at 31 December 2014.
(d) Profit-sharing and bonuses
DV, 19p9(c),11
37p85(a)-(c)
The provision for profit-sharing and bonuses is payable within three month of finalisation of the audited
(e) Contingent liability
37p85(a)-(c)
A contingent liability of HK$1,000,000 has been recognised on the acquisition of ABC Group for a pending
lawsuit in which the entity is a defendant. The claim has arisen from a customer alleging defects on products
supplied to them. It is expected that the courts will have reached a decision on this case by the end of 2015.
The potential undiscounted amount of all future payments that the group could be required to make if there
was an adverse decision related to the lawsuit is estimated to be between HK$500,000 and HK$1,500,000.
As of 31 December 2014, there has been no change in the amount recognised (except for the unwinding of the
discount of HK$4,000) for the liability at 31 March 2014, as there has been no change in the probability of the
outcome of the lawsuit.
FRS3B64(g),
p57
The selling shareholders of ABC Group have contractually agreed to indemnify Specimen Holdings Limited
for the claim that may become payable in respect of the above-mentioned lawsuit. An indemnification asset of
HK$1,000,000, equivalent to the fair value of the indemnified liability, has been recognised by the group. The
indemnification asset is deducted from consideration transferred for the business combination. As is the case
with the indemnified liability, there has been no change in the amount recognised for the indemnification
asset as at 31 December 2014, as there has been no change in the range of outcomes or assumptions used to
develop the estimate of the liability.
36 Dividends
1p107, 1p137(a)
10p12
A4(1)(f)
GEM18.50B
(1)(k)
A4(1)(f)
GEM18.50B
(1)(k)
10Sch9(1)(e)
10Sch13(1)(j)
The dividends paid in 2014 and 2013 were HK$10,102,000 (HK$0.48 per share) and HK$15,736,000
(HK$0.78 per share) respectively. A dividend in respect of the year ended 31 December 2014 of HK$0.51
per share, amounting to a total dividend of HK$12,945,000, is to be proposed at the annual general
meeting on 30 April 2015. These financial statements do not reflect this dividend payable.
Interim dividend paid of HK$- (2013:HK$nil) per ordinary share

Proposed final dividend of HK$0.51 (2013:HK$0.48) per ordinary share
2014
HK$000
2013
HK$000
12,945
10,102
12,945
10,102
The aggregate amounts of the dividends paid and proposed during 2013 and 2014 have been disclosed in the
consolidated income statement in accordance with the Hong Kong Companies Ordinance.
132

37 Cash generated from operations
7p18(b), 20
Profit before income tax including discontinued operations

Adjustments for:
Amortisation of prepaid operating lease payment (Note 16)
Depreciation of property, plant and equipment (Note 16a)
Fair value gains on investment properties (Note 17)
Amortisation (Note 18)
Goodwill impairment charge (Note 18)
(Profit)/loss on disposal of property, plant and equipment (see below)
Share-based payment
Post-employment benefits
Fair value gains on derivative financial instruments (Note 9)
Fair value (gains)/losses on financial assets at fair value through profit
or loss (Note 9)
Dividend income on available-for-sale financial assets (Note 7)
(Note 7)
Finance expenses net (Note 11)
Share of profit from investments accounted for using equity method
(Note 12b)
Foreign exchange losses on operating activities
Gains on revaluation of existing investments (Note 41)
Changes in working capital (excluding the effects of acquisition and
currency translation differences on consolidation):
Inventories
Financial assets at fair value through profit or loss
2014
HK$000
48,860
2013
HK$000
25,415
1,100
24,654
(7,900)
800
4,650
(17)
690
39
(86)
200
16,248
(6,000)
565
8
822
196
(88)
(85)
(1,100)
238
(388)
(487)
6,443
(310)
10,588
(1,293)
(1,022)
277
(850)
200
44
1,592
(3,883)
(14,114)
(966)
(2,829)
(858)
(243)
59,334
41,776
In the statement of cash flows, proceeds from sale of property, plant and equipment comprise:
2014
HK$000
2013
HK$000
(Restated)
Net book amount (Note 16a)

Profit/(loss) on disposal of property, plant and equipment
6,337
17
2,987
(8)
Proceeds from disposal of property, plant and equipment
6,354
2,979
Group
Non-cash transactions
7p43
The principal non-cash transaction is the issue of shares as consideration for the acquisition discussed in
Note 41.
133

38 Contingencies60
37p86,
10Sch12(5)
Group
Since 2010, the group has been defending an action brought by an environment agency in Europe. The group
has disclaimed the liability.
No provision in relation to this claim has been recognised in these consolidated financial statements, as legal
advice indicates that it is not probable that a significant liability will arise. Further claims for which
provisions have been made are reflected in Note 35.
39 Commitments60
10Sch12(6)
(a) Capital commitments

Capital expenditure of property, plant and equipment authorised by the board of directors which has not
been contracted for as of 31 December 2014 amounts to HK$1,250,000 (2013: HK$850,000).
Capital expenditure contracted for at the end of the year but not yet incurred is as follows:
Group
16p74(c)
38p122(e)
40p75(h)
40p75(h)

Intangible assets
Investment properties - repairs and maintenance
2014
HK$000
2013
HK$000
3,593
460
290
3,667
474
200
4,343
4,341
140
130
4,483
4,471
(b) Operating lease commitments group company as lessee

17p35(d)
The group leases various retail outlets, offices and warehouses under non-cancellable operating lease
agreements. The lease terms are between 5 and 10 years, and the majority of lease agreements are renewable
at the end of the lease period at market rate.
17p35(d)
The group also leases various plant and machinery under cancellable operating lease agreements. The group
is required to give a six-month notice for the termination of these agreements. The lease expenditure
charged to the income statement during the year is disclosed in Note 9.
17p35(a)
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
Later than 5 years
60
2014
HK$000
2013
HK$000
11,664
45,651
15,710
10,604
45,651
27,374
73,025
83,629
The contingencies and commitments of the company, if any, are required to be disclosed if the companys balance sheet is prepared.
134

40

(a) Acquisition of additional interest in a subsidiary
FRS12p18
On 21 April 2014, the company acquired an additional 5% of the issued shares of XYZ Group for a purchase
consideration of HK$500,000. The carrying amount of the non-controlling interests in XYZ Group on the
date of acquisition was HK$710,000. The group recognised a decrease in non-controlling interests of
HK$300,000 and a decrease in equity attributable to owners of the company of HK$200,000. The effect
of changes in the ownership interest of ABC Group on the equity attributable to owners of the company
during the year is summarised as follows:
As at31 December
2014
2013
HK$000
HK$000
Carrying amount of non-controlling interests acquired
Consideration paid to non-controlling interests
Excess of consideration paid recognised within equity
FRS12p18
300
(500)
(200)
(b) Disposal of interest in a subsidiary without loss of control

On 5 September 2014, the company disposed of 10% of interest in Red Limited at a consideration of
HK$1,500,000. The carrying amount of the non-controlling interests in Red Limited on the date of
disposal was HK$2,000,000. The group recognised an increase in non-controlling interests of
HK$1,250,000 and an increase in equity attributable to owners of the company of HK$250,000. The effect
of changes in the ownership interest of Red Limited on the equity attributable to owners of the company
during the year is summarised as follows:
As at 31 December
2013
2014
HK$000
HK$000
Carrying amount of non-controlling interests disposed of
Consideration received from non-controlling interests
Gain on disposal within equity
(1,250)
1,500
250
There were no transactions with non-controlling interests in 2013.

FRS12p18
(c) Effects of transactions with non-controlling interests on the equity attributable to owners of the
company for the year ended 31 December 2014
31
December
2014
HK$000
Changes in equity attributable to owners of the company arising from:
- Acquisition of additional interests in subsidiary
- Disposal of interests in a subsidiary without loss of control
Net effect for transactions with non-controlling interests
on equity attributable to owners of the company
135
(200)
250
50

41
FRS3B64
(a-d)
On 30 June 2013, the group acquired 15% of the share capital of ABC Group for HK$1,150,000 (Note 20).
On 1 March 2014, the group acquired a further 65% of the share capital and obtained the control of ABC
Group, a shoe and leather goods retailer operating in the US and most western European countries.
FRS3B64(e)
As a result of the acquisition, the group is expected to increase its presence in these markets. It also
expects to reduce costs through economies of scale. The goodwill of HK$4,501,000 arising from the
acquisition is attributable to acquired customer base and economies of scale expected from combining the
operations of the group and ABC Group. None of the goodwill recognised is expected to be deductible for
income tax purposes.
The following table summarises the consideration paid for ABC Group, the fair value of assets acquired,
liabilities assumed and the non-controlling interest at the acquisition date.
FRS3B64(f)(i)
FRS3B64f(iv)
FRS3B64f(iii),
(g)(i)
FRS3B64(f)
FRS3B64(g)
FRS3
B64(p)(i)
FRS3B64(i)
Consideration:
At 1 March 2014
Cash
Equity instruments (3,550,000 ordinary shares)
Contingent consideration
Total consideration transferred
Indemnification asset
Fair value of equity interest in ABC Group held before the
business combination
15,050
(1,000)
Total consideration
16,050
Recognised amounts of identifiable assets acquired

and liabilities assumed
Leasehold land and land use rights (Note 16)
Property, plant and equipment (Note 16a)
Trademarks (included in intangibles) (Note 18)
Licences (included in intangibles) (Note 18)
Contractual customer relationship (included in intangibles)
(Note 18)
Investment in associates (Note 12b)
Available-for-sale financial assets (Note 20)
Inventories
Retirement benefit obligations:
Pensions (Note 34)
Other post-retirement obligations (Note 34)
Borrowings
Contingent liability (Note 35)
Deferred tax liabilities (Note 33)
Total identifiable net assets
FRS3B64
(o)(i)
HK$000
4,050
10,000
1,000
2,000
300
43,500
24,284
2,000
1,000
1,000
389
473
1,122
585
(12,461)
(1,914)
(725)
(41,459)
(1,000)
(1,953)
15,141
Non-controlling interest
(3,592)
Goodwill (Note 18)
4,501
16,050
FRS3B64(m)
Acquisition-related costs of HK$200,000 have been charged to administrative expenses in the

consolidated income statement for the year ended 31 December 2014.
FRS3
B64(f)(iv)
FRS3
B64(m)
The fair value of the 3,550,000 ordinary shares issued as part of the consideration paid for ABC Group
(HK$10,050,000) was based on the published share price on 1 March 2014. Issuance costs totalling
HK$50,000 have been netted against the deemed proceeds.
FRS3
B64(f)(iii),
(g) FRS3
B67(b)
The contingent consideration arrangement requires the group to pay in cash the former owners of ABC
Group 10% of the average profit of ABC Group for three years from 2014 to 2016, in excess of
HK$7,500,000, up to a maximum undiscounted amount of HK$2,500,000.
136

FRS3B64(g)
(ii)
The potential undiscounted amount of all future payments that the group could be required to make under
this arrangement is between HK$0 and HK$2,500,000.
FRS3B64(g)
(i), (ii),
FRS13p93(h)
(i)
The fair value of the contingent consideration arrangement of HK$1,000,000 was estimated by applying the
income approach. The fair value estimates are based on a discount rate of 8% and assumed probabilityadjusted profit in ABC Group of HK$10,000,000 to HK$20,000,000. This is a level 3 fair value
measurement. The key unobservable assumptions in calculating this profit are:
FRS13p93(d)
Assumption
Sales (HK$000)
Gross margin (%)
Distribution costs and administrative expenses
(HK$000)
FRS3
B67(b)
FRS13p93(h)
(ii)
As of 31 December 2014, there was an increase of HK$500,000 (Note 31) recognised in the income statement
for the contingent consideration arrangement, as the assumed probabilityadjusted profit in ABC Group was
recalculated to be approximately HK$20,000,000 to HK$30,000,000.
Range
6,000-10,000
40%-50%
1,000-2,250
Assuming all other variables are held constant; an increase in revenue by HK$5,000,000 each year would
increase the liability by a further HK$100,000, an increase in gross margin by 5% each year would increase
the liability by HK$200,000 and an increase in distribution costs and administrative expenses by
HK$1,000,000 each year would decrease the liability by HK$80,000.
FRS3
B64(h)
The fair value of trade and other receivables is HK$585,000 and includes trade receivables with a fair value
of HK$510,000. The gross contractual amount for trade receivables due is HK$960,000, of which
HK$450,000 is expected to be uncollectible.
FRS3
B67(a)
The fair value of the acquired identifiable intangible assets of HK$4,000,000 (including trademarks,
licences and contractual customer relationship) is provisional pending receipt of the final valuations for
those assets.
FRS3B64(j),
B67(c),
37p84, 85
FRS3
B64(g),
p57
A contingent liability of HK$1,000,000 (Note 35) has been recognised for a pending lawsuit in which ABC
Group is a defendant. The claim has arisen from a customer alleging defects on products supplied to them.
It is expected that the courts will have reached a decision on this case by the end of 2015. The potential
undiscounted amount of all future payments that the group could be required to make if there was an
adverse decision related to the lawsuit is estimated to be between HK$500,000 and HK$1,500,000. As of 31
December 2014, there has been no change in the amount recognised (except for unwinding of the discount
HK$4,000) for the liability at 31 March 2014, as there has been no change in the range of outcomes or
assumptions used to develop the estimates.
The selling shareholders of ABC Group have contractually agreed to indemnify the group for the claim that
may become payable in respect of the above-mentioned lawsuit. An indemnification asset of HK$1,000,000,
equivalent to the fair value of the indemnified liability, has been recognised by the group. The
indemnification asset is deducted from consideration transferred for the business combination. As is the
case with the indemnified liability, there has been no change in the amount recognised for the
indemnification asset as at 31 December 2014, as there has been no change in the range of outcomes or
assumptions used to develop the estimate of the liability.
FRS3B64(o)
The fair value of the non-controlling interest in ABC Group, an unlisted company, was estimated by using
the purchase price paid for acquisition of 65% stake in ABC group. This purchase price was adjusted for the
lack of control and lack of marketability that market participants would consider when estimating the fair
value of the non-controlling interest in ABC Group.
FRS3
B64(p)(ii)
The group recognised a gain of HK$850,000 as a result of measuring at fair value its 15% equity interest in
ABC Group held before the business combination. The gain is included in other income in the group's
income statement for the year ended 31 December 2014.
FRS3
B64(q)(i)
The revenue included in the consolidated income statement since 1 March 2014 contributed by ABC Group
was HK$44,709,000. ABC Group also contributed profit of HK$12,762,000 over the same period.
FRS3
B64(q)(ii)
Had ABC Group been consolidated from 1 January 2014, the consolidated income statement would show
pro-forma revenue61 of HK$220,345,000 and profit of HK$33,565,000.
61
The information on combined revenue and profit does not represent actual results for the year and is therefore labelled as pro-forma.
137

42
Related party transactions 62
1p138(c)
24p13,
S129A(1)
The group is controlled by M Limited (incorporated in the UK), which owns 57% of the companys shares.
The remaining 43% of the shares are widely held. The ultimate parent63 of the group is G Limited
(incorporated in the UK). The ultimate controlling party of the group is Mr Power.
24p 18, 19, 24
The following transactions were carried out with related parties:
24p18(a)
(a) Sales of goods and services
Sales of goods:
Associates
Associates of G Limited
Sales of services:
The ultimate parent (legal and administration services)
Close family members of the ultimate controlling party (design services)
Total
2014
HK$000
2013
HK$000
1,002
121
204
87
67
100
1,290
127
104
522
Goods are sold based on the price lists in force and terms that would be available to third parties64. Sales of
services are negotiated with related parties on a cost-plus basis, allowing a margin ranging from 15% to 30%
(2013: 10% to 18%).
24p18(a)
(b) Purchases of goods and services

Purchases of goods:
Associates
Purchases of services:
An entity controlled by key management personnel
The immediate parent (management services)
Total
2014
HK$000
2013
HK$000
3,054
3,058
83
295
3,432
70
268
3,396
24p23
Goods and services are bought from associates and an entity controlled by key management personnel on
normal commercial terms and conditions. The entity controlled by key management personnel is a firm
belonging to Mr Chamois, a non-executive director of the company. Management services are bought from
the immediate parent on a cost-plus basis, allowing a margin ranging from 15% to 30% (2013: 10% to 24%).
24p17
(c) Key management compensation

Key management includes directors (executive and non-executive), members of the Executive Committee,
the Company Secretary and the Head of Internal Audit. The compensation paid or payable to key
management for employee services is shown below:
2014
2013
HK$000
HK$000
24p17(a)
24p17(d)
24p17(b)
24p17(c)
24p17(e)
62
63
Salaries and other short-term employee benefits

Termination benefits
Other long-term benefits
2,200
1,600
123
26
150
1,890
85
22
107
Total
4,099
2,104
All contracts with related parties are required to be disclosed, including commitments to do something if a particular event occurs or does not occur in the
future, including executory contracts (recognised and unrecognised) (IAS/HKAS 24 p21(i)).
Section 129A of the Hong Kong Companies Ordinance (HKCO) requires disclosure of the name of the ultimate parent undertaking. Since the term
undertaking as defined in the 23rd schedule to the Hong Kong Companies Ordinance, includes a partnership or an unincorporated association carrying
on a trade or business, whether for profit or not, as well as a body corporate. If the ultimate parent undertaking is a body corporate, then the country of its
incorporation should be disclosed, whereas if it is not a body corporate, then the address of its principal place of its business should be disclosed.
Although the disclosure requirements under section 129A of HKCO and IAS/HKAS 24Rp13 are similar, it should be noted that where the ultimate parent
undertaking is controlled by an individual, additional disclosure will be required to meet both the requirements of the HKCO and IAS/HKAS24.
64
Management should disclose that related-party transactions were made on an arms length basis only when such terms can be substantiated
(IAS/HKAS24p23).
138

24p18(b)
In addition to the above amounts, the Group is committed to pay the members of the Executive Committee
up to HK1, 250,000 in the event of a change in control of the Group.
24p18(b), 1p77
(d) Year-end balances arising from sales/purchases of goods/services
Receivables from related parties (Note 22):

Associates
Close family members of key management personnel
Payables to related parties (Note 31):
Immediate parent
Associates
Entity controlled by key management personnel
2014
HK$000
2013
HK$000
26
24
4
32
8
6
200
1,902
100
190
1,005
The receivables from related parties arise mainly from sale transactions and are due two months after the
date of sales. The receivables are unsecured in nature and bear no interest. No provisions are held against
receivables from related parties (2013: nil).
The payables to related parties arise mainly from purchase transactions and are due two months after the
date of purchase. The payables bear no interest.
24p18, 1p77
65None
(e) Loans to related parties

2014
HK$000
2013
HK$000
Loans to key management of the company (and their families)65:

At 1 January
Loans advanced during year
Loan repayments received
Interest charged
Interest received
196
343
(49)
30
(30)
168
62
(34)
16
(16)
At 31 December
490
196
Loans to associates:
At 1 January
Interest charged
Interest received
1,192
1,000
(14)
187
(187)
1,206
50
(64)
120
(120)
At 31 December
2,178
1,192
Total loans to related parties:

At 1 January
Interest charged
Interest received (Note 11)
1,388
1,343
(63)
217
(217)
1,374
112
(98)
136
(136)
At 31 December (Note 22)
2,668
1,388
of the loans made to members of key management has been made to directors.
139

24p18(b)(i)
S161B(1)(a)(b)
(d)
The loans advanced to key management have the following terms and conditions:
Amount of loan66
Maximum
outstanding
At
Name of key At end of beginning during the
management
year
Term
year
of year
HK$000 HK$000
HK$000
2014
Mr Brown
173
173
173
Repayable monthly over 2 years
Mr White
170
212
212
2013
Mr Black
Mr White
FRS7p15,
10Sch9(1)(c)
20
42
20
60
20
60
Interest rate

Repayable monthly over 1 year
6.3%
6.3%
6.5%
6.5%
Certain loans advanced to associates during the year amounting to HK$1,500,000 (2013: HK$500,000) are
collateralised by shares in listed companies. The fair value of these shares was HK$65,000 at the end of the
year (2013: HK$590,000).
The loans to associates are due on 1 January 2015 and carry interest at 7.0% (2013: 8%). The fair values and
the effective interest rates of loans to associates are disclosed in Note 22.
24p18(c)
No provision has been required in 2014 and 2013 for the loans made to key management personnel and
associates.
66The
loans are assumed to be made by the company after 13 February 2004 (i.e. date of commencement of the Companies (Amendment) Ordinance 2003). If
the loans had been made before 13 February 2004 and remained outstanding at the end of the financial year, the disclosures would have been made
following section 161B (1) in effect immediately before the amendment of the Ordinance. Under that section, there is no need to disclose the total amounts
payable as part of the terms of the loan nor the amount of principal due but unpaid.
140

43 Events after the balance sheet date

S129D(3)(l)
10p21,
FRS3B64(a)-(d),
(m)
The group acquired 100% of the share capital of K&Co, a group of companies specialising in the
manufacture of shoes for extreme sports, for a cash consideration of HK$5,950,000 on 1 February 2015.
Details of net assets acquired and goodwill are as follows:
On acquisition
HK$000
FRS3B64(f),(i)
Purchase consideration:
FRS3B64(m)
Cash paid
Direct cost relating to the acquisition charged in profit or loss
7p40(a)
Total purchase consideration

Fair value of assets acquired (see below)
5,800
150
5,950
(5,145)
Goodwill
805
FRS3B64(e)
The above goodwill is attributable to K&Cos strong position and profitability in trading in the niche market
for extreme-sports equipment.
FRS3B64(i)
The assets and liabilities arising from the acquisition, provisionally determined, are as follows:
Fair value
HK$000
Trademarks
Licences
Customer relationships
Favourable lease agreements
Inventories
Borrowings
Deferred tax assets
195
29,056
1,000
700
1,850
800
995
855
(9,646)
(1,425)
(19,259)
24
Net assets acquired
5,145
141

(b) Associates
10p21
The group acquired 40% of the share capital of L&Co, a group of companies specialising in the manufacture
of leisure shoes, for a cash consideration of HK$2,050,000 on 25 January 2015.
On acquisition
HK$000
Cash paid
Direct cost relating to the acquisition
2,050
70

Share of fair value of net assets acquired (see below)
2,120
(2,000)
Goodwill
120
DV
The goodwill is attributable to L&Cos strong position and profitability in trading in the market of leisure
shoes and to its workforce, which cannot be separately recognised as an intangible asset.
DV
Fair value
HK$000
Contractual customer relationships
Inventory
Cash
Trade creditors
Borrowings
380
3,200
500
220
(420)
(1,880)
Net asset acquired
2,000
(c) Equity transactions

10p21
33p71(e)
10p21, 22(f)
On 1 January 2015, options on 1,200 shares were granted to directors and employees with an exercise price
set at the market share prices less 15% on that date of HK$3.13 per share (share price: HK$3.68) (expiry
date: 31 December 2018).
The company re-issued 500,000 treasury shares for a total consideration of HK$1,500,000 on 15 January
2015.
(d) Borrowings
10p21
On 1 February 2015, the group issued HK$6,777,000 6.5% US dollar bonds to finance its expansion
programme and working capital requirements in the US. The bonds are repayable on 31 December 2018.
142

Independent Auditors Report

To the shareholders of Specimen Holdings Limited
(incorporated in Hong Kong with limited liability)
We have audited the consolidated financial statements of Specimen Holdings Limited (the Company) and its subsidiaries
(together, the Group) set out on pages [x] to [x], which comprise the consolidated and company [balance sheets]
[statements of financial position]67as at 31 December 2014, and [the consolidated income statement,] [the consolidated
statement of comprehensive income,]67the consolidated statement of changes in equity and the consolidated [cash flow
statement][ statement of cash flows]67for the year then ended, and a summary of significant accounting policies and other
explanatory information.
Directors Responsibility for the Consolidated Financial Statements
The directors of the Company are responsible for the preparation of consolidated financial statements that give a true and
fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified
Public Accountants, and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit [and to report our
opinion solely to you, as a body, in accordance with section [141 of/80 of Schedule 11 to] 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.]68
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 about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys preparation of consolidated financial statements
that give a true and fair view 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 entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well
as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of
the Group as at 31 December 2014, and of the Groups [profit] [loss] 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.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, [date]
67Tailor
the titles of the primary financial statements in the introductory paragraph to ensure consistency with the titles of financial statements used by the
entity.
Language is included under the section headed "Auditors responsibility" only for audit in accordance with Hong Kong Standards on Auditing.
Bannerman Language should continue to be included under the section headed "Other Matters" for all audits performed in accordance with International
Standards on Auditing under ISA 700.
For financial statements with periods ended before 3 March 2014 (e.g. year ended 31 December 2013, 31 January 2014 and 28 February 2014):
reference to "section 141 of the Hong Kong Companies Ordinance".
For financial statements with periods ended after 3 March 2014 but before 2 March 2015 (e.g. year ended on 31 March 2014, year ending on 30
June 2014 or 31 December 2014): reference to "section 80 of Schedule 11 to the Hong Kong Companies Ordinance.
68Bannerman
143

Appendix I Report of the Directors

REPORT OF THE DIRECTORS
S129D(1)
The directors submit their report together with the audited financial statements for the year ended 31
December 2014.
Principal activities and geographical analysis of operations
S129D(3)(a)
The principal activity of the company is investment holding. The activities of the subsidiaries are set out
in Note 12a to the financial statements.
A4(3), A7,
GEM18.08
An analysis of the groups performance for the year by operating segment is set out in Note 5 to the
Results and appropriations
The results of the group for the year are set out in the consolidated income statement on pages 1-2.
S129D(3)(b)
The directors recommend the payment of a final dividend of HK$0.51 per ordinary share, totalling
HK$12,945,000.
OR
S129D(3)(b)
[The directors do not recommend the payment of a dividend.]
A17
GEM18.31
[Note: Where the shareholders have waived or agreed to waive any dividends under any agreement,
particulars of such arrangements are required.]
Reserves
S129D(3)(c)
Movements in the reserves of the group and of the company during the year are set out in Notes 29 and
30 to the financial statements.
Donations
S129D(3)(d) & (e)
Charitable and other donations made by the group during the year amounted to HK$500,000.
S129D(3)(f)
Details of the movements in property, plant and equipment of the group [and of the company] are set out
Principal properties
A23, GEM18.23
Details of the principal properties held for development and/or sale and for investment purposes are set
out on page [X] of the annual report.
Share capital
S129D(3)(g)
Details of the movements in share capital of the company are set out in Note 27 to the financial
statements.
Distributable reserves69
A29
GEM18.37
69
Distributable reserves of the company at 31 December 2014, calculated under section 79B of the
Companies Ordinance [or legislation applicable in companys place of incorporation], amounted to
HK$37,693,000 (2013: HK$36,224,000).
For further guidance, please refer to Accounting Bulletin 4 Guidance on the Determination of Realised Profits and Losses in the context of Distributions
under the Hong Kong Companies Ordinance.
144

Appendix I Report of the Directors (Continued)

[Pre-emptive rights
A20
There is no provision for pre-emptive rights under the companys bye-laws and there was no restriction
against such rights under the laws of [country of incorporation], which would oblige the company to
offer new shares on a pro-rata basis to existing shareholders.]
Five year financial summary
A19
GEM18.33
A summary of the results and of the assets and liabilities of the group for the last five financial years is set
Purchase, sale or redemption of securities
A10(4)
GEM18.14
[The company has not redeemed any of its shares during the year. Neither the company nor any of its
subsidiaries has purchased or sold any of the companys shares during the year.]
OR
MB10.06(4)(b)
A10(4)
GEM18.14
GEM13.13(2)
On 18 April 2014, the company purchased 875,000 ordinary shares of the company at prices of HK$2.93
per share on The Hong Kong Stock Exchange. The purchase involved a total cash outlay of
HK$2,564,000 and was for the purpose of [state the reason]. The aggregate price of the purchased
shares was charged to equity as treasury shares. The company reissued 500,000 treasury shares for a
total consideration of HK$1.5 million on 15 January 2014.
Save as disclosed above, neither the company nor its subsidiary companies has purchased or sold any of
the companys shares during the year ended 31 December 2014 and the company has not redeemed any of
its shares during the year ended 31 December 2014.
A11
GEM18.32
[The following disclosures should be made for any issue of equity securities for cash otherwise than
shareholders in proportion to their shareholdings and which has not been specifically authorised by the
shareholders:
reasons for making the issue
classes of equity securities issued
as respect each class of equity securities, number issued and their aggregate normal value
the issue price of each security
net price to listed issuer of each security
if less than 6 in number, the names of allottees. If equal to or more than 6 allottees, a brief
generic description of them
market price of the securities concerned on a named date, being the date on which the terms of
the issue were fixed
use of the proceeds]
145

Share options
MB17.09
GEM23.09
Share options are granted to directors, executives, employees with more than three years of service and
business partners at the invitation of the directors under the Executive Share Option Scheme approved by
shareholders at an Extraordinary General Meeting on 1 July 2006. The Executive Share Option Scheme
is designed to motivate executives and key employees and other persons who make a contribution to the
Group and enable the group to attract and retain individuals with experience and ability and to reward
them for their past contributions.
The options were granted at nil consideration.
The exercise price of the granted options is equal to or higher than the market price of the shares on the
date of the grant. Each option gives the holder the right to subscribe for one share of the Company.
Options are conditional on the employee completing three years service. The options are exercisable
starting three years from the grant date only if the group achieves its target growth; the options have a
contractual option term of five years.
The company can issue options so that the total number of shares that may be issued upon exercise of all
options to be granted under all the share option schemes does not in aggregate exceed 10% of the shares in
issue on the date of approval of the Executive Share Option Scheme. The company may renew this limit at
any time, subject to shareholders approval and the issue of a circular and in accordance with the Listing
Rules provided that the number of shares to be issued upon exercise of all outstanding options granted and
yet to be exercised under all the share option schemes does not exceed 30% of the shares in issue from
time to time.
As at [the latest practicable date prior to the issue of the annual report], options to subscribe for a total of
4,833,000 option shares were still outstanding under the Executive Share Option Scheme which
represents approximately 19.1% of the issued ordinary shares of the company.
The Executive Share Option Scheme shall be valid and effective for a period of 10 years commencing from
the approval of the Scheme.
146


MB17.07
GEM23.07
GEM18.28(7)
Details of the shares outstanding on which options are granted as at 31 December 2014 under the scheme
are as follows:
Number of options (in thousands) 70
held at 31 Exercise
December
price
2014
HK$
granted
during the
year
during the
year
150
150
1.20
2 July 2010
2 July 2011
1st July 2015
2001
200
2.95
2 July 2014 2 July 2015
1st July 2019
500
50071
1.10
2 July 2009 2 July 2010
1st July 2014
800
800
1.35
2 July 2012 2 July 2013
1st July 2017
1001
100
2.95
2 July 2014 2 July 2015
1st July 2019
100
100
1.20
2 July 2010
2 July 2011
1st July 2015
400
400
2.38
2 July 2011 2 July 2012
1st July 2016
2001
200
2.95
2 July 2014 2 July 2015
1st July 2019
Mr D
2001
200
2.95
2 July 2014 2 July 2015
1st July 2019
Mr F
150
10071
50
1.20
2 July 2010
2 July 2011
1st July 2015
Continuous
contract
employees
500
500
1.20
2 July 2010
2 July 2011
1st July 2015
450
125
5071
275
1.35
2 July 2012 2 July 2013
1st July 2017
155
155
2.00
2 July 2013 2 July 2015 1st July 2018
1,277
1,277
2.38
2 July 2011 2 July 2012
1st July 2016
2141
214
2.95
2 July 2014 2 July 2015
1st July 2019
150
5072
100
2.38
2 July 2011 2 July 2012
1st July 2016
501
50
2.95
2 July 2014 2 July 2015
1st July 2019
112
5072
62
2.00
2 July 2013 2 July 2015 1st July 2018
964
125
750
4,833
Chairman Mr C
expired
exercised
during the
held at 1
January
2014
year
Grant Exercisable
date
from
Exercisable
until
Executive
directors
Mr A
(resigned as
director on
[specify date])
but still
employee of
the company at
31/12/2014.
Mr B
(excluding
resigned
Director Mr A)
Suppliers
Others
4,744
70
Where options lapse or are cancelled during the year, these movements should also be disclosed, including exercise price in respect of those cancelled.
date was 5 May 2014. At the date before the options were exercised, the market value per share was HK$2.78.
71Exercise
72Exercise
147


MB17.07, MB17.08
GEM23.07
GEM23.08
At 30 June 2014, the date before the options were granted, the market value per share was HK$3.47. The value of
the options granted to the respective parties is as follows:
HK$000
61
125
125
125
133
31
600
Director Mr A:
Director Mr B:
Chairman Mr C:
Director Mr D:
Continuous contract employees:
Suppliers:
MB17.08
GEM23.08
The value of the options granted during the year is HK$830,000, based on the Black-Scholes valuation
model. The significant inputs into the model were share price of HK$3.47 at the grant date, exercise price
shown above, standard deviation of expected share price returns of 30%, expected life of options of 3 years
(2013: 3 years), expected dividend paid out rate of 4.3% and annual risk-free interest rate of 5%. The
volatility measured at the standard deviation of expected share price returns is based on statistical analysis
of daily share prices over the last three years. The Black-Scholes model is developed to estimate the fair
value of European share options. The fair values calculated are inherently subjective and uncertain due to
the assumptions made and the limitations of the model used. The value of an option varies with different
variables of certain subjective assumptions. Any change in variables so adopted may materially affect the
estimation of the fair value of an option.
148


Directors
S129D(3)(i)
The directors during the year and up to the date of this report were:
Mr. C
(Chairman)
Executive directors
Mr. A
(resigned on [specify date])
Mr. B
Mr. F
Mr. D
(appointed on [specify date])
Independent non-executive directors
Mr. E
Mr. G
Mr. H
In accordance with Article 20 of the companys Articles of Association, Mr. B and Mr. F retire by rotation at
the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
In accordance with Article 21 of the companys Articles of Association, Mr. D retires at the forthcoming
Annual General Meeting but, being eligible, offers himself for re-election.
MB Appendix14K
GEM18.24(2)
GEM Appendix15K
Mr. E, Mr. G and Mr. H are independent non-executive directors and were appointed for a two-year term
expiring on [31 December 2014].
[OR
There being no provision in the companys Articles of Association for retirement by rotation, all directors
continue in office.]
Directors service contracts
A14*
GEM18.24(1)*
None of the directors who are proposed for re-election at the forthcoming Annual General Meeting has a
service contract with the company which is not determinable within one year without payment of
compensation, other than statutory compensation.
OR
A14*
GEM18.24(1)*
A14A
GEM18.24A
MB13.69
GEM17.91
Mr. B has a service contract with the company with remaining unexpired period of [3] years which is not
determinable within one year without payment of compensation. As the contract was signed on 31
December 2004 in accordance with the Listing Rule, no shareholders approval is required.
[Note:* Only applicable to directors proposed for re-election at the forthcoming Annual General
Meeting.].
149


S162
A15, GEM18.25
Directors interests in contracts

No contracts of significance* in relation to the groups business to which the company, any of its
subsidiaries, fellow subsidiaries or its parent company was a party and in which a director of the company
had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time
during the year.
[OR
S129D(3)(j)
A15
GEM18.25
Pursuant to an agreement dated 28 February 2012 (the Agreement) made between Orange Limited, a
subsidiary of the group, and LMF Holdings Limited (LMF), Orange Limited agreed to pay LMF an
annual fee for the provision of consultancy services in accordance with the terms of the Agreement. LMF
was paid a fee of HK$83,000 for the year ended 31 December 2014 (2013: HK$70,000). Mr E, a nonexecutive director of the company, is interested in this transaction to the extent that LMF is controlled by
him.
Save for contracts amongst group companies and the aforementioned transaction, no other contracts of
significance to which the company, any of its subsidiaries, fellow subsidiaries or its parent company was a
party and in which a director of the company had a material interest, whether directly or indirectly,
subsisted at the end of the year or at any time during the year.
A15.2 & A15.3

GEM18.25(note1)
[Note:* A contract of significance is one where any of the percentage ratios (as defined under
MB14.04(9)/GEM19.04(9)) of the transaction is 1% or more or the omission of information relating to
that contract could have changed / influenced the judgement / decision of a person relying on the
relevant information.]
Biographical details of directors and senior management
A12
MB13.51B(1)
GEM18.39
GEM17.50A(1)
Brief biographical details of directors and senior management are set out on page [x].
[Such details will include:
full name (which should normally be the same as that stated in the declaration and undertaking of
the director or supervisor in the form set out in Form B, H or I in Appendix 5 to MB rules and the
form set out in Appendix 6 to GEM Rule) and age;
positions held with the company and other members of the group;
experience including (i) other directorships held in the last three years in public companies the
securities of which are listed on any securities market in Hong Kong or overseas, and (ii) other major
appointments and professional qualifications;
length or proposed length of service with the company;
relationship with any directors, senior management or substantial or controlling shareholders of the
issuer; and
such other information (which may include business experience) of which shareholders should be
aware, pertaining to the ability or integrity of such personsetc.
Where any of the directors or senior managers is related that fact should be stated. Details of disclosure
requirements of the biographical of directors and senior management should be referred to Rules 13.51
to 13.51C of Main Board Listing Rules / Rules 17.50 to 17.50B and 18.39 of GEM Listing Rules.
Where there is a change in any of the information below during the course of the directors or
supervisors term of office, the change and the updated information regarding the director or supervisor
should be disclosed in the next published annual or interim report (whichever is the earlier):
full name (which should normally be the same as that stated in the declaration and undertaking of
the director or supervisor in the form set out in Form B, H or I in Appendix 5 to MB rules and the
form set out in Appendix 6 to GEM Rule);
experience including (i) other directorships held in the last three years in public companies the
securities of which are listed on any securities market in Hong Kong or overseas, and (ii) other major
proposed length of service with the issuer;
issuer; and
amount of the directors or supervisors emoluments and the basis of determining the directors or
supervisors emoluments (including any bonus payments, whether fixed or discretionary in nature,
irrespective of whether the director or supervisor has or does not have a service contract) and how
much of the emoluments are covered by a service contract.
150


S129D(3)(k)
A13(1)&(2)
PN 5(3.1),(3.2),(3.2)
GEM18.15, 18.17
GEM18.17A
Directors and chief executives interests and / or short positions in the shares, underlying
shares and debentures of the company or any associated corporation
At 31 December 2014, the interests and short positions of each director and chief executive (should
include supervisors in case of a PRC issuer) in the shares, underlying shares and debentures of the
company and its associated corporations (within the meaning of the Securities and Futures Ordinance
(SFO), as recorded in the register required to be kept by the company under Section 352 of Part XV of
the SFO were as follows:
(a) Ordinary shares in [state the companys name, i.e. the company or its associated corporation] at 31
December 2014.
Number of shares held
Personal
interests
Family *Corporate
interests
interests
*Trusts
and
similar
interests
*Persons
acting in
concert
Other
interests
Total
% of the
Issued
share
capital of
the
company
Director Mr B
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Director Mr C
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Chief Executive Mr M Long positions

Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
(b)
Note: The nature of such interests should be provided. Where corporate interests that are not
wholly owned by the directors or chief executives, the percentage interests held by them in such
corporation should be disclosed.
x% redeemable preferences shares in [state the companys name, i.e. the company or its associated
corporation] at 31 December 2014.
Personal
interest
Family *Corporat
interests e interests
*Trusts
and
similar
interests
*Persons
acting in
concert
Other
interests
Total
% of the
Issued
share
capital of
the
company
Director Mr B
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Director Mr C
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Chief Executive Mr M
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
*Note: The nature of such interests should be provided. Where corporate interests that are not wholly owned by
the directors or chief executives, the percentage interests held by them in such corporation should be disclosed.
(1) x shares are held by DEF Limited, a company in which Mr. B holds x% equity interests and has a controlling
interest.
(2) x shares are held by discretionary trusts of which Mr. C and members of his family are beneficiaries.
151


(c)
derivative to ordinary shares in [state the companys name, i.e. the company or its associated
corporation]
Listed Warrants
(physically settled equity derivatives)
As at 31 December 2014
Unlisted Options
(physically settled equity
derivatives)
Director Mr B
Long positions
Director Mr C
Long positions
Short positions
x
x
x
x
Chief executive Mr M
Long positions
Short positions
x
x
x
x
Share options are granted to directors and chief executives under the Executive Share Option
Scheme approved by shareholders at an Extraordinary General Meeting on 1 July 2006. Refer
details under Share Options above.
OR
Saved as disclosed above, at no time during the year, the directors and chief executives (including
their spouse and children under 18 years of age) had any interest in, or had been granted, or
exercised, any rights to subscribe for shares (or warrants or debentures, if applicable) of the
company and its associated corporations required to be disclosed pursuant to the SFO.
(d)
Other than those interests and short positions disclosed above, the directors and chief executives
also hold shares of certain subsidiaries solely for the purpose of ensuring that the relevant
subsidiary has more than one member.
OR
S129D(3)(k)
At no time during the year was the company, its subsidiaries, its associated companies, its fellow
subsidiaries or its parent company a party to any arrangement to enable the directors and chief
executives of the company (including their spouse and children under 18 years of age) to hold any
interests or short positions in the shares or underlying shares in, or debentures of, the company or
its associated corporation.
152


A13(3)
GEM18.16
GEM18.17
GEM18.17B
PN5(3.4)
Substantial shareholders interests and / or short positions in the shares, underlying

shares of the company
At 31 December 2014, the register of substantial shareholders required to be kept under Section 336 of
Part XV of the SFO shows that the company had not been notified of any substantial shareholders
interests and short positions, being 5% or more of the companys issued share capital, other than those of
the directors and chief executives as disclosed above.
OR
The register of substantial shareholders required to be kept under section 336 of Part XV of the SFO
shows that as at 31 December 2014, the company had been notified of the following substantial
shareholders interests and short positions, being 5% or more of the companys issued share capital.
These interests are in addition to those disclosed above in respect of the directors and chief executives.
(a) ordinary shares in the company
Number of shares
Personal
interests
*Trusts
and
Family *Corporate similar
interests
interests interests
*Persons
acting in
Other
concert interests
% of the
Issued
share
capital of
the
Total company
Mr X
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Mrs Y
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Mr Z
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
*Note: The nature of such interests should be provided. Where corporate interests that are not wholly owned by the
substantial shareholders, the percentage interests held by them in such corporation should be disclosed.
A13(3)
GEM18.17
GEM18.17C
PN5(3.5)
[Same disclosures as those of substantial shareholders should be made for other persons whose interests are
recorded in the register to be kept under section 336 of the SFO.]
Management contracts
No contracts concerning the management and administration of the whole or any substantial part of the
business of the company were entered into or existed during the year.
OR
S129D(3)(ia)
S162A(1)(a)
A16(1)
GEM18.26
A16(2)
GEM18.27
There exist agreements for management and payroll services, in respect of which BXK Management
Services Limited provides services to various companies in the group and under which costs are
reimbursed and fees are payable. These agreements can be terminated by either party giving not less than
twelve months notice of termination expiring on 31 December 2014 or any subsequent 31st December.
[Notes:
- Details are required for any contract of significance between the company or any one of its subsidiaries, and a
controlling shareholder* or any subsidiaries of the controlling shareholder.
- Details are also required for any contract of significance for the provision of services to the group by a controlling
shareholder or any of the subsidiaries of the controlling shareholder.
*For the purpose of this requirement, controlling shareholder mean any shareholder entitled to exercise, or control
the exercise of:
(i) in the case of a PRC issuer, 30 per cent (or such other amount as may from time to time be specified in applicable
PRC law as being the level for triggering a mandatory general offer or for otherwise establishing legal or
management control over a business enterprise);
(ii) in other cases, 30 per cent (or such other amount as may from time to time be specified in the Takeovers Code as
being the level for triggering a mandatory general offer);
or more of the voting power at general meetings of the listed issuer or one which is in a position to control the
composition of a majority of the board of directors of the listed issuer.]
153


A31
GEM18.40
Major suppliers and customers
A31(6), A31(7)
GEM18.40(6)
&18.40(7)
During the year, the group purchased less than 30% of its goods and services from its 5 largest suppliers
and sold less than 30% of its goods and services to its 5 largest customers.
OR
A31(1)-(4)
GEM18.40(1)GEM18.40(4)
The percentages of purchases and sales for the year attributable to the groups major suppliers and
customers are as follows:
Purchases
- the largest supplier
- five largest suppliers in aggregate
Sales
- the largest customer
- five largest customers in aggregate
A31(5)
GEM18.40(5)
A31(5)
GEM18.40(5)
A8(3), GEM18.9(3)
x%
x%
x%
x%
None of the directors, their associates or any shareholder (which to the knowledge of the directors owns
more than 5% of the companys share capital) had an interest in these major suppliers or customers.
OR
[Director Mr. B held a 20% interest in the share capital of the groups largest supplier.]
Connected transactions
A summary of the related party transactions entered into by the group during the year ended 31 December
2014 is contained in Note 42 to the consolidated accounts. The transactions in relation to the acquisition of
a further 65% of the share capital of ABC Group as described in Note 41 fall under the definition of
connected transactions under the Listing Rules.
The following transactions between certain connected parties (as defined in the Listing Rules) and the
company have been entered into and/or are ongoing for which relevant announcements, if necessary, had
been made by the company in accordance with [Main Board: Chapter 14A / GEM: Chapter 20] of the
Listing Rules.
(1) Connected transactions
A8 (1), MB14A. 49
GEM18.09(1)
GEM20. 47
On 1 March 2014, the group acquired a further 65% of the share capital of ABC Group, a shoe and leather
goods retailer operating in the US and most western European countries. The consideration was settled
through the issue of 3.55 million ordinary shares of the company and cash. ABC Group is a subsidiary of
EFG Corporation, a company which is controlled by Mr X who is a substantial shareholder of a subsidiary
of the company. The contingent consideration arrangement requires the group to pay the former owners of
ABC Group 10% of the average profit of ABC Group for three years from 2012 to 2014, in excess of
HK$ 7,500,000 for 2012, up to a maximum undiscounted amount of HK$2,500,000.
154


(2) Continuing connected transactions
A8(2), MB14A. 49
GEM18.09(2)
GEM20. 47
MB14A. 71
GEM20. 69
GL73-14
On 30 June 2013, Pink Limited, a subsidiary of the company, has entered into a tenancy agreement with
ABC Limited. Mr. E is a director of Pink Limited and Miss L, a spouse of Mr E, is the substantial
shareholder of ABC Limited. The group leased a flat as office at 8/F, London Tower, Kings Road,
London with an area of approximately 2,800 square metre for a term of 24 months from 1 July 2013 to
30 June 2015 at a monthly rental of HK$1,280,000.
[Note: According to GL73-14 issued by the HKEx, listed issuers should disclose whether they have
followed the pricing policies and guidelines set out in their continuing connected transaction
announcement(s) and the circular(s) (if any) when determining the price and terms of the continuing
connected transactions conducted during the year. Sample wording is set out below:
The price and the terms of the above transaction have been determined in accordance with the
pricing policies and guideline set out in the relevant announcement dated [date] and the relevant
circular dated [date].]
MB14A. 55
GEM20. 53
The aforesaid continuing connected transaction has been reviewed by independent non-executive
directors of the company. The independent non-executive directors confirmed that the aforesaid
connected transaction were entered into (a) in the ordinary and usual course of business of the group;
(b) either on normal commercial terms or on terms no less favourable to the group than terms available
to or from independent third parties; (c) in accordance with the relevant agreements governing them on
terms that are fair and reasonable and in the interests of the shareholders of the company as a whole.
MB14A. 58
GEM20. 56
The companys auditor was engaged to report on the groups continuing connected transactions in
accordance with Hong Kong Standard on Assurance Engagements 3000 Assurance Engagements
Other Than Audits or Reviews of Historical Financial Information and with reference to Practice
Note 740 Auditors Letter on Continuing Connected Transactions under the Hong Kong Listing
Rules issued by the Hong Kong Institute of Certified Public Accountants. The auditor has issued his
unqualified letter containing his findings and conclusions in respect of the continuing connected
transactions disclosed by the group on page [ ] of the Annual Report in accordance with [paragraph
14A. 56 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited/paragraph 20. 54 of the Rules Governing the Listing of Securities on the Growth Enterprise
Market of The Stock Exchange of Hong Kong Limited]. A copy of the auditors letter has been
provided by the company to The Stock Exchange of Hong Kong Limited
A8(3)
GEM18.09(3)
[Note: Give details of connected transactions disclosed pursuant to Listing Rules and specify which
transactions disclosed as related party transactions also constitute connected transactions as defined
under the Listing Rules. Note that related party and connected transactions have different
definitions, albeit with a high degree of overlapping.]
155


Financial assistance and guarantees to affiliated companies
MB13.16
MB13.22
GEM17.18, 17.24
Based on the disclosure obligations under [Main Board: Chapter 13/GEM: Chapter 17 of the Listing
Rules] as at 31 December 2014, details of advances (including guarantee given by the group) which
are non-trading in nature, made by the group to the following entity (which amount exceeds 8% of
the total assets of the group as at 31 December 2014 were as follows:
Name of company
Relationship with
the group
Advances
HK$000
Corporate
guarantee
HK$000
x (Note 2)
Alfa Limited
Associated
company
X (Note 1)
Beta S.A.
Associated
company
X (Note 3)
Notes:
1. This advance to Alfa Limited was made on 1 July 2013 for working capital purposes which is
unsecured, bearing interest at the rate of 6.5% per annum and is repayable on or before 30
June 2015.
2. This represents a corporate guarantee secured by a fixed deposit of HK$[x] for a bank loan of
HK$[x] granted to Alfa Limited on 31 December 2014 for working capital purposes. The
aforesaid bank loan has been fully utilized by Alfa Limited.
3. This advance to Beta S.A. was made during the periods from 1 January 2010 to 31 December
2015.
Combined balance sheet of affiliated companies as at the [latest practicable date subsequent to year end]
Alfa Limited
Interest held
Beta S.A.
15%
Total
30%
HK$000
HK$000
HK$000
HK$000
HK$000
Intangible assets
Other assets
Borrowing
Other liabilities
Net assets
x]
Sufficiency of public float

A34A, MB8.08
MB13.35
GEM17.38A,
GEM18.08B
GEM11.23(7)
Based on the information that is publicly available to the company and within the knowledge of the
Directors, it is confirmed that there is sufficient public float of at least 25% of the companys issued
shares at [the latest practicable date prior to the issue of the annual report].
MB8.10
GEM11.04
Competing business
Set out below is information disclosed pursuant to paragraph [8.10 of Main Board Listing
Rules/paragraph 11.04 of GEM Listing Rules]*of the Listing Rules:Mrs. Y is an executive director of Colour Limited. The wholesale and manufacturing activities of leather
goods of Colour Limited constitutes a competing business to the group.
Mr. Z is a director and beneficial owner of Competitor Limited. Leather products retailing activities of
Competitor Limited constitute a competing business to the group.
156


Both Mrs. Y and Mr. Z are controlling shareholders of the company but not involved in any way in the
managing of the groups wholesale and manufacturing of leather products. The group is therefore capable
of carrying on such business independently of, and at arms length from the said competing business.
Compliance advisers Interests
GEM18.45
As at 31 December 2014, as notified by the companys compliance adviser[, insert name of the
compliance adviser,] neither the compliance adviser nor any of its directors, employees or associates (as
referred to in Note 3 Rule 6A.31 of the GEM Listing Rules) had any interest in the securities of the
company.
Pursuant to the compliance adviser agreement dated [insert agreement date] entered into between the
company and the compliance adviser, the compliance adviser has received and shall receive an annual fee
for acting as the companys retained compliance adviser for the period from [insert commencement date]
to [insert termination date].
S129D(3)(l)
Subsequent events
On [specify date after year end], the group acquired 100% interest in K & Co. which is specialising in the
manufacture of shoes for extreme sports. The consideration of HK$5,950,000 was settled in cash on 1
February 2015. The estimated goodwill on acquisition of the subsidiary is approximately HK$805,000.
Other matters
S129D(3)(l)
[Consider: Matters that are material for a proper appreciation of the state of affairs of the company
and/or results of the year. For example:
(a) Significant events occurring during the year, which have had an effect on the trading results in
specific areas.
(b) Additional explanations of large and unusual/ extraordinary items.
(c) Additional explanations of reasons for changes in accounting policies.
(d) Additional explanations of significant related party transactions if not provided elsewhere.]
A18, GEM 18.18
[An explanation of the difference if net income shown in the financial statements differs materially
from any profit forecast published by the company].
[Professional qualifications of:
GEM18.44(1)
(a) the company secretary; and

(b) the compliance officer.]
Auditors
S131
The financial statements have been audited by PricewaterhouseCoopers who retire and, being eligible,
offer themselves for re-appointment.
A30
GEM18.42
[For listed companies only: if there has been any change in the auditors of the company in any of the
preceding three years then a statement of that fact is necessary.]
S129D(2)
On behalf of the Board
By order of the Board
Chairman
Hong Kong, [ specify date ]
OR
157
Secretary

Appendix Ia Corporate Governance Report under the Code (for Listed Companies only)
A34,GEM18.44(2)
General
MB Appendix 14
GEM Appendix 15
1. Issuers must include a Corporate Governance Report prepared by the board of directors in their
summary financial reports (if any) under paragraph 50 of Appendix 16 (GEM: paragraph 81 of Chapter
18) and annual reports under paragraph 34 of Appendix 16 (GEM: paragraph 44 of Chapter 18). The
Corporate Governance Report must contain all the information set out in Paragraphs G to P of
Appendix 14 (GEM: Appendix 15). Any failure to do so will be regarded as a breach of the Exchange
Listing Rules.
To a reasonable and appropriate extent, the Corporate Governance Report included in an issuers
summary financial report may be a summary of the Corporate Governance Report contained in the
annual report and may also incorporate information by reference to its annual report. The references
must be clear and unambiguous and the summary must not contain only a cross-reference without any
discussion of the matter. The summary must contain, as a minimum, a narrative statement indicating
overall compliance with and highlighting any deviation from the code provisions.
Issuers are also encouraged to disclose information set out in Paragraphs Q to T of Appendix 14 in
their Corporate Governance Reports.
What is comply or explain?
1. The Code sets out a number of principles followed by code provisions and recommended best
practices. It is important to recognise that the code provisions and recommended best practices are
not mandatory rules. The Exchange does not envisage a one size fits all approach. Deviations from
code provisions are acceptable if the issuer considers there are more suitable ways for it to comply
with the principles.
2. Therefore the Code permits greater flexibility than the Rules, reflecting that it is impractical to
define in detail the behaviour necessary from all issuers to achieve good corporate governance. To
avoid box ticking, issuers must consider their own individual circumstances, the size and
complexity of their operations and the nature of the risks and challenges they face. Where an issuer
considers a more suitable alternative to a code provision exists, it should adopt it and give reasons.
However, the issuer must explain to its shareholders why good corporate governance was achieved
by means other than strict compliance with the code provision.
3. Shareholders should not consider departures from code provisions and recommended best
practices as breaches. They should carefully consider and evaluate explanations given by issuers in
the comply or explain process, taking into account the purpose of good corporate governance.
4. An informed, constructive dialogue between issuers and shareholders is important to improving
corporate governance.
Mandatory Disclosure Requirements
2. To provide transparency, the issuers must include the following information for the accounting period
covered by the annual report and significant subsequent events for the period up to the date of
publication of the annual report, to the extent possible:
MB Appendix 14G
GEM Appendix 15G
(a) Corporate governance practices

(i)
a narrative statement explaining how the issuer has applied the principles in the Code, enabling
its shareholders to evaluate how the principles have been applied;
(ii) a statement as to whether the issuer meets the code provisions. If an issuer has adopted its own
code that exceeds the code provisions, it may draw attention to this fact in its annual report; and
(iii) for any deviation from the code provisions, details of the deviation during the financial year
(including considered reasons).
MB Appendix 14H
GEM Appendix 15H
(b) Directors securities transactions

For the Model Code set out in Appendix 10 (GEM: paragraph 48-67 of Chapter 5):
(i)
whether the issuer has adopted a code of conduct regarding directors securities transactions on
terms no less exacting than the required standard set out in the Model Code;
(ii) having made specific enquiry of all directors, whether the directors of the issuer have complied
with, or whether there has been any non-compliance with, the required standard set out in the
Model Code and its code of conduct regarding directors securities transactions; and
158

Appendix Ia Corporate Governance Report under the Code (for Listed Companies only) (continued)
(iii) for any non-compliance with the required standard set out in the Model Code, if any, details of
these and an explanation of the remedial steps taken by the issuer to address them.
MB Appendix 14I
GEM Appendix 15I
(c) Board of directors

(i)
Composition of the board, by category of directors including name of chairman, executive

directors, non-executive directors and independent non-executive directors;
(ii) number of board meetings held during the financial year;

(iii) attendance of each director, by name, at the board and general meetings;
Notes: 1
Subject to the issuers constitutional documents and the law and regulations of its
place of incorporation, attendance by a director at a meeting by electronic means
such as telephonic or video-conferencing may be counted as physical attendance.
If a director is appointed part way during a financial year, his attendance should be
stated by reference to the number of board meetings held during his tenure.
(iv) for each named director, the number of board or committee meetings he attended and
separately the number of board or committee meetings attended by his alternate. Attendance at
board or committee meetings by an alternate director should not be counted as attendance by
the director himself;
(v) a statement of the respective responsibilities, accountabilities and contributions of the board
and management. In particular, a statement of how the board operates, including a high level
statement on the types of decisions taken by the board and those delegated to management.
MB3.10(1)-(2),
3.10A
GEM5.05(1)-(2),
5.05A
(vi) details of non-compliance (if any) with rules 3.10(1) & (2) and 3.10A (GEM: 5.05 (1) & (2) and
5.05A) and an explanation of the remedial steps taken to address non-compliance. This should
cover non-compliance with appointment of a sufficient number of independent non-executive
directors and appointment of an independent non-executive director with appropriate
professional qualifications, or accounting or related financial management expertise,
respectively;
MB3.13
A12A
GEM18.39A
GEM5.09
(vii) reasons why the issuer considers an independent non-executive director to be independent
where he/she fails to meet one or more of the guidelines for assessing independence set out in
rule 3.13 (GEM: 5.09);
MB3.13
A12B
GEM18.39B
GEM5.09
Note: Under paragraph 12B of Appendix 16 (GEM: paragraph 39B of Chapter 18), a listed issuer must
confirm whether it has received from each of its independent non-executive directors an annual
confirmation of his independence pursuant to rule 3.13 (GEM: 5.09) and whether it still consider
the independent non-executive directors to be independent.
(viii) relationship (including financial, business, family or other material/relevant relationship(s)), if
any, between board members and in particular, between the chairman and the chief executive;
and
(ix) how each director, by name, complied with MB Code A.6.5 (GEM Code A.6.5) on directors
training.
MB Appendix 14J
GEM Appendix 15J
(d) Chairman and chief executive

(i)
The identity of the chairman and chief executive; and
(ii) whether the roles of the chairman and chief executive are separate and exercised by different
individuals.
MB Appendix 14K
GEM Appendix 15K
(e) Non-executive directors

The term of appointment of non-executive directors.
159

MB Appendix 14L
GEM Appendix 15L
(f)
Board committees
The following information for each of the remuneration committee, nomination committee and audit
committee, and corporate governance functions:
(i)
the role and function of the committee;.
(ii) the composition of the committee and whether it comprises independent non-executive
directors, non-executive directors and executive directors(including names and identifying in
particular the chairman of the remuneration committee);
(iii) the number of meeting held by the committee during the year to discuss matters and the record
of attendance of members, by name, at meetings held during the year; and
(iv) a summary of the work during the year, including:
(1) for the remuneration committee, determining the policy for the remuneration of executive
directors, assessing performance of executive directors and approving the terms of executive
directors service contracts, performed by the remuneration committee. Disclose which of
the two models of remuneration committee described in MB Code B.1.2(c) (GEM Code
B.1.2(c) ) was adopted;
MB Code A.5.6
GEM Code A.5.6
(2) for the nomination committee, determining the policy for the nomination of directors,
performed by the nomination committee or the board of directors (if there is no nomination
committee) during the year. The nomination procedures and the process and criteria
adopted by the nomination committee or the board of directors (if there is no nomination
committee) to select and recommend candidates for directorship during the year. W.e.f. 1
September 2013, The nomination committee (or the board) should have a policy concerning
diversity of board members, and should disclose the policy or a summary of the policy in the
corporate governance report. If the nomination committee (or the board) has a policy
concerning diversity, this section should also include the boards policy or a summary of the
policy on board diversity, including any measurable objectives that it has set for
implementing the policy, and progress on achieving those objectives;
Note: Board diversity will differ according to the circumstances of each issuer. Diversity of board
members can be achieved through consideration of a number of factors, including but not
limited to gender, age, cultural and educational background, or professional experience.
Each issuer should take into account its own business model and specific needs, and disclose
the rationale for the factors it uses for this purpose.
(3) for corporate governance, determining the policy for the corporate governance of the
issuer, and duties performed by the board or the committee(s) under MB Code D.3.1(GEM
Code D.3.1); and
(4) for the audit committee, a report on how it met its responsibilities in its review of the
quarterly (if relevant), half-yearly and annual results and internal control system, and its
other duties under the Code. Details of non-compliance with MB rule 3.21 (GEM rule 5.28)
(if any) and an explanation of the remedial steps taken by the issuer to address noncompliance with establishment of an audit committee.
MB Appendix 14M
GEM Appendix 15M
(g) Auditors remuneration

An analysis of remuneration in respect of audit, and non-audit services provided by the auditors
(including any entity that is under common control, ownership or management with the audit firm or
any entity that a reasonable and informed third party having knowledge of all relevant information
would reasonably conclude as part of the audit firm nationally or internationally) to the issuer. The
analysis must include, in respect of each significant non-audit service assignment, details of the
nature of the services and the fees paid.
Note: An explanation or reconciliation should be provided if the details of auditors remuneration in
the Corporate Governance Report were different from information on audit fees disclosed in the
160

Note: The code provisions expect issuers to make certain specified disclosures in the Corporate
Governance Report. Where issuers choose not to make the expected disclosure, they must give
considered reasons for not doing so under paragraph G(c). For ease of reference, the specific
disclosure expectations of the code provisions are:
MB Code C.1.3
GEM Code C.1.3
(1)
MB Code C.1.3
GEM Code C.1.3
(2) report on material uncertainties, if any, relating to events or conditions that may cast
significant doubt upon the issuers ability to continue as a going concern;
MB Code C.2.1
GEM Code C.2.1
(3) a statement that the board has conducted a review of the effectiveness of internal control
system of the issuer and its subsidiaries; and
MB Code C.3.5
GEM Code C.3.5
(4) a statement from the audit committee explaining its recommendation and the reason(s) why
the board has taken a different view from the audit committee on the selection, appointment,
resignation or dismissal of external auditors.
MB Appendix 14N
GEM Appendix 15N
directors acknowledgement of their responsibility for preparing the accounts and a statement
by the auditors about their reporting responsibilities;
(h) Company secretary

(a) Where an issuer engages an external service provider as its company secretary, its primary
corporate contact person at the issuer (including his/her name and position); and
(b) details of non-compliance with MB rule 3.29 (GEM rule 5.15).
MB Appendix 14O
GEM Appendix 15O
(i)
Shareholders rights
(a) How shareholders can convene an extraordinary general meeting;
(b) the procedures by which enquiries may be put to the board and sufficient contact details to
enable these enquiries to be properly directed; and
(c) the procedures and sufficient contact details for putting forward proposals at shareholders
meetings.
(j) Investors relations

Any significant changes in the issuers constitutional documents during the year.
MB Appendix 14P
GEM Appendix 15P
Recommended Disclosures
3.
MB Appendix 14Q
GEM Appendix 15Q
The disclosures set out in this paragraph on corporate governance matters are provided for issuers
reference. They are not intended to be exhaustive or mandatory. They are intended to show the
areas which issuers may comment on in their Corporate Governance Report. The level of details
needed varies with the nature and complexity of issuers business activities. Issuers are encouraged
to include the following information in their Corporate Governance Report:
(a) Share interests of senior management

The number of shares held by senior management (i.e. those individuals whose biographical details
are disclosed in the annual report).
161

MB Appendix 14R
GEM Appendix 15R
(b) Investor relations

(i)
Details of shareholders by type and aggregate shareholding;
(ii) details of the last shareholders meeting, including the time and venue, major items discussed
and voting particulars;
(iv) indication of important shareholders dates in the coming financial year; and
(v) public float capitalisation at the year end.
(c) Internal controls
MB Appendix 14S
GEM Appendix
15SMB Code C.2.1
GEM Code C.2.1
(i)
Where an issuer includes a directors statement that they have conducted a review of its internal
control system in the annual report under MB Code C.2.1 (GEM Code C.2.1), it is encouraged to
disclose the following:
(1)
an explanation of how the internal control system has been defined for the issuer;
(2)
procedures and internal controls for the handling and dissemination of price sensitive
information;
(3)
whether the issuer has an internal audit function;
(4)
the outcome of the review of the need for an internal audit function conducted, on an
annual basis, by an issuer without one (MB/GEM Code C.2.6);
(5)
how often internal controls are reviewed;
(6)
a statement that the directors have reviewed the effectiveness of the internal control
system and whether they consider them effective and adequate;
(7)
directors criteria for assessing the effectiveness of the internal control system;
(8)
the period covered by the review;
(9)
details of any significant areas of concern which may affect shareholders;
(10) significant views or proposals put forward by the audit committee; and
(11) where an issuer has not conducted a review of its internal control system during the year,
an explanation why not; and
MB Appendix 14S
GEM Appendix 15S
MB Code C.2.4C.2.6
GEM Code C.2.4C.2.6
(ii) a narrative statement explaining how the issuer has complied with the code provisions on internal
control during the year. The disclosures should also include:
(a) the process used to identify, evaluate and manage significant risks;
(b) additional information to explain its risk management processes and internal control system;
(c) an acknowledgement by the board that it is responsible for the internal control system and
reviewing its effectiveness;
(d) the process used to review the effectiveness of the internal control system; and
(e) the process used to resolve material internal control defects for any significant problems
disclosed in its annual reports and accounts.
Note: Issuers should ensure that their disclosures provide meaningful information and do not give
a misleading impression. Issuers without an internal audit function should review the need for
one on an annual basis and should disclose the outcome of this review in the Corporate
Governance Report.
MB Appendix 14T
GEM Appendix 15T
(d) Management functions

The division of responsibility between the board and management.
Note: Issuers may consider that some of the information recommended under paragraph 3 is too lengthy
and detailed to be included in the Corporate Governance Report. As an alternative to full disclosure
in the Corporate Governance Report, issuers may choose to include some or all of this information:
(a) on its website and highlight to investors where they can:
(i)
access the soft copy by giving a hyperlink direct to the relevant webpage; and/or
(ii) collect a hard copy of the relevant information free of charge; or

(b) where the information is publicly available, by stating where the information can be found. Any
hyperlink should be direct to the relevant webpage.
162

Appendix II - Other Information in the Annual Report (for Listed Companies Only)
(i) Environmental, Social and Governance Report
DV
It is a recommended best practice for the issuers to include the environmental, social and governance (ESG)
information in their annual reports and in separate reports in respect of the following areas and aspects:
Workplace Quality
o Working conditions
o Health and safety
o Development and training
o Labour standards
Environmental protection
o Emissions
o Use of resources
o The environment and natural resources
Operating practices
o Supply chain management
o Product responsibility
o Anti-corruption
Community involvement
o Community investment
Please refer to Appendix 27 (Appendix 20 for GEM) for the detailed recommended disclosures.
(ii) Five year financial summary
A19
GEM18.33
Results
Profit/loss
attributable to:
- Owners of the company
-
Non-controlling interest
2014
HK$000

2013
2012
2010
HK$000
HK$000
HK$000
2009
HK$000
(x)
(x)
x
(x)
x
(x)
x
(x)
x
(x)
x
(x)
(x)
(x)
Assets and liabilities

Total assets
Total liabilities
Total equity
A19, GEM18.33 [Where
the published results and statement of assets and liabilities have not been prepared on a consistent
basis this must be explained.]
163

Appendix II - Other Information in the Annual Report (for Listed Companies Only) (continued)
(iii) Schedule of principal properties
A23
GEM18.23
(a) Properties held for development and/or sale
Description
Lot number State of

completion
Estimated
completion
date
Type
Site and gross

floor area
Groups
interests
xxx
xxx
xxx
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
(b) Investment properties

Description
Lot number
Type
Lease term
xxx
xxx
xxx
x
x
x
x
x
x
x
x
x
[Note: Required disclosure if any of percentage ratios as defined under MB 14.04(9) or GEM19.04
(9) of the listed Groups properties held for development and/or sale or for investment properties
exceeds 5%.]
(iv) Senior management remuneration by band73
MB Code B.1.5
GEM Code B.1.5

Emolument bands74 (in HK dollar)
[e.g. HK$1,000,001 HK$1,500,000]
[e.g. HK$2,000,000 HK$2,500,000]
DV
73
74
2014
2013
3
2
4
1
[Under MB Code B.1.8 (GEM B.1.8), it is recommended best practice to disclose details of any remuneration payable to members of
senior management, on an individual and named basis, in their annual reports.]
Senior management is defined as the same persons whose biographical details are disclosed as required by Appendix 16 (GEM Chapter 18).
The Code does not specify the banding in which the senior management remuneration should be disclosed. The issuers should customise the banding based
on its own circumstances.
164

Appendix III Operating and financial review

A32(1) - A32(12)
GEM18.41
A52
GEM18.83
For companies listed in Hong Kong, according to the Hong Kong Listing Rules, a listed issuer shall
include in its annual report a separate statement containing a discussion and analysis of the groups
performance during the financial year and the material factors underlying its results and financial
position. It should emphasise trends and identify significant events or transactions during the
financial year under review. As a minimum the directors of the listed issuer should comment on the
followings:
the groups liquidity and financial resources
capital structure of the group in terms of maturity profile of debt and obligation, type of capital
instruments used, currency and interest rate structure
significant investments held, their performance and future prospects
details of material acquisitions and disposals of subsidiaries and associated companies
comment on segmental information
where applicable, details of number and remuneration of employees, remuneration policies,

bonus and share option schemes and training schemes
details of charges on group assets
details of future plans for material investments or capital assets and their expected sources of
funding in the coming year
gearing ratio (the basis on which the gearing ratio is computed should be disclosed)
exposure to fluctuations in exchange rates and any related hedges; and
details of contingent liabilities, if any.
The Hong Kong Listing Rules also encouraged the listed issuers to disclose the following additional
commentary on management discussion and analysis in their annual reports:
(i)
efficiency indicators (e.g. return on equity, working capital ratios) for the last five financial years
indicating the bases of computation;
(ii) industry specific ratios, if any, for the last five financial years indicating the bases of
computation;
(iii) a discussion of the listed issuers purpose, corporate strategy and principal drivers of
performance;
(iv) an overview of trends in the listed issuers industry and business;
(v) a discussion on business risks (including known events, uncertainties and other factors which
may substantially affect future performance) and risks management policy;
(vi) a discussion on the listed issuers environmental policies and performance, including
compliance with the relevant laws and regulations;
(vii) a discussion on the listed issuers policies and performance on community, social, ethical and
reputational issues;
(viii) an account of the listed issuers key relationships with employees, customers, suppliers and
others, on which its success depends; and
(ix) receipts from, and returns to shareholders.
MB Code C.1.4
GEM Code C.1.4
Business model and the corporate strategy

The directors should include in the separate statement containing a discussion and analysis of the
groups performance in the annual report, an explanation of the basis on which the issuer generates
or preserves value over the longer term (the business model) and the strategy for delivering the
issuers objectives.
Note: An issuer should have a corporate strategy and a long term business model. Long term
financial performance as opposed to short term rewards should be a corporate governance
objective. An issuers board should not take undue risks to make short term gains at the expense of
long term objectives.
165

Appendix III Operating and financial review (continued)

For mining companies listing in Hong Kong
MB18.14
GEM18A.14
A Mineral Company must include in its interim (half-yearly) and annual reports details of its exploration,
development and mining production activities and a summary of expenditure incurred on these activities
during the period under review. If there has been no exploration, development or production activity, that
fact must be stated.
Guidance under GL47-13:
For "details of exploration, development and mining production activities", a Mineral Company must
disclose the following details in its interim and annual reports:
Details of exploration activities including number, average size, total length of holes drilled during the
review period.
Details of development activities including progress on the mining structure or infrastructure.
Details of mining activities including quantity of mineral ore being mined during the period under review
by project or at least a separate discussion on major projects.
Details of new contracts and commitments entered into during the period including those related to
infrastructure projects (road and railway), subcontracting arrangements and purchases of equipment.
If a Mineral Company has several mineral assets/ projects on hand, it should consider presenting the above
information on a project basis.
For the "summary of expenditure incurred", a Mineral Company must disclose both the operating expenses
(i.e. costs that were directly charged to income statement during the period they were incurred) and capital
expenditures incurred. A Mineral Company, depending on its own situation, should consider providing a
further breakdown of expenses incurred in order to provide more meaningful information to its
shareholders and enhance the transparency of its activities (e.g. separately disclose labour costs incurred for
mining activities and processing activities).
Statements on Resources and/or Reserves
MB18.15
GEM18A.15
A Mineral Company75 that publicly discloses details of Resources76 and/or Reserves77 must give an update of
those Resources and/or Reserves once a year in its annual report, in accordance with the reporting standard
under which they were previously disclosed or a Reporting Standard78.
MB18.16
GEM18A.16
A Mineral Company must include an update of its Resources and/or Reserves in its annual report in
accordance with the Reporting Standard under which they were previously disclosed.
MB18.17
GEM18A.17
Annual updates of Resources and/or Reserves must comply with rule 18.18 (GEM 18A.18).
75
76
77
78
A Mineral Company is defined as a listed issuer whose principal activity, whether directly or through its subsidiaries, involves the exploration for and/or extraction of
natural resources including minerals, oil and gas or solid fuels, or a listed issuer that has acquired or disposed of mineral or exploration assets by a transaction
classified as major or above after 3 June 2010. Principal activity is determined by whether the activity represented 25 per cent or more of the company's assets,
revenue or operating expenses.
Resource is defined as:
with regard to minerals, a concentration or occurrence of material of intrinsic economic interest in or on the Earths crust in such form, quality and quantity
that there are reasonable prospects for their eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured Resources, as defined in the JORC Code.
with regard to Petroleum, Contingent Resources and/or Prospective Resources.

Please refer to MB Chapter 18/GEM Chapter 18A for definitions of the technical terms used for a Mineral Company.
Reserve is defined as:
with regard to minerals, the economically mineable part of a Measured, and/or Indicated Resource, taking into account diluting materials and allowances for
losses, which may occur when the material is mined. Appropriate assessments to a minimum of a Pre-feasibility Study must have been carried out. Mineral
Reserves are subdivided in order of increasing confidence into Probable Reserves and Proved Reserves.
with regard to Petroleum, those quantities of Petroleum anticipated to be commercially recoverable by the application of development projects to known
accumulations from a given date forward under defined conditions.
Reporting Standard refers to a recognised standard acceptable to the Stock Exchange, including:
the JORC Code, NI 43-101, and the SAMREC Code, with regard to mineral Resources and Reserves;
PRMS with regard to Petroleum Resources and Reserves; and
CIMVAL, the SAMVAL Code, and the VALMIN Code, with regard to valuations.
166


Note: Annual updates are not required to be supported by a Competent Person's Report79 and may take the
form of a no material change statement.
MB18.18
GEM18A.18
Any data presented on Resources and/or Reserves by a Mineral Company in the annual report, must be
presented in tables in a manner readily understandable to a non-technical person. All assumptions must be
clearly disclosed and statements should include an estimate of volume, tonnage and grades.
Additional disclosure requirements under GL 47-13:
A Mineral Company should disclose in its annual reports:
the assumptions adopted for the resources and reserves estimates; and
the reasons for any material change of assumptions as compared with previous disclosed estimates.
Examples include changes in geological confidence level, additional drilling information becoming
available, amount of mineral mined during the period etc.
MB18.19
GEM18A.19
All statements referring to Resources and/or Reserves must at least be substantiated by the issuers internal
experts.
International Organisation of Securities Commissions
In 1998, the International Organisation of Securities Commissions (IOSCO) issued Ìnternational disclosure
standards for cross-border offerings and initial listings by foreign issuers', comprising recommended
disclosure standards, including an operating and financial review and discussion of future prospects. IOSCO
standards for prospectuses are not mandatory, but they are increasingly incorporated in national stock
exchange requirements for prospectuses and annual reports. The text of IOSCO's standard on operating and
financial reviews and prospects is reproduced below. Although the standard refers to a company'
throughout, we consider that, where a company has subsidiaries, it should be applied to the group.
Standard
Discuss the company's financial condition, changes in financial condition and results of operations for each
year and interim period for which financial statements are required, including the causes of material
changes from year to year in financial statement line items, to the extent necessary for an understanding of
the company's business as a whole. Information provided also shall relate to all separate segments of the
group. Provide the information specified below as well as such other information that is necessary for an
investor's understanding of the company's financial condition, changes in financial condition and results of
operations.
79
Competent Person's Report is a public report prepared by a Competent Person that satisfies the requirements as set out in MB18.21 and MB18.22 (GEM18A.21 and
GEM18A.22) on Resources and/or Reserves, in compliance with MB Chapter 18/GEM Chapter 18A and the applicable Reporting Standard.
167


A
Operating results. Provide information regarding significant factors, including unusual or infrequent events
or new developments, materially affecting the company's income from operations, indicating the extent to
which income was so affected. Describe any other significant component of revenue or expenses necessary to
understand the company's results of operations.
(1)
To the extent that the financial statements disclose material changes in net sales or revenues, provide a
narrative discussion of the extent to which such changes are attributable to changes in prices or to changes in
the volume or amount of products or services being sold or to the introduction of new products or services.
(2)
Describe the impact of inflation, if material. If the currency in which financial statements are presented is of a
country that has experienced hyperinflation, the existence of such inflation, a five-year history of the annual
rate of inflation and a discussion of the impact of hyperinflation on the company's business shall be disclosed.
(3)
Provide information regarding the impact of foreign currency fluctuations on the company, if material, and the
extent to which foreign currency net investments are hedged by currency borrowings and other hedging
instruments.
(4)
Provide information regarding any governmental economic, fiscal, monetary or political policies or factors that
have materially affected, or could materially affect, directly or indirectly, the company's operations or
investments by host country shareholders.
Liquidity and capital resources. The following information shall be provided:
(1)
Information regarding the company's liquidity (both short and long term), including:
(a)
a description of the internal and external sources of liquidity and a brief discussion of any material
unused sources of liquidity. Include a statement by the company that, in its opinion, the working capital
is sufficient for the company's present requirements, or, if not, how it proposes to provide the additional
working capital needed.
(b)
an evaluation of the sources and amounts of the company's cash flows, including the nature and extent
of any legal or economic restrictions on the ability of subsidiaries to transfer funds to the parent in the
form of cash dividends, loans or advances and the impact such restrictions have had or are expected to
have on the ability of the company to meet its cash obligations.
(c)
information on the level of borrowings at the end of the period under review, the seasonality of
borrowing requirements and the maturity profile of borrowings and committed borrowing facilities,
with a description of any restrictions on their use.
(2)
Information regarding the type of financial instruments used, the maturity profile of debt, currency and
interest rate structure. The discussion also should include funding and treasury policies and objectives in
terms of the manner in which treasury activities are controlled, the currencies in which cash and cash
equivalents are held, the extent to which borrowings are at fixed rates, and the use of financial instruments for
hedging purposes.
(3)
Information regarding the company's material commitments for capital expenditures as of the end of the latest
financial year and any subsequent interim period and an indication of the general purpose of such
commitments and the anticipated sources of funds needed to fulfil such commitments.
Research and development, patents and licenses, etc. Provide a description of the company's research
and development policies for the last three years, where it is significant, including the amount spent during
each of the last three financial years on group-sponsored research and development activities.
Trend information. The group should identify the most significant recent trends in production, sales and
inventory, the state of the order book and costs and selling prices since the latest financial year. The group also
should discuss, for at least the current financial year, any known trends, uncertainties, demands, commitments
or events that are reasonably likely to have a material effect on the group's net sales or revenues, income from
continuing operations, profitability, liquidity or capital resources, or that would cause reported financial
information not necessarily to be indicative of future operating results or financial condition.
168


Management commentary
The IASB issued a non-mandatory practice statement on management commentary in December 2010 that provides
principles for the presentation of a narrative report on an entity's financial performance, position and cash flows.
The IASB's practice statement provides a broad framework of principles, qualitative characteristics and elements
that might be used to provide users of financial reports with decision-useful information. The practice statement
recommends that the commentary is entity-specific and may include the following components:
A description of the business including discussion of matters such as the industries, markets and competitive
position; legal, regulatory and macro-economic environment; and the entity's structure and economic model.
Management's objectives and strategies to help users understand the priorities for action and the resources
that must be managed to deliver results.
The critical financial and non-financial resources available to the entity and how those resources are used in
meeting management's objectives for the entity.
The principal risks, and management's plans and strategies for managing those risks, and the effectiveness of
those strategies.
The performance and development of the entity to provide insights into the trends and factors affecting the
business and to help users understand the extent to which past performance may be indicative of future
performance.
The performance measures that management uses to evaluate the entity's performance against its objectives,
which helps users to assess the degree to which goals and objectives are being achieved.
169

Appendix IV Alternative presentation of primary statements

1 Consolidated income statement by nature of expense
As an alternative to the presentation of costs by function shown in the above illustrative
IFRS/HKFRS consolidated financial statements, the group is permitted to present the analysis of
costs using the nature of expenditure format. The following disclosures would be made on the face of
the income statement:
1p81(b), 84
1p10(b), 12
1p102,113, 1p38
A4(1)(n), A2(2)&(5),
GEM18.50B(1)(o),
GEM18.07(2)&(5),S124,
10Sch17(6)
1p82(a),A4(1)(a)
GEM18.50(B)(1)(a)
1p99, 103,A4(1)(h)
GEM18.50(B)(1)(b)
A4(1)(k),
GEM18.50B(1)(f)
1p85, A4(1)(h)
GEM18.50B(1)(b)
1p85
1p85
1p85
1p85
1p82(b)
1p85
1p82(c), A4(1)(m)
GEME18.50B(1)(n)
1p85, A4(1)(b)
GEM18.50B(1)(g)
1p82(d), 12p77, A4(1)(c)
GEM18.50B(1)(h)
Note
Revenue
2014
HK$000
211,034
Other income
2,437
Changes in inventories of finished goods and

work in progress
Employee benefits expense
Depreciation and amortisation
9
9
10
16, 16a,
18
Transportation expense
Advertising costs
Operating lease payments
Impairment charges
Other gains net
18
8
2,300
(31,845)
(15,577)
(17,013)
(8,584)
(12,759)
(10,604)
(4,650)
7,810
(6,112)
(6,000)
(8,500)
6,063
(1,659)
34,781
Finance income
Finance expenses
11
11
11
1,730
(8,173)
(6,443)
1,609
(12,197)
(10,588)
12(b)
1,293
1,022
48,620
25,215
(14,298)
(8,175)
Share of profit of investments accounted for

using the equity method
Income tax expense
13
Profit for the year
1p83(a)(i)
(6,950)
(47,185)
(40,310)
(26,554)
(6,117)
(3,798)
53,770
FRS5p33(a)
1p83(a)(i)
764
Profit for the year from continuing

operations
1p83(a)(ii)
2013
HK$000
112,360
Other expenses
Operating profit
1p82
1p82(f)
26

Profit attributable to owners of the company arises

from:
170
34,322
17,040
100
34,422
120
17,160
31,874
2,548
34,422
16,304
856
17,160
31,794
80
31,874
16,184
120
16,304

Appendix IV Alternative presentation of primary statements (Continued)

2 Consolidated statement of comprehensive income single statement, by function of expense and
income tax effect presented on an aggregate basis
Year ended 31
December
1p10(b), 10A
A4(1)(n), A2 (2)&(5),
GEM18.50B(1)(o),
GEM18.07(2)&(5)
S124, 10Sch17(6)
Note
2014
HK$000
2013
HK$000
1p82(a), A4(1)(a),
GEM18.50(B)(1)(a)
1p99,103,A4(1)(i),
GEM18.50(B)(1)(d)
Revenue
211,034
112,360
Cost of sales
6,9
(80,707)
(50,305)
130,327
62,055
1p99,103
Gross profit
(54,814)
(22,155)
1p99,103
(31,990)
(11,946)
1p99,103, A4(1)(h),
GEM18.50B(1)(b)
Other income
2,437
764
1p85
Other gains net
1p85
Operating profit
1p85
Finance income
11
1,730
1,609
1p82(b)
Finance expenses
11
(8,173)
(12,197)
1p85
11
(6,443)
(10,588)
1p82(c), A4(1)(m),
GEM18.50B(1)(n)
Share of profit of investments accounted for using the equity

method
12b
1,293
1,022
1p85, A4(1)(b),
GEM18.50B(1)(g)
48,620
25,215
(14,298)
(8,175)
34,322
17,040
1p82(d), 12p77,
A4(1)(c),
GEM18.50B(1)(h)
Income tax expense
1p85
FRS5p33(a)
Discontinued operations:
13

1p81A(a)
26
7,810
6,063
53,770
34,781
100
120
34,422
17,160
29, 13
119
(910)
30
524
185
(850)
(3)
Profit for the year

Other comprehensive income:
1p82A
Items that will not be reclassified to profit or loss
19p120(c)
Remeasurements of post-employment benefit obligations
1p82A
Items that may be subsequently reclassified to profit or loss
FRS7p20(a)(ii)
Change in value of available-for-sale financial assets
FRS3p59
Reclassification of revaluation of previously held interest in

ABC Group
FRS7p23(c)
Cash flow hedges
30
97
1p85
30
(45)
40
21p52(b)
3,011
(13)
Share of other comprehensive income of investments

accounted for using the equity method
(12)
(14)
1p82A
Total other comprehensive income, before tax
2,844
(715)
Income tax relating to components of other

(241)
150
Other comprehensive income for the year, net of tax80
2,603
(565)
37,025
16,595
1p90
1p81A(c)
80The
7, 30,
41
30
income tax effect has been presented on an aggregate basis; therefore, an additional note disclosure presents the income tax effect of each component. Alternatively,
this information could be presented within the statement of comprehensive income.
171


Year ended
31 December
2014
2013
HK$000
HK$000
1p81B(a)(ii)
1p81B(a)(i),
FRS12p12(e)

31,874
16,304
2,548
856
34,422
17,160
31,794
80
31,874
16,184
120
16,304
34,225
2,800
37,025
15,779
816
16,595
34,145
80
34,225
15,659
120
15,779
FRS5p33(d)

arises from:
1p81B(b)(ii)
1p81B(b)(i)
Total comprehensive income attributable to:

FRS5p33(d)
Total comprehensive income attributable to

owners of the company arises from81:
26
Earnings per share from continuing and discontinued operations to the owners of the
company for the year (expressed in HK$ per share)
33p66, A4(1)(g),
GEM18,50B(1)(m)
33p68
33p66
33p68

2014
2013
1.35
0.79
0.01
1.36
0.01
0.80
2014
2013
1.22
0.01
1.23
0.74
0.01
0.75
14

14
10Sch13(1)(j)
81
82
83
Dividends83
36
2014
HK$000
12,945
2013
HK$000
10,102
IFRS/HKFRS 5p33 (d) requires the disclosure of the amount of income from continuing operations and from discontinued operations attributable to owners of the
Company. These disclosures may be presented either in the notes or in the statement of comprehensive income.
EPS for discontinued operations may be given in the notes to the accounts instead of the face of the income statement.
IAS/HKAS 1p107 requires an entity to present the amount of dividends recognised as distributions to owners during the period either in the statement of changes in
equity or in the notes, because dividends are distributions to owners in their capacity as owners and the statement of changes in equity presents all owner changes in
equity. In the basis of conclusion of IAS/HKAS 1, the Board concluded that an entity should not present dividends in the statement of comprehensive income
because that statement presents non-owner changes in equity. However, HKCO Tenth Sch.para 13(1)(j)) requires the disclosure of the aggregate amount of the
dividends paid and proposed in the profit and loss account. The disclosure above only illustrated the disclosure requirements of the HKCO for reference purpose.
172

Note Income tax expense

Tax effects of components of other comprehensive income
12p81(ab)
2014
Before
tax
HK$000
1p90
1p90
2013
Tax (charge)
credit
After tax
Before
tax
HK$000 HK$000
HK$000
Tax
(charge)
credit
After
tax
HK$000 HK$000
Fair value gains on available-for-sale financial

assets
524
(162)
362
185
(123)
62

associates
(12)
(12)
(14)
(14)
119
(36)
83
(910)
273
(637)
1p90
Remeasurements of post-employment benefit

obligations
1p90
Impact of change in the [country name] tax

rate on deferred tax
1p90
Cash flow hedges
1p90
1p90
FRS3p42
Reclassification of revaluation of previously

(850)
2,844
(10)
(10)
97
(33)
64
(3)
(3)
(45)
(45)
40
40
3,011
3,011
(13)
(13)
(850)
(241)
173
2,603
(715)
150
(565)


3
Consolidated statement of cash flows direct method
IAS/HKAS 7 encourages the use of the `direct method' for the presentation of cash flows from operating activities. The
presentation of cash flows from operating activities using the direct method in accordance with IAS/HKAS 7, paragraph
18, is as follows:
Year ended
31 December
A2(3)&(5), GEM18.07
(3)&(5)1p113, 7p10
7p18(a)
2014
2013
HK$000
HK$000

Cash receipts from customers
Cash paid to suppliers and employees
Interest paid
Income taxes paid
Net cash flows from operating activities
212,847
114,451
(153,513)
(72,675)
59,334
41,776
(7,835)
(14,773)
(12,317)
(10,526)
39,182
16,477
7p21, 7p10
7p39
(3,950)
7p16(a)
(5,555)
(6,042)
(4,929)
6,354
2,979
7p16(b)

Purchase of investment properties
(100)
(3,050)
(700)
(2,781)
(1,150)
Loans granted to associates
(1,000)
(50)
7p16(a)
7p16(c)
7p16(e)
7p16(f)
Loan repayments received from associates
7p31
Interest received
7p31
Dividends received
14
564
983
1,217
1,180
1,120
(12,834)
(2,062)
7p21, 7p10
7p17(a)
950
1,070
7p17(b)
Buy-back of shares
(2,564)
7p17(c)
Proceeds from issuance of convertible bond
50,000
7p17(c)
Proceeds from issuance of redeemable preference

shares
30,000
7p17(c)
8,500
18,000
7p17(d)
(83,117)
(34,674)
7p31
(10,102)
(15,736)
7p31
Dividends paid to holders of redeemable preference

shares
(1,950)
(1,950)
(500)
1,500
7p31
7p28
(1,920)
(550)
(39,203)
(3,840)
Net (decrease)/increase in cash and cash

equivalents
(12,855)
10,575
25,598
15,087
Cash and cash equivalents at beginning of the year

Exchange gains/(losses) on cash and cash equivalents
7p28
Cash and cash equivalents at end of the year
(465)
(64)
12,278
25,598
174

Appendix V Policies and disclosures for areas not relevant to Specimen Holdings Limited
1
Construction contracts
Note Accounting policies
11p3
A construction contract is defined by IAS/HKAS 11, Construction contracts, as a contract specifically

negotiated for the construction of an asset.
11p22
When the outcome of a construction contract can be estimated reliably and it is probable that the contract
will be profitable, contract revenue is recognised over the period of the contract by reference to the stage
of completion. Contract costs are recognised as expenses by reference to the stage of completion of the
contract activity at the end of the reporting period. When it is probable that total contract costs will exceed
total contract revenue, the expected loss is recognised as an expense immediately.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised
only to the extent of contract costs incurred that are likely to be recoverable.
Variations in contract work, claims and incentive payments are included in contract revenue to the extent
that may have been agreed with the customer and are capable of being reliably measured.
The group uses the percentage-of-completion method to determine the appropriate amount to recognise
in a given period. The stage of completion is measured by reference to the contract costs incurred up to
the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred in
the year in connection with future activity on a contract are excluded from contract costs in determining
the stage of completion.
On the balance sheet, the group reports the net contract position for each contract as either an asset or a
liability. A contract represents an asset where costs incurred plus recognised profits (less recognised
losses) exceed progress billings; a contract represents a liability where the opposite is the case.
Consolidated balance sheet (extracts)
1p60
1p54(h)
1p60
1p54(k)
Note
2014
HK$000
2013
HK$000
Current assets
22
23,303
20,374
Current liabilities
31
17,667
13,733
2014
HK$000
2013
HK$000
58,115
(54,729)
3,386
(386)
(500)
39,212
(37,084)
2,128
(128)
(400)
Consolidated income statement (extracts)
11p39(a)
11p16
1p103
1p103
1p103
Contract revenue
Contract costs
Gross profit
Selling and marketing costs
175

Appendix V Policies and disclosures for areas not relevant to Specimen Holdings Limited (continued)
1
Construction contracts (Continued)

Note Trade and other receivables (extracts)84
2014
HK$000
2013
HK$000
18,174
(109)
18,065
1,216
1,300
54
2,668
23,303
16,944
(70)
16,874
920
1,146
46
1,388
20,374
2014
HK$000
2013
HK$000
10,983
2,202
997
2,002
1,483
17,667
9,495
1,195
1,255
960
828
13,733
2014
HK$000
2013
HK$000
69,804
(69,585)
219
56,028
(56,383)
(355)
FRS7p36,
1p78(b)
11p42(a)
1p77, 24p18
1p77, 24p18
Trade receivables
Less: Allowance for impairment of receivables
Amounts due from customers for contract work
Prepayments
Loans to related parties (Note 42)
Total
Note Trade and other payables (extracts)85
1p77
24p18
11p42(b)
Trade payables
Amounts due to customers for contract work
Accrued expenses
Note Construction contracts
11p40(a)
84
85
The aggregate costs incurred and recognised profits

(less recognised losses) to date
Less: Progress billings
Net balance sheet position for ongoing contracts
At 31 December 2014, trade and other receivables include retentions of HK$232,000 (2013: HK$132,000) related to construction contracts in progress.
At 31 December 2014, trade and other payables include customer advances of HK$142,000 (2013: HK$355,000) related to construction contracts in progress.
176

2
17p4
Leases: Accounting by lessor

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of
payments, the right to use an asset for an agreed period of time.
1p119
When assets are leased out under a finance lease, the present value of the lease payments is recognised
as a receivable. The difference between the gross receivable and the present value of the receivable is
recognised as unearned finance income.
The method for allocating gross earnings to accounting periods is referred to a as the actuarial method.
The actuarial method allocates rentals between finance income and repayment of capital in each
accounting period in such a way that finance income will emerge as a constant rate of return on the
lessor's net investment in the lease.
17p49
When assets are leased out under an operating lease, the asset is included in the balance sheet based on
the nature of the asset.
17p50
Lease income on operating leases is recognised over the term of the lease on a straight-line basis.
Commentary
Additional disclosure is required of the following for a lease:
(a) reconciliation between the gross investment in the lease and the present value of the minimum lease
payments receivable at the end of the reposting period. An entity discloses the gross investment in
the lease and the present value of the minimum lease payments receivable at the end of the
reporting periods:
(i) not later than one year;
(ii) later than one year and not later than five years; and
(iii) later than five years;
(b) unearned finance income;
(c) the unguaranteed residual values accruing to the benefit of the lessor;
(d) the accumulated allowance for uncollectible minimum lease payments receivable;
(e) contingent rents recognised as income in the period;
(f) a general description of the lessor's material leasing arrangements;
Note Property, plant and equipment
The category of vehicles and equipment includes vehicles leased by the group to third parties under
operating leases with the following carrying amounts:
17p57
Cost
Accumulated depreciation at 1 January
Depreciation charge for the year
Net book amount
177
2014
HK$000
2013
HK$000
70,234
(14,818)
(5,058)
50,358
83,824
(9,800)
(3,700)
70,324

2
Leases: Accounting by lessor (Continued)
1p78(b)
Note Trade and other receivables
17p47(a)
Non-current receivables
Finance leases gross receivables
Unearned finance income
17p47(b)
1p78(b)
17p47(a)
17p47(b)
1p78(b)
17p47(a)
Current receivables
Finance leases gross receivables
Unearned finance income
Gross receivables from finance leases:
Later than 5 years
2014
HK$000
2013
HK$000
1,810
(222)
1,588
630
(98)
532
1,336
(140)
1,196
316
(38)
278
1,336
1,810
3,146
316
630
946
1p78(b),
17p47(b)
Unearned future finance income on finance leases

Net investment in finance leases
(362)
2,784
(136)
810
1p78(b)
The net investment in finance leases may be analysed as follows:

Later than 5 years
Total
1,196
1,588
2,784
278
532
810
17p47(a)
Note Operating leases

17p56(a)
Operating leases rental receivables group company as lessor

The future minimum lease payments receivable under non-cancellable operating leases are as follows:

Later than 5 years
2014
HK$000
2013
HK$000
12,920
41,800
840
55,560
12,920
41,800
10,840
65,560
17p56(b )
Contingent-based rents recognised in the income statement were HK$235,000 (2013: HK$40,000).
17p56(c )
The company leases vehicles under various agreements which terminate between 2014 and 2018. The
agreements do not include an extension option.
178

3
Investments: held-to-maturity financial assets

Investments
Held-to-maturity financial assets
1p119
39p9
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and
fixed maturities that the group's management has the positive intention and ability to hold to maturity. If the
group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category
would be tainted and reclassified as available for sale. Held-to-maturity financial assets are included in noncurrent assets, except for those with maturities less than 12 months from the end of the reporting period,
which are classified as current assets.
2014
HK$000
1p60
1p54(d)
Non-current assets
3,999
2013
HK$000
1,099
Note Held-to-maturity financial assets

FRS7p27(b)
39AG71-73

2014
HK$000
2013
HK$000
4,018
984
160
(19)
3,999
(45)
1,099
Listed securities:
Debentures with fixed interest of 5% and maturity date of
15 June 2017 UK
Debentures with fixed interest of 5.5% and maturity date of
15 June 2013 US
Allowance for impairment
The movement in held to maturity of financial assets may be summarised as follows:
1p66
1p66
At 1 January
Additions
Disposals
At 31 December
Current portion
179
2014
HK$000
2013
HK$000
1,099
81
3,003
(165)
(19)
3,999
(3,999)
390
56
978
(280)
(45)
1,099
(939)
160

3
Investments: held-to-maturity financial assets (Continued)
FRS7p16
FRS7
p20(e)
FRS7
p12(b)
FRS7
p20(a)(iii)
FRS7p25
FRS7
p34(c)
Movements on the provision for impairment of held-to-maturity financial assets are as follows:
At 1 January
Unwind of discount (Note 11)
At 31 December
2013
HK$000
30
16
(26)
19
(3)
2
45
The group has not reclassified any financial assets measured amortised cost rather than fair value
during the year (2013: nil).
There were no gains or losses realised on the disposal of held to maturity financial assets in 2014 and
2013, as all the financial assets were disposed of at their redemption date.
The fair value of held to maturity financial assets is based on quoted market bid prices (2014:
HK$3,901,000; 2013: HK$976,000).
Held-to-maturity financial assets are denominated in the following currencies:
2014
HK$000
2,190
1,809
3,999
UK pound
US dollar
Total
FRS7p36(a)
2014
HK$000
45
2013
HK$000
990
109
1,099
The maximum exposure to credit risk at the reporting date is the carrying amount of held to maturity
financial assets.
180

4
Government grants
Government grants
20p39(a)
20p12
Grants from the government are recognised at their fair value where there is a reasonable assurance that
the grant will be received and the group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the income statement over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to property, plant and equipment are included in non-current liabilities as
deferred government grants and are credited to the income statement on a straight- line basis over the
expected lives of the related assets.
Note Other gains - net
20p39(b)
20p39(c)
The group obtained and recognised as income a government grant of HK$100,000 (2013: nil) to
compensate for losses caused by flooding incurred in the previous year. The group is obliged not to reduce
its average number of employees over the next three years under the terms of this government grant.
The group benefits from government assistance for promoting in international markets products made in
the UK; such assistance includes marketing research and similar services provided by various UK
government agencies free of charge.
181

5
Oil and gas exploration assets

FRS6p24
Oil and natural gas exploration and evaluation expenditures are accounted for using the successful
efforts method of accounting. Costs are accumulated on a field-by-field basis. Geological and geophysical
costs are expensed as incurred. Costs directly associated with an exploration well, and exploration and
property leasehold acquisition costs, are capitalised until the determination of reserves is evaluated. If it is
determined that commercial discovery has not been achieved, these costs are charged to expense.
Capitalisation is made within property, plant and equipment or intangible assets according to the nature
of the expenditure.
Once commercial reserves are found, exploration and evaluation assets are tested for impairment and
transferred to development tangible and intangible assets. No depreciation and/or amortisation is
charged during the exploration and evaluation phase.
(a) Development tangible and intangible assets
Expenditure on the construction, installation or completion of infrastructure facilities such as platforms,
pipelines and the drilling of commercially proven development wells, is capitalised within property, plant
and equipment and intangible assets according to nature. When development is completed on a specific
field, it is transferred to production or intangible assets. No depreciation or amortisation is charged
during the exploration and evaluation phase.
(b) Oil and gas production assets
Oil and gas production properties are aggregated exploration and evaluation tangible assets, and
development expenditures associated with the production of proved reserves.
(c) Depreciation/amortisation
Expenditure on the construction, installation or completion of infrastructure facilities such as platforms,
pipelines and the drilling of commercially proven development wells, is capitalised within property, plant
and equipment and intangible assets according to nature. When development is completed on a specific
field, it is transferred to production or intangible assets. No depreciation or amortisation is charged
during the exploration and evaluation phase.
Oil and gas properties intangible assets are depreciated or amortised using the unit-of- production
method. Unit-of-production rates are based on proved developed reserves, which are oil, gas and other
mineral reserves estimated to be recovered from existing facilities using current operating methods. Oil
and gas volumes are considered produced once they have been measured through meters at custody
transfer or sales transaction points at the outlet valve on the field storage tank.
(d) Impairment exploration and evaluation assets
Exploration and evaluation assets are tested for impairment when reclassified to development tangible or
intangible assets, or whenever facts and circumstances indicate impairment. An impairment loss is
recognised for the amount by which the exploration and evaluation assets' carrying amount exceeds their
recoverable amount. The recoverable amount is the higher of the exploration and evaluation assets' fair
value less costs to sell and their value in use.
(e) Impairment proved oil and gas production properties and intangible assets
Proven oil and gas properties and intangible assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows.
182

5
Oil and gas exploration assets (Continued)

Note Property, plant and equipment86
Other
Capitalised
Subtotal
exploration
and
Capitalised
assets
evaluation
development
under
businesses
and
Production
corporate
expenditure
expenditure
construction
assets
assets
Total
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
218
12,450
12,668
58,720
3,951
75,339
At 1 January 2014
Cost
Accumulated amortisation and
impairment
Net book amount
(33)
(33)
(5,100)
(77)
(5,210)
185
12,450
12,635
53,620
3,874
70,129

2014
185
12,450
12,635
53,620
3,874
70,129
17
346
363
1,182
325
1,870
Acquisitions
386
386
125
515
45
1,526
1,571
5,530
95
7,196
Additions
Transfers
(9)
(958)
(967)
1,712
Disposals
(12)
(1,687)
(1,699)
745
(1,699)
Depreciation charge
(725)
(42)
(767)
Impairment charge
(7)
(36)
(43)
(250)
(3)
(296)
219
12,027
12,246
61,194
4,253
77,693
264
12,027
12,291
67,019
4,330
83,640
At 31 December 2014
Cost
impairment
Net book amount
86
(45)
219
12,027
(45)
12,246
(5,825)
61,194
(77)
4,253
(5,947)
77,693
For the purpose of this illustrative appendix, comparatives for the year ended 31 December 2013 are not disclosed, although they are required by IAS/HKAS 1.
183

5
Oil and gas exploration assets (Continued)

Note Intangible assets87
Capitalised
Subtotal
exploration
intangible
and
Capitalised
assets in
evaluation
development
progress
expenditure
expenditure
expenditure
Production
assets
Goodwill88
HK$000
HK$000
HK$000
HK$000
HK$000
5,192
750
5,942
3,412
9,475
Other
HK$000
Total
HK$000
At 1 January 2013
Cost
545
19,374

impairment
Net book amount
(924)
(924)
(852)
(75)
(19)
(1,870)
4,268
750
5,018
2,560
9,400
526
17,504
4,268
750
5,018
2,560
9,400
526
17,504
152
160
195
423
28
806
26
32
58
68
Additions
381
389
15
86
490
Transfers
(548)

Acquisitions
Transfers to production
548
105
(28)
(15)
(43)
(98)
(42)
(140)
(850)
(850)
Disposals
(28)
Amortisation charge
Impairment charge
(45)
(45)
(175)
(745)
(5)
(225)
4,234
468
4,702
2,767
9,648
598
17,715
5,203
468
5,671
3,717
9,898
659
19,945
At 31 December 2013
Cost
impairment
Net book amount
(969)
4,234
(969)
468
4,702
(950)
2,767
(250)
(61)
9,648
598
(2,230)
17,715
Assets and liabilities related to the exploration and evaluation of mineral resources other than those
presented above are as follows:
Receivables from joint venture partners

Payable to subcontractors and operators
2014
HK$000
2013
HK$000
25
32
22
34
Exploration and evaluation activities have led to total expenses of HK$59,000,000 (2013:
HK$57,000,000), of which HK$52,000,000 (2013: HK$43,000,000) are impairment charges.
In 2013, the disposal of a 16.67% interest in an offshore exploration stage Field X resulted in post-tax
profits on sale of HK$93,000,000 (2013: nil).
Cash payments of HK$415,000,000 (2013: HK$395,000,000) have been incurred related to exploration
and evaluation activities. The cash proceeds due to the disposal of the interest in Field X were
HK$8,000,000 (2013: nil).
87
88
For the purpose of this illustrative appendix, comparatives for the year ended 31 December 2013 are not disclosed, although they are required by IAS/HKAS 1.
Disclosures required by IAS/HKAS 36 for impairment tests relating to indefinite life intangible assets have not been included in this appendix.
184

6
Revenue recognition: multiple-element arrangements

The group offers certain arrangements whereby a customer can purchase a personal computer together
with a two-year servicing agreement. Where such multiple-element arrangements exist, the amount of
revenue allocated to each element is based upon the relative fair values of the various elements. The fair
values of each element are determined based on the current market price of each of the elements when
sold separately. The revenue relating to the computer is recognised when risks and rewards of the
computer are transferred to the customer which occurs on delivery. Revenue relating to the service
element is recognised on a straight-line basis over the service period.
185

7
Defaults and breaches of loans payable89

Borrowings (extract)
FRS7p18
The company was overdue paying interest on bank borrowings with a carrying amount of HK$10,000,000.
The company experienced a temporary shortage of currencies because cash outflows in the second and third
quarters for business expansions in the UK were higher than anticipated. As a result, interest payables of
HK$700,000 due by 30 September 2013 remained unpaid.
The company has paid all outstanding amounts (including additional interests and penalties for the late
payment) during the fourth quarter.
Management expects that the company will be able to meet all contractual obligations from borrowings on a
timely basis going forward.
FRS7p19
Covenants
Some of the company's credit contracts are subject to covenant clauses, whereby the company is required to
meet certain key performance indicators. The company did not fulfil the debt/equity ratio as required in the
contract for a credit line of HK$30,000,000, of which the company has currently drawn an amount of
HK$15,000,000.
Due to this breach of the covenant clause, the bank is contractually entitled to request early repayment of
the outstanding amount of HK$15,000,000. The outstanding balance was reclassified as a current
liability90. Management started renegotiating the terms of the loan agreement when it became likely that
the covenant clause may be breached.
The bank has not requested early repayment of the loan as of the date when these financial statements were
approved by the board of directors. Management expects that a revised loan agreement will be in place
during the first quarter of 2015.
89
90
These events or conditions may cast significant doubt about the entity's ability to continue as a going concern. When events or conditions have been identified that
may cast significant doubt on an entity's ability to continue as a going concern, the auditor should: (1) Review management's plans for future actions based on its
going concern assessment; (2) Gather sufficient appropriate audit evidence to confirm or dispel whether or not a material uncertainty exists through carrying out
audit procedures considered necessary, including considering the effect of any plans of management and other mitigating factors; (3) Seek written representations
from management regarding its plans for future action. If a material uncertainty related to events or conditions that may cast significant doubt on a company's
ability to continue as a going concern exists, disclosure is required in the auditor's report. ISA/HKSA 570, Going concern', establishes standards and provides
guidance on the auditor's responsibility in the audit of financial statements with respect to the going concern assumption used in the preparation of the financial
statements, including considering management's assessment of the entity's ability to continue as a going concern.
The reclassification of non-current debt to current liabilities would still be required if the terms of the loan were successfully renegotiated after the end of the
reporting period.
186

8
39p9
Note Accounting policies (under IAS/HKAS 39)

Financial guarantee contracts are contracts that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in
accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial
institutions and other bodies on behalf of subsidiaries or associates to secure loans, overdrafts and other
banking facilities.
39p43, 47
39AG4(a)
FRS 7p3(d)
Financial guarantees are initially recognised in the financial statements at fair value on the date the
guarantee was given. The fair value of a financial guarantee at the time of signature is zero because all
guarantees are agreed on arms length terms, and the value of the premium agreed corresponds to the
value of the guarantee obligation. No receivable for the future premiums is recognised. Subsequent to
initial recognition, the companys liabilities under such guarantees are measured at the higher of the
initial amount, less amortisation of fees recognised in accordance with IAS/HKAS 18, and the best
estimate of the amount required to settle the guarantee. These estimates are determined based on
experience of similar transactions and history of past losses, supplemented by managements judgement.
The fee income earned is recognised on a straight-line basis over the life of the guarantee. Any increase in
the liability relating to guarantees is reported in the consolidated income statement within other
operating expenses.
Where guarantees in relation to loans or other payables of subsidiaries or associates are provided for no
compensation, the fair values are accounted for as contributions and recognised as part of the cost of the
investment in the financial statements of the company.
Note Financial risk factors
FRS7p34(a),
36(a)
FRS 7 Appx
B9,10
FRS7 IG21
Maximum exposure to credit risk before collateral held or other credit enhancements
Group and Company
Maximum exposure
2014
2013
HK$000
HK$000
Credit risk exposure relating to off-balance sheet items
Financial guarantees
At 31 December
801
801
889
889
Liquidity risk (extracts)

Less than1 year
HK$000
Group
HK$000
At 31 December 2014
141
At 31 December 2013
100
Company
Less than1 year Between 1 and 2 years
HK$000
HK$000
At 31 December 2014
801
At 31 December 2013
889
187

8
Financial guarantee contracts (continued)

Note Other financial liabilities (extracts)
Group
2014
2013
HK$000
HK$000
Current
Liabilities for financial guarantees
Total current other financial liabilities
90
90
10
10
Non-current
Total non-current other financial liabilities
30
30
80
80
Company
2014
2013
HK$000
HK$000
Current
Total current other financial liabilities
Non-current
Total non-current other financial liabilities
200
200
110
110
50
50
90
90
Note Financial guarantees

The company has guaranteed the bank overdrafts and drawn components of bank loans of a number of
subsidiaries and a third party customer. Under the terms of the financial guarantee contracts, the
company will make payments to reimburse the lenders upon failure of the guaranteed entity to make
payments when due.
Terms and face values of the liabilities guaranteed were as follows:
Bank term loans of:

- controlled entities
- a third party customer
Year of maturity
31 December2014
Face value
HK$000
31 December 2013
Face value
HK$000
2014-2015
2014-2015
660
141
789
100
The method used in determining the fair value of these guarantees has been disclosed in the accounting
policy Financial guarantee contracts. See Note x.
Group
2014
2013
HK$000
HK$000
Amortisation of financial guarantee contracts
188

8
Financial guarantee contracts (continued)

Commentary
IAS/HKAS 39 requires the financial guarantee contract to be initially recorded at fair value, which is likely to
equal the premium received (IAS/HKAS 39 AG4(a)). Where the issuer of a financial guarantee is entitled to
receive recurring future premiums over the life of the contract, IFRS/HKFRS allows but does not require
recognition of a gross receivable for future premiums not yet due, together with a liability for the guarantee.
The entity should select a presentation policy and apply it consistently to all issued financial guarantee
contracts.
If the group has previously asserted explicitly that it regards issued financial guarantee contracts as insurance
contracts and has used accounting applicable to insurance contracts, it may elect to apply either IAS/HKAS
39 or IFRS/FRS 4 to such financial guarantee contracts.
189

9

Note - Accounting policies
Properties under development and held for sale are stated at the lower of cost and net realisable value.
Development cost of properties comprises cost of land use rights, construction costs and borrowing costs
incurred during the construction period. Upon completion, the properties are transferred to completed
properties held for sale.
Net realisable value takes into account the price ultimately expected to be realised, less applicable
variable selling expenses and the anticipated costs to completion.
Properties under development and held for sale are classified as current assets unless the construction
period of the relevant property development project is expected to complete beyond normal operating
cycle.
Note Properties under development and held for sale
As at 1 January
Additions
Properties sold
As at 31 December
2p36(b)
1p66(a)
17p35(d)
10Sch12(9)(9a)
10Sch31(b)-(d)
1p61
91
Properties under development and held for sale comprise:

Land use rights
Construction cost and capitalised expenditures
Finance cost capitalised
Amounts are expected to be completed:

Within the normal operating cycle included under current assets91
Beyond normal operating cycle included under non-current assets
Land use rights:

In Hong Kong, held on leases of:
Between 10-50 years
Over 50 years
Group
2014
HK$000
46,100
1,500
(500)
47,100
2013
HK$000
47,600
1,000
(2,500)
46,100
Group
2014
HK$000
2013
HK$000
36,000
10,850
250
47,100
35,500
10,400
200
46,100
37,000
10,100
47,100
36,100
10,000
46,100
25,050
450
25,500
24,550
450
25,000
The amount of properties under development and held for sale expected to be recovered after more than one
year is HK$30,000 (2013: HK$31,100). The remaining balance is expected to be recovered within one year.
Issue 6 of the financial reporting and auditing alert issued by the HKICPA in January 2010 set out that, properties under development which are intended to be held
for sale within an entitys normal operating cycle are included in current assets (IAS/HKAS p66(a)). The carrying value of the properties that are expected to be
completed and available for sale more than twelve months after the balance sheet date should be disclosed (IAS/HKAS 1 p61).
190

10
Customer loyalty programmes

Note Accounting policy
The group operates a loyalty programme where customers accumulate points for purchases made which
entitle them to discounts on future purchases. The reward points are recognised as a separately
identifiable component of the initial sale transaction by allocating the fair value of the consideration
received between the award points and the other components of the sale such that the reward points are
initially recognised as deferred income at their fair value. Revenue from the reward points is recognised
when the points are redeemed. Breakage is recognised as reward points are redeemed based upon
expected redemption rates.. Reward points expire 12 months after the initial sale.
Note Current liabilities Other liabilities
Group
2014
2013
HK$000
HK$000
Deferred revenue: customer loyalty
programme
395
191
370

11
Biological assets
Note 1 General information
1p138(b),
41p46(a)
The group is engaged in the business of farming sheep and poultry, primarily for sale to meat processors.
The group is also engaged in the business of growing and managing palm oil plantations for the sale of
palm oil. The group earns ancillary income from various agricultural produce, such as wool.
Note 2 Accounting policies
1p117(a)
1p119
41p41
FRS13p93(d)
FRS13p93(d)
41p54(a),
(b)
The consolidated financial statements have been prepared under the historical cost convention, as
modified by the revaluation of land and buildings, available-for-sale financial assets, financial assets and
financial liabilities (including derivative financial instruments at fair value through profit or loss) and
certain biological assets.
Biological assets
Biological assets comprise sheep and palm oil plantations.
Sheep are measured at fair value less cost to sell, based on market prices at auction of livestock of similar
age, breed and genetic merit with adjustments, where necessary, to reflect the differences.
The fair value of oil palms excludes the land upon which the trees are planted or the fixed assets utilised in
the upkeep of planted areas. The biological process starts with preparation of land for planting seedlings
and ends with the harvesting of crops in the form of fresh fruit bunches (FFB). Thereafter, crude palm oil
and palm kernel oil is extracted from FFB. Consistently with this process, the fair value of oil palms is
determined using a discounted cash flow model, by reference to the estimated FFB crop harvest over the
full remaining productive life of the trees of up to 20 years, applying an estimated produce value for
transfer to the manufacturing process and allowing for upkeep, harvesting costs and an appropriate
allocation of overheads. The estimated produce value is derived from a long term forecast of crude palm
oil prices to determine the present value of expected future cash flows over the next 20 years. The
estimated FFB crop harvest used to derive the fair value is derived by applying palm oil yield to plantation
size.
Costs to sell include the incremental selling costs, including auctioneers fees and commission paid to
brokers and dealers.
Changes in fair value of livestock and palm oil plantations are recognised in the income statement.
Farming costs such as feeding, labour costs, pasture maintenance, veterinary services and sheering are
expensed as incurred. The cost of purchase of sheep plus transportation charges are capitalised as part of
biological assets.
Note 3 Estimates and judgements Biological assets
FRS13p93(d)
In measuring the fair value of sheep and palm oil plantations various management estimates and
judgements are required:
(a) Sheep
Estimates and judgements in determining the fair value of sheep relate to the market prices, average
weight and quality of animals and mortality rates.
Market price of sheep is obtained from the weekly auctions at the local market. The quality of livestock
sold at the local market is considered to approximate the groups breeding and slaughter livestock.
The sheep grow at different rates and there can be a considerable spread in the quality and weight of
animals and that affects the price achieved. An average weight is assumed for the slaughter sheep
livestock that are not yet at marketable weight.
(b) Palm oil plantations
Estimates and judgements in determining the fair value of palm oil plantations relate to determining the
palm oil yield, the long term crude palm oil price, palm kernel oil price and the discount rates.
192

11
Biological assets (Continued)

Consolidated income statement (extracts)
41p40
Note
2014
HK$000
2013
HK$000
4
5
5
26,240
23,000
(23,180)
27,548
19,028
(24,348)
Note
2014
HK$000
2013
HK$000
Assets
Non-current assets
Biological assets
37,500
25,940
Current assets
Biological assets
4,300
5,760
Note
2014
HK$000
2013
HK$000
23,740
2,500
26,240
25,198
2,350
27,548
2014
HK$000
2013
HK$000
31,700
10,280
(480)
21,950
1,530
(18,450)
(4,730)
41,800
32,420
4,600
(350)
17,930
1,448
(19,450)
(4,898)
31,700
4,300
8,200
12,500
5,760
5,690
11,450
29,300
29,300
41,800
20,250
20,250
31,700
Revenue
Change in fair value of biological assets
Cost of sales of livestock and palm oil
Consolidated balance sheet (extracts)
1p68
1p60
1p54(f)
1p60
1p54(f)
Note 4 Revenue (extracts)
Sale of livestock and palm oil

Sale of wool
Total revenue
Note 5 Biological assets
41p50
41p50(b)
41p50(a)
41p50(a)
41p50(a)
41p50(d)
41p50(c)
41p43,45
At 1 January
Increase due to purchases
Livestock losses
Change in fair value due to biological transformation
Change in fair value of livestock due to price changes
Transfer of harvested FFB to inventory
Decrease due to sales
At 31 December
Sheep at fair value less cost to sell:
Mature
Immature
Palm oil plantation

Mature at fair value less cost to sell
At 31 December
193

11
41p46(b)
As at 31 December 2014 the group had 6,500 sheep and 2,600,000hectares of palm oil plantations (2013:
5,397 sheep and 2,170,000 hectares of palm oil plantations). In addition, the biological assets include
25,000 hatching eggs (2013: 16,500). During the year the group sold 3,123 sheep (2013: 4,098 sheep) and
550,000 kgs of palm oil (2013:545,000 kg of palm oil).
41p43
Sheep for slaughter are classified as immature until they are ready for slaughter.
Selling expenses of HK$560,000 (2013: HK$850,000) were incurred during the year.
Livestock are classified as current assets if they are to be sold within one year. Harvested FFB are
transferred to inventory at fair value when harvested.
FRS13p93(a-b)
The following table presents the group's biological assets that are measured at fair value at 31 December 2014.
Level 1
Level 2
Level 3
Total
HK$000
HK$000
HK$000
HK$000
Mature
4,300
4,300
Immature
8,200
8,200
29,300
29,300
Sheep
Palm oil plantation

Mature
FRS13p93(a-b)
The following table presents the group's biological assets that are measured at fair value at 31 December 2013.
Level 1
Level 2
Level 3
Total
HK$000
HK$000
HK$000
HK$000
Mature
5,760
5,760
Immature
5,690
5,690
20,250
20,250
Sheep
Palm oil plantation

Mature
FRS13p93(c)
There were no transfers between any levels during the year.

The movement in the fair value of the assets within level 3 of the hierarchy is as follows:
Palm oil
plantation 2014
Palm oil plantation 2013
HK$000
HK$000
20,250
13,639
4,309
2,503
Decreases due to harvest
(14,115)
(12,752)
Gain in profit or loss arising from

biological transformation
18,856
16,860
Closing balance
29,300
20,250
Opening balance
Increases due to expenditure to planted areas
194

11
FRS 13p93(e)(i)
FRS 13p93(f)
FRS13p 93(d),(h)(i)
HK$000
HK$000
Total gains or losses for the year

included in profit or loss for assets
held at the end of the year, under
Change in fair value of biological
assets
18,856
16,860
Change in unrealised gains or

losses for the year included in
profit or loss for assets held at
the end of the year
16,532
13,040
The following unobservable inputs were used to measure the group's palm oil plantation:
Description
Fair value
at 31
December
2014
Valuation
technique(s)
Unobserv Range of
able
unobservable
inputs
inputs
(probability weighted
average)
Relationship of
unobservable
inputs to fair
value
Palm oil plantation
6,815
Discounted cash
flows
Palm oil
yield tonnes per
hectare
The higher the

palm oil yield, the
higher the fair value
20-30 (24) per

year
Crude palm US$ 800-1,100

oil price
(900) per tonne
Palm
Kernel Oil
price
US$ 1,000-1,200
(1,050) per tonne
Discount
rate
9%-11% (10.5%)
The higher the

discount rate, the
lower the fair value.
Description
Fair value
at 31
December
2013
Valuation
technique(s)
Unobserv Range of
able
unobservable
inputs
inputs
(probability weighted
average)
Relationship of
unobservable
inputs to fair
value
Palm oil plantation
5,323
Discounted cash
flows
Palm oil
yield tonnes per
hectare
The higher the

palm oil yield, the
higher the fair value
20-30 (25) per

year
Crude palm US$ 750-1,070

oil price
(900) per tonne
41p49(c)
The higher the

market price, the
higher the fair
value.
Palm
Kernel Oil
price
US$ 900-1,150
(1,030) per tonne
Discount
rate
9%-11% (10.5%)
The higher the

market price, the
higher the fair
value.
The higher the
discount rate, the
lower the fair value.
Note 6 Financial risk management strategies

The group is exposed to risks arising from environmental and climatic changes, commodity prices and
financing risks.
The groups geographic spread of farms allows a high degree of mitigation against adverse climatic
conditions such as droughts and floods and disease outbreaks. The group has strong environmental
policies and procedures in place to comply with environmental and other laws.
195

The group is exposed to risks arising from fluctuations in the price and sales volume of sheep. Where
possible, the group enters into supply contracts for sheep to ensure sales volumes can be met by meat
processing companies. The group has long-term contracts in place for supply of poultry to its major
customers.
The seasonal nature of the sheep farming business requires a high level of cash flow in the second half of
the year. The group actively manages the working capital requirements and has secured sufficient credit
facilities sufficient to meet the cash flow requirements.
41p49(b)
Note 7 Commitments
The group has entered into a contract to acquire 250 breeding sheep at 31 December 2014 for
HK$1,250,000 (2013:Nil).
196

12
Put option arrangements

The potential cash payments related to put options issued by the group over the equity of subsidiary
companies are accounted for as financial liabilities when such options may only be settled other than by
exchange of a fixed amount of cash or another financial asset for a fixed number of shares in the
subsidiary. The amount that may become payable under the option on exercise is initially recognised at
fair value within borrowings with a corresponding charge directly to equity. The charge to equity is
recognised separately as written put options over non-controlling interests, adjacent to non-controlling
interests in the net assets of consolidated subsidiaries.
The group recognises the cost of writing such put options, determined as the excess of the fair value of the
option over any consideration received, as a financing cost. Such options are subsequently measured at
amortised cost, using the effective interest rate method, in order to accrete the liability up to the amount
payable under the option at the date at which it first becomes exercisable. The charge arising is recorded
as a financing cost. In the event that the option expires unexercised, the liability is derecognised with a
corresponding adjustment to equity.
197

13
Share-based payments: modification and cancellation
IFRS2p27
If the terms of an equity-settled award are modified, at a minimum an expense is recognised as if the
terms had not been modified. An additional expense is recognised for any modification that increases the
total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as
measured at the date of modification.
IFRS2p28(a),
(c)
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification of the original award, as described
in the previous paragraph.
If an equity award is cancelled by forfeiture, when the vesting conditions (other than market conditions)
have not been met, any expense not yet recognised for that award, as at the date of forfeiture, is treated as
if it had never been recognised. At the same time, any expense previously recognised on such cancelled
equity awards are reversed from the accounts effective as at the date of forfeiture.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
198

Appendix VI Critical accounting estimates and judgements not relevant to Specimen Holdings Limited
Critical accounting estimates
1p125
The following critical accounting estimates may be applicable, among many other possible areas not
presented in Specimen Holdings Limiteds consolidated financial statements.
(a) Useful lives of technology division's plant and equipment
The group's management determines the estimated useful lives and related depreciation charges for its
plant and equipment. This estimate is based on projected product lifecycles for its high-tech segment. It
could change significantly as a result of technical innovations and competitor actions in response to
severe industry cycles. Management will increase the depreciation charge where useful lives are less
than previously estimated lives, or it will write-off or write-down technically obsolete or non-strategic
assets that have been abandoned or sold.
Were the actual useful lives of the technology division plant and equipment to differ by 10% from
management's estimates, the carrying amount of the plant and equipment would be an estimated
HK$1,000,000 higher or HK$970,000 lower.
(b) Warranty claims
The group generally offers three-year warranties for its personal computer products. Management
estimates the related provision for future warranty claims based on historical warranty claim
information, as well as recent trends that might suggest that past cost information may differ from
future claims.
Factors that could impact the estimated claim information include the success of the group's
productivity and quality initiatives, as well as parts and labour costs.
Were claims costs to differ by 10% from management's estimates, the warranty provisions would be an
estimated HK$2,000,000 higher or HK$1,875,000 lower.
Critical accounting judgements
1p122
The following critical accounting judgements may be applicable, among many other possible areas not
presented in Specimen Holdings Limiteds consolidated financial statements.
(a) Held-to-maturity investments
The group follows the IAS/HKAS 39 guidance on classifying non-derivative financial assets with fixed or
determinable payments and fixed maturity as held to maturity. This classification requires significant
judgement. In making this judgement, the group evaluates its intention and ability to hold such
investments to maturity.
If the group fails to keep these investments to maturity other than for specific circumstances explained
in IAS/HKAS 39, it will be required to reclassify the whole class as available-for-sale. The investments
would, therefore, be measured at fair value not amortised cost.
If the class of held-to-maturity investments is tainted, the fair value would increase by HK$2,300,000,
with a corresponding entry in the fair value reserve in shareholders' equity.
199

Appendix VII Forthcoming requirements

A. New and amended standards that have been issued and are effective for periods commencing after 1 January
2014
Standards
Key requirements
Early adoption and

(I) Changes effective for annual periods beginning on or after 1 July 2014
Amendment to
This narrow scope amendment applies to contributions from
IAS/HKAS19
employees or third parties to defined benefit plans. The amendment
regarding defined
distinguishes between contributions that are linked to service only
benefit plans:
in the period in which they arise and those linked to service in more
employee
than one period. The amendment allows contributions that are
contributions
linked to service, and do not vary with the length of employee

service, to be deducted from the cost of benefits earned in the
period that the service is provided. Contributions that are linked to
service, and vary according to the length of employee service, must
be spread over the service period using the same attribution method
that is applied to the benefits.
Annual
These amendments include changes from the 2010-2012 cycle of the
improvements 2012
annual improvements project, that affect the below standards:
IFRS/HKFRS8, Operating segments
An entity shall apply the
The standard is amended to require disclosure of the

judgements made by management in aggregating operating
segments and a reconciliation of segment assets to the entitys
assets when segment assets are reported.
amendment to IFRS/HKFRS8
for annual periods beginning on
or after 1 July 2014. Earlier
application is permitted.
IAS/HKAS16, Property, plant and equipment and

IAS/HKAS38, Intangible assets
Both standards are amended to clarify how the gross carrying

amount and the accumulated depreciation are treated where
an entity uses the revaluation model.
and IAS/HKAS38 for annual
amendments to IAS/HKAS16
periods beginning on or after 1
July 2014. Earlier application is
permitted.
amendments to IAS/HKAS 16
and IAS/HKAS 38 to all
revaluations recognised in
annual periods beginning on or
after the date of initial
application of the amendment
and in the immediately
preceding annual period.
Adjusted comparative
information for any earlier
periods presented is not
mandatory.
IAS/HKAS 24, Related Party Disclosures

The reporting entity is not required to disclose the
compensation paid by the management entity (as a related
party) to the management entitys employee or directors, but it
is required to disclose the amounts charged to the reporting
entity by the management entity for services provided.
200

amendment to IAS/HKAS24 for
after 1 July 2014. Earlier

Appendix VII Forthcoming requirements (continued)

2014 (continued)
Standards
Key requirements
Early adoption and

(I) Changes effective for annual periods beginning on or after 1 July 2014 (continued)
The amendments include changes from the 2011-2013 cycle of the
Annual
annual improvements project that affect 4 standards:
improvements 2013
IFRS/HKFRS3, Business combinations

It clarifies that IFRS/HKFRS 3 does not apply to the
accounting for the formation of any joint arrangement under
IFRS /HKFRS 11 in the financial statements of the joint
arrangement.
IFRS/HKFRS13, Fair value measurement

It clarifies that the portfolio exception in IFRS/HKFRS 13,
which allows an entity to measure the fair value of a group of
financial assets and financial liabilities on a net basis, applies
to all contracts (including non-financial contracts) within the
scope of IAS/HKAS 39 or IFRS/HKFRS 9.

prospectively for annual periods
beginning on or after 1 July 2014.

for annual periods beginning on
or after 1 July 2014 and
prospectively from the beginning
of the first annual period in which
IFRS/HKFRS 13 is applied.
IAS/HKAS40, Investment property
amendment to IAS/HKAS40 for
Preparers also need to refer to the guidance in IFRS 3/HKFRS

3 to determine whether the acquisition of an investment
property is a business combination.

after 1 July 2014. An entity may
choose to apply the amendment
to individual acquisitions of
investment property before 1 July
2014 if, and only if, the
information necessary to apply
the amendment is available.
201


2014 (continued)
Standards
Key requirements
Early adoption and

(II) Changes effective for annual periods beginning on or after 1 January 2016
IFRS/HKFRS 14 IFRS/HKFRS 14 Regulatory Deferral Accounts, describes regulatory
IFRS/HKFRS 14 is effective for
Regulatory
deferral account balances as amounts of expense or income that would not
an entitys first annual
Deferral
be recognised as assets or liabilities in accordance with other standards, but
IFRS/HKFRS financial
Accounts
that qualify to be deferred in accordance with IFRS/HKFRS14 because the
statements for a period
amount is included, or is expected to be included, by the rate regulator in
beginning on or after 1 January
establishing the price(s) that an entity can charge to customers for rate-
2016, with earlier application
regulated goods or services.
permitted.
IFRS/HKFRS 14 permits eligible first- time adopters of IFRS/HKFRS to

continue their previous GAAP rate-regulated accounting policies, with
limited changes. IFRS/HKFRS 14 requires separate presentation of
regulatory deferral account balances in the balance sheet and of movements
in those balances in the statement of comprehensive income. Disclosures
are required to identify the nature of, and risk associated with, the form of
rate regulation that has given rise to the recognition of regulatory deferral
account balances.
Amendment to
The amendment requires an investor to apply the principles of business
Amendment to IFRS/HKFRS 11
IFRS/HKFRS 11
combination accounting when it acquires an interest in a joint operation
is effective for an entitys annual
on accounting
that constitutes a business (as defined in IFRS/HKFRS 3, Business
for acquisitions
combinations. Specifically, an investor will need to:
of interests in
joint operations
measure identifiable assets and liabilities at fair value;

expense acquisition-related costs;
recognise deferred tax; and
recognise the residual as goodwill.

permitted.
All other principles of business combination accounting apply unless they

conflict with IFRS/HKFRS 11.
The amendment is applicable to both the acquisition of the initial interest
and a further interest in a joint operation. The previously held interest is
not remeasured when the acquisition of an additional interest in the same
joint operation with joint control maintained.
Amendments to
The amendments clarify when a method of depreciation or amortisation
Amendments to IAS/HKAS 16
IAS/HKAS 16
based on revenue may be appropriate. The amendment to IAS/HKAS 16
and IAS/HKAS 38 are effective
and IAS/HKAS
clarifies that depreciation of an item of property, plant and equipment
for an entitys annual
38 on
based on revenue generated by using the asset is not appropriate.
clarification of
acceptable
The amendment to IAS/HKAS 38 establishes a rebuttable presumption that beginning on or after 1 January
methods of
amortisation of an intangible asset based on revenue generated by using the
depreciation
asset is inappropriate. The presumption may only be rebutted in certain
permitted.
and
limited circumstances:
amortisation
where the intangible asset is expressed as a measure of

revenue; or
where it can be demonstrated that revenue and the
consumption of the economic benefits of the intangible
asset are highly correlated.
202


2014 (continued)
Standards
Key requirements
Early adoption and

(II) Changes effective for annual periods beginning on or after 1 January 2016 (continued)
Amendments to
The amendments change the reporting for bearer plants, such as grape
Amendments to IAS/HKAS 16
IAS/HKAS 16
vines, rubber trees and oil palms. Bearer plants should be accounted for in
and IAS/HKAS 41 are effective
and IAS/HKAS
the same way as property, plant and equipment because their operation is
for an entitys annual
41 on
similar to that of manufacturing. The amendments include them in the
Agriculture:
scope of IAS/HKAS 16 rather than IAS/HKAS 41.
bearer plants

The produce on bearer plants will remain in the scope of IAS/HKAS 41.

permitted.
Amendments to
The amendments address an inconsistency between IFRS/HKFRS 10 and
Amendments to IFRS/HKFRS
IFRS/HKFRS
IAS/HKAS 28 in the sale and contribution of assets between an investor
10 and IAS/HKAS 28 are
10 and
and its associate or joint venture.
effective for an entitys annual
IAS/HKAS 28
on sale or
A full gain or loss is recognised when a transaction involves a business. A
contribution of
partial gain or loss is recognised when a transaction involves assets that do
assets between
not constitute a business, even if those assets are in a subsidiary.
an investor and
permitted.
its associate or
joint venture
Amendment to
The amendment allows entities to use equity method to account for
Amendment to IAS/HKAS 27 is
IAS/HKAS 27
investments in subsidiaries, joint ventures and associates in their separate
effective for an entitys annual
on equity
method in
separate
financial
statements
permitted.
203


2014 (continued)
Standards
Key requirements
Early adoption and

Annual
The amendments include changes from the 2012-2014 cycle of the
improvements 2014
annual improvements project that affect 4 standards:
IFRS/HKFRS 5, Non-current assets held for sale and

discontinued operations
It clarifies that when an asset (or disposal group) is reclassified
from held for sale to held for distribution, or vice versa, this
does not constitute a change to a plan of sale or distribution, and
does not have to be accounted for as such. This means that the

amendment to IFRS/HKFRS 5
prospectively for annual periods
2016. Earlier application is
permitted.
asset (or disposal group) does not need to be reinstated in the

financial statements as if it had never been classified as held for
sale or held for distribution simply because the manner of
disposal has changed. It also explains that the guidance on
changes in a plan of sale should be applied to an asset (or
disposal group) which ceases to be held for distribution but is
not classified as held for sale.
IFRS/HKFRS 7, Financial instruments: Disclosures

There are two amendments:
i)
An entity shall apply this
Service contracts
If an entity transfers a financial asset to a third party
prospectively with an option to
under conditions which allow the transferor to
apply retrospectively, for annual
derecognise the asset, IFRS/HKFRS 7 requires
disclosure of all types of continuing involvement that
January 2016.
the entity might still have in the transferred assets. It

provides guidance about what is meant by continuing
involvement.
There is a consequential amendment to IFRS/HKFRS
1 to give the same relief to first time adopters.
ii)
Interim financial statements

It clarifies the additional disclosure required by the
retrospectively for annual
amendments to IFRS/HKFRS 7, Disclosure
offsetting financial assets and financial liabilities is
January 2016. Earlier
not specifically required for all interim periods, unless
required by IAS/HKAS 34.
204


2014 (continued)
Standards
Key requirements
Early adoption and

IAS/HKAS 19, Employee benefits
amendment to IAS/HKAS 19
It clarifies when determining the discount rate for post-
employment benefit obligations, it is the currency that the
liabilities are denominated in that is important, not the country
January 2016, limited to the
where they arise. The assessment of whether there is a deep
beginning of the earliest
market in high-quality corporate bonds is based on corporate
period presented. Earlier
bonds in that currency, not corporate bonds in a particular
country. Similarly, where there is no deep market in highquality corporate bonds in that currency, government bonds in
the relevant currency should be used.
IAS/HKAS 34, Interim financial reporting

It clarifies what is meant by the reference in the standard to
information disclosed elsewhere in the interim financial report.
It also amends IAS/HKAS 34 to require a cross-reference from
the interim financial statements to the location of that
information.
205

amendment to IAS/HKAS 34


A.
New and amended standards that have been issued and are effective for periods commencing after 1 January
2014 (continued)
Standards
Key requirements
Early adoption and

An entity shall apply those
The amendments clarify the application of the consolidation exception for
amendments to IFRS/HKFRS
IFRS/HKFRS
investment entities and their subsidiaries.
10, IFRS/HKFRS 12, and
10,
IAS/HKAS 28 for annual
The amendments to IFRS/HKFRS 10 clarify that the exception from
IFRS/HKFRS 12
preparing consolidated financial statements is available to intermediate
and IAS/HKAS
parent entities which are subsidiaries of investment entities. The exception
28 on
is available when the investment entity parent measures its subsidiaries at
investment
fair value. The intermediate parent would also need to meet the other
entities:
criteria for exception listed in IFRS/HKFRS 10.
applying the
Amendments to
consolidation
The amendments also clarify that an investment entity should consolidate a
exception
subsidiary which is not an investment entity and which provides services in

support of the investment entitys investment activities, such that it acts as
an extension of the investment entity. However, the amendments also
confirm that if the subsidiary is itself an investment entity, the investment
entity parent should measure its investment in the subsidiary at fair value
through profit or loss. This approach is required regardless of whether the
subsidiary provides investment-related services to the parent or to third
parties.
The amendments to IAS/HKAS 28 allow an entity which is not an
investment entity, but has an interest in an associate or a joint venture
which is an investment entity, a relief to retain the fair value measurement
applied by the investment entity associate or joint venture, or to unwind the
fair value measurement and instead perform a consolidation at the level of
the investment entity associate or joint venture for their subsidiaries when
applying the equity method.
Amendments to
The amendments clarify guidance in IAS/HKAS 1 on materiality and
An entity shall apply those
IAS/HKAS 1 for
aggregation, the presentation of subtotals, the structure of financial
amendments to IAS/HKAS 1 for
the disclosure
statements and the disclosure of accounting policies.
initiative
after 1 January 2016. Earlier

Although the amendments do not require specific changes, they clarify a
number of presentation issues and highlight that preparers are permitted to
tailor the format and presentation of the financial statements to their
circumstances and the needs of users.
The key areas addressed by the changes are as follows:
Materiality: an entity should not aggregate or disaggregate

information in a manner that obscures useful information. An entity
need not provide disclosures if the information is not material;
Disaggregation and subtotals: the amendments clarify what

additional subtotals are acceptable and how they should be presented;
Notes: an entity is not required to present the notes to the financial

statements in a particular order, and management should tailor the
structure of their notes to their circumstances and the needs of their
users;
Accounting policies: how to identify a significant accounting policy

that should be disclosed;
Other comprehensive income from equity accounted investments:

other comprehensive income of associates and joint ventures should
be separated into the share of items that will subsequently be
reclassified to profit or loss and those that will not.
206


2014 (continued)
Standards
Key requirements
Early adoption and

(III) Changes effective for annual periods beginning on or after 1 January 2017
IFRS/HKFRS15
IFRS/HKFRS 15 establishes a comprehensive framework for
An entity shall apply
Revenue from
determining when to recognise revenue and how much revenue to
IFRS/HKFRS 15 for annual
Contracts with
recognise through a 5-step approach : (1) Identify the contract(s)
reporting periods beginning on
Customers
with customer; (2) Identify separate performance obligations in a
or after 1 January 2017. Earlier
contract (3) Determine the transaction price (4) Allocate
application is permitted. If an
transaction price to performance obligations and (5) recognise
entity applies IFRS/HKFRS 15
revenue when performance obligation is satisfied. The core
earlier, it shall disclose that
principle is that a company should recognise revenue to depict the
fact.
transfer of promised goods or services to the customer in an

amount that reflects the consideration to which the company
expects to be entitled in exchange for those goods or services. It
moves away from a revenue recognition model based on an
earnings processes to an asset-liability approach based on
transfer of control.
IFRS/HKFRS 15 provides specific guidance on capitalisation of
contract cost and licence arrangements. It also includes a cohesive
set of disclosure requirements about the nature, amount, timing
and uncertainty of revenue and cash flows arising from the entitys
contracts with customers.
IFRS/HKFRS 15 replaces the previous revenue standards:
IAS/HKAS 18 Revenue and IAS/HKAS 11 Construction Contracts,
and the related Interpretations on revenue recognition:
IFRIC/HK(IFRIC) 13 Customer Loyalty Programmes,
IFRIC/HK(IFRIC) 15 Agreements for the Construction of Real
Estate, IFRIC/HK(IFRIC) 18 Transfers of Assets from Customers
and SIC-31 Revenue Barter Transactions Involving Advertising
Services.
207


2014 (continued)
Standards
Key requirements
Early adoption and

(IV) Changes effective for annual periods beginning on or after 1 January 2018
IFRS/HKFRS 9
IFRS/HKFRS 9 (2014), "Financial instruments" replaces the whole of
Financial Instruments
IAS/HKAS 39.
IFRS/HKFRS 9 is effective
for annual periods beginning
on or after 1 January
IFRS/HKFRS 9 has three financial asset classification categories for
2018. Earlier application is

permitted.
investments in debt instruments: amortised cost, fair value through

other comprehensive income (OCI) and fair value through profit or
loss. Classification is driven by the entitys business model for
managing the debt instruments and their contractual cash flow
characteristics. Investments in equity instruments are always
measured at fair value. However, management can make an
irrevocable election to present changes in fair value in OCI, provided
the instrument is not held for trading. If the equity instrument is held
for trading, changes in fair value are presented in profit or loss. For
If an entity elects to apply

IFRS/HKFRS 9 (2014) early
it must disclose that fact and
apply all of the requirements
at the same time. Entities
applying the standard before
1 February 2015 continue to
have the option to apply the
standard in phases.
financial liabilities there are two classification categories: amortised
All previous versions of
cost and fair value through profit or loss. Where non-derivative
IFRS/HKFRS 9 are superseded.
financial liabilities are designated at fair value through profit or loss,

the changes in the fair value due to changes in the liabilitys own
credit risk are recognised in OCI, unless such changes in fair value
would create an accounting mismatch in profit or loss, in which case,
all fair value movements are recognised in profit or loss. There is no
subsequent recycling of the amounts in OCI to profit or loss. For
financial liabilities held for trading (including derivative financial
liabilities), all changes in fair value are presented in profit or loss.
IFRS/HKFRS 9 introduces a new model for the recognition of
impairment losses the expected credit losses (ECL) model, which
constitutes a change from the incurred loss model in IAS/HKAS 39.
IFRS/HKFRS 9 contains a three stage approach, which is based on
the change in credit quality of financial assets since initial
recognition. Assets move through the three stages as credit quality
changes and the stages dictate how an entity measures impairment
losses and applies the effective interest rate method. The new rules
mean that on initial recognition of a non-credit impaired financial
asset carried at amortised cost a day-1 loss equal to the 12-month ECL
is recognised in profit or loss. In the case of accounts receivables this
day-1 loss will be equal to their lifetime ECL. Where there is a
significant increase in credit risk, impairment is measured using
lifetime ECL rather than 12-month ECL.
IFRS/HKFRS 9 applies to all hedging relationships, with the
exception of portfolio fair value hedges of interest rate risk. The new
guidance better aligns hedge accounting with the risk management
activities of an entity and provides relief from the more rule-based
approach of IAS/HKAS39.
208


B. New Hong Kong Companies Ordinance (Cap. 622)
Key requirements
Early adoption and transition

provision, if any
The requirements of Part 9 "Accounts and Audit" of the new Hong Kong Companies Ordinance Effective for annual periods
(Cap. 622) come into operation for Hong Kong incorporated companys first financial year
commencing on or after 3 March
commencing on or after 3 March 2014 in accordance with section 358 of that Ordinance.
2014. Prospective application and

no early application is allowed.
An overview of the major changes in disclosure requirements relating to financial statements is

as follows:
Most of the specific disclosures required under Tenth Schedule of the Companies
Ordinance (Cap.32) have been removed in order to streamline the disclosure
requirements that overlap with the accounting standard, leaving only a small number of
public interest disclosure requirements not covered by the HKFRS being retained in
Schedule 4 of the Hong Kong Companies Ordinance (Cap. 622), including:
(a)
the aggregate amount of any outstanding loans to directors and employees to acquire
shares in the company authorised under sections 280 and 281 of the new Companies
Ordinance;
information regarding a companys ultimate parent undertaking; and
auditors remuneration
(b)
(c)
The Companys balance sheet is no longer required to be presented as a primary

statement. It is presented in the notes to the financial statements. Except for the note
disclosing the movement of the Companys reserves, the balance sheet of the Company is
not required to contain any other notes. Accordingly, all the corresponding notes in
relation to the Companys balance sheet have been removed in this illustrative disclosure.
More extensive disclosures are required for the benefits and interests of directors, as
follows:
(a)
(b)
(c)
the directors emoluments;

the directors retirement benefits;
payments made or benefit provided in respect of the termination of the service of
directors, whether in the capacity of directors or in any other capacity while directors;
loans, quasi-loans and other dealings in favour of:
(d)
(e)
(f)
(i)
directors of the Company and of a holding company of the Company;
(ii)
bodies corporate controlled by such directors; and
(iii) entities connected with such directors;

material interests of directors in transactions, arrangements or contracts entered into by
the Company;
consideration provided to or receivable by third parties for making available the services
of a person as director or in any other capacity while director.
The new disclosure required by the new Hong Kong Companies Ordinance (Cap. 622) in the
financial statements is illustrated in Appendix VIII. That appendix should be read in
conjunction with the full set of Illustrative IFRS/HKFRS Consolidated Financial Statements - 31
December 2014.
209

Appendix VIII Illustrative disclosure required by the new Hong Kong Companies Ordinance (Cap. 622) for
financial year ending on or after 2 March 2015 (Financial Statement Section)
This illustrative disclosure for financial statements section is prepared under the new Companies Ordinance (Cap. 622) (New CO)
and is applicable for the following annual reports:
Hong Kong incorporated companies
mandatory for annual reports covering financial years ending on or after 2 March
2015
Overseas incorporated companies

listed in Hong Kong
mandatory for annual reports covering financial years ending on or after 31

December 2015
early adoption is allowed for annual reports covering financial years ending on or after
2 March 2015 but before 31 December 2015
This appendix only covers pages or disclosures which are affected by the new Hong Kong Companies Ordinance (Cap. 622). The
requirements under the predecessor Companies Ordinance (Cap. 32) are crossed out, new disclosures are highlighted in grey and
underlined.
An overview of the major changes in disclosures required under the new Hong Kong Companies Ordinance (Cap. 622) is as follows:
Most of the specific disclosures required under Tenth Schedule of the Companies Ordinance (Cap.32) have been removed in
order to streamline the disclosure requirements that overlap with the accounting standard, leaving only a small number of
public interest disclosure requirements not covered by the HKFRS being retained in Schedule 4 of the Hong Kong Companies
Ordinance (Cap. 622), including:
(d)
the aggregate amount of any outstanding loans to directors and employees to acquire shares in the company authorised under
sections 280 and 281 of the new Companies Ordinance;
information regarding a companys ultimate parent undertaking; and
auditors remuneration
(e)
(f)
The Companys balance sheet is no longer required to be presented as a primary statement. It is presented in the notes to the
financial statements. Except for the note disclosing the movement of the Companys reserves, the balance sheet of the
Company is not required to contain any other notes. Accordingly, all the corresponding notes in relation to the Companys
balance sheet have been removed in this illustrative disclosure.
More extensive disclosures are required for the benefits and interests of directors, as follows:
(g)
(h)
(i)
the directors emoluments;

the directors retirement benefits;
payments made or benefit provided in respect of the termination of the service of directors, whether in the capacity of
directors or in any other capacity while directors;
loans, quasi-loans and other dealings in favour of:
(i) directors of the Company and of a holding company of the Company;
(ii) bodies corporate controlled by such directors; and
(iii) entities connected with such directors;
material interests of directors in transactions, arrangements or contracts entered into by the Company;
consideration provided to or receivable by third parties for making available the services of a person as director or in any other
capacity while director.
(j)
(k)
(l)
210

financial year ending on or after 2 March 2015 (Financial Statement Section) (continued)
The references in the left-hand margin of the financial statements represent the paragraph of the International/Hong Kong
Financial Reporting Standards, Companies Ordinance or the Listing Rules in which the disclosure appears. The designation DV
(disclosure voluntary) indicates that disclosure is encouraged but not required and, therefore, represents best practice.
List of abbreviations used
Abbreviations
International/Hong Kong Accounting Standard No. 1, paragraph 1
1p1
International/Hong Kong Accounting Standard No. 1, paragraph 81, footnote
1p81*
The Guidance on Implementing of International/Hong Kong Accounting Standard No. 1,

paragraph 5
1IG5
International/Hong Kong Accounting Standard No. 1, Basis for Conclusions, paragraph 21
1BC 21
International/Hong Kong Financial Reporting Standard No. 2, paragraph 6
FRS2p6
International/Hong Kong Financial Reporting Standard No. 7, Appendix B, paragraph 1
FRS7AppxB1
SIC/HK(SIC) Interpretation No. 13, paragraph 4
SIC13p4
IFRIC/HK(IFRIC) Interpretation No. 6, paragraph 4
FRIC6p4
The Companies Ordinance (Cap. 32), Section 129D(1)
S129D(1)
The Companies Ordinance (Cap. 32), Tenth Schedule, paragraph 17(5)
10Sch17(5)
The new Hong Kong Companies Ordinance (Cap. 622), Section 383
s383
The new Hong Kong Companies Ordinance (Cap. 622), paragraph 1, part 1 of Schedule 4
4Sch.p1.1
Companies (Disclosure of Information about Benefits of Directors) Regulation (Cap. 622G),

Section 4
622G4
Companies (Directors Report) Regulation (Cap. 622D), Section 3
622D3
For listed companies only

References to Listing Rules relating to Main Board:
The Listing Rules, Practice Note No. 5, paragraph 5(3)
PN5.5(3)
The Listing Rules, Appendix 16, paragraph 4(1)(a)
A4(1)(a)
MB14.08
MB Code C.1.2
Reference to Listing Rules relating to Growth Enterprise Market:

GEM18.15
The Listing Rules, Appendix 16, paragraph 1
GEM Appendix 16(1)
GEM Code C.1.2
211 (original page v)

Contents
Page
Auditors report
1 142
143
Appendices
Appendix I
Report of the directors
144 157
Appendix Ia
Corporate governance report under the Code (for listed companies

only)
158 162
Appendix II
Other information in the annual report (for listed companies only)
163 164
Appendix III
Operating and financial review
165 169
Appendix IV
Alternative presentation of primary statements

1. Consolidated income statement by nature of expense
2. Consolidated statement of comprehensive income single statement, by
function of expense and income tax effect presented on an aggregate basis
3. Consolidated statement of cash flows direct method
170 174
Appendix V
Policies and disclosures for areas not relevant to Specimen Holdings

Limited
14. Construction contracts
175 198
15. Leases: accounting by lessor

16. Investments: held-to-maturity financial assets
17. Government grants
18. Oil and gas exploration assets
19. Revenue recognition: multiple-element arrangements
20. Defaults and breaches of loans payable
21. Financial guarantee contracts
22. Properties under development and held for sale
23. Customer loyalty programmes
24. Biological assets
25. Put option arrangements
26. Share-based payments: modification and cancellation
199
Appendix VI
Critical accounting estimates and judgements not relevant to

- Critical accounting estimates
Useful lives of technology divisions plant and equipment
Warranty claims
- Critical accounting judgements
Held-to-maturity investments
Appendix VII
Forthcoming requirements
200 209
Appendix VIII

2015 (Financial Statement Section)
2015 (Directors Report Section)
210 290
Appendix IX
212 (original page vi)
291 307

Index to the illustrative IFRS/HKFRS consolidated financial statements

Note
Consolidated income statement by function of
expense
Consolidated statement of comprehensive
income
1
2
Page
64-69
Exceptional items
70
9-12
Other income
70
13-14
Other gains net
70

General information
Summary of significant accounting policies:
15-17
18-21
9
10
11
12a
12b
2.1
2.2
2.3
2.4
Subsidiaries
Associates
Joint arrangements
22-24
25-26
26-27
27
13
14
15
Expenses by nature
Employee benefit expense
Investments in and loans to subsidiaries Company
Investments accounted for using the equity method
Group
Income tax expense
Earnings per share
2.5
Segment reporting
27
15a
2.6
2.7
2.8
2.9
2.10
2.11
Foreign currency translation

Investment property
Intangible assets
Impairment of non-financial assets
Non-current assets (or disposal groups)
held-for-sale and discontinued
operations
Financial assets
Offsetting financial instruments
Impairment of financial assets
Derivative financial instruments and
hedging activities
Inventories
27-28
28-29
29
29-30
30
31
16
16a
17
18
19a
19b
Leasehold land and land use rights Group

Property, plant and equipment Group
Investment properties Group
Intangible assets Group
Financial instruments by category Group and Company
Credit quality of financial assets Group and Company
86
87-88
89-96
97-100
100-102
102-103
31-32
32
32-33
33-34
20
21
22
23
Available-for-sale financial assets Group

Trade and other receivables Group
Inventories Group
104-105
106-107
107-109
109
35
35
35
24
25
26
2.19 Share capital

2.20 Trade payables
2.21 Borrowings
2.22 Borrowing costs
2.23 Compound financial instruments
2.24 Current and deferred Income tax
2.27 Provisions
2.28 Revenue recognition
2.29 Interest income
2.30 Dividend income
2.31 Leases
3.1
Financial risk factors
3.2
Capital management
3.3
Fair value estimation
3.4
Offsetting financial assets and financial
liabilities
4.1
Critical accounting estimates and
assumptions
35
35
36
36
36
37
38-39
39
39-40
40-41
41
41
41
41
41
44-60
27
27a
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Financial assets at fair value through profit or loss Group

Cash and bank balances Group and Company
Non-current assets held for sale and discontinued
operations Group
Buy-back of shares
Share-based payments Group and Company
Retained earnings Group and Company
Other reserves Group and Company
Borrowings Group and Company
Post employment benefits Group
(a)Defined benefit pension plans
(b)Post - employment medical benefits
(c)Post - employment benefits (pension and medical)
Dividends
Contingencies
Commitments
124-127
127-128
129-130
131-132
132
133
134
134
135
136-137
61-62
42
43
Related-party transactions
Events after the balance sheet date
138-140
141-142
4.2
62-63
44
Balance sheet and reserve movement of the holding

company
Benefits and interests of directors (disclosures required by
section 383 of the Hong Kong Companies Ordinance
(Cap. 622) and Companies (Disclosure of Information
about Benefits of Directors) Regulation (Cap. 622G))
143-144
2.16
2.17
2.18
3-8
Note
5
Segment information
Balance sheet
2.12
2.13
2.14
2.15
Page
1-2
Critical judgements in applying the

companys accounting policies
22
45
213 (original page vii)
71
71-73
74
74-77
77-82
83-84
85
86
86
109
110
110-111
112
112
113
114
115-117
118
118-121
122-123
145-154

Consolidated income statement by function of expense

1p81(b), 84
1p10(b), 12
Note
1p113, 1p38, A4(1)(n),

A2(2)&(5)
GEM18.50B(1)(o)
GEM18.07(2)&(5)
S124, 10Sch17(6)

2015
2014
HK$000
HK$000
1p82(a), A4(1)(a),
GEM18.50B(1)(a)
Revenue
1p99, 103, A4(1)(i)

GEM18.50B(1)(d)
Cost of sales
211,034
112,360
6, 9
(80,707)
(50,305)
Gross profit
9
9
130,327
(54,814)
(31,990)
62,055
(22,155)
(11,946)
Other income
Other gains net
7
8
2,437
7,810
764
6,063
1p82(b)
Operating profit1
Finance income
Finance expenses
11
11
53,770
1,730
(8,173)
34,781
1,609
(12,197)
1p85
11
(6,443)
(10,588)
1p82(c), A4(1)(m)
GEM18.50B(1)(n)
Share of profit of investments accounted for using the equity method
12b
1,293
1,022
13
48,620
(14,298)
25,215
(8,175)
34,322
17,040
100
120
34,422
17,160
31,874
16,304
2,548
856
34,422
17,160
1p99103
1p99,103
1p99, 103, A4(1)(h)
GEM18.50B(1)(b)
1p85
1p85
1p85
1p85, A4(1)(b)
GEM18.50B(1)(g)
1p82(d), 12p77,
A4(1)(c)
GEM18.50B(1)(h)
1p85
FRS5p33(a)
1p81A(a)

Income tax expense

Profit for the year
26

1p81B(a)(ii), A4(1)(e),
GEM18.50B(1)(j)
1p81B(a)(i),FRS12p12
(e), A4(1)(d),
GEM18.50B(1)(i)
Profit attributable to owners of the company arises from:

31,794
80
16,184
120
31,874
16,304
IAS/HKAS 1 does not prescribe the disclosure of operating profit on the face of the income statement. However, entities are not prohibited from disclosing this or a
similar line item.
214 (original page 1)

Note
2015
2014
Earnings per share from continuing and discontinued
operations attributable to owners of the company for the
year (expressed in HK$ per share)
33p66, A4(1)(g),
GEM18.50B(1)(m)
14
33p68

1.35
0.01
0.79
0.01
33p66
1.36
0.80
33p66
33p68

1.22
0.01
0.74
0.01
33p66
1.23
0.75
14
10Sch13(1)(j)
2
3
Dividends3
36
2014
HK$000
12,945
2013
HK$000
10,102
EPS of discontinued operations may be given in the notes to the financial statements instead in the income statement.
IAS/HKAS 1 p107 requires an entity to present the amount of dividends recognised as distributions to owners during the period either in the statement of changes in
equity or in the notes, because dividends are distributions to owners in their capacity as owners and the statement of changes in equity presents all owner changes in
equity. In the basis of conclusion of IAS/HKAS, the Board concluded that an entity should not present dividends in the income statement because that statement
presents non-owner changes in equity. However, HKCO Tenth Sch. para 13(1)(j)) requires the disclosure of the aggregate amount of the dividends paid and proposed
in the profit and loss account. The disclosure above only illustrated the disclosure requirements of the Ordinance for reference purpose.

33p4
25.
When an entity presents both consolidated financial statements and separate financial statements
prepared in accordance with IAS/HKAS 27, Consolidated and separate financial statements, the
disclosures required by IAS/HKAS 33 are presented only on the basis of the consolidated information. An
entity that chooses to disclose EPS based on its separate financial statements presents such EPS
information only in its separate statement of comprehensive income.
Components of other comprehensive income

1p7
26.
Components of other comprehensive income (OCI) are items of income and expense (including
reclassification adjustments) that are not recognised in profit or loss as required or permitted by other
IFRS/HKFRSs. They include: changes in the revaluation surplus relating to property, plant and equipment
or intangible assets; measurements of post-employment defined benefit obligations; gains and losses
arising from translating the financial statements of a foreign operation; gains and losses on re-measuring
available-for-sale financial assets; and the effective portion of gains and losses on hedging instruments in
a cash flow hedge.
1p91
1p90
27.
Entities may present components of other comprehensive income either net of related tax effect or before
related tax effects. Specimen Holdings Limited has chosen to present the items net of tax. In this case the
amount of income tax relating to each component of OCI, including reclassification adjustments, is
disclosed in the notes.
1p92,94
28.
An entity discloses separately any reclassification adjustments relating to components of other

comprehensive income either in the statement of comprehensive income or in the notes.
1p7,95
29.
Reclassification adjustments are amounts reclassified to profit or loss in the current period that were
recognised in other comprehensive income in the current or previous periods. They arise, for example, on
disposal of a foreign operation, on derecognition of an available-for-sale financial asset and when a
hedged forecast transaction affects profit or loss.
1p82A
30.
IAS/HKAS 1 has been amended, effective for annual periods beginning on or after 1 July 2012. The
amendment requires items of OCI, classified by nature (including share of the other comprehensive
income of associates and joint ventures accounted for using the equity method) , to be grouped into those
that will be reclassified subsequently to profit or loss when specific conditions are met and those that will
not be reclassified to profit or loss. The amendment also requires entities that present items of OCI before
related tax effects with the aggregate tax shown separately to allocate the tax between the items that might
be reclassified subsequently to the profit or loss section and those that will not be reclassified.
1p107
31.
The amount of dividends recognised as distributions to owners during the period, and the related amount
per share are presented either in the statement of changes in equity or in the notes. Dividends cannot be
However, HKCO Tenth Sch. para 13(1)(j)) requires the disclosure of the aggregate amount of the dividends
paid and proposed in the profit and loss account.
Consistency
1p45
32.
The presentation and classification of items in the financial statements is retained from one period to
the next unless:
(a)
it is apparent, following a significant change in the nature of the entitys operations or a
review of its financial statements, that another presentation or classification would be more
appropriate, addressing the criteria for the selection and application of accounting policies in
(b)
IFRS/HKFRS requires a change in presentation.

1p29
33.
Each material class of similar items is presented separately in the financial statements. Items of a
dissimilar nature or function are presented separately unless they are immaterial.
Offsetting
1p32
1p34(a)
34.
Assets and liabilities, and income and expenses, are not offset unless required or permitted by an
IFRS/HKFRS. Examples of income and expenses that are required or permitted to be offset are as
follows:
(a)
Gains and losses on the disposal of non-current assets, including investments and operating
assets, are reported by deducting from the proceeds on disposal the carrying amount of the asset
and related selling expenses.


Note
1p10(a), 1p54, 1p113,
1p38, A4(2),
A2(1)&(5),
GEM18.50B(2),
GEM18.07(1)&(5)
10Sch4, S124
1p60, 1p66
1p54(a), A4(2)(a)
GEM18.50B(2)(a)
1p54(b)
1p54(c)
1p54(e), 28p38
1p54(o), 1p56
1p54(d), FRS7p8(d),
10Sch8,
1p54(d), FRS7p8(a)
1p54(h), FRSp8(c)
1p60, 1p66,A4(2)(b)
GEM18.50B(2)(b)
1p54(g), A4(2)(b)(i),
GEM18.50B(2)(b)(i)
1p54(h), FRS7p8(c),
A4(2)(b)(ii),
GEM18.50B(2)(b)(ii)
1p54(d), FRS7p8(d)
1p54(d), FRS7p8(a)
1p54(d), FRS7p8(a)
1p54(i), FRS7p8,
A4(2)(b)(iii),
1p55, FRS7p8
FRS5p38, 40,
1p54(j)
Assets
Non-current assets
Leasehold land and land use rights
16
16a
59,129
70,008
11,800
70,300
17
18
12b
25,000
26,272
18,649
17,000
20,700
17,053
33
20
3,546
17,420
3,383
14,910
21
22
395
2,322
222,741
245
1,352
156,743
Inventories
23
24,700
18,132
22
19,765
18,330

profit or loss
Cash and cash equivalents (excluding
bank overdrafts)
20
21
24
1,950
1,069
11,820
951
7,972
25
14,928
32,062
Restricted cash
25
Assets of disposal group classified as

held for sale
26
3,000
77,232
3,333
2,000
79,447
80,565
303,306
79,447
236,190
27
27
21,000
10,494
27
30
29
36
42,444
14,426
71,706
12,945
58,761
128,576
7,188
31,494
6,665
51,705
10,102
41,603
89,864
1,766
Total equity
135,764
91,630
Intangible assets
Investments accounted for using the
equity method
Deferred income tax assets
Current assets
Total assets
1p54(r), A4(2)(g)
GEM18.50B(2)(g)
1p78(e) ,
1p78(e), 1p55
1p78(e)
1p78(e), 1p55
10Sch9(1)(e)
1p54(q), A4(2)(h),
GEM18.50B(2)(h)
As at 31 December
2015
2014
HK$000
HK$000

Equity attributable to owners of
the company
Share capital/[and other statutory
capital reserves]5a
Other reserves
Retained earnings
- Others

Note
1p60, 1p69, A4(2)(f),

GEM18.50B(2)(f)
1p54(m), FRS7p8(f),
A4(2)(f)(i)
GEM18.50B(2)(f)(i)
1p54(m), FRS7p8(e)
1p54(o), 1p56,
10Sch8
1p54(l), 1p78(d)
1p54(l), 1p78(d)
Liabilities
Borrowings
32
115,121
96,346

21
33
135
11,188
129
8,184

34
35
5,116
1,320
132,880
2,611
274
107,544
31
17,478
2,566
11,716
12,973
2,771
18,258
460
2,222
34,442
220
618
2,396
37,016
Total liabilities
Net current assets
34,662
167,542
303,306
45,903
37,016
144,560
236,190
42,431
268,644
199,174
1p60, 1p69, A4(2)(c)

GEM18.50B(2)(c)
1p54(k), FRS7p8(f)
1p54(n)
1p54(m), FRS7p8(f),
A4(2)(c)(i)
GEM18.50B(2)(c)(i)
1p54(m), FRS7p8(e)
1p54(l)
Current liabilities
FRS5p38, 1p54(p)
A4(2)(d),
GEM18.50B(2)(d)
A4(2)(e),
GEM18.50B(2)(e)
As at 31 December
2015
2014
HK$000
HK$000

Current income tax liabilities
Borrowings
32

21
35
Liabilities of disposal group classified as

held-for-sale
26
10p17
The notes on pages x to x are an integral part of these consolidated financial

statements.
S129B(1) s387,10p17
The financial statements on pages x to x were approved by the Board of Directors on [DATE] and were
signed on its behalf6
_________________________
[Name of Director]
____________________________
[Name of Director]
6 Every balance sheet of a company shall be approved by the board by directors of the company and signed on behalf of the board by two of the directors or, in the case of
private company having only one director, by the sole director. A company also needs to state the names of the person who signed the balance sheet on the directors
behalf.

Commentary: The holding companys balance sheet is no longer required to be presented as one of the
primary financial statement. Paragraph 2(1)(a)&(b) of part 1 of Schedule 4 requires the holding companys
balance sheet and reserve movements to be contained in the notes to annual financial statements for the
financial year, so the following balance sheet has been moved to Note 44. Paragraph 2(2) of part 1 of
Schedule 4 specifies that the holding companys balance sheet to be contained in the notes to the annual
consolidated financial statements for a financial year is not required to contain any notes.
Balance sheet
Note
1p10(a), 1p54, 1p113, 1p38,
A2(1)&(5),GEM18.07(1)&(5)
10Sch4, S124
Assets
FRS7p8(c)
Non-current assets
1p60, 1p66, A4(2)(b)
Current assets
1p60, 1p66
As at 31 December
2014
2013
HK$000
HK$000
12a
12a
67,206
89,794
157,000
66,310
25,000
91,310
25
5,039
7,230
162,039
98,540
42,444
5,433
21,000
10,494
31,494
-
12,945
26,260
87,082
10,102
26,944
68,540
GEM18.50B(2)(b)
1p54(i), FRS7p8
A4(2)(b)(iii)
Total assets
1p54(r), A4(2)(g)
GEM18.50B(2)(g)
1p78(e),
1p78(e), 1p55
1p78(e)
1p78(e), 1p55
10Sch9(1)(e)

company
Other reserves
Retained earnings
- Others
Total equity
27
27
27
30
29
36
Liabilities
1p60, 1p69, A4(2)(f)
GEM18.50B(2)(f)
1p54 (m), FRS7p8(f)
A4(2)(f)(i)
GEM18.50B(2)(f)(i)
1p54(o), 1p56, 10Sch8
Borrowings
32
72,822
30,000
33
2,135
74,957
30,000
162,039
98,540
5,039
7,230
162,039
98,540
Total liabilities
A4(2)(d), GEM18.50B(2)(d)
Net current assets
A4(2)(e), GEM18.50B(2)(e)
10p17
The notes on pages x to x are an integral part of these financial statements.

The financial statements on pages x to x were approved by the Board of Directors on [DATE]
and were signed on its behalf.4
S129B(1) ,10p17
Director
Director
7 Every balance sheet of a company shall be approved by the board by directors of the company and signed on behalf of the board by two of the directors or, in the case of
a private company having only one director, by the sole director

Commentary balance sheet (continued)
27p38A
36p12(h)
10Sch18(4),
27p16(a)
An investor is required to recognise dividends received from a subsidiary, joint venture or associate in its separate financial
statements as income. The receipt of a dividend from a subsidiary, joint venture or associate may be an internal indicator that the
related investment could be impaired. The investor is, therefore, required to test the related investment for impairment where a
dividend is received and:
there is evidence available that the carrying amount of the investment exceeds the carrying amount in the consolidated
financial statements of the investees net assets including associated goodwill; or
the dividend exceeds the total comprehensive income of the subsidiary, joint venture or associate in the period that the
dividend is declared.
Dealt with / not dealt with

The following disclosure is required if the company has taken advantage of the exemption* under IFRS/HKFRS 10 para 4(a) from
the requirement to prepare consolidated financial statements.
The company has taken advantage of the exemption under IAS27 [HKAS27] from the requirement to prepare consolidated financial
statements as it and its subsidiaries are included in the consolidated financial statements of its parent, M Limited. M Limited was
incorporated in Hong Kong. It has prepared the consolidated financial statements for public use in accordance with IFRS [HKFRS].
The registered office of the company is 21/F Nice Building, City Plaza Three, 14 Taikoo Wan Road, Taikoo Shing, Island East, Hong
Kong. The consolidated financial statements of M Limited are obtainable at the companys registered office.
The net profits of the subsidiaries attributable to owners of the company are as follows:
Dealt with in the companys financial statements

Not dealt with in the companys financial statements
2014
HK$000
XX
XX
XX
Previous years
HK$000
XX
XX
XX
* Please note that if the company prepares its financial statements under HKFRS but its ultimate or immediate parent entity
prepares its financial statements under IFRS or HKFRS, the exemption for the preparation of the consolidated financial statements
under IAS/HKAS27 applies.
However if the company prepares its financial statements under IFRS but its ultimate or immediate parent entity prepares their
financial statements under HKFRS, the exemption for the preparation of the consolidated financial statements under IAS/HKAS27
does not apply.
In addition, a Hong Kong incorporated parent company can only take advantage of the exemption under IFRS/HKFRS 10 para 4(a)
if it is a wholly-owned subsidiary of another company at the end of its financial year satisfying the exemption allowed under section
124(2) of the Hong Kong Companies Ordinance.


1p10(c),106,108,
109, 113
A2(4)&(5),
GEM18.07(4)&
(5)
Note
HK$000
FRS7p20(a)(ii)
1p82(h)
19p120(c)
1p82(g), FRS
7p23(c)
1p82(g),39p102
(a)
1p82(g),21p52
(b)
1p106(a)
FRS2p50
FRS2p50
1p106(d)(iii)
1p106(d)(iii)
HK$000
HK$000
Total
Noncontrolling
interests
Total equity
HK$000
HK$000
HK$000
HK$000
10,424
6,553
50,932
87,909
1,500
89,409
16,304
16,304
856
17,160
30
62
62
62
30
(14)
(14)
(14)
29, 13
(637)
(637)
(637)
30
(3)
(3)
(3)
30
40
40
40
differences
- Group
- Associates
30
(78)
105
(78)
105
(40)
(118)
105
Total other
comprehensive income,
net of tax
112
(637)
(525)
(40)
(565)
Total comprehensive
income
112
15,667
15,779
816
16,595
29
822
822
822
Comprehensive
income
Profit for the year
Other
comprehensive
income9
Available-for-sale
financial assets
Share of other
of investments
accounted for using the
equity method
obligations
Cash flow hedges
Employees share option

scheme:
Value of employee
services
issued
share option scheme
Dividends relating to
2012
Total transactions
with owners,
recognised directly
in equity
Balance at 31
December 2013

Share
Retained
Other
premium reserves8
earnings
20,000
Balance at 1 January
2013
1p106(d)(i)
1p106(d)(ii)
Share
capital
27
1,000
70
1,070
1,070
29
20
20
20
36
(15,736)
(15,736)
(550)
(16,286)
1,000
70
(14,894)
(13,824)
(550)
(14,374)
21,000
10,494
6,665
51,705
89,864
1,766
91,630
Individual reserves can be grouped into other reserves in the statement of changes in equity if these are similar in nature and can be regarded as a component of
equity. If the individual reserves are not shown in the statement of changes in equity, an analysis should be given in the notes.
Under the amendment to IAS/HKAS 1 arising from Improvements to IFRSs issued in 2010, companies can implement this by either (a) showing each line item of
other comprehensive income separately in the above statement (as shown above); or (b) by having a single-line presentation of other comprehensive income plus a
separate note showing an analysis of each item of other comprehensive income for each component of equity. In these illustrative financial statements, we put this
information in the statement of changes in equity.

1p106(d)(i)
1p106(d)(ii)
1p82(h),
FRS7p20(a)(ii)
19p120(c)
1p82(g),
FRS 7p23(c)
1p82(g),
39p102(a)
1p82(g), 21p52(b)
12p80(d), 81(ab)
FRS3p42
1p82(g)
1p106(a)
FRS2p50
FRS2p50
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)
1p106(d)(iii)

Share
Other
Retained
premium reserves
earnings
HK$000
HK$000
Noncontrolling
interests
HK$000
31,874
31,874
2,548
34,422
30
362
362
362
30
(12)
(12)
(12)
29,
13
83
83
83
30
64
64
64
30
(45)
(45)
(45)
differences
- Group
- Associates
Impact of the change in the
tax rate of [country name]
on deferred tax
Reclassification of
30
2,833
(74)
(10)
2,833
(74)
(10)
252
3,085
(74)
(10)
(850)
(850)
(850)
Total other comprehensive

income, net of tax
2,278
73
2,351
252
2,603
Total comprehensive
income
2,278
31,947
34,225
2,800
37,025
29
690
690
690
27
750
200
950
950
1p106,108,109
A2(4)&(5),
GEM18.07(4)&(5)
Note
Comprehensive income
Profit or loss
Other comprehensive
income9b
Available-for-sale financial
assets
Share of other
comprehensive income of
investments accounted for
using equity method
obligations
Cash flow hedges
Employee share option

scheme:
Value of employee
services
issued
share option scheme
Issue of ordinary shares
related to business
combination
Transition to no par value
regime on 3 March 2014
Buy-back of shares
component, net of tax
Total contributions by
and distributions to
owners of the company,
recognised directly in
equity
arising on business
combination
Total changes in
ownership interests in
subsidiaries that do not
result in a loss of control
Share
capital
HK$000
29,
13
30,
41
9c
HK$000
Total
9a
HK$000
Total equity
HK$000
29
30
30
30
27
3,550
6,450
10,000
10,000
27
17,144
(17,144)
27(a)
30
5,433
(2,564)
(2,564)
5,433
(2,564)
5,433
36
(10,102)
(10,102)
(1,920)
(12,022)
21,444
(10,494)
5,433
(11,946)
4,437
(1,920)
2,517
41
3,592
3,592
40
50
50
950
1,000
50
50
4,542
4,592
Individual reserves can be grouped into other reserves in the statement of changes in equity if these are similar in nature and can be regarded as a component of equity.
If the individual reserves are not shown in the statement of changes in equity, an analysis should be given in the notes.
9b Under the amendment to IAS/HKAS 1 arising from Improvements to IFRSs issued in 2010, companies can implement this by either (a) showing each line item of other
comprehensive income separately in the above statement (as shown above); or (b) by having a single-line presentation of other comprehensive income plus a separate
note showing an analysis of each item of other comprehensive income for each component of equity. In these illustrative financial statements, we put this information
in the statement of changes in equity.
9a
9c
Share premium/ [other statutory reserves, shown individually, e.g. capital redemption reserve.]

1p106(d)(iii)
Total transactions with

owners, recognised
directly in equity
21,444
(10,494)
5,483
(11,946)
4,487
2,622
7,109
Balance at 31 December
2015
42,444
14,426
71,706
128,576
7,188
135,764
Commentary statement of changes in equity

The commentary that follows explains some of the key requirements in IAS/HKAS 1, Presentation of financial
statements, and other aspects that impact the statement of changes in equity.
Disclosures
1p106
1.
Information to be included in the statement of changes in equity includes:

(a)
Total comprehensive income for the period, showing separately the total amounts attributable to
owners of the Company and to non-controlling interests.
(b)
For each component of equity, the effects of retrospective application or retrospective restatement
recognised in accordance with IAS/HKAS 8.
(c)
For each component of equity, a reconciliation between the carrying amount at the beginning and the
end of the period, separately disclosing changes resulting from:
(i) profit or loss;
(ii) each item of other comprehensive income; and
(iii) transactions with owners in their capacity as owners, showing separately contributions by and
distributions to owners and changes in ownership interests in subsidiaries that do not result in a
loss of control.
2.
For each component of equity, the analysis of other comprehensive income by item may be presented either in
the statement of changes in equity or disclosed within the notes.
Dividends
1p107
3.
The amount of dividends recognised as distributions to owners during the period and the related amount per
share are now disclosed either in the statement of changes in equity or in the notes. Dividends cannot be
However, HKCO Tenth Sch. para 13(1)(j) requires the disclosure of the aggregate amount of the dividends paid
and proposed in the profit and loss account.


7p10, 18(b),
1p38, A2(3)&(5),
GEM
18.07(3)&(5)
Year ended 31
December
Note
2014
2013
HK$000
HK$000
1p113
7p31
7p35

Interest paid
Income tax paid
37
59,334
(7,835)
(12,317)
41,776
(14,773)
(10,526)
39,182
16,477
(3,750)
7p21, 7p10
7p39
41
7p16(a)
16a
(4,755)
(6,042)
16
(4,929)
37
6,354
2,979
Purchases of investment properties (including interest capitalised)
17
(100)
7p16(b)
7p16(a)
18
(3,050)
(700)
7p16(c)
20
(2,781)
(1,150)
7p16(e)
Loans granted to related parties
42
(1,343)
(112)
7p16(f)
Loan repayments received from related parties
42
63
98
7p7, 7p16
Restricted bank deposits
25
(1,000)
500
7p31
Interest received
983
1,217
7p31
Dividends received
1,180
1,120
(13,128)
(2,090)
27
950
1,070

7p21, 7p10
7p17(a)
7p17(b)
Buy-back of shares
29
(2,564)
7p17(c)
Proceeds from issuance of convertible bonds
32(b)
50,000
7p17(c)
Proceeds from issuance of redeemable preference shares
32(c)
30,000
7p17(c)
8,500
18,000
7p17(d)
7p31
7p31
Dividends paid to holders of redeemable preferences shares
7p31
36
40
40

(83,117)
(34,674)
(10,102)
(15,736)
(1,950)
(1,950)
(500)
1,500
(1,920)
(550)
(39,203)
(3,840)


1
General information
1p138(b), (c)
1p51(a)(b)
Specimen Holdings Limited (the company) and its subsidiaries (together the group) manufacture, distribute and
sell shoes through a network of independent retailers. The group has manufacturing plants around the world and
sells mainly in Hong Kong, the UK and the US. During the year, the group acquired control of ABC Group, a shoe
and leather goods retailer operating in the US and most western European countries.
1p138(a)
The company is a limited liability company incorporated in Hong Kong. The address of its registered office is 21/F
Nice Building, City Plaza Three, 14 Taikoo Wan Road, Taikoo Shing, Island East, Hong Kong.
The company has its primary listing on The Stock Exchange of Hong Kong Limited.
These financial statements are presented in HK dollars, unless otherwise stated.
10p17
Summary of significant accounting policies

Commentary accounting policies
The following note is a complete reiteration of a large number of possible accounting policies. Management should
only present information that relates directly to the business and should avoid boilerplate disclosure.
1p112(a)
1p117(b), 1p119
A2(6), A2.2
GEM18.07(6)
GEM18.04
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation

1p116
1p117(a)
A2.1, A5
GEM18.19
GEM18.20
GEM18.04
The consolidated financial statements of Specimen Holdings Limited have been prepared in accordance with
International/Hong Kong Financial Reporting Standards (IFRS/HKFRS). The consolidated financial statements
have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial
assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or
loss and investment properties, which are carried at fair value.
In accordance with the transitional and saving arrangements for Part 9 of the Hong Kong Companies Ordinance
(Cap. 622), Accounts and Audit as set out in sections 76 to 87 of Schedule 11 to the Hong Kong Companies
Ordinance (Cap. 622), the consolidated financial statements are prepared in accordance with the applicable
requirements of the predecessor Companies Ordinance (Cap. 32) for this financial year and the comparative period.10
The preparation of financial statements in conformity with IFRS/HKFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the groups
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are disclosed in Note 4.
2.1.1 Going concern
The group meets its day-to-day working capital requirements through its bank facilities. The current economic
conditions continue to create uncertainty particularly over (a) the level of demand for the groups products; and (b)
the availability of bank finance for the foreseeable future. The groups forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the group should be able to operate within the level of
its current facilities. After making enquiries, the directors have a reasonable expectation that the group has adequate
resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the
going concern basis in preparing its consolidated financial statements. Further information on the groups
borrowings is given in Note 32.
10 For
non- Hong Kong incorporated companies, it is recommended to use this paragraph: The consolidated financial statements are prepared in accordance with the
applicable requirements of the predecessor Companies Ordinance (Cap. 32) for this financial year and the comparative period.

2.1.2 Changes in accounting policy and disclosures10a92
8p28
(a)
New and amended standards adopted by the group
The following standards have been adopted by the group for the first time for the financial year beginning on or after 1
January 2014:
Amendment to IAS/HKAS 32, 'Financial instruments: Presentation' on offsetting financial assets and financial
liabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It must also be
legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency
or bankruptcy. The amendment also considers settlement mechanisms. The amendment did not have a significant
effect on the group financial statements.
Amendments to IAS/HKAS 36, 'Impairment of assets', on the recoverable amount disclosures for non-financial assets.
This amendment removed certain disclosures of the recoverable amount of CGUs which had been included in
IAS/HKAS 36 by the issue of IFRS/HKFRS 13. It also enhanced the disclosures of information about the recoverable
amount of impaired assets if that amount is based on fair value less costs of disposal.
Amendment to IAS/HKAS 39, 'Financial instruments: Recognition and measurement' on the novation of derivatives
and the continuation of hedge accounting. This amendment considers legislative changes to 'over-the-counter'
derivatives and the establishment of central counterparties. Under IAS/HKAS 39 novation of derivatives to central
counterparties would result in discontinuance of hedge accounting. The amendment provides relief from
discontinuing hedge accounting when novation of a hedging instrument meets specified criteria. The group has
applied the amendment and there has been no significant impact on the group financial statements as a result.
IFRIC/HK(IFRIC) 21, 'Levies', sets out the accounting for an obligation to pay a levy if that liability is within the scope
of IAS/HKAS 37 'Provisions'. The interpretation addresses what the obligating event is that gives rise to the payment a
levy and when a liability should be recognised. The Group is not currently subjected to significant levies so the impact
on the Group is not material.
Other standards, amendments and interpretations which are effective for the financial year beginning on 1 January
2014 are not material to the group.
10a A detailed list of IFRSs/HKFRSs and IFRIC/HK(IFRIC) interpretations effective first time for the financial year beginning 1 January 2014 is included in pages iii to iv
of the introduction and of the forthcoming requirements that are effective for periods after 1 January 2014 is included in appendix VII.

(b)
New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2014, and have not been applied in preparing these consolidated financial statement. None
of these is expected to have a significant effect on the consolidated financial statements of the group, except the
following set out below:
IFRS/HKFRS 9, Financial instruments, addresses the classification, measurement and recognition of financial assets
and financial liabilities. The complete version of IFRS/HKFRS 9 was issued in July 2014. It replaces the guidance in
IAS/HKAS 39 that relates to the classification and measurement of financial instruments. IFRS/HKFRS 9 retains but
simplifies the mixed measurement model and establishes three primary measurement categories for financial assets:
amortised cost, fair value through OCI and fair value through P&L. The basis of classification depends on the entity's
business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments
are required to be measured at fair value through profit or loss with the irrevocable option at inception to present
changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred
loss impairment model used in IAS/HKAS 39. For financial liabilities there were no changes to classification and
measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities
designated at fair value through profit or loss. IFRS/HKFRS 9 relaxes the requirements for hedge effectiveness by
replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and
hedging instrument and for the hedged ratio to be the same as the one management actually use for risk management
purposes.
Contemporaneous documentation is still required but is different to that currently prepared under IAS/HKAS 39. The
standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The
group is yet to assess IFRS/HKAS 9s full impact.
IFRS/HKFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and establishes principles
for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of
revenue and cash flows arising from an entitys contracts with customers. Revenue is recognised when a customer
obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or
service. The standard replaces IAS/HKAS 18 'Revenue' and IAS/HKAS 11 'Construction contracts' and related
interpretations. The standard is effective for annual periods beginning on or after 1 January 2017 and earlier
application is permitted. The group is assessing the impact of IFRS/HKAS 15.
There are no other IFRSs/HKFRSs or IFRIC/HK (IFRIC) interpretations that are not yet effective that would be
expected to have a material impact on the group.
(c)
New Hong Kong Companies Ordinance (Cap.622)
In addition, the requirements of Part 9 "Accounts and Audit" of the new Hong Kong Companies Ordinance (Cap. 622)
come into operation during the financial year, as a result, there are changes to presentation and disclosures of certain
information in the consolidated financial statements.as from the Company's first financial year commencing on or
after 3 March 2014 in accordance with section 358 of that Ordinance. The group is in the process of making an
assessment of expected impact of the changes in the Companies Ordinance on the consolidated financial statements in
the period of initial application of Part 9 of the new Hong Kong Companies Ordinance (Cap. 622). So far it has
concluded that the impact is unlikely to be significant and only the presentation and the disclosure of information in
the consolidated financial statements will be affected.

28p28
28p34
Profits and losses resulting from upstream and downstream transactions between the group and its associate are
recognised in the groups financial statements only to the extent of unrelated investors interests in the associates.
Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed where necessary to ensure consistency with the policies
adopted by the group.
Gain or losses on dilution of equity interest in associates are recognised in the income statement.
2.4 Joint arrangements
The group has applied IFRS/HKFRS 11 to all joint arrangements. Under IFRS/HKFRS 11 investments in joint
arrangements are classified as either joint operations or joint ventures depending on the contractual rights and
obligations each investor. The group has assessed the nature of its joint arrangements and determined them to be
joint ventures. Joint ventures are accounted for using the equity method.
28p10
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted
thereafter to recognise the groups share of the post-acquisition profits or losses and movements in other
comprehensive income. The group's investments in joint ventures include goodwill identified on acquisition. Upon
the acquisition of the ownership interest in a joint venture, any difference between the cost of the joint venture and
the groups share of the net fair value of the joint ventures identifiable assets and liabilities is accounted for as
goodwill. When the groups share of losses in a joint venture equals or exceeds its interests in the joint ventures
(which includes any long-term interests that, in substance, form part of the groups net investment in the joint
ventures), the group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the joint ventures.
FRS11pC2-3
28p28
Unrealised gains on transactions between the group and its joint ventures are eliminated to the extent of the groups
interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to
ensure consistency with the policies adopted by the group.
1p119
2.5 Segment reporting
FRS8p5(6)
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the steering committee that makes strategic
decisions.
1p119,
10Sch12(14)
2.6 Foreign currency translation
1p119
(a) Functional and presentation currency
21p17
21p9, 18
1p51(d)
Items included in the financial statements of each of the groups entities are measured using the currency of the
primary economic environment in which the entity operates (the functional currency). The consolidated financial
statements are presented in HK dollars (HK$), which is the companys functional and the groups presentation
currency.
1p119
(b) Transactions and balances
21p21, 28
21p32
39p95(a)
39p102(a)
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other
comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.

1p119
2.16 Inventories
2p36(a), 9
2p10, 25
23p6, 7
2p28, 30
39p98(b)
10Sch12(13)
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, firstout (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials,
direct labour, other direct costs and related production overheads (based on normal operating capacity). It
excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business,
less applicable variable selling expenses. Costs of inventories include the transfer from equity of any
gains/losses on qualifying cash flow hedges for purchases of raw materials12.
1p119
FRS7p21
2.17 Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in
the normal operating cycle of the business if longer), they are classified as current assets. If not, they are
presented as non-current assets.
39p43
39p46(a)
39p59
FRS7 Appx B5(f)
FRS7
Appx B5(d)
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less allowance for impairment.
1p119
2.18 Cash and cash equivalents
FRS7p21
7p46
In the consolidated statement of cash flows, cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments with original maturities of three months or less,
and bank overdrafts. In the consolidated and entity balance sheet, bank overdrafts are shown within
borrowings in current liabilities.
1p119
2.19 Share capital
FRS7p21
32p18(a)
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities
(Note 2.21).
32p37
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
1p119
2.20 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within one year
or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current
liabilities.
FRS7p21
39p43
12
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
Management may choose to keep these gains/(loss) in equity until the acquired asset affects profit or loss. At this time, management should re-classify the
gains/(loss) into profit or loss.

1p119
A26(1), &
(2)&(4),
GEM18.34(1),
&(2) &(4)
The group operates various post-employment schemes, including both defined benefit and defined
contribution pension plans and post-employment medical plans.
(a) Pension obligations
19p26
1927
19p28
19p30
19p57,19p58,
19p59,19p60,
19p67,19p68,
19p83
19p103
A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate
entity. The group has no legal or constructive obligations to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior
periods. A defined benefit plan is a pension plan that is not a defined contribution plan.
Typically defined benefit plans define an amount of pension benefit that an employee will receive on
retirement, usually dependent on one or more factors such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The
defined benefit obligation is calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of
the related pension obligation. In countries where there is no deep market in such bonds, the market rates
on government bonds are used.
The current service cost of the defined benefit plan, recognised in the income statement in employee benefit
expense, except where included in the cost of an asset, reflects the increase in the defined benefit obligation
results from employee service in the current year, benefit changes, curtailments and settlements.
19p57(d)
Past-service costs are recognised immediately in income statements.
19p51
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the income
statement.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive income in the period in which they arise.
For defined contribution plans, the group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The group has no further payment
obligations once the contributions have been paid. The contributions are recognised as employee benefit
expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund
or a reduction in the future payments is available.
1p119
(b) Other post-employment obligations
19p155
Some group companies provide post-retirement healthcare benefits to their retirees. The entitlement to
these benefits is usually conditional on the employee remaining in service up to retirement age and the
completion of a minimum service period. The expected costs of these benefits are accrued over the period of
employment using the same accounting methodology as used for defined benefit pension plans. Actuarial
gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they arise. These obligations are
valued annually by independent qualified actuaries.
1p119
(c) Termination benefits
19p159
Termination benefits are payable when employment is terminated by the group before the normal
retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The
group recognises termination benefits at the earlier of the following dates: (a) when the group can no longer
withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is
within the scope of IAS/HKAS 37 and involves the payment of termination benefits. In the case of an offer
made to encourage voluntary redundancy, the termination benefits are measured based on the number of
employees expected to accept the offer. Benefits falling due more than 12 months after the end of the
reporting period are discounted to their present value.

1p119
(d) Profit-sharing and bonus plans
19p19
The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into
consideration the profit attributable to the company's shareholders after certain adjustments. The group
recognises a provision where contractually obliged or where there is a past practice that has created a constructive
obligation.
(e) Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made
for the estimated liability for annual leave as a result of services rendered by employees up to the balance
sheet date.
Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.
1p119, MB17.08,
GEM23.08

(a) Equity-settled share-based payment transactions
FRS2p15(b)
FRS2p19
FRS2p21
FRS2p20
FRS2p21A
FRS2p15
FRS2p20
The group operates a number of equity-settled, share-based compensation plans, under which the entity
receives services from employees as consideration for equity instruments (options) of the group. The fair
value of the employee services received in exchange for the grant of the options is recognised as an
expense. The total amount to be expensed is determined by reference to the fair value of the options
granted:
including any market performance conditions (for example, an entity's share price);
excluding the impact of any service and non-market performance vesting conditions (for example,
profitability, sales growth targets and remaining an employee of the entity over a specified time
period); and
including the impact of any non-vesting conditions (for example, the requirement for employees to
save or holding shares for a specified period of time).
At the end of each reporting period, the group revises its estimates of the number of options that are
expected to vest based on the non-marketing performance and service conditions. It recognises the
impact of the revision to original estimates, if any, in the income statement, with a corresponding
adjustment to equity.
In addition, in some circumstances employees may provide services in advance of the grant date and
therefore the grant date fair value is estimated for the purposes of recognising the expense during the
period between service commencement period and grant date.
When the options are exercised, the company issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (and share premium).
(b) Share-based payment transactions among group entities
The grant by the company of options over its equity instruments to the employees of subsidiary
undertakings in the group is treated as a capital contribution. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an
increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent
entity accounts.
(c) Social security contributions on share options gains
The social security contributions payable in connection with the grant of the share options is considered
an integral part of the grant itself, and the charge will be treated as a cash-settled transaction.
1p119
2.27 Provisions
37p14
37p72
37p63
Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the group has
a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will
be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions
comprise lease termination penalties and employee termination payments. Provisions are not recognised for
future operating losses.

Segment information
A4(3), A7
GEM18.50B(3)
GEM18.08
FRS8
p22(a)
The strategic steering committee is the groups chief operating decision-maker. Management has determined the
operating segments based on the information reviewed by the strategic steering committee for the purposes of
allocating resources and assessing performance.
FRS8
p22(a)(b)
The strategic steering committee considers the business from both a geographic and product perspective.
Geographically, management considers the performance in HK, UK, US, China and Russia. From a product
perspective, management separately considers the wholesale and retail activities in these geographies. The group
only has retail activities in the HK and US. The wholesale segments derive their revenue primarily from the
manufacture and wholesale sale of the group's own brand of shoes, Footsy Tootsy. The HK and US retail segments
derive their revenue from retail sales of shoe and leather goods including the group's own brand and other major
retail shoe brands.
FRS8
p22(a)
Although the China segment does not meet the quantitative thresholds required by IFRS/HKFRS 8 for reportable
segments, management has concluded that this segment should be reported, as it is closely monitored by the
strategic steering committee as a potential growth region and is expected to materially contribute to group
revenue in the future.
FRS8
p18
During 2013, US retail did not qualify as a reportable operating segment. However, with the acquisition in 2014 of
ABC group (see Note 41), US retail qualifies as a reportable operating segment; the comparatives have been
restated.
FRS8p16
All other segments primarily relate to the sale of design services and goods transportation services to other shoe
manufacturers in the UK and HK and wholesale shoe revenue from the Central American region. These activities
are excluded from the reportable operating segments, as these activities are not reviewed by the strategic steering
committee.
FRS8
p27(b), 28
The strategic steering committee assesses the performance of the operating segments based on a measure of
adjusted EBITDA. This measurement basis excludes discontinued operations and the effects of non-recurring
expenditure from the operating segments such as restructuring costs, legal expenses and goodwill impairments
when the impairment is the result of an isolated, non-recurring event. The measure also excludes the effects of
equity-settled share-based payments and unrealised gains/losses on financial instruments. Interest income and
expenditure are not allocated to segments, as this type of activity is driven by the central treasury function, which
manages the cash position of the group.
Revenue
FRS8p27(a)
Sales between segments are carried out at arm's length. The revenue from external parties reported to the strategic
steering committee is measured in a manner consistent with that in the income statement.
2014
2013 (Restated)
Inter-
Revenue from
Total
Inter-
Total segment
segment
external
segment
segment
Revenue from
external
revenue
revenue
customers
revenue
revenue
customers
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
HK wholesale
46,638
(11,403)
35,235
57,284
(11,457)
45,827
HK retail
43,257
43,257
1,682
1,682
US wholesale
28,820
(7,364)
21,456
33,990
(6,798)
27,192
US retail
42,672
42,672
2,390
2,390
Russia
26,273
(5,255)
21,018
8,778
(1,756)
7,022
China
5,818
(1,164)
4,654
3,209
(642)
2,567
40,273
(8,055)
32,218
26,223
(5,245)
20,978
UK
All other segments
Total
13,155
(2,631)
10,524
5,724
(1,022)
4,702
246,906
(35,872)
211,034
139,280
(26,920)
112,360

Entity-Wide information
FRS8p32
Breakdown of the revenue from all services is as follows:

2015
HK$000
202,884
8,000
150
211,034
Analysis of revenue by category

Sales of goods
Revenue from services
Royalty income
FRS8p33(a)
2014
HK$000
104,495
7,800
65
112,360
Revenue from external customers by country, based on the destination of the customer:
2015
HK$000
50,697
46,843
21,148
7,233
14,365
10,655
35,949
24,144
211,034
HK
US
Russia
China
Germany
France
Other countries
Total
2014
HK$000
48,951
8,403
8,039
3,840
13,717
6,999
14,168
8,243
112,360
Revenues from the individual countries included in Other European countries and Other countries are not
material.
FRS8p33(b)
Non-current assets, other than financial instruments and deferred income tax assets (there are no
employment benefit assets and rights arising under insurance contracts), by country:
2015
HK$000
61,855
69,037
7,531
4,523
19,526
15,179
8,652
15,077
201,380
HK
US
Russia
China
Germany
France
Other countries
Total
2014
HK$000
39,567
34,055
4,269
4,983
17,459
15,757
7,372
14,743
138,205
Non-current assets in the individual countries included in Other European countries and Other countries are
not material.
FRS8p34
Revenues of approximately HK$32,023,000 (2014: HK$28,034,000) are derived from a single external
customer. These revenues are attributable to the US retail and HK wholesale segments.
10Sch16(2)
A4(1)(a)
GEM18.50B
(1)(a)
Turnover consists of sales from wholesale and retail segments, which are HK$202,884,000 and
HK$104,495,000 for the years ended 31 December 2015 and 2014 respectively21.
21
10Sch 16(2) Turnover should consist of revenues from principal activities and should not usually include items of revenues and gains that arise incidentally. Before
the alignment of the Listing Rules to the requirements of the new CO, the information about Turnover is still required by the Listing Rules.

Exceptional items
An analysis of the amount presented as an exceptional item in these financial statements is given below.
Operating items
2015
HK$000
2014
HK$000
6,117
The inventory write-down of HK$6,117,000 relates to leather accessories that have been destroyed by fire
in an accident. This amount is included within cost of sales in the income statement.
Other income
18p35(b)(v)
18p35(b)(v)
A4(1)(h),
GEM18.50B(1)(b
)
2015
HK$000
2014
HK$000
Gain on remeasuring existing interest in ABC Group on acquisition

(Note 41)
Dividend income on available-for-sale financial assets
850
1,100
487
388
310
Investment income
Insurance reimbursement
2,437
698
66
2,437
764
The insurance reimbursement relates to the excess of insurance proceeds over the carrying values of goods
damaged.
10Sch13(1)(g)
The investment income from listed and unlisted investments for the year ended 31 December 2014 are
HK$1,542,000 (2013: 253,000) and HK$895,000 (2013: HK$445,000) respectively.
Other gains net
FRS7p20(a)(i),
A4(1)(h),
GEM18.50B(1)(b)
FRS7p20(a)(i)
21p52(a)
FRS7p24(a)
FRS7p24(b)
Financial assets at fair value through profit or loss (Note 24):

Fair value losses
Fair value gains
Foreign exchange forward contracts:
Held for trading
Net foreign exchange (losses)/ gains (Note 15)
Ineffectiveness on fair value hedges (Note 21)
Ineffectiveness on cash flow hedges (Note 21)
Net gains from fair value adjustment on investment properties (Note 17)
2015
HK$000
2014
HK$000
(508)
593
(238)
86
(277)
(1)
17
7,900
88
200
(1)
14
6,000
7,810
6,063

Expenses by nature
1p104
1p104
1p104
1p104,
10Sch13(1)(a),
A4(1)(k),
GEM18.50B(1)(f)
1p104
1p104
1p104,
10Sch13(1)(i),
10Sch15
10Sch15
4sch.p2.1
MB Code
M/GEM Code M
1p104
2015
HK$000
2014
HK$000
Changes in inventories of finished goods and work in progress

Inventory write-down (Note 6)
Employee benefit expense (Note 10)
6,950
47,185
6,117
40,310
(2,300)
31,845
15,577
Depreciation, amortisation and impairment charges (Notes 16, 16a and

18)
Transportation expenses
Advertising costs
31,204
8,584
12,759
17,013
6,112
6,000
Operating lease payments (Note 16a)
10,604
8,500
1,000
500
1,187
1,111
1,000
300
359
167,511
84,406
Auditors remuneration21.1
- Audit services
- Non-audit services
Other restructuring costs (Note 35)
Other expenses
Total cost of sales, distribution expenses and administrative
expenses
10 Employee benefit expense
19p171
FRS2p51(a)
19p53,A26(3),
GEM18.34(3)
19p141 A26(3),
GEM18.34(3)
19p141
1p104
2015
HK$000
2014
HK$000
28,363
9,369
690
10,041
3,802
822
Pension costs defined contribution plans
756
232
Pension costs defined benefit plans (Note 34)

Other post-employment benefits (Note 34)
948
184
561
119
40,310
15,577
Wages and salaries, including restructuring costs HK$799,000 (2014: nil)

(Note 35) and other termination benefits HK$1,600,000 (2014: nil)
Social security costs
Share options granted to directors and employees (Notes 28 and 29)
Total employee benefit expense
(a) Pensions defined contribution plans

A26(4) (2),
GEM18.34(4)(2)
Forfeited contributions totalling HK$56,000 (2014: HK$15,000) were utilised during the year leaving
HK$nil available at the year-end to reduce future contributions.
Contributions totalling HK$65,000 (2014: HK$20,000) were payable to the fund at the year-end.
21.1 As an explanation or reconciliation should be provided if the details of the auditors remuneration in the Corporate Governance Report were different from
information on audit fees disclosed in the financial statements, listed companies can choose to disclose fees for audit services and non-audit services in the financial
statements to be consistent with those disclosed in the Corporate Governance Report.

(b) Directors and chief executives23 emoluments
A24(1)-(6)
GEM18.28(1)(6)
S161
The remuneration22 of every director26aand the chief executive23for the year ended 31 December 2015 is set
out below:
Fees
HK$000
Name
Salary
HK$000
Discretionary
bonuses24
HK$000
Employers
Inducement
benefits
fees
(a)
scheme25
as director
HK$000 HK$000
HK$000
HK$000
Total
HK$000
Director26a
Mr. A
15
400
25
440
(b)
Mr. B
75
4,800
1,000
25
5,900
Mr. C
75
2,050
500
25
2,650
(c)
Mr. D
40
1,250
25
1,315
Mr. E
30
30
Mr. F
75
1,500
200
25
1,800
Mr. G
30
30
Mr. H
30
30
30
30
Chief
executive23
Mr. J
Notes:
(a) Other benefits include leave pay, share option, insurance premium and club membership.
(b) Resigned on [Date].
(c) Appointed on [Date].
S161
The remuneration of every director25aand the chief executive24 for the year ended 31 December 2014 is set
out below:
Fees
HK$000
Name
Salary
HK$000
Discretionary
bonuses24
HK$000
Employers
Inducement
benefits
fees
(a)
scheme25
as director
Total
HK$000 HK$000
HK$000
HK$000 HK$000
Director26a
Mr. A
75
4,400
Mr. B
75
4,800
800
43
5,718
Mr. C
75
2,050
600
25
2,750
Mr. E
30
30
Mr. F
75
1,500
300
1,875
Mr. G
30
30
Mr. H
30
30
30
Chief
executive23
Mr. J
4,475
30
22In making the above disclosures, reference can be made to AB 3 which discusses the minimum disclosure that directors remuneration would include remuneration
from the companys holding companies, fellow subsidiaries, associates or any other company and also that directors remuneration be apportioned between the parent
company and subsidiaries.
23The disclosure refers to the remuneration of a chief executive who is not a director. If the director who is also the chief executive, no separate disclosure in respect of
the remuneration of the chief executive is required, but a note should be added to indicate that the director is also the chief executive.
24 In addition to discretionary bonus payments, all bonus payments to which a director is contractually entitled and which are not fixed in amount, together with the
basis upon which they are determined must be disclosed here.
25Pension does not include payments from a pension scheme when contributions to the pension scheme are substantially adequate to maintain the scheme. This is
because contributions made to such pension schemes would already have been included under directors emoluments at the time the contributions were made.
26a In the case of a PRC issuer, references to directors or past directors shall also mean and include supervisors and past supervisors (as appropriate).

[In addition to the directors26b emoluments disclosed above, directors26b A and B of the company receive emoluments
from the parent company, amounting to HK$1,25 million each (2012: HK$1 million each), part of which is in respect of
their services to the company and its subsidiaries. No apportionment has been made as the directors26b consider that it is
impracticable to apportion this amount between their services to the group and their services to the companys parent
company.]
A24A
GEM18.29
During the year, Mr. B waived emoluments of HK$1 million and has agreed to waive 2013 emoluments of
HK$1 million.
Commentary:
The disclosures of Directors and chief executives emoluments have been moved to a separate note Note 45 Benefits and
interests of directors (disclosures required by section 383 of the Hong Kong Companies Ordinance (Cap. 622) and
Companies (Disclosure of Information about Benefits of Directors) Regulation (Cap. 622G))
(b) Five highest paid individuals

The five individuals whose emoluments were the highest in the group for the year include three (2014: four)
directors whose emoluments are reflected in the analysis shown in Note 45. The emoluments payable to the
remaining two (2014: one) individuals during the year are as follows:
A25(1)-(5)
GEM18.30(1)-(5)
Basic salaries, housing allowances, share options, other

allowances and benefits in kind
Contribution to pension scheme
Bonuses
Inducement fee
Compensation for loss of office:
- contractual payments
2015
HK$000
2014
HK$000
1,500
1,850
25
600
20
250
-
1,000
- other payment
10
3,155
A25(6)
GEM18.30(6)
2,100

2015
2014
Emolument bands (in HK dollar)
HK$1,000,001 - HK$1,500,000
HK$2,000,000 - HK$2,500,000
2
-
26b In the case of a PRC issuer, references to directors or past directors shall also mean and include supervisors and past supervisors (as appropriate).

11
A4(1)(j),
GEM18.50B(1)(e)
21p52(a)
Interest expense:
Bank borrowings wholly repayable within 5 years
Dividend on redeemable preference shares wholly repayable within 5 years
(Note 32)
Convertible bond wholly repayable within 5 years (Note 32)
Provisions: unwinding of discount (Note 35)
Allowance for impairment of trade receivables: unwinding of discount (Note
22)
Net foreign exchange gains on financing activities (Note 15)
FRS7p23(d)
Fair value gains on financial instruments:

Interest rate swaps: cash flow hedges, transfer from equity
FRS7
p24(a)(i)
Interest rate swaps: fair value hedges
FRS7
p24(a)(ii)
Fair value adjustment of bank borrowings attributable to interest rate risk
FRS7p20(b)
10Sch2(b)
10Sch13(1)(b)
37p84(e)
Finance expenses
Less: amounts capitalised on qualifying assets
Total finance expenses
Finance income:
Interest income on short-term bank deposits
Interest income on available-for-sale financial assets
Interest income on loans to related parties (Note 42)
FRS7p20(b)
Finance income
Net finance expenses
2015
HK$000
2014
HK$000
(5,314)
(10,644)
(1,950)
(3,083)
(550)
(44)
(1,950)
(648)
(37)
(3)
2,594
(2)
996
102
88
16
31
(16)
(31)
(8,248)
75
(8,173)
(12,197)
(12,197)
550
963
217
489
984
136
1,730
1,609
(6,443)
(10,588)
12a Investments in and loans to subsidiaries Company Subsidiaries

10Sch18
(a) Investments in subsidiaries
10Sch9(1)(a)
27p16(c)
Investments, at cost:
Shares listed overseas
Unlisted shares
Capital contribution relating to share-based payment
2014
HK$000
2013
HK$000
37,650
29,177
379
37,650
28,454
206
67,206
66,310
148,000
126,000
10Sch12(11)
Market value of listed shares
27p16(c)
Investments in group undertakings are recorded at cost, which is the fair value of the consideration paid.
Refer to Notes 40 and 41 for the additions of investments in subsidiaries for the year.
DV
The capital contribution relating to share based payment relates to options on 1,210 shares granted by the
company to employees of subsidiary undertakings in the group. Refer to Note 28 for further details on the
group's share option schemes.

FRS12
p10(a),
12(a-c)
The following is a list of the principal subsidiaries at 31 December 2015:

Name
S128
(1)-(2)
S128
(4)-(5)
A9,
GEM
18.10
27p16
(b)
Place of
incorporation
and kind of legal
entity2693
Principal activities and

place of operation2794
Particulars of issued share

capital and debt
securities2895
Black
Limited
Hong Kong,
Limited liability
company
Investment holding and

shoes manufacturing in
Hong Kong
10,000 Ordinary shares
Blue
Limited
Hong Kong,
limited liability
company
Shoes manufacturing in
Hong Kong and
Mainland China
2,000,000 Ordinary
shares
Proportion
of ordinary
shares
directly held
by parent
(%)
Proportion
of ordinary
shares held
by the
group (%)
Proportion of
ordinary
shares held by
noncontrolling
interests
(%)
100%
100%
100%
60%
40%
30%
Proportion
of
preference
shares held
by the group
(%)
100%
2,000 Preference shares

Red
Limited
Shoes wholesale and

retailing in Canada and
the United States
U.S.A., limited
liability
company
Shoes wholesale and

Kingdom

1 UK pound each.
70%
Pink
Limited
United
Kingdom,
limited liability
company
Shoes wholesale and

Kingdom

1 UK pound each.
100%
Green
Limited
Japan, limited
liability
company
Shoes wholesales and

retailing in Mainland
China, Japan and
Singapore
1,000,000 ordinary
shares of 10,000
Renminbi each
40%
60%
U.S.A limited
liability
company
Shoe and leather goods

retailer
1,000,000 Ordinary
40%
60%
ABC
Group
Delta Inc
27p17
2,000,000 Ordinary
U.S.A., limited
liability
company
Debenture of
US$500,000 repayable
from 1 January 2015 to 31
December 2016.
Although the group owns less than half of the equity interests in Green Ltd and Delta Inc, it is able to gain power over more than one half of the voting
rights by virtue of an agreement with other investors. Consequently, the group consolidates Green Ltd and Delta Inc.
A9(1),
GEM18.10(1)
26
27
28
10Sch18(3)
For a MB listed parent company the kind of legal entity information is required only for its subsidiaries established in the PRC. For a
GEM listed parent company, the kind of legal entity information and nature of business is required to be shown for each subsidiary.
Unlisted companies need not disclose the place of operation of subsidiaries.
Unlisted companies need not disclose the particulars of subsidiaries debt securities and classes of issued share capital not held by them.
Other disclosures
Where the companys shares (or debentures) are held by its subsidiaries other than as security for an ordinary business transaction, notes
along the following lines should be disclosed:At 31 December 2015, the companys subsidiaries held directly or indirectly x fully paid 10% preference shares of the company of HK$x
each.
Where subsidiaries are not audited by the principal auditor, that fact is recommended to be disclosed by notes along the following lines,
with an asterisk marked against the appropriate subsidiary:-
PN600.1(17)
Subsidiaries not audited by PricewaterhouseCoopers. The aggregate net assets of subsidiaries not audited by PricewaterhouseCoopers
amounted to approximately x% of the groups total assets/turnover/profits.
27p40(e)
Disclose the reporting date of the financial statements of a subsidiary when such financial statements are used to prepare consolidated
financial statements and are as of a reporting date or for a period that is different from that of the parent, and the reason for using a
different reporting date or period.

1p77,
10Sch18(2)
(b) Loans to subsidiaries29
FRS7p31
10Sch9(4)
The loans to subsidiaries are unsecured, interest free, denominated in HK dollar and repayable on [date]. The fair
values of loans to subsidiaries are HK$90.2 million (2013: HK$25.4 million), which are based on cash flows
discounted using a rate based on the borrowing rate of 7.2% (2013: 7.2%). The discounted rate equals to HIBOR plus
appropriate credit rating.
(a) Material non-controlling interests
FRS12p12 (f)
The total non-controlling interest for the period is HK$7,188,000 (2013: HK$1,766,000), of which HK$5,327,000
(2013: nil) is for ABC Group and HK$2,466,000 (2013: HK$2,392,000) is attributed to Delta Inc. The non-controlling
interests in respect of Red Limited and Green Limited are not material.
Significant restrictions
FRS12p10(b)(
i)
Cash and short-term deposits of HK$1,394,000 (2013: HK$1,006,000) are held in China and are subject to local
exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital
from the country, other than through normal dividends.
Summarised financial information on subsidiaries with material non-controlling interests
FRS12p12(g),
B10(b)
Set out below are the summarised financial information for each subsidiary that has non-controlling interests that are
material to the group. See Note 40 for transactions with non-controlling interests.
Delta Inc
ABC Group
2015
2014
2015
2014
HK$000
HK$000
HK$000
HK$000
5,890
4,828
16,935
14,742
(3,009)
(2,457)
(4,514)
(3,686)
2,881
2,371
12,421
11,056
3,672
2,357
10,008
8,536
(2,565)
(1,161)
(3,848)
(1,742)
1,107
1,196
6,160
6,794
3,988
3,567
18,581
17,850
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Summarised income statement
Delta Inc
Revenue
ABC Group
2015
2014
2015
2014
HK$000
HK$000
HK$000
HK$000
19,602
17,883
29,403
26,825
4,218
3,007
6,327
6,611
(1,692)
(1,411)
(2,838)
(2,667)
2,526
1,596
3,489
3,944
23
19
369
(203)
554
495
2,895
1,393
4,066
4,458
Total comprehensive income allocated to NonControlling Interests
1,737
836
1,138
Dividends paid to Non-Controlling Interests
1,770
550
150

Income tax expense/income
Post-tax profit from discontinued operations
29 Credit risk disclosures should be included, where appropriate (IFRS/HKFRS7p36, 37)

13
Income tax expense
10Sch17(3),
10Sch12(5),
A4(1)(c),
GEM18.50B(
1)(h)
12p80(a),
12p80(b),
10Sch17(4)
12p80(c),
12p80(d),
10Sch17(4)
Hong Kong profits tax has been provided at the rate of 16.5% (2013: 16.5%) on the estimated assessable profit
for the year. Taxation on overseas profits has been calculated on the estimated assessable profit for the year at
the rates of taxation prevailing in the countries in which the group operates.32.1
2015
HK$000
2014
HK$000
Current tax:
Current tax on profits for the year
Adjustments in respect of prior years
14,046
6,050
150
Total current tax
14,196
6,050
199
2,125
(97)
102
14,298
2,125
8,175
Deferred tax (Note 33):

Origination and reversal of temporary differences
Impact of change in the [country name] tax rate
Total deferred tax
Income tax expense
12p81(c)
10Sch12(12)
The tax on the groups profit before tax differs from the theoretical amount that would arise using the
weighted average tax rate applicable to profits of the consolidated entities as follows:
2015
HK$000
2014
HK$000
Profit before tax
48,620
25,215
Tax calculated at domestic tax rates applicable to profits in the respective

countries
Tax effects of:
Associates and Joint Ventures results reported net of tax
Income not subject to tax
Expenses not deductible for tax purposes
Utilisation of previously unrecognised tax losses
Tax losses for which no deferred income tax asset was recognised
Re-measurement of deferred tax change in the [country name] tax rate
Adjustment in respect of prior years
15,924
7,709
(414)
(1,385)
1,540
(1,450)
30
(97)
150
(278)
(707)
1,104
347
Tax charge
14,298
8,175
12p81(d)
The weighted average applicable tax rate was 33% (2014: 31%). The increase is caused by a change in the
profitability of the groups subsidiaries in the respective countries partially offset by the impact of the
reduction in the tax rate of [country name] (see below).
12p81(d)
During the year, as a result of the change in the corporation tax rate of [country name] from 30% to 28% that
was substantively enacted on 26 June 2015 and that will be effective from 1 April 2016, the relevant deferred
tax balances have been re-measured. Deferred tax expected to reverse in the year to 31 December 2016 has
been measured using the effective rate that will apply in [country name] for the period (28.5%)32.
1p125
10p22(h)
Further reductions to the [country name] tax rate have been announced. The changes, which are expected to
be enacted separately each year, propose to reduce the rate by 1% per annum to 24% by 1 April 2019. The
changes had not been substantively enacted at the balance sheet date and, therefore, are not recognised in
these financial statements.
32
If the effect of the proposed changes is material, disclosure should be given of the effect of the changes, either as disclosure of events after the reporting period or as future material adjustment to the carrying amounts of assets and liabilities. This disclosure
needs to be tailored but does not need to be reconciled to the income statement.
32.1 New Co does not require such disclosure, however such information is useful to the understanding of the users of financial statements, it is recommended to be kept.

15
21p52(a)
The exchange differences (charged)/credited to the income statement are included as follows:
Other (losses)/gains net (Note 8)

Net finance expenses (Note 11)
2015
HK$000
2014
HK$000
(277)
2,594
200
996
2,317
1,196
15a Profit attributable to owners of the company

S123(5)(b)(ii)
The profit attributable to owners of the company is dealt with in the financial statements of the company to
the extent of HK$14,135,000 (2013: HK$10,026,000).
16 Leasehold land and land use rights Group

17p35
10Sch12(9)(b)
10Sch31(b)-(d)
The groups interests in leasehold land and land use rights represent prepaid operating lease payments and
their net book value are analysed as follows:
2013
HK$000
29,148
29,981
11,800
59,129
11,800
Outside Hong Kong, held on:

Leases37 of over 50 years
16p74(a)
10Sch12(4)
2014
HK$000
2015
HK$000
2014
HK$000
At 1 January
Additions
Amortisation of prepaid operating lease payment
11,800
4,929
43,500
(1,100)
12,000
(200)
At 31 December
59,129
11,800
Bank borrowings are secured on land for the carrying amount of HK$29,148,000 (2014: Nil) (Note 32).
37 The above refers to remaining lease periods.

16a Property, plant and equipment - Group

1p78(a)
Land and
Buildings
HK$000
16,450
(1,333)
71,072
(17,524)
20,025
(3,690)
107,547
(22,547)
Net book amount
15,117
53,548
16,335
85,000

Additions
Disposals (Note 37)
15,117
(381)
1,588
(436)
53,548
(703)
2,970
(2,607)
(7,576)
16,335
(423)
1,484
(380)
(8,236)
85,000
(1,507)
6,042
(2,987)
(16,248)
15,888
45,632
8,780
70,300
At 31 December 2014
Cost
17,648
(1,760)
68,125
(22,493)
20,026
(11,246)
105,799
(35,499)
Net book amount
15,888
45,632
8,780
70,300

Additions
Disposals (Note 37)
Transfers
Transferred to disposal group
classified as held for sale (Note 26)
15,888
1,601
5,572
1,126
(2,000)
500
(3,445)
45,632
1,280
5,513
427
(3,729)
(7,768)
8,780
342
13,199
2,202
(608)
(13,441)
1,000
(500)
-
70,300
3,223
24,284
4,755
(6,337)
(24,654)
(341)
(1,222)
(1,563)
18,901
40,133
10,474
500
70,008
At 31 December 2015
Cost
23,546
(4,645)
58,268
(18,135)
26,927
(16,453)
500
-
109,241
(39,233)
Net book amount
18,901
40,133
10,474
500
70,008
396
16p73(d)
16p73(e)
16p73(e)(viii)
16p73(e)(i)
16p73(e)(ix)
16p73(e)(vii)
16p73(d)
16p73(d)
16p73(e)(viii)
16p73(e)(iii)
16p73(e)(i)
16p73(e)(ix)
16p73(e)(vii)
FRS5p38
16p73(d)
396
Furniture,
fittings
and Construction
equipment
in progress
HK$000
HK$000
Vehicles
and
machinery
HK$000
At 1 January 2014
Cost
Total
HK$000
If the company chooses the revaluation model to measure its buildings, add the following disclosures.
16p77(e)
If buildings were stated on the historical cost basis, the amounts would be as follows:
Cost
Net book amount
2015
HK$000
2014
HK$000
xxx
(xxx)
xxx
(xxx)
xxx
xxx
The analysis of the cost or valuation at 31 December 2014 and 2013 of the above assets is as follows:
At cost
At valuation
10Sch12(7)
Buildings
HK$000
Vehicles and
machinery
HK000
Furniture, fittings
and equipment
HK$000
Total
HK$000
xxx
xxx
xxx
-
xxx
-
xxx
xxx
xxx
xxx
xxx
xxx

The net book value of the groups interests in leasehold land classified as finance lease are analysed as
follows:
10Sch12(9)(b)
10Sch31(b)(d)
2014
HK$000
2013
HK$000
11,000
11,000
In Hong Kong, held on:

DV
Property, plant and equipment transferred to the disposal group classified as held-for-sale amounts to
HK$1,563,000 and relates to assets which are used by Shoes Limited (part of the wholesale segment). See
Note 26 for further details regarding the disposal group held for sale.
DV 1p104
Depreciation expense of HK$10,295,000 (2014: HK$8,675,000) has been charged in 'cost of goods sold',
HK$8,242,000 (2014: HK$4,138,000) in 'selling and marketing costs' and HK$6,117,000 (2014:
HK$3,435,000) in 'administrative expenses'.
17p35(c)
Lease rentals amounting to HK$1,172,000 (2014: HK$895,000) and HK$9,432,000 (2014:

HK$7,605,000) relating to the lease of machinery and property, respectively, are included in the income
statement (Note 9).
Construction work in progress as at 31 December2015 mainly comprises new shoe manufacturing
equipment being constructed in the UK.
23p26
16p74(a),
10Sch12(4),
During the year, the group has capitalised borrowing costs amounting to HK$75,000 (2014: nil) on
qualifying assets. Borrowing costs were capitalised at the weighted average rate of its general borrowings
of 7.5%.
Bank borrowings are secured on buildings for the value of HK$8,532,000 (2014: HK$Nil) (Note 32).
Vehicles and machinery includes the following amounts where the group is a lessee under a finance lease:
17p31(a)
Cost capitalised finance leases

Net book amount
17p31(e)
2015
HK$000
2014
HK$000
13,996
(5,150)
14,074
(3,926)
8,846
10,148
The group leases various vehicles and machinery under non-cancellable finance lease agreements. The lease
terms are between 3 and 15 years, and ownership of the assets lie within the group.
39 The above refers to remaining lease periods.

17 Investment properties - Group
40p76(a)
40p76(a)
40p76(c)
40p76(d)
40p76(f)
At fair value
Opening balance at 1 January
Acquisitions
Classified as held for sale or disposals40
Net gains from fair value adjustment (Note 8)
Transfer (to)/from inventories and owner-occupied property40
40p76
Closing balance at 31 December
40p75(f)
(a) Amounts recognised in profit and loss for investment properties
40p76
40p75(f)(i)
40p75(f)(ii)
40p75(f)(iii)
2015
HK$000
2014
HK$000
17,000
90
10
7,900
-
11,000
6,000
-
25,000
17,000
2015
HK$000
2014
HK$000
180
(7)
165
(6)
(3)
(3)
170
156
Rental income
Direct operating expenses from property that generated rental income
Direct operating expenses from property that did not generate rental
income
10Sch13(1)(h)
40p75(h)
As at 31 December 2015, the group had no unprovided contractual obligations for future repairs and
maintenance (2012: Nil).
The Group's investment properties are held within a business model whose objective is to consume
substantially all of the economic benefits embodied in the investment properties through sale. The Group
has measured the deferred tax relating to the temporary differences of these investment properties using
the tax rates and the tax bases that are consistent with the expected manner of recovery of these investment
An independent valuation of the groups investment properties was performed by the valuer, ABC
Property Surveyors Limited, to determine the fair value of the investment properties as at 31
December 2015 and 2014. The revaluation gains or losses is included in Òther gains - net' in income
statement (Note 8). The following table analyses the investment properties carried at fair value, by
valuation method.
FRS13p93(a),( b)

Description

measurements
- Office units- UK
Pacific
Quoted
prices in
active
markets for
identical
assets
(Level 1)
HK$000
Significant
other
observable
inputs
(Level 2)
HK$000
Significant
unobservable
inputs (Level 3)
HK$000
Total
HK$000
3,678
-
14,519
3,678
14,519
6,803
6,803
3,678
21,322
25,000
40 The line items are shown for illustrative purpose only.

18 Intangible assets - Group
Trademarks
Goodwill and licences
HK$000
HK$000
38p118
38p118(c)
Contractual
customer
relationships
HK$000
Internally
generated
software
development
costs
HK$000
Total
HK$000
At 1 January 2014
Cost
12,546
8,301
(330)
1,455
(510)
22,302
(840)
Net book amount
12,546
7,971
945
21,462
38p118(e)(vi)

Additions
12,546
(546)
7,971
(306)
700
(365)
945
(45)
(200)
21,462
(897)
700
(565)
10Sch9(1)(b)
12,000
8,000
700
20,700
38p118(c)
At 31 December 2014
Cost
12,000
8,710
(710)
1,400
(700)
22,110
(1,410)
Net book amount
12,000
8,000
700
20,700
12,000
341
4,501
(4,650)
8,000
96
684
3,000
(402)
1,000
(278)
700
134
2,366
(120)
20,700
571
3,050
8,501
(4,650)
(800)
(100)
(1,000)
(1,100)
12,092
10,378
722
3,080
26,272
38p118(e)
38p118(e)(vii)
38p118(e)(i)
38p118(e)
FRS5p38,
38p118(e)(ii)

Additions
Impairment charge (Note 9)
Transferred to disposal group classified as held
for sale (Note 26)
10Sch9(1)(b)
38p118(e)(vii)
38p118(e)(i)
38p118(e)(i)
38p118(e)(iv)
38p118(e)(vi)
38p118(c)
At 31 December 2015
Cost
16,742
(4,650)
11,480
(1,102)
1,000
(278)
3,900
(820)
33,122
(6,850)
Net book amount
12,092
10,378
722
3,080
26,272
36p126(a)
The carrying amount of the segment (Russia - wholesale) has been reduced to its recoverable amount through
recognition of an impairment loss against goodwill. This loss has been included in cost of goods sold in the income
statement.
38p118(d)
Amortisation of HK$40,000 (2014: HK$100,000) is included in the cost of goods sold the income statement;
HK$680,000 (2014: HK$365,000) in distribution expenses; and HK$80,000 (2014: HK$100,000) in administrative
expenses.

36p134(d)(ii)
Other operating costs are the fixed costs of the CGUs, which do not vary significantly with sales volumes or prices.
Management forecasts these costs based on the current structure of the business, adjusting for inflationary increases
and these do not reflect any future restructurings or cost saving measures. The amounts disclosed above are the
average operating costs for the five-year forecast period.
36p134(d)(ii)
Annual capital expenditure is the expected cash costs in the US Retail segment for refurbishing stores. This is based
on the historical experience of management in the ABC group and the planned refurbishment expenditure required
post acquisition. No incremental revenue or cost savings are assumed in the value-in-use model as a result of this
expenditure.
36p134(d)(ii)
The long term growth rates used are consistent with the forecasts included in industry reports. The discount rates
used are pre-tax and reflect specific risks relating to the relevant operating segments.
36p130(a)
The impairment charge arose in a wholesale CGU in Step-land (included in the Russian operating segment) following
a decision in early 2015 to reduce the manufacturing output allocated to these operations (Note 35). This was a result
of a redefinition of the groups allocation of manufacturing volumes across all CGUs in order to benefit from
advantageous market conditions. Following this decision, the group reassessed the depreciation policies of its
property, plant and equipment in this country and estimated that their useful lives would not be affected. No other
class of asset other than goodwill was impaired. The pre-tax discount rate used in the previous years for the wholesale
CGU in Step-land was 13.5%.
36p134(f)
In European Wholesale, the recoverable amount calculated based on value in use exceeded carrying value by C705.
An annual sales volume growth rate of 1.5%, an annual sales price rate of 1.2%, a gross margin of 55%, annual
operating costs of HK$8,900,000, a fall in long term growth rate to 1.6% or a rise in discount rate to 14.9%, all
changes taken in isolation, would remove the remaining headroom.
Commentary
IAS/HKAS 36 paragraph 134 requires disclosure of information for CGUs for which the carrying amount of
goodwill or intangible assets is significant in relation to the entity's total goodwill or intangible assets.
IAS/HKAS 36 paragraph 134(d)(i) requires disclosure of each of the key assumptions on which management
has based its forecasts and to which the recoverable amounts are most sensitive and IAS/HKAS 36 paragraph
134(f)(iii) requires disclosure of the amounts by which these values must change for the recoverable amount to
be equal to the carrying amount.
The relevant assumptions will vary for each reporting entity dependent upon the individual facts and
circumstances of the reported cash-generating units. The disclosures of key assumptions have been enhanced
in these illustrative financial statements.
19a Financial instruments by category Group and Company

(a) Group
Assets at fair
value Derivatives
used for
Loans and through the
receivables profit & loss
hedging
HK$000
HK$000
HK$000
FRS7p6
31 December 2015
prepayments44
profit or loss
Restricted cash
Total
Availablefor-sale
Total
HK$000 HK$000
361
1,103
19,370
19,370
1,464
20,787
20,787
14,928
3,000
11,820
11,820
14,928
3,000
38,715
12,181
1,103
19,370
71,369
44 Prepayments are excluded from the trade and other receivables balance as this analysis is required only for financial instruments.

2015
HK$000
2014
HK$000

89,794
5,039
25,000
7,230
Total
94,833
32,230
Financial liabilities at
amortised cost
2014
2015
HK$000 HK$000
Borrowings
72,822
30,000
72,822
30,000
19b Credit quality of financial assets- Group and Company

FRS7p36(c)
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates:
Group
2015
2014
HK$000 HK$000
Trade receivables
Counterparties with external credit rating (Moodys)
A
BB
BBB
5,895
3,200
1,500
5,757
3,980
1,830
10,595
11,567
Group
2015
2014
HK$000 HK$000
Counterparties without external credit rating
Group 1
Group 2
Group 3
Total unimpaired trade receivables
750
4,832
1,770
555
3,596
1,312
7,352
5,463
17,947
17,030

Cash at bank and short-term bank deposits47
Group
AAA
AA
A
2015
HK$000
8,790
5,300
3,038
2014
HK$000
13,890
7,840
9,832
17,128
31,562
Company
2014
2013
HK$000 HK$000
3,711
4,981
1,026
2,004
4,737
6,985
Group
2015
2014
HK$000 HK$000
Available-for-sale debt securities
AA
DV
Derivative financial assets

AAA
AA
DV
347
264
347
264
1,046
418
826
370
1,464
1,196
Group
2015
2014
HK$000 HK$000
Group 2
Group 3
2,501
167
2,668
1,301
87
1,388
Group 1 new customers/related parties (less than 6 months).

Group 2 existing customers/related parties (more than 6 months) with no defaults in the past.
Group 3 existing customers/related parties (more than 6 months) with some defaults in the past. All
defaults were fully recovered.
Note: None of the loans to related parties is past due but not impaired.
47 The rest of the balance sheet item cash and cash equivalents is cash on hand.

20 Available-for-sale financial assets48 - Group

2015
HK$000
2014
HK$000
14,910
646
473
4,887
(1,256)
(130)
14,096
(459)
1,150
(152)
(850)
690
275
19,370
(17,420)
14,910
(14,910)
1,950
1p79(b)
At 1 January
Additions
Disposals
Net losses transfer from equity (Note 30)
Reclassification of revaluation of previously held interest in ABC Group (Note
30)
Net gains transfer to equity (Note 30)
1p66
At 31 December
1p66
Current portion
FRS7p20(a)(ii)
The group removed profits of HK$217,000 (2014: HK$187,000) and losses HK$87,000 (2014: HK$35,000)
from equity into the income statement. Losses in the amount of HK$55,000 (2014: HK$20,000) were due to
impairments.
FRS7p31, 34,
10Sch9(1)(a)
10Sch9(3)
Available-for-sale financial assets include the following:
Listed securities:
Debentures with fixed interest of 6.5% and maturity date of 27 August 2015
Non-cumulative 9.0% non-redeemable preference shares
Unlisted securities:
Debt securities with fixed interest ranging from 6.3% to 6.5% and maturity
dates between July 2016 and May 2018
2015
HK$000
2014
HK$000
8,335
5,850
4,550
210
78
8,300
2,086
4,260
19,023
14,646
347
264
19,370
14,910
48 It is presumed that where an investor holds less than 20% of the voting power of an entity, either directly or indirectly, it does not have significant influence over that
entity. However, despite the investors interest in an entitys voting shares, this presumption can be rebutted where an investor can demonstrate that it has
significant influence, e.g. with representation on the board of directors or equivalent governing body of the investee.

2015
HK$000
10Sch12(II)
FRS7p34(c)
Available-for-sale financial assets are denominated in the following currencies:
2014
HK$000
19,023
14,646
2015
HK$000
2014
HK$000
7,897
5,850
4,550
1,073
8,121
2,086
4,260
443
19,370
14,910
HK dollar
UK pound
US dollar
Other currencies
FRS13p93(b), (d)
The fair values of unlisted securities are based on cash flows discounted using a rate based on the market
interest rate and the risk premium specific to the unlisted securities (2014: 6%; 2012: 5.8%). The fair
values are within level 2 of the fair value hierarchy (see Note 3.3).
FRS7p36(a)
The maximum exposure to credit risk at the reporting date is the carrying value of the debt securities
classified as available-for-sale.
FRS7p36(c)
None of these financial assets is either past due or impaired.
10Sch19(1),
24p20
Available-for-sale financial assets of aggregated carrying amount of HK$200,000 are in shares of fellow
subsidiaries.
10Sch12(4),
24p21(h)
Listed securities of aggregate carrying amount of HK$1.2 million have been pledged to a bank to secure
loan and overdraft facilities for XX Limited, a fellow subsidiary.
At 31 December 2014, the carrying amounts of interests in each of the following companies (if any) exceed
10% of total assets of the company and the group.
Name
Place of
incorporation
Particulars of
Principal activities issued shares held Interest held
xx
xx
xx
S129(2)
xx
xx

21

2015
2014
Assets Liabilities
Assets Liabilities
HK$000 HK$000 HK$000 HK$000
FRS7p22(a)(b)
FRS7p22(a)(b)
FRS7p22(a)(b)

Forward foreign exchange contracts cash flow
hedges
Forward foreign exchange contracts held-for-trading
Total
1p66, 69
1p66, 69
351
57
110
37
220
49
121
11
695
361
180
268
606
321
317
298
1,464
595
1,196
747
345
50
100
35
200
45
120
9
395
135
245
129
1,069
460
951
618
Less non-current portion:

Current portion
Derivatives holding for trading purpose are classified as a current asset or liability. The full fair value of a
hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged
item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less
than 12 months.
FRS7p24
The ineffective portion recognised in the profit or loss that arises from fair value hedges amounts to a loss
of HK$1,000 (2014: loss of HK$1,000) (Note 8). The ineffective portion recognised in the profit or loss
that arises from cash flow hedges amounts to a gain of HK$17,000 (2014: a gain of HK$14,000) (Note 8).
There was no ineffectiveness to be recorded from net investment in foreign entity hedges.
39p91(a),101(a)
During the year the Group's derivative financial instruments were novated to a central counterparty
following a change in the law. This had no impact on the Group's hedge accounting.
(a) Forward foreign exchange contracts
FRS7p31
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December
2015 were HK$92,370,000 (2014: HK$89,689,000).
FRS7p23(a)
39p100, 1p79(b)
The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at
various dates during the next 12 months. Gains and losses recognised in the hedging reserve in equity
(Note 30) on forward foreign exchange contracts as of 31 December 2015 are recognised in the income
statement in the period or periods during which the hedged forecast transaction affects the income
statement. This is generally within 12 months from the end of the reporting period unless the gain or loss is
included in the initial amount recognised for the purchase of fixed assets, in which case recognition is over
the lifetime of the asset (five to ten years).
(b) Interest rate swaps
FRS7p31
The notional principal amounts of the outstanding interest rate swap contracts at 31 December 2015 were
HK$4,314,000 (2014: HK$3,839,000).
FRS7p23(a),
1p79(b)
At 31 December 2015, the fixed interest rates vary from 6.9% to 7.4% (2014: 6.7% to 7.2%), and the main
floating rates are EURIBOR and LIBOR. Gains and losses recognised in the hedging reserve in equity (Note
30) on interest rate swap contracts as of 31 December 2015 will be continuously released to the income
statement until the repayment of the bank borrowings (Note 32).
(c) Hedge of net investment in foreign entity
FRS7p22, 1p79(b)
A proportion of the groups US dollar-denominated borrowing amounting to HK$321,000 (2014:

HK$321,000) is designated as a hedge of the net investment in the groups US subsidiary. The fair value of
the borrowing at 31 December 2015 was HK$370,000 (2014: HK$279,000). The foreign exchange loss of
HK$45,000 (2014: gain of HK$40,000) on translation of the borrowing to currency at the end of the year
is recognised in other comprehensive income.

The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the
balance sheet.
FRS7p36(a)
22 Trade and other receivables Group
FRS7p36,
1p77
10Sch6
FRS7p16
1p78(b)
1p78(b)
1p78(b),
24p18(b)
4Sch.p1.1
1p78(b),
24p18(b)
1p78(b),
1p66
1p66
Trade receivables
Less: allowance for impairment of trade
receivables
Prepayments
2015
HK$00
0
2014
HK$000
18,174
17,172
(109)
18,065
1,050
(70)
17,102
911
54
593
343
250
46
620
385
235
2,325
22,087
1,003
19,682
(2,322)
19,765
(1,352)
18,330

Loans to employees
-Loans to key management
-Loans to other employees
Loans to other related parties (Note 42)
Less non-current portion: loans to related
parties
Current portion
All non-current receivables are due within five years from the end of the year.
FRS7p25
The fair values of trade and other receivables are as follows:

Group
2015
HK$00
0
18,065
54
2,722
20,841
Trade receivables
Receivables from related parties
4Sch.p1.1
2014
HK$000
17,102
46
1,398
18,546
The loans to employees given by the company is for the purpose of enabling the selected employees to acquire the shares
of the company.
s280,
s281, s282
Commentary:
The loans made under the authority s280 and s281 include loans given by the company (and not include its subsidiaries)
to employees of the company and its subsidiaries for the purpose of an employee share scheme or acquisition of beneficial
ownership of shares in the company or its holding company by the employees. Employees also include the former
employees, as well as those employees spouses, widows, widowers, or minor children.
FRS13p93(
b),(d),
FRS13p97
The fair values of loans to related parties are based on cash flows discounted using a rate based on the borrowings rate of
7.5% (2014: 7.2%). The discount rate equals to LIBOR plus appropriate credit rating. The fair values are within level 2 of
the fair value hierarchy.
24p18(b)(i) The
effective interest rates on non-current receivables were as follows:
FRS7p14,
10Sch12(4)
2015
2014
6.5-7.0%
6.5-7.0%
Certain UK subsidiaries of the group transferred receivable balances amounting to HK$1,014,000 to a bank in exchange
for cash during the year ended 31 December 2015. The transaction has been accounted for as a collateralised borrowing
(Note 32). In case the entities default under the loan agreement, the bank has the right to receive the cash flows from the
receivables transferred. Without default, the entities will collect the receivables and allocate new receivables as collateral.

GEM18.50B
(2)(b)(ii)(a)
A4(2)(b)(ii)(a)
The majority of the groups sales are on letter of credit or documents against payment. The remaining amounts are
with credit terms of 60 days and which are mostly covered by customers standby letters of credit or bank guarantees.
At 31 December 2014 and 2013, the ageing analysis49 of the trade receivables based on invoice date were as follows:
2014
2013
HK$000
HK$000
17,881
297
50
16,997
187
34
18,228
17,218
Up to 3 months
3 to 6 months
Over 6 months
DV
As of 31 December 2014, trade receivables of HK$17,670,000 (2013: HK$16,595,000) were fully performing.
FRS7 p37(a)
As of 31 December 2014, trade receivables of HK$277,000 (2013: HK$207,000) were past due but not
impaired. These relate to a number of independent customers for whom there is no significant financial
difficulty and based on past experience, the overdue amounts can be recovered. The ageing analysis of these
trade receivables is as follows:
Up to 3 months
3 to 6 months
FRS7 p37(b)
2014
HK$000
2013
HK$000
177
100
108
99
277
207
As of 31 December 2014, trade receivables of HK$227,000 (2013: HK$142,000) were impaired. The amount
of the provision was HK$109,000 as of 31 December 2014 (2013: HK$70,000). The individually impaired
receivables mainly relate to wholesalers, which are in unexpectedly difficult economic situations. It was
assessed that a portion of the receivables is expected to be recovered. The ageing of these receivables is as
follows:
3 to 6 months
Over 6 months
49
2014
HK$000
2013
HK$000
177
50
108
34
227
142
A4(2)(4.2), GEM18.50B(2)(Note)
The disclosure requirement of the Listing Rules for ageing analysis of trade debtors should include the amounts due by related companies which are trading in nature.
Moreover, it is recommended that the ageing analysis should be presented on the basis of the date of the relevant invoice and categorised into time-bands that are
appropriate for the business based on analysis used by an issuers management to monitor the issuers financial position (e.g. where the credit period is 30 days from the
date of invoice, the ageing analysis could be categorised into 30 days, 60 days, 90 days, 120 days, etc.). The basis on which the ageing analysis is presented should be
disclosed.

FRS7p16
FRS7p20(e)
Movements on the groups allowance for impairment of trade receivables are as follows:
At 1 January
Provision for receivables impairment
Receivables written off during the year as uncollectible
Unwind of discount
At 31 December
2015
HK$000
2014
HK$000
70
74
(28)
(10)
3
38
61
(23)
(8)
2
109
70
The creation and release of provision for impaired receivables have been included in other expenses in the
income statement (Note 9). Unwind of discount is included in finance expenses in the income statement
(Note 11). Amounts charged to the allowance account are generally written off, when there is no expectation of
recovering additional cash.
FRS7p16
The other classes within trade and other receivables do not contain impaired assets.
FRS7p36(a)
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable
mentioned above. The group does not hold any collateral as security.
23 Inventories Group
2p36(b), 1p78(c)
Raw materials
Work in progress
Finished goods50
2015
HK$000
2014
HK$000
7,622
1,810
15,268
7,562
1,796
8,774
24,700
18,132
2p36(d), 38
The cost of inventories recognised as expense and included in cost of sales amounted to HK$60,252,000
(2014: HK$29,545,000), which included inventory write-down of HK$6,117,000 (2014: Nil).
2p36 (f),(g)
As at 31 December 2014, a batch of finished goods with cost of HK$1,003,000 was considered as obsolete.
A provision of HK$603,000 was made as at 31 December 2014. The group reversed HK$603,000 of a
previous inventory write-down in July 2015. The group has sold all the goods that were written down to an
independent retailer in Australia at original cost. The amount reversed has been included in cost of sales
in the income statement.

24
Financial assets at fair value through profit or loss Group
FRS7p8(a), 31,
34(c)
10Sch9(1)(a)
10Sch9(3)
10Sch12(11)
Listed securities held-for-trading

2015
HK$000
2014
HK$000
5,850
4,250
1,720
3,560
3,540
872
11,820
7,972
7p15
Financial assets at fair value through profit or loss are presented within 'operating activities' as part of
changes in working capital in the statement of cash flows (Note 37).
FRS7p20(a)(i)
Changes in fair values of financial assets at fair value through profit or loss are recorded in other gains
net in the income statement (Note 8).
FRS13p91
The fair value of all equity securities is based on their current bid prices in an active market.
50 Separate disclosure of finished goods at fair value less cost to sell is required, where applicable.

25 Cash and bank balances Group and Company

(a) Cash and cash equivalents
Group
Company
2015
2014
2014
2013
HK$000
HK$000
HK$000 HK$000
Cash at bank and on hand
Short-term bank deposits
Cash and cash equivalents (excluding bank overdrafts)
7p45
8,398
6,530
26,648
5,414
5,039
7,230
14,928
32,062
5,039
7,230
Cash, cash equivalents and bank overdrafts include the following for the purposes of the statement of cash flows:
Group
2015
HK$000
7p8
2014
HK$000
(Restated)

14,928
(2,650)
32,062
(6,464)
12,278
25,598
(b) Restricted cash

As at 31 December 2015, HK$3,000,000 (2014: HK$2,000,000) are restricted deposits held at bank as
reserve for serving of debt for revolving loans provided by the bank.
26
Non-current assets held-for-sale and discontinued operations Group
FRS5p41
(a)(b)(d)
The assets and liabilities related to Company Shoes Limited(part of the UK wholesale segment),a 80% owned
subsidiary of the company, have been presented as held for sale following the approval of the groups
management and shareholders on 23 September 2015 to sell Company Shoes Limited in the UK. The completion
date for the transaction is expected by May 2016.
FRS5p38
(a) Assets of disposal group classified as held for sale
FRS5p38
2015
HK$000
2014
HK$000

Goodwill
Other intangible assets
Inventory
1,563
100
1,000
442
228
Total
3,333
(b) Liabilities of disposal group classified as held for sale

2015
HK$000
2014
HK$000

Provisions
104
20
96
Total
220

27 Share capital Group and Company

31 December 2014
31 December 2013
Number of
Number of
shares
shares
(thousands)
HK$000 (thousands)
HK$000
1p79,
Authorised: (Note (a))

Ordinary shares of HK$1 each (Note (b))
100,000
100,000
Ordinary shares, issued and fully paid:

1p79,A2(4)&(5),
GEM18.07(4)&(5)
At 1 January 2014
1p106,(d)(iii)

At 31 December 2014
1p106(d)(iii)
FRS3pB64(f)(iv)

Acquisition of subsidiaries (Note (ca)) (Note 41)
Transition to no-par regime on 3 March 2014 (Note (d))
1p79(a)
At 31 December 2015
Number of shares
(thousands)
Share capital
HK$000
20,000
20,00037,144
1,000
1,000
21,000
21,00038,144
750
3,550
750
3,550
17,144
25,300
42,444
(e)
Under the Hong Kong Companies Ordinance (Cap. 622), which commenced operation
on 3 March 2014, the concept of authorised share capital no longer exists. [Consider
adding further disclosure if the number of shares that the company may issue is
constrained in other ways, such as through the companys articles of association]
(f)
In accordance with section 135 of the Hong Kong Companies Ordinance (Cap. 622), the
Companys shares no longer have a par or nominal value with effect from 3 March 2014.
There is no impact on the number of shares in issue or the relative entitlement of any of
the members as a result of this transition.
(a) The group issued 3,550,000 shares on 1 March 2015 (14.0% of the total ordinary share capital
issued) to the shareholders of ABC Group as part of the purchase consideration for an additional 65%
of its ordinary share capital. The ordinary shares issued have the same rights as the other shares in
issue. The fair value of the shares issued amounted to HK$10,050,000 (HK$2.83 per share). The
related transaction costs amounting to HK$50,000 have been netted off with the deemed proceeds.
(d) In accordance with the transitional provisions set out in section 37 of Schedule 11 to Hong Kong
Companies Ordinance (Cap. 622), on 3 March 2014, any amount standing to the credit of the share
premium account has become part of the Companys share capital.
27a Buy-back of shares

1p79(a),
A10(4), GEM18.14
10Sch13(1)(d)
The Company acquired 875,000 of its own shares through purchases on the Hong Kong Stock Exchange
on 18 April 2015. The total amount paid to acquire the shares was HK$2,564,000 and has been deducted
from retained earnings54 within shareholders equity (Note 29).
54 In accordance with section 257 of the Hong Kong Companies Ordinance (Cap. 622), the payment for buy-back of shares of companies incorporated and listed in
Hong Kong from the stock market may be made (a) out of the Companys distributable profits; (b) out of the proceeds of a fresh issue of shares made for the purpose
of the buy-back.

28 Share-based payments Group and Company

FRS2p45(a),
10Sch12(2),A10(1)&
(2),
GEM18.11&18.12
Share options are granted to directors and to selected employees. The exercise price of the granted
options is equal to the market price of the shares less 15% on the date of the grant. Options are
conditional on the employee completing three years service (the vesting period). The options are
exercisable starting three years from the grant date, subject to the group achieving its target growth in
earnings per share over the period of inflation plus 4%; the options have a contractual option term of
five years. The group has no legal or constructive obligation to repurchase or settle the options in cash.
Movements in the number of share options outstanding and their related weighted average exercise
prices are as follows:
2015
2014
Average
exercise
price in Number of
HK$ per
share
share
options
option (thousands)
Average
exercise
price in
HK$ per
Number of
share share options
option (thousands)
FRS2p45 (b)(v)
At 1 January
Granted
Forfeited
Exercised
Expired
1.73
2.95
2.30
1.28
-
4,744
964
(125)
(750)
-
1.29
2.38
0.80
1.08
2.00
4,150
1,827
(33)
(1,000)
(200)
FRS2p45 (b)(vi)
At 31 December
2.03
4,833
1.73
4,744
FRS2p45 (b)(i)
FRS2p45 (b)(ii)
FRS2p45 (b)(iii)
FRS2p45 (b)(iv)
FRS2p45 (b)(vii),
FRS2p45(c)
Out of the 4,833,000 outstanding options (2014: 4,744,000), 1,875,000 options (2014: 1,400,000) were
exercisable. Options exercised in 2015 resulted in 750,000 shares (2014: 1,000,000 shares) being issued at
a weighted average price of HK$1.28 each (2014: HK$1.08 each). The related weighted average share price
at the time of exercise was HK$2.85 (2014: HK$2.65) per share. The related transaction costs amounting
to HK$10,000 (2014: HK$10,000) have been netted off with the proceeds received.
FRS2p45(d)
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Expiry date 1 July
Exercise price
in HK$ per
share option
2014
2014
2015
2016
2017
2018
FRS2p46
FRS2p47(a)
1.10
1.20
1.35
2.00
2.38
2.95
Number of share
options (thousands)
2015
2014
800
1,075
217
1,777
964
500
900
1,250
267
1,827
4,833
4,744
The weighted average fair value of options granted during the period determined using the Black-Scholes
valuation model was HK$0.86 per option (2014: HK$0.66). The significant inputs into the model were
weighted average share price of HK$3.47 (2014: HK$2.8) at the grant date, exercise price shown above,
volatility of 30% (2014: 27%), dividend yield of 4.3% (2014: 3.5%), an expected option life of three years,
and an annual risk-free interest rate of 5% (2014: 4%). The volatility measured at the standard deviation of
continuously compounded share returns is based on statistical analysis of daily share prices over the last
three years. See Note 10 for the total expense recognised in the income statement for share options granted
to directors and employees.

29 Retained earnings Group and Company

A2(4)&(5),
GEM18.07(4)&(5)
1p106(d)
1p106(d)
FRS2p50
12p68C
19p120(c)
At 1 January 2014
Profit for the year
Value of employee services55
At 31 December 2014
1p106(d)
1p106(d)
FRS2p50
12p68C
1p97(a)
19p120(c)
12p81(a), (d)
At 1 January 2015
Profit for the year
Value of employee services55 (Note 10)
Buy-back of shares56
Impact of change in [country name] tax rate on deferred tax57
At 31 December 2015
Group
HK$000
50,932
16,304
(15,736)
822
20
(637)
Company
HK$000
41,934
10,026
(15,736)
822
51,705
37,046
51,705
31,874
(10,102)
690
30
(2,564)
83
(10)
37,046
14,135
(10,102)
690
(2,564)
71,706
39,205
Commentary: The movement of retain earnings of the holding company has been moved to Note 45 as
a footnote to the companys balance sheet.
55 The credit entry to equity in respect of the IFRS/HKFRS 2 charge should be recorded in accordance with local company law and practice. This may be a specific
reserve, retained earnings or share capital.
56 The accounting treatment of buy-back of shares should be recorded in accordance with local company law and practice. National law may require to deduct
distributable profits. In the absence of any legal requirement, the amount is debited to a separate component of equity. Paid-in capital is not reduced.
In accordance with section 257 of the Hong Kong Companies Ordinance (cap. 622), the payment for buy-back of shares of companies incorporated and listed in
Hong Kong from the stock market may be made (a) out of the Companys distributable profits; (b) out of the proceeds of a fresh issue of shares made for the purpose
of the buy back.
57 Solely for illustrative purposes, a change in tax rates has been assumed to have taken place in 2015.

30 Other reserves Group and Company

S48B, 10Sch4(1),
10Sch6-7,
10Sch13(1)(e),A2(
4)&(5),
GEM18.07(4)&(5),
GEM18.50B(1)(l)
FRS7p20(a)(ii)
12p61A, 81(ab)
28p10
FRS7p23(c)
12p61A, 81(ab)
FRS7p23(d)
12p61A, 81(ab)
FRS7p23(e)
12p61A, 81(ab)
39p102(a)
21p52(b)
21p52(b), 28p10
(a) Group
Convertible
bond
HK$000
Availablefor-sale
Hedging
reserve Investments
HK$000
HK$000
Translation
HK$000
Total
HK$000
At 1 January 2014
Revaluation gross (Note 20)
Revaluation transfer gross
(Note 20)
Revaluation associates (Note
12b)
Cash flow hedges:
Fair value gains
Tax on fair value gains (Note
13)
Transfers to sales
(Note 13)
Tax on transfers to inventory
(Note 13)
Net investment hedge (Note
21)
differences:
Group
Associates
65
1,320
275
5,168
6,553
275
(152)
(61)
(152)
(61)
(14)
(14)
300
300
(101)
(236)
(101)
(236)
79
(67)
79
(67)
22
22
40
40
(78)
105
(78)
105
At 31 December 2014
62
1,368
5,235
6,665

S48B, 10Sch4(1),
10Sch6-7,
10Sch13(1)(e),
A2(4)&(5),
GEM18.07(4)&(5),
GEM18.50B(1)(l) (a) Group
FRS7p20(a)(ii)
12p61A, 81(ab)
28p10
FRS7p23(c)
12p61A, 81(ab)
FRS7p23(d)
12p61A, 81(ab)
FRS7p23(e)
12p61A, 81(ab)
39p102(a)
21p52(b)
21p52(b), 28p10
1p106(d)(iii)
FRS3p42
32p28
12p61A
At 1 January2015
Revaluation gross (Note
20)
Revaluation transfer
gross (Note 20)
Revaluation associates
(Note 12b)
Cash flow hedges:
Fair value gains
Tax on fair value gains
(Note 13)
Transfers to sales
(Note 13)
Tax on transfers to
inventory (Note 13)
(Note 21)
differences:
Group
Associates
Reclassification of
(Note 41)
component (Note 32b)
on convertible bond (Note
13)
At 31 December 2015
Available-forConvertible
Hedging
sale
bond
reserve
investments
Capital
HK$000
HK$000
62
HK$000
1,368
HK$000
690
690
(130)
(198)
(130)
(198)
(12)
(12)
368
368
(123)
(120)
(123)
(120)
40
(151)
40
(151)
50
50
(45)
(45)
2,833
(74)
2,833
(74)
50
50
(850)
(850)
7,761
7,761
(2,328)
5,433
126
868
50
7,949
(2,328)
14,426
reserve Translation
Total
HK$000 HK$000
5,235
6,665
(b) Company
Convertible bonds
HK$000
12p61A
Balance at 1 January and 31 December 2013

Convertible bonds equity component58 (Note 32b)
Tax on equity component (Note 13)
Balance at 31 December 2014
7,761
(2,328)
5,433
Commentary: The reserves movement of the holding company has been moved to Note 45 as a
footnote to the companys balance sheet.
58 Temporary taxable difference for the liability component of the convertible bond is determined in accordance with para 23 of IAS/HKAS 12. It is assumed that the
tax base on the convertible bond in note 32b is not split between the debt and equity elements. If the tax base were split, this would impact the deferred tax position.

Other comprehensive income, net of tax
Other
reserves
Group
Retained
earnings
Total
HK$000 HK$000 HK$000

DV
19p120(c)
DV
FRS3p42
28p10
39p102(a)
21p52(b)
31 December 2015
Items that will not be reclassified to profit or
loss
Remeasurement of post-employment benefit
obligations
Items that may be subsequently reclassified
to profit or loss
Change in value of available-for-sale financial
assets
Reclassification of revaluation of previously
method
Impact of change in [country name] tax rate
on deferred tax
Cash flow hedges
DV
Total
DV
19p102(c)
DV
28p10
39p102(a)
21p52(b)
31 December 2014
Items that will not be reclassified to profit or
loss
Remeasurement of post-employment benefit
obligations
Items that may be subsequently reclassified
to profit or loss
Change in value of available-for-sale financial
assets
method
Cash flow hedges
DV
Total
FRS7p20,
1p106A
NonTotal other
controlling comprehensive
interests
income
HK$000
HK$000
83
-
83
-
83
-
362
362
362
(850)
(850)
(850)
(12)
(12)
(12)
64
(45)
2,759
(10)
-
(10)
64
(45)
2,759
252
(10)
64
(45)
3,011
2,278
2,278
(10)
73
2,268
2,351
252
252
2,520
2,603
(637)
(637)
(637)
62
62
62
(14)
(3)
40
27
(14)
(3)
40
27
(40)
(14)
(3)
40
(13)
112
112
(637)
112
(525)
(40)
(40)
72
(565)
Commentary
Entities are allowed to show the disaggregation of changes in each component of equity arising from transactions recognised in
other comprehensive income in either the statement of changes in equity or in the notes. In these illustrative financial statements,
we present this information in the notes.

31

Group
2015
2014
HK$000
HK$000
1p77
24p18
A4(2)(c)(ii)(b)
, GEM18.50B
(2)(c)(ii)(b)
Trade payables
Other liabilities contingent considerations (Note 41)
Accrued expenses
9,791
2,202
2,002
1,500
1,983
17,478
9,990
1,195
960
828
12,973
At 31 December 2015, the ageing analysis59 of the trade payables (including amounts due to related parties of
trading in nature) based on invoice date were are follows:
2015
2014
HK$000
HK$000
[insert ageing, e.g.]
0-30 days
9,808
10,099
31-60 days
1,120
1,080
61-90 days
1,065
6
11,993
11,185
32 Borrowings Group and Company

Group
2014
2015
HK$000
HK$000
Company
2014
2013
HK$000
HK$000
Non-current
Bank borrowings
Convertible bond
Redeemable preference shares
32,193
42,822
3,300
30,000
6,806
40,244
18,092
30,000
8,010
42,822
30,000
30,000
115,121
96,346
72,822
30,000
2,650
1,014
3,368
2,492
2,192
6,464
4,598
4,608
2,588
11,716
18,258
126,837
114,604
72,822
30,000
Current
Collateralised borrowings (Note 22)
Bank borrowings
Total borrowings
A4(2)(4.2), GEM18.50B(2)(Note)
59 The disclosure requirement of the Listing rule for ageing analysis of trade payables should include the amounts due to related companies which are trading in nature.
Moreover, it is recommended that the ageing analysis should be presented on the basis of the date of the relevant invoice and categorised into time-bands that are
appropriate for the business based on analysis used by an issuers management to monitor the issuers financial position (e.g. where the credit period is 30 days from
the date of invoice, the ageing analysis could be categorised into 30 days, 60 days, 90 days, 120 days, etc.). The basis on which the ageing analysis is presented
should be disclosed.

(a) Borrowings
FRS7p31,
A22(1),
GEM18.21
Bank borrowings mature until 2019 and bear average coupons of 7.5% annually (2013: 7.4% annually).
At 31 December 2015, the groups borrowings were repayable as follows:
Group
Bank borrowings
and overdrafts
Other loans
2015
2014
2015
2014
HK$000 HK$000 HK$000
HK$000
Within 1 year
6,018
11,062
3,506
4,608
3,870
35,238
2,000
5,059
28,323
5,006
43,122
9,900
Over 5 years
31,000
33,133
38,211
51,306
79,628
52,700
Group
Bank borrowings
and overdrafts
Other loans
2014
2013
2014
2013
HK$000 HK$000 HK$000
HK$000
10Sch9(1)(d)
Wholly repayable within

5 years
Wholly repayable after 5
years
Company
Other loans
2015
2014
HK$000
HK$000
42,822
30,000
30,000
72,822
30,000
Company
Other loans
2014
2013
HK$000
HK$000
38,211
51,306
46,328
4,608
42,822
38,211
51,306
33,300
79,628
48,092
52,700
30,000
72,822
30,000
30,000
FRS7p14
10Sch10
Total borrowings include secured liabilities (bank and collateralised borrowings). Bank borrowings are secured by
the land and buildings of the group of HK$37,680,000 (2014: Nil) (Notes 16 and 16a). Collateralised borrowings
are secured by trade receivables of HK$1,014,000 (2014: Nil) (Note 22).
FRS7p31
The exposure of the groups borrowings to interest rate changes and the contractual repricing dates at the end of
the year are as follows:
Group
2014
HK$000
(Restated)
10,496
36,713
47,722
31,906
16,748
29,100
38,555
30,201
42,822
30,000
30,000
126,837
114,604
72,822
30,000
6 months or less
6-12 months
1-5 years
Over 5 years
FRS7p25
Company
2014
HK$000
2015
HK$000
2013
HK$000
The carrying amounts and fair value of the non-current borrowings are as follows:
Group
Carrying amount
2015
HK$000
Bank borrowings
Redeemable
preference shares
Debentures and
other loans
Convertible bond
Finance lease
liabilities
Company
Carrying amount
Fair Value
2014
2014 HK$00
2013
2014
2013
HK$000
0 HK$000 HK$000 HK$000
Fair Value
2015
2014
HK$000 HK$000
32,193
40,244
32,590
39,960
30,000
30,000
28,450
28,850
30,000
30,000
28,450
28,850
3,300
42,822
18,092
-
3,240
42,752
17,730
-
42,822
42,752
6,806
8,010
6,205
7,990
115,121
96,346
113,237
94,530
72,822
30,000
71,202
28,850

FRS13p93(b)
The fair value of current borrowings equals their carrying amount, as the impact of discounting is not
,(d),
FRS13p97, significant. The fair values are based on cash flows discounted using a rate based on the borrowing rate of
7.5% (2014: 7.2%) and are within level 2 of the fair value hierarchy.
FRS7p25
FRS7p31, 34(c)
The carrying amounts of the groups borrowings are denominated in the following currencies:
Group
2015
2014
HK$000
HK$000
HK dollar
UK pound
US dollar
Other currencies
DV, 7p50(a)
Company
2014
2015
HK$000
HK$000
80,100
28,353
17,998
386
80,200
16,142
17,898
364
72,822
-
30,000
-
126,837
114,604
72,822
30,000
Group
2015
HK$000
2014
HK$000
The group has the following undrawn borrowing facilities:
Floating rate:
Expiring beyond one year
Fixed rate:
6,150
14,000
4,100
8,400
18,750
12,500
38,900
25,000
The facilities expiring within one year are annual facilities subject to review at various dates during 2015. The
other facilities have been arranged to help finance the proposed expansion of the groups activities in UK.
(b) Convertible bonds
FRS7p17, 1p79(b),
32p28, 32p31,
10Sch9(4),
A10(1)&(2),
GEM18.11& 18.12
The company issued 500,000 5.0% convertible bonds at a par value of HK$50 million on 2 January 2015. The
bonds mature five years from the issue date at their nominal value of HK$50 million or can be converted into
shares at the holders option at the maturity date at the rate of 33 shares per HK$500. The values of the liability
component and the equity conversion component were determined at issuance of the bond.
The convertible bond recognised in the balance sheet is calculated as follows:
Group and Company
2015
2014
HK$000
HK$000
32p28
Face value of convertible bond issued on 2 January 2015

Equity component (Note 30)
50,000
(7,761)
Liability component on initial recognition at 2 January 2015

Interest expense (Note 11)
Interest paid
42,239
3,083
(2,500)
42,822
Liability component at 31 December 2015
FRS13p93(b),
(d), FRS13p97
The fair value of the liability component of the convertible bond at 31 December 2015 amounted to
HK$42,617,000. The fair value is calculated using cash flows discounted at a rate based on the borrowings
rate of 7.5% and are within level 2 of the fair value hierarchy.

33

The analysis of deferred tax assets and deferred tax liabilities is as follows:
Group
2014
2015
HK$000
HK$000
1p61
Deferred tax assets:

Deferred tax asset to be recovered after more
than 12 months
Deferred tax asset to be recovered within 12
months
Deferred tax liabilities:

Deferred tax liability to be recovered after
more than 12 months
Deferred tax liability to be recovered within
12 months
Deferred tax liabilities (net)
Company
2014
2013
HK$000
HK$000
(2,899)
(3,319)
(647)
(64)
(3,546)
(3,383)
9,561
7,147
2,135
1,627
1,037
11,188
8,184
2,135
7,642
4,801
2,135
The gross movement on the deferred income tax account is as follows:

Group
2015
HK$000
At 1 January
Income statement charge/(credit)
(Note 13)
Tax charge/(credit) relating to
components of other comprehensive
income (Note 13)
Tax charged/(credited) directly to
equity (Note 13)
At 31 December
2014
HK$000
Company
2014
2013
HK$000
HK$000
4,801
(1,753)
1,953
3,000
(154)
102
2,125
(193)
241
(150)
2,298
(20)
2,328
7,642
4,801
2,135

12p81(g)(i)
12p81(g)(ii)
The movement in deferred income tax assets and liabilities during the year, without taking into consideration
the offsetting of balances within the same tax jurisdiction, is as follows:
Deferred tax liabilities
Group
Accelerated tax Fair value Convertible
depreciation
gains
bond
Other
HK$000 HK$000
HK$000 HK$000
Company
Convertible
bond
HK$000
Total
HK$000
At 1 January 2014
Charged to the income statement
income
6,058
1,786
272
237
304
6,567
2,090
241
61
100
61
341
12p81(g)(i)
At 31 December 2014
8,085
433
541
9,059
12p81(g)(ii)
income statement
250
(193)
57
(193)
12p81(ab)

income
Acquisition of subsidiaries (Note
41)
231
2,328
231
2,328
2,328
553
(571)
1,375
(263)
275
(123)
2,203
(957)
8,317
1,776
2,135
693
12,921
2,135
12p81(g)(ii)
12p81(ab)
12p81(a)
12p81(a)
12p81(g)(i)
At 31 December 2015
Deferred tax assets
12p81(g)(ii)
12p81(ab)
12p81(a)
At 1 January 2014
statement
Credited to other comprehensive income
12p81(g)(i)
12p81(g)(ii)
12p81(ab)
12p81(a)
12p81(g)(i)
At 31 December 2014
(Credited)/charged to the income
statement
Charged to other comprehensive income
At 31 December 2015
Group
Retirement
benefit
Impairment
obligation Provisions
losses
Tax losses
HK$000
HK$000
HK$000
HK$000
Other
HK$000
Total
HK$000
(428)
(962)
(732)
(1,072)
(373)
(3,567)
(211)
181
(146)
(20)
35
(211)
(20)
(35)
(460)
(495)
(639)
(816)
(732)
(1,532)
(539)
(4,258)
10
(250)
(538)
(125)
(322)
(85)
1,000
(350)
(95)
(30)
(236)
45
10
(30)
(250)
(796)
(879)
(1,479)
(1,139)
(882)
(900)
(5,279)
12p81(e)
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related
tax benefit through future taxable profits is probable. The group did not recognise deferred income tax assets of
HK$333,000 (2014: HK$1,588,000) in respect of losses amounting to HK$1,000,000 (2014: HK$5,294,000) that
can be carried forward against future taxable income. Losses amounting to HK$900,000 (2014: HK$5,294,000) and
HK$100,000 (2014: nil) expire in 2016 and 2017 respectively.
12p81(f)
Deferred income tax liabilities of HK$3,141,000 (2014: HK$2,016,000) have not been recognised for the withholding
tax and other taxes that would be payable on the unremitted earnings of certain subsidiaries. Such amounts are
permanently reinvested. Unremitted earnings totalled HK$30,671,000 at 31 December 2014 (2014:
HK$23,294,000).

35
1p78(d)
10Sch13(1)(f)
37p84(a)
37p84(b)
37p84(d),
10Sch13(1)(f)
37p84(e)
37p84(c)
FRS5p38
37p84(a)
Contingent
Profitliability
sharing arising on a
Environmental
Legal
and
business
claims bonuses combination
restoration Restructuring
HK$000
HK$000
HK$000 HK$000 HK$000
Total
HK$000
At 1 January 2014
income statement:
Additional provisions
On acquisition of ABC Group
842
828
1,000
2,670
316
1,986
2,405
500
1,000
5,207
1,000

Unwinding of discount (Note
11)
Used during year
Transferred to disposal
group/classified as held for sale
(15)
(15)
(10)
(40)
40
(233)
(7)
(886)
(3,059)
(68)
(990)
44
(5,168)
(75)
(96)
(96)
847
1,100
91
500
1,004
3,542
At 31 December 2014
Analysis of total provisions:
2014
2013
HK$000 HK$000
1p69
1p69
Non-current (environmental restoration)

Current
1,320
2,222
274
2,396
3,542
2,670
(a) Environmental restoration

37p85
(a)-(c)
The group uses various chemicals in working with leather. A provision is recognised for the present value of costs
to be incurred for the restoration of the manufacturing sites. It is expected that HK$531,000 will be used during
2015 and HK$320,000 during 2016. Total expected costs to be incurred are HK$880,000 (2013: HK$760,000).
DV
The provision transferred to the disposal group classified as held for sale amounts to HK$96,000 and relates to an
environmental restoration provision for Shoes Limited (part of the wholesale segment). See Note 26 for further
details regarding the disposal group held for sale.
(b) Restructuring
37p85(a)-(c)
The reduction of the volumes assigned to manufacturing operations in Step-land (a subsidiary) will result in the
reduction of a total of 155 jobs at two factories. An agreement was reached with the local union representatives
that specifies the number of staff involved and the voluntary redundancy compensation package offered by the
group, as well as amounts payable to those made redundant, before the financial year-end. The estimated staff
restructuring costs to be incurred are HK$799,000 at 31 December 2014 (Note 10). Other direct costs attributable
to the restructuring, including lease termination, are HK$1,187,000. These costs were fully provided for in 2014.
The provision of HK$1,100,000 at 31 December 2014 is expected to be fully utilised during the first half of 2015.
36p130
A goodwill impairment charge of HK$4,650,000 was recognised in the cash-generating unit relating to Step-land
as a result of this restructuring (Note 18).

(c) Legal claims
37p85(a)-(c)
The amounts represent a provision for certain legal claims brought against the group by customers of the
wholesale segment. The provision charge is recognised in profit or loss within administrative expenses. The
balance at 31 December 2014 is expected to be utilised in the first half of 2015. In the directors opinion, after
taking appropriate legal advice, the outcome of these legal claims will not give rise to any significant loss
beyond the amounts provided at 31 December 2014.
(d) Profit-sharing and bonuses
DV, 19p9(c),11
37p85(a)-(c)
The provision for profit-sharing and bonuses is payable within three month of finalisation of the audited
(e) Contingent liability
37p85(a)-(c)
A contingent liability of HK$1,000,000 has been recognised on the acquisition of ABC Group for a pending
lawsuit in which the entity is a defendant. The claim has arisen from a customer alleging defects on products
supplied to them. It is expected that the courts will have reached a decision on this case by the end of 2015.
The potential undiscounted amount of all future payments that the group could be required to make if there
was an adverse decision related to the lawsuit is estimated to be between HK$500,000 and HK$1,500,000.
As of 31 December 2014, there has been no change in the amount recognised (except for the unwinding of the
discount of HK$4,000) for the liability at 31 March 2014, as there has been no change in the probability of the
outcome of the lawsuit.
FRS3B64(g),
p57
The selling shareholders of ABC Group have contractually agreed to indemnify Specimen Holdings Limited
for the claim that may become payable in respect of the above-mentioned lawsuit. An indemnification asset of
HK$1,000,000, equivalent to the fair value of the indemnified liability, has been recognised by the group. The
indemnification asset is deducted from consideration transferred for the business combination. As is the case
with the indemnified liability, there has been no change in the amount recognised for the indemnification
asset as at 31 December 2014, as there has been no change in the range of outcomes or assumptions used to
develop the estimate of the liability.
36 Dividends
1p107, 1p137(a)
10p12
A4(1)(f)
GEM18.50B
(1)(k)
A4(1)(f)
GEM18.50B
(1)(k)
10Sch9(1)(e)
10Sch13(1)(j)
The dividends paid in 2014 and 2013 were HK$10,102,000 (HK$0.48 per share) and HK$15,736,000
(HK$0.78 per share) respectively. A dividend in respect of the year ended 31 December 2014 of HK$0.51
per share, amounting to a total dividend of HK$12,945,000, is to be proposed at the annual general
meeting on 30 April 2015. These financial statements do not reflect this dividend payable.
Interim dividend paid of HK$- (2013:HK$nil) per ordinary share

Proposed final dividend of HK$0.51 (2013:HK$0.48) per ordinary share
2015
HK$000
2014
HK$000
12,945
10,102
12,945
10,102
The aggregate amounts of the dividends paid and proposed during 2014 and 2015 have been disclosed in the
consolidated income statement in accordance with the Hong Kong Companies Ordinance.

38 Contingencies60
37p86, 10Sch12(5)
Group
Since 2010, the group has been defending an action brought by an environment agency in Europe. The group has
disclaimed the liability.
No provision in relation to this claim has been recognised in these consolidated financial statements, as legal advice
indicates that it is not probable that a significant liability will arise. Further claims for which provisions have been
made are reflected in Note 35.
39 Commitments60
10Sch12(6)
(a) Capital commitments

Capital expenditure of property, plant and equipment authorised by the board of directors which has not been
contracted for as of 31 December 2015 amounts to HK$1,250,000 (2013: HK$850,000).
Capital expenditure contracted for at the end of the year but not yet incurred is as follows:
Group
16p74(c)
38p122(e)
40p75(h)
40p75(h)

Intangible assets
2015
HK$000
2014
HK$000
3,593
460
290
3,667
474
200
4,343
4,341
140
130
4,483
4,471
Investment properties - repairs and maintenance
(b) Operating lease commitments group company as lessee

17p35(d)
The group leases various retail outlets, offices and warehouses under non-cancellable operating lease agreements.
The lease terms are between 5 and 10 years, and the majority of lease agreements are renewable at the end of the
lease period at market rate.
17p35(d)
The group also leases various plant and machinery under cancellable operating lease agreements. The group is
required to give a six-month notice for the termination of these agreements. The lease expenditure charged to the
income statement during the year is disclosed in Note 9.
17p35(a)
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
2015
HK$000
2014
HK$000
11,664
45,651
15,710
10,604
45,651
27,374
73,025
83,629

Later than 5 years
60 The contingencies and commitments of the company, if any, are required to be disclosed if the companys balance sheet is prepared

42
Related party transactions62 97
1p138(c)
24p13,
S129A(1)
4Sch.p1.3
The group is controlled by M Limited (incorporated in the UK), which owns 57% of the companys shares.
The remaining 43% of the shares are widely held. The ultimate parent6398 of the group is G Limited
(incorporated in the UK). The ultimate controlling party of the group is Mr Power.
24p 18, 19, 24
In addition to those disclosed elsewhere in the financial statements, the following transactions were carried
out with related parties:
24p18(a)
(a) Sales of goods and services
Sales of goods:
Associates
Sales of services:
The ultimate parent (legal and administration services)
Close family members of the ultimate controlling party (design services)
Total
2015
HK$000
2014
HK$000
1,002
121
204
87
67
100
1,290
127
104
522
Goods are sold based on the price lists in force and terms that would be available to third parties6499. Sales of
services are negotiated with related parties on a cost-plus basis, allowing a margin ranging from 15% to 30%
(2013: 10% to 18%).
24p18(a)
(b) Purchases of goods and services

Purchases of goods:
Associates
Purchases of services:
An entity controlled by key management personnel
The immediate parent (management services)
Total
2015
HK$000
2014
HK$000
3,054
3,058
83
295
3,432
70
268
3,396
24p23
Goods and services are bought from associates and an entity controlled by key management personnel on
normal commercial terms and conditions. The entity controlled by key management personnel is a firm
belonging to Mr Chamois, a non-executive director of the company. Management services are bought from
the immediate parent on a cost-plus basis, allowing a margin ranging from 15% to 30% (2014: 10% to 24%).
24p17
(c) Key management compensation

Key management includes directors (executive and non-executive), members of the Executive Committee,
the Company Secretary and the Head of Internal Audit. The compensation paid or payable to key
management for employee services is shown below:
2015
2014
HK$000
HK$000
24p17(a)
24p17(d)
24p17(b)
24p17(c)
24p17(e)
9762
Salaries and other short-term employee benefits

Termination benefits
Other long-term benefits
2,200
1,600
123
26
150
1,890
85
22
107
Total
4,099
2,104
All contracts with related parties are required to be disclosed, including commitments to do something if a particular event occurs or does not occur in the future,
including executory contracts (recognised and unrecognised) (IAS/HKAS 24 p21(i)).
129A Paragraph 3 of Part 1 of Schedule 4 of the new Hong Kong Companies Ordinance (Cap. 622) requires disclosure of the name of the ultimate parent
undertaking. Since the term undertaking as defined in the section 367 to the new Hong Kong Companies Ordinance (Cap. 622), includes a partnership or an
unincorporated association carrying on a trade or business, whether for profit or not, as well as a body corporate. If the ultimate parent undertaking is a body
corporate, then the country of its incorporation should be disclosed, whereas if it is not a body corporate, then the address of its principal place of its business should
be disclosed.
Although the disclosure requirements under section Paragraph 3 of Part 1 of Schedule 4 of the new Hong Kong Companies Ordinance (Cap. 622) and IAS/HKAS
24Rp13 are similar, it should be noted that where the ultimate parent undertaking is controlled by an individual, additional disclosure will be required to meet both
the requirements of the new Hong Kong Companies Ordinance (Cap. 622) and IAS/HKAS24.
9863 Section
9964 Management
should disclose that related-party transactions were made on an arms length basis only when such terms can be substantiated (IAS/HKAS24p23).

24p18(b)(i)
The loans advanced to key management have the following terms and conditions:
Amount of loan66
S161B(1)(a)(b)
Maximum
(d), 4Sch.p1.1
outstanding
At
Name of key At end of beginning during the
management
year
of year
year
Term
HK$000 HK$000
HK$000
2015
Mr Brown
173
173
173
Mr White
170
212
212
2014
Mr Black
Mr White
FRS7p15,
10Sch9(1)(c)
20
42
20
60
20
60
Interest rate

Repayable monthly over 1 year
6.3%
6.3%
6.5%
6.5%
Certain loans advanced to associates during the year amounting to HK$1,500,000 (2014: HK$500,000) are
collateralised by shares in listed companies. The fair value of these shares was HK$65,000 at the end of the
year (2014: HK$590,000).
The loans to associates are due on 1 January 2016 and carry interest at 7.0% (2014: 8%). The fair values and
the effective interest rates of loans to associates are disclosed in Note 22.
24p18(c)
No provision has been required in 2015 and 2014 for the loans made to key management personnel and
associates.
66 The loans are assumed to be made by the company after 13 February 2004 (ie date of commencement of the Companies (Amendment) Ordinance 2003). If the loans
had been made before 13 February 2004 and remained outstanding at the end of the financial year, the disclosures would have been made following section 161B(1)
in effect immediately before the amendment of the Ordinance. Under that section, there is no need to disclose the total amounts payable as part of the terms of the
loan nor the amount of principal due but unpaid.

43 Events after the balance sheet date

S129D(3)(l)
10p21,
FRS3B64(a)-(d),
(m)
The group acquired 100% of the share capital of K&Co, a group of companies specialising in the
manufacture of shoes for extreme sports, for a cash consideration of HK$5,950,000 on 1 February 2016.
On acquisition
HK$000
FRS3B64(f),(i)
FRS3B64(m)
Cash paid
Direct cost relating to the acquisition charged in profit or loss
7p40(a)

Fair value of assets acquired (see below)
5,800
150
5,950
(5,145)
Goodwill
805
FRS3B64(e)
The above goodwill is attributable to K&Cos strong position and profitability in trading in the niche market
for extreme-sports equipment.
FRS3B64(i)
Fair value
HK$000
Trademarks
Licences
Customer relationships
Favourable lease agreements
Inventories
Borrowings
Deferred tax assets
195
29,056
1,000
700
1,850
800
995
855
(9,646)
(1,425)
(19,259)
24
Net assets acquired
5,145

44 Balance sheet and reserve movement of the Company

4Sch.p1.2(1)(a),
4Sch.p1.2(3)
Balance sheet of the Company

Note
1p10(a), 1p54, 1p113, 1p38,

A2(1)&(5), A4(2),
GEM18.07(1)&(5),
GEM18.50B(2)
10Sch4, S124
Assets
FRS7p8(c)
Non-current assets
1p60, 1p66, A4(2)(b)
Current assets
1p60, 1p66
As at 31 December
2015
2014
HK$000
HK$000
12a
12a
67,206
89,794
157,000
66,310
25,000
91,310
25
5,039
7,230
162,039
98,540
42,444
5,433
21,000
10,494
31,494
-
39,205
37,046
12,945
26,260
87,082
10,102
26,944
68,540
GEM18.50B(2)(b)
1p54(i), FRS7p8
A4(2)(b)(iii)
Total assets
1p54(r), A4(2)(g)
GEM18.50B(2)(g)

company
1p78(e)

Other reserves
1p78(e), 1p55
Retained earnings
10Sch9(1)(e)

- Others
Total equity
1p78(e),
1p78(e), 1p55
27
27
27
30
(Note
(a))
29
(Note
(a))
36
Liabilities
1p60, 1p69, A4(2)(f)
GEM18.50B(2)(f)
1p54 (m), FRS7p8(f)
A4(2)(f)(i)
GEM18.50B(2)(f)(i)
1p54(o), 1p56, 10Sch8
Borrowings
32
72,822
30,000
33
2,135
74,957
30,000
162,039
98,540
5,039
7,230
162,039
98,540
Total liabilities
A4(2)(d), GEM18.50B(2)(d)
Net current assets
A4(2)(e), GEM18.50B(2)(e)
275

44 Balance sheet and reserve movement of the Company (continued)

Note (a) Reserve movement of the Company
Retained
earnings Other reserves
HK$000
HK$000
41,934
10,026
(15,736)
822
-
A2(4)&(5),
GEM18.07(4)&(5),
4Sch.p1.2(1)(b)
1p106(d)
1p106(d)
FRS2p50
At 1 January 2014
Profit for the year
Value of employee services
At 31 December 2014
1p106(d)
1p106(d)
FRS2p50
1p97(a)
12p61A
At 1 January 2015
Profit for the year
Value of employee services
Buy-back of shares
Convertible bonds equity component
At 31 December 2015
37,046
37,046
14,135
(10,102)
690
(2,564)
7,761
(2,328)
39,205
5,433
Commentary: Except for the note disclosing the movement of the holding companys reserves, the balance sheet of the holding company is not
required to contain any other notes. 4Sch.p1.2(1), 4Sch.p1.2(2)
276

Appendix VIII Illustrative disclosure required by the new Hong Kong Companies Ordinance (Cap. 622) for financial year ending on or after 2 March 2015 (Financial
Statement Section) (continued)
45 Benefits and interests of directors (disclosures required by section 383 of the Hong Kong Companies Ordinance (Cap. 622), Companies
(Disclosure of Information about Benefits of Directors) Regulation (Cap. 622G) and HK Listing Rules)
A24(1)-(6)
(A) Directors 26a and chief executives23 emoluments22
GEM18.28(1)-(6)
S161
S383(1)(a)
622G4
The remuneration22 of every director and the chief executive23 is set out below:
For the year ended 31 December 2015:
Emoluments paid or receivable in respect of a persons services as a director, whether of the company or its subsidiary undertaking622G4(3)(a):
Name
Mr. A
Mr. B
(Note(b))
Mr. C
Mr. D
(Note(c))
Mr. E
Mr. F
Mr. G
Mr. H
(Note (d))
Mr. I
Chief
executive2
3:
Mr. J
HK$000
Emoluments paid or
receivable in respect
of directors other
services in
connection with the
management of the
affairs of the
company or its
subsidiary
undertaking622G4(3)(b)
(Note (e))
HK$000
Total
HK$000
(Note (a))
HK$000
622G4(6)(a)(iii), 25
HK$000
Inducement
FeesA24(5)
HK$000
HK$000
Compensation
for loss of
office as
director A24(6)
[The
disclosure has
been moved to
a separate
note.]
HK$000
25
440
4,800
2,050
1,000
500
25
25
5,900
2,650
40
30
75
30
1,250
1,500
-
200
-
25
25
-
100
-
1,415
30
1,800
30
30
30
200
250
30
480
30
30
Fees622G4(6)
Salary622G4
Discretionary
bonuses622G4(6)
Housing
allowance622
(a)(i)
(6)(a)(i)
(a)(i), 24
G4(6)(a)(ii)
HK$000
HK$000
HK$000
15
400
75
75
Estimated
money
value622G4(5) of
other
benefits622G4(6)(a)(
iv)
277
Employers
contribution
to pension
scheme a
retirement
benefit
scheme
Remunerations
paid or
receivable in
respect of
accepting office
as
director622G4(4),
A24(5)

For the year ended 31 December 2014 (Restated):

Certain of the comparative information of directors emoluments for the year ended 31 December 2014 previously disclosed in accordance with the predecessor
Companies Ordinance have been restated in order to comply with the new scope and requirements by the Hong Kong Companies Ordinance (Cap.622).
Emoluments paid or receivable in respect of a persons services as a director, whether of the company or its subsidiary undertaking622G4(3)(a):
Emoluments paid or
receivable in respect
Compensation
Fees622G4(6
Name
Salary622G4(
Discretionary
Housing
bonuses622G4(6)
allowance62
Inducement
)(a)(i)
6)(a)(i)
(a)(i), 24
2G4(6)(a)(ii)
feesA24(5)
HK$000
HK$000
HK$000
HK$000
HK$000
of directors other
Employers
for loss of
Remunerations
services in
contribution
office as
paid or
connection with the
Estimated
to pension
director A24(6)
receivable in
management of the
money
scheme a
[The
respect of
affairs of the
value622G4(5) of
retirement
disclosure has
accepting office
company or its
other
benefit
been moved to
as
subsidiary
benefits622G4(6)(a)(
scheme622G4(6)
a separate
director622G4(4)
undertaking622G4(3)(b)
(Note (a))
(a)(iii), 25
note.]
(Note (e))
Total
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
4,475
iv)
Mr. A
75
4,400
Mr. B
75
4,800
800
43
5,718
Mr. C
75
2,050
600
25
2,750
Mr. E
30
30
Mr. F
75
1,500
300
1,875
Mr. G
30
30
Mr. H
30
30
Mr. I
30
200
250
480
30
30
Chief
executive23
Mr. J
Notes:
(a) Other benefits include leave pay, share option, insurance premium and club membership 622G4(2)(b).
(b)
Resigned on [Date].
(c)
Appointed on [Date].
(d)
Retired on [Date].
(e)
Represents the payments made to a management service company in respect of Mr. Is services in connection with the management of the affairs of the group.
278

Commentary Estimated money value of a non-cash benefit

622G4(5) specifies that, if any emoluments consist of a non-cash benefit otherwise, then the reference to the amount of emoluments is a reference to the
estimated money value of that benefit. However, the term estimated money value is not defined under either the old CO or the new CO. AB3 issued by
HKICPA in 2000 provides some guidance in respect of the determination of the estimated money value under old CO. The followings are examples of possible
ways of estimating money value of share-based payment in the directors' remuneration for old CO disclosure purpose and we consider it would be acceptable
under the new CO:
(a) the difference between the market prices at the date of exercise of shares acquired and consideration paid by the directors during the year. This has been the
common practice before the introduction of IFRS/HKFRS 2.
(b)a value based on the annual charge of the share-based payment in accordance with IFRS/HKFRS 2.
279

[In addition to the directors26a emoluments disclosed above, directors26a A and B of the company receive emoluments from the parent company, amounting to
HK$1.25 million each (2014: HK$1 million each), part of which is in respect of their services to the parent company and its subsidiaries. No apportionment has
been made as the directors26a consider that it is impracticable to apportion this amount between their services to the group and their services to the companys
parent company.]
A24A
During the year, Mr. B waived emoluments of HK$1 million and has agreed to waive 2014 emoluments of HK$1 million.
GEM18.29
Footnotes:
22. In making the above disclosures, reference can be made to AB 3 which discusses the minimum disclosure that directors remuneration would include
remuneration from the companys holding companies, fellow subsidiaries, associates or any other company and also that directors remuneration be
apportioned between the parent company and subsidiaries. In making the above disclosures, reference should be made to Companies (Disclosure of
Information about Benefits of Directors) Regulation (Cap. 622G), which specifically addresses the detailed disclosure requirements in respect of directors
emoluments.
Particularly, 622G10 specifies that the directors emoluments should include all relevant sums, whether paid by or receivable from the company or its subsidiary
undertaking or any other person. A reference to a payment to or receivable by a director includes: a) a payment to or receivable by a connected entity of the
director; and b) a payment to a person made or to be made at the direction of, or for the benefit of, the director or a connected entity of the director. A reference
to a payment by a person includes a payment by another person made at the direction of, or on behalf of, the person. Connected entity of the director is defined
in section 486 of the new CO, which is not the same as the definition of related party under IAS/HKAS24. Please refer to Section 486 of the new CO for the
definition of connected entity.
622G9 specifies directors emoluments must be the amount of (a) all relevant sums receivable in respect of that year (whenever paid); or (b) in the case of sums
not receivable in respect of a period, the sums paid during that year. It also requires that the corresponding amount for the immediately preceding financial year
must also be shown in the notes.
23. The disclosure refers to the remuneration of a chief executive who is not a director. If the director who is also the chief executive, no separate disclosure in
respect of the remuneration of the chief executive is required, but a note should be added to indicate that the director is also the chief executive.
24. In addition to discretionary bonus payments, all bonus payments to which a director is contractually entitled and which are not fixed in amount, together
with the basis upon which they are determined must be disclosed here.
25. Pension does not include payments from a pension scheme when contributions to the pension scheme are substantially adequate to maintain the scheme.
This is because contributions made to such pension schemes would already have been included under directors emoluments at the time the contributions were
made. According to 622G4(6)(a)(iii) and 622G4(6)(b), this includes any contributions paid under a retirement benefits scheme, by any person other than the
director, in respect of the director; and excludes any retirement benefits to which the director is entitled under any retirement benefits scheme. The retirement
benefits to which the director is entitled under any retirement benefit scheme are disclosed in accordance with 622G5 separately in Note 45(B).
26a. In the case of a PRC issuer, references to directors or past directors shall also mean and include supervisors and past supervisors (as appropriate).
280

S383(1)(b)
622G5(3)(a),
622G5(3)(b)
(B) Directors retirement benefits

The retirement benefits paid to [or receivable by] Mr.H during the year ended 31 December 2015 by a defined benefit pension plan operated by the group in
respect of Mr. Hs services as a director of the company and its subsidiaries is HK$200,000 (2014: nil). No other retirement benefits were paid to [or
receivable by] Mr. H in respect of Mr. Hs other services in connection with the management of the affairs of the company or its subsidiary undertaking
(2014: same).
Commentary:
622G5(4),
622G4(6)(a)(iii
)
For the purpose of disclosure of the retirement benefits paid to or receivable by the directors, 622G5(4) states that any amount of the retirement benefits paid
or receivable under a retirement benefits scheme is to be disregarded if the contributions made under the scheme are substantially adequate for the
maintenance of the scheme. Accordingly, retirement benefits paid to or receivable by the directors through the defined contribution schemes are not required to
be disclosed as directors retirement benefits. According to 622G4(6)(a)(iii), the contributions made by the company to the defined contribution schemes for the
benefits of directors are considered as directors emoluments.
S383(1)(c)
(C) Directors termination benefitsA24(6)

On 10 September 2014, the Board made a resolution to terminate the appointment of Mr. B as the director of the company and certain subsidiaries. The
company, subsidiaries of the company and the controlling shareholder M Limited made the following payments to Mr. B as compensation for the early
termination of the appointment:
Paid by or receivable from:
622G6(4)(a),
622G6(4)(b),
622G6(4)(c)
622G6(3)(a)
for the loss of office as a director622G6(3)(a)
622G6(3)(b)
for the loss of any other office in connection with the management of the affairs of the
company and[/or] its subsidiaries622G6(3)(b)
622G6(2)(b),
622G6(5)
622G7(1)
the
the subsidiary
the controlling
company622G6(4)(a)
undertakings622G6(4)(b)
shareholder622G6(4)(c)
Total
HK$000
HK$000
HK$000
HK$000
100
20
120
50
100(Note (a))
150
150
100
20
270
Included in the HK$100,000 paid to Mr. B, HK$80,000 is estimated money value 622G6(5) of one years free use of an apartment of a subsidiary622G6(2)(b).
(D) Consideration provided to third parties for making available directors services
During the year ended 31 December 2015, the company paid HK$250,000622G7(2) to the former employer of Mr. D for making available the services of Mr. D
as a director of the Company622G7(1) (2014: nil).
281

Commentary:
According to section 383(2)(a) of the new CO, the directors retirement benefits should include former directors.
According to section 383(2)(a)(ii), the directors termination benefits should include former directors and shadow directors. Shadow director (), in relation to a
body corporate, is defined in section 2 of the new CO as a person in accordance with whose directions or instructions (excluding advice given in a professional capacity)
the directors, or a majority of the directors, of the body corporate are accustomed to act.
Reference should be made to Part 2 of 622G (622G2 622G12) for detailed requirements of the disclosure of directors emoluments and retirement benefits, payments in
respect of termination of directors services and consideration for directors services.
Commentary - Comparative information in financial statements for an entity's first financial year beginning on or after 3 March 2014
An entity's first financial year beginning on or after 3 March 2014 will be the first financial year for which the requirements of sections 380 and 383 will be effective. For
example, this will be the first financial year for which disclosures under Schedule 4 and the Companies (Disclosure of Information about Benefits of Directors) Regulation
(Cap. 622G) ("622G") will be required, instead of those under the 10th Schedule to, and section 161 of, the old CO. What information should be disclosed in the financial
statements for this financial year as comparative information for these requirements? HKICPA gave its answer to this question in its Questions and Answers on financial
reporting issues relating to the transition from the predecessor Companies Ordinance (Cap. 32) to the new Companies Ordinance (Cap. 622). Please refer to
Http://www.hkicpa.org.hk/en/standards-and-regulations/standards/new-co/predecessor-co-index/ for detail.
282

S161(B)(1)(a)(b)
-(d), S383(1)(d)
622G15(2),
622G15(3)(a),
(E) Information about loans, quasi-loans and other dealings in favour of directors, controlled bodies corporate by and connected entities
with such directors
(a) The information about loans, quasi-loans and other dealings entered into by the company622G15(2)(a) or subsidiary undertaking of the company622G15(2)(b),
where applicable, in favour of directors622G15(2)(a)(i) is as follows:
622G15(3)(b),
622G16(2)(a)
Outstanding
Outstanding
622G15(3)(b)(ii)/
622G15(3)(b)(iia)/
Amounts
Aggregate
Aggregate
622G15(3)(b)(iv)/
Aggregate
outstanding
outstanding
Aggregate
provisions
amount622G16(2)(a)(i)
Provisions
amounts
Maximum
at the
outstanding during
the year
end of the year
HK$000
HK$000
Mr. E
200
Mr. F
Name of
director622G15(3)(a)
Total amount
at the beginning of
payable 622G15(3)(b)(i)
amounts622G16(2)(a)(ii
622G15(3)(b)(v)/
622G16(2)(a)(iii)
for
fallen due but not
doubtful/bad
the year 622G15(3)(b)(iii)
been paid
debts made
HK$000
HK$000
HK$000
HK$000
150
100
150
240
120
120
180
120
60
120
Repayable annually over 3 years
622G16(2)(a)(ia)
Interest rate
Security
622G15(3)(b)(i)
622G15(3)(b)(i)
years
6.3%
Nil
Repayable monthly in 2 years
5.5%
Nil
6.0%
Nil
Term 622G15(3)(b)(i)
At 31 December 2015:
Loans:
Repayable quarterly over 4
Quasi-loans or credit transactions:

Mr. F
Quasi-loan 1: Repayable
monthly over 2 years;
Quasi-loan 1: 80;
Mr. G
Quasi-loan 1: 60;
Quasi-loan 2: 80
120
80
Quasi-loan 2: 60
monthly over 4 years
Mr. E
200
150
200
Mr. F
240
120
240
180
120
180
Repayable annually over 3 years
Quasi-loan 1:
5.5%;
Quasi-loan 2:
6.3%
Nil
years
6.3%
Nil
Repayable monthly in 2 years
5.5%
Nil
6.0%
Nil
Loans:
Repayable quarterly over 4

Mr. F
monthly over 2 years;
Quasi-loan 1: 80;
Mr. G
Quasi-loan 2: 80
Quasi-loan 1: 80;
-
120
Quasi-loan 2: 80
283
-
monthly over 4 years
Quasi-loan 1:
5.5%;
Quasi-loan 2:
6.3%
Nil

(b) The information about loans, quasi-loans and other dealings entered into by the company622G15(2)(a) or subsidiary undertaking of the company622G15(2)(b),
where applicable, in favour of a controlled body corporate of Mr. A622G15(2)(a)(ii) is as follows:
622G15(2),
622G15(3)(a),
622G15(3)(b)
Outstanding
622G15(3)(b)(ii)/
Outstanding
outstanding
622G15(3)(b)(iia)/
amounts
Aggregate
at the
Total amount
borrower622G15(3)(a)
622G15(3)(b)(v)/
Amounts622G15(3)(b)(iv)/A
Aggregate
Maximum
ggregate
provisions
outstanding
outstanding
amounts622G16(2)(a)(ii)
beginning of the
amounts622G16(2)(a)(ia)
during the year
fallen due but not been
doubtful/bad
year
at the end of the year
622G15(3)(b)(iii)
paid
debts made
HK$000
HK$000
HK$000
HK$000
HK$000
HK$000
1,000
800
600
800
622G16(2)(a)(i)
Name of the
Provisions
Aggregate
622G16(2)(a)(iii)
for
Interest
Term
622G15(3)(b)(i)
rate
Security
622G15(3)(b)(i)
622G15(3)(b)(i)
Loan:
Repayable annually
A Limited
over 5 years
Pledge of a
6.5%
property

Quasi-loan 1:
Repayable quarterly
over 1 year;
Quasi-loan 2:
Quasi-loan 1: 400;
A Limited
Quasi-loan 1: 400;
Repayable quarterly
Quasi-loan 2: 400
400
Quasi-loan 2: 400
1,000
800
1,000
over 2 years
Quasi-loan 1:
Quasi-loan
Secured by a
1: 5%;
piece of land of A
Quasi-loan
Limited; Quasi-
2: 5.5%
loan 2: Nil
Loan:
Repayable annually
A Limited
284
over 5 years
Pledge of a
6.5%
property

622G15(2),
622G15(3)(a),
622G15(3)(b)
(c) The information about loans, quasi-loans and other dealings entered into by the company622G15(2)(a) or subsidiary undertaking of the company622G15(2)(a),
where applicable, in favour of certain connected entities622G15(2)(a)(iii) of Mr. K, a director of the holding company of the company622G15(2)(a)(i), is as follows:
Name of
the
borrower
622G15(3)(a)
Nature of
connection622G15(3)(a)(ii)
Loan:
Mr. K
Junior
Son of Mr. K
K
Limited
Associate of Mr. K where Mr. K

holds 30% shares
Total amount
HK$000
Outstanding
622G15(3)(b)(ii)/
Aggregate
outstanding
amounts
622G16(2)(a)(i) at the
beginning of the
year
HK$000
Outstanding622G15(3
)(b)(iia)/
Aggregate
outstanding
amounts
622G16(2)(a)(ia) at the
end of the year
HK$000
Maximum
outstanding
during the
year
100
80
Quasi-loan 1:
1,250;
Quasi-loan 2:
1,250
2,500
Provisions
2,500
Amounts
622G15(3)(b)(iv)/
Aggregate
amounts
622G15(3)(b)(v)/
622G16(2)(a)(iia)
HK$000
fallen due but

not been paid
HK$000
for doubtful/
bad debts
made
HK$000
100
Repayable monthly
over 1 year
622G15(3)(b)(iii)
Quasi-loan 1:
1,250;
Quasi-loan 2:
1,250
Aggregate
provisions
622G16(2)(a)(iii)
Interest
rate
Security
622G15(3)(b)(i)
622G15(3)(b)(i)
5.0%
Nil
Quasi-loan 1:
Repayable on
maturity over 2
years;
Quasi-loan 2:
Repayable on
maturity over 4
years
Quasiloan 1:
6.0%;
Quasiloan 2:
6.3%
Quasi-loan 1:
Pledge of
properties;
Quasi-loan 2:
Machineries
Quasi-loan 1:
Repayable on
maturity over 2
years;
Quasi-loan 2:
Repayable on
maturity over 4
years
Quasiloan 1:
6.0%;
Quasiloan 2:
6.3%
Quasi-loan 1:
Pledge of
properties;
Quasi-loan 2:
Machineries
Term 622G15(3)(b)(i)
K
Limited
Associate of Mr. K where Mr. K

holds 30% shares
Quasi-loan 1:
1,250;
Quasi-loan 2:
1,250
2,500
285
Quasi-loan 1:
1,250;
Quasi-loan 2:
1,250

622G15(2),
(d) The information about the guarantee or security622G13(6)(a) provided to certain controlled body corporates622G15(2)(a)(ii) and connected entities622G15(2)(a)(iii) of
Mr. G in respect of their loan, quasi-loans or credit transactions is as follows:
622G15(3)(a),
622G15(3)(c)
Maximum liability that may be incurred under the guarantee

Amounts622G15(3)(c)(iii)/Aggregate
amounts622G16(2)(b)(ii) paid or
Individually622G15(3)(c)(i)/
Individually622G15(3)(c)(
in aggregate622G16(2)(b)(i)
ia)/in
at the beginning of the
aggregate622G16(2)(b)(ia)
During the year
purpose of fulfilling the guarantee or
year
at the end of the year
622G15(3)(c)(ii)
discharging the security
HK$000
HK$000
HK$000
2,000
3,000
3,000
2: Machineries
5,500
4,000
Quasi-loan 2: 3,000
Guarantee
3,500
2,000
3,500
6,500
5,500
Name of the
borrower622G1
5(3)(a)
Nature of guarantee or
Nature of connection622G15(3)(a)(ii)
security622G15(2)
liability/aggregate liabilities incurred

during the financial year for the
As at 31 December 2015:
Loan:
G Limited
Controlled body corporate of Mr. G
Guarantee

Quasi-loan 1: Pledge of
G Associate
Limited
properties; Quasi-loan
Associate of Mr. G where Mr. G holds 25% shares
Quasi-loan 1: 2,500;
As at 31 December 2014:
Loan:
G Limited
Controlled body corporate of Mr. G

Quasi-loan 1: Pledge of
G Associate
Limited
properties; Quasi-loan
Associate of Mr. G where Mr. G holds 25% shares
2: Machineries
286
Quasi-loan 1: 3,500;
Quasi-loan 2: 3,000

Commentary:
According to section 383(2)(a)(iii), loans, quasi-loans and other dealings in favour of director of the company and of a holding company of the company, or
bodies corporate controlled by such directors, or entities connected with such directors, also include a shadow director of that director.
According to 622G15(2)(a), if the loans, quasi-loans and other dealings were entered into by the company, the scope of disclosure includes relevant information
of the loans, quasi-loans and other dealings in favour of the following person who at any time during the financial year was:
(i) a director of the company or of its holding company;
(ii) a controlled body corporate of such a director; or
(iii) in the case of a specified company, a connected entity of such a director;
According to 622G15(2)(b), if the loans, quasi-loans and other dealings were entered into by the subsidiary undertaking of the company, the scope of disclosure
only includes the relevant information of the loans, quasi-loans and other dealings in favour of a person who at any time during the financial year was a director
of the company.
According to 622G16(2), in relation to all quasi-loans or credit transactions, and guarantees or securities in connection with quasi-loans or
credit transactions entered into by the company or its subsidiary undertakings with each person as listed under 622G15(3)(a), where applicable, the
information required by 622G15(3)(b)(ii), 622G15(3)(b)(iia), 622G15(3)(b)(iv), 622G15(3)(b)(v), 622G15(3)(c)(i), 622G15(3)(c)(ia) and 622G15(3)(c)(iii) can be
disclosed in aggregate, i.e.
outstanding amount at the beginning of the financial year;
outstanding amount at the end of the year;
amount fallen due but not been paid;
provision for doubtful and bad debts;
maximum liability that may be incurred under the guarantee or security at the beginning of the financial year;
maximum liability that may be incurred under the guarantee or security at the end of the financial year;
amount paid and liability incurred during the financial year for the purpose of fulfilling the guarantee or discharging the security
For each of the loans, guarantees or securities in connection with loans, the information required by 622G15 should be disclosed separately.
Reference should be made to Part 3 of 622G (622G13-622G19) for detailed requirements of the disclosure of information about loans, quasi-loans and other
dealings in favour of directors, controlled bodies corporate and connected entities.
287

Commentary: Disclosures applicable to companies that are authorised financial institutions or where their subsidiary undertakings are
authorised financial institutions:
Please refer to 622G17 for details of the disclosure requirements.
S162,
(F) Directors material interests in transactions, arrangements or contracts
S129D(3)(j)
S383(1)(e),
622G20
No significant transactions, arrangements and contracts in relation to the groups business to which the Company was a party and in which a director of the
Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.
[OR
Pursuant to an agreement dated 28 February 2010 (the Agreement) made between the Company 622G20(3)(c), and LMF Holdings Limited (LMF)622G20(3)(c),
the Company agreed to pay LMF an annual fee for the provision of consultancy services in accordance with the terms of the Agreement. LMF was paid a fee
of HK$83,000 for the year ended 31 December 2015 (2014: HK$70,000) 622G20(3)(a),622G20(3)(b). Mr E 622G20(3)(d), a non-executive director of the Company, is
interested in this transaction to the extent that LMF is controlled by him 622G20(3)(d).
Save for contracts amongst group companies and the aforementioned transaction, no other significant transactions, arrangements and contracts to which
the Company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or
at any time during the year.
]
288

Commentary:
The disclosures relating to directors material interests in contracts required by Schedule 162 and 129D(3)(j) in the old CO were previously disclosed in the
Directors Report. According to section 383(1)(e) of the new CO and in accordance with section 20 of 622G, the scope has been expanded to cover the directors
material interests in transactions, arrangements or contracts. In respect of the location of the disclosure, if the transaction, arrangement or contract involves the
company, it is required by section 383(1)(e) and 622G22(1)(1) to be disclosed in the notes to the financial statements. If the transaction, arrangement or
contract involves a specified undertaking of the company, it is required by 622D10(1) to be disclosed in the Directors Report. A specified undertaking of the
company is defined in section 1 of 622D, which includes:
(i) a parent company of the company;
(ii) a subsidiary undertaking of the company; or
(iii) a subsidiary undertaking of the companys parent company.
According to section 383(2)(a)(iii), the information about material interests of directors in transactions, arrangements or contracts entered into by the
company also include a shadow director of that director.
622G22(5) refers a transaction, arrangement or contract to that is significant in relation to the companys business. The directors of the company should
consider if a transaction, arrangement or contract is significant in relation to the companys business. 622G22(7) states that the directors of the company should
consider if the directors interest in a transaction, arrangement or contract is material or not.
Reference should be made to Part 4 of 622G(622G20 622G23) for detailed requirements of the disclosure of directors material interests in transactions,
arrangements or contracts.
289

Independent Auditors Report

To the members shareholders of Specimen Holdings Limited
(incorporated in Hong Kong with limited liability)
We have audited the consolidated financial statements of Specimen Holdings Limited (the Company) and its subsidiaries
(together, the Group) set out on pages [x] to [x], which comprise the consolidated and company [balance sheets] [statements of
financial position]67 as at 31 December 2014, and [the consolidated income statement,] [the consolidated statement of
comprehensive income,]67the consolidated statement of changes in equity and the consolidated [cash flow statement][ statement of
cash flows]67for the year then ended, and a summary of significant accounting policies and other explanatory information.
Directors Responsibility for the Consolidated Financial Statements
The directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view
in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants,
and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit [and to report our opinion
solely to you, as a body, in accordance with section [141 of/80 of Schedule 11 to] 405 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.]68
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 about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation of consolidated financial statements that give a true and fair view 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 entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the consolidated
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the financial position state of affairs of the
Company and of the Group its subsidiaries as at 31 December 2014, and of the Groups [profit] [loss] their financial performance
and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly
prepared in accordance compliance with the Hong Kong Companies Ordinance.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, [date]
67 Tailor the titles of the primary financial statements in the introductory paragraph to ensure consistency with the titles of financial statements used by the entity.
68 Bannerman Language is included under the section headed "Auditors responsibility" only for audit in accordance with Hong Kong Standards on Auditing.
Bannerman Language should continue to be included under the section headed "Other Matters" for all audits performed in accordance with International Standards on
Auditing under ISA 700.
For financial statements with periods ended before 3 March 2014 (e.g. year ended 31 December 2013, 31 January 2014 and 28 February 2014): reference to
"section 141 of the Hong Kong Companies Ordinance".
For financial statements with periods ended after 3 March 2014 but before 2 March 2015 (e.g. year ended on 31 March 2014, year ending on 30 June 2014 or
31 December 2014): reference to "section 80 of Schedule 11 to the Hong Kong Companies Ordinance.

Appendix IX Illustrative disclosure required by the new Hong Kong Companies Ordinance (Cap. 622) for
financial year ending on or after 2 March 2015 (Directors Report Section)
This illustrative disclosure for directors report section is prepared under the new Companies Ordinance (Cap. 622) (New CO) and
is applicable for the following annual reports:
Hong Kong incorporated companies
mandatory for annual reports covering financial years ending on or after 2 March
2015
Overseas incorporated companies

listed in Hong Kong
mandatory for annual reports covering financial years ending on or after 31

December 2015
early adoption is allowed for annual reports covering financial years ending on or after
2 March 2015 but before 31 December 2015
Report of the Directors
[Note: This illustrative Report of Directors does not include the Business Review as required by s388(1)(a). When preparing the
business review, an entity is required to follow the requirements in Schedule 5 and make reference to the guidance in Accounting
Bulletin 5 issued by HKICPA (AB5).
Directors of companies listed in Hong Kong are required to provide a management discussion and analysis (MD&A)(as
illustrated in the Appendix I of 2014 Illustrative Consolidated Financial Statements) under the Listing Rules. As required by the
new CO, directors have to ensure that they also meet the requirements for business review under Schedule 5.
Specifically, some of the recommended disclosures under the current Listing Rules are parts of the requirements under Schedule 5
and are required to be disclosed in the directors report. Please refer to the Commentary box at the end of this appendix for the
comparison between the disclosures in the MD&A required/recommended by the current Listing Rules and the mandatory
disclosures required by Schedule 5. While there is a degree of overlap between the two, AB5 may be insufficient to address the
Listing Rules requirements.]
291

financial year ending on or after 2 March 2015 (Directors Report Section) (continued)
REPORT OF THE DIRECTORS
S129D(1) s388(1),
s388(2)
The directors submit their report together with the audited financial statements for the year ended 31
December 2015.
Principal activities and geographical analysis of operations
S129D(3)(a)
s390(1)(b), s390(3)
The principal activity of the company is investment holding. The activities of the subsidiaries are set out
A4(3), A7,
GEM18.08
An analysis of the groups performance for the year by operating segment is set out in Note 5 to the
Results and appropriations
The results of the group for the year are set out in the consolidated income statement on pages 1-2.
S129D(3)(b) 622D7
The directors recommend the payment of a final dividend of HK$0.51 per ordinary share, totalling
HK$12,945,000.
OR
S129D(3)(b) 622D7
[The directors do not recommend the payment of a dividend.]
A17
GEM18.31
[Note: Where the shareholders have waived or agreed to waive any dividends under any agreement,
particulars of such arrangements are required.]
Reserves
S129D(3)(c)
Movements in the reserves of the group and of the company during the year are set out in Notes 29 and
30 to the financial statements.
Donations
S129D(3)(d) & (e)

622D4
Charitable and other donations made by the group during the year amounted to HK$500,000.
S129D(3)(f)
Details of the movements in property, plant and equipment of the group [and of the company] are set out
Principal properties
A23, GEM18.23
Details of the principal properties held for development and/or sale and for investment purposes are set
out on page 160 of the annual report.
Share capital issued in the year
S129D(3)(g) 622D5
622D5
Details of the movements in share capital of the company shares issued in the year ended 31 December
2015 are set out in Note 27 and Note 28 to the financial statements.
Commentary:
If, in any financial year of a company, the company has issued any shares, a directors report for the
financial year must state: (a)the reason for making the issue; (b) the classes of shares issued; and (c) for
each class of shares, the number of shares issued and the consideration received by the company for the
issue.
292

Distributable reserves92
A29
GEM18.37
Distributable reserves of the company at 31 December 2015, calculated under section 79B Part 6 of the new
Hong Kong Companies Ordinance (Cap. 622) [or legislation applicable in companys place of
incorporation], amounted to HK$37,693,000 (2014: HK$36,224,000).
Debentures issued in the year
622D.5A
The group issued 20,000 6% debentures at a par value of $2,000,000 on 2 January 2015622D5A(b). After
deducting the issuance costs, the group received net consideration of HK$1,950,000622D5A(c) from the
issuance. The reason for issuing the debentures is [state the reason]622D5A(a).
Equity linked agreements
(a)
622D6
The Company issued 500,000 5.0% convertible bonds at a par value of HK$50 million on 2 January 2015.
The bonds mature five years from the issue date at their nominal value of HK$50 million or can be
converted into shares at the holders option at the maturity date at the rate of 33 shares per
HK$500.622D6(1)(b)(i),622D6(1)(b)(ii),622D6(2)(d) The maximum number of ordinary shares622D6(2)(a) to be issued at
the maturity date is 3,300,000 shares622D6(2)(b) and none of them was issued up to 31 December 2015.
622D6(1)(d),622D(2)(b) The net proceeds received from the issuance of convertible bonds was HK$50 million.
622D6(1)(b)(iii) The group will not receive further consideration when the holders determines to convert the
bonds into ordinary shares of the Company at maturity date. 622D6(2)(c) The reason for issuance of the
convertible bonds is [state the reason]. 622D6(1)(a)
(b)
622D6
Convertible bonds
Share options granted to directors and selected employees.
Details of the share options granted in prior years and current year is set out in Note 28 of the financial
statements and Share options section contained in this Directors Report. For the share options granted
during the year ended 31 December 2015, none of the ordinary shares were issued. 622D6(1)(d)
[Pre-emptive rights
A20
There is no provision for pre-emptive rights under the companys bye-laws and there was no restriction
against such rights under the laws of [country of incorporation], which would oblige the company to offer
new shares on a pro-rata basis to existing shareholders.]
Five year financial summary
A19
GEM18.33
92
A summary of the results and of the assets and liabilities of the group for the last five financial years is set
For further guidance, please refer to Accounting Bulletin 4 Guidance on the Determination of Realised Profits and Losses in the context of Distributions under the
Hong Kong Companies Ordinance.
293

Purchase, sale or redemption of securities
A10(4)
GEM18.14
[The company has not redeemed any of its shares during the year. Neither the company nor any of its
subsidiaries has purchased or sold any of the companys shares during the year.]
OR
MB10.06(4)(b)
A10(4)
GEM18.14
GEM13.13(2)
On 18 April 2015, the company purchased 875,000 ordinary shares of HK$1 each of the company at prices
of HK$2.93 per share on The Hong Kong Stock Exchange. The purchase involved a total cash outlay of
HK$2,564,000 and was for the purpose of [state the reason]. The aggregate price of the purchased shares
was charged to equity as treasury shares. The company reissued 500,000 treasury shares for a total
consideration of HK$1.5 million on 15 January 2015.
Save as disclosed above, neither the company nor its subsidiary companies has purchased or sold any of the
companys shares during the year ended 31 December 2015 and the company has not redeemed any of its
shares during the year ended 31 December 2015.
A11
GEM18.32
[The following disclosures should be made for any issue of equity securities for cash otherwise than
shareholders in proportion to their shareholdings and which has not been specifically authorised by the
shareholders:
reasons for making the issue
classes of equity securities issued
as respect each class of equity securities, number issued and their aggregate normal value
the issue price of each security
net price to listed issuer of each security
if less than 6 in number, the names of allottees. If equal to or more than 6 allottees, a brief generic
description of them
market price of the securities concerned on a named date, being the date on which the terms of
the issue were fixed
use of the proceeds]
Share options
MB17.09
GEM23.09
622D6
Share options are granted to directors, executives, employees with more than three years of service and
business partners at the invitation of the directors under the Executive Share Option Scheme approved by
shareholders at an Extraordinary General Meeting on 1 July 2006. The Executive Share Option Scheme is
designed to motivate executives and key employees and other persons who make a contribution to the group
and enable the group to attract and retain individuals with experience and ability and to reward them for
their past contributions622D6(1)(a).
The options were granted at nil consideration622D6(1)(b)(iii), 622D6(2)(c).
The exercise price of the granted options is equal to or higher than the market price of the shares on the date
of the grant. Each option gives the holder the right to subscribe for one share of the company622D6(1)(c),
622D6(2)(a). Options are conditional on the employee completing three years service. The options are
exercisable starting three years from the grant date only if the group achieves its target growth; the options
have a contractual option term of five years.622D6(1)(b)(i), 622D6(1)(b)(ii), 622D6(2)(d)
The company can issue options so that the total number of shares that may be issued upon exercise of all
options to be granted under all the share option schemes does not in aggregate exceed 10% of the shares in
issue on the date of approval of the Executive Share Option Scheme. The company may renew this limit at
any time, subject to shareholders approval and the issue of a circular and in accordance with the Listing
Rules provided that the number of shares to be issued upon exercise of all outstanding options granted and
yet to be exercised under all the share option schemes does not exceed 30% of the shares in issue from time
to time.
As at [the latest practicable date prior to the issue of the annual report], options to subscribe for a total of
4,833,000 option shares were still outstanding under the Executive Share Option Scheme which
represents approximately 19.1% of the issued ordinary shares of the company.622D6(2)(b)
The Executive Share Option Scheme shall be valid and effective for a period of 10 years commencing from
the approval of the Scheme.
294

MB17.07
GEM23.07
GEM18.28(7)
622D6
Details of the shares outstanding on which options are granted as at 31 December 2015 under the scheme
are as follows:
Number of options (in thousands) 93
held at 1
January
2015
granted
during the
year (Note
(1))
150
200
500
800
expired
held at 31 Exercise
exercised
December
during the
during the year622D6(1)(d) 2015622D6(2)(b)
price
year
HK$
Grant Exercisable
date
from
Exercisable
until
150
1.20 2 July 2011 2 July 2012
1st July 2016
200
2.95 2 July 2015 2 July 2016
1st July 2020
50094
1.10 2 July 2010 2 July 2011
1st July 2015
800
1.35 2 July 2013 2 July 2014
1st July 2018
100
100
2.95 2 July 2015 2 July 2016
1st July 2020
100
100
1.20 2 July 2011 2 July 2012
1st July 2016
400
400
2.38 2 July 2012 2 July 2013
1st July 2017
200
200
2.95 2 July 2015 2 July 2016
1st July 2020
Mr D
200
200
2.95 2 July 2015 2 July 2016
1st July 2020
Mr F
150
10094
50
1.20 2 July 2011 2 July 2012
1st July 2016
Continuous
contract
employees
500
500
1.20 2 July 2011 2 July 2012
1st July 2016
450
125
5094
275
1.35 2 July 2013 2 July 2014
1st July 2018
155
155
2.00 2 July 2014 2 July 2015
1st July 2019
1,277
1,277
2.38 2 July 2012 2 July 2013
1st July 2017
214
214
2.95 2 July 2015 2 July 2016
1st July 2020
150
5095
100
2.38 2 July 2012 2 July 2013
1st July 2017
50
50
2.95 2 July 2015 2 July 2016
1st July 2020
112
5095
62
2.00 2 July 2014 2 July 2015
1st July 2019
964
125
Chairman Mr C
Executive
directors
Mr A
(resigned as
director on
[specify date])
but still
employee of the
company at
31/12/2015.
Mr B
(excluding
resigned
Director Mr A)
Suppliers
Others
4,744
93
750
4,833
Where options lapse or are cancelled during the year, these movements should also be disclosed, including exercise price in respect of those cancelled.
94Exercise
95Exercise
295

MB17.07, MB17.08
GEM23.07
GEM23.08
(1) At 30 June 2015, the date before the options were granted, the market value per share was HK$3.47.
The value of the options granted to the respective parties is as follows:
HK$000
61
125
125
125
133
31
600
Director Mr A:
Director Mr B:
Chairman Mr C:
Director Mr D:
Continuous contract employees:
Suppliers:
MB17.08
GEM23.08
The value of the options granted during the year is HK$830,000, based on the Black-Scholes valuation
model. The significant inputs into the model were share price of HK$3.47 at the grant date, exercise price
shown above, standard deviation of expected share price returns of 30%, expected life of options of 3 years
(2014: 3 years), expected dividend paid out rate of 4.3% and annual risk-free interest rate of 5%. The volatility
measured at the standard deviation of expected share price returns is based on statistical analysis of daily
share prices over the last three years. The Black-Scholes model is developed to estimate the fair value of
European share options. The fair values calculated are inherently subjective and uncertain due to the
assumptions made and the limitations of the model used. The value of an option varies with different
variables of certain subjective assumptions. Any change in variables so adopted may materially affect the
estimation of the fair value of an option.
296

Directors
(a)
S129D(3)(i)
s390(1)(a)
Directors of the company
The directors of the company during the year and up to the date of this report were:
Mr. C
(Chairman)
Executive directors
Mr. A
(resigned on [specify date])
Mr. B
Mr. F
Mr. D
(appointed on [specify date])
Mr. I
Independent non-executive directors
Mr. E
Mr. G
Mr. H
In accordance with Article 20 of the companys Articles of Association, Mr. B and Mr. F retire by rotation at
the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
In accordance with Article 21 of the companys Articles of Association, Mr. D retires at the forthcoming
Annual General Meeting but, being eligible, offers himself for re-election.
622D8
Mr. A resigned on [specify date] as executive director of the company due to [state the reason for the
resignation]. Mr. A has confirmed that he has no disagreement with the Board and nothing relating to the
affairs of the company needed to be brought to the attention of the shareholders of the Company. [OR If the
Company has received a notice in writing from the director specifying that the resignation or refusal of
standing for re-election is due to reasons relating to the affairs of the Company (whether or not other
reasons are specified), a directors report for the financial year must contain a summary of the reasons
relating to the affairs of the Company.]
MB Appendix14K
GEM18.24(2)
GEM Appendix15K
Mr. E, Mr. G and Mr. H are independent non-executive directors and were appointed for a two-year term
expiring on [31 December 2016].
[OR
There being no provision in the companys Articles of Association for retirement by rotation, all directors
continue in office.]
A28.2
[Applicable for HK incorporated companies only:

(b) Directors of the companys subsidiaries
s390(1)(a), s390(3)
During the year and up to the date of this report, Mr. A, B, F and D are also directors in certain subsidiaries of
the company. Other directors of the companys subsidiaries during the year and up to the date of this report
include: Mr. J, K and L.]
Commentary:
In the FAQ series of Companies Registry, the Companies Registry has the following position on the
disclosures of the names of the directors of the subsidiaries:
The names of directors of all subsidiary undertakings included in the annual consolidated financial
statements may be disclosed on a consolidated basis, without further setting out specifically the
directorship of each individual subsidiary undertaking. If the number of names of directors of all
subsidiary undertakings is, in the opinion of the directors of the holding company, of excessive length,
disclosure of the names of directors of subsidiary undertakings may be made by way of inclusion by
reference, provided that the information on the relevant directors' names is clearly contained in the
directors' report by making a list of such names readily available to the reader. This may include, for
example, by providing a link to the relevant website(s) which contains a full list of the names.
The above does not affect the requirement to disclose the names of the directors of the holding company
and other particulars required under section 390, such information must be contained fully in the
directors' report.
Source: http://www.cr.gov.hk/en/companies_ordinance/faq_account-audit.htm#12]
297

Directors service contracts
A14*
GEM18.24(1)*
None of the directors who are proposed for re-election at the forthcoming Annual General Meeting has a
service contract with the company which is not determinable within one year without payment of
compensation, other than statutory compensation.
OR
A14*
GEM18.24(1)*
A14A
GEM18.24A
MB13.69
GEM17.91
Mr. B has a service contract with the company with remaining unexpired period of [3] years which is not
determinable within one year without payment of compensation. As the contract was signed on 31 December
2004 in accordance with the Listing Rule, no shareholders approval is required.
[Note:* Only applicable to directors proposed for re-election at the forthcoming Annual General Meeting.].
S162 622D10
A15, GEM18.25
Directors material** interests in transactions, arrangements and contracts that are

significant in relation to the companys business
No transactions, arrangements and contracts of significance* in relation to the groups business to which the
companys, any of its subsidiaries, fellow subsidiaries or its parent company was a party and in which a
director of the company [applicable for public company: and the directors connected party***] had a
material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the
year.
[OR
S129D(3)(j)
622D10(2)
A15
GEM18.25
Pursuant to an agreement dated 28 February 2013 (the Agreement) made between Orange Limited, a
subsidiary of the group, and LMF Holdings Limited (LMF)622D10(2)(c), Orange Limited agreed to pay LMF an
annual fee for the provision of consultancy services in accordance with the terms of the Agreement.622D10(2)(a)
LMF was paid a fee of HK$83,000 for the year ended 31 December 2015 (2014: HK$70,000).622D10(2)(b) Mr
E622D10(2)(d), a non-executive director of the company, is interested in this transaction to the extent that LMF is
controlled by him.622D10(2)(e)
Save for contracts amongst group companies and the aforementioned transaction, no other transactions,
arrangements and contracts of significance to which the company, any of its subsidiaries, fellow subsidiaries
or its parent company was a party and in which a director of the company [applicable to public company:
and the directors connected party] had a material interest, whether directly or indirectly, subsisted at the
end of the year or at any time during the year.
A15.2 & A15.3

[Note:* A contract of significance is one where any of the percentage ratios (as defined under
GEM18.25(note12,3)
MB14.04(9)/GEM19.04(9)) of the transaction is 1% or more or the omission of information relating
622D10(5)
to that
contract could have changed / influenced the judgement / decision of a person relying on the relevant
information. According to 622D10(5), a transaction, arrangement or contract is not significant in relation
to the companys business if, after consideration, the directors of the company are of the opinion that it is
not significant in relation to the companys business.]
622D10(6)
[Note**: According to 622D10(6), an interest that a director of a company has in a transaction,

arrangement or contract is not material if, after consideration, the directors of the company are of the
opinion that it is not material.]
622D10(8)(b), s486
A15.4,
GEM18.25(note4)
[Note***: According to 622D10(8)(b), a reference to a connected entity, in relation to a director, is a

reference to an entity connected with the director within the meaning of s486. ]
298

Biographical details of directors and senior management
A12
MB13.51B(1)
GEM18.39
GEM17.50A(1)
Brief biographical details of directors and senior management are set out on page [x].
[Such details will include:
full name (which should normally be the same as that stated in the declaration and undertaking of the
director or supervisor in the form set out in Form B, H or I in Appendix 5 to MB rules and the form set
out in Appendix 6 to GEM Rule) and age;
experience including (i) other directorships held in the last three years in public companies the securities
of which are listed on any securities market in Hong Kong or overseas, and (ii) other major
length or proposed length of service with the company;
issuer; and
such other information (which may include business experience) of which shareholders should be
aware, pertaining to the ability or integrity of such personsetc.
Where any of the directors or senior managers is related that fact should be stated. Details of disclosure
requirements of the biographical of directors and senior management should be referred to Rules 13.51 to
13.51C of Main Board Listing Rules / Rules 17.50 to 17.50B and 18.39 of GEM Listing Rules.
Where there is a change in any of the information below during the course of the directors or supervisors
term of office, the change and the updated information regarding the director or supervisor should be
disclosed in the next published annual or interim report (whichever is the earlier):
full name (which should normally be the same as that stated in the declaration and undertaking of the
director or supervisor in the form set out in Form B, H or I in Appendix 5 to MB rules and the form set
out in Appendix 6 to GEM Rule);
experience including (i) other directorships held in the last three years in public companies the securities
of which are listed on any securities market in Hong Kong or overseas, and (ii) other major
proposed length of service with the issuer;
issuer; and
amount of the directors or supervisors emoluments and the basis of determining the directors or
supervisors emoluments (including any bonus payments, whether fixed or discretionary in nature,
irrespective of whether the director or supervisor has or does not have a service contract) and how
much of the emoluments are covered by a service contract.
299

S129D(3)(k)622D3
A13(1)&(2)
PN 5(3.1),(3.2),(3.2)
GEM18.15, 18.17
GEM18.17A
Directors and chief executives interests and / or short positions in the shares, underlying
shares and debentures of the company or any specified undertaking of the company* or
any other associated corporation
At 31 December 2015, the interests and short positions of each director and chief executive (should
include supervisors in case of a PRC issuer) in the shares, underlying shares and debentures of the
company and its associated corporations (within the meaning of the Securities and Futures Ordinance
(SFO), as recorded in the register required to be kept by the company under Section 352 of Part XV of
the SFO were as follows:
(a) Ordinary shares of HK$x each in [state the companys name, i.e. the company or its associated
corporation] at 31 December 2015.
Personal
interests
Family **Corporat
interests e interests
**Trusts
and **Persons
similar acting in
interests
concert
Other
interests
Total
% of the
Issued
share
capital of
the
company
Director Mr B
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Director Mr C
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
622D2
Note: Specified undertaking, in relation to a company, is defined in 622D2, with the meaning of: (a)
a parent company of the company; (b) a subsidiary undertaking of the company; or (c) a subsidiary
undertaking of the companys parent company. Compared with the meaning of associated
corporation defined under Section 352 of Part XV of the SFO, apart from specified undertaking of
the listed corporation as defined by 622D2, associated corporation also includes a corporation (not
being a subsidiary of the listed corporation) in which the listed corporation has an interest in the
shares of a class comprised in its share capital exceeding in number one-fifth of the number of the
issued shares of that class.
** Note: The nature of such interests should be provided. Where corporate interests that are not
wholly owned by the directors or chief executives, the percentage interests held by them in such
corporation should be disclosed.
622D3
(b)
x% redeemable preferences shares of HK$x each in [state the companys name, i.e. the company or
its associated corporation] at 31 December 2015.
Personal
interest
Family *Corporate
interests
interests
*Trusts
and
similar
interests
*Persons
acting in
concert
Other
interests
Total
% of the
Issued
share
capital of
the
company
Director Mr B
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Director Mr C
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
*Note: The nature of such interests should be provided. Where corporate interests that are not wholly owned by
the directors or chief executives, the percentage interests held by them in such corporation should be disclosed.
(1) x shares are held by DEF Limited, a company in which Mr. B holds x% equity interests and has a controlling
interest.
(2) x shares are held by discretionary trusts of which Mr. C and members of his family are beneficiaries.
300

622D3
(c)
derivative to ordinary shares of HK$x each in [state the companys name, i.e. the company or its
associated corporation]
Listed Warrants
(physically settled equity derivatives)
Unlisted Options
(physically settled equity
derivatives)
Director Mr B
Long positions
Director Mr C
Long positions
Short positions
x
x
x
x
Chief executive Mr M
Long positions
Short positions
x
x
x
x
Share options are granted to directors and chief executives under the Executive Share Option
Scheme approved by shareholders at an Extraordinary General Meeting on 1 July 2006. Refer
details under Share Options above.
622D3
OR
Saved as disclosed above, at no time during the year, the directors and chief executives (including
their spouse and children under 18 years of age) had any interest in, or had been granted, or
exercised, any rights to subscribe for shares (or warrants or debentures, if applicable) of the
company, its specified undertakings and its other associated corporations required to be disclosed
pursuant to the SFO and the Hong Kong Companies Ordinance (Cap. 622).
(d)
Other than those interests and short positions disclosed above, the directors and chief executives
also hold shares of certain subsidiaries solely for the purpose of ensuring that the relevant
subsidiary has more than one member.
OR
S129D(3)(k)622D3
At no time during the year was the company, its subsidiaries, its associated companies, its fellow
subsidiaries, or its parent company or its other associated corporations a party to any arrangement
to enable the directors and chief executives of the company (including their spouse and children
under 18 years of age) to hold any interests or short positions in the shares or underlying shares in,
or debentures of, the company or its specified undertakings or other associated corporation.
A13(3)
GEM18.16
GEM18.17
GEM18.17B
PN5(3.4)
Substantial shareholders interests and / or short positions in the shares, underlying

shares of the company
At 31 December 2015, the register of substantial shareholders required to be kept under Section
336 of Part XV of the SFO shows that the company had not been notified of any substantial
shareholders interests and short positions, being 5% or more of the companys issued share capital,
other than those of the directors and chief executives as disclosed above.
OR
The register of substantial shareholders required to be kept under section 336 of Part XV of the
SFO shows that as at 31 December 2015, the company had been notified of the following substantial
shareholders interests and short positions, being 5% or more of the companys issued share capital.
These interests are in addition to those disclosed above in respect of the directors and chief
executives.
(a)
ordinary shares of HK$x each in the company

Number of shares
*Trusts
and *Persons
Family *Corporate
similar acting in
Other
Personal
interests interests
interests interests
concert interests
Total
% of the
Issued share
capital of the
company
Mr X
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Mrs Y
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Mr Z
Long positions
Short positions
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
301

*Note: The nature of such interests should be provided. Where corporate interests that are not wholly owned by the
substantial shareholders, the percentage interests held by them in such corporation should be disclosed.
A13(3)
GEM18.17
GEM18.17C
PN5(3.5)
[Same disclosures as those of substantial shareholders should be made for other persons whose interests are
recorded in the register to be kept under section 336 of the SFO.]
Management contracts
s543
No contracts concerning the management and administration of the whole or any substantial part of the
business of the company were entered into or existed during the year.
OR
S129D(3)(ia)
S162A(1)(a)
s543
A16(1)
GEM18.26
A16(2)
GEM18.27
There exist agreements for management and payroll services, in respect of which BXK Management
Services Limited provides services to various companies in the group and under which costs are
reimbursed and fees are payable. These agreements can be terminated by either party giving not less than
twelve months notice of termination expiring on 31 December 2015 or any subsequent 31st December. Mr.
C is one of the directors and shareholders who holds 25% shares of BXK Management Services Limited.
[Notes:
- Details are required for any contract of significance between the company or any one of its subsidiaries, and a
controlling shareholder* or any subsidiaries of the controlling shareholder.
- Details are also required for any contract of significance for the provision of services to the group by a controlling
shareholder or any of the subsidiaries of the controlling shareholder.
*For the purpose of this requirement, controlling shareholder mean any shareholder entitled to exercise, or control
the exercise of:
(i) in the case of a PRC issuer, 30 per cent (or such other amount as may from time to time be specified in applicable
PRC law as being the level for triggering a mandatory general offer or for otherwise establishing legal or
management control over a business enterprise);
(ii) in other cases, 30 per cent (or such other amount as may from time to time be specified in the Takeovers Code as
being the level for triggering a mandatory general offer);
or more of the voting power at general meetings of the listed issuer or one which is in a position to control the
composition of a majority of the board of directors of the listed issuer.]
A31
GEM18.40
Major suppliers and customers
A31(6), A31(7)
GEM18.40(6)
&18.40(7)
During the year, the group purchased less than 30% of its goods and services from its 5 largest suppliers
and sold less than 30% of its goods and services to its 5 largest customers.
OR
A31(1)-(4)
GEM18.40(1)GEM18.40(4)
The percentages of purchases and sales for the year attributable to the groups major suppliers and
customers are as follows:
Purchases
- the largest supplier
- five largest suppliers in aggregate
Sales
- the largest customer
- five largest customers in aggregate
A31(5)
GEM18.40(5)
A31(5)
GEM18.40(5)
x%
x%
x%
x%
None of the directors, their associates or any shareholder (which to the knowledge of the directors owns
more than 5% of the companys share capital) had an interest in these major suppliers or customers.
OR
[Director Mr. B held a 20% interest in the share capital of the groups largest supplier.]
302

Connected transactions
A summary of the related party transactions entered into by the group during the year ended 31 December
2015 is contained in Note 42 to the consolidated accounts. The transactions in relation to the acquisition of
a further 65% of the share capital of ABC Group as described in Note 41 fall under the definition of
connected transactions under the Listing Rules.
The following transactions between certain connected parties (as defined in the Listing Rules) and the
company have been entered into and/or are ongoing for which relevant announcements, if necessary, had
been made by the company in accordance with [Main Board: Chapter 14A / GEM: Chapter 20] of the
Listing Rules.
(1) Connected transactions
A8(1), MB14A. 49
GEM18.09(1)
GEM20. 47
On 1 March 2015, the group acquired a further 65% of the share capital of ABC Group, a shoe and leather
goods retailer operating in the US and most western European countries. The consideration was settled
through the issue of 3.55 million ordinary shares of the company at HK$1 each and cash. ABC Group is a
subsidiary of EFG Corporation, a company which is controlled by Mr X who is a substantial shareholder of
a subsidiary of the company. The contingent consideration arrangement requires the group to pay the
former owners of ABC Group 10% of the average profit of ABC Group for three years from 2015 to 2017, in
excess of HK$ 7,500,000 for 2015, up to a maximum undiscounted amount of HK$2,500,000.
(2) Continuing connected transactions
A8(2), MB14A. 49
GEM18.09(2)
GEM20. 47
MB14A. 71
GEM20. 69
GL73-14
On 30 June 2014, Pink Limited, a subsidiary of the company, has entered into a tenancy agreement with
ABC Limited. Mr. E is a director of Pink Limited and Miss L, a spouse of Mr E, is the substantial
shareholder of ABC Limited. The group leased a flat as office at 8/F, London Tower, Kings Road,
London with an area of approximately 2,800 square metre for a term of 24 months from 1 July 2014 to
30 June 2016 at a monthly rental of HK$1,280,000.
[Note: According to GL73-14 issued by the HKEx, listed issuers should disclose whether they have
followed the pricing policies and guidelines set out in their continuing connected transaction
announcement(s) and the circular(s) (if any) when determining the price and terms of the continuing
connected transactions conducted during the year. Sample wording is set out below:
The price and the terms of the above transaction have been determined in accordance with the
pricing policies and guideline set out in the relevant announcement dated [date] and the relevant
circular dated [date].]
MB14A. 55
GEM20. 53
MB14A. 58
GEM20. 56
The aforesaid continuing connected transaction has been reviewed by independent non-executive
directors of the company. The independent non-executive directors confirmed that the aforesaid
connected transaction were entered into (a) in the ordinary and usual course of business of the group;
(b) either on normal commercial terms or on terms no less favourable to the group than terms available
to or from independent third parties; (c) in accordance with the relevant agreements governing them on
terms that are fair and reasonable and in the interests of the shareholders of the company as a whole.
The companys auditor was engaged to report on the groups continuing connected transactions in
accordance with Hong Kong Standard on Assurance Engagements 3000 Assurance Engagements
Other Than Audits or Reviews of Historical Financial Information and with reference to Practice
Note 740 Auditors Letter on Continuing Connected Transactions under the Hong Kong Listing
Rules issued by the Hong Kong Institute of Certified Public Accountants. The auditor has issued his
unqualified letter containing his findings and conclusions in respect of the continuing connected
transactions disclosed by the group on page [ ] of the Annual Report in accordance with [paragraph
14A. 56 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited/paragraph 20. 54 of the Rules Governing the Listing of Securities on the Growth Enterprise
Market of The Stock Exchange of Hong Kong Limited]. A copy of the auditors letter has been
provided by the company to The Stock Exchange of Hong Kong Limited
[Note: Give details of connected transactions disclosed pursuant to Listing Rules and specify which
transactions disclosed as related party transactions also constitute connected transactions as defined
under the Listing Rules. Note that related party and connected transactions have different
definitions, albeit with a high degree of overlapping.]
303

Financial assistance and guarantees to affiliated companies
MB13.16
MB13.22
GEM17.18, 17.24
Based on the disclosure obligations under [Main Board: Chapter 13/GEM: Chapter 17 of the Listing
Rules] as at 31 December 2015, details of advances (including guarantee given by the group) which
are non-trading in nature, made by the group to the following entity (which amount exceeds 8% of
the total assets of the group as at 31 December 2015 were as follows:
Name of company
Relationship with
the group
Advances
HK$000
Corporate
guarantee
HK$000
x (Note 2)
Alfa Limited
Associated
company
X (Note 1)
Beta S.A.
Associated
company
X (Note 3)
Notes:
4. This advance to Alfa Limited was made on 1 July 2014 for working capital purposes which is
unsecured, bearing interest at the rate of 6.5% per annum and is repayable on or before 30
June 2016.
5. This represents a corporate guarantee secured by a fixed deposit of HK$[x] for a bank loan of
HK$[x] granted to Alfa Limited on 31 December 2015 for working capital purposes. The
aforesaid bank loan has been fully utilized by Alfa Limited.
6. This advance to Beta S.A. was made during the periods from 1 January 2011 to 31 December
2016.
Combined balance sheet of affiliated companies as at the [latest practicable date subsequent to year end]
Alfa Limited
Interest held
Beta S.A.
15%
Total
30%
HK$000
HK$000
HK$000
HK$000
HK$000
Other assets
Borrowing
Other liabilities
Net assets
x]
Intangible assets
Sufficiency of public float

A34A, MB8.08
MB13.35
GEM17.38A,
GEM18.08B
GEM11.23(7)
Based on the information that is publicly available to the company and within the knowledge of the
Directors, it is confirmed that there is sufficient public float of at least 25% of the companys issued
shares at [the latest practicable date prior to the issue of the annual report].
MB8.10
GEM11.04
Competing business
Set out below is information disclosed pursuant to paragraph [8.10 of Main Board Listing
Rules/paragraph 11.04 of GEM Listing Rules]*of the Listing Rules:Mrs. Y is an executive director of Colour Limited. The wholesale and manufacturing activities of leather
goods of Colour Limited constitutes a competing business to the group.
Mr. Z is a director and beneficial owner of Competitor Limited. Leather products retailing activities of
Competitor Limited constitute a competing business to the group.
304

Both Mrs. Y and Mr. Z are controlling shareholders of the company but not involved in any way in the
managing of the groups wholesale and manufacturing of leather products. The group is therefore capable
of carrying on such business independently of, and at arms length from the said competing business.
Compliance advisers Interests
GEM18.45
As at 31 December 2015, as notified by the companys compliance adviser[, insert name of the
compliance adviser,] neither the compliance adviser nor any of its directors, employees or associates (as
referred to in Note 3 Rule 6A.31 of the GEM Listing Rules) had any interest in the securities of the
company.
Pursuant to the compliance adviser agreement dated [insert agreement date] entered into between the
company and the compliance adviser, the compliance adviser has received and shall receive an annual fee
for acting as the companys retained compliance adviser for the period from [insert commencement date]
to [insert termination date].
Sch5
Business review
[Insert business review disclosures as required by Schedule 5 of the New CO.
This illustrative Report of Directors does not include the Business Review as required by s388(1)(a).
When preparing the business review, an entity is required to follow the requirements in Schedule 5 and
make reference to the guidance in Accounting Bulletin 5 issued by HKICPA (AB5).
For companies listed in Hong Kong, the Listing Rules require the issuer to disclose a discussion and
analysis of its performance (MD&A) in its annual report (not necessary in the director's report section).
To a certain extent, the business review disclosures required by Schedule 5 of the New CO overlaps with
the MD&A disclosures required by the Listing Rules, If the listed issuer wants to rely on the MD&A
disclosures made outside the directors' report section to fulfill part of the business review disclosures
required by the New CO, a cross reference to the relevant part of the MD&A should be made in the
directors' report. While there is a degree of overlap between the two, the MD&A disclosures many not
cover all the business review disclosures required by Schedule 5 of the New CO, and vice versa. Hence,
the company should be careful in making the required disclosures.
Please refer to the Commentary set out om this appendix for a high-level comparison between the
business review disclosures required by the New CO and MD&A disclosures required by the Listing
Rules.]
S129D(3)(l) s390(2),
s390(3)
Subsequent events
On [specify date after year end], the group acquired 100% interest in K & Co. which is specialising in the
manufacture of shoes for extreme sports. The consideration of HK$5,950,000 was settled in cash on 1
February 2016. The estimated goodwill on acquisition of the subsidiary is approximately HK$805,000.
s470, 622D9
s470, 622D9
Permitted indemnity provisions

At no time during the financial year and up to the date of this Directors Report, there was or is, any
permitted indemnity provision being in force for the benefit of any of the directors of the Company
(whether made by the Company or otherwise) or an associated company* (if made by the Company).
[OR
The Directors Report needs to disclose if a permitted indemnity provision is, or was, in force in any
of the following situations:
(i) if at the date that the directors approved this Directors Report a permitted indemnity provision
is in force for the benefit of:
one or more of the directors of the Company (whether made by the Company or otherwise); or
one or more directors of an associated company* (if made by the Company)

(ii) if at any time during the financial year to which this Directors Report relates a permitted
indemnity provision is in force for the benefit of:
one or more of the directors of the Company (whether made by the Company or otherwise); or
one or more directors of an associated company* (if made by the Company)]
s2(1)
[Note*: An associated company is defined in Section 2(1): (a) a subsidiary of the body corporate; (b) a
holding company of the body corporate; or (c) a subsidiary of such holding company.]
305

Other matters
S129D(3)(l) s390(2),
s390(3)
[Consider: Matters that are material for a proper appreciation of the state of affairs of the company
and/or results of the year. For example:
(e) Significant events occurring during the year, which have had an effect on the trading results in
specific areas.
(f) Additional explanations of large and unusual/ extraordinary items.
(g) Additional explanations of reasons for changes in accounting policies.
(h) Additional explanations of significant related party transactions if not provided elsewhere.]
A18, GEM 18.18
[An explanation of the difference if net income shown in the financial statements differs materially
from any profit forecast published by the company].
[Professional qualifications of:
GEM18.44(1)
(c) the company secretary; and

(d) the compliance officer.]
Auditors
S131 s394
The financial statements have been audited by PricewaterhouseCoopers who retire and, being eligible,
offer themselves for re-appointment.
A30
GEM18.42
[For listed companies only: if there has been any change in the auditors of the company in any of the
preceding three years then a statement of that fact is necessary.]
S129D(2) s391
On behalf of the Board
Name of Chairman
Hong Kong, [ specify date ]
By order of the Board
OR
306
Name of Company Secretary

Commentary: Comparison between the mandatory and recommended disclosures in the MD&A required by the
current Listing Rules and mandatory disclosures required by Schedule 5.
MD&A under the Listing Rules
Business review under the new CO
Mandatory disclosures (Para 32 of Main Board Rule

Appendix 16/ Para 41 of GEM Rule Chapter 18): (For the
illustrative MD&A under existing Listing Rules, please refer to
Appendix I of 2014 Illustrative Consolidated Financial Statements.)
Schedule 5 of new CO:
the groups liquidity and financial resources

capital structure of the group in terms of maturity profile of debt
and obligation, type of capital instruments used, currency and
interest rate structure
a fair review of the groups business;

a description of the principal risks and
uncertainties facing the group; (Note *)
state of groups order book (where applicable) and prospects for

new business
significant investments held, their performance and future

prospects
details of material acquisitions and disposals of subsidiaries and
associated companies
comment on segmental information
where applicable, details of number and remuneration of

employees, remuneration policies, bonus and share option
schemes and training schemes
details of charges on group assets
particulars of important events affecting the group

that have occurred since the end of the financial
year;
an indication of likely future development in the
groups business; and
to the extent necessary for an understanding of the
development, performance or position of the
groups business, a business review must include:
(a) an analysis using financial key performance
indicators;
(b) a discussion on:
details of future plans for material investments or capital assets

and their expected sources of funding in the coming year
gearing ratio (the basis on which the gearing ratio is computed

should be disclosed)
exposure to fluctuations in exchange rates and any related

hedges; and
details of contingent liabilities, if any
the groups environmental policies and

performance; and (Note *)
the groups compliance with the relevant laws
and regulations that have a significant impact
on the group; and
(c) an account of the groups key relationships
with its employees, customers and suppliers
and others that have a significant impact on
the group and on which the groups success
depends (Note *)
Recommended additional disclosures (Para 52 of Main

Board Rule Appendix 16/ Para 83 of GEM Rule Chapter 18):
efficiency indicators (e.g. return on equity, working capital ratios)

for the last five financial years indicating the bases of
computation;
industry specific ratios, if any, for the last five financial years
indicating the bases of computation
a discussion of the listed issuers purpose, corporate strategy and
principal drivers of performance
an overview of trends in the listed issuers industry and business;
a discussion on business risks (including known events,
uncertainties and other factors which may substantially affect
future performance) and risks management policy (Note *)
a discussion on the listed issuers environmental policies and
performance, including compliance with the relevant laws and
regulations (Note *)
a discussion on the listed issuers policies and performance on
community, social, ethical and reputational issues
an account of the listed issuers key relationships with employees,
customers, suppliers and others, on which its success depends
(Note *)
receipts from, and returns to shareholders
Note *: These disclosures are identified by the Hong Kong Stock Exchange (SEHK) to be duplicated with relevant disclosures in
Schedule 5. SEHK is proposing to remove those duplicated disclosures in the revised Listing Rules. However, these disclosures
are parts of the requirements of Schedule 5.
307
PwCs Accounting Technical Publications
Manual of accounting
IFRS 2015
A practical guide to new

IFRSs for 2014
Global guide to IFRS providing

comprehensive practical guidance on
how to prepare financial statements
in accordance with IFRS. Includes
hundreds of worked examples and
guidance on financial instruments.
The Manual is a three-volume set
comprising:
IFRS 2015 volume 1 & 2
Illustrative IFRS consolidated
financial statements for 2014 year
ends
This guide provides a high-level outline

of the key requirements of new IFRS
standards and interpretations that
come into effect in 2014, in question
and answer format.
Language: English and Simplified
Chinese
Language: English
Illustrative condensed
consolidated interim
financial information for
existing IFRS/HKFRS
preparers
The 2014 version of the Illustrative
condensed consolidated interim
financial information for existing
IFRS / HKFRS preparers is for a
fictitious listed manufacturing and
retailing group incorporated in Hong
Kong. The illustrative example is
prepared in accordance with the
requirements as set out in:
The Hong Kong Companies
Ordinance;
The Listing Rules issued by the
Stock Exchange of Hong Kong
Limited;
IFRSs issued by the International
Accounting Standards Board; and
HKFRSs issued by the Hong Kong
Institute of Certified Public
Accountants.
Practical guides to IFRS

Practical guides to IFRS provide
updates on the guidance in recently
released discussion papers, exposure
drafts and final standards from the
IASB.
Language: English and Simplified
Chinese
Language: English
IFRS/HKFRS News
Monthly newsletter highlighting the
latest update in the
International/Hong Kong Financial
Reporting Standards.
Language: English
IFRS/HKFRS News
(Chinese)
Monthly newsletter highlighting the
latest update in the
International/Hong Kong Financial
Reporting Standards.
Language: Simplified Chinese
Please visit www.pwccn.com/home/eng/latestacctupdates.html for more publications.
www.pwchk.com
This content is for general information purposes only, and should not be used as a substitute for
consultation with professional advisors.
2015 PricewaterhouseCoopers Limited. All rights reserved. PwC refers to the Hong Kong member
firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity.
Please see www.pwc.com/structure for further details.HK-20141205-3

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PwCs Accounting Technical Publications

IFRS Manual of Accounting (English with Chinese translation)

MoA Volume 11: Foreign

MoA Volume 12: Earnings per

This volume covers Chapter 7 - Foreign

MoA Volume 13: Service

This volume covers Chapter 33 Service concession arrangements of the

This volume covers Chapter 5 Embedded derivatives in host contracts;

Please visit www.pwccn.com/home/eng/ifrs_accounting_manual.html for details.

Illustrative IFRS/HKFRS Consolidated Financial Statements

Illustrative IFRS/HKFRS Consolidated Financial Statements

Illustrative financial statements : Investment funds

Illustrative financial statements : Investment property

Illustrative financial statements : Private equity

Illustrative financial statements : Insurance

Illustrative financial statements for authorised institutions in Hong Kong

Early adoption and

These amendments are to the application guidance in

IAS/HKAS 32, Financial instruments: Presentation, and clarify

some of the requirements for offsetting financial assets and

asset and liability offsetting

financial liabilities on the balance sheet.

These amendments mean that many funds and similar entities

IFRS/HKFRS 10, 12 and

will be exempt from consolidating most of their subsidiaries.

Instead, they will measure them at fair value through profit or

investment entity definition and which display particular

Amendment to IAS/HKAS This amendment addresses the disclosure of information about

the recoverable amount of impaired assets if that amount is

recoverable amount disclosures based on fair value less costs of disposal.

Early adoption is permitted.

Amendment to IAS/HKAS This amendment provides relief from discontinuing hedge

accounting when novation of a hedging instrument to a central

counterparty meets specified criteria.

Early adoption is permitted.

This is an interpretation of IAS/HKAS 37, 'Provisions,

Recognition and Measurement

contingent liabilities and contingent assets'. IAS/HKAS 37 sets

Early adoption is permitted.

Illustrative IFRS/HKFRS Consolidated Financial Statements

Early adoption and

These amendments include changes from the 2010-2012 cycle

of the annual improvements project, that affect 7 standards,

IFRS/HKFRS2, Share-based payment

The amendment clarifies the definition of a vesting

applied to share-based payment

IFRS/HKFRS3, Business combinations and consequential

Illustrative IFRS/HKFRS Consolidated Financial Statements

International/Hong Kong Accounting Standard No. 1, paragraph 81, footnote

The Guidance on Implementing of International/Hong Kong Accounting Standard No. 1,

International/Hong Kong Accounting Standard No. 1, Basis for Conclusions, paragraph 21

International/Hong Kong Financial Reporting Standard No. 2, paragraph 6

International/Hong Kong Financial Reporting Standard No. 7, Appendix B, paragraph 1

SIC/HK(SIC) Interpretation No. 13, paragraph 4

IFRIC/HK(IFRIC) Interpretation No. 6, paragraph 4

The Companies Ordinance (Cap. 32), Section 129D(1)

The Companies Ordinance (Cap. 32), Tenth Schedule, paragraph 17(5)

For listed companies only

The Listing Rules, Appendix 16, paragraph 4(1)(a)

The Listing Rules, Chapter 14, paragraph 8

The Listing Rules, Appendix 14, paragraph C.1.2

Reference to Listing Rules relating to Growth Enterprise Market: