SUCCESS UNIVERSE GROUP LIMITED - Annual Report 2010

(Incorporated in Bermuda with limited liability) Stock Code: 00487 One team for Annual Report 2010 Contents 1 Our.Vision 3 Corporate.Information 4 Financial.Highlights 5 Group.Structure 6 Chairman’s.Statement 9 Business.Highlights 10 Management.Discussion.and.Analysis 24 Corporate.Governance.Report 30 Report.of.Directors 38 Biographical.Details.of.Directors.and.Senior.Management 40 Independent.Auditors’ Report 42 Consolidated.Income.Statement 43 Consolidated.Statement.of.Comprehensive.Income 44 Consolidated.Statement.of.Financial.Position 46 Statement.of.Financial.Position 47 Consolidated.Statement.of.Changes.in.Equity 48 Consolidated.Statement.of.Cash.Flows 50 Notes.to.the.Consolidated.Financial.Statements 110 Five-year.Financial.Summary OurVision The.Group.aims.to.become.a.leading.player.in.the.gaming,.entertainment.and.tourist-related.industries.and contribute to the sustainable development of these sectors. We endeavour to create long-term value.for.all.of.our.stakeholders,.while.maintaining.a.high.standard.of.corporate.governance. One.team.for SUCCESS CorporateInformation DIRECTORS Executive.Directors Mr..Yeung.Hoi.Sing,.Sonny.(Chairman) Dr..Ma.Ho.Man,.Hoffman.(Deputy.Chairman) Non-executive.Director Mr..Choi.Kin.Pui,.Russelle Independent.Non-executive.Directors Mr..Luk.Ka.Yee,.Patrick Mr..Yim.Kai.Pung Ms..Yeung.Mo.Sheung,.Ann COMPANY.SECRETARY Ms..Chiu.Nam.Ying,.Agnes FINANCIAL.CONTROLLER Mr..Wong.Chi.Keung,.Alvin AUTHORISED.REPRESENTATIVES Dr..Ma.Ho.Man,.Hoffman Ms..Chiu.Nam.Ying,.Agnes AUDIT.COMMITTEE Mr..Yim.Kai.Pung.(Chairman) Mr..Choi.Kin.Pui,.Russelle Mr..Luk.Ka.Yee,.Patrick Ms..Yeung.Mo.Sheung,.Ann REMUNERATION.COMMITTEE Mr..Yeung.Hoi.Sing,.Sonny.(Chairman) Mr..Choi.Kin.Pui,.Russelle Mr..Luk.Ka.Yee,.Patrick Mr..Yim.Kai.Pung Ms..Yeung.Mo.Sheung,.Ann EXECUTIVE.COMMITTEE Mr..Yeung.Hoi.Sing,.Sonny.(Chairman) Dr..Ma.Ho.Man,.Hoffman AUDITORS HLB.Hodgson.Impey.Cheng Chartered.Accountants Certified.Public.Accountants LEGALADVISERSONHONGKONGLAWS Iu,.Lai.&.Li LEGAL.ADVISERS.ON.BERMUDA.LAWS Conyers.Dill.&.Pearman PRINCIPAL.BANKERS Chong.Hing.Bank.Limited Fubon.Bank.(Hong.Kong).Limited Royal.Bank.of.Canada The.Bank.of.East.Asia,.Limited The.Hongkong.and.Shanghai.Banking.Corporation.Limited PRINCIPAL.SHARE.REGISTRAR.AND.TRANSFER.AGENT.IN.BERMUDA Butterfield.Fulcrum.Group.(Bermuda).Limited Rosebank.Centre 11.Bermudiana.Road Pembroke,.HM.08 Bermuda BRANCH.SHARE.REGISTRAR.AND.TRANSFER.OFFICE.IN.HONG.KONG Tricor.Tengis.Limited 26th.Floor Tesbury.Centre 28.Queen’s.Road.East Wanchai Hong.Kong REGISTERED.OFFICE Clarendon.House 2.Church.Street Hamilton.HM.11 Bermuda HEAD.OFFICE.AND.PRINCIPAL.PLACE.OF.BUSINESS Suite.1601-2.&.8-10,.16/F. Great.Eagle.Centre 23.Harbour.Road Wanchai Hong.Kong SHARE.LISTING The.Stock.Exchange.of.Hong.Kong.Limited Stock.Code:.00487 WEBSITE www.successug.com FinancialHighlights Fifteen. Year.ended. Year.ended. months.ended. 31.December. 31.December. 31.December. 2010 2009. 2008. HK$’000 HK$’000 HK$’000 Results Turnover Cruise.leasing.and.management 69,600 72,600 118,000 Travel 1,129,639 509,254 1,202,239 627,254 Loss.from.operations (47,935) (67,592) (173,797) (238,304) Consolidated.statement.of.financial.position Total.assets Total.liabilities Net.assets At.31.December.2010 HK$’0001,475,374 881,823 593,551 At.31.December.2009 HK$’0001,345,509 671,636 673,873 At.31.December.2008 HK$’000 1,418,947 487,788 931,159 Success.Universe.Group.Limited GroupStructure Chairman’s Statement 2010 was a year of steady growthfor theGroup.With ourtravelbusiness marking a significantimprovementin performance andPonte16 achieving encouraging results,webelievetheGroup will continue to achieve consistent growth. The Group is well positioned to seizethe many opportunities ahead. Chairman’sStatement Dear.Valued.Shareholders, On behalf of the board of directors of Success Universe.Group.Limited.(the.“Company”),.I.am.pleased.to.present.the.annual reportoftheCompany andits subsidiaries(collectively the.“Group”).for.the.year.ended.31.December.2010.. 2010 was a year of steady growth for the Group, as buoyant financial markets globally translated into growth.in consumer spending, travel and gaming. With such a favourable.backdrop,.coupled.with.our.efforts.to.strengthen.our business.platform.and.maximise.the.synergies.across.our core businesses and our flagship investment project, Ponte.16,.the.Group.sustained.a.strong.growth.momentum.in 2010. With our travel business posting a profit and Ponte.16.achieving.encouraging.growth.in.operating.results,.we arepleasedtohavedelivered improved resultsduringthe year. SUCCESS.COMES.FROM.UNIQUE.POSITIONING. In.February.2011,.Ponte.16.celebrated.its.third.anniversary,.enabling the project to reflect on the success of its perceptive.business.approach..Over.the.past.year,.Ponte.16.has continued to build on its unique brand positioning, implementing a number of strategic initiatives to further distinguish itself as a premier destination with attractive historical.and.cultural.features.for.tourists.all.over.the.world..Ponte.16.is.already.reaping.the.benefits.of.its.efforts. The opening of MJ Gallery at Ponte 16 (the “Gallery”) in February 2010 marked a momentous milestone for Ponte16.ThefirstofitskindinAsia,theGalleryhasbrought to life some of Michael Jackson’s most iconic moments through adynamic exhibition of rare andgenuine mementos, offering an exclusive experience for visitors. In addition, Ponte.16.partnered.with.Julien’s.Auctions.to.hold.“Rock.the.World” Exhibition.as.well.as.Hollywood.“Legends” Exhibition.and Auction in 2010, bringing to Macau a rare collection of.pop.culture.historical.artifacts.and.attracting.visitors.and.buyers.from.around.the.world..The.unprecedented.success.of.these.events.has.demonstrated.the.world-class.standard.of.Ponte.16’s.facilities.and.services,.and.more.importantly,.enhanced.the.international.image.of.the.brand.. The.partnership.of.Ponte.16.with.a.world-renowned.auction.house in staging large scale exhibitions and auctions.in Macau has shown its dedication to bringing more international.events.to.the.local.scene,.which.enhances.the.destination’stourist appeal.Theseinitiatives also supplement the.exciting.features.of.Ponte.16.in.the.culturally.rich.Inner.HarbourDistrictandfurther strengthenits uniqueposition as aperfectmix of entertainment, culture andtourisminMacau. Moreover,.these.efforts.have.not.only.successfully.promoted.Ponte.16.and.Macau.to.the.world.and.effectively.diversified.the customer mix of the resort, but also contributed to the increase in visitor flow to the resort and its sound performance. During the year, Ponte 16 continued to deliver a positive EBITDA*,.which.was.up.by.approximately.201%.compared.to that of the previous year. Thanks to various marketing initiatives and the synergies created with our core businesses, Ponte 16 achieved a growth rate in gross gaming.revenue.that.was.well.above.the.industry.average..Occupancy rate atthe award-winningSofitelMacau At Ponte 16 also recorded outstanding improvement throughout.the.year,.and.the.luxury.VIP.mansions.of.Sofitel.Macau.At.Ponte.16.continued.to.be.well.received.by.high-end.travellers.. *EBITDA:EarningsBeforeInterest,Taxes,Depreciation andAmortisation Chairman’sStatement (continued) SUCCESS.COMES.FROM.SYNERGIC.BUSINESS.PLATFORMS Riding.on.the.steady.recovery.of.the.global.economy.and.positive market sentiment, our travel business recorded a.strong rebound.in.2010..The.significant.improvement.in.performance was also driven by continuous progress of our meeting, incentive, convention and exhibition(MICE) business.as.well.as.our.strategic.expansion.into.the.China.market. Other high-margin services such as corporate ticketingandinboundtourstoNorthAmerica are alsopopular among.our.customers,.thanks.to.our.one-stop.services.and.extensive.sales.network. During.the.year,.our.travel.business.platform.has.continued.to create synergies withPonte16and our cruisebusinessby bringingdiversified clienteletothem.Atthe sametime,it also benefited.from.their.well-connected.business.network. SUCCESS.COMES.FROM.SUSTAINABLE.GROWTH Macau’s gaming industry set a record high in 2010 with.industry revenue in Macau soaring approximately 58% to a record MOP188.34 billion. Tourism in Macau also blossomed,.with.the.number.of.visitors.rising.approximately.15%. Capitalising.on.the.momentum.in.Macau.as.well.as.the Government’s efforts and determination in sustaining a.healthy and.sound.development.of.the.gaming.industry,.webelievePonte16 and our tourist-relatedbusiness will continue to achieve consistent growth. The close collaboration.between.Guangdong,.Hong.Kong.and.Macau,.following the announcement of “The Outline of the Plan for.the.Reform.and.Development.of.the.Pearl.River.Delta”,.also brings new opportunities to the development of the Pearl River.Delta.region,.from.which.the.tourism.sector.in.Macau standstobenefit.TheGroup’stravelbusinessis also expected.to.continue.to.benefit.from.the.robust.recovery.of.the.global.economy.and.growing.affluence.in.China. To further expand the Group’s entertainment business and.extend.our.footprint.in.Mainland.China,.the.Group.has.started.to.develop.a.new.business.which.intends.to.provide.a.technology.services.platform.and.technical.support.to.the.mobile.sports.lottery.market.in.China..This.initiative.will.also.allowtheGroupto capturethe enormouspotential ofChina’s growing.lottery.industry.. Onthe strengthof ourthree-prongedbusiness strategy,I am confident.that.we.are.in.the.best.position.to.seize.the.ample.opportunities aheadin ordertodeliverfavourable returns and long-term valueto our shareholders, while maintainingahigh standard of.corporate.governance..We.shall.also.continue.to strengthen our business platform and work towards our.goal.to.become.one.of.the.key.players.in.the.gaming,.entertainment.and.tourist-related.industries. APPRECIATION Iwouldliketotakethis opportunitytothankour shareholders.for their continued support, and to express my gratitude to my fellow directors for their guidance, our customers and.business.partners.for.their.trust.and.our.staff.for.their.dedication.and.hard.work..Our.achievements.in.2010.would.not.have.been.possible.without.the.commitment.and.hard.work.of.our.people.at.all.levels. Yeung.Hoi.Sing,.Sonny Chairman Hong.Kong 29.March.2011 Success.Universe.Group.Limited BusinessHighlights ‧ Total.turnover.was.up.approximately.20%.from.approximately.HK$1,202.2.million.to.approximately.HK$1,444.9.million. ‧ Gross.profit.was.up.approximately.5%,.reaching.approximately.HK$92.1.million ‧ Travel.business.posted.a.profit.in.the.wake.of.the.global.economic.rebound. ‧ TheGroup’sflagshipinvestmentproject,Ponte16,continuedtodeliverapositiveEBITDA*which wasupby approximately 201%.to.approximately.HK$206.6.million.compared.to.that.of.last.year ‧ Ponte16openedAsia’sfirstMichaelJackson(“MJ”)gallery,MJGalleryatPonte16,inFebruary2010,whichisoneofthe Macau.Government.Tourist.Office’s.“must-see”.attractions ‧ Ponte16partneredwithJulien’sAuctionstohold“RocktheWorld”ExhibitionandHollywood“Legends”ExhibitioninMay 2010.and.September.2010.respectively,.followed.by.Hollywood.“Legends”.Auction.in.October.2010 *.EBITDA:.Earnings.Before.Interest,.Taxes,.Depreciation.and.Amortisation Management Discussion andAnalysis Riding.on.the.strong.global.economic.recovery.throughout.the.year,.the.Group achieved substantial improvement in its business performance through.the.effective.execution.of.its.three-pronged.strategy. ManagementDiscussion andAnalysis   Riding.on.the.strong.global.economic.recovery.throughout.2010,.Success.Universe.Group.Limited.(“Success.Universe” orthe “Company”)anditssubsidiaries(collectivelythe “Group”)achieved.substantial.improvement.in.its.business.performance.during.the.year.through.the.effective.execution.of the Group’s three-pronged strategy. This resulted in enhancementsinthe strategic synergies amongtheGroup’s core travel and cruise businesses, as well as its flagship investment project, Ponte 16. In addition to attaining substantial growth in the operating results of the travel business.and.Ponte.16,.the.resort.also.reinforced.its.unique.positioning as a premier world-class travel destination infused.with.exclusive.international.cultural.elements..These.accomplishments also.strengthened.the.Group’s.business.platform, laying a solid foundation for seizing growth opportunities.ahead. The.following.discussion.should.be.read.in.conjunction.with.the.consolidated.financial.statements.and.the.related.notes.included.in.this.annual.report. RESULTS 2010.marked.a.year.of.robust.growth.for.Success.Universe..The.Group.posted.a.turnover.of.approximately.HK$1,444.9.million.for.the.year.ended.31.December.2010,.representing.an increase of approximately 20% from approximately HK$1,202.2 million in 2009. Gross profit reached approximately HK$92.1.million,.up.approximately.5%.from.approximately.HK$87.7.million.in.2009..Loss.attributable.to.owners oftheCompany narrowedto approximatelyHK$80.8 million, compared to approximately HK$173.8 million in 2009..Loss.per.share.also.reduced.from.7.13.HK.cents.in.2009.to.3.31.HK.cents.in.2010. Turnover from the Group’s travel business soared approximately 22% to approximately HK$1,375.3 million in.2010,.compared.to.approximately.HK$1,129.6.million.in.2009,.as.ticketing.revenue.increased.by.approximately.21%.to approximately HK$1,281.5 million in 2010, compared to approximately HK$1,055.6 million in 2009, backed by economic.recovery.in.Hong.Kong,.Canada.and.the.United.States.of.America.(the.“USA”)..This.segment.also.posted.a.profit.during.the.year.as.a.result.of.strong.revenue.growth,.with a segmentprofit reaching approximatelyHK$8.2million, compared with a segment loss of approximately HK$9.4 million.in.the.last.corresponding.year. With.its.distinctive.positioning.that.appeals.to.visitors.from.Mainland China, Hong Kong and overseas, Ponte 16 maintained its strong growth momentum in 2010 and achieved a growth of approximately 201% in EBITDA* to approximatelyHK$206.6 million.Whilehighdepreciation and amortisation charges.during.the.initial.stage.of.operations.continued.to.affect.Ponte.16’s.results.during.the.year,.the.loss has been reduced substantially on the back of its strong business performance. The Group’s shared loss of the.associates.relating.to.Ponte.16.for.the.year.ended.31 December 2010 amounted to approximately HK$44.4 million,.which.was.substantially.lower.than.that.for.2009.of.approximately.HK$115.7.million. DIVIDENDS No interim dividend was paid in 2010 (2009: Nil). The.directors oftheCompanydo notrecommend anypaymentof afinaldividendfortheyear ended31December2010(2009: Nil). REVIEW.OF.OPERATIONS *EBITDA:EarningsBeforeInterest,Taxes,Depreciation andAmortisation Management Discussion and Analysis Travel Business DrivenbytheeconomicreboundandtheGroup’s strategic initiatives, the Group’s travel business has witnessedrobustgrowth in sales andposted aprofitforthebusiness segmentforthefullyear. ManagementDiscussion andAnalysis(continued)     REVIEW.OF.OPERATIONS Travel.Business Posted.a.profit.in.the.wake.of.economic.rebound The gradual growth momentum of the Group’s travel.business whichstartedinthe secondhalf of2009 continued in.2010,.capitalising.on.the.global.economic.recovery.which.drove.demand.for.air.tickets.and.other.travel.products..The.Group’s travel business units in Hong Kong and Macau together with its travel agency companies located in Canada.and.the.USA.(the.“Jade.Travel.Group”),.witnessed.robust.growth.in.sales.and.posted.a.profit.for.the.business.segment.for.the.year..Turnover.in.the.segment.increased.by.approximately 22% to approximately HK$1,375.3 million, compared to approximately HK$1,129.6 million in 2009. Profit in.this.segment.amounted.to.approximately.HK$8.2.million, compared withaloss ofapproximatelyHK$9.4million in.2009. During the year, the travel business continued to deliver.strong.results,.fueled.by.the.growth.in.ticketing.sales.as.well.as its.popular.tailor-made.inbound.and.outbound.tours.to.and from.North.America..The.global.reach.of.the.Group’s.travel business network also translated into cross-selling opportunities.for.Ponte.16.and.the.Group’s.cruise.business,.resulting in abroadeningofthe customerbaseforthese units, particularly.in.the.high-end.market.segment..In.addition.to.providing one-stop.travel.services.to.leisure.and.business.travellers.as.well.as.local.and.multinational.corporations,.the.Group also.stepped.up.its.efforts.in.developing.the.MICE.(Meeting,.Incentive,.Convention.and.Exhibition).business.to.further.expand.this.high-margin.business.stream. Management Discussion and Analysis Cruise Business Cruise business remained a steady revenue contributorfortheGroupdespitehighfuelcosts. ManagementDiscussion andAnalysis(continued)     Cruise.Business Stable.revenue.contribution.despite.surge.in.fuel.costs The.cruise.business.remained.a.steady.revenue.contributor.for.the.Group.during.the.year..Turnover.from.the.cruise.ship,. M.V.MacauSuccess,(in whichtheGrouphas a55%interest) decreased.by.approximately.4%.to.approximately.HK$69.6.million(2009: approximatelyHK$72.6 million).The cruise business posted.a.segment.loss.of.approximately.HK$1.9.million compared with a profit of approximately HK$2.2 million in 2009. During the year, the surge in fuel costs continued.to.have.a.negative.impact.on.the.performance.in.this.segment. Management Discussion and Analysis Investment Project – Ponte 16 Ponte 16 continued to outperform the overall Macau gaming industry in 2010 and further uphelditsposition as a world-class resort destinationbyenrichingits entertainmentoffering. ManagementDiscussion andAnalysis(continued)     Investment.Project.–.Ponte.16 Uniquepositioningresultsin sustainablestronggrowth Ponte16further uphelditsposition as a world-class resort destination of choice during the year. Leveraging its unparalleled combination of cultural and entertainment elements.as.well.as.its.strategic.location.in.the.historic.Inner.Harbour District of Macau, Ponte 16 attained substantial growth.in.operating.results.during.the.year.and.at.the.same.time.further.raised.its.profile.on.the.world.stage. Ponte16continuedto outperformthe overallMacaugaming industryduring2010, withgrossgaming revenue achieving a growth.rate.of.approximately.76%.from.last.year,.comparing.to.the.industry.rate.of.approximately.58%..During.the.China.National Day Holiday “Golden Week” in October 2010, Ponte 16 recorded a double-digit growth in the average number of visitors as comparedtothat ofthe sameperiodin the.previous.year. Currently,.the.casino.of.Ponte.16.has.a.total.of.109.gaming.tables,.81.of.which.are.mass.gaming.tables,.nine.are.high-limit.tables.and.19.are.VIP.tables. Ponte.16.enriched.its.entertainment.offering.with.the.grand.opening ofAsia’sfirstMichaelJackson(“MJ”)gallery,MJ GalleryatPonte16(the“Gallery”),inFebruary2010.Housing over.40.rare.collectibles.of.MJ,.including.a.left.hand.white.rhinestone glove which MJ wore in his first Moonwalk performance, the Gallery has been immensely popular among tourists since its opening and is on the Macau Government Tourist Office’s list of “must-see” attractions. The.grand.opening.of.MJ.Cafe.at.Ponte.16.in.August.2010.further boosted the attractiveness of the premier resort destination. During the year, Ponte 16 successfully raised its global profile.by.introducing.joint.international.events.with.a.world-renowned auction house, Julien’s Auctions, into Macau’s entertainment.scene..In.May.2010,.Ponte.16.hosted.“Rock.the World” Exhibition as the sole sponsor in Macau. The exhibition.featured.over.100.valuable.items.from.the.biggest.starsin modern movies andpop music,includingMJ,Marilyn Monroe, “Superman” Christopher Reeve and the leading.lady of “Titanic”, Kate Winslet. Ponte 16 also sponsored Hollywood “Legends” Exhibition in September 2010, showcasing close to 200 pieces of collectibles from MJ, Madonna,.Elvis.Presley,.Princess.Diana,.Bruce.Lee.and.The.Beatles, as wellas an assortmentofpopculture artifactsfrom Hollywood.blockbuster.movies. ManagementDiscussion andAnalysis(continued)     The.resounding.success.of.the.series.of.iconic.international.eventshas notonly enhancedthe cultural appealofPonte16.and.helped.broaden.its.customer.base,.but.also.elevated.its.global.image.as.well.as.that.of.Macau..As.such,.Ponte.16.is.very.proud.to.be.able.to.play.an.integral.role.in.contributing.to.the.revitalisation.of.the.historic.Inner.Harbour.District.of.Macau.and.its.transformation.into.a.truly.international.tourist.attraction..During.the.year,.Ponte.16.was.able.to.achieve.a.more diverse.customer.mix,.drawing.in.a.growing.number.of.visitors.from.many.neighbouring.and.Western.countries..Leveraging.the.extensive.sales.network.of.its.travel.platform,.theGroupsteppedupits marketingeffortsinMainlandChina, andpartnered withvarious airlines andtour operatorsto offer Chinese.tourist.travel.packages.to.Ponte.16. The award-winning Sofitel Macau At Ponte 16, managed by the.internationally-acclaimed.hotel.management.group,.the Accor Group, continued to be one of the preferred accommodation choices for visitors from Mainland China and.abroad..Throughout.the.year.under.review,.the.five-star.hotel.recorded.a.high.occupancy.rate.that.was.in.line.with.the.industry.average,.and.the.luxury.VIP.mansions.of.Sofitel.Macau.At.Ponte.16.continued.to.be.well.received.by.high-end.travellers.from.across.the.globe. Following the successful exhibitions, Ponte 16 staged.Hollywood.“Legends” Auction.in.October.2010,.bringing.in.thefirstauctionheldbyJulien’sAuctionsinAsia.The auction drew.over.10,000.buyers.and.collectors.of.Hollywood.and.rock ‘n’ roll pop culture artifacts from around the world. Overall, 435 auction items were sold during the 11-hour.auction. The most impressive sale went to the MJ and Michael Jordan.signed.basketball,.which.was.sold.at.366.times over the highest estimated price at US$294,000 including.buyer’s.premium. ManagementDiscussion andAnalysis(continued)     Withits unbeatable world-class services andfacilities,Sofitel.Macau.At.Ponte.16.was.named.one.of.the.“Top.25.Hotels.in Hong Kong, Macau and Taiwan” by TripAdvisor in its “Travelers’ Choice 2010 Awards”, “The Best Presidential Suite Macau” by.Hurun.Presidential.Awards,.“2010.China.Travel.Awards.–.China’s.Top.100.Hotels” and.“Best.Leisure.HotelinMacau”byTravel+LeisureMagazine,andthe“2010 Outstanding.Service.Hotel.Award.in.Macau” by.HotelClub..These.awards.are.a.testament.to.the.efforts.and.dedication.of.the.hotel.in.meeting.and.exceeding.the.expectations.of.its guests. Management Discussion and Analysis TheGroup will continueto strengthen its.business.platform.and.competitive.edge,.as.well.as expanditsfootholdintheChina market.Over the long-term, the Group is poised to benefit fromitsgrowing marketposition and willcertainly enrich.its.business.portfolio. ManagementDiscussion andAnalysis(continued)     FINANCIAL.REVIEW Liquidity,.Financial.Resources.and.Gearing As at 31 December 2010, the Group had net current assets of approximatelyHK$117.9 million(31December 2009: approximately HK$23.6 million) and net assets of approximately HK$593.6 million (31 December 2009: approximately.HK$673.9.million). On 1 December 2008, Mr. Yeung Hoi Sing, Sonny(“Mr. Yeung”), a director and a controlling shareholder of the Company, provided a HK$200 million term loan facility to the.Company.which.is.unsecured.and.charged.with.interest.at the prime rate quoted for Hong Kong dollars loans by The.Hongkong.and.Shanghai.Banking.Corporation.Limited..The.principal.amount.of.the.loan.facility.was.increased.up.to.HK$290.million.on.14.April.2009.and.the.final.repayment.date oftheloan andall other sums owingtoMr.Yeung under the.revised.loan.facility.was.further.extended.to.30.October.2012.by.a.letter.agreement.dated.23.June.2010..As.at.31.December.2010,.the.Company.had.utilised.the.loan.facility.inthe amount ofHK$105.0 million(31December2009: HK$47.5.million). On.22.October.2009,.the.Company.as.borrower.and.New.ShepherdAssetsLimited(“NewShepherd”), a wholly-owned subsidiary of the Company, as security provider entered into.an.agreement.in.relation.to.a.HK$250.million.revolving.credit.facility.(the.“Revolving.Credit.Facility”).with.a.financial.institution(the “Lender”)aslender,whichisathirdparty independent.of.the.Company..The.Revolving.Credit.Facility.carries afloatinginterest rate andtheloan under suchfacility shall.be.repayable.on.or.before.36.months.after.22.October.2009..The.proceeds.of.the.Revolving.Credit.Facility.should.beappliedforon-lendingtoPier16–PropertyDevelopment Limited(“Pier16 –PropertyDevelopment”)inconnection with the cashflow requirements of Pier 16 – Property Development.and.its.subsidiaries..As.at.31.December.2010,.the.Company.had.utilised.the.Revolving.Credit.Facility.in.the.amount ofHK$246.0 million(31December2009:HK$132.0 million). During the.year,.Jade.Travel.Ltd..(“Jade.Travel,.Canada”),.an.80%.indirectly.owned.subsidiary.of.the.Company.which.was incorporated in Canada, was granted secured bank loans which.carry.a.fixed.interest.rate.and.the.loans.shall.be repayable by consecutive monthly instalments. The proceed.of.the.loans.was.to.finance.the.acquisition.of.the.new.properties.of.Jade.Travel,.Canada.and.their.renovation.costs.As at31December2010,the outstanding loans were approximately.HK$14.5.million.(31.December.2009:.Nil). Apartfromthe aforesaidloans, as at31December2010,the Group.had.an.interest-bearing.loan.from.a.related.company.of approximatelyHK$23.2 million(31December2009: approximately.HK$21.0.million)..The.loan.is.unsecured.and.chargedwith interestatthe rate of4%per annum andhas no fixed.terms.of.repayment.. As at 31 December 2010, there were loans from shareholders of non-controlling interests of approximately HK$16.4 million (31 December 2009: approximately HK$10.0.million).and.other.loans.payables.of.approximately.HK$192.2 million (31 December 2009: approximately HK$171.7.million)..These.loans.are.interest-free,.unsecured.and.will.not.be.repaid.within.the.next.12.months. Total equity attributable to owners of the Company as at 31 December 2010 was approximately HK$547.9 million (31 December 2009: approximately HK$627.7 million). Accordingly,.the.gearing.ratio,.which.was.measured.on.the.basis.of.the.interest-bearing.borrowings.of.the.Group.over.total equity attributable to owners of the Company, was approximately.71%.as.at.31.December.2010.(31.December.2009:.approximately.32%). ManagementDiscussion andAnalysis(continued)     Provision.of.Further.Financial.Assistance.to.Pier.16.–.Property.Development Reference.was.made.to.the.announcement.dated.25.June.2010issuedbytheCompany, additionalshareholder’sloans in.the.total.amount.of.approximately.HK$134.9.million.had.been provided to Pier 16 – Property Development during theyear(31December2009: approximatelyHK$188.5 million),.which.were.mainly.to.finance.the.construction.cost.of.and.the.repayment.of.indebtedness.by.Pier.16.–.Property.Development. Pledge.of.Assets As at 31 December 2010, the Group had secured the.following.assets: (a). theGrouppledgedthetimedepositsofapproximately HK$8.1 million(31December2009: approximately HK$8.3 million) to certain banks for the issuance of several.bank.guarantees.and.a.standby.letter.of.creditfacility of approximatelyHK$10.2 million(31 December.2009:.approximately.HK$10.2.million).for.the.operations.of.the.Group; (b). World.Fortune.Limited,.an.indirect.subsidiary.of.the.Company,pledged all(31December2009:100%) of.its.shares.in.Pier.16.–.Property.Development.to.a.bank,for andonbehalf ofthe syndicate oflenders,in respect of syndicatedloanfacilitiesgrantedtoPier16 –.Property.Development; (c). New Shepherd.pledged.51%.(31.December.2009:.51%) of the entire issued share capital from time to.time.of.Favor.Jumbo.Limited,.an.indirect.wholly-owned.subsidiary.of.the.Company,.to.the.Lender.in.respect oftheRevolvingCreditFacilitygrantedtothe Company;.and (d). the Group’s self-occupied properties with carrying amount of approximately HK$21.6 million (31 December2009:Nil)waspledgedto abankto secure bank.loans.to.Jade.Travel,.Canada. Contingent.Liabilities As.at.31.December.2010,.the.Company.gave.a.corporate.guarantee for the syndicated loan facilities of HK$1,600 million.granted.to.an.associate.of.the.Group.(31.December.2009:.HK$1,600.million)..The.maximum.guarantee.amount.borne.by.the.Company.was.HK$860.million.(31.December.2009:.HK$860.million)..The.total.loan.outstanding.and.bank.guarantee.facility.from.the.syndicated.loan.facilities.for.the.associate.as.at.31.December.2010.was.HK$800.million.and.HK$240.million.respectively.(31.December.2009:.HK$1,040.million.and.Nil.respectively). HUMAN.RESOURCES As at 31 December 2010, the Group had a total of 424.employees. Remuneration is determined on the basis of qualifications,.experience,.responsibilities.and.performance..Apart from the basic remuneration, staff benefits include medical insurance and retirement benefits under the Mandatory Provident Fund Scheme. Share options might alsobegrantedto eligible employees oftheGroupas along-term.incentive. PROSPECTS Looking ahead, the Group’s travel business is expected.to benefit.from.the.steady.global.economic.recovery.amid.record low interest rates as well as signs of stabilising employment and property markets in major economies. While China’s economic growth is expected to moderate this.year,.its.momentum.will.remain.strong..The.continuous.growthinwealthandincomeinChina willprovetobe astrong growth.driver.for.the.travel.industry.going.forward. ManagementDiscussion andAnalysis(continued)     To.seize.these.growth.opportunities,.the.Group.will.continue.to.focus.on.expanding.its.foothold.in.the.China.market.and.seek further cross-selling opportunities for Ponte 16 and the.Group’s.cruise.business.through.cooperation.with.travel.operators.in.Mainland.China. For the Jade Travel Group, economic resilience in North America will continue to benefit its ticketing and tour businesses..The.granting.of.“Approved.Destination.Status” to.Canada.by.the.Mainland.China.authorities.has.opened.up.new.business.opportunities..The.Group.is.actively.identifying business.partners.with.sound.credibility.in.China.to.channel.business.to.the.Jade.Travel.Group. Leveraging Macau’s increasingly important status as an international conference and exhibition centre, the Group will continue to step up its efforts in developing its MICE business. With its global business network, the Group is also.exploring.MICE.business.opportunities.beyond.Macau.throughproactiveliaisons with convention centres aroundthe world.to.further.expand.this.high-margin.business.avenue. Building on its rising international reputation, the Group’s flagship investment project, Ponte 16, will continue to benefit from.the.strong.growth.in.visitor.arrivals.in.Macau..The consistent.growth.is.further.supported.by.the.Macau.Government’s recent measureto limitthe number ofgaming tables,.which.is.set.to.help.sustain.the.healthy.development.of.the.gaming.and.entertainment.industry.in.the.long.run. To further.strengthen.its.unmatched.position.as.a.premier.resort destination, Ponte 16 will continue to explore new Hollywood elements to bring an exclusive entertainment experience to its visitors, and to further raise its brand awareness.worldwide. In.early.2011,.Pier.16.–.Property.Development.entered.into.a.settlement.agreement.with.the.remaining.occupant.of.the.construction.site.of.phase.3.of.the.Ponte.16.development.project to terminate the legal proceedings it had initiated in 2005. Following the settlement agreement, Ponte 16 recoveredpossession ofthe whole construction site, andthe developmentofthe shopping arcade atphase3 willproceed as.planned..The.shopping.arcade,.which.will.offer.an.array.of.shops.and.restaurants,.is.expected.to.be.another.stable.revenue.contributor.to.Ponte.16. In view of the sustainable economic growth of Mainland China, the Group initiated a new business in 2010 which intends.to.provide.a.technology.services.platform.as.well.as.technical support.to.China’s.mobile.sports.lottery.market..This.strategic.expansion.of.the.Group’s.entertainment.arm.will.not.only.extend.the.Group’s.footprint.in.Mainland.China,.but.will.also.enable.it.to.capture.the.enormous.potential.and.growth.opportunities.of.China’s.burgeoning.lottery.industry. Backed by the positive global economic outlook and favourablepolicy environmentinMacau andMainlandChina, the.Group.will.continue.to.strengthen.its.business.platform.and.competitive.edge.by.continuing.the.implementation.of.the three-pronged business strategy, and to translate the resultsinto enhanced valueforits shareholders,partners and customers.Overthelong-term,theGroup ispoisedtobenefit from.its.growing.market.position.and.will.certainly.enrich.its.business.portfolio. CorporateGovernanceReport SuccessUniverseGroupLimited(the “Company”)iscommittedtomaintainhigh corporategovernancestandard and.procedures.to.ensure.the.integrity,.transparency.and.quality.of.disclosure.in.order.to.enhance.the.shareholders’.value. CORPORATE.GOVERNANCE.PRACTICES Inthe opinion ofthedirectors oftheCompany(“Director(s)”),theCompanyhas appliedtheprinciples andcompliedwith allthe.codeprovisions as set outintheCode onCorporateGovernancePractices containedinAppendix14 oftheRulesGoverning theListing ofSecuritiesonTheStockExchangeofHongKongLimited(the “ListingRules”)duringtheyearended31December 2010. DIRECTORS’.SECURITIES.TRANSACTIONS TheCompanyhasadoptedacodeof conduct regarding securitiestransactionsbyDirectors(the “CodeofConduct”)onterms.no.less.exacting.than.the.required.standard.of.the.Model.Code.for.Securities.Transactions.by.Directors.of.Listed.Issuers.(the.“Model.Code”).as.set.out.in.Appendix.10.of.the.Listing.Rules. Having.made.specific.enquiry.of.all.Directors,.each.of.whom.has.confirmed.his/her.compliance.with.the.required.standard.set.out.in.the.Code.of.Conduct.and.the.Model.Code.throughout.the.year.under.review. BOARD.OF.DIRECTORS The.board.of.Directors.(the.“Board”),.led.by.its.chairman.(the.“Chairman”),.Mr..Yeung.Hoi.Sing,.Sonny,.is.responsible.for.overseeing the.management.of.the.business.and.affairs,.considering.and.approving.strategic.plans.and.major.corporate.matters,.as.well.as.reviewing.operational.and.financial.performance..The.Board.is.committed.to.make.decisions.in.the.best.interests.of.both.the.Company.and.its.shareholders. TheBoardcurrently consists of six members, includingtwo executiveDirectors, namelyMr.YeungHoiSing,Sonny(Chairman) andDr.MaHoMan,Hoffman(DeputyChairman); anon-executiveDirector,namelyMr.ChoiKinPui,Russelle(the “NED”);and threeindependentnon-executiveDirectors, namelyMr.LukKaYee,Patrick,Mr.YimKaiPung andMs.YeungMoSheung,Ann (“INEDs”).TheDirectors’biographicalinformationisset out inthesectionheaded “BiographicalDetailsofDirectorsandSenior Management” on.pages.38.and.39. TherolesoftheChairmanandtheDeputyChairmanoftheBoard(the “DeputyChairman”)whoperformsthefunctionof chief executive officer are segregated and assumedby separateindividualsto strike abalance ofpower and authority sothatpower and.job.responsibilities.are.not.concentrated.in.any.one.individual.of.the.Board..The.Chairman,.Mr..Yeung.Hoi.Sing,.Sonny,.is.responsible.for.overseeing.the.function.of.the.Board.and.formulating.overall.strategies.and.policies.of.the.Company,.while.the.DeputyChairman,Dr.MaHoMan,Hoffman,is responsiblefor implementingtheCompany’s strategies regardingthebusiness development.of.the.Company.and.its.subsidiaries.(collectively.the.“Group”).as.well.as.managing.the.Group’s.business.and.operations..The.functions.and.responsibilities.between.the.Chairman.and.the.Deputy.Chairman.are.clearly.segregated. CorporateGovernanceReport(continued) Except.that.Dr..Ma.Ho.Man,.Hoffman.is.the.nephew.of.Mr..Yeung.Hoi.Sing,.Sonny,.to.the.best.knowledge.of.the.Directors,.thereis nofinancial,business,family and/or other material/relevant relationship among members oftheBoard andbetweenthe Chairman.and.the.Deputy.Chairman.who.performs.the.function.of.chief.executive.officer. The.Board.includes.three.INEDs.and.one.of.them,.Mr..Yim.Kai.Pung,.is.an.associate.member.of.the.Hong.Kong.Institute.of.Certified.Public.Accountants.and.a.fellow.member.of.The.Association.of.Chartered.Certified.Accountants.of.the.United.Kingdom.Hehas over20years ofexperiencein auditing,taxation andprovision offinance consultancy servicesfor companies in.Hong.Kong.and.the.People’s.Republic.of.China. The.NED.and.all.INEDs.entered.into.service.contracts.with.the.Company.for.a.term.of.one.year..Pursuant.to.the.bye-laws.of.theCompany, allDirectors appointedbytheBoardshallhold office untilthe nextfollowinggeneral meeting oftheCompany(in case offilling a casual vacancy) or untilthe nextfollowing annualgeneralmeeting oftheCompany(in case of an additiontothe number ofDirectors) aftertheir appointment andthe retiringDirector shallbe eligiblefor re-election.In addition, at each annual general.meeting.of.the.Company,.one-third.of.the.Directors.shall.retire.from.office.by.rotation.such.that.all.Directors.should.be.subject.to.retirement.by.rotation.at.least.once.every.three.years. The.Board.meets.regularly.throughout.the.year.as.and.when.required..Notices.of.at.least.14.days.are.given.to.all.Directors.for.all.regular.Board.meetings..The.company.secretary.of.the.Company.assists.the.Chairman.in.preparing.the.agendas.for.the.meetings and allDirectors are consultedtoinclude any mattersinthe agendas.Agenda and accompanyingboardpapers are given.to.all.Directors.in.a.timely.manner.and.at.least.3.days.before.the.appointed.date.of.each.meeting. During.the.year.under.review,.four.regular.Board.meetings.and.two.non-regular.Board.meetings.were.held..Details.of.the.Directors’.attendance.at.the.said.Board.meetings.are.set.out.below: Number.of.Board.meetings.Directors attended/held Executive.Directors Mr..Yeung.Hoi.Sing,.Sonny.(Chairman) 5/6. Dr..Ma.Ho.Man,.Hoffman.(Deputy.Chairman) 6/6 Non-executive.Director Mr..Choi.Kin.Pui,.Russelle.6/6 Independent.non-executive.Directors Mr..Luk.Ka.Yee,.Patrick.6/6 Mr..Yim.Kai.Pung.6/6 Ms..Yeung.Mo.Sheung,.Ann 6/6 The Board has agreed on a procedure to enable the Directors to seek independent professional advice in appropriate circumstances, at the Company’s expense, to assist them to discharge their duties. Adequate, complete and reliable information.is.provided.to.the.Directors.in.a.timely.manner.to.keep.them.abreast.of.the.Group’s.latest.developments.and.any.major.changes.to.the.relevant.rules.and.regulations.and.thus.can.assist.them.in.discharging.their.duties. CorporateGovernanceReport(continued) DELEGATION.BY.THE.BOARD The.Board.has.established.three.Board.committees,.namely.the.audit.committee.(the.“Audit.Committee”),.the.remuneration.committee.(the.“Remuneration.Committee”).and.the.executive.committee.(the.“Executive.Committee”).to.oversee.particular.aspects.of.the.Company’s.affairs.and.to.assist.in.sharing.the.Board’s.responsibilities..The.Board.has.reserved.for.its.decision.or consideration on matters covering corporate strategy, annualandinterim results, changes of members oftheBoard and its committees,.major.acquisitions,.disposals.and.capital.transactions,.and.other.significant.operational.and.financial.matters..All.the.Board.committees.have.clear.written.terms.of.reference.and.have.to.report.to.the.Board.regularly.on.their.decisions.and.recommendations.Theday-to-day running oftheGroup,includingimplementation ofthe strategies andplans adoptedbythe Boardandits committees,isdelegatedto management withdivisionalheads responsiblefordifferent aspects ofthebusiness/ affairs. AUDIT.COMMITTEE TheCompanyformulatedwrittenterms of referencefortheAuditCommittee in accordance withthe requirements oftheListing.Rules,.full.text.of.which.is.available.on.the.Company’s.website..The.Audit.Committee.currently.consists.of.the.NED.and.all.INEDs andis chairedbyMr.YimKaiPungwhopossesses appropriateprofessional accountingqualification as required under the.Listing.Rules. The.primary.duties.of.the.Audit.Committee.include,.inter.alia,.monitoring.integrity.of.the.financial.statements.of.the.Company.and ensuring objectivity and credibilityoffinancialreporting, reviewing effectiveness oftheinternal control system oftheGroup as.well.as.overseeing.the.relationship.with.the.external.auditors.of.the.Company. During.the.year.under.review,.four.Audit.Committee.meetings.were.held.and.several.resolutions.in.writing.were.passed.by.all.members.of.the.Audit.Committee..Details.of.attendance.of.the.Audit.Committee.members.at.the.said.Audit.Committee.meetings.are.set.out.below: Number.of.Audit.Committee.Audit.Committee.members meetings.attended/held Mr..Yim.Kai.Pung.(Chairman.of.the.Audit.Committee) 4/4 Mr..Choi.Kin.Pui,.Russelle 4/4 Mr..Luk.Ka.Yee,.Patrick.4/4 Ms..Yeung.Mo.Sheung,.Ann 4/4 During.the.year.under.review,.the.Audit.Committee.had.considered,.reviewed.and/or.discussed.(i).the.auditing.and.financial.reporting.matters;.(ii).the.change.of.external.auditors.and.the.remuneration.as.well.as.terms.of.engagement.of.the.external.auditors;(iii)the annual andinterim results; and(iv)the effectiveness ofthe internal control system oftheGroup.Each member of.the.Audit.Committee.has.unrestricted.access.to.the.exter nal.auditors.and.all.senior.staff.of.the.Group. CorporateGovernanceReport(continued) REMUNERATION.COMMITTEE The.Company.formulated.written.terms.of.reference.for.the.Remuneration.Committee.in.accordance.with.the.requirements.of.the.Listing.Rules,.full.text.of.which.is.available.on.the.Company’s.website..The.Remuneration.Committee.currently.consists.of theChairman oftheBoard,theNED and allINEDs withMr.YeungHoiSing,Sonny acts asthe chairman oftheRemuneration Committee. The major responsibilities oftheRemunerationCommittee areto make recommendationtotheBoardontheCompany’spolicy andstructureforremunerationoftheDirectorsandseniormanagement oftheCompany(the “SeniorManagement”)andonthe establishment.of.a.formal.and.transparent.procedure.for.developing.remuneration.policy,.to.determine.specific.remuneration.packages.of.all.executive.Directors.and.the.Senior.Management.and.also.to.make.recommendations.to.the.Board.of.the.remuneration oftheNEDandallINEDs.TheRemunerationCommitteetakesinto consideration onfactors suchas salariespaid by.comparable.companies,.time.commitment.and.responsibilities.of.the.Directors.and.the.Senior.Management. During.the.year.under.review,.one.Remuneration.Committee.meeting.was.held.and.a.resolution.in.writing.was.passed.by.all.members.of.the.Remuneration.Committee.for,.inter.alia,.reviewing.the.remuneration.policy.and.structure.for.as.well.as.the.remuneration.packages.of.all.Directors.and.the.Senior.Management..Details.of.attendance.of.the.Remuneration.Committee.members.at.the.said.Remuneration.Committee.meeting.are.set.out.below: Number.of.Remuneration.Committee.Remuneration.Committee.members meeting.attended/held Mr..Yeung.Hoi.Sing,.Sonny.(Chairman.of.the.Remuneration.Committee) 1/1 Mr..Choi.Kin.Pui,.Russelle 1/1 Mr..Luk.Ka.Yee,.Patrick 1/1 Mr..Yim.Kai.Pung 1/1 Ms..Yeung.Mo.Sheung,.Ann 1/1 EXECUTIVE.COMMITTEE The.Executive.Committee.was.established.by.the.Board.with.specific.written.terms.of.reference..It.currently.consists.of.all.executive.Directors,.namely.Mr..Yeung.Hoi.Sing,.Sonny.and.Dr..Ma.Ho.Man,.Hoffman.with.Mr..Yeung.Hoi.Sing,.Sonny.acts.as.the.chairman.of.the.Executive.Committee..The.Executive.Committee.is.responsible.for.reviewing.and.approving,.inter.alia,.any matters concerningtheday-to-day management,business and operations affairs oftheCompany, and any matterstobe delegated.to.it.by.the.Board.from.time.to.time. NOMINATION.OF.DIRECTORS The.Company.did.not.establish.a.nomination.committee.and.the.Board.is.responsible.for.reviewing.its.size,.structure.and.composition(including.the.skills,.knowledge.and.experience.of.its.members).from.time.to.time.as.appropriate.to.ensure.that.the.Board.has.a.balance.of.skills.and.experience.appropriate.for.the.business.of.the.Company..Besides,.the.Board.is.responsiblefor assessingtheindependence ofINEDs and considering any appointment ofits own members as well as making recommendationstotheshareholdersoftheCompany(the “Shareholders”)onDirectorsstandingforre-electionatthegeneral meeting.following.their.appointments.and.retirement.by.rotation. Duringtheyear under review, no new member was appointed totheBoard.TheBoardhas(i) recommendedthe re-appointment oftheDirectors standingfor re-election atthe annualgeneral meeting oftheCompanyheld on3June2010(the “2010AnnualGeneralMeeting”);(ii)reviewedits own size, structure as wellas composition; and(iii) assessedtheindependence of.INEDs. CorporateGovernanceReport(continued) INTERNAL.CONTROLS TheBoardis responsiblefor ensuringthattheGroupmaintains sound and effectiveinternal control system so asto safeguard.the investment.of.the.Shareholders.and.the.assets.of.the.Group..The.Company.has.annually.engaged.an.independent.professionalfirm(the“IndependentProfessionalFirm”)toreviewtheinternalcontrolsystemoftheGroupwhichcoversfinancial, operational and compliance controls as wellas risk managementfunctions.Duringtheyear,theIndependentProfessionalFirm has conducteda review oftheinternal control system oftheGroup andthe relevant review reporthasbeen consideredbythe Audit.Committee.for.assessing.the.effectiveness.of.the.said.internal.control.system..The.Board,.through.the.reviews.made.by.theIndependentProfessionalFirm andtheAuditCommittee, concludedthattheGroup’sinternal control system was effective. The.Audit.Committee.has.also.reviewed.the.adequacy.of.resources,.qualifications.and.experience.of.staff.(the.“Accounting.Staff”)oftheCompany’saccounting andfinancial reportingfunction(the “AccountingFunction”),andtheirtrainingprogrammes and.budget.during.the.year..The.Board,.through.the.review.made.by.the.Audit.Committee,.considered.that.the.resources.of.the.Accounting.Function.as.well.as.the.qualifications.and.experience.of.the.Accounting.Staff.are.adequate.and.the.training.programmes.and.budget.for.the.Accounting.Staff.are.sufficient. DIRECTORS’ANDAUDITORS’RESPONSIBILITIESFORTHEFINANCIALSTATEMENTS The.Directors.acknowledge.their.responsibilities.for.the.preparation.of.the.financial.statements.of.the.Group.and.ensure.that.the.financial.statements.are.prepared.in.accordance.with.statutory.requirements.and.applicable.accounting.standards..The.Directors.also.ensure.the.timely.publication.of.the.financial.statements.of.the.Group.. The statementofthe external auditors oftheCompany,HLBHodgsonImpeyCheng(which was appointedbytheDirectors on 21.July.2010.to.fill.the.casual.vacancy.following.the.resignation.of.the.former.external.auditor,.CCIF.CPA.Limited),.about.their.reporting.responsibilities.on.the.financial.statements.of.the.Group.is.set.out.in.the.Independent.Auditors’ Report.on.pages.40.and.41. The.Directors.confirm.that,.to.the.best.of.their.knowledge,.information.and.belief,.having.made.all.reasonable.enquiries,.they.are not aware of any materialuncertainties relatingto events or conditionsthatmaycast significantdoubtupontheCompany’s ability.to.continue.as.a.going.concern. CorporateGovernanceReport(continued) AUDITORS’.REMUNERATION For.the.year.ended.31.December.2010,.the.amounts.paid.to.the.external.auditors.of.the.Group.in.respect.of.the.following.services.provided.to.the.Group.are.as.follows: 31.December.2010 HK$’000 Audit.services 1,449 Other.advisory.services 311 1,760 COMMUNICATION.WITH.SHAREHOLDERS The.Board.is.committed.to.provide.clear.and.full.information.on.the.Group.to.the.Shareholders.through.the.publication.of.notices,.announcements,.circulars.and.financial.reports.of.the.Company..Additional.information,.such.as.press.releases.and.other.business.information.are.also.available.on.the.Company’s.website.at.www.successug.com,.being.updated.in.a.timely.manner. The.annual.general.meeting.provides.a.useful.forum.for.the.Shareholders.to.exchange.views.with.the.Board..The.Chairman,.alsobeingthe chairman oftheRemunerationCommittee, as well asthe chairman oftheAuditCommittee werepresentatthe 2010.Annual.General.Meeting.to.answer.the.Shareholders’.questions. Separate resolutions areproposedatgeneralmeetings on eachsubstantiallyseparateissues,includingthe election ofindividual Directors..Notices.of.at.least.20.clear.business.days.and.10.clear.business.days.are.given.to.the.Shareholders.for.all.annual.general.meetings.and.special.general.meetings.of.the.Company.respectively..Detailed.procedures.for.conducting.a.poll.are.clearly.explained.at.the.commencement.of.the.general.meetings. ReportofDirectors The.directors.(“Director(s)”).of.Success.Universe.Group.Limited.(the.“Company”).present.their.annual.report.together.with.the.audited consolidatedfinancial statementsoftheCompany anditssubsidiaries(collectivelythe“Group”)fortheyearended31 December.2010. PRINCIPAL.ACTIVITIES TheCompanyis aninvestmentholding company.Its subsidiaries areprincipallyengagedintheleasing and management ofthe.55%.owned.cruise.and.travel-related.businesses. Particulars of.the.Company’s.subsidiaries.as.at.31.December.2010.are.set.out.in.note.19.to.the.consolidated.financial.statements. RESULTS.AND.APPROPRIATIONS The results oftheGroupfortheyear ended31December2010are set outinthe consolidatedincome statement onpage42. No.interim.dividend.was.paid.during.the.year.(2009:.Nil)..The.Directors.do.not.recommend.any.payment.of.a.final.dividend.for.the.year.ended.31.December.2010.(2009:.Nil). SEGMENT.INFORMATION An analysis oftheGroup’sperformancefortheyear ended31December2010bybusiness andgeographical segmentsis set.out.in.note.6.to.the.consolidated.financial.statements. FIVE-YEAR.FINANCIAL.SUMMARY A.financial.summary.of.the.Group.for.the.past.five.financial.years.is.set.out.on.page.110. RESERVES Details ofthe movementsinthe reserves oftheGroupduringtheyear are set outinthe consolidatedstatement of changesin.equity onpage47 ofthis annual report and otherdetails ofthe reserves oftheGroupare set out in note40tothe consolidated financial.statements. CHARITABLE.CONTRIBUTIONS During.the.year,.the.Group.made.charitable.and.other.donations.totalling.approximately.HK$10,000.(2009:.approximately.HK$5,000). PROPERTY,.PLANT.AND.EQUIPMENT Details.of.the.movements.in.the.property,.plant.and.equipment.of.the.Group.during.the.year.are.set.out.in.note.16.to.the.consolidated.financial.statements. ReportofDirectors(continued) SHARE.CAPITAL There.was.no.movement.in.the.share.capital.of.the.Company.during.the.year..Details.of.the.share.capital.of.the.Company.are.set.out.in.note.38.to.the.consolidated.financial.statements. LOANS.AND.BORROWINGS Details.of.the.loans.and.borrowings.of.the.Group.as.at.31.December.2010.are.set.out.in.notes.31,.33,.36.and.37.to.the.consolidated.financial.statements. DIRECTORS The.Directors.who.held.office.during.the.year.and.up.to.the.date.of.this.report.were: Executive.Directors: Mr..Yeung.Hoi.Sing,.Sonny.(Chairman) Dr..Ma.Ho.Man,.Hoffman.(Deputy.Chairman) Non-executive.Director.(“NED”): Mr..Choi.Kin.Pui,.Russelle Independent.Non-executive.Directors.(“INED(s)”): Mr..Luk.Ka.Yee,.Patrick Mr..Yim.Kai.Pung Ms..Yeung.Mo.Sheung,.Ann Inaccordancewithbye-law87ofthebye-lawsoftheCompany(the “Bye-laws”),Dr.MaHoMan,HoffmanandMs.YeungMo Sheung,.Ann.shall.retire.by.rotation.and,.being.eligible,.will.offer.themselves.for.re-election.at.the.forthcoming.annual.general.meeting.of.the.Company.(the.“Annual.General.Meeting”). The.Company.has.received.from.each.of.the.INEDs.an.annual.confirmation.of.his/her.independence.pursuant.to.Rule.3.13.of.theRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the “ListingRules”)and considers all.of.the.INEDs.to.be.independent. ReportofDirectors(continued) CHANGES.OF.DIRECTORS’.INFORMATION Changesintheinformation oftheDirectors requiredtobedisclosedpursuanttoRule13.51B(1) oftheListingRules subsequent.to.the.date.of.the.Interim.Report.2010.of.the.Company.and.up.to.the.date.of.this.report.are.set.out.below: –. Dr..Ma.Ho.Man,.Hoffman,.an.executive.Director.and.the.Deputy.Chairman.of.the.Company,.was.appointed.as.an.executivedirector andthe chairman oftheboard ofdirectors ofSeeCorporationLimited, a companylisted ontheMain Board.of.The.Stock.Exchange.of.Hong.Kong.Limited.(the.“Stock.Exchange”),.with.effect.from.14.October.2010. –. Mr.ChoiKinPui,Russelle,aNED,ceasedtoactasanexecutivedirectorofMintelInc.,alicensedcarrierinthePeople’s Republic.of.China,.in.September.2010. –. Mr.YimKaiPung(“Mr.Yim”),anINED,actsasadirectoraswellasthemanagingdirectorofCCTHCPALimited which was.considered.as.a.major.appointment.of.Mr..Yim.since.September.2010. –. Ms.YeungMoSheung,Ann,anINED,wasappointedasanindependent non-executivedirectorofHaoWenHoldings Limited,.a.company.listed.on.the.Growth.Enterprise.Market.of.the.Stock.Exchange,.with.effect.from.11.January.2011. DIRECTORS’.SERVICE.CONTRACTS None oftheDirectorsproposedfor re-election attheAnnualGeneralMeetinghas a service contract withtheCompany which.is.not.determinable.by.the.Company.within.one.year.without.payment.of.compensation,.other.than.statutory.compensation. CONTRACTS.OF.SIGNIFICANCE On.1.December.2008,.the.Company.as.borrower.and.Mr..Yeung.Hoi.Sing,.Sonny.(“Mr..Yeung”),.an.executive.Director.and.a.controlling.shareholder.of.the.Company,.as.lender.entered.into.a.letter.agreement.regarding.an.unsecured.term.loan.facility.of.uptoHK$200 million(“LoanFacility”).The rate ofinterestonthe entireprincipalamountdrawn and outstanding undertheLoan Facilitywastheprime ratequotedforHongKongdollarsloansbyTheHongkong andShanghaiBankingCorporationLimited. On.14.April.2009,.the.Company.and.Mr..Yeung.also.entered.into.a.letter.agreement.to.increase.the.principal.amount.of.the.Loan.Facility.up.to.HK$290.million..In.addition,.Mr..Yeung.undertook.not.to.demand.early.repayment.of.the.loan.and.all.other.sums.owing.to.him.under.the.revised.Loan.Facility.before.30.June.2010.(the.“Final.Repayment.Date”)..The.Final.Repayment.Date was extendedto30June2011byaletter agreementdated25June2009 and wasfurther extendedto30October2012 by.another.letter.agreement.dated.23.June.2010. Save asdisclosedabove,there were no contracts of significanceto whichtheCompanyor any ofits subsidiaries was aparty and.in.which.any.of.the.Directors.or.controlling.shareholders.or.its.subsidiaries.had.a.material.interest,.whether.directly.or.indirectly,.subsisted.at.the.end.of.the.year.or.at.any.time.during.the.year. 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.subsisted.during.the.year. ReportofDirectors(continued) DIRECTORS’.AND.CHIEF.EXECUTIVE’S.INTERESTS.IN.SECURITIES As.at.31.December.2010,.the.Directors.or.chief.executive.of.the.Company.and/or.any.of.their.respective.associates.had.the.followinginterests andshortpositions inthe shares, underlying shares ordebentures oftheCompany or any ofits associated corporations.(within.the.meaning.of.Part.XV.of.the.Securities.and.Futures.Ordinance.(Chapter.571).of.the.Laws.of.Hong.Kong.(the.“SFO”)).as.recorded.in.the.register.required.to.be.kept.by.the.Company.pursuant.to.Section.352.of.the.SFO,.or.as.otherwise,.notified.to.the.Company.and.the.Stock.Exchange.pursuant.to.the.Model.Code.for.Securities.Transactions.by.Directors.of.Listed.Issuers.(the.“Model.Code”).contained.in.the.Listing.Rules: Interest.in.the.shares.of.the.Company.(“Share(s)”) Approximate. Long.position/ Number.of. percentage.of. Name.of.Director Short.position Nature.of.interest Shares.held shareholding % Mr..Yeung.(Note) Long.position Corporate.interest 1,010,953,432 41.45 Note: Mr..Yeung,.an.executive.Director.and.the.Chairman.of.the.Company,.is.deemed.to.have.corporate.interest.in.1,010,953,432.Shares.by.virtue. of.the.interest.of.the.Shares.held.by.Silver.Rich.Macau.Development.Limited,.which.is.wholly-owned.by.a.discretionary.trust,.the.beneficiaries. of.which.are.family.members.of.Mr..Yeung. Save asdisclosedabove, as at31December2010, none oftheDirectors or chief executive oftheCompany, ortheir respective.associates,.had.any.interests.or.short.positions.in.the.shares,.underlying.shares.or.debentures.of.the.Company.or.any.of.its.associated.corporations.(within.the.meaning.of.Part.XV.of.the.SFO).as.recorded.in.the.register.required.to.be.kept.by.the.CompanypursuanttoSection352 oftheSFO, or as otherwise, notifiedtotheCompany andtheStockExchangepursuantto the.Model.Code. SHARE.OPTION.SCHEME.AND.DIRECTORS’.RIGHTS.TO.ACQUIRE.SHARES.OR.DEBENTURES Details.of.the.share.option.scheme.are.set.out.in.note.39(b).to.the.consolidated.financial.statements. Atnotimeduringtheyear wastheCompany or any ofits subsidiaries, apartyto any arrangementsto enabletheDirectorsto acquire.benefits.by.means.of.the.acquisition.of.shares.in,.or.debentures.of,.the.Company.or.any.other.body.corporate. ReportofDirectors(continued) SUBSTANTIAL.SHAREHOLDERS’.INTERESTS.IN.SECURITIES As at31December2010,thefollowingpersons(otherthan aDirector or chiefexecutive oftheCompany)had, or weredeemed.ortakentohave,interests or shortpositions intheShares and underlyingShares as recorded inthe register requiredtobekept by.the.Company.pursuant.to.Section.336.of.the.SFO: Interest.in.the.Shares Approximate. Name.of. Long.position/ Number.of. percentage.of. substantial.shareholder Short.position Capacity Shares.held shareholding % Silver.Rich.Macau.Long.position Beneficial.owner 1,010,953,432 41.45 Development.Limited Trustcorp.Limited.(Note.1) Long.position Trustee 1,010,953,432 41.45 Newcorp.Ltd..(Note.1) Long.position Interest.of.controlled.1,010,953,432 41.45 corporation Ms..Liu.Siu.Lam,.Marian.(Note.2) Long.position Interest.of.spouse 1,010,953,432 41.45 Maruhan.Corporation Long.position Beneficial.owner 440,000,000 18.19 Notes: 1.. Asat31December2010,theentireissuedsharecapitalofSilverRichMacauDevelopmentLimitedwasheldbyTrustcorpLimited,whichwas a.trustee ofadiscretionarytrust,thebeneficiaries of which werefamilymembers ofMr.Yeung.TrustcorpLimited was a wholly-ownedsubsidiary ofNewcorpLtd..Accordingly, each ofTrustcorpLimitedandNewcorpLtd. wasdeemedtobeinterested in1,010,953,432SharesheldbySilver Rich.Macau.Development.Limited.as.at.31.December.2010. 2.. Ms..Liu.Siu.Lam,.Marian,.being.the.spouse.of.Mr..Yeung,.was.deemed.to.be.interested.in.1,010,953,432.Shares.in.which.Mr..Yeung.had.a.deemed.interest. Save asdisclosedabove, as at31December2010, no otherperson(otherthan aDirector or chief executive oftheCompany).had,.or.was.deemed.or.taken.to.have,.an.interest.or.short.position.in.the.Shares.and.underlying.Shares.which.were.recorded.in.the.register.required.to.be.kept.by.the.Company.pursuant.to.Section.336.of.the.SFO. ReportofDirectors(continued) DISCLOSURE.UNDER.RULES.13.20.AND.13.22.OF.THE.LISTING.RULES Based.on.the.disclosure.obligations.under.Rules.13.20.and.13.22.of.the.Listing.Rules,.the.financial.assistance,.which.was.madebytheGroupby wayofthe shareholder’sloanprovidedbyWorldFortuneLimited(“WorldFortune”), anindirectsubsidiary of.the.Company,.and.a.corporate.guarantee.given.by.the.Company.in.respect.of.the.payment.obligation.of.Pier.16.–.Property.Development.Limited.(“Pier.16.–.Property.Development”,.a.49%.owned.associate.of.World.Fortune).under.syndicated.loan.facilities.granted.to.Pier.16.–.Property.Development.(the.“Financial.Assistance”),.continued.to.exist.as.at.31.December.2010..Pier.16.–.Property.Development.is.principally.engaged.in.the.property.holding.and,.through.its.subsidiaries,.operating.Ponte.16,.being.a.world-class.integrated.casino-entertainment.resort.located.in.Macau..The.Financial.Assistance.is.mainly.used.for.the.development.and.operations.of.Ponte.16. The.amounts.of.the.Financial.Assistance.as.at.31.December.2010.were.set.out.below: Aggregate.Shareholder’s.Corporate.Financial.Name.of.associate loan guarantee Assistance HK$’million HK$’million HK$’million Pier.16.–.Property.Development 1,224 860 2,084 The.shareholder’s.loan.provided.by.World.Fortune.is.unsecured,.interest-free.and.has.no.fixed.terms.of.repayment. Further.details.are.set.out.in.notes.20.and.42.to.the.consolidated.financial.statements. Set.out.below.is.a.combined.balance.sheet.of.Pier.16.–.Property.Development.and.the.Group’s.attributable.interests.in.this. associate.according.to.its.audited.consolidated.financial.statements.for.the.year.ended.31.December.2010: Group’s. Combined. attributable. balance.sheet interests HK$’000 HK$’000 Non-current.assets 2,329,281 1,141,348 Current.assets 399,008 195,514 Current.liabilities 334,227 163,771 Non-current.liabilities 3,057,931 1,498,386 CONVERTIBLE.SECURITIES,.OPTIONS,.WARRANTS.OR.SIMILAR.RIGHTS The.Company.had.no.outstanding.convertible.securities,.options,.warrants.or.other.similar.rights.as.at.31.December.2010. PURCHASE,.SALE.OR.REDEMPTION.OF.THE.COMPANY’S.LISTED.SECURITIES During the year ended 31 December 2010, there was no purchase, sale or redemption by the Company, or any of its.subsidiaries,.of.the.listed.securities.of.the.Company. ReportofDirectors(continued) MAJOR.SUPPLIERS.AND.CUSTOMERS During.the.year,.the.five.largest.customers.of.the.continuing.operations.of.the.Group.accounted.for.approximately.15.1%.of.totalturnover ofthe continuing operations oftheGroup of whichthelargest customer accountedfor approximately4.8% and the.five.largest.suppliers.of.the.continuing.operations.of.the.Group.accounted.for.approximately.84.8%.of.total.purchases.of.the.continuing.operations.of.the.Group,.of.which.the.largest.supplier.accounted.for.approximately.76.5%. None oftheDirectors or anyoftheir associates or any shareholders(which,tothebestknowledge oftheDirectors, owns more than.5%.of.the.Company’s.issued.share.capital).had.any.beneficial.interest.in.the.above.five.largest.customers.or.five.largest.suppliers. PRE-EMPTIVE.RIGHTS There.is.no.provision.for.pre-emptive.rights.under.the.Bye-laws.and.there.is.no.restriction.against.such.rights.under.the.laws.of.Bermuda,.which.would.oblige.the.Company.to.offer.new.Shares.on.a.pro-rata.basis.to.its.existing.shareholders. SUFFICIENCY.OF.PUBLIC.FLOAT As atthedate ofthis report,theCompanyhas maintained a sufficientpublicfloat asprescribedundertheListingRules,based.on.the.information.that.is.publicly.available.to.the.Company.and.within.the.knowledge.of.the.Directors. EMOLUMENT.POLICY Theremunerationcommittee(the “RemunerationCommittee”)of theboard ofDirectors(the “Board”)isresponsiblefor.determining specific.remuneration.packages.of.all.executive.Directors.and.senior.management.of.the.Company.(“Senior.Management”)..Besides,.the.Remuneration.Committee.makes.recommendation.to.the.Board.for.its.determination.on.the.remuneration.of.the.NED.and.all.INEDs..Factors.such.as.salaries.paid.by.comparable.companies,.qualifications,.experience,.time.commitment.and.responsibilities.of.the.Directors.and.the.Senior.Management.as.well.as.prevailing.market.condition.are.considered.by.the.Remuneration.Committee.for.determining/making.proposals.on.remuneration.of.the.relevant.Directors.and.Senior.Management. The.remuneration.packages.of.employees.of.the.Group.(other.than.the.executive.Directors.and.the.Senior.Management).are determined and reviewed periodically on the basis of their respective qualifications, experience, responsibilities and performance.as.well.as.prevailing.market.condition..In.addition.to.salaries,.the.Company.offers.staff.benefits.which.include.medical.insurance.and.retirement.benefits.under.the.Mandatory.Provident.Fund.Scheme..The.Group.also.operates.a.share.option.scheme.pursuant.to.which.share.options.might.be.granted.as.a.long-term.incentive.to.its.directors.and.employees. RETIREMENT.BENEFIT.SCHEME Details.of.the.retirement.benefit.scheme.of.the.Group.are.set.out.in.note.39(a).to.the.consolidated.financial.statements. ReportofDirectors(continued) CORPORATE.GOVERNANCE The.Company.has.published.its.Corporate.Governance.Report,.details.of.which.are.set.out.on.pages.24.to.29.of.this.annual.report. AUDITORS On.21.July.2010,.CCIF.CPA.Limited.(“CCIF”).resigned.as.auditor.of.the.Company.and.HLB.Hodgson.Impey.Cheng.(“HLB”).were.appointed.as.auditors.of.the.Company.to.fill.the.casual.vacancy.created.by.the.resignation.of.CCIF. The consolidatedfinancialstatements oftheGroupfortheyear ended31December2010havebeen auditedbyHLBwho shall retire.at.the.Annual.General.Meeting.and,.being.eligible,.will.offer.themselves.for.re-appointment. On.behalf.of.the.Board Yeung.Hoi.Sing,.Sonny Chairman Hong.Kong,.29.March.2011 BiographicalDetailsofDirectorsandSeniorManagement EXECUTIVE.DIRECTORS Mr..Yeung.Hoi.Sing,.Sonny,.aged 56,.joined.the.Group.in.2003..He.is.an.executive.director.and.the.Chairman.of.the.Company.as.well.as.a.director.of.the.subsidiaries.of.the.Company..He.is.also.the.chairman.of.the.remuneration.committee.(the.“Remuneration.Committee”).and.the.executive.committee.(the.“Executive.Committee”).of.the.Company..Mr..Yeung.is.responsibleforthe overallcorporateplanning andbusinessdevelopment oftheGroup.Hehasbeen a member oftheNational Committee.of.the.Chinese.People’s.Political.Consultative.Conference,.the.People’s.Republic.of.China.(the.“PRC”).since.1993.and.has.over.27.years.of.experience.in.finance.industry.in.Hong.Kong..Prior.to.joining.the.Group,.Mr..Yeung.held.managerial.roles.in.several.financial.service.sectors.such.as.leveraged.foreign.exchange.trading,.and.securities.and.futures.brokerage..He.is.presently.the.sole.beneficial.owner.of.Success.Securities.Limited.(“Success.Securities”),.which.is.a.licensed.corporation.undertheSecuritiesandFuturesOrdinanceaswell asaparticipant ofTheStockExchangeofHongKongLimited(the “Stock Exchange”),principallyengagedintheprovision of securitiesbrokerage services.Mr.Yeunghas certainprivate investments in propertydevelopmentbusinessesinHongKong,Macau andCanada.Heis also adirector ofSilverRichMacauDevelopment Limited,.being.a.substantial.shareholder.of.the.Company..Mr..Yeung.is.an.uncle.of.Dr..Ma.Ho.Man,.Hoffman,.an.executive.director.and.the.Deputy.Chairman.of.the.Company. Dr. Ma.Ho.Man,.Hoffman,.aged.37,.joined.the.Group.in.2005..He.is.an.executive.director.and.the.Deputy.Chairman.of.the.Companyas wellas adirector ofthe subsidiaries oftheCompany.Dr.Mais also a member oftheExecutiveCommittee.Heis responsibleforimplementingtheCompany’s strategies regardingthebusinessdevelopment oftheGroup as well as managing the.Group’s.business.and.operations..Dr..Ma.joined.Success.Securities,.which.is.beneficially.wholly-owned.by.Mr..Yeung.Hoi.Sing,.Sonny.(“Mr..Yeung”),.being.an.executive.director.and.the.Chairman.of.the.Company,.in.2000..He.has.been.a.director.of.Success.Securities.since.November.2008.and.responsible.for.overseeing.the.marketing.affairs.of.such.company..Dr..Ma.is.currently.an.executive.director.and.the.chairman.of.the.board.of.directors.of.See.Corporation.Limited,.a.company.listed.on.the.Main.Board.of.the.Stock.Exchange..He.has.over.14.years.of.experience.in.the.financial.industry.and.years.of.managerial.experience..He.was.awarded.Fellowship.by.Canadian.Chartered.Institute.of.Business.Administration.and.Honorary.Doctorate.of.Management.by.Lincoln.University.in.2009.and.2010.respectively..Dr..Ma.is.a.nephew.of.Mr..Yeung. NON-EXECUTIVE.DIRECTOR Mr..Choi.Kin.Pui,.Russelle,.aged.56,.joined.the.Group.in.2003..He.is.a.non-executive.director.of.the.Company.as.well.as.a member.of.the.audit.committee.of.the.Company.(the.“Audit.Committee”).and.the.Remuneration.Committee..Mr..Choi.graduated.from.St..Pius.X.High.School.in.1976..He.has.over.17.years.of.management.experience.in.the.telecommunication.industry.in.Hong.Kong.and.the.United.States.(the.“US”)..Mr..Choi.established.Elephant.Talk.Limited.in.1994,.a.wholly-owned.subsidiary of anAmerican corporation,ElephantTalkCommunicationsInc.(“ETCI”), whose securities arequotedontheOver-The-CounterBulletinBoardintheUS and engagesintheprovision oftelecommunications servicesinHongKong andtheUS. Mr. Choi.was.a.director.of.ETCI.from.2002.to.2008.as.well.as.the.president.and.the.chief.executive.officer.of.ETCI.from.2002.to.2006.and.was.responsible.for.the.planning.of.the.overall.strategy.of.ETCI..He.also.served.as.the.chairman.of.ET.Network.ServicesLimited, aHongKongcompany engages intheprovision ofinternet access and outsourcing servicesinthePRC and Hong.Kong.. BiographicalDetailsofDirectorsandSeniorManagement(continued) INDEPENDENT.NON-EXECUTIVE.DIRECTORS Mr..Luk.Ka.Yee,.Patrick,.aged.49,.joined.the.Group.in.2003..He.is.an.independent.non-executive.director.of.the.Company.as.well.as.a.member.of.the.Audit.Committee.and.the.Remuneration.Committee..Mr..Luk.obtained.a.Law.Degree.in.England.in.1986..Throughout.his.tenure.of.career,.Mr..Luk.has.been.appointed.to.serve.in.various.senior.management.positions.which.involved.corporate/legal.and.property.development.as.well.as.property.management.aspects..He.is.presently.the.consultant.to.Pacific.Rich.Management.&.Consultants.Limited,.a.company.providing.property.and.facilities.management.in.Hong.Kong.. Mr.Yim.Kai.Pung,.aged.45,.joined.the.Group.in.2004..He.is.an.independent.non-executive.director.of.the.Company,.the.chairman of.the.Audit.Committee.and.a.member.of.the.Remuneration.Committee..Mr..Yim.holds.a.Bachelor.degree.of.AccountancywithhonoursfromCityUniversity ofHongKong in1993 and is an associate member oftheHongKongInstitute of.Certified.Public.Accountants.and.a.fellow.member.of.The.Association.of.Chartered.Certified.Accountants.of.the.United.Kingdom.Hehas over20years ofexperiencein auditing,taxation andprovision offinance consultancy servicesfor companies in.Hong.Kong.and.the.PRC..Mr..Yim.is.presently.a.sole.proprietor.of.David.Yim.&.Co.,.Certified.Public.Accountants,.and.a.director.as.well.as.the.managing.director.of.CCTH.CPA.Limited..He.is.currently.an.independent.non-executive.director.of.Greens.Holdings.Ltd.,.a.company.listed.on.the.Main.Board.of.the.Stock.Exchange..Mr..Yim.was.a.director.(who.was.first.appointed as an executivedirector andthen redesignated as a non-executivedirector) ofSanyuanGroupLimited, a company previously.listed.on.the.Main.Board.of.the.Stock.Exchange. Ms. Yeung.Mo.Sheung,.Ann,.aged 46,.joined.the.Group.in.2004..She.is.an.independent.non-executive.director.of.the.Companyas well as a member oftheAuditCommittee andtheRemunerationCommittee.Ms.Yeungholds aBachelordegree ofRetailMarketingwithhonoursintheUnitedKingdom and aDiplomainMarketingfromTheCharteredInstitute ofMarketing. She.pursued.her.further.study.on.legal.course.and.has.been.awarded.a.Diploma.in.Legal.Practice.in.the.United.Kingdom.in.1998.and.is.presently.a.partner.of.Messrs..Fung.&.Fung,.Solicitors,.a.legal.firm.in.Hong.Kong..Ms..Yeung.is.currently.an.independent.non-executive.director.of.Hao.Wen.Holdings.Limited,.a.company.listed.on.the.Growth.Enterprise.Market.of.the.StockExchange, andwas anindependent non-executivedirector ofFastSystemsTechnology(Holdings)Limited(nowknown as.Seamless.Green.China.(Holdings).Limited),.a.company.listed.on.the.Growth.Enterprise.Market.of.the.Stock.Exchange. COMPANY.SECRETARY Ms..Chiu.Nam.Ying,.Agnes,.aged.37,.joined.the.Group.in.2003..She.is.the.company.secretary.of.the.Company.and.is.responsiblefor overseeing alllegal matters oftheGroup.Ms.Chiuis aqualified solicitor andan associate member ofTheHong Kong.Institute.of.Chartered.Secretaries.and.The.Institute.of.Chartered.Secretaries.and.Administrators..She.holds.a.Master.degree ofLawsfromTheUniversityofSheffield,UnitedKingdomin1997.BeforejoiningtheGroup,Ms.Chiu was apracticing solicitor.in.a.local.law.firm.and.possessed.solid.experience.in.banking.and.finance.as.well.as.property.related.matters. FINANCIAL.CONTROLLER Mr..Wong.Chi.Keung,.Alvin,.aged.48,.joined.the.Group.in.2008..He.is.the.financial.controller.of.the.Group.as.well.as.the.qualifiedaccountant oftheCompany, andis responsibleforfinancial and accounting matters oftheGroup.Mr.Wongis afellow member.of.the.Hong.Kong.Institute.of.Certified.Public.Accountants.and.The.Association.of.Chartered.Certified.Accountants.and an.associate.member.of.The.Chartered.Institute.of.Management.Accountants..He.is.currently.an.independent.non-executivedirector as wellasthe chairman ofboththe auditcommittee andthe remuneration committee ofITCPropertiesGroup Limited,.a company.listed.on.the.Main.Board.of.the.Stock.Exchange..He.has.over.23.years.of.experience.in.accounting.and.corporate.finance.gained.in.property.development,.construction.and.manufacturing.companies.. IndependentAuditors’Report 31/F,GloucesterTower TheLandmark 11PedderStreet Central HongKong INDEPENDENT.AUDITORS’.REPORT.TO.THE.SHAREHOLDERS.OF.SUCCESS.UNIVERSE.GROUP.LIMITED. (Incorporated.in.Bermuda.with.limited.liability) WehaveauditedtheconsolidatedfinancialstatementsofSuccessUniverseGroupLimited(the “Company”)anditssubsidiaries.(collectively.referred.to.as.the.“Group”).set.out.on.pages.42.to.109,.which.comprise.the.consolidated.statement.of.financial.position as at31December2010,the consolidatedincome statement,the consolidatedstatement of comprehensive income, the consolidatedstatement of changesin equity andthe consolidated statement of cashflowsfortheyearthen 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.disclosure.requirements.of.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 solelytoyou, as abody,in accordance with section90 oftheBermudaCompaniesAct, andfor no otherpurpose.We do.not.assume.responsibility.towards.or.accept.liability.to.any.other.person.for.the.contents.of.this.report..We.conducted.our.auditin accordance withHongKongStandards onAuditingissuedbytheHongKongInstitute ofCertifiedPublicAccountants. Those standards.require.that.we.comply.with.ethical.requirements.and.plan.and.perform.the.audit.to.obtain.reasonable.assurance.as.to.whether.the.consolidated.financial.statements.are.free.from.material.misstatement. IndependentAuditors’Report(continued) 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’ judgement,.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 auditors considerinternal control relevanttothe entity’spreparation ofthe consolidatedfinancial 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.entity’s.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.Group.as.at.31.December.2010.and.of.the.Group’s.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.disclosure.requirements.of.the.Hong.Kong.Companies.Ordinance. OTHER.MATTER The.consolidated.financial.statements.of.the.Group.for.the.year.ended.31.December.2009.were.audited.by.another.auditor.who.expressed.an.unmodified.opinion.on.those.statements.on.16.April.2010. HLB.Hodgson.Impey.Cheng Chartered.Accountants Certified.Public.Accountants Hong.Kong,.29.March.2011 ConsolidatedIncomeStatement For.the.year.ended.31.December.2010 2010 2009 Notes HK$’000 HK$’000 Turnover 6,.7 1,444,902 1,202,239 Cost.of.sales (1,352,774) (1,114,589) Gross.profit 92,128 87,650 Other.revenue.and.gains 8 44,521 31,363 Administrative.expenses (138,585) (136,042) Other.operating.expenses 9(c) (12,600) (30,906) Loss.from.operations (14,536) (47,935) Finance.costs 9(a) (20,854) (9,304) Share.of.results.of.jointly.controlled.entities 331 – Share.of.results.of.associates (115,657) Loss.before.taxation 9 (172,896) Income.tax 10(a) (1,790) Loss.for.the.year (174,686) –.Diluted (7.13).HK.cents The.accompanying.notes.form.an.integral.part.of.these.consolidated.financial.statements. ConsolidatedStatementofComprehensiveIncome For.the.year.ended.31.December.2010 HK$’000 The.accompanying.notes.form.an.integral.part.of.these.consolidated.financial.statements. ConsolidatedStatementofFinancialPosition As.at.31.December.2010 At.31.December. Note HK$’000 NON-CURRENT.ASSETS Property,.plant.and.equipment Goodwill Intangible.assets Interest.in.associates Interest.in.jointly.controlled.entities Deposit.for.acquisition.of.properties Deposit.for.acquisition.of.a.company Deferred.tax.assets CURRENT.ASSETS Inventories Trade.and.other.receivables Tax.recoverable Pledged.bank.deposits Cash.and.cash.equivalents CURRENT.LIABILITIES Trade.and.other.payables Deferred.income Profit.guarantee.liabilities Financial.guarantee.contract Bank.loans.–.due.within.one.year Tax.payable NET.CURRENT.ASSETS TOTAL.ASSETS.LESS.CURRENT.LIABILITIES NON-CURRENT.LIABILITIES Deferred.income Profit.guarantee.liabilities Loans.payables Long-term.payables Due.to.a.related.company Deferred.tax.liabilities Financial.guarantee.contract Bank.loans.–.due.after.one.year Loan.from.a.director.and.controlling.shareholder NET.ASSETS 16 17 18 20 21 22 23 34(b) 24 25 26 27 28 29 30 35 36 34(a) 29 30 31 32 33 34(b) 35 36 37 78,381 6,828 32,526 1,094,945 1,362 2,632 60,384 848 1,277,906 1,129 15,893 – 8,273 42,308 67,603 22,097 170 9,100 12,600 – 33 44,000 23,603 1,301,509 – 32,608 313,754 193,797 20,994 83 18,900 – 47,500 627,636 673,873 ConsolidatedStatementofFinancialPosition(continued) As.at.31.December.2010 At.31.December. Note HK$’000 CAPITAL.AND.RESERVES Share.capital 38 24,390 Reserves 40 523,500 603,269 Approved.and.authorised.for.issue.by.the.board.of.directors.on.29.March.2011. On.behalf.of.the.board Yeung.Hoi.Sing,.Sonny Ma.Ho.Man,.Hoffman Director Director The.accompanying.notes.form.an.integral.part.of.these.consolidated.financial.statements. StatementofFinancialPosition As.at.31.December.2010 AtAt 31.December 31.December 2010 2009 Note HK$’000 HK$’000 NON-CURRENT.ASSETS Investments.in.subsidiaries 19 1,284,829 1,201,010 CURRENT.ASSETS Deposits,.prepayments.and.other.receivables 25 295 394 Pledged.bank.deposits 26 7,335 6,892 Cash.and.cash.equivalents 27 7,788 15,074 CURRENT.LIABILITIES Other.payables.and.accruals 28 52,487 52,264 Financial.guarantee.contract 35 12,600 64,864 NET.CURRENT.ASSETS/(LIABILITIES) (49,790) TOTAL.ASSETS.LESS.CURRENT.LIABILITIES 1,151,220 NON-CURRENT.LIABILITIES Loans.payable 31 246,000 132,000 Financial.guarantee.contract 35 6,300 18,900 Loan.from.a.director.and.controlling.shareholder 37 47,500 198,400 NET.ASSETS 952,820 CAPITAL.AND.RESERVES Share.capital 38 24,390 24,390 Reserves 40 928,430 TOTAL.EQUITY 952,820 Approved.and.authorised.for.issue.by.the.board.of.directors.on.29.March.2011. On.behalf.of.the.board Yeung.Hoi.Sing,.Sonny Ma.Ho.Man,.Hoffman Director Director The.accompanying.notes.form.an.integral.part.of.these.consolidated.financial.statements. ConsolidatedStatementofChangesinEquity For.the.year.ended.31.December.2010 Attributable.to.the.owners.of.the.Company Capital Property Non- Share Share Distribution redemption revaluation Exchange Accumulated controlling Total capital premium reserve reserve reserve reserve losses Total interests equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 At.1.January.2009 24,390 908,785 52,333 976 86,248 (4,235) (183,659) 884,838 46,321 931,159 Total.comprehensive.income/(loss). for.the.year – – – – (86,248) 2,866 (173,797) (257,179) (107) (257,286) At.31.December.2009 24,390 908,785 52,333 976 – (1,369) (357,456) 627,659 46,214 673,873 At.1.January.2010 24,390 908,785 52,333 976 – (1,369) (357,456) 627,659 46,214 673,873 Total.comprehensive.income/(loss). for.the.year – – – – – 1,013 (80,782) (79,769) (553) (80,322) At.31.December.2010 24,390 908,785 52,333 976 – (356) (438,238) 547,890 45,661 593,551 The.accompanying.notes.form.an.integral.part.of.these.consolidated.financial.statements. ConsolidatedStatementofCashFlows For.the.year.ended.31.December.2010 Notes HK$’000 OPERATING.ACTIVITIES Loss.before.taxation Adjustments.for: Interest.income Finance.costs Depreciation Amortisation.on.intangible.assets Amortisation.on.financial.guarantee.contract Share.of.results.of.jointly.controlled.entities Share.of.results.of.associates Reversal.of.impairment.loss.recognised.on.intangible.assets Reversal.of.impairment.loss.recognised.on.other.receivable Impairment.loss.recognised.on – .goodwill – .intangible.assets – .interest.in.jointly.controlled.entities –.interest.in.associates Compensation.for.termination.of.contract Write.back.of.long-outstanding.trade.payables Exchange.alignment Loss.on.disposal.of.property,.plant.and.equipment 9 8 9(a) 16 9(d),.18 8,.35 8,.18 8,.25(b) 9(c),.17 9(c),.18 9(c),.21 9(c),.20 8,.23 8 9(d) (172,896) (170) 9,304 11,428 541 (12,600) – 115,657 – (1,387) 895 6,711 10,700 12,600 – (3,210) (349) 2 18 Operating.loss.before.changes.in.working.capital (19,091) (22,758) Decrease.in.inventories 31 (Increase)/decrease.in.trade.and.other.receivables 17,344 Increase.in.trade.and.other.payables 547 Increase/(decrease).in.deferred.income (1,095) Cash.used.in.operations (5,931) Income.tax.(paid)/refunded –.Hong.Kong.profits.tax.paid (2,212) –.Overseas.tax.refunded 1,541 NET.CASH.USED.IN.OPERATING.ACTIVITIES (6,602) ConsolidatedStatementofCashFlows(continued) For.the.year.ended.31.December.2010 Notes HK$’000 INVESTING.ACTIVITIES Payment.for.purchase.of.property,.plant.and.equipment Proceeds.from.disposal.of.property,.plant.and.equipment Refund.of.deposit.for.acquisition.of.a.company Increase.in.amounts.due.from.associates Increase.in.amount.due.from.a.jointly.controlled.entity Decrease/(increase).in.pledged.bank.deposits Interest.income.received NET.CASH.USED.IN.INVESTING.ACTIVITIES FINANCING.ACTIVITIES Proceed.from.loans.payables Proceed.from.bank.loans Payment.for.profit.guarantee.liabilities Loan.from.a.director.and.controlling.shareholder Finance.costs NET.CASH.GENERATED.FROM.FINANCING.ACTIVITIES Net.increase/(decrease).in.cash.and.cash.equivalents Cash.and.cash.equivalents.at.the.beginning.of.year Effect.of.foreign.exchange.rate.changes CASH.AND.CASH.EQUIVALENTS.AT.THE.END.OF.YEAR Analysis.of.balances.of.cash.and.cash.equivalents Cash.and.bank.balance 27 (3,523) 80 – (189,570) (12,050) (1,511) 170 (206,404) 144,494 – (3,792) 47,500 (1,243) 186,959 (26,047) 66,675 1,680 42,308 42,308 The.accompanying.notes.form.an.integral.part.of.these.consolidated.financial.statements. NotestotheConsolidatedFinancialStatements For.the.year.ended.31.December.2010 1..ORGANISATION.AND.PRINCIPAL.ACTIVITIES TheCompanywasincorporated as an exempted company withlimited liabilityinBermuda on27May2004 underthe.CompaniesAct1981ofBermudaandislisted onTheStockExchangeofHongKongLimited(the “StockExchange”). Theprincipalactivity oftheCompanyis investmentholding.Theprincipal activities ofits subsidiaries are set out in note 19.to.the.consolidated.financial.statements. 2..SIGNIFICANT.ACCOUNTING.POLICIES (a).Statement.of.compliance These.consolidated.financial.statements.have.been.prepared.in.accordance.with.all.applicable.Hong.Kong.Financial.Reporting.Standards.(“HKFRSs”),.which.collective.term.includes.all.applicable.individual.HKFRSs,.HongKongAccountingStandards(“HKASs”)andinterpretationsissuedbytheHongKongInstitute ofCertified Public.Accountants.(“HKICPA”),.accounting.principles.generally.accepted.in.Hong.Kong.and.the.disclosure.requirements.of.the.Hong.Kong.Companies.Ordinance..These.consolidated.financial.statements.also.comply.with the.applicable.disclosure.requirements.of.the.Rules.Governing.the.Listing.of.Securities.on.the.Stock.Exchange.Asummary ofthe significant accountingpolicies adoptedbytheGroup(asdefinedhereinafter)is set out.below. The.HKICPA.has.issued.certain.amendments.and.interpretations.which.are.or.have.become.effective..It.also.issued.certain.new.and.revised.HKFRSs,.which.are.first.effective.or.available.for.early.adoption.for.the.current.accountingperiod oftheGroup(asdefinedhereinafter) andtheCompany.Note3providesinformation oninitial application.of.these.developments.to.the.extent.that.they.are.relevant.to.the.Group.for.the.current.and.prior.accounting.periods.reflected.in.these.consolidated.financial.statements. (b).Basis.of.preparation.of.the.consolidated.financial.statements The.consolidated.financial.statements.include.the.financial.statements.of.the.Company.and.its.subsidiaries.(collectively.the.“Group”).and.the.Group’s.interest.in.associates.and.jointly.controlled.entities.made.up.to.31.December.each.year. (i).Going.Concern The.Group.incurred.a.loss.attributable.to.owners.of.the.Company.of.approximately.HK$80,782,000.(2009:.approximately.HK$173,797,000),.operating.net.cash.outflow.of.approximately.HK$35,450,000.(2009:.approximately.HK$6,602,000).and.net.increase.in.cash.and.cash.equivalents.of.approximately.HK$66,790,000(2009: netdecrease of approximatelyHK$26,047,000) fortheyear ended31 December.2010. In.preparing.these.consolidated.financial.statements,.the.directors.of.the.Company.(“Director(s)”).have.given.careful.consideration.to.the.impact.of.the.current.and.anticipated.future.liquidity.of.the.Group.and.the abilityoftheGroupto attainprofitable andpositive cashflow operationsintheimmediate andlonger term. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2..SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (b).Basis.of.preparation.of.the.consolidated.financial.statements.(continued) (i).Going.Concern.(continued) In orderto strengthenthe capitalbase oftheGroup andtoimprovetheGroup’sliquidityand cashflows.in.the.near.foreseeable.future,.and.to.sustain.the.Group.as.a.going.concern,.the.Company.has.entered.into atermloanfacility agreement of uptoHK$200 million withMr.YeungHoiSing,Sonny(“Mr.Yeung”), a.director.and.the.controlling.shareholder.of.the.Company,.the.loan.is.unsecured.and.charged.with.interest.at.the.prime.rate.quoted.for.Hong.Kong.dollars.loans.by.The.Hongkong.and.Shanghai.Banking.Corporation.Limited..The.principal.amount.of.the.loan.facility.was.increased.up.to.HK$290.million.on.14April2009andthefinalrepaymentdate oftheloan and all other sums owingtoMr.Yeung underthe revisedloanfacility wasfurther extendedto30October2012byaletter agreementdated23June2010. Uptothedate ofapproval ofthese consolidatedfinancial statements,theCompanyhad utilisedtheloan facility.in.the.amount.of.HK$105.0.million.(2009:.HK$47.5.million). In.the.opinion.of.the.Directors,.taking.into.account.of.the.loan.facility.and.financial.undertaking.from.Mr.Yeung,.the.Group.will.have.sufficient.working.capital.for.its.current.requirements..Accordingly,.the.Directors.consider.that.it.is.appropriate.to.prepare.these.consolidated.financial.statements.on.a.going.concern.basis. Should.the.Group.be.unable.to.continue.as.a.going.concern,.adjustments.would.have.to.be.made.to.restatethe values of assetstotheir recoverable amounts,toprovidefor anyfurtherliabilities which might arise.and.to.classify.non-current.assets.and.liabilities.as.current.assets.and.liabilities,.respectively..The.effects ofthesepotential adjustmentshave notbeen reflectedinthese consolidatedfinancialstatements. (ii).Basis.of.measurement The measurementbasis usedinthepreparation ofthe consolidatedfinancial statementsisthehistorical.cost.basis. The.preparation.of.consolidated.financial.statements.in.conformity.with.HKFRSs.requires.management.to.make.judgements,.estimates.and.assumptions.that.affect.the.application.of.policies.and.reported.amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances,.the.results.of.which.form.the.basis.of.making.the.judgements.about.carrying.amount.of.assets.and.liabilities.not.readily.apparent.from.other.sources..Actual.results.may.differ.from.these.estimates. The.estimates.and.underlying.assumptions.are.reviewed.on.an.ongoing.basis..Revisions.to.accounting.estimates.are.recognised.in.the.period.in.which.the.estimate.is.revised.if.the.revision.affects.only.that.period,.or.in.the.period.of.the.revision.and.future.periods.if.the.revision.affects.both.current.and.future.periods. Judgements.made.by.management.in.the.application.of.HKFRSs.that.have.significant.effect.on.the.financialstatements and estimates with a significant risk of materialadjustmentinthe nextfinancialyear are.discussed.in.note.5. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2..SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (c).Subsidiaries.and.non-controlling.interests Subsidiaries are entities controlledbytheGrouportheCompany.Control exists whentheGrouphasthepower.togovernthefinancial and operatingpolicies of an entity so asto obtainbenefitsfromits activities.In assessing control,.potential.voting.rights.that.presently.are.exercisable.are.taken.into.account. An.investment.in.a.subsidiary.is.consolidated.into.the.consolidated.financial.statements.from.the.date.that.control.commences.until.the.date.that.control.ceases. Intra-group balances.and.transactions.and.any.unrealised.profits.arising.from.intra-group.transactions.are.eliminatedinfullinpreparingthe consolidatedfinancialstatements.Unrealisedlosses resultingfromintra-group transactions.are.eliminated.in.the.same.way.as.unrealised.gains.but.only.to.the.extent.there.is.no.evidence.of.impairment. Non-controlling.interests.represent.the.portion.of.the.net.assets.of.subsidiaries.attributable.to.interests.that.are not.owned.by.the.Company,.whether.directly.or.indirectly.through.subsidiaries,.and.in.respect.of.which.the.Grouphas notagreedany additionalterms withtheholders ofthoseinterests whichwouldresultinthegroup as a wholehavinga contractualobligationin respect ofthose intereststhat meetsthedefinition ofafinancialliability. Non-controllinginterests arepresentedinthe consolidatedstatement offinancialposition andthe consolidated statement of changesin equity within equity, separatelyfrom equity attributabletothe owners oftheCompany. Non-controlling.interests.in.the.results.of.the.Group.are.presented.on.the.face.of.the.consolidated.income.statement.and.the.consolidated.statement.of.comprehensive.income.as.an.allocation.of.the.total.profit.or.loss.for.the.year.between.the.holders.of.non-controlling.interests.and.the.owners.of.the.Company. Wherelosses applicabletothe non-controllinginterestsholders exceedits’interestinthe equityof a subsidiary, the.excess,.and.any.further.losses.applicable.to.the.non-controlling.interests.holders,.are.charged.against.the.Group’s.interest.except.to.the.extent.that.the.non-controlling.interests.holders.has.a.binding.obligation.to,.and.is.able.to,.make.additional.investment.to.cover.the.losses..If.the.subsidiary.subsequently.reports.profits,.the.Group’sinterestis allocated all suchprofits untilthe non-controllinginterestsholders’ share oflossespreviously absorbed.by.the.Group.has.been.recovered. Loansfromtheholders ofnon-controllinginterests andother contractual obligationstowardstheseholders are presented.as.financial.liabilities.in.the.consolidated.statement.of.financial.position.in.accordance.with.note.2(l). IntheCompany’s statement offinancialposition, aninvestmentin subsidiaries is stated at costlessimpairment losses.(see.note.2(i)). (d).Associates.and.jointly.controlled.entities An.associate.is.an.entity.in.which.the.Group.or.the.Company.has.significant.influence,.but.not.control.or.joint.control,.over.its.management,.including.participation.in.the.financial.and.operating.policy.decisions. Ajointlycontrolled entityis an entity which operates under a contractual arrangementbetweentheGroup orthe Companyandotherparties, wherethe contractualarrangement establishedthattheGrouportheCompanyand one.or.more.of.the.other.parties.share.joint.control.over.the.economic.activity.of.the.entity. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2..SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (d).Associates.and.jointly.controlled.entities.(continued) An investmentin an associate or ajointly controlled entity is accountedforinthe consolidatedfinancial.statements under the equity method and is initially recorded at cost and adjusted thereafter for the post acquisition.change.in.the.Group’s.share.of.the.associate’s.net.assets,.unless.it.is.classified.as.held.for.sale.(or.includedin adisposalgroupthat is classified asheldfor sale).The consolidatedincome statementincludesthe Group’s.share.of.the.post-acquisition,.post-tax.results.of.the.associates.for.the.year,.including.any.impairment.loss.on.goodwill.relating.to.the.investment.in.associates.for.the.year.(see.notes.2(e).and.(i))..The.Group’s.share.of the.post-acquisition.post-tax.items.of.the.investees’ other.comprehensive.income.is.recognised.in.the.consolidated.statement.of.comprehensive.income. When.the.Group’s.share.of.losses.exceeds.its.interest.in.the.associates.or.the.jointly.controlled.entities,.the.Group’s.interest.is.reduced.to.nil.and.recognition.of.further.losses.is.discontinued.except.to.the.extent.that.the.Group.has.incurred.legal.or.constructive.obligations.or.made.payments.on.behalf.of.the.investee..For.this.purpose,.the.Group’s.interest.is.the.carrying.amount.of.the.investment.under.the.equity.method.together.with.the.Group’s.long-term.interests.that.in.substance.form.part.of.the.Group’s.net.investment.in.the.associates.or.the.jointly.controlled.entities. Unrealisedprofits.and.losses.resulting.from.transactions.between.the.Group.and.its.associates.and.jointly.controlled entities are eliminated to the extent of the Group’s interest in the associates, except where unrealisedlossesprovide evidence ofan impairment ofthe assettransferred,in which casethey are recognised immediately.in.profit.or.loss. In.the.Company’s.statement.of.financial.position,.investments.in.associates.and.jointly.controlled.entities.are.stated.at.cost.less.impairment.losses.(see.note.2(i)). (e).Goodwill Goodwillrepresentsthe excess ofthe costofabusiness combination or aninvestmentin an associate or ajointly.controlled.entity.over.the.Group’s.interest.in.the.net.fair.value.of.the.acquiree’s.identifiable.assets,.liabilities.and.contingent.liabilities. Goodwill.is.stated.at.cost.less.accumulated.impairment.losses..Goodwill.arising.on.a.business.combination.is.allocated.to.each.cash-generating.units.or.groups.of.cash.generating.units,.that.is.expected.to.benefit.from.the synergies ofthe combination andistestedannuallyforimpairment(see note2(i)).In respectof associate or jointly.controlled.entity,.the.carrying.amount.of.goodwill.is.included.in.the.carrying.amount.of.the.interest.in.the.associate.or.jointly.controlled.entity.and.the.investment.as.a.whole.is.tested.for.impairment.whenever.there.is.objective.evidence.of.impairment.(see.note.2(i)). Any excess.of.the.Group’s.interest.in.the.net.fair.value.of.the.acquiree’s.identifiable.assets,.liabilities.and.contingent liabilities overthe costofabusiness combination or aninvestmentin an associate orjointly controlled entity.is.recognised.immediately.in.profit.or.loss. On.disposal.of.a.cash-generating.unit.of.an.associate.or.a.jointly.controlled.entity,.any.attributable.amount.of.purchased.goodwill.is.included.in.the.calculation.of.the.profit.or.loss.on.disposal. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2..SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (f).Property,.plant.and.equipment Property, plant and equipment are stated in the consolidated statement of financial position at cost less.accumulated.depreciation.and.impairment.losses.(see.note.2(i)). Gain orlosses arisingfromthe retirement ordisposalofanitem ofproperty,plant and equipmentaredetermined as.the.difference.between.the.net.disposal.proceeds.on.disposal.and.the.carrying.amount.of.the.item.and.are.recognised.in.profit.or.loss.on.the.date.of.retirement.or.disposal. Depreciation.is.calculated.to.write.off.the.cost.of.items.of.property,.plant.and.equipment,.less.their.estimated.residual.value,.if.any,.using.the.straight-line.method.over.their.estimated.useful.life.at.the.following.rates.per.annum: Freehold.land.and.building.2.5% Cruise.5% Leasehold.improvements.Over.lease.terms Plant.and.machinery.20% Furniture,.fittings.and.office.equipment.20%.–.331/3% Motor.vehicles.30%.–.331/3% Motor.yacht.20% Where parts.of.an.item.of.property,.plant.and.equipment.have.different.useful.lives,.the.cost.of.the.item.is.allocated.on.a.reasonable.basis.between.the.parts.and.each.part.is.depreciated.separately..Both.the.useful.life.of.an.asset.and.its.residual.value,.if.any,.are.reviewed.annually. (g).Intangible.assets.(other.than.goodwill) Intangible.assets,.other.than.goodwill,.identified.on.business.combinations.are.capitalised.on.their.fair.values..They.represent.mainly.trademark.and.relationship.with.customers..Subsequent.to.initial.recognition,.intangible.assets.with.finite.useful.lives.are.carried.at.cost.less.accumulated.amortisation.and.accumulated.impairment.losses.Amortisationforintangible assets withfinite usefullivesis chargedtoprofitorloss on a straight-linebasis from.the.date.of.acquisition.over.their.estimated.useful.lives.as.follows: Client.list 15.years The.asset’s.useful.lives.and.their.amortisation.method.are.reviewed.annually. Intangible.assets.with.indefinite.useful.lives.are.not.amortised..The.intangible.asset.and.its.status.are.reviewed.annually.to.determine.whether.events.and.circumstances.continue.to.support.indefinite.useful.life..Should.the.usefullife ofanintangible asset changefromindefinitetofinite,the change wouldbe accountedforprospectively from.the.date.of.change.and.in.accordance.with.the.policy.for.amortisation.of.intangible.assets.with.finite.lives.as.set.out.above. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (h). Operating.lease.charges Where.the.Group.has.the.use.of.assets.held.under.operating.leases,.payments.made.under.the.leases.are.charged.to.profit.or.loss.in.equal.installments.over.the.accounting.periods.covered.by.the.lease.term,.except.where an alternativebasisis more representative ofthepattern ofbenefitstobederivedfromtheleasedasset. Leaseincentives receivedare recognisedinprofitorloss as anintegralpartofthe aggregate netleasepayments made..Contingent.rentals.are.charged.to.profit.or.loss.in.the.accounting.period.in.which.they.are.incurred. (i). Impairment.of.assets (i). Impairment.of.investments.in.debt.and.equity.securities.and.other.receivables Investments.in.debt.and.equity.securities.and.other.current.and.non-current.receivables.that.are.stated.at cost or amortised cost or are classified as available-for-sale securities are reviewedatthe end of each reporting.period.to.determine.whether.there.is.objective.evidence.of.impairment..If.any.such.evidence.exists,.any.impairment.loss.is.determined.and.recognised.as.follows: –. For.unquoted.equity.securities.and.current.receivables.that.are.carried.at.cost,.the.impairment.loss.is.measured.as.the.difference.between.the.carrying.amount.of.the.financial.asset.and.the.present.value.of.estimated.future.cash.flows,.discounted.at.the.current.market.rate.of.return.for.a.similar.financial.asset.where.the.effect.of.discounting.is.material..Impairment.losses.for.current.receivables are reversedifin a subsequentperiodthe amount oftheimpairmentlossdecreases. Impairment.losses.for.equity.securities.are.not.reversed. –. Forfinancialassetscarried at amortised cost,theimpairmentloss ismeasured asthedifference between the.asset’s.carrying.amount.and.the.present.value.of.estimated.future.cash.flows,.discounted.at.the.financial.asset’s.original.effective.interest.rate.(i.e..the.effective.interest.rate.computed.at.initial.recognition.of.these.assets). If.in.a.subsequent.period.the.amount.of.an.impairment.loss.decreases.and.the.decrease.can.be.linked.objectively to.an.event.occurring.after.the.impairment.loss.was.recognised,.the.impairment.loss.is.reversed.through.profit.or.loss..A.reversal.of.an.impairment.loss.shall.not.result.in.the.asset’s.carrying.amount exceedingthat which wouldhavebeendeterminedhad noimpairmentlossbeen recognisedin prior.years. Impairment.losses.recognised.in.profit.or.loss.in.respect.of.other.receivables.are.not.reversed.through.profit.or.loss..Any.subsequent.increase.in.the.fair.value.of.such.assets.is.recognised.directly.in.other.comprehensive.income. Impairment.losses.in.respect.of.other.receivables.are.reversed.if.the.subsequent.increase.in.fair.value.can.be.objectively.related.to.an.event.occurring.after.the.impairment.loss.was.recognised..Reversals.of.impairment.losses.in.such.circumstances.are.recognised.in.profit.or.loss. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (i). Impairment.of.assets.(continued) (ii). Impairment.of.other.assets Internal.and.external.sources.of.information.are.reviewed.at.the.end.of.each.reporting.period.to.identify.indications.that.the.following.assets.may.be.impaired.or,.except.in.the.case.of.goodwill,.an.impairment.loss.previously.recognised.no.longer.exists.or.may.have.decreased: –. property,.plant.and.equipment; –. intangible.assets; –. investments.in.subsidiaries,.associates.and.jointly.controlled.entities;.and –. goodwill If.any.such.indication.exists,.the.asset’s.recoverable.amount.is.estimated..In.addition,.for.goodwill,.the.recoverable.amount.is.estimated.annually.whether.or.not.there.is.any.indication.of.impairment. –. Calculation.of.recoverable.amount The.recoverable.amount.of.an.asset.is.the.greater.of.its.net.selling.price.and.value.in.use..In.assessingvaluein use,the estimatedfuture cashflows arediscountedtotheirpresentvalue using apre-taxdiscount ratethat reflects current market assessments oftime value of money andthe risks specifictothe asset.Where an assetdoes notgenerate cashinflowslargelyindependent of those.from.other.assets,.the.recoverable.amount.is.determined.for.the.smallest.group.of.assets.that.generates.cash.inflows.independently.(i.e..a.cash-generating.unit). –. Recognition.of.impairment.losses An.impairment.loss.is.recognised.in.profit.or.loss.whenever.the.carrying.amount.of.an.asset,.or.the cash-generatingunitto whichitbelongs, exceedsits recoverable amount.Impairmentlosses recognised.in.respect.of.cash-generating.units.are.allocated.first.to.reduce.the.carrying.amount.of.any.goodwill.allocated.to.the.cash-generating.unit.(or.group.of.units).and.then,.to.reduce.the.carrying amount ofthe other assetsinthe unit(orgroup of units)on apro ratabasis, exceptthat the.carrying.amount.of.asset.will.not.be.reduced.below.its.individual.fair.value.less.costs.to.sell,.or.value.in.use,.if.determinable. –. Reversals.of.impairment.losses In respect.of.assets.other.than.goodwill,.an.impairment.loss.is.reversed.if.there.has.been.a.favourable.change.in.the.estimates.used.to.determine.the.recoverable.amount..An.impairment.loss.in.respect.of.goodwill.is.not.reversed. A.reversal.of.an.impairment.loss.is.limited.to.the.asset’s.carrying.amount.that.would.have.been.determined.had.no.impairment.loss.been.recognised.in.prior.years..Reversals.of.impairment.losses.are.credited.to.profit.or.loss.in.the.year.in.which.the.reversals.are.recognised. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2..SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (j).Inventories Inventories.are.carried.at.the.lower.of.cost.and.net.realisable.value. Cost is calculated using the first-in, first-out formula and comprises all costs of purchase in bringing the inventories.to.their.present.location.and.condition. Net.realisable.value.is.the.estimated.selling.price.in.the.ordinary.course.of.business.less.the.estimated.costs.of.completion.and.the.estimated.costs.necessary.to.make.the.sale. When.inventories.are.consumed,.the.carrying.amount.of.those.inventories.is.recognised.as.an.expense.in.the.periodin whichthe relatedrevenueis recognised.The amount of any writedown of inventoriesto net realisable value and alllosses ofinventories are recognised as an expense intheperiodthe writedown orloss occurs.The amount of any reversalofanywrite-down ofinventoriesis recognisedas a reductioninthe amount of inventories recognised.as.an.expense.in.the.period.in.which.the.reversal.occurs. (k). Trade.and.other.receivables Trade.and.other.receivables.are.initially.recognised.at.fair.value.on.the.trade.date.and.thereafter.stated.at.amortisedcost less allowanceforimpairment ofdoubtfuldebts(see note2(i)).In suchcases,the receivables are stated.at.cost.less.allowance.for.impairment.losses.for.bad.and.doubtful.debts. (l). Trade.and.other.payables Trade andotherpayables areinitiallyrecognised atfair value andthereafter stated at amortised cost unlessthe.effect.of.discounting.would.be.immaterial,.in.which.case.they.are.stated.at.cost. (m). Cash.and.cash.equivalents Cash.and.cash.equivalents.comprise.cash.at.bank.and.on.hand,.demand.deposits.with.banks.and.other.financial.institutions,.and.short-term,.highly.liquid.investments.that.are.readily.convertible.into.known.amounts.of.cash.and.which.are.subject.to.an.insignificant.risk.of.changes.in.value,.having.been.within.three.months.of.maturity.at.acquisition..Bank.overdrafts.that.are.repayable.on.demand.and.form.an.integral.part.of.the.Group’s.cash.management.are.also.included.as.a.component.of.cash.and.cash.equivalents.for.the.purpose.of.the.consolidated.statement.of.cash.flows. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2..SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (n).Employee.benefits (i). Short.term.employee.benefits.and.contributions.to.defined.contribution.retirement.plans Salaries,.annual.bonuses,.paid.annual.leave,.contributions.to.defined.contribution.plans.and.the.cost.of.non-monetary.benefits.are.accrued.in.the.year.in.which.the.associated.services.are.rendered.by.employees..Where.payment.or.settlement.is.deferred.and.the.effect.would.be.material,.these.amounts.are.stated.at.their.present.values. (ii). Termination.benefits Termination.benefits.are.recognised.when,.and.only.when,.the.Group.demonstrably.commits.itself.to.terminate.employment.or.to.provide.benefits.as.a.result.of.voluntary.redundancy.by.having.a.detailed.formal.plan.which.is.without.realistic.possibility.of.withdrawal. (o).Income.tax Income.tax.for.the.year.comprises.current.tax.and.movements.in.deferred.tax.assets.and.liabilities..Current.tax.andmovementsindeferredtax assets andliabilities are recognisedinprofitorloss excepttothe extentthatthey relate.to.items.recognised.other.comprehensive.income.or.directly.in.equity,.in.which.case.they.are.recognised.in.other.comprehensive.income.or.directly.in.equity,.respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted.at.the.end.of.the.reporting.period,.and.any.adjustment.to.tax.payable.in.respect.of.previous.years. Deferred.tax.assets.and.liabilities.arise.from.deductible.and.taxable.temporary.differences.respectively,.being.thedifferencesbetweenthe carryingamounts of assets andliabilitiesforfinancial reportpurposes andtheirtax bases..Deferred.tax.assets.also.arise.from.unused.tax.losses.and.unused.tax.credits. Apart.from.certain.limited.exceptions,.all.deferred.tax.liabilities,.and.all.deferred.tax.assets.to.the.extent.that.it.is.probable.that.future.taxable.profits.will.be.available.against.which.the.asset.can.be.utilised,.are.recognised..Futuretaxableprofitsthatmay supportthe recognition ofdeferredtax assets arisingfromdeductibletemporary differences.include.those.that.will.arise.from.the.reversal.of.existing.taxable.temporary.differences,.provided.thosedifferences relatetothe sametaxation authority andthe sametaxable entity, and are expectedto reverse eitherinthe sameperiod asthe expected reversal ofthedeductibletemporarydifference orinperiodinto which ataxloss arisingfromthedeferredtax assetcanbe carriedbackorforward.The same criteria are adoptedwhen determiningwhether existingtaxabletemporarydifferences supportthe recognition ofdeferredtax assets arising from.unused.tax.losses.and.credits,.that.is,.those.differences.are.taken.into.account.if.they.relate.to.the.same.taxation authority andthe sametaxable entity, and are expectedto reversein aperiod, orperiods,in whichthe tax.loss.or.credit.can.be.utilised. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (o). Income.tax.(continued) Thelimitedexceptionsto recognition ofdeferredtax assets andliabilities arethosetemporarydifferences arising.from.goodwill.not.deductible.for.tax.purposes,.the.initial.recognition.of.assets.or.liabilities.that.affect.neither.accounting nortaxableprofit(providedtheyare notpart of abusiness combination), andtemporarydifferences related.to.investments.in.subsidiaries.to.the.extent.that,.in.the.case.of.taxable.differences,.the.Group.controls.thetimingofthe reversal anditisprobablethatthedifferences willnot reverseintheforeseeablefuture, orinthe case.of.deductible.differences,.unless.it.is.probable.that.they.will.reserve.in.the.future. The amountofdeferredtax recognised is measuredbased onthe expected manner of realisation or settlement of.the.carrying.amount.of.the.assets.and.liabilities,.using.tax.rates.enacted.or.substantively.enacted.at.the.end.of.the.reporting.period..Deferred.tax.assets.and.liabilities.are.not.discounted. The carryingamountofadeferredtax asset is reviewed atthe endofeachreportingperiod andis reducedtothe extentthat itis nolongerprobablethatsufficienttaxableprofits willbe availableto allowthe relatedtaxbenefitto be.utilised..Any.such.reduction.is.reversed.to.the.extent.that.it.becomes.probable.that.sufficient.taxable.profits.will.be.available. Additionalincometaxesthatarisefromthedistribution ofdividends are recognisedwhentheliabilitytopaythe related.dividends.is.recognised. Current.tax.balances.and.deferred.tax.balances,.and.movements.therein,.are.presented.separately.from.each.other.and.are.not.offset..Current.tax.assets.are.offset.against.current.tax.liabilities,.and.deferred.tax.assets.againstdeferredtaxliabilities,iftheCompany ortheGrouphasthe legally enforceable rightto set off currenttax assets.against.current.tax.liabilities.and.the.following.additional.conditions.are.met: –. in.the.case.of.current.tax.assets.and.liabilities,.the.Company.or.the.Group.intends.either.to.settle.on.a.net.basis,.or.to.realise.the.asset.and.settle.the.liability.simultaneously;.or –. inthecaseofdeferredtaxassetsandliabilities,iftheyrelatetoincometaxesleviedbythesametaxation authority.on.either: –. the.same.taxable.entity;.or –. differenttaxableentities,which,ineachfutureperiodinwhichsignificant amountsofdeferredtax liabilities or assets are expectedtobe settledor recovered,intendto realisethe currenttax assets and.settle.the.current.tax.liabilities.on.a.net.basis.or.realise.and.settle.simultaneously. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (p). Financial.guarantees.issued,.provisions.and.contingent.liabilities (i). Financial.guarantees.issued Financialguarantees are contractsthatrequiretheissuer(i.e.theguarantor)to make specifiedpayments.toreimburse.the.beneficiary.of.the.guarantee.(the.“holder”).for.a.loss.the.holder.incurs.because.a.specified.debtor.fails.to.make.payment.when.due.in.accordance.with.the.terms.of.a.debt.instrument. Where the.Group.issues.a.financial.guarantee,.the.fair.value.of.the.guarantee.(being.the.transaction.price, unlessthefair value can otherwisebe reliably estimated)isinitially recognised asdeferredincome within.trade.and.other.payables..Where.consideration.is.received.or.receivable.for.the.issuance.of.the.guarantee,.the.consideration.is.recognised.in.accordance.with.the.Group’s.policies.applicable.to.that.category.of.asset..Where.no.such.consideration.is.received.or.receivable,.an.immediate.expense.is.recognised.in.profit.or.loss.on.initial.recognition.of.any.deferred.income. The amountoftheguaranteeinitially recognised asdeferred incomeis amortisedinprofitorloss overthe term oftheguarantee asincomefromfinancialguaranteesissued.In addition,provisions are recognised in.accordance.with.note.2(p)(ii).if.and.when.(i).it.becomes.probable.that.the.holder.of.the.guarantee.will.call.upon.the.Group.under.the.guarantee,.and.(ii).the.amount.of.that.claim.on.the.Group.is.expected.to.exceed.the.amount.currently.carried.in.trade.and.other.payables.in.respect.of.that.guarantee.i.e..the.amount.initially.recognised,.less.accumulated.amortisation. (ii). Other.provisions.and.contingent.liabilities Provisions.are.recognised.for.other.liabilities.of.uncertain.timing.or.amount.when.the.Group.or.the.Company.has.a.legal.or.constructive.obligation.arising.as.a.result.of.a.past.event,.it.is.probable.that.an.outflow of economicbenefits willbe requiredto settlethe obligation anda reliable estimate canbe made. Where.the.time.value.of.money.is.material,.provisions.are.stated.at.the.present.value.of.the.expenditure.expected.to.settle.the.obligation. Where.it.is.not.probable.that.an.outflow.of.economic.benefits.will.be.required,.or.the.amount.cannot.be.estimated.reliably,.the.obligation.is.disclosed.as.a.contingent.liability,.unless.the.probability.of.outflow.of.economic.benefits.is.remote..Possible.obligations,.whose.existence.will.only.be.confirmed.by.the.occurrence.or.non-occurrence.of.one.or.more.future.events.are.also.disclosed.as.contingent.liabilities.unless.the.probability.of.outflow.of.economic.benefits.is.remote. (q). Revenue.recognition Provideditisprobablethatthe economicbenefits willflowtotheGroupandthe revenue andcosts,ifapplicable,.can.be.measured.reliably,.revenue.is.recognised.in.profit.or.loss.as.follows: (i). Cruise.leasing.and.management.fee.income –. Cruise.leasing.income.is.recognised.on.an.accrual.basis.in.accordance.with.the.terms.of.the.leasing.agreement. –. Cruise.management.fee.income.is.recognised.when.the.management.service.is.rendered. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (q). Revenue.recognition.(continued) (ii). Travel-related.agency.services.fee.income –. Revenue.from.the.sale.of.air.tickets.is.recognised.when.the.tickets.are.issued. –. Revenue.from.the.sale.of.tour.packages.is.recognised.when.travel.arrangements.have.been.booked.and.confirmed.with.customers..Deposits.from.customers.are.reported.as.liabilities. –. Revenuefromthesaleofgrouptoursisrecognisedatthepointofgroupdeparture.Depositsfrom customers.are.reported.as.liabilities.until.the.tour.departs. –. Other.income.consists.of.revenue.earned.based.on.volume.sales.through.various.on-line.ticket.processing systems. Other income is recognised when it is measurable and all contractual obligations.have.been.fulfilled. (iii) Management.fee.income.is.recognised.when.the.amounts.are.measurable.and.the.ultimate.collections.are.reasonably.assumed. (iv) Dividend income from unlisted investments is recognised when the shareholder’s right to receive.payment.is.established. (v). Interest.income.is.recognised.on.a.time-apportioned.basis.using.the.effective.interest.method. (vi). Services.income.is.recognised.when.services.are.provided. (vii). Deferredincome comprises ofa sign-upbonusfor an on-lineticketprocessing system andis recognised.as.revenue.in.accordance.with.the.terms.of.the.agreement. (r). Translation.of.foreign.currencies Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the.transactiondates.Monetaryassets andliabilitiesdenominatedinforeign currencies aretranslated attheforeign exchange.rates.ruling.at.the.end.of.the.reporting.period..Exchange.gains.and.losses.are.recognised.in.profit.or.loss. Non-monetary assets.and.liabilities.that.are.measured.in.terms.of.historical.cost.in.a.foreign.currency.are.translated.using.the.foreign.exchange.rates.ruling.at.the.transaction.dates..Non-monetary.assets.and.liabilities.denominated.in.foreign.currencies.that.are.stated.at.fair.value.are.translated.using.the.foreign.exchange.rates.ruling.at.the.dates.the.fair.value.was.determined. The results offoreign operations aretranslatedintoHongKongdollars atthe exchange rates approximatingthe foreign exchange rates rulingatthedates ofthetransactions.Theitems showedinthe consolidatedstatement of.financial.position,.including.goodwill.arising.on.consolidation.of.foreign.operations.acquired.on.or.after.1.January.2005,.are.translated.into.Hong.Kong.dollars.at.the.foreign.exchange.rates.ruling.at.the.end.of.the.reportingperiod.The resulting exchangedifferences are recogniseddirectlyin a separate component of equity. Goodwill.arising.on.consolidation.of.a.foreign.operation.acquired.before.1.January.2005.is.translated.at.the.foreign.exchange.rate.that.applied.at.the.date.of.acquisition.of.the.foreign.operation. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (r). Translation.of.foreign.currencies.(continued) On.disposal.of.a.foreign.operation,.the.cumulative.amount.of.the.exchange.differences.recognised.in.equity.which.relate.to.that.foreign.operation.is.included.in.the.calculation.of.the.profit.or.loss.on.disposal. (s). Borrowing.costs Borrowingcosts are expensed inprofit orlossintheperiodin whichthey areincurred, excepttothe extentthat.theyare capitalisedasbeingdirectly attributabletothe acquisition, construction orproduction of an asset which necessarily.takes.a.substantial.period.of.time.to.get.ready.for.its.intended.use.or.sale. The capitalisation ofborrowingcosts aspart ofthe cost of aqualifying asset commences when expenditurefor the.asset.is.being.incurred,.borrowing.costs.are.being.incurred.and.activities.that.are.necessary.to.prepare.the.assetforitsintendeduse or sale areinprogress.Capitalisation ofborrowing costsis suspended or ceases when substantiallyallthe activities necessarytopreparethequalifyingassetforitsintended use or sale areinterrupted or.complete. (t). Related.parties For.the.purposes.of.these.financial.statements,.a.party.is.considered.to.be.related.to.the.Group.if: (i). thepartyhastheability,directlyorindirectlythrough oneormoreintermediaries,tocontroltheGroup or exercise.significant.influence.over.the.Group.in.making.financial.and.operating.policy.decisions,.or.has.joint.control.over.the.Group; (ii). the.Group.and.the.party.are.subject.to.common.control; (iii). the.party.is.an.associate.of.the.Group.or.a.joint.venture.in.which.the.Group.is.a.venturer; (iv). the.party.is.a.member.of.key.management.personnel.of.the.Group.or.the.Group’s.parent,.or.a.close.familymember of such anindividual, or is an entity underthe control,joint control or significantinfluence or.such.individuals; (v). thepartyisaclosefamilymemberof aparty referredtoin(i) or isanentity underthecontrol,joint control or.significant.influence.of.such.individuals;.or (vi). thepartyisapost-employmentbenefitplanwhichisforthebenefitof employeesoftheGroup orof any entity.that.is.a.related.party.of.the.Group. Close.family.members.of.an.individual.are.those.family.members.who.may.be.expected.to.influence,.or.be.influenced.by,.that.individual.in.their.dealings.with.the.entity. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 2.. SIGNIFICANT.ACCOUNTING.POLICIES.(CONTINUED) (u). Segment.reporting Operatingsegments, andthe amounts of each segmentitem reportedinthe consolidatedfinancial statements,.are identified.from.the.financial.information.provided.regularly.to.the.Group’s.chief.operating.decision.marker.(“CODM”).for.the.purposes.of.allocating.resources.to,.and.assessing.the.performance.of,.the.Group’s.various.lines.of.business.and.geographical.location. Individually material operating segments are not aggregated for financial reporting purposes unless the segmentshave similar economic characteristics andare similarin respectofthe nature ofproducts andservices, the nature ofproductionprocesses,thetype or class of customers,the methods usedtodistributetheproducts or provide.the.services,.and.the.nature.of.the.regulatory.environment..Operating.segments.which.are.not.individually.material.may.be.aggregated.if.they.share.a.majority.of.these.criteria. 3.. APPLICATION.OF.NEW.AND.REVISED.HONG.KONG.FINANCIAL.REPORTING.STANDARDS The.accounting.policies.adopted.in.the.consolidated.financial.statements.for.the.year.ended.31.December.2010.are.consistent.with.those.followed.in.the.preparation.of.the.Group’s.consolidated.financial.statements.for.the.year.ended.31.December.2009.except.as.described.below. In.the.current.year,.the.Group.has.applied,.for.the.first.time,.a.number.of.new.and.revised.standards,.amendments.and.interpretations.(the.“new.HKFRSs”).issued.by.the.HKICPA,.which.are.effective.for.the.Group’s.accounting.period.beginning.on.1.January.2010. The.new.HKFRSs.adopted.by.the.Group.in.the.consolidated.financial.statements.are.set.out.as.follows: HKFRSs.(Amendments) Amendments.to.HKFRS.5.as.part.of.Improvements.to.HKFRSs.2008 HKFRSs.(Amendments) Improvements.to.HKFRSs.2009 HKFRS.1.(Amendments) Additional.Exemptions.for.First-time.Adopters HKFRS.2.(Amendments) Group.Cash-settled.Share-based.Payment.Transactions HKFRS.3.(Revised) Business.Combinations HKAS.27.(Revised) Consolidated.and.Separate.Financial.Statements HKAS.39.(Amendment) Eligible.Hedged.Items HK(IFRIC).–.Int.17 Distributions.of.Non-cash.Assets.to.Owners HK.–.Int.5 Presentation.of.Financial.Statements.–.Classification.by.the.Borrower.of. a.Term.Loan.that.Contains.a.Repayment.on.Demand.Clause The application ofthe above newHKFRSshas no material effect onthe results andfinancialposition oftheGroup and oftheCompanyforthe current orprior accountingperiods whichhavebeenprepared andpresented.Accordingly, no prior.period.adjustment.was.required. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 3.. APPLICATION.OF.NEW.AND.REVISED.HONG.KONG.FINANCIAL.REPORTING.STANDARDS.(CONTINUED) The.Group.has.not.early.applied.the.following.new.and.revised.standards,.amendments.or.interpretations.that.have.been.issued.but.are.not.yet.effective: HKFRSs.(Amendments) Improvements.to.HKFRSs.20107 HKFRS.1.(Amendment) Limited.Exemption.from.Comparative.HKFRS.7.Disclosures.for. First-time.Adopters2 HKFRS.1.(Amendment) Severe.Hyperinflation.and.Removal.of.Fixed.Dates.for.First-time.Adpoters4 HKFRS.7.(Amendments) Disclosure.–.Transfer.of.Financial.Assets4 HKFRS.9 Financial.Instruments6 HKAS.12.(Amendments) Deferred.Tax:.Recovery.of.Underlying.Assets5 HKAS.24.(Revised) Related.Party.Disclosures3 HKAS.32.(Amendments) Classification.of.Rights.Issues1 HK(IFRIC).–.Int.14.(Amendments) Prepayments.of.a.Minimum.Funding.Requirement3 HK(IFRIC).–.Int.19 Extinguishing.Financial.Liabilities.with.Equity.Instruments2 1 Effective.for.annual.periods.beginning.on.or.after.1.February.2010 2 Effective.for.annual.periods.beginning.on.or.after.1.July.2010 3 Effective.for.annual.periods.beginning.on.or.after.1.January.2011 4 Effective.for.annual.periods.beginning.on.or.after.1.July.2011 5 Effective.for.annual.periods.beginning.on.or.after.1.January.2012 6 Effective.for.annual.periods.beginning.on.or.after.1.January.2013 7 Effective.for.annual.periods.beginning.on.or.after.1.July.2010.and.1.January.2011,.as.appropriate The.Group.is.in.the.process.of.assessing.the.potential.impact.of.the.above.new.HKFRSs.upon.initial.application.but.is.not.yet.in.a.position.to.state.whether.the.above.new.HKFRSs.will.have.a.significant.impact.on.the.Group’s.and.the.Company’s.results.of.operations.and.financial.position. 4.. FINANCIAL.RISK.MANAGEMENT.AND.FAIR.VALUES TheGrouphas exposureto creditrisk,liquidityriskand market risk(includingcurrency risk andinterest rate risk)fromits.use offinancialinstruments.This notepresents information abouttheGroup’s exposureto each ofthe above risks,the Group’s objectives,policies andprocessesfor measuring and managing risk, andtheGroup’s management of capital. (a). Credit.risk Credit.risk.is.the.risk.of.financial.loss.to.the.Group.if.a.customer.or.counterparty.to.a.financial.instrument.fails.to.meet.its.contractual.obligations,.and.the.Group’s.credit.risk.is.primarily.attributable.to.the.trade.and.other.receivables.and.cash.and.cash.equivalents..Management.has.a.credit.policy.in.a.place.and.the.exposures.to.these.credit.risks.are.monitored.on.an.ongoing.basis. The managementhas establisheda creditpolicyunder which credit evaluations areperformed on all customers requiring credit.Trade receivables aredue within3 monthsfromthedate ofbilling.Tradedebtors withbalances that are morethan3 months are requestedto settle all outstandingbalancebefore anyfurther creditisgranted. Normally,.the.Group.does.not.obtain.collateral.from.customers. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 4..FINANCIAL.RISK.MANAGEMENT.AND.FAIR.VALUES.(CONTINUED) (a).Credit.risk.(continued) The.Group’s.exposure.to.credit.risk.is.influenced.mainly.by.the.individual.characteristics.of.each.customer..At.the endofthe reportingdate,theGrouphas a certain concentration of creditrisk as0.32%(2009:2.62%)ofthe total.trade.and.other.receivables.was.due.from.the.Group’s.five.largest.customers. The maximum exposureto creditrisk withouttaking accountof any collateralheldis representedbythe carrying amountof eachfinancial assetinthe consolidated statement offinancialposition afterdeducting anyimpairment allowance..Except.for.a.financial.guarantee.given.by.the.Company.as.set.out.in.note.35,.the.Group.does.not.provide.any.other.guarantees.which.would.expose.the.Group.or.the.Company.to.credit.risk..The.maximum.exposure to.credit.risk.in.respect.of.this.financial.guarantee.at.the.Company’s.statement.of.financial.position.is.disclosed.in.note.35. Further.quantitative.disclosures.in.respect.of.the.Group’s.exposure.to.credit.risk.arising.from.trade.and.other.receivables.are.set.out.in.note.25. (b).Liquidity.risk Liquidity.risk.is.the.risk.that.the.Group.will.not.be.able.to.meet.its.financial.obligations.as.they.fall.due..The.Group’s.policy.is.to.regularly.monitor.its.current.and.expected.liquidity.requirement.and.its.compliance.with.lending.covenants,.to.ensure.that.it.maintains.sufficient.reserves.of.cash.and.adequate.committed.lines.of.funding.from.major.financial.institutions.to.meet.its.liquidity.requirements.in.the.short.and.longer.term. Thefollowingtabledetailsthe remainingcontractual maturities atthe end ofthe reportingperiod oftheGroup’s and.the.Company’s.non-derivative.financial.liabilities,.which.are.based.on.the.contractual.maturity.date..The.amountsdisclosedinthetable arethe contractual undiscounted cashflows(includinginterestpayments computed.using.contractual.rates.or,.if.floating,.based.on.rates.current.at.the.end.of.the.reporting.period).and.the.earliest.date.the.Group.and.the.Company.can.be.required.to.pay: The.Group At.31.December.2010 Within More.than More.than Total 1.year 1.year.but 2.years.but contractual or.on less.than less.than undiscounted Carrying demand 2.years 5.years cash.flow amount HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Trade.and.other.payables 22,536 – – 22,536 22,536 Profit.guarantee.liabilities 9,100 9,100 14,408 32,608 32,608 Loans.payables – 461,823 – 461,823 454,640 Long-term.payables – 262,646 – 262,646 205,126 Due.to.a.related.company – 24,036 – 24,036 23,191 Bank.loans 588 621 14,121 15,330 14,496 Loan.from.a.director.and. For.the.year.ended.31.December.2010 4..FINANCIAL.RISK.MANAGEMENT.AND.FAIR.VALUES.(CONTINUED) (b).Liquidity.risk.(continued) The.Group.(continued) At.31.December.2009 Within More.than More.than Total 1.year 1.year.but 2.years.but contractual or.on less.than less.than undiscounted Carrying demand 2.years 5.years cash.flow amount HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Trade.and.other.payables 22,097 – – 22,097 22,097 Profit.guarantee.liabilities 9,100 9,100 23,508 41,708 41,708 Loans.payables – 142,268 175,153 317,421 313,754 Long-term.payables – – 283,138 283,138 193,797 Due.to.a.related.company – 21,834 – 21,834 20,994 Loan.from.a.director.and. controlling.shareholder – 49,875 – 49,875 47,500 31,197 223,077 481,799 736,073 639,850 The.Company At.31.December.2010 Within More.than More.than Total 1.year 1.year.but 2.years.but contractual or.on less.than less.than undiscounted Carrying demand 2.years 5.years cash.flow amount HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Other.payables.and.accruals 52,487 – – 52,487 52,487 Loan.from.a.director.and. At.31.December.2009 Within More.than More.than Total 1.year 1.year.but 2.years.but contractual or.on less.than less.than undiscounted Carrying demand 2.years 5.years cash.flow amount HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Other.payables.and.accruals 52,264 – – 52,264 52,264 Loan.from.a.director.and. controlling.shareholder – 49,875 – 49,875 47,500 Loan.payable – – 135,667 135,667 132,000 52,264 49,875 135,667 237,806 231,764 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 4.. FINANCIAL.RISK.MANAGEMENT.AND.FAIR.VALUES.(CONTINUED) (b). Liquidity.risk.(continued) The.Company.(continued) As at31December2010,itwas notprobablethatthe counterpartiestothefinancialguarantee willclaim under.the.contracts..Consequently,.the.carrying.amount.of.the.financial.guarantee.contract.of.HK$18.9.million.(2009:.HK$31.5.million).has.not.been.presented.above. At.31.December.2009 HK$’000 Expiry.period Guarantee.given.to.bank.in.respect.of.banking.facilities.granted.to.an.associate 860,000 2012 (c). Currency.risk Presently,.there.is.no.hedging.policy.with.respect.to.the.foreign.exchange.exposure..The.Group’s.transactional.currency areHongKongdollars,Canadiandollars andUnitedStatesdollars as substantially alltheturnover are inHongKongdollars,Canadiandollars andUnitedStatesdollars.TheGroup’s andtheCompany’stransactional foreign.exchange.exposure.was.insignificant. (d). Interest.rate.risk The.market.risk.exposure.of.the.Group.is.the.changes.in.interest.rates..Interest.rate.risk.arises.primarily.from.the amountdueto a related company and loanspayables carry atfloatinginterest rates.TheGroup’s cashflow exposureistotheinterest rate risk andfair valueinterest rate risk astheborrowingsissued at variable rates and fixed.rates,.respectively..The.Group.does.not.use.financial.derivatives.to.hedge.against.the.interest.rate.risk..Other.than.bank.loans,.the.Company.has.no.significant.exposure.to.interest.rate.risk..At.31.December.2010,.it.is.estimated.that.a.general.increase/decrease.of.100.basis.points.in.interest.rates,.with.all.other.variables.held.constant,.would.increase/decrease.the.Group’s.loss.before.tax.by.approximately.HK$3,510,000.(2009:.approximatelyHK$1,795,000).The sensitivityanalysis abovehasbeendetermined assumingthatthe changein interest.rates.had.occurred.at.the.end.of.the.reporting.period.and.had.been.applied.to.the.exposure.to.interest.rate riskforthefinancialliabilitiesin existence atthatdate.The100basispointsincrease ordecrease represents management’s assessment of reasonablypossible change ininterest rates overtheperiod untilthe next annual reporting.date..The.analysis.is.performed,.on.the.same.basis.for.2009. (e). Fair.values Thefair values oftheGroup’sfinancial assets andfinancialliabilities aredeterminedin accordance withgenerally.acceptedpricing modelsbased ondiscounted cashflow analysis usingprices or ratesfrom observable current market transactions..The.Directors.consider.that.the.carrying.amounts.of.the.financial.assets.and.financial.liabilities recordedat amortised costinthe consolidatedfinancialstatements are not materiallydifferentfromtheir fair.values.as.at.31.December.2010.and.2009. TheGroupdoes nothave anyfinancialinstrumentthatis measuredsubsequentto initial recognition atfair value. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 5..ACCOUNTING.ESTIMATES.AND.JUDGEMENTS (a).Key.sources.estimation.uncertainty In.the.process.of.applying.the.Group’s.accounting.policies.which.are.described.in.note.2,.management.has.made certainkey assumptions concerningthefuture, and otherkey sources of estimated uncertainty atthe end ofthe reportingperiod,that mayhave a significant risk of causing a material adjustmenttothe carrying amounts of.assets.and.liabilities.within.the.next.financial.year,.as.discussed.below: (i). Impairment.of.property,.plant.and.equipment.and.freehold.land.and.buildings The.recoverable.amount.of.an.asset.is.the.greater.of.its.net.selling.price.and.value.in.use..In.assessing.value in.use,.the.estimated.future.cash.flows.are.discounted.to.their.present.value.using.a.pre-tax.discountratethat reflects current market assessments ofthetime value of money andthe risks specific to.the.asset,.which.requires.significant.judgement.relating.to.the.level.of.revenue.and.the.amount.of.operating.costs..The.Group.uses.all.readily.available.information.in.determining.an.amount.that.is.a.reasonable.approximation.of.the.recoverable.amount,.including.estimates.based.on.reasonable.and.supportable.assumptions.and.projections.of.revenue.and.operating.costs..Changes.in.these.estimates.could have.a.significant.impact.on.the.carrying.amount.of.the.assets.and.could.result.in.additional.impairment.charge.or.reversal.of.impairment.in.future.periods. (ii). Impairment.of.receivables The Group maintains impairment allowance for doubtful accounts based upon evaluation of the.recoverability of.the.trade.receivables.and.other.receivables,.where.applicable,.at.the.end.of.each.reporting.period..The.estimates.are.based.on.the.aging.of.the.trade.receivables.and.other.receivables.balances andthehistorical write-off experience, net of recoveries.Ifthefinancial condition ofthedebtors were.to.deteriorate,.additional.impairment.allowance.may.be.required. (iii).Impairment.of.intangible.assets The Group performs annual test on whether there has been impairment of intangible assets in.accordance.with.the.accounting.policy.stated.in.note.2(i)..The.recoverable.amounts.of.cash-generating.units aredeterminedbased on valuein use calculations.These calculations requirethe use of estimates and assumptions madeby management onthefuture operation ofthebusiness,pre-taxdiscount rates, and.other.assumptions.underlying.the.value.in.use.calculations. (iv).Amortisation.on.intangible.assets Intangible assets are amortised on a straight-line basis over their estimated useful lives. The.determination ofthe usefullivesinvolves management’s estimation.TheGroup reassessesthe usefullife of.the.intangible.assets.and.if.the.expectation.differs.from.the.original.estimate,.such.a.difference.may.impact.the.amortisation.in.the.year.and.the.estimate.will.be.changed.in.the.future.period. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 5..ACCOUNTING.ESTIMATES.AND.JUDGEMENTS.(CONTINUED) (b).Critical.accounting.judgements.in.applying.the.Group’s.accounting.policies Indeterminingthe carryingamounts of some assets andliabilities,theGroupmakes assumptionsforthe effects.of.uncertain.future.events.on.those.assets.and.liabilities.at.the.end.of.each.reporting.period..These.estimates.involve.assumptions.about.such.items.as.cash.flows.and.discount.rates.used..The.Group’s.estimates.and.assumptions arebased onhistorical experience and expectations offuture events and are reviewedperiodically. In.addition.to.assumptions.and.estimations.of.future.events,.judgements.are.also.made.during.the.process.of.applying.the.Group’s.accounting.policies. (i).Impairment.test.for.interest.in.associates TheGroupcompletedits annualimpairmenttestforinterestin associatesby comparingthe recoverable.amount of interest in associates to its carrying amount as at 31 December 2010. The Group has engaged.Roma.Appraisals.Limited.(“Roma”),.an.independent.professional.valuer,.who.has.among.their.staff,.fellow.members.of.the.Hong.Kong.Institute.of.Surveyor,.to.carry.out.a.valuation.of.the.interest.in.associates.as.at.31.December.2010.based.on.the.value.in.use.calculations..This.valuation.uses.cash.flowprojectionsbasedonfinancial estimates covering afive-yearperiod, and adiscount rate of14.97% (2009:.13.24%)..The.cash.flows.beyond.the.five-year.period.are.extrapolated.using.a.steady.4.66%.(2009:.4%).growth.rate.for.the.casino.and.hotel.industries.in.which.are.operated.by.associates. Management.has.considered.the.above.assumptions.and.valuation.and.also.taken.into.account.the.business.plan.going.forward..The.valuation.depends.upon.an.estimate.of.future.cash.flows.from.the.interestin associates andotherkey assumptions, which arebased ontheDirectors’bestestimates.The valuationis sensitivetotheseparameters.Changesintheseparameters couldleadto a materialrevision of.the.valuation.which.may.have.effects.on.the.net.assets.and.results.of.the.Group. The.carrying.amount.of.the.interest.in.associates.is.written.down.by.approximately.HK$44.1.million.(2009:approximatelyHK$31.5million) which wasduetodecreaseinthe carrying amount ofthedeemed capital.contribution.to.the.associates. (ii).Going.concern As.mentioned.in.note.2(b)(i).to.the.consolidated.financial.statements,.the.Directors.are.satisfied.that.the.Group.will.be.able.to.meet.its.financial.obligations.in.full.as.and.when.they.fall.due.in.the.foreseeable.future..As.the.Directors.are.confident.that.the.Group.will.be.able.to.continue.in.operational.existence.in.the.foreseeable.future,.the.consolidated.financial.statements.have.been.prepared.on.a.going.concern.basis. If.the.going.concern.basis.is.not.appropriate,.adjustment.would.have.to.be.made.to.provide.for.any.furtherliabilities which might arise.Such adjustments mayhave a significant consequential effect onthe loss.for.the.year.and.net.assets.of.the.Group. (iii).Maruhan.Put.Option On.1.October.2007,.Golden.Sun.Profits.Limited.(“Golden.Sun”),.an.indirect.subsidiary.of.the.Company,.as.vendor.and.the.Company.as.Golden.Sun’s.guarantor.entered.into.a.sale.and.purchase.agreement.with.Maruhan.Corporation.(“Maruhan”),.a.then.independent.third.party,.as.purchaser.regarding.(i).the.disposal.of.10.2%.interest.of.the.entire.issued.share.capital.(the.“World.Fortune.Sale.Shares”).of.World.Fortune.Limited.(“World.Fortune”),.a.subsidiary.of.Golden.Sun;.and.(ii).the.assignment.of.all.rights,.title,.interests.and.benefits.of.and.in.the.shareholder’s.loan.of.approximately.HK$66,468,000.due.by.World.Fortune.to.Golden.Sun.for.a.total.consideration.of.approximately.HK$208,501,000.(the.“World.Fortune.Disposal”)..The.World.Fortune.Disposal.was.completed.on.29.October.2007. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 5..ACCOUNTING.ESTIMATES.AND.JUDGEMENTS.(CONTINUED) (b).Critical.accounting.judgements.in.applying.the.Group’s.accounting.policies.(continued) (iii).Maruhan.Put.Option.(continued) On.the.date.of.completion.of.the.World.Fortune.Disposal,.Golden.Sun,.the.Company,.Maruhan.and.World.Fortune.entered.into.a.shareholders’ agreement.(the.“World.Fortune.Shareholders’ Agreement”)..Pursuant.to.the.terms.of.the.World.Fortune.Shareholders’ Agreement,.(i).Golden.Sun,.in.consideration.of.HK$1.paid.by.Maruhan,.granted.to.Maruhan.the.right.to.require.Golden.Sun.to.purchase.or.procure.thepurchase ofMaruhan’s entire equity interestinWorldFortune andthe entire amount ofshareholder’s loan.provided.by.Maruhan.to.World.Fortune.(the.“Maruhan.Put.Option”);.and.(ii).Maruhan.shall.advance.toWorldFortune afurther sum ofapproximatelyHK$116,369,000byway ofshareholder’sloantoWorld Fortune.which.would.on-lend.the.same.to.Pier.16.–.Property.Development.Limited.(“Pier.16.–.Property.Development”)forthepurpose offinancing and completingthedevelopment ofPonte16,theintegrated casino-entertainment.resort. The Maruhan Put Option shall be exercised at any time on any business day during the period commencing.from.the.fifth.anniversary.of.29.October.2007,.the.date.of.entering.into.the.World.Fortune.Shareholders’Agreement, andending onthedayfalling six monthsthereafter.TheMaruhanPutOption purchase.price.shall.be.determined.based.on.Maruhan’s.effective.interest.of.4.998%.in.the.properties.heldbyPier16–PropertyDevelopment(the “Property”)andwithreferencetoa30%discounttothethen prevailing.market.value.of.the.Property.to.be.determined.by.an.independent.professional.valuer.to.be.agreedbythe shareholders ofWorldFortune.Ifthe value oftheProperty asdeterminedbythe saidvaluer after.taking.into.account.a.30%.discount.exceeds.HK$6,500.million.or.is.below.HK$3,900.million,.the.MaruhanPutOptionpurchaseprice shallbe calculated with referencetoHK$6,500 million orHK$3,900 million.(as.the.case.may.be). TheDirectors consideredthatafterthe completion oftheWorldFortuneDisposal,theGroup stillretains substantially.all.the.risks.and.rewards.of.ownership.of.the.World.Fortune.Sale.Shares..Therefore,.the.Group continues.to.account.for.World.Fortune.as.a.wholly-owned.subsidiary.of.the.Company..The.consideration of approximately HK$208,501,000 received has been recognised as liabilities and classifiedunderloanspayables(note31) andlong-termpayables(note32) inthe consolidatedstatement of.financial.position..As.the.Group.does.not.have.the.unconditional.rights.to.avoid.settlement.under.the.Maruhan.Put.Option,.the.Group.has.to.recognise.the.relevant.financial.liabilities.at.the.amount.of.the.presentvalue ofthe estimatedfuture cash outflows whenitis requiredto acquiretheWorldFortuneSale Shares. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 5..ACCOUNTING.ESTIMATES.AND.JUDGEMENTS.(CONTINUED) (b).Critical.accounting.judgements.in.applying.the.Group’s.accounting.policies.(continued) (iv).SBI.Macau.Put.Option On.7.July.2008,.Favor.Jumbo.Limited.(“Favor.Jumbo”),.an.indirect.wholly-owned.subsidiary.of.the.Company, as.vendor.and.the.Company.as.Favor.Jumbo’s.guarantor.entered.into.a.sale.and.purchase.agreement.with.SBI.Macau.Holdings.Limited.(“SBI.Macau”),.an.independent.third.party,.as.purchaser.regarding.(i).the.disposal.of.910.shares.(the.“Golden.Sun.Sale.Shares”).of.Golden.Sun,.being.4.55%.of.the.entire.issued.share.capital.of.Golden.Sun,.a.subsidiary.of.Favor.Jumbo;.and.(ii).the.assignment.of all rights, title, interests and benefits of and in 4.55% of the entire amount of the interest-free shareholder’sloanduebyGoldenSuntoFavorJumbo atface value which amountingto approximately HK$39,486,000.(collectively.the.“Golden.Sun.Disposal”)..The.total.consideration.for.the.Golden.Sun.Disposal.was.HK$130.million..In.addition,.Favor.Jumbo.guaranteed.that.SBI.Macau.shall.be.entitled.to.a.return.of.not.less.than.HK$9.1.million.for.each.full.fiscal.year.for.a.period.of.sixty.successive.months.immediatelyafterthedate of completion oftheGoldenSunDisposal.Thedetails oftheprofitguarantee liabilities.have.been.set.out.in.note.30.to.the.consolidated.financial.statements. The.Golden.Sun.Disposal.was.completed.on.8.August.2008..On.the.date.of.completion.of.the.Golden.Sun Disposal, Favor Jumbo, the Company, SBI Macau, SBI Holdings, Inc.(SBI Macau’s holding company).and.Golden.Sun.entered.into.a.shareholders’ agreement.(the.“Golden.Sun.Shareholders’ Agreement”). Pursuant.to.the.terms.of.the.Golden.Sun.Shareholders’ Agreement,.Favor.Jumbo,.in.consideration.of.HK$1.paid.by.SBI.Macau,.granted.to.SBI.Macau.the.right.to.require.Favor.Jumbo.to.purchase.or.procure.the.purchase.of.the.entire.equity.interest.in.Golden.Sun.and.the.entire.amount.of.the.shareholder’s.loan.owing.by.Golden.Sun.to.SBI.Macau.(the.“SBI.Macau.Put.Option”). TheSBIMacauPutOptionpurchaseprice shallbeHK$99,465.77per ordinaryshareinthe share capital of.Golden.Sun.held.by.SBI.Macau.as.at.completion.of.the.SBI.Macau.Put.Option.plus.the.face.value.of.the entire amount ofthe shareholder’sloan owingbyGoldenSuntoSBIMacau as at completion ofthe SBI.Macau.Put.Option,.and.the.reserve.as.calculated.in.accordance.with.the.terms.of.the.Golden.Sun.Shareholders’.Agreement. The SBI Macau Put Option can be exercised at any time on any business day during the period commencing.from.the.fifth.anniversary.of.8.August.2008,.the.date.of.entering.into.the.Golden.Sun.Shareholders’.Agreement,.and.ending.on.the.day.falling.two.months.thereafter. The.Directors.considered.that.after.the.completion.of.the.Golden.Sun.Disposal,.the.Group.still.retains.substantiallyallthe risks andrewards of ownership oftheGoldenSunSaleShares.Therefore,theGroup accounts.for.Golden.Sun.as.a.wholly-owned.subsidiary.of.the.Company..The.consideration.of.HK$130.million receivedhasbeen recognisedasliabilities and classified underprofitguaranteeliabilities(note30), the loanspayables(note31) and long-termpayables(note32)inthe consolidated statement offinancial position.AstheGroupdoes nothavethe unconditionalrightsto avoid settlement undertheSBIMacau PutOption,theGrouphasto recognisethe relevantfinancialliabilities atthe amountofthepresent value of.the.estimate.future.cash.outflow.when.it.is.required.to.acquire.the.Golden.Sun.Sale.Shares. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 6..SEGMENT.INFORMATION Operating.segments.are.identified.on.the.basis.of.internal.reports.which.provide.information.about.components.of.the.Group.Thisinformationis reportedto andreviewedbyCODMforthepurposes ofresources allocation andperformance assessment. The CODM.considers.the.business.from.both.geographic.and.service.perspective..Geographically,.management.considers.the.performance.of.the.travel.business.in.North.America.and.Hong.Kong.separately. TheGrouphaspresentedthefollowingtwo reportable segments.These segments are managedseparately.Thetravel segment.and.the.cruise.leasing.and.management.segment.provide.different.services.and.require.different.information.technology.systems.and.marketing.strategies. The.cruise.leasing.and.management.reportable.segment.provides.cruise.management.services.and.the.leasing.of.cruise. The.travel.reportable.segment.derives.their.revenue.primarily.from.sales.of.air.tickets.and.provision.of.travel-related.services. (a).Segment.results,.assets.and.liabilities Forthepurposes ofassessing segmentperformance and allocating resourcesbetween segments,theGroup’s.CODMmonitorsthe results, assets andliabilities attributableto eachreportable segmentonthefollowingbases: Segment.profit.represents.the.profit.from.each.segment.without.allocation.of.corporate.administrative.costs.such as.directors’ salaries,.share.of.results.of.associates.and.jointly.controlled.entities,.investment.income.and corporate finance costs. To arrive at reportable segment profit, the management additionally provide segment information concerninginterestincome,finance costs and major non-cashitems such asdepreciation, amortisation.and.impairment.losses.derived.from.reportable.segments..Unallocated.corporate.income.mainly.comprises amortisation on financial guarantee contract, management fee income from an associate and other.sundry.income..This.is.the.measure.reported.to.the.CODM.for.the.purposes.of.resources.allocation.and.performance.assessment..Taxation.charge/(credit).is.not.allocated.to.reportable.segments. Revenue.and.expenses.are.allocated.to.the.reportable.segments.with.reference.to.sales.generated.by.those.segments.and.the.expenses.incurred.by.those.segments. Inter-segmentsales arepricedwith referencetoprices chargedto externalpartiesfor similar orders.The revenue from.external.parties.reported.to.the.CODM.is.measured.in.a.manner.consistent.with.that.in.the.consolidated.income.statement. All.assets.are.allocated.to.reportable.segments.other.than.current.and.deferred.tax.assets,.tax.recoverable,.interestin associates,interestinjointly controlled entities and unallocated corporate assets.Unallocated corporate.assets.mainly.include.part.of.the.property,.plant.and.equipment,.cash.and.cash.equivalents.of.the.central.administration.companies. All.liabilities.are.allocated.to.reportable.segments.other.than.current.and.deferred.tax.liabilities.and.corporate.liabilities..Unallocated.corporate.liabilities.mainly.include.profit.guarantee.liabilities,.loans.payables,.long-term.payables, financial.guarantee.contracts,.loan.from.a.director.and.controlling.shareholder.and.part.of.other.payables.borne.by.the.central.administration.companies. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 6..SEGMENT.INFORMATION.(CONTINUED) (a).Segment.results,.assets.and.liabilities.(continued) Information.regarding.the.Group’s.reportable.segments.as.provided.to.the.Group’s.CODM.for.the.purposes.of.resources.allocation.and.assessment.of.segment.performance.for.the.year.is.set.out.below: Cruise.leasing.and.management Travel Total 2009 2009 2009 HK$’000 HK$’000 HK$’000 Interest.income Amortisation.on.intangible.assets Depreciation Reversal.of.impairment.loss.recognised.on.other.receivable Reversal.of.impairment.loss.recognised.on.intangible.assets Impairment.loss.recognised.on –.intangible.assets –.goodwill Finance.costs 3 49 52 – (541) (541) (6,994) (1,435) (8,429) 1,387 – 1,387 – – – – (6,711) (6,711) – (895) (895) – (739) (739) Reportable.segment.assets 95,954 68,305 164,259 Additions.to.non-current.segment.assets 3,118 397 3,515 Reportable.segment.liabilities 4,287 45,843 50,130 6..SEGMENT.INFORMATION.(CONTINUED) (b).Reconciliation.of.reportable.segment.revenue,.profit/(loss),.assets,.liabilities.and.other.items 2009 HK$’000 Revenue Reportable.segment.revenue Elimination.of.inter-segment.revenue Consolidated.turnover Profit/(loss) Reportable.segment.profit/(loss) Share.of.results.of.jointly.controlled.entities Share.of.results.of.associates Unallocated.corporate.income Depreciation Interest.income Finance.costs Unallocated.corporate.expenses Consolidated.loss.before.taxation 1,203,027 (788) 1,202,239 (7,208) – (115,657) 19,612 (2,999) 118 (8,565) (58,197) (172,896) At.31.December.2009 HK$’000 Assets Reportable.segment.assets Interest.in.associates Interest.in.jointly.controlled.entities Unallocated – .Deferred.tax.assets – .Tax.recoverable – .Corporate.assets Consolidated.total.assets Liabilities Reportable.segment.liabilities Unallocated – .Tax.payable – .Deferred.tax.liabilities – .Corporate.liabilities Consolidated.total.liabilities 164,259 1,094,945 1,362 848 – 84,095 1,345,509 50,130 33 83 621,390 671,636 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 6.. SEGMENT.INFORMATION.(CONTINUED) (b). Reconciliation.of.reportable.segment.revenue,.profit/(loss),.assets,.liabilities.and.other.items.(continued) Other.items Cruise.leasing.and.management Travel Unallocated Consolidated 2009 2009 2009 2009 HK$’000 HK$’000 HK$’000 HK$’000 Amortisation.on.intangible.assets – 541 – 541 Impairment.loss.recognised.on –.intangible.assets – 6,711 – 6,711 –.goodwill – 895 – 895 Depreciation 6,994 1,435 2,999 11,428 Reversal.of.impairment.loss.recognised.on.intangible.assets – – – – Reversal.of.impairment.loss.recognised.on.other.receivable (1,387) – – (1,387) Interest.income (3) (49) (118) (170) Finance.costs – 739 8,565 9,304 Additions.to.non-current.assets 3,118 397 8 3,523 (c). An.analysis.of.the.Group’s.revenue.from.all.major.services.is.as.follows: 2009 HK$’000 (d). Geographical.information The.following.is.an.analysis.of.geographical.location.of.(i).the.Group’s.revenue.from.external.customers.and. (ii).the.Group’s.non-current.assets..The.geographical.location.of.customers.refers.to.the.location.at.which.the.services.were.provided..The.Group’s.non-current.assets.included.property,.plant.and.equipment,.goodwill,.intangible assets,interestin associates,interestinjointly controlled entities,depositfor acquisition ofproperties and.deposit.for.acquisition.of.a.company. Thegeographicallocation ofproperty,plantand equipment anddepositfor acquisition ofpropertiesisbased on thephysicallocation ofthe assetunder consideration.Inthe case ofintangible assets andgoodwill,itisbasedon thelocation of operationsto whichtheseintangibles are allocated.Inthe case ofinterestin associates and jointly controlled.entities.and.deposit.for.acquisition.of.a.company,.it.is.the.location.of.operations.of.such.associates,.jointly.controlled.entities.and.company. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 6..SEGMENT.INFORMATION.(CONTINUED) (d).Geographical.information.(continued) Non-current.assets Revenue.from At. external.customers 31.December 2009 2009 HK$’000 HK$’000 (e).Major.customer Revenue.of.approximately.HK$69.6.million.(2009:.approximately.HK$72.6.million).is.derived.from.a.single.external customer.This revenueis attributabletothe cruiseleasing and management segment.No other single customers.contributed.10%.or.more.to.the.Group’s.revenue.for.both.2010.and.2009. 7..TURNOVER Theprincipalactivities oftheGroup areleasing of andprovision of managementservicestothe cruise andtravel-related.business. Turnover.represents.cruise.leasing.and.management.fee.income.and.travel-related.agency.services.fee.income..The.amount.of.each.significant.category.of.revenue.recognised.in.turnover.during.the.year.is.as.follows: NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 8.. OTHER.REVENUE.AND.GAINS Note HK$’000 Other.revenue Interest.income.on.bank.deposits 49 *. Thisrepresentsimpairment recognisedondebtsdueby adebtorwhichhasbeenlong-outstanding.TheDirectorsconsideredthatthe.amounts.due.could.not.be.recovered..Therefore,.full.impairment.has.been.made.in.the.previous.year..During.the.year,.the.debtor.has.made.repayment.in.respect.of.such.long-outstanding.amount,.therefore,.the.reversal.of.impairment.loss.was.recognised.for.the.year.(note.25(b)). NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 9..LOSS.BEFORE.TAXATION Loss.before.taxation.is.arrived.at.after.charging/(crediting).as.follows: 2009 Note HK$’000 (a).Finance.costs Interest.on.loan.from.a.related.company 33 739 Interest.on.bank.loans 36 – Interest.on.long-term.payables 32 6,749 Interest.on.loan.from.a.director.and.controlling.shareholder 37 1,043 Interest.on.other.loans 31(vi) 5,192 573 Total.interest.expenses.on.financial.liabilities.not.at.fair.value.through.profit.or.loss Finance.charges (b).Staff.costs Salaries,.wages.and.other.benefits.(including.directors’ emoluments) Contributions.to.defined.contribution.retirement.plan (c).Other.operating.expenses Impairment.loss.recognised.on – .goodwill – .intangible.assets – .interest.in.associates – .interest.in.jointly.controlled.entity (d).Other.items Auditors’ remuneration –.audit.services –.other.services Depreciation.on.owned.fixed.assets Amortisation.on.intangible.assets Loss.on.disposal.of.property,.plant.and.equipment Operating.lease.rentals –.properties –.plant.and.machinery Net.exchange.gain Cost.of.inventories 9,104 200 9,304 61,927 1,675 63,602 895 6,711 12,600 10,700 30,906 1,454 325 11,428 541 18 7,951 539 (911) 17,870 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 10..INCOME.TAX.IN.THE.CONSOLIDATED.INCOME.STATEMENT (a). Taxation.in.the.consolidated.income.statement.represents: 2010 2009 Note HK$’000 HK$’000 Current.tax.–.Hong.Kong.Profits.Tax –.Charge.for.the.year 14 1,275 –.Under.provision.in.respect.of.prior.years 17 – 31 1,275 Current.tax.–.Overseas.profits.tax –.Charge.for.the.year 1,324 – –.Under.provision.in.respect.of.prior.years – 1,355 1,306 Deferred.taxation.relating.to.the.origination.and. Hong.Kong.Profits.Tax.is.calculated.at.16.5%.(2009:.16.5%).of.the.estimated.assessable.profit.for.the.year. Taxation.arising.in.other.jurisdictions.are.calculated.at.the.rates.prevailing.in.the.relevant.jurisdictions. 10..INCOME.TAX.IN.THE.CONSOLIDATED.INCOME.STATEMENT.(CONTINUED) (b).Reconciliation.between.tax.expense.and.accounting.loss.at.applicable.tax.rates: 11..DIRECTORS’.REMUNERATION Directors’.remuneration.disclosed.pursuant.to.Section.161.of.the.Hong.Kong.Companies.Ordinance.is.as.follows: Salaries,.allowances.Retirement.benefit.Directors’.fees and.other.benefits scheme.contributions Total 2009 2009 2009 2009 Name HK$’000 HK$’000 HK$’000 HK$’000 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 12..INDIVIDUALS.WITH.HIGHEST.EMOLUMENTS Thefiveindividuals withthehighest emoluments, one(2009: one)is aDirector whose emolumentsisdisclosedin note. 11..The.aggregate.of.the.emoluments.in.respect.of.the.other.four.(2009:.four).individuals.are.as.follows: 2010 2009 HK$’000 HK$’000 The.emoluments.of.the.four.(2009:.four).individuals.with.the.highest.emoluments.are.within.the.following.band: Number.of.individuals 2010 2009 Nil.–.HK$1,000,000 4 13.. LOSS.ATTRIBUTABLE.TO.OWNERS.OF.THE.COMPANY The.loss.attributable.to.owners.of.the.Company.includes.a.loss.of.approximately.HK$8,812,000.(2009:.approximately.HK$7,287,000).which.has.been.dealt.with.in.the.financial.statements.of.the.Company. 14.. DIVIDENDS No.interim.dividend.was.paid.during.the.year.under.review.(2009:.Nil)..The.Directors.do.not.recommend.any.payment.of.a.final.dividend.for.the.year.ended.31.December.2010.(2009:.Nil). 15.. LOSS.PER.SHARE (a). Basic.loss.per.share The calculation of basic loss per share is based on the loss attributable to owners of the Company of.approximately.HK$80,782,000.(2009:.approximately.HK$173,797,000).and.on.the.weighted.average.number.of.approximately.2,438,964,000.ordinary.shares.(2009:.approximately.2,438,964,000.ordinary.shares).in.issue.during.the.year. (b). Diluted.loss.per.share Diluted.loss.per.share.equals.to.the.basic.loss.per.share.as.there.were.no.potential.dilutive.ordinary.shares.outstanding.for.the.year.presented. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 16..PROPERTY,.PLANT.AND.EQUIPMENT The.Group Freehold land.and building HK$’000 Cruise Leasehold improvements HK$’000 HK$’000 Plant.and machinery HK$’000 Furniture, fittings.and office equipment HK$’000 Motor vehicles HK$’000 Motor yacht HK$’000 Total HK$’000 Cost At.1.January.2009 2,410 93,600 3,692 9,853 5,155 2,450 4,700 121,860 Addition – – 181 3,098 244 – – 3,523 Disposals – – (545) – (84) (126) – (755) Exchange.alignment 370 – 473 – 960 144 – 1,947 At.31.December.2009.and.1.January.2010 2,780 93,600 3,801 12,951 6,275 2,468 4,700 126,575 Addition 18,847 – 2,024 2,339 392 – – 23,602 Disposals – – (30) – (20) (1) – (51) Exchange.alignment 167 – (153) – (2,614) 63 – (2,537) At.31.December.2010 21,794 93,600 5,642 15,290 4,033 2,530 4,700 147,589 Accumulated.depreciation At.1.January.2009 5 23,400 2,025 6,437 2,396 868 1,018 36,149 Charge.for.the.year 54 4,680 1,284 2,150 1,523 797 940 11,428 Written.back.on.disposals – – (523) – (78) (56) – (657) Exchange.alignment 11 – 382 – 760 121 – 1,274 At.31.December.2009.and.1.January.2010 70 28,080 3,168 8,587 4,601 1,730 1,958 48,194 Charge.for.the.year 125 4,680 571 2,330 1,117 550 940 10,313 Written.back.on.disposals – – (30) – (18) (1) – (49) Exchange.alignment (8) – (184) – (2,662) 62 – (2,792) At.31.December.2010 187 32,760 3,525 10,917 3,038 2,341 2,898 55,666 Carrying.amount At.31.December.2010 21,607 60,840 2,117 4,373 995 189 1,802 91,923 At.31.December.2009 2,710 65,520 633 4,364 1,674 738 2,742 78,381 The.analysis.of.carrying.amount.of.property.is.as.follows: At.31.December. HK$’000 Freehold.land.and.building.held.outside.Hong.Kong 2,710 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 17..GOODWILL The.Group HK$’000 Cost At.1.January.2009,.31.December.2009,.1.January.2010.and.31.December.2010 8,332 Accumulated.impairment.losses At.1.January.2009 Impairment.loss (609) (895) At.31.December.2009.and.1.January.2010 (1,504) Impairment.loss – At.31.December.2010 (1,504) Carrying.amount At.31.December.2010 6,828 At.31.December.2009 6,828 Goodwillis.allocated.to.the.Group’s.cash-generating.units.(“CGUs”).identified.according.to.business.segment.as.follows: At.31.December.2009 HK$’000 Cruise.management.CGU Travel.CGU At.31.December. HK$’000 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 17..GOODWILL.(CONTINUED) The.recoverable.amount.of.the.CGU.is.determined.on.value.in.use.calculations..These.calculations.use.cash.flow.projections.based.on.the.financial.budgets.approved.by.management.covering.a.five-year.period..Cash.flows.beyond.thefive-yearperiod are extrapolated usingthe estimatedgrowth rates statedbelow.Thegrowth ratedoes not exceed the.long-term.average.growth.rate.for.the.business.in.which.the.CGU.operates. Key.assumptions.used.for.value.in.use.calculations: Travel.CGU Cruise.management.CGU 2009 2009 % % –.Growth.rate 4.5 Zero –.Discount.rate 12.8 5 The.discount.rates.reflect.specific.risks.relating.to.the.relevant.segment. Based.on.the.impairment.tests.performed,.the.recoverable.amount.of.the.both.travel.CGU.and.cruise.management.CGU.are.higher.than.their.carrying.amount.based.on.value.in.use.calculations..Accordingly,.no.impairment.loss.is.recognised.for.the.year.(2009:.approximately.HK$895,000.was.recognised.for.the.travel.CGU). Management.believes.that.any.reasonably.possible.change.in.the.key.assumptions.on.which.recoverable.amount.is.based.would.not.cause.the.aggregate.carrying.amount.to.exceed.the.aggregate.recoverable.amount.of.the.travel.and.cruise.management.CGU. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 18..INTANGIBLE.ASSETS The.Group Trademark Client.list Total Note HK$’000 HK$’000 HK$’000 Cost At.1.January.2009 27,743 7,756 35,499 Exchange.alignment 4,144 1,159 5,303 At.31.December.2009.and.1.January.2010 31,887 8,915 40,802 Exchange.alignment 2,053 574 2,627 At.31.December.2010 33,940 9,489 43,429 Accumulated.amortisation.and.impairment. losses At.1.January.2009 – (891) (891) Charge.for.the.year – (541) (541) Impairment.loss 9(c) (3,682) (3,029) (6,711) Exchange.alignment – (133) (133) At.31.December.2009.and.1.January.2010 (3,682) (4,594) (8,276) Charge.for.the.year – (339) (339) Reversal.of.impairment.loss 8 3,571 971 4,542 Exchange.alignment (237) (296) (533) At.31.December.2010 (348) (4,258) (4,606) Carrying.amount At.31.December.2010 33,592 5,231 38,823 At.31.December.2009 28,205 4,321 32,526 Trademark InaccordancewithHKAS36“ImpairmentofAssets”,theGroupcompleteditsannualimpairmenttestforthetrademark.by.comparing.its.recoverable.amount.to.its.carrying.amount.as.at.31.December.2010..The.Group.has.conducted.a.valuation ofthetrademarkbased onthe valuein use calculations.With referencetothe valuations carriedoutbyRoma, the carrying amount ofthetrademarkis approximatelyHK$33,592,000.A reversal ofimpairmentloss of approximately HK$3,571,000 has been recognised for the year ended 31 December 2010 (2009: impaired approximately HK$3,682,000). The.valuation.of.the.trademark.is.based.on.the.relief-from-royalty.method.and.uses.cash.flow.projections.based.on.financial.estimates.covering.a.five-year.period,.the.expected.sales.deriving.from.the.trademark.in.the.travel.CGU.and.a.discount.of.13.1%.(2009:.14.3%)..The.cash.flows.beyond.the.five-year.period.are.extrapolated.using.a.steady.3%.(2009:.4.5%).growth.rate..This.growth.rate.does.not.exceed.the.long-term.average.growth.rate.for.travel.markets.in.which.the.Group.operates..Management.has.considered.the.above.assumptions.and.valuation.and.also.taken.into.account.the.business.plan.going.forward. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 18.. INTANGIBLE.ASSETS.(CONTINUED) Client.list The.Directors.assessed.that.the.client.list.having.15.years.of.useful.lives.from.the.date.of.acquisition..The.Group.has.completed.its.annual.impairment.test.for.the.client.list.by.comparing.the.recoverable.amount.of.the.client.list.to.its.carrying.amount.as.at.31.December.2010..The.Group.has.conducted.a.valuation.of.the.client.list.based.on.the.value.in.use.calculations..With.reference.to.the.valuations.carried.out.by.Roma,.the.carrying.amount.of.the.client.list.is.approximatelyHK$5,231,000.Areversal ofimpairmentloss of approximatelyHK$971,000hasbeen recognisedforthe year.ended.31.December.2010.(2009:.impaired.approximately.HK$3,029,000). The.valuation.of.the.client.list.is.based.on.the.contributory.charge.method.and.uses.cash.flow.projections.based.on.financial.estimates.covering.a.five-year.period,.the.expected.sales.deriving.from.the.client.list.in.the.travel.CGU.and.a.discount.rate.of.13.1%.(2009:.14.3%),.The.cash.flows.beyond.the.five-year.period.are.extrapolated.using.a.steady.3%.(2009:.4.5%).growth.rate..This.growth.rate.does.not.exceed.the.long-term.average.growth.rate.for.travel.markets.in.which.the.Group.operates..Management.has.considered.the.above.assumptions.and.valuation.and.also.taken.into.account.the.business.plan.going.forward. 19.. INVESTMENTS.IN.SUBSIDIARIES The.Company At.31.December.2009 Note HK$’000 #. After.considering.the.accumulated.losses.and.net.liabilities.positions.of.the.relevant.subsidiaries,.the.Directors.are.of.the.opinion.that.an.additional.impairment.loss.of.approximately.HK$19,202,000.(2009:.approximately.HK$27,255,000).has.been.recognised.for.the.year.ended.31.December.2010. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 19..INVESTMENTS.IN.SUBSIDIARIES.(CONTINUED) As statedin note20(d)tothe consolidatedfinancialstatements,theGrouphas engagedRomato carry out a valuation.on.the.interest.in.associates.based.on.value.in.use.calculations..The.recoverable.amount.of.the.interest.in.associates.is.higher.than.its.carrying.amount,.therefore,.the.Directors.considered.that.there.is.no.impairment.loss.on.interest.in.associates exceptforthe reductioninthe carrying amount ofthedeemed capitalcontributionfortheyear.Onthisbasis, the.Directors.considered.that.no.impairment.should.be.made.for.the.investments.in.those.subsidiaries.which.held.the.interestin associates.The valuationdepends upon an estimate offuture cashflowsfromtheinterestin associates and other.key.assumptions.on.the.growth.of.the.business,.which.is.based.on.the.Directors’ best.estimates..The.valuation.is.sensitive.to.these.parameters..Changes.in.these.parameters.could.lead.to.a.material.revision.of.the.valuation.which.mayhave effects ontheDirectors’impairmentassessment oninvestmentsinthose subsidiaries whichheldthe interest in.associates. Thefollowinglistcontains onlytheparticulars of subsidiaries whichprincipally affectedthe results, assets orliabilities of the.Group..The.class.of.shares.held.is.ordinary.unless.otherwise.stated. All of these are controlled subsidiaries as defined under note 2(c) and have been consolidated into the financial statements.of.the.Group. Proportion.of.ownership.interest Place.of Particulars.of Group’s Held incorporation/ issued.and.paid.up effective by.the Held.by Principal Name.of.subsidiary operations share.capital interest Company subsidiaries activities % % % Macau.Success.(Hong.Kong). Hong.Kong 10,000,000.shares.of. 100 100 – Investment.holding Limited HK$0.01.each Capture.Success.Limited British.Virgin.Islands/ 100.shares.of.US$1.each 55 – 55 Cruise.leasing South.China.Sea,.other. than.in.Hong.Kong Favor.Jumbo.Limited British.Virgin.Islands 100.shares.of.US$1.each 100 – 100 Investment.holding Golden.Sun.Profits.Limited British.Virgin.Islands 20,000.shares.of.US$1.each 100 – 100 Investment.holding Hover.Management.Limited Hong.Kong/South.China. 100.shares.of.HK$1.each 55 – 55 Provision.of.cruise. Sea,.other.than.in. management.services Hong.Kong Macau.Success.Management. Hong.Kong 100.shares.of.HK$1.each 100 – 100 Provision.of.administration. Services.Limited services Travel.Success.Limited Hong.Kong 500,000sharesofHK$1each 100 – 100 Travel.agency World.Fortune.Limited Hong.Kong 1,000.shares.of.HK$1.each 100 – 100 Investment.holding NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 19..INVESTMENTS.IN.SUBSIDIARIES.(CONTINUED) Proportion.of.ownership.interest Place.of Particulars.of Group’ s Held incorporation/ issued.and.paid.up effective by.the Held.by Principal Name.of.subsidiary operations share.capital interest Company subsidiaries activities % % % 665127.British.Columbia.Ltd. Canada (i).(ii). 10,000.common.shares without.par.value;.and 1,400.Class.A.Preferred.shares.with.CAD0.01.par.value.(without.voting.right) 80 – 80 Investment.holding Jade.Travel.Ltd..(“Jade.Travel.Ltd..(Canada)”) Canada 7.common.shares.without.par.value 80 – 80 Wholesale.and.retail.business.of.selling.airline.ticketsandtourpackages Jade.Travel.Ltd. United.States.of.America 100.common.shares.without.par.value 80 – 80 Wholesale.and.retail.business.of.selling.airline.ticketsandtourpackages 20.. INTEREST.IN.ASSOCIATES The.Group Note At 31.December 2009 HK$’000 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 20.. INTEREST.IN.ASSOCIATES.(CONTINUED) (a) The.following.list.contains.only.the.particulars.of.associates,.all.of.which.are.unlisted.corporate.entities,.which.principally.affected.the.results.or.assets.of.the.Group: Proportion.of.ownership.interest Place.of Particulars.of Group’s Held incorporation/ issued.and.paid.up effective by.the Held.by Principal Name.of.associate operations share.capital interest Company a.subsidiary activity % % % Pier.16.–.Entertainment. Macau 2.shares.of.MOP24,000. 49 – 49 Provision.of. Group.Corporation. and.MOP1,000. management.services. Limited respectively for.casino.operations Pier.16.–.Management.Macau/Hong.Kong 2.shares.of.MOP24,000.49 – 49 Hotel.operations Limited and.Macau and.MOP1,000.respectively Pier.16.–.Gaming.Macau 1.share.of.MOP50,000 49 – 49 Provision.of.Promotion,.Limited gaming.promotion.services Pier.16.–.Property.Macau 100,000.shares.of.49 – 49 Property.holding Development MOP100.each (b). Goodwill Because goodwill is included in the carrying amount of the interest in associates and is not separately.recognised,.it.is.not.tested.for.impairment.separately.by.applying.the.requirements.for.impairment.testing.in.HKAS.36.“Impairment.of.Assets”..Instead,.the.entire.carrying.amount.of.the.interest.in.associates.is.tested.for.impairment.as.set.out.in.note.20(d).below. (c) The.amounts.due.from.associates.are.unsecured,.interest-free.and.have.no.fixed.terms.of.repayment..Their.carrying.amounts.are.not.materially.difference.from.their.fair.value. (d). Impairment.test.for.interest.in.associates For.the.year,.the.additional.impairment.loss.recognised.on.interest.in.associates.of.HK$12.6.million.(2009:.HK$12.6.million).was.due.to.the.decrease.in.the.carrying.amount.of.the.deemed.capital.contribution.to.the.associates.Thedeemed capital contributionis referencedtothefinancialguarantee contract(note35)granted by the Group to the associates. The deemed capital contribution decreased as the carrying amount of financial.guarantee.to.the.associates.decreased.during.the.year..Therefore,.at.the.end.of.the.reporting.period,.the carrying.amount.of.the.interest.in.associates.is.written.down.by.approximately.HK$44.1.million.(2009:.approximately.HK$31.5.million). Moreover, the Group completed its annual impairment test for interest in associates by comparing the recoverable.amount.of.interest.in.associates.to.its.carrying.amount.as.at.31.December.2010..The.Group.has.engaged.Roma.to.carry.out.a.valuation.of.the.interest.in.associates.as.at.31.December.2010.based.on.the.value.in.use.calculations..This.valuation.uses.cash.flow.projections.based.on.financial.estimates.covering.a.five-year.period,.and.a.discount.rate.of.14.97%.(2009:.13.24%)..The.cash.flows.beyond.the.five-year.period.are extrapolated.using.a.steady.4.66%.(2009:.4%).growth.rate.for.the.casino.and.hotel.industries.in.which.are.operatedby associates.Managementhas consideredthe above assumptions and valuation and alsotaken into account.the.business.plan.going.forward. For.the.year.ended.31.December.2010 20.. INTEREST.IN.ASSOCIATES.(CONTINUED) (e) The following is summary of aggregate amounts of assets, liabilities, revenue, and results of the Group’s associates: 2009 HK$’000 Revenues 374,031 Loss (236,035) 21.. INTEREST.IN.JOINTLY.CONTROLLED.ENTITIES The.Group At.31.December.2009 HK$’000 Share.of.net.assets 12 Amount.due.from.a.jointly.controlled.entity 12,050 12,050 12,393 12,062 Impairment.loss# (10,700) 1,362 # The.Group.has.advanced.HK$12.million.to.the.jointly.controlled.entity.to.finance.the.acquisition.of.certain.assets..The.advance.was.unsecured.and.interest-free..In.the.opinion.of.the.Directors,.the.amount.will.not.be.repaid.within.twelve.months.from.the.end.of.the.reporting.period.and.is.therefore.classified.as.non-current.assets..As.the.recoverable.amount.of.the.advance.is.expected.to.be.less.than.its.carrying.amount,.an.impairment.loss.of.HK$10.7.million.has.been.recognised.for.the.year.ended.31.December.2010.(2009:.HK$10.7.million)..The.recoverable.amount.of.this.advance.is.determined.based.on.the.net.cash.flows.from.operations.estimated.by.management.for.the.coming.five.years. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 21..INTEREST.IN.JOINTLY.CONTROLLED.ENTITIES.(CONTINUED) Details.of.the.Group’s.interest.in.the.jointly.controlled.entities.are.as.follows: Group’s.Particulars.of.effective.Form.of.business Place.of issued.and.paid.up.interest Name.of.joint.venture structure incorporation share.capital % Principal.activity Surplus.Win.Enterprises.Limited Incorporated British.Virgin.Islands 2.shares.of.US$1.each 50 Investment.holding Double.Diamond.International. Incorporated British.Virgin.Islands 100.shares.of.US$1.each 40 Operation.of.pier Limited The.amount.due.from.a.jointly.controlled.entity.is.unsecured,.interest-free.and.has.no.fixed.terms.of.repayment. Thefollowingis summaryofaggregate amounts of assets,liabilities, revenue and results ofthejointly controlled entities: At.At.31.December.31.December.2010 2009 HK$’000 HK$’000 Non-current.assets 29,293 14,647 2010 2009 HK$’000 HK$’000 Income 914 136 Expenses (87) Profit.before.tax 49 Taxation (23) Profit.for.the.year 26 22..DEPOSIT.FOR.ACQUISITION.OF.PROPERTIES On.28.February.2008,.Jade.Travel.Ltd..(Canada),.an.80%.indirectly.owned.subsidiary.of.the.Company,.entered.into.a.sale and.purchase.agreement.to.purchase.the.properties.located.in.Richmond.Hill,.Ontario,.Canada.for.a.total.consideration of approximatelyCAD2,364,000(equivalentto approximatelyHK$17,547,000).InJuly2010,JadeTravel Ltd..(Canada).has.moved.in.these.properties..The.acquisition.of.these.properties.has.been.completed.during.the.year.and.the.deposit.has.then.been.reclassified.as.the.property,.plant.and.equipment.disclosed.in.note.16.accordingly. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 23..DEPOSIT.FOR.ACQUISITION.OF.A.COMPANY This representedadeposit ofHK$60 millionpaidto上海永德投資有限公司( “上海永德 ”), anindependentthirdparty,.uponsigning of aletterofintent(the “LetterofIntent”)and aconfidentiality agreement(the “ConfidentialityAgreement”) on 10 January 2008 for the proposed acquisition by an indirect wholly-owned subsidiary of the Company of at least.10%.and.not.more.than.51%.of.the.entire.issued.share.capital.of.重慶林科物業發展有限公司 ,.a.90%.owned.subsidiary.of.上海永德 ..A.letter.agreement.has.been.signed.on.30.June.2010.to.further.extend.the.long.stop.date.for.entering.into.a.formal.agreement.to.31.December.2010..The.Letter.of.Intent.and.the.Confidentiality.Agreement.were.eventuallyterminated on13December2010 andthedeposithasbeen refunded with a compensation of approximately HK$7,026,000.(note.8). 24..INVENTORIES The.Group The analysis ofthe amount ofinventories recognised as an expense andincludedin consolidatedincome statementis as.follows: 25..TRADE.AND.OTHER.RECEIVABLES The.Group The.Company NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 25.. TRADE.AND.OTHER.RECEIVABLES.(CONTINUED) (a). Trade.receivables (i). Aging.analysis Included.in.trade.and.other.receivables,.the.aging.analysis.for.trade.receivables.is.as.follows: TheGroupnormally allows an average creditperiod of30to60daysto customers of cruise leasing and managementbusiness(2009: average creditperiod of30to60days) and30daysto customers oftravel business.(2009:.30.days)..Further.details.on.the.Group’s.credit.policy.are.set.out.in.note.4(a). (ii). Impairment.of.trade.receivables Impairment.loss.in.respect.of.trade.receivables.are.recorded.using.an.allowance.account.unless.the.Group.is.satisfied.that.recovery.of.the.amount.is.remote,.in.which.case.the.impairment.loss.is.written.off against.trade.receivables.directly.(see.note.2(i))..At.the.end.of.the.reporting.period,.there.has.no.impairment.loss.recognised.on.the.trade.receivables.(2009:.Nil). (iii). Trade.receivables.that.are.not.impaired The.aging.analysis.of.trade.receivables.that.are.neither.individually.nor.collectively.considered.to.be.impaired.are.as.follows: NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 25..TRADE.AND.OTHER.RECEIVABLES.(CONTINUED) (a). Trade.receivables.(continued) (iii). Trade.receivables.that.are.not.impaired.(continued) Receivablesthatwere neitherpastdue nor impaired relateto a wide range of customersfor whomthere.was.no.recent.history.of.default. Receivables.that.were.past.due.but.not.impaired.relate.to.a.number.of.independent.customers.that.have.a good.track.record.with.the.Group..Based.on.past.experience,.management.believes.that.no.impairment.allowance.is.necessary.in.respect.of.these.balances.as.there.has.not.been.a.significant.changein creditquality andthebalances are still consideredfullyrecoverable.TheGroupdoes nothold any.collateral.over.these.balances. (b). Other.receivables Note The.Group HK$’000 Movement.in.the.impairment.loss.recognised.on.other.receivables At.1.January.2009 22,763 Reversal.of.impairment.loss* 8 (1,387) At.31.December.2009.and.1.January.2010 21,376 Reversal.of.impairment.loss* 8 (4,943) At.31.December.2010 16,433 * Thisrepresentsimpairmentrecognisedondebtsduebyadebtorwhichhasbeen long-outstanding.TheDirectorsconsidered.thatthe amountsdue couldnotbe recovered.Therefore,fullimpairmenthasbeen madeinthepreviousyear.Duringtheyear, the.debtor.has.made.repayment.in.respect.of.such.long-outstanding.amount,.therefore,.the.reversal.of.impairment.loss.was.recognised.for.the.year. 26.. PLEDGED.BANK.DEPOSITS The amounts arepledgedto secure certainbankingfacilitiesgrantedtotheGroup(note46).Thepledgedbankdeposits.carry.fixed.interest.rate.of.0.01%.to.0.175%.per.annum.(2009:.0.03%.to.0.125%.per.annum). NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 27..CASH.AND.CASH.EQUIVALENTS The.Group The.Company At. At. 31.December. 31.December. 2009 2009 HK$’000 HK$’000 Cash.and.bank.balances 21,708 7,788 Non-pledged.time.bank.deposits 23,000 20,600 – – Cash.and.cash.equivalents.in.the.consolidated.statements.of.financial.position.and.cash.flows 42,308 7,788 Deposits.with.banks.carry.interest.at.market.rates.which.is.0.1%.to.0.38%.per.annum.for.current.year.(2009:.0.001%.to.0.01%.per.annum). 28..TRADE.AND.OTHER.PAYABLES The.Group The.Company At. At.31.December. 31.December.2009 2009 HK$’000 HK$’000 The.amounts.due.to.subsidiaries.are.interest-free,.unsecured.and.have.no.fixed.terms.of.repayment. Aging.analysis Included.in.trade.and.other.payables,.the.aging.analysis.of.trade.payables.is.as.follows: The.Group At.31.December. HK$’000 For.the.year.ended.31.December.2010 29..DEFERRED.INCOME The.Group Deferredincome comprises ofa sign-upbonusfor an on-lineticketprocessing system andis recognised as revenuein.accordance.with.the.terms.of.the.agreements. 30..PROFIT.GUARANTEE.LIABILITIES As.mentioned.in.note.5(b)(iv),.Favor.Jumbo.guaranteed.that.SBI.Macau.shall.be.entitled.to.a.return.of.not.less.than.HK$9.1million(“GuaranteedAmount”)for eachfullfiscalyearfor aperiodof sixty successive monthsimmediately after thedateof completionoftheGoldenSunDisposal(the “RelevantPeriod”).Theprofitguaranteeliabilitiesarecarried at amortised.cost. In.the.event.the.amounts.received.by.SBI.Macau.from.the.distribution.of.the.profits.of.Golden.Sun.for.any.fiscal.year.during.the.Relevant.Period.falls.short.(“Shortfall”).of.the.higher.of.the.return.(the.“Return”).as.stipulated.in.the.Golden.SunShareholders’AgreementortheGuaranteedAmount(pro-rated,ifnecessary),FavorJumbo shallpaytoSBIMacau such.Shortfall.within.six.months.from.the.end.of.the.relevant.fiscal.year.during.the.Relevant.Period. Ifthe aggregate oftheReturn andtheShortfallpayments receivedbySBIMacaufromGoldenSun and/orFavorJumbo in respect oftheRelevantPeriod exceedsthetotalGuaranteedAmount(pro-rated,ifnecessary)fortheRelevantPeriod (the.“Excess”),.SBI.Macau.shall.refund.and.pay.to.Favor.Jumbo.the.lesser.of.(a).the.aggregate.amount.of.the.Shortfall.paid.by.Favor.Jumbo.to.SBI.Macau.during.the.Relevant.Period;.and.(b).the.Excess,.within.three.months.upon.notice.from.Favor.Jumbo.the.amount.payable.by.SBI.Macau.after.the.expiry.of.the.Relevant.Period. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 31..LOANS.PAYABLES Note The.Group At.31.December.2010 At.31.December.2009 HK$’000 HK$’000 The.Company At.31.December.2010 At.31.December.2009 HK$’000 HK$’000 Loans.from.shareholders.of.non-controlling.interests –.Mrs..Yung.Yuen.Ping.Kwok (i) 2,749 2,583 – – – .SABC.Holdings.Ltd. (ii) 7,918 7,439 – – – .Up.Fly.Limited (iii) 5,749 – – – 16,416 10,022 – – Loan.from.Maruhan (iv) 152,738 132,246 – – Notes: (i). Mrs.YungYuenPingKwokisashareholderofnon-controllinginterestsofan80% indirectlyownedsubsidiaryoftheCompany,namely.665127.British.Columbia.Ltd...The.loan.is.unsecured,.interest-free.and.not.expected.to.be.settled.within.one.year. (ii). SABC.Holdings.Ltd..is.a.shareholder.of.non-controlling.interests.of.an.80%.indirectly.owned.subsidiary.of.the.Company,.namely.665127.British.Columbia.Ltd...The.loan.is.unsecured,.interest-free.and.not.expected.to.be.settled.within.one.year. (iii). UpFlyLimitedisashareholderofnon-controllinginterestsof a70% indirectly owned subsidiary oftheCompany,namelyHonourRich China.Development.Limited..The.loan.is.unsecured,.interest-free.and.not.expected.to.be.settled.within.one.year. (iv). The.amount.represented.the.shareholder’s.loan.of.approximately.HK$66,468,000.due.by.World.Fortune.to.Golden.Sun.taken.up.by.Maruhan.upon.the.completion.of.the.World.Fortune.Disposal.on.29.October.2007.and.further.shareholder’s.loan.of.approximately.HK$86,270,000.(2009:.approximately.HK$65,778,000).advanced.by.Maruhan.to.World.Fortune.pursuant.to.the.World.Fortune.Shareholders’.Agreement..The.loans.are.unsecured,.interest-free.and.not.expected.to.be.settled.within.one.year. (v). As mentioned in note 5(b)(iv), pursuant to a deed of assignment dated 8 August 2008, Favor Jumbo assigned the loan of approximatelyHK$39,486,000duebyGoldenSuntoSBIMacau.Theloan is unsecured,interest-free and not expectedtobe settled within.one.year. (vi). The.other.loans.carry.a.floating.interest.rate.at.Hong.Kong.interbank.offered.rate.plus.a.margin.and.are.secured.by.51%.of.the.entire.issued.share.capital.from.time.to.time.of.Favor.Jumbo..The.loans.shall.be.repayable.on.or.before.36.months.after.22.October.2009..According.to.the.loan.agreement,.the.Group.shall.maintain.a.consolidated.tangible.net.worth.at.all.times.of.not.less.than.HK$400.million. The.carrying.amounts.of.the.loans.payables.are.approximately.to.their.fair.value. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 32..LONG-TERM.PAYABLES The.Group At.31.December.2009 HK$’000 The.carrying.amounts.of.the.long-term.payables.are.approximately.to.their.fair.value. 33..DUE.TO.A.RELATED.COMPANY The.Group The relatedcompanyis aninvestmentholdingcompanybeneficiallywholly-ownedbyMr.Yeung.Theloan is unsecured,.bearing.interest.at.the.rate.of.4%.per.annum.and.not.expected.to.be.settled.within.one.year. 34..INCOME.TAX.IN.THE.CONSOLIDATED.STATEMENT.OF.FINANCIAL.POSITION (a).Current.taxation.in.the.consolidated.statement.of.financial.position The.Group At.31.December.2009 HK$’000 Provision.for.Hong.Kong.profits.tax.for.the.year 1,275 Provision.for.overseas.profits.tax.for.the.year – Provisional.profits.tax.paid (1,246) Exchange.alignment 47 – 1,157 29 Balance.of.profits.tax.provision.relating.to.prior.years –.Hong.Kong (16) –.Overseas 20 33 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 34.. INCOME.TAX.IN.THE.CONSOLIDATED.STATEMENT.OF.FINANCIAL.POSITION.(CONTINUED) (b). Recognised.deferred.tax.(assets)/liabilities The.movements.of.deferred.tax.(assets)/liabilities.during.the.year.are.as.follows: Note The.Group.Accelerated.depreciation HK$’000 At.1.January.2009 (1,107) Debited.to.the.consolidated.income.statement 10(a) 484 Exchange.alignment (142) At.31.December.2009.and.1.January.2010 (765) Debited.to.the.consolidated.income.statement 10(a) 815 Exchange.alignment (21) At.31.December.2010 The.Group At.At.31.December.31.December.2010 2009 HK$’000 HK$’000 Net.deferred.tax.assets.recognised.on.the.consolidated. statement.of.financial.position – (848) Net.deferred.tax.liabilities.recognised.on.the.consolidated. (c).Unrecognised.deferred.tax.assets Deferredtax assets are recognisedfortaxloss carriedforwardtothe extentthatthe realisation ofthe relatedtax.benefit.through.utilisation.against.future.taxable.profits.is.probable..At.31.December.2010,.the.Group.had.tax.losses ofapproximatelyHK$103 million(2009: approximatelyHK$103 million)that are availableto carryforward indefinitely.for.offsetting.against.future.taxable.profits. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 35..FINANCIAL.GUARANTEE.CONTRACT The.Group.and.the.Company At.31.December.Note 2009 HK$’000 At31December2010,theCompanyhadan outstanding corporateguaranteeto abankin respect of syndicated loan facilities.of.HK$1,600.million.(2009:.HK$1,600.million).granted.to.an.associate.(note.42)..The.maximum.guarantee.amount.borne.by.the.Company.was.HK$860.million.(2009:.HK$860.million)..The.total.loan.outstanding.under.the.syndicated.loan.facilities.as.at.31.December.2010.was.HK$800.million.(2009:.HK$1,040.million). Based.on.the.valuation.performed.by.an.independent.professional.valuer,.the.Directors.considered.that.the.fair.value.of.the.financial.guarantee.contract.was.approximately.HK$63.million.at.the.date.of.issuance.of.the.financial.guarantee.contract. The.carrying.amount.of.the.financial.guarantee.contract.recognised.in.the.Group’s.and.the.Company’s.statements.of.financial.position.was.in.accordance.with.HKAS.39.and.HKFRS.4.(Amendments). The.financial.guarantee.contract.is.carried.at.amortised.cost. 36..BANK.LOANS The.Group At.31.December.2009 HK$’000 Bank.loans,.secured – NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 36..BANK.LOANS.(CONTINUED) At.At.31.December.31.December.2010 2009 HK$’000 HK$’000 Carrying.amount.repayable: Within.one.year 556 – More.than.one.year,.but.no.exceeding.two.years 587 – More.than.two.years,.but.not.more.than.five.years 1,976 – More.than.five.years – – Less:.Amounts.shown.under.current.liabilities – Amounts.shown.under.non-current.liabilities – 37..LOAN.FROM.A.DIRECTOR.AND.CONTROLLING.SHAREHOLDER The.Group.and.the.Company At.At.31.December.31.December. These representtheloanfromMr.Yeungunderthe revised loanfacilityasdisclosedin note2(b)(i).Theloanis unsecured and.bearing.interest.at.the.prime.rate.quoted.for.Hong.Kong.dollars.loans.by.The.Hongkong.and.Shanghai.Banking.Corporation.Limited..Mr..Yeung.undertook.not.to.demand.early.repayment.of.the.loan.and.all.other.sums.owing.to.Mr..Yeungunderthe revisedloanfacilitybefore30October2012.Inthe opinion oftheDirectors,theborrowing ofthe said loan.from.Mr..Yeung.was.for.the.benefit.of.the.Company.and.on.normal.commercial.terms.where.no.security.over.the.assets.of.the.Company.was.granted. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 38..SHARE.CAPITAL Number Nominal of.shares value ’000 HK$’000 Authorised: Ordinary.shares.of.HK$0.01.each At.1.January.2009,.31.December.2009,.1.January.2010.and.31.December.2010 160,000,000 1,600,000 Issued.and.fully.paid: Ordinary.shares.of.HK$0.01.each At.1.January.2009,.31.December.2009,.1.January.2010.and.31.December.2010 2,438,964 24,390 The owners ofordinaryshares are entitledto receivedividends asdeclaredfromtimetotime andare entitledto one vote per.share.at.general.meetings.of.the.Company..All.ordinary.shares.rank.equally.with.regard.to.the.Company’s.residual.assets. 39..EMPLOYEE.RETIREMENT.BENEFITS (a). Defined.contribution.retirement.plan The.Group.participates.in.a.Mandatory.Provident.Fund.Scheme.(the.“MPF.Scheme”).under.the.Hong.Kong.Mandatory.Provident.Fund.Schemes.Ordinance.for.employees.employed.under.the.jurisdiction.of.the.Hong.Kong Employment.Ordinance..The.MPF.Scheme.is.a.defined.contribution.retirement.plan.administered.by.independent.trustees..Under.the.MPF.Scheme,.the.employer.and.its.employees.are.each.required.to.make.contributionstotheplan at5% ofthe employees’ relevant income, subjectto a cap of monthly relevantincome of.HK$20,000..Contributions.to.the.plan.vest.immediately. (b). Share.option.scheme TheCompanyparticipatesinashareoptionscheme(the “OptionScheme”)forthepurposeofproviding.incentives andrewardsto eligibleparticipants who contributetothe success oftheGroup’s operations.Eligible participants oftheOptionSchemeincludethedirectors andother employees oftheGroup.TheOptionScheme became.effective.on.8.November.2004.and,.unless.otherwise.cancelled.or.amended,.will.remain.in.force.for.10yearsfromthedate ofadoption oftheOptionScheme, i.e.20August2004.UndertheOptionScheme,the Directors are authorised attheir absolutediscretion,toinvite anyemployee, executive or officer ofanymember of theGroupor anyentityin whichtheGroupholds anyequityinterest(including anyDirectors)and anyconsultant, agent,.adviser,.vendor,.supplier.or.customer.who.is.eligible.to.participate.in.the.Option.Scheme,.to.take.up.options.to.subscribe.for.shares.of.the.Company.(“Share(s)”). There is.no.provision.in.the.Option.Scheme.to.require.a.grantee.to.fulfill.any.performance.target.or.to.hold.the.option.for.a.certain.period.before.exercising.the.option,.but.the.Company.may.at.its.absolute.discretion.from.time.to.time.provide.such.requirements.in.the.offer.of.grant.of.options. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 39..EMPLOYEE.RETIREMENT.BENEFITS.(CONTINUED) (b).Share.option.scheme.(continued) The.maximum.number.of.Shares.which.may.be.issued.upon.exercise.of.all.options.to.be.granted.under.the.OptionScheme andany other share option schemes oftheCompany shall notin aggregate exceed10% ofthe total.number.of.Shares.in.issue.as.at.the.date.of.adoption.of.the.Option.Scheme. The.Company.may.seek.approval.of.the.shareholders.in.general.meeting.for.refreshing.the.10%.limit.under.the.Option.Scheme.save.that.the.total.number.of.Shares.which.may.be.issued.upon.exercise.of.all.options.to.be.granted.under.the.Option.Scheme.and.any.other.share.option.schemes.of.the.Company.under.the.limit.as.“refreshed” shall.not.exceed.10%.of.the.total.number.of.Shares.in.issue.as.at.the.date.of.approval.of.the.limit..Options.previously.granted.under.the.Option.Scheme.and.any.other.share.option.schemes.of.the.Company.(includingthose outstanding, cancelled,lapsedin accordance withthe other scheme(s)or exercised options) will not.be.counted.for.the.purpose.of.calculating.the.limit.as.“refreshed”. Notwithstanding.aforesaid.in.above,.the.maximum.number.of.Shares.which.may.be.issued.upon.exercise.of.all.outstanding.options.granted.and.yet.to.be.exercised.under.the.Option.Scheme.and.any.other.share.option.schemes.of.the.Company.must.not.exceed.30%.of.the.total.number.of.Shares.in.issue.from.time.to.time. The.total.number.of.Shares.issued.and.to.be.issued.upon.exercise.of.the.options.granted.to.each.participant.(including.both.exercised.and.outstanding.options).in.any.12-month.period.shall.not.exceed.1%.of.the.total.number.of.Shares.in.issue. The exercisepricein respectofanyparticular option shallbe suchprice asdeterminedbytheboard ofDirectors inits absolutediscretion atthetime ofthe making ofthe offerbutin any casethe exerciseprice shall notbeless than.the.highest.of.(i).the.official.closing.price.of.the.Shares.as.stated.in.the.daily.quotation.sheets.of.the.Stock.Exchange.on.the.date.of.offer,.which.must.be.a.business.day;.(ii).the.average.of.the.official.closing.price.of.the.Shares.as.stated.in.the.daily.quotation.sheets.of.the.Stock.Exchange.for.the.five.business.days.immediately.preceding.the.date.of.offer;.and.(iii).the.nominal.value.of.the.Share. The.offer.of.a.grant.of.share.options.must.be.accepted.not.later.than.28.days.after.the.date.of.offer,.upon.payment of.a.consideration.of.HK$1.by.the.grantee..The.exercise.period.of.the.share.options.granted.is.determined.by.the.board.of.Directors,.save.that.such.period.shall.not.be.more.than.a.period.of.10.years.from.the.date.upon.which.the.share.options.are.granted.or.deemed.to.be.granted.and.accepted. At.the.end.of.the.reporting.period,.no.share.options.had.been.granted.under.the.Option.Scheme.since.its.adoption.(2009:.Nil). NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 40.. RESERVES The.Group Attributable.to.the.owners.of.the.Company Capital Property Non- Share Distribution redemption revaluation Exchange Accumulated controlling Total premium reserve reserve reserve reserve losses Total interests equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 At.1.January.2009 908,785 52,333 976 86,248 (4,235) (183,659) 860,448 46,321 906,769 Total.comprehensive.income/(loss).for.the.year – – – (86,248) 2,866 (173,797) (257,179) (107) (257,286) At.31.December.2009 908,785 52,333 976 – (1,369) (357,456) 603,269 46,214 649,483 At.1.January.2010 908,785 52,333 976 – (1,369) (357,456) 603,269 46,214 649,483 Total.comprehensive.income/(loss) for.the.year – – – – 1,013 (80,782) (79,769) (553) (80,322) At.31.December.2010 908,785 52,333 976 – (356) (438,238) 523,500 45,661 569,161 Nature.and.purpose.of.reserves (a). Share.premium The application.of.the.share.premium.accounts.is.governed.by.section.40.of.the.Companies.Act.1981.of.Bermuda. (b). Exchange.reserve The.exchange.reserve.comprises.all.foreign.exchange.differences.arising.from.the.translation.of.the.financial.statements offoreign operations.The reserveisdealt within accordance withthe accountingpolicies setoutin note.2(r). (c). Property.revaluation.reserve The.amount.represents.the.Group’s.share.of.revaluation.surplus.of.a.casino.building.held.by.an.associate. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 40..RESERVES.(CONTINUED) The.Company SpremHK$ hare.ium ’000 Retained.profits HK$’000 Total HK$’000 At.1.January.2009 908,785 43,271 952,056 Total.comprehensive.loss.for.the.year – (23,626) (23,626) At.31.December.2009.and.1.January.2010 908,785 19,645 928,430 Total.comprehensive.loss.for.the.year – (15,414) (15,414) At.31.December.2010 908,785 4,231 913,016 Distribution.of.reserves At.31.December.2010,.the.aggregate.amount.of.reserves.available.for.distribution.to.owners.of.the.Company.was.approximately.HK$4,231,000.(2009:.approximately.HK$19,645,000). 41.. COMMITMENTS (a) Capitalcommitments outstandingat31December2010 notprovideforinthe consolidatedfinancialstatements were.as.follows: The.Group The.Company At.31.December.2010 Note HK$’000 31.December. At.2009 31.December.HK$’000 At.2010 HK$’000 At.31.December.2009 HK$’000 Contracted.but.not.provided.for NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 41.. COMMITMENTS.(CONTINUED) (b) At.31.December.2010,.the.total.future.minimum.lease.payments.under.non-cancellable.operating.leases.are.payable.as.follows: The.Group The.Company At. At.31.December. 31.December.2009 2009 HK$’000 HK$’000 TheGrouplease certain officepremises under operatingleases.Theleasestypically runforperiod rangingfrom two.to.five.years..None.of.leases.includes.contingent.rentals. 42.. CONTINGENT.LIABILITIES As.at.31.December.2010,.the.Company.gave.a.corporate.guarantee.for.syndicated.loan.facilities.of.HK$1,600.million.granted to an associate of theGroup(2009:HK$1,600 million).The maximumguarantee amountbornebythe CompanywasHK$860 million(2009:HK$860 million)(note35).Thetotalloan outstanding andbankguaranteefacility fromthe syndicatedloanfacilities atthe endofthe reportingperiodwasHK$800million andHK$240million respectively (2009:.HK$1,040.million.and.Nil.respectively). 43.. EVENTS.AFTER.THE.REPORTING.PERIOD The.Group.did.not.have.any.significant.event.after.the.reporting.period. NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 44..RELATED.PARTY.TRANSACTIONS (a) The.Group.had.the.following.transactions.with.the.related.parties.during.the.year: Note The.Group 2010 HK$’000 2009 HK$’000 Travel.services.fee.income.received.and.receivable.from –.an.associate –.key.management (i) (i) 290 95 – Cost.of.sales.related.to.travel.services.paid.and.payable.to.an.associate (i) 796 Management.fee.income.received.and.receivable.from.an.associate (ii) 6,795 Interest.expenses.paid.and.payable.to.a.related.company 33 816 739 Interest.expenses.paid.to.a.director.and.controlling.shareholder 37 3,412 1,043 Notes: (i). The.travel.services.fee.was.charged.according.to.prices.and.conditions.comparable.to.those.offered.to.other.customers. (ii). The managementfee was chargedon actualcostincurredbythe Groupfor provision ofmanagement andtechnical services. 44.. RELATED.PARTY.TRANSACTIONS.(CONTINUED) (b) The.outstanding.balances.with.related.parties.at.the.end.of.the.reporting.period.are.as.follows: The.Group At 31.December 2009 Note HK$’000 Amounts.due.from.associates 20(c) 1,044,036 Amount.due.from.a.jointly.controlled.entity 21 12,050 Due.to.a.related.company 33 20,994 Loan.from.a.director.and.controlling.shareholder 37 47,500 Included.in.trade.and.other.receivables –.Other.receivable.from.a.related.party (i) – –.Prepayment.for.consultancy.services (ii) – Notes: On20September2010,awholly-owned subsidiary of theCompany enteredintoacooperativeagreement(the “Cooperative.Agreement”).with.an.independent.third.party.(the.“JV.Partner”),.who.subsequently.became.a.related.party.of.the.Company.upon.formation.of.a.joint.venture.company.of.which.the.Company.and.the.JV.Partner.indirectly.held.70%.and.30%.interests.respectively.(the“JVCompany”),inordertostartdevelopinganewbusinesswhich intendstoprovideatechnologyservicesplatformandtechnical support.to.the.mobile.sports.lottery.market.in.China.(the.“New.Business”)..Pursuant.to.the.terms.of.the.Cooperative.Agreement,.the.Company.has.paid.the.following: (i). TheamountofreceivableisfromtheJVPartnerforhison-lendingtotheJVCompany.Theamount issecuredby30% equity interest.of.the.JV.Company,.interest-free.and.has.no.fixed.repayment.terms. (ii). The.amount.is.the.prepayment.for.consultancy.services.in.respect.of.the.New.Business.paid.to.the.JV.Partner..The.amount.is.secured.by.cash.which.is.equivalent.to.RMB5.million. (c). Key.management.personnel.compensation Save.as.disclosed.elsewhere.in.the.consolidated.financial.statements,.the.compensation.for.key.management.personnel.is.disclosed.as.follows: The.Group 2009 Note HK$’000 NotestotheConsolidatedFinancialStatements(continued) For.the.year.ended.31.December.2010 44.. RELATED.PARTY.TRANSACTIONS.(CONTINUED) (d) On.1.December.2008,.the.Company.has.entered.into.a.term.loan.facility.agreement.of.up.to.HK$200.million.withMr.Yeung,theloanis unsecured and charged withinterest attheprime ratequotedforHongKongdollars loans.by.The.Hongkong.and.Shanghai.Banking.Corporation.Limited..The.principal.amount.of.the.loan.facility.was.increased.up.to.HK$290.million.on.14.April.2009.and.the.final.repayment.date.of.the.loan.and.all.other.sums.owing.to.Mr..Yeung.under.the.revised.loan.facility.was.further.extended.to.30.October.2012.by.a.letter.agreement.dated.23.June.2010. 45.. CAPITAL.RISK.MANAGEMENT The.Group’s.primary.objectives.when.managing.capital.are.to.safeguard.the.Group’s.ability.to.continue.as.a.going.concern, sothatit can continuetoprovide returnsfor shareholders andbenefitsfor other stakeholders andto maintain an.optimal.capital.structure.to.reduce.the.cost.of.capital. The.Group.actively.and.regularly.reviews.and.manages.its.capital.structure.to.maintain.a.balance.between.the.higher.shareholders.returns.that.might.be.possible.with.higher.level.of.borrowings.and.the.advantages.and.security.afforded.bya sound capitalposition, and makes adjustmentstothe capital structureinlight of changesin economic conditions. The.Group.monitors.its.capital.structure.on.the.basis.of.debt-to-capital.ratio..For.this.purpose.the.Group.defines.debt.astotalborrowings which arebearing afixed or variableinterest rates such as amountdueto a related company(note 33), otherloans(note31(vi)),bankloans(note36)andloanfrom adirector and controlling shareholder(note37).Capital represents.total.equity.attributable.to.owners.of.the.Company.in.the.consolidated.statement.of.financial.position. Duringtheyear,theGroup’s strategy, whichwas unchangedfrom2009, wasto maintainthedebt-to-capital ratio aslow asfeasible.In orderto maintain or adjustthe ratio,theGroup may adjustthe amount ofdividendspaidto shareholders, return.capital.to.shareholders,.issue.new.shares.or.sell.assets.to.reduce.debt. As.at.31.December.2010,.the.debt-to-capital.ratio.is.71%.(2009:.32%). 46.. PLEDGE.OF.ASSETS As.at.31.December.2010,.the.Group.had.secured.the.following.assets: (a). The.Group.pledged.the.time.deposits.of.approximately.HK$8.1.million.(2009:.approximately.HK$8.3.million).to.certain.banks.for.the.issuance.of.several.bank.guarantees.and.standby.letter.of.credit.facility.of.approximately.HK$10.2.million.(2009:.approximately.HK$10.2.million).for.the.operations.of.the.Group; (b). World.Fortune.pledged.all.(2009:.100%).of.its.shares.in.Pier.16.–.Property.Development.to.a.bank,.for.and.on.behalf.of.the.syndicate.of.lenders,.in.respect.of.the.syndicated.loan.facilities.granted.to.Pier.16.–.Property.Development; (c). New Shepherd.Assets.Limited,.a.wholly-owned.subsidiary.of.the.Company,.pledged.51%.(2009:.51%).of.the.entire.issued.share.capital.from.time.to.time.of.Favor.Jumbo.to.a.financial.institution.which.is.a.third.party.independent.of.the.Company.in.respect.of.the.revolving.credit.facility.granted.to.the.Company;.and (d). The.Group’s.self-occupied.properties.with.carrying.amount.of.approximately.HK$21.6.million.(2009:.Nil).was.pledged.to.a.bank.to.secure.bank.loans.to.Jade.Travel.Ltd..(Canada). Five-yearFinancialSummary RESULTS Fifteen.months Year.ended Year.ended ended Year.ended.Year.ended.31.December 31.December 31.December 30.September 30.September 2010 2009 2008 2007 2006 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 ASSETS.AND.LIABILITIES At At At At At 31.December 31.December 31.December 30.September 30.September 2010 2009 2008 2007 2006 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Total.assets 1,475,374 1,345,509 1,418,947 1,197,379 978,395 Total.liabilities (881,823) (671,636) (487,788) (170,466) (11,475) Non-controlling.interests (45,661) (46,214) (46,321) (49,983) (40,304) Total.equity.attributable.to. owners.of.the.Company 547,890 627,659 884,838 976,930 926,616