Newsletter Belt and Road Brings Great Opportunities to Hong Kong Financial Sector Silk Road Economic Belt 21st Century Maritime Silk Road China China

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1 國富浩華 ( 香港 ) 會計師事務所有限公司 Crowe Horwath (HK) CPA Limited Member Crowe Horwath International Newsletter This issue of Newsletter published by Crowe Horwath (HK) CPA Limited provides an update on tax, financial reporting, other technical issues, as well as activities of our company and its affiliates and our community involvement. Please click to access the latest issues available in the Insights section of our website. You can also click all the back issues of our News Express and Newsletter for review. Content Belt and Road Brings Great Opportunities to Hong Kong 2-4 Financial Sector 8-9 A Joint Venture Company - BRI Asia formed for New Services 4 Business Update : Valuation Services 5 Consulting and Valuation Career Experience Programme 5 A Tour of University Recruitment Talks Crowe Horwath International GCA SIG Meeting Honorary Auditor of the Miss Exhibition Pageant and Booth Design 7 Competition of the 50th Hong Kong Brands & Products Expo CityU AC Internship Ceremony 7 ACCA Community Day s Rickshaw Race 7 BRI Asia ACCA 11 Disclaimer: The content in this publication is of general information only. It is not offered as advice and should not be taken as such. We expressly disclaim all liabilities to any person for any reliance placed on the contents of this publication. No client or other reader should act or refrain from acting on the basis of the contents of this publication without seeking specific professional advice. Crowe Horwath (HK) CPA Limited is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. Crowe Horwath (HK) CPA Limited and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath or any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath or any other Crowe Horwath member Crowe Horwath (HK) CPA Limited

2 Newsletter Belt and Road Brings Great Opportunities to Hong Kong Financial Sector Silk Road Economic Belt 21st Century Maritime Silk Road China China China Central Asia Central Asia Southeast Asia Russia Western Asia South Asia Europe Persian Gulf Indian Ocean Mediterranean China China South China Sea South China Sea Indian Ocean Europe South Pacific Ocean China s Belt and Road Initiative is a national development strategy initiated by Chinese President Xi Jinping in It is mainly composed of Silk Road Economic Belt and 21st Century Maritime Silk Road. The conceptual framework of the Belt and Road aims to establish five connective economic corridors spanning over Asia, Europe and Africa. The Silk Road Economic Belt focusses on: (1) linking China to Europe through Central Asia and Russia; (2) connecting China with the Middle East through Central Asia; and (3) bringing together China and Southeast Asia, South Asia and the Indian Ocean. The 21st Century Maritime Silk Road, meanwhile, focusses on using Chinese coastal ports to: (4) link China with Europe through the South China Sea and Indian Ocean; and (5) connect China with the South Pacific Ocean through the South China Sea. This ambitious initiative is aimed at promoting connection and economic co-operation with neighbouring countries via developing infrastructure and strengthening the multi-lateral trade ties among the Belt and Road countries. The Belt and Road Initiative sets five cooperation directions and priorities including policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bond. Growing demand for financing activates the financing marketew Financial integration is one of the key development goals set by the Belt and Road Initiative. The development of air, road and sea transport, electricity supply, communication, infrastructure projects, and strengthening of economic and trade cooperation, coupled with China s national strategies to go global, will inevitably lead to inbound and outbound investments as well as cross-border mergers and acquisitions, intensifying the enterprises demand for financing. This will help stimulate Hong Kong financial market and further strengthen Hong Kong as an international financial centre. According to the latest statistics announced by the Ministry of Commerce of the People s Republic of China, China s outward non-financial direct 2

3 Newsletter investment reached a record high of US$ billion in 2015, being a 14.7% rise year on year. China s outward direct investment (ODI) achieved its 13th consecutive year of growth with an average annual increase up to 33.6%. Statistics show that Chinese enterprises made direct investment in 49 Belt and Road-related countries in 2015 with a total investment amounted to US$14.82 billion, attaining an 18.2% growth yearon-year. China s ODI was mainly invested in / through Hong Kong, Cayman Islands, the United States, Singapore, British Virgin Islands, the Netherlands and Australia. The total accumulative figures indicate that 60% of China s ODI was directed to, or channeled through Hong Kong. The Belt and Road Initiative will create huge capital demand particularly the infrastructure projects. Being an international financial centre, Hong Kong has a robust banking system. The financing market system is mature, stable and cost-effective, having multiple channels of financial intermediation, a big capacity and circulation with a high degree of international marketization in both volume and flow. All these can help satisfy the financing needs of the Belt and Road Initiative. Hong Kong Exchange s statistics showed that a total of HK$261.3 billion was raised through IPOs in Hong Kong in 2015, making it rank first globally. Hong Kong has abundant experience in fund raising. Leveraging the advantages of its financial sector, Hong Kong can help the Belt and Road-related enterprises to raise capital through various channels such as IPO, refinancing after listing, private equity financing, issuing bonds and bank loans. needs to arrange loan syndication or bond issuance for financing projects. Hong Kong s capital market, assets management professional experts and a wide variety of financial products enable it to support the AIIB in project financing, bond issuance, investment, financial management and foreign exchange management. Hong Kong has expressed to the Central Government its intention to join the AIIB and is now proactive to have discussion about Hong Kong s joining as a non-sovereign territory with the Central Government and the bank. Strengthening Hong Kong as an offshore RMB services centrew Following the commencement of the Belt and Road scheme, cross-border trading and investment will inevitably grow. With the Belt and Road mainly doing transactions in Chinese currency, China needs a reliable international offshore RMB services centre which can link up all regions along the Belt and Road routes and various RMB platforms in the mainland to provide strong support for services related to, among others, offshore RMB settlement as well as RMB financing and assets management. Hong Kong has been the world s largest offshore RMB business centre, with its offshore RMB deposits and payment transactions accounting for about 60% and 70% of the global offshore total respectively. At the end of 2015, Hong Kong s total outstanding amount of RMB customer deposits and certificates of deposit was RMB1,010.4 billion. RMB is a major currency for the Belt and Road infrastructure financing which further enhances the use of Chinese yuan and enriches the variety of RMB products (e.g. bond issuance, insurance, loan, investment etc). Hong Kong financial institutes may leverage bank loans and bond issuance to provide RMB financing for the Belt and Road infrastructure, further promoting capital recycling and cross-border circulation of Chinese yuan in Hong Kong s offshore RMB market. Meanwhile, as an international offshore RMB services centre for the Belt and Road Initiative, Hong Kong may strengthen its RMB business with countries along the Belt and Road routes which will help enhance RMB business between Hong Kong banks and international financial institutes and enterprises, boosting the use ratio of RMB in the course of trade finance, project investment and crossborder loans. RMB internationalization can be progressively achieved under the premise of an orderly manner and risk controllable condition. The Belt and Road scheme will bring a large number of infrastructure projects and Asian Infrastructure Investment Bank (AIIB) is an integral part of the initiative. Aside from its initial capital, the AIIB also 3

4 Newsletter Greater demand for international asset management and risk management With the growth of cross-border trading and investment brought by the Belt and Road Initiative, demand for wealth and risk management in countries and regions along the Belt and Road routes will be escalated. As one of the top asset management hubs in Asia, Hong Kong is well-positioned to grasp the demand for such kind of service derived from the Belt and Road Initiative. In recent years, Hong Kong s wealth and asset management has been rapidly growing. According to the Fund Management Activities Survey released by the Securities and Futures Commission in July 2015, the combined fund management business (i.e. the overall value of assets reported in the sub-sectors of asset management, fund advisory, private banking and SFC-authorized REITs.) in Hong Kong sustained another year-on-year increase to reach a record high of $17,682 billion, up 10.5%, as of the end of Driven by the Belt and Road policy, Chinese enterprises will continue to expand their business operations overseas, and hence leading to a greater demand for commercial services to lower their financial costs and optimize the treasury-related risk management. Hong Kong is a hub for financial services, trading and logistics, together with its advantages of free flow of capital, a highly efficient capital market and well-established multinational banking network, first-rate financial infrastructure and treasury talents, sound legal system, and low and simple tax regime, enabling it to become an ideal place for establishment of treasury centres. Hong Kong can provide the following professional services for the Belt and Road Initiative Laws Intellectual property protection Arbitration Accounting Financing Insurance and reinsurance Risk investment Asset management Mergers and acquisitions Corporate governance e-commerce Shipping and logistics Global industry chain management Research and development Infrastructure and engineering management International conference Convention and exhibition A Joint Venture Company - BRI Asia formed for New Services Our Chairman and CEO Mr Charles Chan (left) shaking hands with Managing Partner of BRI Ferrier Mr Brian Silvia after signing the co-operation agreement. Our company, a full-service Hong Kongbased member firm of a global top 9 accounting network, and BRI Ferrier, a unique affiliation of expert business recovery, insolvency, forensic accounting and advisory firms on 2 March 2016 announced that both parties have entered into an agreement to form a joint venture company, BRI Asia, to deliver expert services and commercial guidance to meet any client challenge. Headquartered in Hong Kong, BRI Asia not only has in-house technical expertise, but also forms alliances with specialist service providers. BRI Asia will provide cross-border insolvency, forensics, litigation support, corporate finance, risk advisory, business improvement, merger and acquisition integration and interim management services. CEO of BRI Asia Mr Rupert Purser will manage operations and lead the JV company s business consulting practice. Our Chairman and CEO Mr Charles Chan said, We are excited to join the BRI Ferrier network in establishing BRI Asia. Through the joint venture and strategic alliances, we can integrate our complementary strengths to help address issues and challenges facing businesses throughout Asia. Contact : Ms Ivy Chua, Director ivy.chua@crowehorwath.hk Tel:

5 Newsletter Business Update : Valuation Services Consulting and Valuation Career Experience Programme Following the achievements made in the second half of 2015, Crowe Horwath (HK) Consulting and Valuation Limited ( Crowe Horwath HK ) continues to maintain its proven track record in providing quality and reliable valuation services in the first quarter of Crowe Horwath HK acted as an industry consultant for an IPO client named FCS Nelson Holdings Limited, a decoration and interior design services provider in Hong Kong which has submitted A1 form for their GEM listing. Our seasoned professional team has completed an industry overview research report containing a thorough market study on the decoration and interior design market in Hong Kong for the client. The industry overview report is an integral part of the prerequisite requirements for initial public offerings on GEM board. FCS Nelson Holdings Limited is a Hong Kong-based company which offers a spectrum of services for the interior design and construction of residential and commercial buildings. It provides a complete and comprehensive range of design and construction services with professionalism, craftsmanship and quality customer service. The founder of the company has more than 30 years of experience in decoration and interior design industry. The company is one of the top ten decoration and interior design companies in Hong Kong. Our Director Ms Stella Law (3rd right) and her professional team with the participating students. With the commitment to corporate social responsibility, Crowe Horwath (HK) Consulting & Valuation Limited ( Crowe Horwath HK ) supported the Business-School Partnership Programme (BSPP) Career Experience Programme organized by Education Bureau (EDB) in 2016, as its strong initiative to cultivate the next generation in the society. The programme offered work experience opportunities to five secondary students, enabling them to have an initial understanding of consulting and valuation through real practice. Our Director Ms Stella Law said, participating students were assigned to perform an array of duties to widen their exposure to the profession of valuation. Our professional surveyors and chartered financial analysts also gave them counsel. They introduced to the students numerous areas related to the profession including valuation, building up of financial modelling, real estate and business consultancy, and let them recognize the day-to-day work of different positions. They also shared their experience of selecting subjects with the students. Ms Law said that the career experience programme not only deepened the students understanding of the profession of valuation but also helped attract more talents to join the profession, further enhancing the professionalism and the standard of the industry. Ms Law was very impressed by the students who were enthusiastic and conscientious in the two-day internship. I can see the students treasure this opportunity for learning and their performance is surprisingly good. She continued that the company will sustainably support this kind of programme of EDB in future. Given that there are sufficient available resources, the company will consider expanding the programme by offering a five-day internship with more work experience opportunities to benefit more students from different walks of life. Students have rare opportunities to closely observe the operation of a company in such a real situation. The programme enables students of different backgrounds to be familiar with the business operation of the industry and this is really meaningful. 5

6 Newsletter A Tour of University Recruitment Talks 2016 Our Director Ms Pammy Fung (4 th left), Senior Manager of Technical & Training Department Mr Edmund Li (3 rd left) and Human Resources Manager Ms Peggy Yam (left) with Professor Phyllis Mo (4 th right) and other staff of CityU s Department of Accountancy. As in previous years, we continued to organize a series of campus recruitment talks in six local tertiary institutes including Hang Seng Management College, Baptist University, Shue Yan University, City University of Hong Kong, the School of Professional Education and Executive Development (SPEED) of The Hong Kong Polytechnic University (PolyU) and the Hong Kong Polytechnic University in February and March 2016, offering the opportunities for would-be graduate students to gain first-hand career information about our company. It was our first time to hold the career talks in campus of Hang Seng Management College and PolyU SPEED. This round of talks received an overwhelming response with a total of near 500 attending students from the six tertiary institutes. During the talks, our Director Ms Pammy Fung, Senior Manager of Technical & Training Department Mr Edmund Li and Human Resources Manager Ms Peggy Yam gave a detailed introduction of our company containing background information, job opportunities, career development path, performance assessment, training and development, etc. The presentation also helped the students to get an initial understanding of our company s scope of business including audit and tax, as well as other business consulting services such as internal control and risk management, IT audit, valuation and human resources advisory. In the Q & A session, students were keen on asking about the job nature of certain categories of our professional services and career prospects in our company. Crowe Horwath International GCA SIG Meeting 2016 Crowe Horwath International Global Corporate Advisors Special Interest Group (GCA SIG) Meeting was held in Hong Kong from 1 to 3 March Crowe Horwath (HK) CPA Limited was the hosting member firm of this annual event. The conference brought 45 delegates of our member firms from 21 countries to network, to grasp the market update on the industry and to explore development opportunities that can take us further together. The event opened by Corporate Finance Partner of Crowe Clark Whitehill LLP Mr Peter Varley who warmly greeted the delegates from all over the world. The welcoming message was followed by a series of speeches by GCA leaders of different regions. It started with a short presentation on Crowe Horwath (HK) CPA Limited by our Chairman and CEO Mr Charles Chan. He introduced our company s full range of services including audit, tax and a variety of business consulting services such as internal control and risk management, transaction and business advisory, valuation, IT audit and HR advisory with highlighting our recent track record of IPO audit. He also gave an explanation on how to use the GCA project platform. Other speech topics included the status report on Crowe Horwath GCA by Mr Peter Varley, Regional Insight by Mr Craig Ferguson and Mr Antipodean Capital, as well as Merger and Acquisition Integration by Mr Chris Nemeth. The first day of the conference also included breakout sessions and networking cocktail. The second day of the conference started with welcome remarks by Mr Peter Varley. The panel session was also moderated by Mr Peter Varley. There were presentations on Strategic Buyer Campaign delivered by Mr Marc Mr Charles Chan delivering a speech at GCA SIG meeting. Shaffer and Japanese capabilities given by Mr Shigeru Sugimoto. The breakout sessions covered Commitment to One Global Team, Extension of Strategic Buyer Campaign and Strengthening the M&A Advisory Team. On the final day, a briefing on GCA newsletter was given along with introduction of website and training of GCA. Before closing remarks by Mr Peter Varley, there were group discussion session and feedback to GCA leadership team. 6

7 Newsletter Honorary Auditor of the Miss Exhibition Pageant and Booth Design Competition of the 50th Hong Kong Brands & Products Expo We have long-established relationship with The Chinese Manufacturers Association of Hong Kong which again invited us as the honorary auditor of the 50th Hong Kong Brands & Products Expo. We have served the Association as the honorary auditor of the event for 10 consecutive years. By using our professional skills and knowledge, we observed the process of the Association in collecting ballot boxes and counting votes for the Miss Exhibition Pageant and Booth Design Competition held during Hong Kong Brands & Products Expo. The event ended with fruitful results. Our Chairman and CEO Mr Charles Chan, upon the Association s invitation, attended the Prize Presentation Ceremony of Miss Exhibition Pageant held on 4 January 2016 at Victoria Park. Mr Charles Chan (right) receiving a souvenir from the Association on behalf of our company. CityU AC Internship Ceremony Our Audit Director Mr Charbon Lo (centre), instructor of CityU s Department of Accountancy Ms Canna Yeung (2 nd right) and partners of other CPA firms. Our Audit Director Mr Charbon Lo attended the Thank You Reception cum Prize Presentation Ceremony hosted by the Department of Accountancy of the City University of Hong Kong for its departmental internship programme on 16 March To help foster the future generation of accounting professionals, we, like many other local companies, supported the programme by offering internship positions to the students of CityU in Our audit managers and senior staff gave the work placement students proper instructions and guidance which enable them to be familiar with the real situation of audit work through internship training. ACCA Community Day s Rickshaw Race As we care for the needy in our community, we took our corporate social responsibility and formed a rickshaw team to participate in the 19th ACCA Community Day s Rickshaw Race. This exciting charitable race hosted by ACCA (the Association of Chartered Certified Accountants) Hong Kong was held on 10 January 2016 at the Chater Road Sunday Pedestrian Precinct, Central. The theme for this year s event was Legend of Love which demonstrated that this traditional fundraising event of ACCA Hong Kong is an established legend of bringing love and care to those in need in our community. This year the spectacular charity event brought fierce competition for various prizes among 25 contending rickshaw teams from CPA firms, multi-national corporations, business organizations, tertiary institutions and other social groups. More importantly, the participating organizations spared no effort to support this charity initiative and help the needy. The event this year raised nearly HK$1.2 million and the donations would be allocated to three local charitable organizations. We formed a contending team to participate in the Rickshaw Race. 7

8 公司通訊 2016 年 4 月 一帶一路 為香港金融業界帶來龐大商機 絲綢之路經濟帶 中國中國中國 中亞 俄羅斯 歐洲 中亞 西亞 波斯灣 地中海 東南亞 南亞 印度洋 21 世紀海上絲綢之路 中國 南海 印度洋 中國 南海 南太平洋 歐洲 融資需求帶動下激活融資市場 % % % 60% ,613 8

9 公司通訊 2016 年 4 月 有助鞏固香港的全球離岸人民幣服務中心地位 ,104 增加國際資產及風險管理的服務需求 , % 宣佈成立合資公司 - BRI Asia 推出新服務 BRI Ferrier BRI Asia BRI Asia BRI Asia Rupert Purser BRI Ferrier Brian Silvia Craig James BRI Asia Rupert Purser BRI Ferrier BRI Asia :, : ivy.chua@crowehorwath.hk :

10 公司通訊 2016 年 4 月 業務動態 : 評估服務 FCS Nelson Holdings Limited FCS Nelson FCS Nelson 30 舉辦諮詢評估工作體驗坊 年大學巡迴招聘講座

11 公司通訊 2016 年 4 月 2016 年國富浩華國際環球企業諮詢專案小組會議 Crowe Clark Whitehill LLP Peter Varley Peter Varley Craig Ferguson Antipodean Capital Chris Nemeth Peter Varley Peter Varley Marc Shaffer Shigeru Sugimoto 擔任第 50 屆工展會工展小姐及攤位設計比賽義務核數師 香港城市大學會計系學生實習計劃頒獎禮 ACCA 公益關愛日 人力車比賽 ACCA ACCA

12 For more information, please contact: 如欲索取更多有關資料, 歡迎聯絡 : 國富浩華 ( 香港 ) 會計師事務所有限公司 Crowe Horwath (HK) CPA Limited Member Crowe Horwath International 9/F Leighton Centre, 77 Leighton Road, Causeway Bay, Hong Kong info@crowehorwath.hk Telephone : Facsimile : Service Hotline : About Crowe Horwath International 國富浩華國際簡介 公司通訊 2016 年 4 月 Crowe Horwath International is ranked among the top 10 global accounting networks with over 200 independent accounting and advisory services firms with 700 offices in 120 countries around the world. Crowe Horwath International's member firms are committed to impeccable quality service, highly integrated service delivery processes and a common set of core values that guide our decisions daily. Each firm is well-established as a leader in its national business community and is staffed by nationals, thereby providing a knowledge of local laws and customs which is important to clients undertaking new ventures or expanding into other countries. Crowe Horwath International member firms are known for their personal service to privately and publicly held businesses in all sectors and have built an international reputation in the areas of audit, tax and advisory services. More information can be obtained at: Our Contacts 我們的人員 Professional Services 專業服務 Contact Person 聯絡人 Telephone 電話 電郵 Audit & Assurance Ms Ivy Chua ivy.chua@crowehorwath.hk Audit & Technical Support Mr Raymond Tsui raymond.tsui@crowehorwath.hk Business & Accounting Services Ms Penny Chan penny.chan@crowehorwath.hk Business & Financial Instruments Valuation Ms Stella Law stella.law@crowehorwath.hk Business Operations Ms Pammy Fung pammy.fung@crowehorwath.hk China Tax, International Tax Mr Wilson Tam wilson.tam@crowehorwath.hk Company Secretarial Services - Listed Company Services - Ms Connie Cheung connie.cheung@chg.hk Company Secretarial Services Support Ms Wendy Tam wendy.tam@chg.hk Corporate Restructuring & Insolvency Ms Ivy Chua ivy.chua@crowehorwath.hk Data Security and IT Audit Ms Ester Ip ester.ip@crowehorwath.hk ESG (Environmental, Social & Governance) & Sustainability Consulting (ESG) / Ms Ester Ip ester.ip@crowehorwath.hk HK IPO Mr Charles Chan charles.chan@crowehorwath.hk Hong Kong Tax, International Tax Mr Albert Cheung albert.cheung@crowehorwath.hk Human Resources Advisory Dr Leslie Tong leslie.tong@crowehorwath.hk Internal Control, Corporate Governance & Risk Management Mr Eddy Yan eddy.yan@crowehorwath.hk International Liaison & SME Audit Mr Charbon Lo international.liaison@crowehorwath.hk Japan Desk Ms Hidy Chan hidy.chan@crowehorwath.hk Property Valuation & Consultancy Mr Leo Lo leo.lo@crowehorwath.hk Transaction Advisory Mr C S Lam cs.lam@crowehorwath.hk Trust and Estate Planning Mr C Yuen chung.yuen@crowehorwath.hk US Listing Audit Ms Sharon Sum sharon.sum@crowehorwath.hk 12