201112 FINANCIAL AID REFUND CHECK SCHEDULE

财务结账校验产品设计流程英文回答：The process of designing a financial closingverification product involves several steps to ensure accuracy and efficiency. Here is a breakdown of the process:1. Define the objectives: The first step is to clearly define the objectives of the financial closing verification product. This involves understanding the specific requirements and goals of the organization. For example,the product may need to verify the accuracy of financial statements, detect fraudulent activities, or ensure compliance with regulations.2. Gather requirements: Once the objectives are defined, the next step is to gather the requirements for the product. This includes identifying the data sources, the types of checks and validations needed, and any specific rules or criteria that need to be applied. For example, the productmay need to check for duplicate transactions, validate account balances, or verify the accuracy of tax calculations.3. Design the system: With the requirements in hand, the next step is to design the system architecture and user interface. This involves determining the technology stack, database structure, and the user interface design. For example, the system may be designed as a web-based application with a responsive user interface and a relational database.4. Develop the product: Once the system design is finalized, the development of the product can begin. This involves writing the code, integrating with external systems, and conducting thorough testing to ensure the product functions as intended. For example, the product may be developed using programming languages such as Python or Java, and it may need to integrate with accounting software or data warehouses.5. Test and validate: After the product is developed,it needs to be thoroughly tested and validated. This includes conducting unit tests, integration tests, and user acceptance tests to ensure all requirements are met and the product functions correctly. For example, the product maybe tested by creating test scenarios and comparing the expected results with the actual results.6. Deploy and monitor: Once the product is tested and validated, it can be deployed in the production environment. This involves setting up the necessary infrastructure, migrating data, and training users on how to use the product. Additionally, monitoring tools should be put in place to track the performance and usage of the product.For example, the product may be deployed on a cloud-based server and monitored using tools like Splunk or New Relic.7. Continuous improvement: The process of designing a financial closing verification product does not end with deployment. It is important to continuously monitor and improve the product based on user feedback and changing requirements. This involves collecting user feedback, analyzing metrics, and implementing updates andenhancements to the product. For example, based on user feedback, the product may be enhanced to include additional validation checks or improve the user interface.中文回答：财务结账校验产品设计流程涉及多个步骤，以确保准确性和效率。

1.¥189.12/¥200.01，euro1=$0.94552.卖英镑500000磅，买美元500000*1.1115=555750美元；0.9001-0.89973.（0.9086-0.9080/0.9080）*（360/180）=0.0013；0.00064.用美元表示的美元交易风险暴露=15亿美元-7.4亿美元-6亿美元=14.8660亿美元。

用英镑表示的美元交易风险暴露=（15亿美元-7.4亿美元-6亿美元）/1.5128=9.8268亿英镑。

5.流动/非流动折算法下英国贝尔分公司的会计风险为：流动资产100万英镑+流动负债100万英镑。

货币/非货币折算法下英国贝尔分公司的会计风险为：货币性资产100万英镑+货币性负债100万英镑。

时态法下英国贝尔分公司的会计风险因为流动资产中存货没有明示而不能确定。

现行汇率法下英国贝尔分公司的会计风险为流动资产100万英镑+流动负债100万英镑+固定资产200万英镑。

6.设x为10年后美元与欧元的即期汇率，即2.18*（x）-1.5=0，x=0.6880。

即10年后美元与欧元的即期汇率为$0.6880=euro1时，投资收益为零，欧元继续贬值则投资收益为负值。

1.国际企业的资金来源：（1）来自于公司内部：1）母公司或子公司本身的未分配利润和公司集团内部积存的折旧基金。

2）公司集团内部相互提供的资金。

主要有各子公司向母公司上缴的利润及划拨的资金，母公司向子公司输送的资金及子公司之间相互提供的资金。

（2）来自于母公司所在国的金融市场。

（3）来自于子公司所在国的金融市场。

（4）来自于国际金融市场：1）向第三国或国际金融机构借款。

2）向国际资本市场融资。

与国内公司相比，其优势在于：（1）资金来源更加广泛。

（2）融资方式更加多样化。

（3）国际融资风险较大。

2.企业国际股票融资的程序包括发行前的准备、起草招股说明书和进行核实、香港联交所或美国证券交易委员会（SEC）的审查和批准过程和股票发行四个步骤。

The University of Hong Kong2011 Financial ReportTreasurer’s Report1Governance of the University6Independent Auditor’s Report8Consolidated Statement of Comprehensive Income10Statement of Comprehensive Income11Consolidated Balance Sheet12Balance Sheet13Consolidated Statement of Cash Flows14Consolidated Statement of Changes in Fund Balances16Notes to the Consolidated Financial Statements17The University of Hong KongOVERVIEWThe financial year 2010-11 was the second year of the last Triennium of the three-year structure curriculum. The Group’s consolidated financial results recorded a surplus of $1,518 million which was largely attributed to the continued recovery of the investment asset value since the global financial crises that took off from September 2008 and partly to the receipt of the matching grant under the fifth Government Matching Grant Scheme introduced in June 2010, from which the University was able to reach the upper limit of $220 million set for each institution. While approaching to the year 2012 when the four-year curriculum structure takes place, the University requires substantial resources to prepare for the double cohort of students in all spheres including the preparation for the curriculum reform and the provision of additional space and infrastructure for teaching and learning. At the same time, the University is also investing in initiatives to further the University vision in alignment with its strategic direction. The University has thus been working on tight financial resources.In preparing the consolidated financial statements, the Group has adopted certain new/revised Hong Kong Accounting Standards (“HKAS”) and Hong Kong Financial Reporting Standards (“HKFRS”) (Collectively “HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants which are effective and relevant to the Group’s operation.RESULTS FOR THE YEARThe Group’s consolidated results for the year ended 30 June 2011are summarized as follows:20112010$ million$ millionIncome6,4246,110Expenditure(6,172)(5,984)Interest and Investment Gain1,255705Surplus for the year before Share of Surplus of Associates and Jointly Controlled Entities 1,507831Share of Surplus of Associates and Jointly Controlled Entities1111Surplus for the year1,518842The consolidated income for the year 2010-11 has increased by $314 million. This was mainly attributable to the increase in government subvention for the Fifth Matching Grant Scheme introduced in June 2010.2011 Financial ReportOn the consolidated expenditure, a total of $6,172 million was incurred for the year (2009-10: $5,984 million), of which $4,734 million (2009-10: $4,641 million) was spent on teaching/learning and research activities of the Group. If the total depreciation and amortization charges of $333 million (2009-10: $280 million) were excluded, the expenditure incurred for the year was approximately 2.5 per cent higher than that of the previous year.INVESTMENTSThe Group’s total investment funds, comprising the General Endowment Fund, General Funds and Specific Funds, amounted to $13,500 million on average in 2011 (2009-10: $12,800 million), an increase of $700 million from 2010. The increase in investment fund size was mainly due to increase in investment asset price and additional donations and grants received during the year.The Group continues to adopt a prudent, disciplined, diversified and long-term approach to its investments. The Group recorded an overall investment gain of $1,255 million for the year, as compared with $705 million in 2010.The investment portfolio securities, being valued at fair value on a consistent basis, generated an overall positive return of 10.4 per cent for the year (2009-10: 6.3 per cent).RESEARCH GRANTS In addition to funding the basic research infrastructure through the block grant, the UGC also provides earmarked grants through the Research Grants Council (“RGC”), partly by direct allocations to the eight institutions to be used as research grants to staff, and partly by awards for competitive bids by individual principal investigators or institutions. The amounts of research grants received and receivable by the University through direct allocations were $14 million (2009-10: $14 million). During the year, the University has been awarded grants totalling $224 million (2009-10: $216 million) through the RGC competitive bids exercise, $74 million of the grants, representing 50% of the General Research Grant would be released to the University in August of the following financial year pursuant to the latest disbursement arrangement of the RGC. The University also received a transfer of $8 million (2009-10: $11 million) from other tertiary institutions for joint research projects. On the related research expenditure side, a total of $215 million was incurred for the year (2009-10: $196 million).DONATIONSDuring the year under review, donations totalling $1,033 million (2009-10: $895 million) were received, of which $127 million (2009-10: $131 million) was for research, $241 million (2009-10: $207 million) for capital building and alterations, additions & improvements projects, $47 million (2009-10: $81 million) for scholarships, bursaries, prizes and loans, and $502 million (2009-10: $397 million) for various purposes, in addition to the $116 million (2009-10: $79 million) for endowments.For accounting purpose, donations and benefactions of $698 million (2009-10: $819 million) was recorded as income in the Consolidated Statement of Comprehensive Income while $116 million (2009-10: $79 million) was recorded as endowment under reserve movement. CAPITAL BUILDING AND ALTERATIONS, ADDITIONS & IMPROVEMENTS PROJECTSIn 2010-11, the University received funding of $966 million (2009-10: $574 million) comprising government subventions of $725 million (2009-10: $367 million) and donations of $241 million (2009-10: $207 million) for its capital programmes covering building projects and other alterations, additions and improvements works. This income was recorded as deferred income in the financial statements. In terms of expenditure, a total of $1,101 million was incurred for the year (2009-10: $536 million), of which $1,053 million (2009-10: $488 million) was spent on capital projects and capitalised as either as construction in progress or building upon completion, and another $48 million (2009-10: $48 million) was expensed in the Income and Expenditure account.The University, under the strategic steering of the Campus Development and Planning Committee, is continuing to plan for the physical development of the campus to meet the projected increase in demand for space as a result of the change to the curriculum structure and the resulting increase in student and staff numbers as well as for the continuing provision of facility and accommodation consistent with the strategic aim to develop the University to the highest level of academic excellence.Construction for the Centennial Campus has been progressing as scheduled. It includes the construction of three academic buildings atop a podium housing central classrooms and learning common facilities with an overall net operable floor area of approximately 42,000 square metres. The project is expected to achieve practical completion in March 2012 to be followed by internal fitting-out and furnishing. It is anticipated that the Centennial Campus will be ready for moving-in by the faculties in mid 2012, and be ready for the in-take of the double cohort of students in the academic year 2012-13. Construction works under the University Street project have been on-going with works being completed in phases. Phase I includes works within the site boundary of the Centennial Campus and is expected to be completed concurrently with the Centennial Campus by the middle of 2012. Phase 2 is being completed in stages with the new canteen at Haking Wong Building started its operation in December 2010 and major renovation works at Composite Building completed and handed over to the Student Union for occupation in July 2011. Other remaining works including phase 3 that extend the University Street to the Sun Yat-Sen Plaza are on-going. The entire project is expected to be substantially completed by 2012.The University of Hong Kong2011 Financial ReportThe Lung Wah Street Student Residence project in Kennedy Town will provide an additional 1,800 residential places for both undergraduate and postgraduate students. The construction of the foundation was completed in 2010 and the superstructure works also commenced in the 4th quarter of the same year. The project is planned to be completed in the latter half of 2012.The project for the construction of Hong Kong Jockey Club Building for Interdisciplinary Research was completed in June 2011 with user departments starting to move-in from the second half of the year. It will provide an additional floor space of about 8,000 square metres with advanced technologies and facilities to cultivate a multi-disciplinary environment for fundamental human research.HKU SCHOOL OF PROFESSIONAL AND CONTINUING EDUCATIONThe School’s enrolment levels consolidated in 2010/11 with 87,797 students enrolled on courses, representing a full-time student equivalent load of some 21,982. Total income for the year increased by 2.7 per cent when compared with the previous year while the expenses increased by 2.9 per cent. A net surplus of $55 million was recorded in the School’s consolidated statement of comprehensive income (2009/10: $54 million), after an annual contribution of $26 million was made to the University (2009/10: $26 million). With its commitments to provide the best in professional and continuing education services in Hong Kong and the region, the School will continue to invest surplus funds generated to develop new programmes and to improve learning and other facilities in the School.In addition to the School’s own Community College, the full-time sub-degree programme activities of the School include the HKU SPACE Po Leung Kuk Community College which is jointly controlled by the School and Po Leung Kuk. A range of new full-time programmes has been offered by the College at its campus in Leighton Road, Causeway Bay and this helped to ensure its continued success in student recruitment.While the current levels of demand appear unlikely to diminish, the continuing education/lifelong learning sector in Hong Kong remains highly competitive. The School is committed to responding to community demand in the dynamic environment of lifelong learning in fulfilment of the University’s mission statement.FINANCIAL OUTLOOKWith the end of the financial year 2010-11, the University has entered into the last year of the triennium before transiting to the four-year structure curriculum. As the year 2012 approaches, full heed has been given to prepare for the new curriculum structure and to receive the double cohorts of students. The year 2011 marks the Centenary of the University. The University is conscious of the competitive environment both locally and globally. With academic excellence underpinning the University’s strategic development, the University is prepared to invest in initiatives that steer the University to further institutional advancement. Given the marginal rate of Government funding for the extra year of the new curriculum, the uncertain future economic outlook arising from the Euro debt and confidence crises surrounding the financial markets and the persistence of the extremely low interest rate environment which impacts upon the University income sources particularly from investment and fund-raising activities, the University has to be more cautious and prudent in financial management to facilitate the long-term growth of the University during this difficult period.Paul M.Y. ChowTreasurerHong Kong, 25 October 2011The University of Hong Kong2011 Financial ReportThe following statement is given to assist readers of the Consolidated Financial Statements to understand the governance structure of the University.SUMMARY OF THE UNIVERSITY’S STRUCTURE OF GOVERNANCEThe University’s structure of governance comprises a Court, a Council and a Senate whose respective constitutions, powers and duties shall be prescribed by the University Ordinance and statutes.The Court is the University’s supreme advisory body and comprises representatives of the University and other stakeholders. The Court offers a means whereby the wider interests of the communities served by the University can be represented and it provides a public forum where members of the Court can raise matters about the University.The Council is the University’s supreme governing body and is responsible for the University’s finances and investments, the management of estate and buildings, staff appointments and terms and conditions of service, and drafting of Statutes.The Senate is the principal academic authority of the University. The Vice-Chancellor chairs the Senate which comprises mainly academic staff and students. Decisions of the Senate on academic matters which have financial or resource implications are subject to approval by the Council. Conversely, decisions by the Council which have academic implications are subject to consultation with the Senate, which is normally the initiating body in such matters.The University follows international best practice in regularly reviewing its governance (as well as management) structure. A Fit for Purposes governance structure was adopted from 2003 following a review pursuant to the recommendation of the University Grants Committee’s Higher Education Review (2002). The “Five Year Review of Fit for Purpose” was conducted and the report had been considered by the Council in 2009 which re-affirmed the Council as the de facto supreme governing body of the University and operates to the trustee model. A Guide and Code of Practice for Members of the Council has also been published to help enhance the transparency and accountability of the governing body and conform to the highest standard of corporate governance.The Council, the supreme governing body of the University, now comprises 16 lay members and 8 University members (both staff and students).The Council met 12 times during 2010-11 and has several Committees including a Finance Committee, an Audit Committee, a Human Resources Policy Committee, a Campus Development and Planning Committee and a Nomination Committee. These committees are formally constituted with terms of reference and they comprise mainly lay members of the Council, one of whom is the Chair.The F inance Committee met 3 times during 2010-11. The Committee advises the Council on all matters within the jurisdiction of the Council which have financial implications and performs the functions laid upon the Committee by the Statutes (Financial procedures), and by the Council’s Budgetary Control Regulations. The Finance Committee appoints an Investments Sub-Committee to oversee and advise on the University’s investment strategy and controls. The Investments Sub-Committee meets regularly and reports significant investment matters to the Finance Committee. The Audit Committee met 4 times during 2010-11. The Committee reviews the effectiveness of the University’s financial and other control systems, satisfies itself that satisfactory arrangements are in place to promote efficiency and effectiveness and advises the Council on risk management and the effectiveness of accounting procedures. It reviews the external auditor’s report and the scope and effectiveness of the internal auditor’s work and advises Council on the appointment of the external auditor. Whilst senior executives attend meetings of the Audit Committee as necessary, they are not members of the Committee and the Committee does meet with the internal and external auditors on their own for independent discussions.The Human Resources Policy Committee dealt with most policy-related matters in circulation and held 5 meetings during 2010-11. The Committee reviews matters on human resource policy such as staff recruitment, retention and development, performance management, workforce planning, succession planning, terms and conditions of service and remuneration strategies, and to advise the Council thereon. It reviews and determines the salaries and terms and conditions of service of officers whose salaries fall outside any pre-determined salary scale/range, and to consider and decide any severance payment for such staff.The Campus Development and Planning Committee met 4 times during 2010-11. The Committee advises the Council on matters relating to the physical development and planning of the University campuses and keep under review operational policies, standards and procedures in connection with University building works and facilities management.The Nominations Committee considers nominations for lay vacancies in the Council membership under the relevant ordinance. In addition, the Senate is the principal academic authority of the University and comprises 51 members who are mainly academic staff while there are also student representatives. Under the Statutes, the Senate is responsible for regulating and directing the academic work of the University in teaching, examining and research, for the award of all Degrees, Diplomas, Certificates and other academic distinction of the University and for the discipline of the students of the University and for the enforcement of such discipline.The University of Hong Kong2011 Financial ReportWe have audited the consolidated financial statements of The University of Hong Kong (the “University”) and its subsidiaries (together, the “Group”) set out on pages 10 to 95, which comprise the consolidated and University balance sheets as at 30 June 2011, and the consolidated and University statement of comprehensive income, the consolidated statement of changes in fund balances and the consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.R E S P O N S I B I L I T Y O F T H E C O U N C I L O F T H E UNIVERSITY FOR THE CONSOLIDATED FINANCIAL STATEMENTSThe Council of the University is 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 for such internal control as the Council of the University determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our opinion solely to you, as a body, in accordance with the Statutes of the University and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements arefree from material misstatement.The University of Hong KongAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s 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 auditor considers internal control relevant to the entity’s preparation of consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Council of the University, 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.OPINIONIn our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the University and of the Group as at 30 June 2011, and of the results of the University and the Group and the cash flows of the Group for the year then ended in accordance with Hong Kong Financial Reporting Standards.PricewaterhouseCoopers Certified Public Accountants Hong Kong, 25 October 20112011 Financial Report(Expressed in thousands of Hong Kong dollars)(Note20112010IncomeGovernment Subventions23,091,3682,794,812Tuition, Programmes and Other Fees 31,930,6961,839,605Donations and Benefactions 4698,577818,782Auxiliary Services 5224,155203,304Other Income6479,371454,115 6,424,1676,110,618Expenditure 7Learning and Research Instruction and Research 4,205,5324,080,340Library 194,150196,525Central Computing Facilities 125,538156,390Other Academic Services 208,536207,791Institutional Support Management and General 400,395368,177Premises and Related Expenses 707,066679,054Student and General Education Services 222,216202,622Other Activities108,94193,332 6,172,3745,984,231Interest and Investment Gain 81,255,602704,845Surplus from Operations 1,507,395831,232Share of Losses of Associates 13(9)(10)Share of Surplus of Jointly Controlled Entities1410,98211,380Surplus for the Year1,518,368842,602Other Comprehensive LossRelease of Deferred Capital Funds 25(47,449)(23,786)Exchange Differences2,295– (45,154)(23,786)Total Comprehensive Income for the Year1,473,214818,816The University of Hong Kong(Expressed in thousands of Hong Kong dollars)Note20112010IncomeGovernment Subventions23,089,6932,793,696Tuition, Programmes and Other Fees 31,102,5501,033,821Donations and Benefactions 4694,611794,149Auxiliary Services 5218,516198,318Other Income6465,265457,661 5,570,6355,277,645Expenditure 7Learning and Research Instruction and Research 3,873,5833,756,084Library 195,731198,632Central Computing Facilities 103,183135,887Other Academic Services 63,42561,591Institutional Support Management and General 232,838215,304Premises and Related Expenses 585,260549,481Student and General Education Services 217,672202,596Other Activities81,81271,859 5,353,5045,191,434Interest and Investment Gain 81,250,060700,990Surplus for the Year1,467,191787,201Other Comprehensive LossRelease of Deferred Capital Funds 25(47,449)(23,786) Total Comprehensive Income for the Year1,419,742763,4152011 Financial Report(Expressed in thousands of Hong Kong dollars)Note20112010ASSETSNon-Current AssetsProperty, Plant and Equipment 116,312,9715,414,233Intangible Assets1230,962–Interest in Associates13664673Interest in Jointly Controlled Entities 14(i)56,55044,414Available-for-Sale Financial Assets 151,4311,431Held-to-Maturity Investments16904,9311,199,945Financial Assets at Fair Value through Profit or Loss 178,704,1876,738,102Loans Receivable1810,37117,169 16,022,06713,415,967 Current AssetsHeld-to-Maturity Investments16427,869255,996Financial Assets at Fair Value through Profit or Loss 175,738631Loans Receivable 18185,772188,202Inventories5,7914,833Accounts Receivable and Prepayments 19584,116337,291Amount due from Jointly Controlled Entities14(i)11,23019,258Bank Deposits with Original Maturity over Three Months 1,156,6503,037,145Cash and Cash Equivalents 202,853,6751,248,458 5,230,8415,091,814 TOTAL ASSETS21,252,90818,507,781FUNDSDeferred Capital Funds 252,132,9211,223,118Restricted Funds 96,274,0505,990,153Other Funds 109,516,4968,248,163 TOTAL FUNDS17,923,46715,461,434 LIABILITIESNon-Current LiabilitiesAccounts Payable and Accruals 2399,903–Employee Benefit Accruals 21138,292205,113Loans and Borrowings 22244,087264,787 482,282469,900 Current LiabilitiesAccounts Payable and Accruals231,549,4681,362,844Amount due to a Jointly Controlled Entity 14(i)431424Employee Benefit Accruals 21519,846439,247Loans and Borrowings 22129,841131,857Deferred Income 24647,573642,075 2,847,1592,576,447 TOTAL LIABILITIES3,329,4413,046,347 TOTAL FUNDS AND LIABILITIES 21,252,90818,507,781 NET CURRENT ASSETS2,383,6822,515,367 TOTAL ASSETS LESS CURRENT LIABILITIES18,405,74915,931,334L.C. TSUI PAUL M.Y. CHOWP.B.L. LAMVice-ChancellorTreasurer Director of FinanceHong Kong, 25 October 2011The University of Hong Kong(Expressed in thousands of Hong Kong dollars)Note20112010ASSETSNon-Current AssetsProperty, Plant and Equipment 115,547,0434,660,261Intangible Assets1223,824–Available-for-Sale Financial Assets 15234234Held-to-Maturity Investments16904,9311,199,945Financial Assets at Fair Value through Profit or Loss 178,704,1876,738,102Loan to a Jointly Controlled Entity 2,2013,200Loans Receivable18256,444283,017 15,438,86412,884,759Current AssetsHeld-to-Maturity Investments 16427,869235,996Loans Receivable 18207,681210,111Inventories 4,8934,123Accounts Receivable and Prepayments 19569,902304,390Bank Deposits with Original Maturity over Three Months 826,3672,583,364Cash and Cash Equivalents202,617,5641,199,878 4,654,2764,537,862 TOTAL ASSETS 20,093,14017,422,621FUNDSDeferred Capital Funds 252,132,9211,223,118Restricted Funds 96,274,8705,990,973Other Funds 108,645,3657,430,504 TOTAL FUNDS17,053,15614,644,595LIABILITIESNon-Current LiabilitiesAccounts Payable and Accruals 2399,903–Employee Benefit Accruals 21138,292205,113Loans and Borrowings22244,087264,787 482,282469,900Current LiabilitiesAccounts Payable and Accruals231,308,5771,140,068Amount due to a Jointly Controlled Entity 431424Employee Benefit Accruals 21472,162394,416Loans and Borrowings 22129,841131,857Deferred Income24646,691641,361 2,557,7022,308,126 TOTAL LIABILITIES3,039,9842,778,026 TOTAL FUNDS AND LIABILITIES 20,093,14017,422,621 NET CURRENT ASSETS2,096,5742,229,736 TOTAL ASSETS LESS CURRENT LIABILITIES17,535,43815,114,495L.C. TSUIPAUL M.Y. CHOWP.B.L. LAMVice-ChancellorTreasurer Director of FinanceHong Kong, 25 October 20112011 Financial Report(Expressed in thousands of Hong Kong dollars)20112010Cash Flows from Operating Activities Surplus for the Year 1,518,368842,602Adjustments for:Depreciation of Property, Plant and Equipment 325,566280,474(Gain)/Loss on Disposal of Property,Plant and Equipment(44)111Amortisation of Intangible Assets7,740–Gain on Disposal of a Subsidiary and an Associate–(1,822)Share of Losses of Associates910Share of Surplus of Jointly Controlled Entities(10,982)(11,380)Amortised cost on loans from HKSAR Government 241–Interest Expenses 3,7093,965Donation in-kind(306,457)(700)Interest and Investment Gain (1,255,602)(704,845)Operating Surplus before Working Capital Changes282,548408,415Decrease in Amount Due from Jointly Controlled Entities8,02810,138Increase in Amount Due to a Jointly Controlled Entity7424Decrease in Staff Loans Receivable10,4841,882Decrease/(Increase) in Student Loans Receivable 431(20)Increase in Other Loans Receivable (1,687)(563)Increase in Inventories(958)(998)Increase in Accounts Receivable and Prepayments (244,880)(111,283)Increase/(Decrease) in Accounts Payable and Accruals173,682(2,243)Increase in Employee Benefit Accruals 13,7787,708Increase in Deferred Income 5,49866,976Cash Generated from Operations 246,931380,436Loan Interest Income Received2,9733,440 Net Cash Generated from Operating Activities 249,904383,876Cash Flows from Investing ActivitiesPurchase of Property, Plant and Equipment (1,113,340)(664,337)Proceeds from Sale of Property,Plant and Equipment1,551976Acquisition of Intangible Assets(38,702)–Decrease in Loan to a Jointly Controlled Entity999–Payment for Purchase of Investments (3,370,519)(2,436,244)Proceeds from Disposals of Investments 2,831,2792,871,210Decrease/(Increase) in Bank Deposits 1,880,495(1,844,008)Interest and Investment Income Received 249,367186,372Net Cash Generated from/(Used in)Investing Activities441,130(1,886,031)。

IFRS12 International Financial Reporting Standard12Disclosure of Interests in Other EntitiesIn May2011the International Accounting Standards Board(IASB)issued IFRS12Disclosure of Interests in Other Entities.IFRS12replaced the disclosure requirements in IAS27Consolidated and Separate Financial Statements,IAS28Investments in Associates and IAS31Interests in Joint Ventures.In June2012,IFRS12was amended by Consolidated Financial Statements,Joint Arrangements and Disclosure of Interests in Other Entities:Transition Guidance(Amendments to IFRS10,IFRS11and IFRS12).These amendments provided additional transition relief in IFRS12,limiting the requirement to present adjusted comparative information to only the annual period immediately preceding the first annual period for which IFRS12is applied.Furthermore, for disclosures related to unconsolidated structured entities,the amendments removed the requirement to present comparative information for periods before IFRS12is first applied.Other IFRSs have made minor consequential amendments to IFRS12,including Investment Entities(Amendments to IFRS10,IFRS12and IAS27)(issued October2012).஽IFRS Foundation A505IFRS12C ONTENTSfrom paragraph INTRODUCTION IN1 INTERNATIONAL FINANCIAL REPORTING STANDARD12 DISCLOSURE OF INTERESTS IN OTHER ENTITIESOBJECTIVE1 Meeting the objective2 SCOPE5 SIGNIFICANT JUDGEMENTS AND ASSUMPTIONS7 Investment entity status9A INTERESTS IN SUBSIDIARIES10 The interest that non-controlling interests have in the group’s activities andcash flows12 The nature and extent of significant restrictions13 Nature of the risks associated with an entity’s interests in consolidatedstructured entities14 Consequences of changes in a parent’s ownership interest in a subsidiarythat do not result in a loss of control18 Consequences of losing control of a subsidiary during the reporting period19 INTERESTS IN UNCONSOLIDATED SUBSIDIARIES(INVESTMENT ENTITIES)19A INTERESTS IN JOINT ARRANGEMENTS AND ASSOCIATES20 Nature,extent and financial effects of an entity’s interests in jointarrangements and associates21 Risks associated with an entity’s interests in joint ventures and associates23 INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES24 Nature of interests26 Nature of risks29 APPENDICESA Defined termsB Application guidanceC Effective date and transitionD Amendments to other IFRSsFOR THE ACCOMPANYING DOCUMENTS LISTED BELOW,SEE PART B OF THIS EDITIONAPPROVAL BY THE BOARD OF IFRS12ISSUED IN MAY2011APPROVAL BY THE BOARD OF CONSOLIDATED FINANCIAL STATEMENTS,JOINT ARRANGEMENTS AND DISCLOSURE OF INTERESTS IN OTHERENTITIES:TRANSITION GUIDANCE(AMENDMENTS TO IFRS10,IFRS11ANDIFRS12)ISSUED IN JUNE2012APPROVAL BY THE BOARD OF INVESTMENT ENTITIES(AMENDMENTS TOIFRS10,IFRS12AND IAS27)ISSUED IN OCTOBER2012A506஽IFRS FoundationIFRS12 BASIS FOR CONCLUSIONS஽IFRS Foundation A507IFRS12International Financial Reporting Standard12Disclosure of Interests in Other Entities (IFRS12)is set out in paragraphs1–31and Appendices A–D.All the paragraphs have equal authority.Paragraphs in bold type state the main principles.Terms defined in Appendix A are in italics the first time they appear in the IFRS.Definitions of other terms are given in the Glossary for International Financial Reporting Standards.IFRS12 should be read in the context of its objective and the Basis for Conclusions,the Preface to International Financial Reporting Standards and the Conceptual Framework for Financial Reporting.IAS8Accounting Policies,Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.A508஽IFRS FoundationIFRS12 IntroductionIN1IFRS12Disclosure of Interests in Other Entities applies to entities that have an interest in a subsidiary,a joint arrangement,an associate or an unconsolidatedstructured entity.IN2The IFRS is effective for annual periods beginning on or after1January2013.Earlier application is permitted.Reasons for issuing the IFRSIN3Users of financial statements have consistently requested improvements to the disclosure of a reporting entity’s interests in other entities to help identify theprofit or loss and cash flows available to the reporting entity and determine thevalue of a current or future investment in the reporting entity.IN4They highlighted the need for better information about the subsidiaries that are consolidated,as well as an entity’s interests in joint arrangements and associatesthat are not consolidated but with which the entity has a special relationship.IN5The global financial crisis that started in2007also highlighted a lack of transparency about the risks to which a reporting entity was exposed from itsinvolvement with structured entities,including those that it had sponsored.IN6In response to input received from users and others,including the G20leaders and the Financial Stability Board,the Board decided to address in IFRS12theneed for improved disclosure of a reporting entity’s interests in other entitieswhen the reporting entity has a special relationship with those other entities.IN7The Board identified an opportunity to integrate and make consistent the disclosure requirements for subsidiaries,joint arrangements,associates andunconsolidated structured entities and present those requirements in a singleIFRS.The Board observed that the disclosure requirements of IAS27Consolidatedand Separate Financial Statements,IAS28Investments in Associates and IAS31Interestsin Joint Ventures overlapped in many areas.In addition,many commented thatthe disclosure requirements for interests in unconsolidated structured entitiesshould not be located in a consolidation standard.Therefore,the Boardconcluded that a combined disclosure standard for interests in other entitieswould make it easier to understand and apply the disclosure requirements forsubsidiaries,joint ventures,associates and unconsolidated structured entities. Main features of the IFRSIN8The IFRS requires an entity to disclose information that enables users of financial statements to evaluate:(a)the nature of,and risks associated with,its interests in other entities;and(b)the effects of those interests on its financial position,financialperformance and cash flows.஽IFRS Foundation A509IFRS12General requirementsIN9The IFRS establishes disclosure objectives according to which an entity discloses information that enables users of its financial statements(a)to understand:(i)the significant judgements and assumptions(and changes tothose judgements and assumptions)made in determining thenature of its interest in another entity or arrangement(iecontrol,joint control or significant influence),and indetermining the type of joint arrangement in which it has aninterest;and(ii)the interest that non-controlling interests have in the group’sactivities and cash flows;and(b)to evaluate:(i)the nature and extent of significant restrictions on its ability toaccess or use assets,and settle liabilities,of the group;(ii)the nature of,and changes in,the risks associated with itsinterests in consolidated structured entities;(iii)the nature and extent of its interests in unconsolidatedstructured entities,and the nature of,and changes in,the risksassociated with those interests;(iv)the nature,extent and financial effects of its interests in jointarrangements and associates,and the nature of the risksassociated with those interests;(v)the consequences of changes in a parent’s ownership interest in asubsidiary that do not result in a loss of control;and(vi)the consequences of losing control of a subsidiary during thereporting period.IN10The IFRS specifies minimum disclosures that an entity must provide.If the minimum disclosures required by the IFRS are not sufficient to meet thedisclosure objective,an entity discloses whatever additional information isnecessary to meet that objective.IN11The IFRS requires an entity to consider the level of detail necessary to satisfy the disclosure objective and how much emphasis to place on each of therequirements in the IFRS.An entity shall aggregate or disaggregate disclosuresso that useful information is not obscured by either the inclusion of a largeamount of insignificant detail or the aggregation of items that have differentcharacteristics.IN12Investment Entities(Amendments to IFRS10,IFRS12and IAS27),issued in October 2012,introduced an exception to the principle in IFRS10Consolidated FinancialStatements that all subsidiaries shall be consolidated.The amendments define aninvestment entity and require a parent that is an investment entity to measureits investment in particular subsidiaries at fair value through profit or loss inaccordance with IFRS9Financial Instruments(or IAS39Financial Instruments: A510஽IFRS FoundationIFRS12Recognition and Measurement,if IFRS9has not yet been adopted)instead of consolidating those subsidiaries in its consolidated and separate financial statements.Consequently,the amendments also introduced new disclosure requirements for investment entities in this IFRS and IAS27Separate Financial Statements.஽IFRS Foundation A511IFRS12International Financial Reporting Standard12Disclosure of Interests in Other EntitiesObjective1The objective of this IFRS is to require an entity to disclose information that enables users of its financial statements to evaluate:(a)the nature of,and risks associated with,its interests in otherentities;and(b)the effects of those interests on its financial position,financialperformance and cash flows.Meeting the objective2To meet the objective in paragraph1,an entity shall disclose:(a)the significant judgements and assumptions it has made in determining:(i)the nature of its interest in another entity or arrangement;(ii)the type of joint arrangement in which it has an interest(paragraphs7–9);(iii)that it meets the definition of an investment entity,if applicable(paragraph9A);and(b)information about its interests in:(i)subsidiaries(paragraphs10–19);(ii)joint arrangements and associates(paragraphs20–23);and(iii)structured entities that are not controlled by the entity(unconsolidated structured entities)(paragraphs24–31).3If the disclosures required by this IFRS,together with disclosures required by other IFRSs,do not meet the objective in paragraph1,an entity shall disclosewhatever additional information is necessary to meet that objective.4An entity shall consider the level of detail necessary to satisfy the disclosure objective and how much emphasis to place on each of the requirements in thisIFRS.It shall aggregate or disaggregate disclosures so that useful information isnot obscured by either the inclusion of a large amount of insignificant detail orthe aggregation of items that have different characteristics(see paragraphsB2–B6).Scope5This IFRS shall be applied by an entity that has an interest in any of the following:(a)subsidiaries(b)joint arrangements(ie joint operations or joint ventures)A512஽IFRS FoundationIFRS12(c)associates(d)unconsolidated structured entities.6This IFRS does not apply to:(a)post-employment benefit plans or other long-term employee benefitplans to which IAS19Employee Benefits applies.(b)an entity’s separate financial statements to which IAS27SeparateFinancial Statements applies.However,if an entity has interests inunconsolidated structured entities and prepares separate financialstatements as its only financial statements,it shall apply therequirements in paragraphs24–31when preparing those separatefinancial statements.(c)an interest held by an entity that participates in,but does not have jointcontrol of,a joint arrangement unless that interest results in significantinfluence over the arrangement or is an interest in a structured entity.(d)an interest in another entity that is accounted for in accordance withIFRS9Financial Instruments.However,an entity shall apply this IFRS:(i)when that interest is an interest in an associate or a joint venturethat,in accordance with IAS28Investments in Associates and JointVentures,is measured at fair value through profit or loss;or(ii)when that interest is an interest in an unconsolidated structuredentity.Significant judgements and assumptions7An entity shall disclose information about significant judgements and assumptions it has made(and changes to those judgements andassumptions)in determining:(a)that it has control of another entity,ie an investee as described inparagraphs5and6of IFRS10Consolidated Financial Statements;(b)that it has joint control of an arrangement or significant influenceover another entity;and(c)the type of joint arrangement(ie joint operation or joint venture)when the arrangement has been structured through a separate vehicle.8The significant judgements and assumptions disclosed in accordance with paragraph7include those made by the entity when changes in facts andcircumstances are such that the conclusion about whether it has control,jointcontrol or significant influence changes during the reporting period.9To comply with paragraph7,an entity shall disclose,for example,significant judgements and assumptions made in determining that:(a)it does not control another entity even though it holds more than half ofthe voting rights of the other entity.(b)it controls another entity even though it holds less than half of thevoting rights of the other entity.஽IFRS Foundation A513IFRS12(c)it is an agent or a principal(see paragraphs B58–B72of IFRS10).(d)it does not have significant influence even though it holds20per cent ormore of the voting rights of another entity.(e)it has significant influence even though it holds less than20per cent ofthe voting rights of another entity.Investment entity status9A When a parent determines that it is an investment entity in accordance with paragraph27of IFRS10,the investment entity shall discloseinformation about significant judgements and assumptions it has made indetermining that it is an investment entity.If the investment entity does nothave one or more of the typical characteristics of an investment entity(seeparagraph28of IFRS10),it shall disclose its reasons for concluding that it isnevertheless an investment entity.9B When an entity becomes,or ceases to be,an investment entity,it shall disclose the change of investment entity status and the reasons for the change.Inaddition,an entity that becomes an investment entity shall disclose the effect ofthe change of status on the financial statements for the period presented,including:(a)the total fair value,as of the date of change of status,of the subsidiariesthat cease to be consolidated;(b)the total gain or loss,if any,calculated in accordance withparagraph B101of IFRS10;and(c)the line item(s)in profit or loss in which the gain or loss is recognised(ifnot presented separately).Interests in subsidiaries10An entity shall disclose information that enables users of its consolidated financial statements(a)to understand:(i)the composition of the group;and(ii)the interest that non-controlling interests have in thegroup’s activities and cash flows(paragraph12);and(b)to evaluate:(i)the nature and extent of significant restrictions on itsability to access or use assets,and settle liabilities,of thegroup(paragraph13);(ii)the nature of,and changes in,the risks associated with itsinterests in consolidated structured entities(paragraphs14–17);(iii)the consequences of changes in its ownership interest in asubsidiary that do not result in a loss of control(paragraph18);andA514஽IFRS FoundationIFRS12(iv)the consequences of losing control of a subsidiary duringthe reporting period(paragraph19).11When the financial statements of a subsidiary used in the preparation of consolidated financial statements are as of a date or for a period that is differentfrom that of the consolidated financial statements(see paragraphs B92and B93of IFRS10),an entity shall disclose:(a)the date of the end of the reporting period of the financial statements ofthat subsidiary;and(b)the reason for using a different date or period.The interest that non-controlling interests have in thegroup’s activities and cash flows12An entity shall disclose for each of its subsidiaries that have non-controlling interests that are material to the reporting entity:(a)the name of the subsidiary.(b)the principal place of business(and country of incorporation if differentfrom the principal place of business)of the subsidiary.(c)the proportion of ownership interests held by non-controlling interests.(d)the proportion of voting rights held by non-controlling interests,ifdifferent from the proportion of ownership interests held.(e)the profit or loss allocated to non-controlling interests of the subsidiaryduring the reporting period.(f)accumulated non-controlling interests of the subsidiary at the end of thereporting period.(g)summarised financial information about the subsidiary(seeparagraph B10).The nature and extent of significant restrictions13An entity shall disclose:(a)significant restrictions(eg statutory,contractual and regulatoryrestrictions)on its ability to access or use the assets and settle theliabilities of the group,such as:(i)those that restrict the ability of a parent or its subsidiaries totransfer cash or other assets to(or from)other entities within thegroup.(ii)guarantees or other requirements that may restrict dividendsand other capital distributions being paid,or loans and advancesbeing made or repaid,to(or from)other entities within thegroup.(b)the nature and extent to which protective rights of non-controllinginterests can significantly restrict the entity’s ability to access or use theassets and settle the liabilities of the group(such as when a parent isobliged to settle liabilities of a subsidiary before settling its own஽IFRS Foundation A515IFRS12liabilities,or approval of non-controlling interests is required either toaccess the assets or to settle the liabilities of a subsidiary).(c)the carrying amounts in the consolidated financial statements of theassets and liabilities to which those restrictions apply.Nature of the risks associated with an entity’s interestsin consolidated structured entities14An entity shall disclose the terms of any contractual arrangements that could require the parent or its subsidiaries to provide financial support to aconsolidated structured entity,including events or circumstances that couldexpose the reporting entity to a loss(eg liquidity arrangements or credit ratingtriggers associated with obligations to purchase assets of the structured entity orprovide financial support).15If during the reporting period a parent or any of its subsidiaries has,without having a contractual obligation to do so,provided financial or other support to aconsolidated structured entity(eg purchasing assets of or instruments issued bythe structured entity),the entity shall disclose:(a)the type and amount of support provided,including situations in whichthe parent or its subsidiaries assisted the structured entity in obtainingfinancial support;and(b)the reasons for providing the support.16If during the reporting period a parent or any of its subsidiaries has,without having a contractual obligation to do so,provided financial or other support to apreviously unconsolidated structured entity and that provision of supportresulted in the entity controlling the structured entity,the entity shall disclosean explanation of the relevant factors in reaching that decision.17An entity shall disclose any current intentions to provide financial or other support to a consolidated structured entity,including intentions to assist thestructured entity in obtaining financial support.Consequences of changes in a parent’s ownershipinterest in a subsidiary that do not result in a loss ofcontrol18An entity shall present a schedule that shows the effects on the equity attributable to owners of the parent of any changes in its ownership interest in asubsidiary that do not result in a loss of control.Consequences of losing control of a subsidiary duringthe reporting period19An entity shall disclose the gain or loss,if any,calculated in accordance with paragraph25of IFRS10,and:(a)the portion of that gain or loss attributable to measuring any investmentretained in the former subsidiary at its fair value at the date whencontrol is lost;andA516஽IFRS FoundationIFRS12(b)the line item(s)in profit or loss in which the gain or loss is recognised(ifnot presented separately).Interests in unconsolidated subsidiaries(investment entities)19A An investment entity that,in accordance with IFRS10,is required to apply the exception to consolidation and instead account for its investment in a subsidiaryat fair value through profit or loss shall disclose that fact.19B For each unconsolidated subsidiary,an investment entity shall disclose:(a)the subsidiary’s name;(b)the principal place of business(and country of incorporation if differentfrom the principal place of business)of the subsidiary;and(c)the proportion of ownership interest held by the investment entity and,if different,the proportion of voting rights held.19C If an investment entity is the parent of another investment entity,the parent shall also provide the disclosures in19B(a)–(c)for investments that arecontrolled by its investment entity subsidiary.The disclosure may be providedby including,in the financial statements of the parent,the financial statementsof the subsidiary(or subsidiaries)that contain the above information.19D An investment entity shall disclose:(a)the nature and extent of any significant restrictions(eg resulting fromborrowing arrangements,regulatory requirements or contractualarrangements)on the ability of an unconsolidated subsidiary to transferfunds to the investment entity in the form of cash dividends or to repayloans or advances made to the unconsolidated subsidiary by theinvestment entity;and(b)any current commitments or intentions to provide financial or othersupport to an unconsolidated subsidiary,including commitments orintentions to assist the subsidiary in obtaining financial support.19E If,during the reporting period,an investment entity or any of its subsidiaries has,without having a contractual obligation to do so,provided financial orother support to an unconsolidated subsidiary(eg purchasing assets of,orinstruments issued by,the subsidiary or assisting the subsidiary in obtainingfinancial support),the entity shall disclose:(a)the type and amount of support provided to each unconsolidatedsubsidiary;and(b)the reasons for providing the support.19F An investment entity shall disclose the terms of any contractual arrangements that could require the entity or its unconsolidated subsidiaries to providefinancial support to an unconsolidated,controlled,structured entity,includingevents or circumstances that could expose the reporting entity to a loss(egliquidity arrangements or credit rating triggers associated with obligations topurchase assets of the structured entity or to provide financial support).஽IFRS Foundation A517IFRS1219G If during the reporting period an investment entity or any of its unconsolidated subsidiaries has,without having a contractual obligation to do so,providedfinancial or other support to an unconsolidated,structured entity that theinvestment entity did not control,and if that provision of support resulted inthe investment entity controlling the structured entity,the investment entityshall disclose an explanation of the relevant factors in reaching the decision toprovide that support.Interests in joint arrangements and associates20An entity shall disclose information that enables users of its financial statements to evaluate:(a)the nature,extent and financial effects of its interests in jointarrangements and associates,including the nature and effects of itscontractual relationship with the other investors with joint control of,or significant influence over,joint arrangements and associates(paragraphs21and22);and(b)the nature of,and changes in,the risks associated with its interestsin joint ventures and associates(paragraph23).Nature,extent and financial effects of an entity’sinterests in joint arrangements and associates21An entity shall disclose:(a)for each joint arrangement and associate that is material to thereporting entity:(i)the name of the joint arrangement or associate.(ii)the nature of the entity’s relationship with the joint arrangementor associate(by,for example,describing the nature of theactivities of the joint arrangement or associate and whether theyare strategic to the entity’s activities).(iii)the principal place of business(and country of incorporation,ifapplicable and different from the principal place of business)ofthe joint arrangement or associate.(iv)the proportion of ownership interest or participating share heldby the entity and,if different,the proportion of voting rightsheld(if applicable).(b)for each joint venture and associate that is material to the reportingentity:(i)whether the investment in the joint venture or associate ismeasured using the equity method or at fair value.(ii)summarised financial information about the joint venture orassociate as specified in paragraphs B12and B13.A518஽IFRS FoundationIFRS12(iii)if the joint venture or associate is accounted for using the equitymethod,the fair value of its investment in the joint venture orassociate,if there is a quoted market price for the investment.(c)financial information as specified in paragraph B16about the entity’sinvestments in joint ventures and associates that are not individuallymaterial:(i)in aggregate for all individually immaterial joint ventures and,separately,(ii)in aggregate for all individually immaterial associates.21A An investment entity need not provide the disclosures required by paragraphs21(b)–21(c).22An entity shall also disclose:(a)the nature and extent of any significant restrictions(eg resulting fromborrowing arrangements,regulatory requirements or contractualarrangements between investors with joint control of or significantinfluence over a joint venture or an associate)on the ability of jointventures or associates to transfer funds to the entity in the form of cashdividends,or to repay loans or advances made by the entity.(b)when the financial statements of a joint venture or associate used inapplying the equity method are as of a date or for a period that isdifferent from that of the entity:(i)the date of the end of the reporting period of the financialstatements of that joint venture or associate;and(ii)the reason for using a different date or period.(c)the unrecognised share of losses of a joint venture or associate,both forthe reporting period and cumulatively,if the entity has stoppedrecognising its share of losses of the joint venture or associate whenapplying the equity method.Risks associated with an entity’s interests in jointventures and associates23An entity shall disclose:(a)commitments that it has relating to its joint ventures separately fromthe amount of other commitments as specified in paragraphs B18–B20.(b)in accordance with IAS37Provisions,Contingent Liabilities and ContingentAssets,unless the probability of loss is remote,contingent liabilitiesincurred relating to its interests in joint ventures or associates(includingits share of contingent liabilities incurred jointly with other investorswith joint control of,or significant influence over,the joint ventures orassociates),separately from the amount of other contingent liabilities.஽IFRS Foundation A519。

Certified Documentary Credit Specialist (CDCS)Self Study GuideCDCS Examinations – April 2011BAFT- IFSA US, Canada, Mexico, Latin America April 2011 Testing Window Registration Deadline – February 28, 2011ifs School of Finance outside the US, Canada, Mexico, Latin America 15 April 2011 Registration Deadline – 31 January 2011BAFT – IFSA ifs School of Finance9 Sylvan Way, Suite 130 4-9 Burgate LaneParsippany, New Jersey 07054 CanterburyKent CT1 2XJTelephone (973) 656-1900 Telephone +44 (0)1227 818609 Fax (973) 656-1915 Fax +44 (0)1227 784331/786030For BAFT- IFSA registered candidates, the 2011 CDCS Examination willonly be offered electronically within candidate’s banks and institutions.June 2010Dear CDCS Candidate:Welcome. You made a significant commitment to your career when you registered for the CDCS examination. This Self-Study Guide has been prepared with your success in mind. It will help you make the transition from the CDCS Content Outline and the Study Text; in addition, it will outline a variety of study techniques for your consideration.The text for the CDCS examination has been updated and revised and published as The Guide to Documentary Credits: third edition (revised). There are changes to the content outline, including the changes in UCP 600 and other rules, as well as updating to the general text. It is important that you study the third edition (revised) as you prepare for the examination.If it has been a few years since you last studied for an examination, a review of this publication will help you identify the areas you will find helpful as you develop your individual study plan. Experiment to find out what suits you best.The CDCS examination is based on a Job Analysis Study that identified the knowledge and skills required for competent practice in the field of documentary credits. The Content Outline details the results of the survey and the Study Text is based on the Content Outline. You can build on the information and experience you have, as you are involved with documentary credit practice.As you can see from the Table of Contents there are many different areas that will be of assistance to you as you prepare to study for the CDCS examination; not all may apply to you. Your first step will be to identify those sections that you want to include in your study plan.Sections 2 and 3 contain the CDCS Content Outline and Examination Specifications. These two documents are the basis for the CDCS examination and should be reviewed in depth.The CDCS examination is an opportunity for you to demonstrate what you know and your skills as a documentary credit specialist. We wish you success in your preparation for the examination.There are several products that will assist you as you prepare for the CDCS examination: The Study Text is the basic reference for the examination; all Multiple-Choice questions are documented to this text.The 2011 examination will be delivered in the U.S. and Canada electronically at bank training sites. For additional information, go to the CDCS website ().CDCS Website (): information will be posted on the website as it becomes available. This will be a source of continuing help to you as you prepare for the examination.Dan Taylor Gavin ShreevePresident & Chief Operating Officer Principal BAFT-IFSA ifs School of Finance____________________________________________________________________________________Table of ContentsIntroductionSection l. CDCS Study TextSection 2. CDCS Content OutlineSection 3. Planning Your Study - Study PlanSection 4. Keys to Studying for SuccessSection 5. CDCS Study GroupsSection 6. Multiple-Choice Question FormatsSection 7. Analysis Questions, In-Basket and Simulation ExercisesSection 8. Tips for Answering Multiple-Choice QuestionsSection 9. Pre-examination Check ListSection 10 Practice TestSection 11 Sample TestSection 12. CDCS Website____________________________________________________________________________________IntroductionVolunteers Associated with the CDCS ProjectThe Certified Documentary Credit Specialist (CDCS) credential is a peer-review project that includes volunteers in each segment of its development. It is a joint project of the ifs School of Finance in the UK, and BAFT- IFSA in the U.S. and is endorsed by the International Chamber of Commerce (ICC). There are several volunteer-intensive phases of the project and they include:•Job Analysis Study: volunteers identified the major responsibilities of a Documentary Credit Specialist. They also detailed the knowledge and experience required to competently meet these responsibilities. The Job Analysis Study serves as the basis of the CDCS Content Outline and the CDCS Examination Specifications.Study Text: The Guide to Documentary Credits: third edition (revised) is the reference text for the CDCS examination. It is based on the Content Outline and was reviewed by volunteers who served as topic experts.Item Writing and Test volunteers write, review and revise the questions on the CDCS examination. This is a very intensive responsibility and the Test Committee meets annually to prepare for each examination administration.CDCS Test CommitteeLowell Campbell, CDCS, J.P. Morgan/Chase Bank N.A. co-chairSteve Cooke, CDCS Standard Chartered Bank co-chairMaria Adamczyk, CDCSMartin Stocks, CDCS, The Royal Bank of Scotland.Gary Bishop, CDCS British Arab Commercial Bank LimitedSam Hodges, CDCS Square 1 BankVictor Pena, CDCS Citicorp____________________________________________________________________________________Section 1. CDCS Study TextThe Study Text for the CDCS examination is The Guide to Documentary Credits: third edition (revised).The text was reviewed by ifs School of Finance and BAFT-IFSA volunteers and produced by the ifs School of Finance and BAFT-IFSA. The Study Text is intended to assist CDCS candidates prepare for the examination. The text is based on the CDCS Content Outline (see Section 2); the Content Outline details the knowledge and skills identified through a Job Analysis Study as necessary to fulfill the major responsibilities of a documentary credit practitioner. A thorough understanding of the topics covered in the CDCS Content Outline should result in success on the CDCS examination.Examination questions in the first section of the examination are referenced to the Study Text. Questions in the Simulation portion of the examination are based on the analysis and application of the information in the Study Text to actual situations.Section 2. CDCS Content Outline - 2011Multiple Choice QuestionsThe CDCS examination has a total of 120 questions and is in two parts:•Part A contains 83 multiple-choice knowledge (KN) and application (AP) questions based on the Study Text -approximately 1.5 hours of the examination.•Part B contains 37 analysis, in-baskets and simulation questions.•Effective 2008, the 120 questions within the CDCS examination will include 15 pre-testing questions. These 15 questions are for pre-testing purposes only and thegrade awarded to candidates will be based upon their performance on the remaining105 questions.•The 15 pre-testing questions will be distributed throughout the examination paper and will not be identifiable by candidates. Candidates should therefore answer all ofthe 120 questions on the examination paper.CDCS Content Outline – SummaryA. Documentary Credit GroupsA.1. Types and Uses of Documentary CreditsA.2. Parties to the Credit: Roles, Responsibilities and RisksA.3. Types of PaymentB. Characteristics of Documentary CreditsB.1. Primary CharacteristicsB.2. Specialty CharacteristicsC. OperationsC.1 ProcessesC.2 Related Products/TermsD. Financial and Commercial DocumentsE. Rules____________________________________________________________________________________CDCS Content OutlineA. Documentary Credit GroupsA.1 Types and Uses of Documentary CreditsA.1a CommercialA.1b StandbyA.2 Parties to the Credit: Roles, Responsibilities and RisksA.2.a Required PartiesA.2.a.(1) Issuing BankA.2.a.(2) BeneficiaryA.2.b ApplicantA.2.c Banks’ Roles and ObligationsA.2.c.(1) Issuing BankA.2.c.(2) Confirming BankA.2.c.(3) Advising BankA.2.c.(4) Negotiating BankA.2.c.(5) Paying BankA.2.c.(6) Accepting BankA.2.c.(7) Reimbursing BankA.2.d Types of RiskA.2.d.(1) Operational/UCP600A.2.d.(2) CreditA.2.d.(3) Foreign ExchangeA.2.d.(4) FraudA.2.d.(5) LegalA.2.d.(6) PoliticalA.3 Types of PaymentA.3.a SightA.3.b DeferredA.3.c NegotiationA.3.d AcceptanceB. Characteristics of Documentary CreditsB.1 Primary CharacteristicsB.2 Specialty CharacteristicsB.2.a Revolving CreditsB.2.a.(1) Cumulative vs. Non-CumulativeB.2.a.(2) Automatic vs. ControlledB.2.b InstalmentB.2.c. Advance PaymentsB.2.d TransferableB.2.e EvergreenB.2.f. CleanB.2 g. Direct PayC. OperationsC.1 ProcessesC.1.a IssueC.1.b Pre-adviseC.1.c Advise____________________________________________________________________________________C.1.d ConfirmC.1.e AmendC.1.f TransferC.1.g PresentC.1.h ExamineC.1.i Pay/RejectC.1.j ClaimC.1.k Reimburse FundsC.1.l CancelC.2 Related Products/TermsC.2.a Letter of IndemnityC.2.b Air Way ReleaseC.2.c Steamship GuaranteeC.2.d Assignment of ProceedsC.2.e Participation and SyndicationC.2.f Trade-related IncotermsD. Financial and Commercial DocumentsD.1 Draft/Bill of ExchangeD.2 Commercial InvoiceD.3 Non-negotiable Seaway BillD.4 Charter Party Bill of LadingD.5 Multimodal Transport DocumentD.6 Air Transport DocumentD.7 Road, Rail or Inland Waterway Transport DocumentD.8 Forwarder’s Cargo Receipt, Mate’s Receipt and Consolidator’s ReceiptD.9 Post Receipt or Certificate of PostingD.10 Courier or Expedited Delivery Service DocumentD.11 Insurance DocumentD.12 Weight CertificateD.13 Certificate of OriginD.14 Packing ListsD.15 Inspection CertificateD.16 Other DocumentsRulesE.1 UCP600 – Uniform Customs and Practice for Documentary CreditsE.2 ISP98 – International Standby PracticesE.3 URR 725 – Uniform Rules for Bank-to-Bank Reimbursements UnderDocumentary CreditsE.4 ICC Decision on Original Documents (Appendix to ICC Publication 681 – ISBP)E.5 ISBP 681E.6 eUCP____________________________________________________________________________________General InformationCandidates will have THREE hours to complete the examination.Candidates are responsible for timing themselves to ensure there is sufficient time to complete both sections of the examination in three hours.•The multiple-choice questions test your knowledge and how to apply that knowledge to specific situations outlined in the simulation exercises.Each question qualifies for one point/mark; incorrect answers/points are not deducted from the number of correct answers.Types of questions - There are three basic levels of multiple-choice questions : Knowledge questions are recall questions.Application questions apply knowledgeAnalysis questions require both knowledge and application skills(See Section 9 for additional explanations on the three cognitive levels for multiple-choice questions.)Section 3. Planning Your StudyTips from successful certification examination candidates•Your objective should be to arrive at the examination secure in the knowledge that, througha well planned course of study and your practical experience, you are in as strong a positionas possible to be successful.•Draft a study schedule/timeframe based on your objectives and a realistic view of your time available for study and preparation.•Review the CDCS Content Outline and Examination Specifications (Sections 2 and 3) and identify the areas with which you are familiar and require review and the areas that are new and will require in-depth study.•Discuss your objectives and study plan with a colleague or mentor who is willing to discuss the examination materials with you and assist you during your study phase.Study TechniquesUsing your experience, think about study techniques that have helped you in the past and any others you may have come across.Some ideas you may want to consider include:•Summarize the main ideas in the text.•Write study questions for self-testing based on materials in the text.•Use the key terms to identify not only definitions but use them for review.•Identify/flag key words, terms and concepts you do not understand or that are new to you. •Prepare ‘flash cards’ to capture key terms, definitions, exhibits and other material that you have identified for additional study.•Work with a partner or study group to teach and test each other.____________________________________________________________________________________•Test yourself frequently. Do not spend time studying what you know. Use what you know for review at the end of the study process.•What is troublesome? Identify someone to help you understand sections you do not know and find difficult.•Use the resources available through ifs School of Finance and BAFT-IFSA: Check the web site () for the CDCS Forum, a listing of review/revision courses and other examination-related information.•Note questions to ask others with more experience or members of your study group.Develop a Study PlanOnce you have considered the different study options available to you, it is still important to draft a study schedule/timeframe based on your objectives and a realistic view of your time for study and preparation. Your study plan should reflect your individual preferences and methods of working. It is important to remember that a study plan is a flexible document and is both an indicator of where you are and where you want to be.The first step you should take is to determine your personal study objectives based on the Content Outline and Study Text.•You may find it helpful to write out your objectives and post them in a visible location.•Advance planning will provide multiple benefits as you prepare for the CDCS examination. It will not require much time to develop a study plan, but doing so will establish your priorities. The most important part of a study plan is to identify how, when and where you want to study.•By reviewing the CDCS Content Outline and Examination Specifications (Sections 2 and3), you will be able to identify the areas with which you are familiar; those you wish toreview in detail; and those that are new to you and need in-depth study.•You will now be in a position to develop an overall study plan with specific timelines. In drawing up your plan, you may find the following useful:−Prepare a study schedule — be realistic. Space your studying and allow ample time for review.−Keep a copy of the CDCS Content Outline in a prominent place as you will refer to it often.−Make the best of your environment. Some individuals prefer to study in a quiet place, while others prefer working with the radio or television on in the background.Whatever your preference, you can usually create the environment you want foryour study session.−Be prepared to study in free moments, whenever you can. This means identifying times that are available to you for study, such as travel time, standing in lines andqueues, waiting for a meeting to start, etc.____________________________________________________________________________________SummaryRelax while studying. The CDCS examination is an opportunity for you to learn and to demonstrate your knowledge and ability. Maintain a positive attitude that you will be successful on the examination and will allocate the resources required to ensure success.Do not worry about how much time is left before the examination. You have planned adequately to allow for the maximum use of your time.Take breaks, exercise. Keep your body and mind relaxed.A sample Study Plan is shown on the next page – you may wish to reproduce it to assist you in your preparation for the examination.____________________________________________________________________________________Study PlanContent Outline Topic Page Reference Completed ____________________________________________________________________________________Section 4. Keys to Studying for SuccessAs adults we know that we learn in a variety of ways that differ significantly from the ways we learned as children. As you read the Study Text you will be able to compare the information with your own experience and knowledge. You can use the information you are studying in several ways:•If this is information you already know, the materials will reinforce your knowledge.•If the information is new to you, you can relate it to your own experience and consider how the information can be used in your job.•Each chapter has objectives and study questions that will assist you as you focus on the key elements within a chapter.•Use your memory effectively:−Frequent Recall and Use: build regular reviews into your study sessions. Be selective about what you need to recall — use key terms and facts.−Indicate Significance: make the information you need to recall stand out by emphasizing it; link the information to your experience; use mnemonics.−Link to Other Items: link information to your own experience; look for patterns and relationships among the items; compare and contrast information.•Regular Review: plan regular reviews of key points; end a session by summarizing what you have studied.•Getting started can be difficult: starting a session with a brief review of the previous session may be helpful.•If you are not feeling motivated, consider why you started this study in the first place and think about what the CDCS credential will enable you to do.•Build in rewards: at the end of study sessions; at the completion of a predetermined number of study sessions; and when you have completed your study.•It is important to think positively during your preparation period. If you do not feel comfortable about your memory, monitor your progress. You will be pleased at how much you can recall.•There are no trick questions. As you take and study the sample test, you will see how straightforward the questions are.•The answers to all multiple-choice questions have been documented to the Study Text.____________________________________________________________________________________Successful students offer the following advice on planningyour study and preparation for the CDCS examination.•To develop my study plan, I reviewed the syllabus and study materials. Then I divided the study text and the study topics into the number of weeks before the exam, allowing time for review.•Design your plan with short study sessions (about 45 minutes) on a regular basis. This builds a study habit and makes it easier to stick to your plan.•When planning your schedule or timetable of study, always build in extra time for contingencies, time off and relaxation and fun. There is nothing worse than feeling like a prisoner of the examination preparation process. If you build in extra study sessions, you can afford to be flexible and remain in control of your time.•Plan to revise your study schedule as you go along.•Tell your family, friends and colleagues what you are doing. They will then know what to expect of your schedule and be more supportive.•Take charge of your own studies. Spend time getting to know the structure and layout of the materials. Monitor your study progress against your plan and make adjustments as needed. Expect success — if you put the effort in, you will pass.At the Examination Site1. Plan to arrive at least 30 minutes early, as identification will be checked prior to your beingallowed into the examination room.2. The examination will start promptly.3. You will be allowed a full three hours to take the examination.4. Read all instructions carefully.5. Pace yourself: the examination has been written to allow approximately 1½ hours for eachsection of the CDCS examination.____________________________________________________________________________________Section 5 CDCS Study GroupsThere is a great deal of benefit to studying with others. Conference calls, email and the Internet provide access to your colleagues preparing for the CDCS examination. Usually two types of information are shared in study groups:Topic information from the Study TextInformal study tips, support and general assistanceThere are several ways to form study groups; most candidates preparing for othercertification examinations prefer the following two:Local Study Group: if there are others in your bank or city preparing for the examination that is your first and probably best option.Electronic Study Group: identify others preparing for the examination who are willing to share ideas, information and provide support by phone, fax and/or email.All questions on the examination are referenced to the Study Text; it is very important to use the Study Text as the sole reference. It should be supplemented by the Rules outlined in Section E of the Content Outline.Study Groups Tips1. Select the format that meets the schedules within your group:Weekly usually meets for 1 – 1 ½ hours per sessionSemi-monthly usually meets twice a month for 3-hour sessionsMonthly usually meets for 3 or 4 hours per sessionTwo Days often 4 - 6 hours per dayThree Days often 4 - 6 hours per day2. Determine the number and length of sessions3. Determine the topic schedule: number of sessions on topic material and number ofsessions focused on study tips etc.4. Determine how presentations will be made to the group:Will leadership rotate and each individual assume responsibility for certain sections of the Study Text, which they will prepare for the rest of the group?Will you have experienced managers, supervisors or CDCSs from the banks discuss the chapters in the Study Text?5. Supplement the sessions with review of the Self-Study Guide.6. After individual or group review of a chapter, answer the questions at the end ofeach chapter. They are not in the examination format but highlight the importantinformation in each chapter.7. Prepare test questions for other members of the group.8. Prepare glossary cards based on the terms in the Self-Study Guide and other keyterms identified from the Study Text.____________________________________________________________________________________Section 6 Multiple-Choice Question FormatsLevels of Multiple-Choice QuestionsSection A of the CDCS examination is entirely multiple-choice questions. There are three levels of questions based on the cognitive or thinking levels required to correctly answer a question.Knowledge (KN) questions are recall questions.Application (AP) questions apply knowledge.Analysis (AN), also called higher level thinking, questions require bothknowledge and application skills.There are several standard formats for multiple-choice questions. Becoming familiar with the various types will assist candidates as they prepare for the examination.Sample Generic QuestionsCorrect answers are noted by an *Recall/Knowledge: recall or knowledge questions recognize specific information and facts that do not vary by situation. Such questions are predominantly an effort of memory and include the recall of specific facts, generalizations, concepts, theories, formulae andprocedures. There will be approximately 46 knowledge or recall questions in theexamination.Which of the following is a primary color?A. Orange.B. Purple.C. Green.* D. Red.Application: application questions require comprehension, interpretation, or manipulation of concepts or data. They primarily test simple interpretations or applications of limited data. Questions may require recognition of more than one element or concept and the ability to apply knowledge to a specific situation. There will be approximately 37 questions in the examination.If the time in London, using Greenwich Mean Time, is 7.30 P.M., what time will it be in New York, using Eastern Standard Time (EST)?A. 12:30 A.M.B. 1:30 A.M.C. 1:30 P.M.* D. 2:30 P.M.____________________________________________________________________________________Analysis: analysis questions require the integration or synthesis of a variety of concepts and/or elements to solve a specific problem situation. Questions test the ability to gather information, evaluate data and make decisions. Analysis questions often require value judgments concerning the effectiveness, appropriateness or best course of action in a given situation. There will be 7 analysis questions in the examination.If a flight taking off from London at 12:35 P.M. takes 6.5 hours to reach New York, what time will it land, using Eastern Standard Time (EST)?A. 1:05 P.M.* B. 2:05 P.M.C. 12:35 A.M.D. 1:05 A.M.Question styles:Direct or Closed Question: a complete question followed by four options; there is only one correct answer to direct or closed questions.Who was the King of England in 1484?A. Henry V.B. George I.* C. Richard III.D. Edward IV.Open Question or Incomplete Sentence: an incomplete sentence with four options; there is only one correct answer to incomplete sentence questions.Confederate Commander General Robert E. Lee’s horse was namedA. Silver.B. Trigger.* C. Traveler.D. Champion.Complete Question that includes the phrase ‘which of the following’: is used when there is more than one correct answer to a question, but ONLY one of the correct answers is offered in the options.Which of the following is a prime number?* A. 7.B. 10.C. 12.D. 15.____________________________________________________________________________________Complex Multiple-Choice: there may be more than one correct answer. The response will include options.Which of the following cities are capitals of their respective countries?1. Paris2. Washington D.C.3. Chicago4. SydneyA. 4 only* B. 1 and 2 onlyC. 1, 3 and 4 onlyD. 2,3 and 4 onlyNegatively worded or EXCEPT questions: three of the four options are correct and only one option is incorrect. There is only one answer for EXCEPT questions.All of the following are primary colors EXCEPT:* A. red.B. blue.C. green.D. orange.Key Words — LEAST, BEST, MOST: the question requires evaluation and the selection of the appropriate option.MOST color blind males inherit the gene from their:A. father.* B. mother.C. maternal grandmotherD. paternal grandfatherSituational Set: there is one answer to each question in situational sets. There may be more than one question for each information set.Michael has $100 to purchase clothes. Costs are: shirts, $20 each; sweaters $30 each; slacks $40 per pair; and socks $5 per pair.1. If Michael purchased 1 pair of slacks and 1 sweater, how many shirts can he buywith his remaining money?* A. One.B. Two.C. Three.D. Four.____________________________________________________________________________________。

© ifs School of Finance 2011175Chapter 12Export credit insurance12.1Risk summaryHere is a good point to remind readers of the risks, mentioned in chapter 2,that an exporter will have to consider. The possible sources of protection are set against each risk. Those in bold are the sources of risk protection covered in this chapter.As can be seen, there is a wide range of insurable risks that come under thegeneral heading of ‘credit insurance’.Trade Finance176© ifs School of Finance 2011Export credit insuranceBroadly, the market for such insurance falls into two groups:•short-term, being cover for credit terms provided by the seller of up to two years, offered by commercial insurers that specialise in these risks; and•long-term, where the risk extends for more than two years.Activity 1An example of sovereign risk would be:ck of foreign exchange to pay in the country of the buyer2.Buyer refuses to pay for goods he has purchased3.Bankruptcy of buyer4.Earthquake in country of the buyer12.2Export credit insurance in detailE xport credit insurance is a specialist field with several providers including commercial entities such as Atradius Credit Insurance NV and Euler Hermes UK plc as well as government credit agencies such as the E xport Credit Guarantee Department (E CGD) in the UK, Coface in France, and E xport-Import of the United States (EXIM Bank).A number of insurance brokers also specialise in arranging cover for clients and a good broker will endeavour to find the best match between a customer’s needs and premium rates.A variety of policies are now available to suit different needs:•Whole turnover:–This is the traditional form of credit insurance and policies can be written to cover both domestic and export sales.–The advantage to the insurer of such policies is the ‘spread of risk’.The insurer is not being subjected to a selection by the exporter ofweaker buyers.–Indemnities are usually between 80 and 95 per cent, ie the exporter is left with between 5 and 20 per cent of the risk.–However, the insurer will impose limits on each buyer and may restrict cover in certain ‘high risk’ markets.© ifs School of Finance 2011177Trade Finance© ifs School of Finance 2011178•Specific or key customer:–Policies are written specifically for one or a small number of customers where the business has the largest part of its turnover.–Indemnities are offered at about the same level of cover butpremiums may reflect the higher risk of a smaller spread of risk. Forthe exporter with one or two large buyers that are crucial to thebusiness, this may be the best option particularly where a defaultcould be catastrophic to the exporter’s business.–Cover can be written to include ‘works in progress’ where a buyerdefaults on a contract before goods are ready for shipment.•E xcess or ‘catastrophe’ policies:–Are similar to the other polices but are designed for the financiallystrong exporter with good in-house credit control and withturnover of several million pounds.–Once a certain pre-agreed level of loss has been sustained, theremaining losses in the policy period will be insured.–Because the exporter is accepting a significant risk by agreeing toan excess (the exporter will cover 100 per cent of losses until athreshold is reached), the premiums will be lower.•Specific policies such as those taken out by a contractor against unfair calling of a bond.12.3Risks covered in such policiesThe risks covered in such policies will depend upon what is actually agreed,but the following are typically available.12.3.1Political or country risksA domestic business selling goods, providing a service, contracting to build or investing in a foreign country will be subject to the laws and government powers of the country concerned.With two countries trading within the EU, the risk is low and there are detailed inter-government agreements and treaties that facilitate the ‘single market’.Export credit insuranceBut in less stable political regimes the risks can be very substantial. A business operation overseas might face any of the following situations:–confiscation or expropriation of machinery, goods or whole factories;–violence caused by civil unrest, a coup d’état, a local war (war involving the UK or any of the ‘five great powers’ may not be insurable);–an inability to convert local currency receipts into sterling or another hard currency;–an embargo placed on imports or the arbitrary cancellation of an import licence after the exporter has been involved in contractual costs;–an intervention by the government that ‘frustrates’ the contract by imposing impossible rules or insisting upon involvement of a new local ‘partner’;–an unfair calling of a performance or similar bond; and–in rare cases, the kidnap of expatriate staff.The premium and limitations on cover will depend upon the insurer’s view of economic and political stability in the areas for which cover is required. 12.3.2Credit risk of buyer defaultFor a business to have 40 per cent of the total assets of the business tied up in receivables is not uncommon. Therefore a business must have good credit control procedures providing detailed understanding of the extent of money due to it from its customers and particularly the sums overdue. Nonetheless, the risk of a large default or several defaults remains and can destroy a good business.The option of using ‘without recourse’ invoice discounting or factoring was covered in chapter 9. However, taking out credit insurance is an alternative and indeed many of the specialist insurers provide both factoring and credit insurance services.One of the key advantages of using specialist insurers and factors, apart from the peace of mind provided, is the access a business has to an insurer’s and/or factor’s database, which can give an early indication, before a contract is negotiated, of risks that are best avoided.The nature and premium cost of any credit insurance purchased will take account of:© ifs School of Finance 2011179Trade Finance© ifs School of Finance 2011180–whether or not the business has an existing policy covering domestic credit risk;–the countries where a default may occur;–the names of the buyers;–the spread of risk – the more countries and customers offered to the insurer, generally the lower the average premium;–whether the business is both willing and able to accept a higher ‘excess’than average – see ‘key customer’ and ‘excess’ policies described above.In the event of non-payment due to buyer insolvency, the insurer will pay once the insolvency is proved. For other reasons for non-payment the insurance pay-out may be delayed; for instance, until after goods have been disposed of when the buyer has refused to take delivery.For banks, the advantages of a customer holding credit insurance are clear and it is possible, where necessary, for the proceeds of a policy to be assigned to a bank.Such an assignment would protect the bank where repayment of a facility was to come from the proceeds of a customer’s contract.12.4 Example of an Atradius export credit policyT ypically an Atradius export credit insurance policy for commercial and political risks cover would include the following features:12.4.1 Risk covered•Buyer insolvency •Buyer’s failure to pay within six months of the due date for goods accepted.•Country risk including:–foreign government action that delays or prevents completion of the contract;–political, economic, legislative or administrative action outside theUK, which delays or prevents payment transfers;Export credit insurance–delays in money transfer from the buyer’s country;–war, civil unrest or similar actions outside the UK that prevents completion of the contract (war between any of the five majorpowers is specifically excluded).•Export restrictions imposed after the date of the contract.•Non-renewal or cancellation of an export licence.•Where an importer is recognised by Atradius as a public buyer, eg local or regional government. The exporter will be covered if the buyer fails to complete the order.•Policy covers exporter from date of shipment.•By payment of additional premium, policy could be extended to cover from date of contract (known as pre credit risk)12.4.2 Amount of cover availableRisk covered Maximum% covered by AtradiusBuyer insolvency90Buyer default90Country/ Political risk9512.4.3 Payout of claims•Buyer insolvency: immediate, provided evidence of insolvency is furnished.•Payment default by the buyer on goods accepted and political, six months after due date for payment.•Atradius will assist the exporter in attempting to recover the debt and defray legal expenses incurred in the recovery action.© ifs School of Finance 2011181Trade Finance© ifs School of Finance 2011182Activity 2The maximum risk of buyer insolvency covered by an Atradiuscredit insurance policy would typically be:1.85%2.90%3.95%4.100%SummaryIn this chapter we have looked at the risk against which export credit insurance can help mitigate, as well as the types of policies available.Answers to activitiesActivity 11. Lack of foreign exchange to pay in the country of the buyer Activity 22. 90%。

金融英语专业财务术语下面店铺为大家带来金融英语专业财务术语，欢迎大家学习!金融英语专业财务术语：香港证券学会 Hong Kong Securities Professionals Association 并购活动* mergers and acquisitions仓 position个人大股东具报书Individual Substantial Shareholders Notification个人投资者户口 Individual Investor Account个人客户 individual client个人交易所参与者 Individual Exchange Participant个人计算机终端机用户 PC terminal user借方结余 debit balance借款股 loan stock借壳上市 backdoor listing借贷资本 loan capital借额 debit伦敦国际金融期货及期权交易所 London International Financial Futures and Options Exchange (LIFFE)伦敦期权市场 London Traded Options Market (LTOM)伦敦证券交易所 London Stock Exchange (LSE)冻结 locked up冻结股份机制 securities-on-hold mechanism原油期货 crude oil futures套戥 / 套汇* / 套利* arbitrage差价 spread差额缴款 marks / marks payment库存股份/股票 treasury stock弱势货币 soft currency息股证 Equity Linked Instrument (ELI)挟仓 cornering; squeeze; short squeeze时间值 time value; time premium时间戳记 time stamp核心盈利 core earnings核准可赎回股份 approved redeemable share核准借入人 approved borrower核准借出代理人 approved lending agent核数委员会「证监会」 Audit Committee「SFC」核数师 auditor核数师报告 auditors' report核证附注 verification notes浮息存款证 floating rate certificate of deposit (FRCD)浮息按揭 variable-rate mortgage浮息票据 floating rate note (FRN)海外发行人 overseas issuer消耗性资产「期权」 wasting asset「options」流动性不足 / 流通性不足 illiquidity流动资金 liquid capital流动资金比率/幅度 liquidity ratio; liquidity margin流动资金调节窗 Liquidity Adjustment Window (LAW)流动资金调节机制「金管局」Liquidity Adjustment Facility (LAF)「HKMA」流动资产 liquid asset流通性 liquidity流通风险 liquidity risk流通量提供者 liquidity provider特别限价盘 special limit order特别处理股「中国内地」Special Treatment「Mainland China」特别征费 Special Levy特别转让股「中国内地」 Particular Transfer「Mainland China」特快登记/过户登记服务 expedited registration service特殊项目 exceptional item特许使用者 privileged user特许财务分析员 chartered financial analyst特许财务分析员公会 Institute of Chartered Financial Analysts特许管理会计师公会Chartered Institute of Management Accountants (CIMA)「特许证券商」制度「美国」 Specialist System「US」特种国债「中国内地」 Special Treasury「Mainland China」特种备兑证信息「大利市」exotic warrant information 「Teletext」留存股票 treasury stock留存盈利/收益 retained earnings; retained income「粉红价单」「美国」 Pink Sheets「US」留存溢利/盈利 retained profits留成资金 / 保留资金 retained capital「粉红价单」「美国」 Pink Sheets「US」纯交易板 trading-only board纸黄金 paper gold索偿通知 claim notice蚊型股 penny stock被动受托人 bare trustee讯框传送交易网络 frame relay trading network托管人 custodian托管商参与者「中央结算系统参与者」Custodian Participant 「CCASS Participants」记名证券 registered securities记名证书 registered certificate记账式国库券「中国内地」Registered Treasury「MainlandChina」财政司司长 Financial Secretary财政年度 financial year财政股东 financial shareholder财政健全 financial integrity金融英语专业财务术语：《财政资源规则》 Financial Resources Rules财务申报 financial reporting财务风险 financial risk; financial exposure财务租赁 financial lease财务通融 financial accomodation财务业绩 financial results财务摘要报告 summary financial report财务监管 financial regulation财务顾问 financial adviser财经市场发展专责小组The Financial Market Development Task Force《财经有道——证券、期货及投资界专业道德实务指引》Ethics in Practice - A Practical Guide for Financial Practitioners 财经事务及库务局 Financial Services and the Treasury Bureau 财经事务及库局局长 Secretary for Financial Services and the Treasury财经事务及库务局常任秘书长Permanent Secretary for Financial Services and the Treasury财资企业集团 financial conglomerate追补按金 margin call退市 delisting退税 tax rebate; tax refund逃税 tax evasion逆向投资者 contrarian逆差 deficit; unfavourable difference; unfavourable variance 逆差额「中央结算系统」 unfavourable marks「CCASS」逆转交易「期权」 trade reversals「options」逆转交易合约「期权」 reversal contract「options」酌情支付的花红 discretionary bonus payment酌情权 discretionary power配售 placing配售代理 placing agent配售指引 placing guidelines配售新股 rights issue配售经办人 book runner配发 allotment除息基准 ex-dividend basis除净日 ex-date除净日未经调整之收市价 ex unadjusted close除牌 delisting除权 ex-rights马来西亚证券交易所交易及自动报价系统Malaysian Exchange of Securities Dealing and Automated Quotation Bhd (MESDAQ) 马城条约 Maastricht Treaty马鞍式组合「期权」 straddle「options」高水「期货」 premium「futures」高于前成交价 plus tick; uptick高于面值 above par高持股量股东「创业板」 significant shareholder「GEM」高息票据 equity linked note (ELN)高杠杆效应的投资 high leveraged investment。