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PAC

IFIC A

ND

ES RESO

UR

CES D

EVELO

PMEN

T LIMITED

INFORMATION FOR INVESTORS

Listing Information Listing: Singapore Exchange Stock code: P11.SI

Ticker Symbol Reuters: PACF.SI Bloomberg: PAH:SP

Key DatesAnnouncement of 1Q FY2013 Results 6 February 2013Announcement of 2Q FY2013 Results 8 May 2013Announcement of 3Q FY2013 Results 7 August 2013Announcement of FY2013 Final Results 25 November 2013Annual General Meeting 27 January 2014Financial Year End 28 September

Share Information (as at 28 September 2013)Board lot size: 1,000 sharesNominal value per share: S$0.05Shares outstanding: 4,790,992,338 sharesPublic float: 1,601,828,752 shares (33.43%)Market capitalisation: S$622,829,004Earnings per share for FY2013: 16.22 HK centsProposed dividend per share for FY2013: 0.30 Singapore cent

Principal Registrar & Transfer Office in BermudaAppleby Management (Bermuda) Ltd.Canon’s Court22 Victoria StreetHamilton HM12 Bermuda

Branch Registrar & Transfer Office in SingaporeBoardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623Tel: 65-6536 5355Fax: 65-6438 8710

Investor Relations ContactFor enquiries from investors and securities analysts, please contact:Investor Relations DepartmentTel: 852-2589 4191Fax: 852-2858 2764E-mail: [email protected]

Pacific Andes Resources Development Limited Annual Report 2013 01

CONTENTS

3 Vision, Mission and Corporate Profile 5 Corporate Information6 Financial Highlights

10 Chairman’s Statement12 Management Discussion and Analysis13 Profile of Directors and Senior Management16 Report of the Directors21 Statement of the Directors22 Report on Corporate Governance34 Corporate Social Responsibility36 Independent Auditors’ Report 37 Consolidated Income Statement38 Consolidated Statement of Comprehensive Income39 Statements of Financial Position41 Statements of Changes In Equity43 Consolidated Statement of Cash Flows45 Notes to the Financial Statements

112 Supplementary Information115 Shareholders’ Information117 Notice of Annual General Meeting


VISIONTo be a world leader in the sourcing, processing, distribution and sales of seafood products, providing millions of people throughout the world with a natural source of healthy protein every day.

MISSIONTo optimise efficiency in the frozen fish supply chain, including distribution to wholesalers and re-processors throughout the world, and the full range of logistical services to fishing vessels.

To be at the forefront of market leading best practice in refrigerated ocean transport of seafood to diverse markets globally, including the provision of the full range of logistical services to fishing vessels.

CORPORATE PROFILEPacific Andes Resources Development Limited (“PARD”) focuses on the development, marketing and distribution of fish and fish products. We integrate the entire supply chain, sourcing frozen seafood products from oceans all around the world. Besides providing a full range of at-sea transportation and logistical services to fishing companies, we also operate one of the world’s most sizeable fishing fleets and fishmeal processing facilities in some of the world’s most important fishing grounds.

REPORT OF THE DIRECTORS

Pacific Andes Resources Development Limited Annual Report 201304

CORPORATE INFORMATION


Board of DirectorsExecutive DirectorsNg Joo Siang (Chairman)Ng Joo Puay, Frank (Managing Director)Teh Hong EngNg Joo Kwee

Independent DirectorsBertie Cheng Shao ShiongLt-Gen (Ret) Ng Jui PingChew Hai Chwee

Alternate DirectorsNg Puay Yee (Alternate Director to Teh Hong Eng)Chan Tak Hei (Alternate Director to Ng Joo Kwee)

Audit CommitteeBertie Cheng Shao Shiong (Chairman)Lt-Gen (Ret) Ng Jui PingChew Hai Chwee

Nominating CommitteeLt-Gen (Ret) Ng Jui Ping (Chairman)Bertie Cheng Shao ShiongNg Joo Siang

Remuneration CommitteeLt-Gen (Ret) Ng Jui Ping (Chairman)Bertie Cheng Shao ShiongChew Hai Chwee

Company SecretariesCheng Soon KeongLynn Wan Tiew Leng

SolicitorsDavid Lim & Partners

AuditorsDeloitte & Touche LLPPublic Accountants andChartered Accountants6 Shenton Way #32-00OUE Downtown 2Singapore 068809Partner in-charge: Jeremy Toh Yew KuanDate of appointment: 29 July 2013

Principal BankersAustralia and New Zealand Banking Group Limited, Hong Kong BranchChina CITIC Bank International LimitedDBS Bank (Hong Kong) LimitedRabobank International, Hong Kong BranchStandard Chartered Bank (Hong Kong) LimitedThe Hongkong and Shanghai Banking Corporation Limited

Registered OfficeCanon’s Court22 Victoria StreetHamilton HM12BermudaTel: 441-295 2244Fax: 441-292 8666

Principal OfficeRooms 3201-3210Hong Kong Plaza188 Connaught Road WestHong KongTel: 852-2547 0168Fax: 852-2858 2764

Singapore Office143 Cecil Street#11-01 GB BuildingSingapore 069542Tel: 65-6276 6666Fax: 65-6276 7676

Principal Registrar & Transfer Office in BermudaAppleby Management (Bermuda) Ltd.Canon’s Court22 Victoria StreetHamilton HM12Bermuda

Branch Registrar & Transfer Office in SingaporeBoardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623Tel: 65-6536 5355Fax: 65-6438 8710

Company Registration Number22137

Company Websitehttp://www.paresourcesdevelopment.com

FINANCIAL HIGHLIGHTS


Fishery and Fish Supply

Frozen Fish SCM

Revenue

FY05

FY06

FY07

FY08

FY09

1/10/08 to28/9/09

FY10

FY11

FY12

FY13 8,764

9,581

9,716

7,432

7,610

7,765

7,005

5,293

3,555

2,892

HK$ million

Africa

Others

The People’s Republic of China (the “PRC”)

Europe

North America

East Asia

Revenue by market

FY05

FY06

FY07

FY08

FY09

1/10/08 to28/9/09

FY10

FY11

FY12

FY13 8,764

9,581

9,716

7,432

7,610

7,765

7,005

5,293

3,555

2,892

HK$ million



Gross profit

FY05

FY06

FY07

FY08

FY09

1/10/08 to 28/9/09

FY10

FY11

FY12

FY13 1,404

1,891

1,830

1,550

1,512

1,520

945

575

317

HK$ million

2,084

EBITDA

FY05

FY06

FY07

FY08

FY09

1/10/08 to 28/9/09

FY10

FY11

FY12

FY13 2,362

2,556

2,255

2,015

1,638

1,577

1,530

1,362

252

604

HK$ million

Net profit

FY05

FY06

FY07

FY08

FY09

1/10/08 to 28/9/09

FY10

FY11

FY12

FY13 1,045

887

964

1,101

996

938

826

946

177

559

HK$ million

Profit attributable to owners of the Company

FY05

FY06

FY07

FY08

FY09

1/10/08 to28/9/09

FY10

FY11

FY12

FY13 777

628

623

773

733

664

481

384

155

257

HK$ million



Current

Non-current

Assets

31.03.05

31.03.06

31.03.07

31.03.08

28.09.09

28.09.10

28.09.11

28.09.12

28.09.13 31,513

2,451

3,772

7,079

11,015

12,860

16,165

20,420

23,305

HK$ million

Liabilities

Current

Non-current

31.03.05

31.03.06

31.03.07

31.03.08

28.09.09

28.09.10

28.09.11

28.09.12

28.09.13 17,400

1,389

1,926

4,298

6,280

5,846

6,925

10,058

10,877

HK$ million



Total borrowings

31.03.05

31.03.06

31.03.07

31.03.08

28.09.09

28.09.10

28.09.11

28.09.12

28.09.13 14,299

9,795

9,072

5,959

5,276

5,214

3,513

1,814

970

HK$ million

Equity

31.03.05

31.03.06

31.03.07

31.03.08

28.09.09

28.09.10

28.09.11

28.09.12

28.09.13 14,113

12,428

10,362

9,240

7,014

4,735

2,781

1,846

1,062

HK$ million

Gearing ratios

Ratio Financial year

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

Net debt to equity 80.2% 88.7% 120.2% 105.3% 72.1% 61.3% 80.7% 75.2% 97.0%

Long term debt to total debt 0.0% 0.1% 61.8% 51.7% 52.0% 44.3% 39.1% 47.4% 39.5%

CHAIRMAN’S STATEMENT


Dear Valued Investors,On behalf of your Board of Directors (the “Board”), I am pleased to deliver the annual report of PARD and its subsidiaries (the “Group”) for the financial year ended 28 September 2013 (“FY2013”).

Our successful acquisition of the Peruvian fishing and fishmeal company, Copeinca ASA (“Copeinca”) during FY2013 represents an important strategic step to reinforce our position as a global leader in the sourcing, processing, distribution and sales of fish products. Having a leading position in the largest fishery in the world, the Peruvian Anchovy fishery presents a long-term value proposition to our Group, and we look forward to the contribution Copeinca will make in the years to come.

In executing this landmark acquisition, we participated in the rights issue by our Singapore-listed subsidiary China Fishery Group Limited (“China Fishery”) to partially fund this transaction. The successful acquisition represents a transformative step to elevate China Fishery to become Peru’s, and one of the world’s largest producers of fishmeal and fish oil.

Our strategic priority for FY2014 is to augment and harness the synergies that we now have within our enlarged businesses. I am confident that our stronger earnings base and new growth impetus will enable us to deliver higher sustained earnings.

Financial Review

For the year under review, our net profit attributable to shareholders improved by 23.8% to HK$777.3 million. However, our Group revenue decreased by 8.5% from HK$9,580.8 million to HK$8,764.1 million due to less favourable operating conditions.

These conditions included lower average selling prices of products that affected our Frozen Fish Supply Chain Management (“Frozen Fish SCM”) Division, and a significant reduction in Total Allowable Catch (“TAC”) in the 2012 second fishing season in the Peruvian Anchovy fishery, which affected our Fishery and Fish Supply Division. The strategic decision not to operate our China Fishery Fleet in the South Pacific Ocean also impacted results. The tempered performance by these businesses was partly mitigated by our new fishing operations in Namibia and the one-month maiden contribution from Copeinca. Our performance also benefitted from our associated company, Tassal Group Limited (“Tassal”), which has been delivering robust profit contributions.

At the balance sheet level, our net debt to equity ratio increased to 97.0% during the year, due mainly to the financing required to support the acquisition of Copeinca. With our stronger operational cash flows, we will work towards an optimal net gearing level to sustain a sound balance sheet that will keep us financially fit for the years ahead.

The Board has recommended a first and final cash dividend of 0.30 Singapore cent per share for FY2013 (FY2012: 0.30 Singapore cent). This brings our total dividend pay-out to shareholders to HK$89.2 million, compared to HK$90.1 million in FY2012.

A more detailed review of the results for the year and the operating performance of the Group are contained in the Management Discussion and Analysis section on page 12 of this report.

Operations ReviewWith the globalisation of international fish trade, our Frozen Fish SCM Division saw lower sales volumes and average selling prices of products.

Our Fishery and Fish Supply Division was affected by lower sales contribution from the Contract Supply Business partly due to lower average selling prices of various products. This Division was also impacted by lower sales contribution from our Peruvian Fishmeal Operations and significantly lower inventories carried forward by our China Fishery Fleet.

Amidst the challenging operating conditions, we remain unwavered in our drive for higher productivity and efficiency across the entire spectrum of our businesses. We also judiciously added capacity and capability in order not to increase the pressure on our margins.

As we focus our efforts towards strengthening our market leadership, we often have to make swift and tactical decisions concerning our investments to ensure that we are optimising value for the Group. To this end, we took pre-emptive action to divest agro-industrial Peruvian firm Camposol Holding Plc, so as to allow the Group to apply our valuable resources towards key businesses.


CHAIRMAN’S STATEMENT

Corporate Social ResponsibilityPARD is resolute in its efforts to meet the interests of its shareholders and we recognise the importance of our role as a responsible corporate citizen. As a company that provides a vast and responsibly derived range of quality seafood products, we are keenly aware of our responsibilities in ensuring our actions are in total compliance with environmental, legal, and social requirements.

Since the inaugural CSR report published in August 2012, the Group has implemented sustainable practices Group-wide — particularly with the newly-established fishing operations in Namibia. We are committed to supporting a responsible and efficient fishing and seafood processing industry dedicated to striking a balance between consumer demand, supply of healthy and affordable protein, and conservation of resources for the future.

Outlook and ProspectsOur acquisition of Copeinca has enabled us to become a leading producer and exporter of fishmeal and fish oil in the world. This competitive advantage will stand us in strong stead to capture even greater growth opportunities in the industry as they emerge.

The outlook for the fishmeal and fish oil industry is bright. One of the trends underscoring our optimism is the growing demand for fishmeal and fish oil, as they serve as key feed inputs into the expanding aquaculture sector. Aquaculture accounts for a crucial component of over 40% (approximately 63 million tonnes per year) of global fish consumption. Aquaculture is expected to be a key source of growth over the coming decades to meet the increasing global demand for seafood as population and urbanisation grow throughout the world. With our market leadership, we are well-positioned to benefit from this trend.

With a currently robust Peruvian Anchovy biomass level estimated at between 10.8 million tonnes and 12.1 million tonnes, the Peruvian Government raised the TAC for the 2013 second fishing season from November 2013 to January 2014 to 2.3 million tonnes. This is 2.8 times higher compared to the same fishing season last year. This is strong evidence that the Peruvian Anchovy resource is sustainable and well-managed under an effective fishery management policy adopted by the Peruvian Government.

As we position ourselves for this growth, we will continue to focus on realising the synergies and cost savings from Copeinca. We will also explore the possibility of increasing the value of the catch by promoting Peruvian Anchovy for direct human consumption. This presents a long-term value proposition for the overall growth of the Group’s business.

While the Fishery and Fish Supply Division is well positioned as our growth engine, the Frozen Fish SCM Division provides the Group with an important earnings base, and we expect it to generate stable returns in the years ahead. In addition, the Group anticipates continued contribution from its investment in Tassal. With our three strategic business pillars in place, PARD is on the right path to strengthen its position as a leading global supplier of high quality fish products.

I believe we have emerged from FY2013 more prepared to seize opportunities presented to us. We have built a strong foundation and the Management is confident of achieving continued profitability in FY2014.

AcknowledgementI would like to thank the Board of Directors for their invaluable contributions and providing strategic counsel to the Management during the course of the year.

On behalf of the Board, I would also wish to thank all of our Management, employees and business partners for their hard work, dedication and professionalism. My gratitude is also extended to all our customers for their continued support.

My fellow directors and I are committed to working with all our colleagues for a successful future, and I look forward to reporting on that in coming years.

Ng Joo SiangChairman

27 December 2013

MANAGEMENT DISCUSSION AND ANALYSIS


The Group completed the acquisition of a 99.1% equity stake in Copeinca at the end of August 2013 (“Copeinca Acquisition”), therefore, the Group’s FY2013 results included a maiden one month (from 31 August 2013 to 28 September 2013) contribution from Copeinca.

Income StatementGroup revenue decreased by 8.5% from HK$9,580.8 million to HK$8,764.1 million.

Revenue from the Frozen Fish SCM Division, which accounted for 50.6% of total revenue, decreased by 8.9% from HK$4,869.6 million to HK$4,435.0 million, mainly attributed to lower average selling prices of products.

Revenue from the Fishery and Fish Supply Division, which accounted for 49.4% of total revenue, decreased by 8.1% from HK$4,711.2 million to HK$4,329.1 million.

Revenue from the Peruvian Fishmeal Operations decreased by 7.5% from HK$1,397.1 million to HK$1,292.4 million, largely as a result of the significant reduction in TAC in the 2012 second fishing season in the Peruvian Anchovy fishery. The effect of higher average selling prices of fishmeal/fish oil and contribution of revenue from Copeinca for one month (HK$245.7 million) reduced this impact. Revenue from Contract Supply Business decreased by 3.6% from HK$2,924.9 million to HK$2,819.1 million, due mainly to lower average prices of various products. Revenue from the CF Fleet decreased by 44.0% from HK$389.2 million to HK$217.6 million, due primarily to the strategic decision of not operating the fishing fleet in the South Pacific Ocean during the year under review.

The geographical breakdown of the Group’s revenue is as follows:

• The PRC — 83.4%• Europe — 5.7%• Africa — 5.5%• East Asia — 4.1%• Others — 1.3%

Gross profit decreased by 25.8% from HK$1,891.4 million to HK$1,404.3 million, in line with lower revenue and higher fixed costs.

Other operating income increased by 200.3% from HK$397.6 million to HK$1,193.9 million. This was mainly attributed to (1) realised gains of HK$325.7 million from foreign exchange derivative contracts on hedging of the receivables, (2) discount of HK$499.6 million on the Copeinca Acquisition, and (3) HK$101.0 million from gain on disposal of available-for-sale investments.

Selling and distribution expenses decreased by 44.0% from HK$442.5 million to HK$247.8 million, in line with the lower sales volume of the Peruvian Fishmeal and Fish Oil Operations, and Frozen Fish SCM Division.

Other operating expenses increased by 115.7% from HK$285.8 million to HK$616.6 million, this was due primarily to (1) expenses of HK$32.0 million associated with China Fishery rights issue completed in April 2013, (2) transaction costs of HK$105.0 million incurred for the acquisition of Copeinca, and (3) provision of diminution in value of HK$350.4 million of plants and vessels under the Fishery and Fish Supply Division.

Finance costs increased by 36.3% from HK$430.2 million to HK$586.2 million, primarily due to additional interest expenses related to China Fishery senior notes issued in July 2012 and the bridging loan used to fund part of the consideration for the Copeinca Acquisition.

EBITDA decreased by 7.6% from HK$2,555.8 million to HK$2,361.5 million due to lower sales.

Share of results of associates increased by 49.6% from HK$38.5 million to HK$57.5 million, primarily attributable to improved earnings from the Group’s investment in Tassal.

Net profit attributable to owners of the Company increased by 23.8% from HK$627.7 million to HK$777.3 million.

Statement of Financial PositionNon-current assets increased by 81.3% from HK$11,144.7 million to HK$20,200.1 million due mainly to (i) prepayment of the new Fourth Long-term Supply Agreement for Contract Supply Business under the Fishery and Fish Supply Division, and (ii) the assets acquired under the Copeinca Acquisition.

Current assets decreased by 7.0% from HK$12,160.6 million to HK$11,313.2 million. Lower accounts receivable and prepayment to fish suppliers were in line with lower sales volume. The Group’s inventories mainly consisted of frozen fish, fishmeal and fish oil. Inventories decreased from HK$1,379.9 million to HK$923.8 million, due primarily to the sale of frozen fish products under the Frozen Fish SCM Division.

Current liabilities increased by 57.1% from HK$5,757.6 million to HK$9,046.6 million. The increase was due mainly to the bridging loan for Copeinca Acquisition.

Non-current liabilities increased by 63.2% from HK$5,119.3 million to HK$8,353.8 million. The increase was due mainly to senior notes arising on acquisition of Copeinca. The increase in deferred tax liabilities was related to Copeinca’s deferred liabilities and the deferred tax liabilities arising from the gain in fair value of Copeinca.

As of 28 September 2013, the Group’s total debt outstanding consisted of HK$14,299.0 million, which included HK$2,131.7 million of the 9.75% senior notes due 2019, HK$1,949.2 million of Copeinca’s 9.00% senior notes due 2017, HK$2,761.2 million of the bridging loan, and other short-term and long-term borrowings. The Group is in the process of refinancing the bridging loan to a medium to long term bank loan. As a result of the Copeinca Acquisition, the Group’s net debt to equity ratio increased to 97.0%.

PROFILE OF DIRECTORS AND SENIOR MANAGEMENT


Executive DirectorsMR NG JOO SIANG 54, is a founding member, an Executive Director and the Chairman of the Company. He is the managing director and vice-chairman of the Hong Kong-listed parent company, Pacific Andes International Holdings Limited. Mr Ng is also an executive director of the Company’s indirect non-wholly owned Singapore listed subsidiary, China Fishery Group Limited, and also the chairman and an executive director of the Company’s indirect non-wholly owned subsidiary, Copeinca ASA (“Copeinca”), a company listed in both Norway and Peru. He is responsible for the formulation of corporate policies and strategies, and oversees the development, management and investments of the Group. He was appointed as the Chairman on 30 March 2007.

Mr Ng graduated from Louisiana State University, Baton Rouge, Louisiana in the USA, majoring in international trade and finance. He has over 20 years of experience in the seafood and shipping industries.

Mr Ng is son of Madam Teh Hong Eng and brother of Mr Ng Joo Kwee, Mr Ng Joo Puay, Frank and Ms Ng Puay Yee.

MR NG JOO PUAY, FRANK 51, is the Managing Director of the Company. He is responsible for corporate planning and policy administration of the Group. Mr Ng is also the executive director of the Hong Kong listed parent company, Pacific Andes International Holdings Limited. He studied at Loyola University in New Orleans, Louisiana, in the USA, majoring in business administration.

Mr Ng has over 20 years of experience in the seafood trading business. Prior to joining the Group in 1987, he was a trading manager with a fish trading company in Taiwan for three years.

Mr Ng is son of Madam Teh Hong Eng and brother of Mr Ng Joo Siang, Mr Ng Joo Kwee and Ms Ng Puay Yee.

MADAM TEH HONG ENG 78, is an Executive Director of the Company. She is responsible for general administration and strategic planning. Madam Teh joined the Group in 1986 and has over 30 years’ experience in administration and financial investments. She is also the chairperson of the Hong Kong listed parent company, Pacific Andes International Holdings Limited. Madam Teh was last re-elected as a Director on 28 January 2013.

Madam Teh is mother of Mr Ng Joo Siang, Mr Ng Joo Kwee, Mr Ng Joo Puay, Frank and Ms Ng Puay Yee.

MR NG JOO KWEE 53, is an Executive Director of the Company. He is the executive chairman of the Company’s indirect non-wholly owned Singapore listed subsidiary, China Fishery Group Limited. Mr Ng is also an executive director of the Hong Kong listed parent company, Pacific Andes International Holdings Limited. He oversees the sourcing, processing, sales and marketing activities of the Group. Mr Ng received education in the USA at Southeastern Louisiana University in Hammond, Louisiana. Between 1983 and 1989, he was president of a seafood trading and fishing company in Taiwan.

In 1989, Mr Ng joined the Group as General Manager of its China operations. In 1994, he resigned from the Company, but rejoined in March 1996. Mr Ng was last re-elected a Director on 28 January 2011.

Mr Ng is son of Madam Teh Hong Eng and brother of Mr Ng Joo Siang, Mr Ng Joo Puay, Frank and Ms Ng Puay Yee.

Independent DirectorsMR BERTIE CHENG SHAO SHIONG 76, was appointed as an Independent Director of the Company on 29 December 1997 and Chairman of the Audit Committee since 27 January 2006. Mr Cheng was last re-elected as a Director on 28 January 2012.

Mr Cheng retired as Chief Executive Officer of POSBank in July 1997. He was appointed as Advisor to POSBank on 1 June 2010. He holds and has held directorships, in both listed and unlisted companies. Currently, he is the Chairman of Telechoice International Limited and Non-executive Chairman of TEE International Limited. He is also a Director of Hong Leong Finance Limited, Singapore Technologies Electronics Limited and Baiduri Bank Berhad. Other appointments include being the Chairman of the Medifund Committee, Singapore General Hospital, Vice-Chairman of the Board of Trustees, Consumers Association of Singapore Endowment (“CASE”) Fund and the Chairman of the Investment Panel of SPRING SEEDS Capital Pte Ltd.

Mr Cheng holds a Bachelor of Arts Degree in Economics (Honours) from the University of Malaya in Singapore. He received the Public Administration Medal (Silver) in 1984 and the Public Service Medal in 2001. He also received the Friend of Labour Award from the National Trade Union Congress (NTUC) in 2008.



MR CHEW HAI CHWEE 58, was appointed as an Independent Director and a member of the Audit and Remuneration Committees of the Company on 22 November 2010. He was last re-elected a Director on 28 January 2011.

Mr Chew had spent the last 27 years working for Asian and US multinationals with listing on the Singapore Exchange (SGX), NYSE and NASDAQ in USA where he was primarily responsible for various business functions and responsibilities including compliance, audit, mergers and acquisitions, corporate governance and international finance.

Currently, he has his own consultancy and investment firm. He is also a director in various listed and unlisted companies. Mr Chew serves as an independent director on the board of Stratech Systems Limited, a listed company on the SGX and WWF-World Wide Fund for Nature-Singapore (a non-profit organization) with headquarters in Gland, Switzerland. He is also a Council Member and an audit committee member in Red Cross (Singapore) and currently chairs the Committee of Humanitarian Aid and International Relief of Red Cross (Singapore). Mr Chew also sits on the Board of Directors of UNLV (University of Nevada Las Vegas) Singapore and on the Board of Advisors of Kemin Asia Pacific. He was appointed in 2012 as a member of audit committee of Thye Hua Kwan.

Mr Chew holds a First Class Honours degree in accounting and MBA in Business from University of South Alabama, USA. In addition, he has attended the Executive Programme for CFO in INSEAD, France.

LIEUTENANT-GENERAL (RETIRED) NG JUI PING 65, was appointed as an Independent Director of the Company and the Chairman of the Nominating and Remuneration Committees of the Company on 27 January 2006. General Ng was last re-elected as a Director on 22 January 2010 and is subject to re-election by shareholders at the forthcoming Annual General Meeting of the Company to be held on 27 January 2014.

General Ng had a distinguished 30-year military career culminating in the position of Chief of Defence Force, Singapore, from which he retired in 1995. He was also Chief of Army and Chief of Staff of the General Staff. He has been conferred the prestigious Meritorious Service Medal (Military) and the Public Administration Medal (Gold), among other national honours, for distinguished service to Singapore. He has also been conferred prestigious awards by regional countries for his contributions.

Following his retirement from the Singapore Armed Forces, General Ng took up the entrepreneurial route. He listed the company he co-founded on the SGX-ST in January 2000 and exited via a share sale in late 2004. He now wholly owns and is Chairman of August Asia Consulting, a business advisory firm amongst other privately-owned companies.

He is also an Independent Director on the SGX-ST listed Boards of Yanlord Land Group Limited and Singapore Shipping Corporation Limited.

His past directorships in other listed companies and other major appointments include Deputy Chairman, Central Provident Fund Board, Singapore; Director, PSA International Pte Ltd and Chairman of its China and North East Asia Group; Director, NTUC Income, Singapore’s largest Insurance group; Chairman, Singapore Technologies Automotive Ltd; Chairman, Horizon.com Limited, Chairman, Chartered Industries of Singapore Pte Ltd; Chairman, Nanyang Institute of Management Pte Ltd; Chairman, Knowledge Alive Pte Ltd; Corporate Advisor to Singapore Technologies Pte Ltd and Singapore Technologies Engineering Ltd; Advisor, Aldar, Abu Dhabi’s largest property development group; Advisor, Chesterton International Property Consultants, Singapore; and Advisor, MEC Coal Pte Ltd.

General Ng received a Master of Arts (History) from Duke University, USA and also completed the Advanced Management Programme in Harvard Business School, USA.

Alternate DirectorsMS NG PUAY YEE 41, was appointed as an Alternate Director to Madam Teh Hong Eng on 15 March 2002. She is also an executive director of the parent company, Pacific Andes International Holdings Limited, and an executive director of Copeinca. Ms Ng is responsible for global sales and marketing of the Pacific Andes Group’s frozen fish and seafood products. In addition, she also oversees the Group’s global raw material sourcing. She is a member of China Fishery’s Corporate Social Responsibility Committee, and is an active board member of various fish trade organisations around the world such as the Groundfish Forum Council, where she is on the executive committee, Whitefish CEO Sustainability Committee, and the National Fishery Institute Executive Committee. She graduated from Indiana University in Bloomington, USA majoring in Mass Communication. Ms Ng joined the Pacific Andes Group in 1995. She is also a board member of the Young Presidents’ Organisation Hong Kong Chapter, and is an active member of the young business leaders’ community in Hong Kong, having chaired the Entrepreneurs’ Organisation Hong Kong Chapter in 2008/9.



Ms Ng is daughter of Madam Teh Hong Eng and sister of Mr Ng Joo Siang, Mr Ng Joo Kwee and Mr Ng Joo Puay, Frank.

MR CHAN TAK HEI 44, was appointed as an Alternate Director to Mr Ng Joo Kwee on 15 March 2002. He is also the finance director of the Company’s indirect non-wholly owned Singapore-listed subsidiary, China Fishery Group Limited.

Mr Chan graduated from the Hong Kong Polytechnic University with a bachelor degree in accountancy and is a fellow member of the Hong Kong Institute of Certified Public Accountants. Prior to joining the Group in 1995, he worked in an international accounting firm for more than four years.

Senior ManagementMR JOSE MIGUEL TIRADO MELGAR 47, is a general manager of CFG Investment S.A.C., and has been brought in to run our Peruvian operations. He has also been appointed as the chief executive officer of Copeinca in September 2013. Mr Tirado is responsible for the overall management of CFG Investment S.A.C. and supervision of the key managers of CFG Investment S.A.C. Prior to joining the Group in 2006, he was an independent investor owning fishing vessels, processing plants and a fishing vessel shipyard in Peru. Mr Tirado graduated from Bentley College in Boston, Massachusetts in 1990 with a Bachelor’s degree in Management.

MR FRANCISCO JAVIER PANIAGUA JARA 43, is a general manager of CFG Investment S.A.C.. He is responsible for all corporate, legal and regulatory matters relating to our Peruvian operations. Prior to joining the Group in 2006, Mr Paniagua was an attorney with Estudio Echecopar and an in-house counsel with Banco Latino, both in Lima, Peru. He was also an attorney with Cleary, Gottlieb, Steen & Hamilton in New York, New York. Mr Paniagua holds a Bachelor’s degree in General Studies and a Law degree, both from Pontificia Universidad Catolica del Peru, and an L.L.M. degree from Cornell Law School in Ithaca, New York.

MR ISAAC FINGER KOGAN 43, is the chief financial officer of CFG Investment S.A.C. a position he has held since April 2008. He has also been appointed the chief financial officer of Copeinca in October 2013. Prior to joining the Group in 2008, he worked as chief financial officer at Hochschild Mining PLC for four years. Mr Finger graduated from Universidad de Lima with a Bachelor’s degree in Industrial Engineering and has a Master of Science degree in Finance from the University of Rochester in New York.

MR JERKO ARZICH 60, is with 36 years of professional experience on Fishmeal and Fishoil processing plants. He graduated on the faculty of Chemical from the University of Chile. He worked 16 years on Pesquera Coloso S.A. from Chile (now Corpesca) in Quality and Production areas. Then he worked 13 years on Austral S.A.A. Peru as Manager Fishmeal and Fishoil Plant and then as Corporative Manager of Quality and Production. Since 2006 he assumed the position of Operation Manager of Fishmeal and Fishoil plant in CFG Investment SAC. He is a professional with several training courses and solid laboral experience.

MR EDUARDO JAUREGUI 50, is a Mechanical Engineer from Universidad Católica del Perú and diplomated as Service Manager from Hamburg Marketing Akademie. He worked for 9 years in Alfa Laval as Manager of Chile and Perú offices. He also worked for 9 years in the peruvian fishmeal industry as Maintenance Manager in Austral Group. He assumed the position of Fleet Manager in CFG Investment SAC since December 2007.



The Directors present their annual report and the audited consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company for the financial year ended 28 September 2013.

1. DIRECTORSThe Directors of the Company in office at the date of this report are:

Executive Directors:Ng Joo Siang — ChairmanNg Joo Puay, Frank — Managing DirectorTeh Hong EngNg Joo KweeNg Puay Yee (Alternate Director to Teh Hong Eng)Chan Tak Hei (Alternate Director to Ng Joo Kwee)

Independent Directors:Bertie Cheng Shao ShiongLt-Gen (Ret) Ng Jui PingChew Hai Chwee

In accordance with the provisions of the Company’s Bye-Laws, Lt-Gen (Ret) Ng Jui Ping will retire and, being eligible, offers himself for re-election. All other directors continue in office.

2. SHARE CAPITAL AND DEBENTURESDetails of movements in the share capital and bonds of the Company and senior notes of the Group are set out in Notes 36, 32, and 34 to the financial statements respectively.

During the year, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed shares.

3. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURESNeither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate.



4. DIRECTORS’ INTERESTS IN SHARES OR DEBENTURESThe Directors of the Company holding office at the end of the financial year had no interests in the shares and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company except as follows:

Direct DeemedName of Director and

Company in which interests is held

At29 September

2012

At28 September

2013

At29 September

2012

At28 September

2013

The Company Ordinary shares of S$0.05 each

Bertie Cheng Shao Shiong — — 5,128,474(note a) 5,128,474(note a)

Lt-Gen (Ret) Ng Jui Ping 252,900 252,900 — —

Intermediate holding company, Pacific Andes International Holdings Limited Ordinary shares of HK$0.10 each

Ng Joo Siang — — 4,828,171(note b) 4,828,171(note b)

Ng Puay Yee 1,304,245 1,304,245 — —Lt-Gen (Ret) Ng Jui Ping 990,216 990,216 — —

Notes:

(a) These shares are held under nominees, Hong Leong Finance Nominees Pte Ltd.

(b) These shares are held under the name of the spouse of Ng Joo Siang.

The director’s interests in the shares of the Company at 19 October 2013 were the same at 28 September 2013.

5. SHARE OPTIONS SCHEME/SHARE AWARDS SCHEME(a) Share Option Scheme of the Company

(i) At a special general meeting held on 28 January 2012, the shareholders of the Company approved a share option scheme known as the PARD Share Option Scheme 2012 (the “2012 Option Scheme”).

During the financial year under review, no options have been granted under the 2012 Option Scheme to any directors and employees of the Company or its subsidiaries.

During the financial year under review, no options have been granted under the 2012 Option Scheme to the company controlling shareholders and its associates, directors and employees of the parent company and its subsidiaries and executive directors and employees of the Company’s associated companies. No options have also been granted under the 2012 Option Scheme to the above group of participants since the commencement of the 2012 Option Scheme.

No options was granted under the 2012 Option Scheme to any employee and/or director (whether executive or non-executive) of a company in the Pacific Andes International Holdings Limited’s Group.

Accordingly, no participant has received 5% or more of the total number of options available under the 2012 Option Scheme.



5. SHARE OPTIONS SCHEME/SHARE AWARDS SCHEME — continued(a) Share Option Scheme of the Company — continued

(ii) Exercise PriceSubject to any alteration of capital pursuant to Rule 10 of the Rules of the 2012 Option Scheme, the exercise price for each share in respect of which an option is exercisable shall be payable upon the exercise of the option and shall be determined by the Remuneration Committee in its absolute discretion, on the date of grant, and fixed by the Remuneration Committee at:

(a) the market price being the weighted average of the last-dealt price for a share, as determined by reference to the daily official list published by the SGX-ST for the three (3) consecutive trading days immediately preceding the date of grant of an option; or

(b) a price which is set at a discount to the market price, provided that the maximum discount shall not exceed twenty per cent (20%) of the market price. The Remuneration Committee shall have the sole and absolute discretion to determine the exact amount of discount to each participant.

In no event will the exercise price be less than the nominal (par) value of a share.

(iii) Alteration of CapitalIf a variation in the issued share capital of the Company (whether by way of a capitalisation of profits or reserves or rights issue, or a reduction, sub-division or consolidation of the existing shares) shall take place, then:

(i) the exercise price for the shares; and/or

(ii) the par value, class and/or number of shares comprised in an option to the extent unexercised; and/or

(iii) the par value, class and/or number of shares over which additional options may be granted to the participants,

shall be adjusted in such manner as the Remuneration Committee may determine to be appropriate and except in relation to a capitalisation issue, upon the written confirmation of the auditors (acting only as experts and not as arbitrators), that in their opinion, such adjustment is fair and reasonable.

Notwithstanding the provisions of Rule 10(a) of the Rules of the 2012 Option Scheme, no such adjustment shall be made:

(i) if as a result, the exercise price shall fall below the par value of a share and if such adjustment would but for this paragraph (b)(i) result in the exercise price being less than the par value of a share, the exercise price payable shall be the par value;

(ii) unless the Remuneration Committee after considering all relevant circumstances, considers it equitable to do so; and

(iii) no options under the 2012 Option Scheme were granted during the financial year under review and no options were granted with exercises set at a discount to the market price of the Company’s shares.



5. SHARE OPTIONS SCHEME/SHARE AWARDS SCHEME — continued(b) Share Awards Scheme of the Company

The Company also has in place a share award scheme known as the PARD Share Awards Scheme (the “Share Awards Scheme”), which was approved by the shareholders of the Company at a special general meeting held on 31 July 2007.

The Company would at its discretion and on a free-of charge basis, grants awards, which represent a specified number of fully paid shares in the share capital of the Company. The awards will vest only after satisfactory completion of Time-Based Targets and/or Time-And-Performance-Based Targets and shall not be more than 10 years from the date of the grant of the shares. Upon the vesting of an award, the participant may receive any or a combination of the following:

(a) new ordinary shares credited as fully paid up;

(b) existing shares repurchased from open market; and/or

(c) cash equivalent value of such shares.

No awards have been granted to participants under the Share Awards Scheme as at 28 September 2012.

The 2012 Option Scheme and the Share Awards Scheme are administered by the Remuneration Committee comprising Lt-Gen (Ret) Ng Jui Ping, Bertie Cheng Shao Shiong and Chew Hai Chwee during the financial year ended 28 September 2013.

The aggregate number of ordinary shares over which options may be granted pursuant to the 2012 Option Scheme, the Share Awards Scheme and any other share scheme which the Company may have in place shall not exceed fifteen percent (15%) of the issued share capital of the Company (excluding treasury shares) from time to time.

(c) Share Awards Scheme of Subsidiary(i) The CFGL Share Awards Scheme (“CFGL SAS”) in respect of ordinary shares in China Fishery Group Limited

was approved by the shareholders of China Fishery Group Limited on 30 April 2007.

(ii) The CFGL SAS is administered by the remuneration committee of China Fishery Group Limited, currently comprising Lim Soon Hock, Tse Man Bun and Tan Ngiap Joo.



5. SHARE OPTIONS SCHEME/SHARE AWARDS SCHEME — continued(c) Share Awards Scheme of Subsidiary — continued

(iii) China Fishery Group Limited would at its discretion and on a free-of-charge basis, grant shares under the CFGL SAS to participants of the scheme. The shares will vest only after satisfactory completion of time-based targets and/or time-and-performance-based targets and shall not be more than 10 years from the date of the grant of the shares. Upon vesting, the participant may receive any or a combination of the following:

(a) new ordinary shares credited as fully paid up;

(b) existing shares repurchased from open market; and

(c) cash equivalent value of such shares.

(iv) No shares awards have been granted to the staff of Pacific Andes International Holdings Limited and China Fishery Group Limited during the year ended 28 September 2013. 1,052,005 share awards had been granted to the staff of Pacific Andes International Holdings Limited and China Fishery Group Limited as at 28 September 2011 and there were an aggregate of 915,314 and 136,691 share awards released and forfeited respectively during the year ended 28 September 2012. As at 28 September 2013, there were nil share awards outstanding.

(v) The aggregate number of ordinary shares which may be issued under the CFGL SAS shall not exceed 15% of the issued share capital of China Fishery Group Limited excluding treasury shares from time to time.

Other than as disclosed above, at no time during the year was the Company or any of its holding companies, subsidiaries or fellow subsidiaries a party to any arrangements to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

6. DIRECTORS’ INTEREST IN CONTRACTS OF SIGNIFICANCEOther than as disclosed in Note 44 to the financial statements and in the Report on Corporate Governance, there was no contract of significance to which the Company or its subsidiaries was a party and in which a director of the Company had a material interest, whether directly or indirectly, existing at the end of the year or at any time during the year.

7. AUDITORSThe auditors, Messrs. Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board


Ng Joo Puay, FrankManaging Director

Date: 27 December 2013


STATEMENT OF THE DIRECTORS

In the opinion of the directors, the consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company as set out on pages 37 to 111 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 28 September 2013, and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board


Ng Joo Puay, FrankManaging Director


REPORT ON CORPORATE GOVERNANCE


The Board of Directors (the “Board”) of Pacific Andes Resources Development Limited (the “Company”) is committed to maintaining a high standard of corporate governance through effective transparency and disclosures.

The Board and Management have taken steps to align the governance framework with the recommendations of the Code of Corporate Governance 2005 (the “Code”), which was revised by the Monetary Authority of Singapore on 2 May 2012 (the “2012 Code”) and is applicable to the Company with effect from the financial year ending 28 September 2014 (“FY2014”).

This report sets out the Company’s application of the corporate governance principles and guidelines of the Code and the 2012 Code (where stated).

Board of DirectorsBoard’s Conduct of its AffairsPrinciple 1: Effective Board to lead and control the Company

The Board’s primary role is to protect and enhance long-term shareholders’ value. Apart from its fiduciary duties, the Board oversees the business affairs of the Company and assumes responsibility for the Group’s overall strategic plans, key operational initiatives, major funding and investment proposals, financial performance reviews and corporate governance practices.

To assist in the execution of its responsibilities, the Board has established the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”). These Board Committees function within clearly defined terms of reference, which are reviewed on a regular basis. These terms of reference had been amended to be in line with the recommendations of the 2012 Code.

The Board conducts scheduled meetings at least four times a year and meets as and when warranted by particular circumstances between these scheduled meetings. The Company’s Bye-Laws provide for meetings to be held via telephone and video conferencing.

The Company has in place orientation programmes for newly appointed Directors to ensure that they are familiar with the Group structure, its business and operations, governance policies, policies on disclosure of interests in securities, rules relating to disclosure of any conflict of interest in a transaction involving the Company, prohibitions in dealing in the Company’s securities and restrictions on disclosure of price sensitive information. Newly appointed directors will participate in orientation programmes, which include meetings with the Chairman/Managing Director and the Group Finance Director to obtain insight information and an understanding of the business.

Matters which specifically require Board approval are those involving material acquisitions, disposal of assets, corporate or financial restructuring and share issuances, dividends and other returns to shareholders and matters which require Board approval as specified under the Company’s interested person transaction policy.

To facilitate effective management, certain functions have been delegated by the Board to various Board Committees. Each Board Committee operates under clearly defined terms of reference. The Chairman of the respective Committees will report to the Board the outcome of the Committee meetings.



Board’s Conduct of its Affairs — continuedPrinciple 1: Effective Board to lead and control the Company — continued

Details of directors’ attendance at Board and Board committees meetings held in FY2013 are summarised in the table below:

BoardAudit

CommitteeRemuneration Committee

Nominating Committee

Name of Directors Held Attended Held Attended Held Attended Held Attended

Ng Joo Siang 4 4 NA NA NA NA 2 2Teh Hong Eng (Alternate: Ng Puay Yee) 4 1 NA NA NA NA NA NANg Joo Puay, Frank 4 4 NA NA NA NA NA NANg Joo Kwee 4 3 NA NA NA NA NA NAChan Tak Hei

(Alternate Director to Ng Joo Kwee) 4 4 4 4(1) 2 2(1) 2 2(1)

Bertie Cheng Shao Shiong 4 4 4 4 2 2 2 2Lt-Gen (Ret) Ng Jui Ping 4 4 4 4 2 2 2 2Chew Hai Chwee 4 4 4 4 2 2 2(2) 2(2)

NA: Not applicable

Notes:

(1) Mr Chan had attended the AC, NC and RC meetings by invitation.

(2) Mr Chew attended the NC by invitation.

All Directors are provided with regular updates on changes in the relevant laws and regulations to enable them to make well-informed decisions. Where possible and when the opportunity arises, the Independent Directors will be invited to the Group’s key locations of operations to enable them to obtain a better perspective of the business and enhance their understanding of the Group’s operations.

Board Composition and GuidancePrinciple 2: Strong and independent element on the Board

As at the date of this report, the Board comprises the following Directors:

Executive DirectorsNg Joo Siang (Chairman)Ng Joo Puay, Frank (Managing Director)Teh Hong EngNg Joo Kwee

Independent DirectorsBertie Cheng Shao ShiongLt-Gen (Ret) Ng Jui PingChew Hai Chwee

Alternate DirectorsNg Puay Yee (Alternate Director to Teh Hong Eng)Chan Tak Hei (Alternate Director to Ng Joo Kwee)

The independence of each Director is reviewed annually by the NC, which has adopted the Code’s definition of what constitutes an independent director in its review. As a result of the NC’s review, the Independent Directors are considered independent.



Board Composition and Guidance — continuedPrinciple 2: Strong and independent element on the Board — continued

The Executive Directors have extensive experience in the frozen seafood and shipping industry and the Independent Directors are well established in their respective professions and possess the relevant expertise and experience in areas such as accounting, finance and business management.

The Independent Directors do constructively challenge Management and assist in the development of proposals on strategies. The NC is satisfied that the Board comprises Directors who as a group provide core competencies such as industry knowledge, strategic planning experience and customer-based experience and knowledge, finance, accounting, business and management experience necessary to meet the Company’s performance targets and to facilitate effective decision-making.

Details of directors’ qualifications and experiences are set out on pages 13 to 15 (Profile of Directors and Senior Management) of this Annual Report.

Chairman and Managing DirectorPrinciple 3: Clear division of responsibilities at the top of the Company

The Chairman of the Company is Mr Ng Joo Siang, who is one of the founders of the Group and plays a key role in developing the business of the Group and provides the Group with strong leadership and vision. Mr Ng is responsible for the workings of the Board and ensures the integrity and effectiveness of the governance process of the Board.

The Company’s Managing Director (“MD”) is Mr Ng Joo Puay, Frank, who is responsible for the day-to-day running of the Group as well as the exercise of strategic goals and control of the quality, quantity and timeliness of information flow between the Board and Management.

Mr Ng Joo Siang and Mr Frank Ng are brothers. There is a clear division of responsibilities between the Chairman and the MD. This ensures a balance of power and authority at the top, as no one individual represents a considerable concentration of power. The roles of Chairman and MD are separate to ensure an appropriate balance of power, increased accountability and greater capacity to the Board for independent decision-making.

All major decisions made by the Chairman and MD are endorsed by the Board. Their performance and appointments to the Board are reviewed periodically by the NC and their remuneration packages are reviewed periodically by the RC. As such, the Board believes that there are adequate safeguards in place against an imbalance concentration of power and authority in single individuals.

Taking cognisance of the non-separation of the roles of the Chairman of the Board and the Executive Chairman, a lead independent director will be appointed in FY2014 in compliance with the 2012 Code.

Board MembershipPrinciple 4: Formal and transparent process for appointment of new directors to the Board

The Directors who held office during the financial year end and up to the date of this report are disclosed on page 16 (Report of the Directors) of this Annual Report. Their profiles are disclosed on page 5 (Corporate Information) and pages 13 to 15 (Profile of Directors and Senior Management) of this Annual Report.

The Board, through the delegation of its authority to the NC has used its best efforts to ensure that Directors appointed to the Board possess the relevant background, experience and knowledge in business, legal, finance and management skill critical to the Group’s business to enable the Board to make sound and well-considered decisions.



Nominating CommitteeThe NC, regulated by a set of written terms of reference, comprises three members, a majority of whom are Independent Directors, as follows:

Lt-Gen (Ret) Ng Jui Ping (Chairman)Bertie Cheng Shao ShiongNg Joo Siang

The NC is chaired by Lt-Gen (Ret) Ng Jui Ping, an Independent Director, who is not associated, directly or indirectly, with a substantial shareholder.

The terms of reference for NC was amended to be in line with the recommendations of the 2012 Code. The primary function of the NC is to determine the criteria for identifying candidates and to review nominations for the appointment of Directors to the Board, to consider how the Board’s performance may be evaluated and to propose objective performance criteria for the Board’s approval. Its principal duties and functions are outlined as follows:

(1) to make recommendations to the Board on all board appointments and re-nomination having regard to the Director’s contribution and performance (e.g. attendance, preparedness, participation, candour, and any other salient factors);

(2) to ensure that all Directors would be required to submit themselves for re-nomination and re-election at regular intervals and at least once in every three years;

(3) to determine annually whether a Director is independent in accordance with the independence guidelines contained in the Code;

(4) to review whether a Director is able to and has adequately carried out his duties as a Director of the Company in particular where the Director concerned has multiple board representations;

(5) to consider how the Board’s performance may be evaluated and propose objective performance criteria; and

(6) to review training and professional development programs for the Board.

In accordance with the Company’s Bye-laws, each Director (other than the Chairman and/or MD) will have to retire at least once every three years by rotation and all newly appointed Directors will have to retire at the next Annual General Meeting (“AGM”). The retiring Director who is eligible will offer himself/herself for re-election. Accordingly, Lt-Gen (Ret) Ng Jui Ping, who is eligible will be offering himself for re-election at the forthcoming AGM.

Mr Bertie Cheng has been an Independent Director of the Board for more than 9 years. The NC had rigorously reviewed Mr Bertie Cheng’s independence at the last NC meeting. Based on both the verbal and written confirmations given by Mr Cheng, the NC found no reason to understand that the length of Mr Cheng’s service has in any way dimmed his independence. Given his wealth of business, working experience and professionalism in carrying out his duties, the NC had found Mr Cheng suitable to continue to act as an Independent Director. The Board has accepted the NC’s recommendation that Mr Cheng was considered independent.

Board PerformancePrinciple 5: Formal assessment of the effectiveness of the Board and contributions by each Director

While the Code recommends that the NC be responsible for assessing the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board, the NC felt that it is more appropriate and effective to assess the Board as a whole, bearing in mind that each member of the Board contributes in different way to the success of the Company. Board decisions are also made on a collective basis. For FY2013, the NC had extracted salient recommendations from the 2012 Code and incorporated these recommendations into the Board evaluation form.



Board Performance — continuedPrinciple 5: Formal assessment of the effectiveness of the Board and contributions by each Director — continued

The NC has adopted a formal system of evaluating the Board performance as a whole. This process entails the completion of a questionnaire by Board Members. A summary of the findings is prepared following the return of the completed questionnaire for review and deliberation by the NC. The NC Chairman then reports the findings to the Board so that an appropriate course of action is agreed. The NC in conducting the appraisal process to assess the performance and effectiveness of the Board as a whole, focuses on a set of performance criteria which includes the evaluation of the size and composition of the Board, the Board’s access to information, Board processes and accountability, Board performance in relation to discharging its principal responsibilities, MD/top management succession planning and the Directors’ standards of conduct.

Access to InformationPrinciple 6: Board members to have complete, adequate and timely information

All Directors have independent access to the Group’s senior management and the Company Secretary and External Auditors at all times. All Directors are provided with adequate and timely information prior to Board meetings and on an ongoing basis. The Company Secretary provides secretarial support to the Board and ensures adherence to Board procedures and relevant rules and regulations, which are applicable to the Company. The Company Secretary attends all Board and Board committees meetings. Should Directors, whether as a group or individually, need independent professional advice to fulfill their duties, such advice will be obtained from a professional firm of the Director’s choice, the cost of which will be borne by the Company.

Procedures for Developing Remuneration PoliciesPrinciple 7: Formal and transparent procedure for fixing remuneration packages of Directors and key management executives

Remuneration CommitteeThe RC, regulated by a set of written terms of reference, comprises three members. As at the date of this report, the composition of the RC is as follows:

Lt-Gen (Ret) Ng Jui Ping (Chairman)Bertie Cheng Shao ShiongChew Hai Chwee

The terms of reference for RC was amended to be in line with the recommendations of the 2012 Code. The RC reviews and recommends to the Board the following matters:

(a) the remuneration packages of all Directors and senior executives of the Group;

(b) fees for Independent Directors, subject to shareholders’ approval at the AGM;

(c) the share-based incentives or awards for directors and key management employees; and

(d) all service contracts and terms of employment of the Executive Directors and senior executives. The RC also has access to external professional advice on remuneration matters, if required.

The Board will table the RC’s recommendation of S$150,000 as Directors’ fees for the financial year ending 28 September 2014 at the forthcoming AGM for approval.

Other than the Directors’ fees for the Independent Directors, which are set in accordance with a remuneration framework, the Board has decided that the policy on annual remuneration will not be tabled at the forthcoming AGM.



Level and Mix of RemunerationPrinciple 8: The level of remuneration for Directors should be adequate, not excessive, and linked to performance

The remuneration policy of the Company is to provide compensation packages at market rates, which rewards successful performance and attract, retain and motivate Directors and senior management.

The Executive Directors do not receive Directors’ fees. The Executive Directors’ and key senior management remuneration packages are based on service contracts and their remuneration are determined by having regard to the performance of the Group as well as individuals and market trends. Service contracts for the Executive Directors do not contain onerous removal clauses.

Independent Directors are paid yearly Directors’ fees of an agreed amount set at a competitive level based on their contributions, taking into account factors such as effort, time spent and their respective responsibilities. Directors’ fees are recommended by the Board for shareholders’ approval at the Company’s AGM.

The Company has in place a share option scheme known as the PARD Share Option Scheme 2012 and a share awards scheme known as the PARD Share Awards Scheme, details of which are disclosed on pages 17 to 19. These two schemes are administered by the RC.

The Company’s shareholders have approved at the Special General Meeting (“SGM”) held on 30 July 2008 to amend the Company’s Articles of Association to include provisions on treasury shares. With this amendment, the Company would be able to acquire its own shares either through market purchase or off-market purchase and thereafter and hold them as treasury shares. These treasury shares may be offered to the Group’s employees through the PARD Share Awards Scheme, where applicable. As at the date of this report, no shares has been repurchased or held as treasury shares.



Disclosure on RemunerationPrinciple 9: Clear disclosure of remuneration policy, level and mix of remuneration, and the procedure for setting the remuneration

The remuneration for the financial year ended FY2013 is shown as below:

Name of Director Remuneration Band Salary

PerformanceBased

BonusesDirector’s

FeeOther

Benefits Total% % % % %

Ng Joo Siang S$500,000 to below S$750,000 48 16 — 36 100Ng Joo Puay, Frank S$250,000 to below S$500,000 48 16 — 36 100Teh Hong Eng S$250,000 to below S$500,000 50 17 — 33 100Ng Joo Kwee S$500,000 to below S$750,000 55 18 — 27 100Chan Tak Hei S$750,000 to below S$1,000,000 55 18 — 27 100Bertie Cheng Shao Shiong Below S$250,000 — — 100 — 100Lt-Gen (Ret) Ng Jui Ping Below S$250,000 — — 100 — 100Chew Hai Chwee Below S$250,000 — — 100 — 100

Top 5 Key Executives (who are not directors)*

Name of Executive* Remuneration Band Salary

PerformanceBased

BonusesOther

Benefits Total% % % %

Francisco Javier Paniagua Jara S$250,000 to below 500,000 100 — — 100Jose Miguel Tirado Melgar S$250,000 to below 500,000 100 — — 100Isaac Finger Kogan Below S$250,000 100 — — 100Jerko Arzich Below S$250,000 100 — — 100Eduardo Jauregui Below S$250,000 100 — — 100

* They are employees of the Company’s subsidiary, China Fishery Group Limited

The RC and the Board are of the view that the remuneration of the Directors is adequate but not excessive in order to attract, retain and motivate them to run the Company successfully.

There are no immediate family members of Directors in employment with the Company and whose remuneration exceeds S$50,000 during FY2013 except for Mr Ng Joo Siang (Chairman), Mr Ng Joo Puay Frank (MD), Mdm Teh Hong Eng (Executive Director) and Mr Ng Joo Kwee (Executive Director).

Mdm Teh Hong Eng is the mother of Ng Joo Siang, Ng Joo Puay Frank and Ng Joo Kwee.

AccountabilityPrinciple 10: The Board should present a balanced and understandable assessment of the Company’s performance, position and prospects

The Board is accountable to shareholders for the management of the Group. The Board updates shareholders on the operations and financial position of the Company through quarterly, half yearly and full year results announcements as well as timely announcements of other matters as prescribed by the relevant rules and regulations. Management is accountable to the Board by providing the Board with the necessary financial information for the discharge of its duties.



Audit CommitteePrinciple 11: Establishment of Audit Committee with written terms of reference

The Company has adopted and has complied with the principles of corporate governance under the Code in relation to the roles and responsibilities of the AC. The AC comprises all Independent Directors. The Board is of the view that the members of the AC are appropriately qualified, having the necessary accounting or management expertise and experience to discharge their responsibilities.

Profile of the AC members is set out on pages 13 and 14 (Profile of Directors and Senior Management) of this Annual Report. The AC, regulated by a set of written terms of reference, comprises three members who are Independent non-executive Directors.

As at the date of this report, the members of the AC are:

Bertie Cheng Shao Shiong (Chairman)Lt-Gen (Ret) Ng Jui PingChew Hai Chwee

The AC meets at least four times a year and as and when deemed appropriate to carry out its functions.

The AC has full access to and the co-operation of Management. The AC also has full discretion to invite any Director or executive officer to attend its meetings and has been given adequate resources to enable it to discharge its functions.

The terms of reference for AC was amended to be in line with the recommendations of the 2012 Code. The functions of the AC are as follows:

(1) assists our Board in discharging its statutory responsibilities on financial and accounting matters;

(2) reviews the financial and operating results and accounting policies of the Group;

(3) reviews significant financial reporting issues and judgments relating to financial statements for each financial year, interim and annual results announcement before submission to the Board for approval;

(4) reviews the adequacy of the Company’s internal control (financial and operational) and risk management policies and systems established by Management;

(5) reviews the audit plans and reports of the external and internal auditors and considers the effectiveness of the actions taken by Management on the auditors’ recommendations;

(6) appraises and reports to our Board on the audits undertaken by the external and internal auditors, the adequacy of the disclosure of information, and the appropriateness and quality of the system of management and internal controls;

(7) reviews the independence of external auditors annually and considers the appointment or re-appointment of external auditors and matters relating to the resignation or removal of the auditors and approves the remuneration and terms of engagement of the external auditors; and

(8) reviews interested person transactions, as defined in the Listing Manual of the SGX-ST.



Audit Committee — continuedPrinciple 11: Establishment of Audit Committee with written terms of reference — continued

The Company has adopted a whistle blowing policy. The coverage of this policy has been extended to external parties as recommended by the 2012 Code. Under this policy, the AC reviews arrangements by which the staff and external parties may, in confidence, report possible improprieties, which may cause financial or non-financial loss of the Company. The objective is to ensure that arrangements are in place, for the independent investigation of such concerns and for appropriate follow-up action. The policy is available on the Company’s website at www.paresourcesdevelopment.com to facilitate participation by external parties.

The AC had reviewed the non-audit services provided by the external auditors, Deloitte & Touche LLP and is of the opinion that the provision of such services does not affect their independence.

Annually, the AC meets with the external auditors without the presence of Management. The AC had recommended the re-appointment of Deloitte & Touche LLP at the forthcoming AGM.

The Company has complied with Rules 712 and 715 of the Listing Manual in relation to the appointment of Deloitte & Touche LLP as the external auditors of the Group. Rule 716 of the Listing Manual is not applicable as the same auditing firm is appointed for the Group.

Internal ControlsPrinciple 12: The Board to ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the Company’s assets, AC to review the adequacy of financial, operational and compliance controls and risk management policies.

The AC is fully aware of the need to put in place a system of internal controls within the Group to safeguard the shareholders’ interests and the Group’s assets, and to manage risks. The system is intended to provide reasonable but not absolute assurance against material misstatements or loss, and to safeguard assets and ensure maintenance of proper accounting records, reliability of financial information, compliance with appropriate legislation, regulation and best practices, and the identification and containment of business risks.

The Group regularly reviews and improves its business and operational activities to identify areas of significant business risks as well as taking appropriate measures to control and mitigate these risks. The Group reviews all significant control policies and procedures and highlights all significant matters to the AC and the Board. Nothing has come to the AC’s attention to cause the AC to believe that the system of internal controls and risk management is inadequate.

The financial risk management objectives and policies are outlined in the financial statements. Risk Management alone does not guarantee that business undertakings will not fail. However, by identifying and managing risks that may arise, the Group can make more informed decisions and benefit from a better balance between risk and reward. This will help protect and also create shareholders’ value.



Internal AuditPrinciple 13: Setting up independent internal audit function

The Company has set up an internal audit (“IA”) function, which reports directly to the AC. The internal auditor has adopted the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

The AC, on an annual basis, will assess the effectiveness of the IA by examining the scope of the IA work and its independence of areas reviewed and the internal auditor’s report. The AC is satisfied that the IA function has adequate resources and appropriate standing within the Company to undertake its activities independently and objectively.

The AC also meets the internal auditor without the presence of Management annually.

The Internal Auditors perform detailed work to assist the AC in the evaluation of the Group’s financial, operational, compliance and information technology controls based on the internal audit plan approved by the AC. Any material non-compliance or weakness in internal controls, including recommendations for improvements, are reported to the AC. The AC also reviews the effectiveness of actions taken by Management on the recommendations made by the Internal Auditors in this respect.

In addition to the work performed by the Internal Auditors, the External Auditors also perform tests of certain controls relevant to the preparation of the Group’s financial statements. The External Auditors report any significant deficiencies of such internal controls to the AC.

During FY2013, Management with the assistance of the Internal Auditors carried out an exercise to review and consolidate the Group’s risk register which identifies key risks facing the Group and the internal controls in place to manage or mitigate those risks.

Based on the internal controls established and maintained by the Group, work performed by the Internal and External auditors, and reviews performed by Management, various Board Committees and the Board; the Board with the concurrence of the AC, is of the opinion that the internal controls in place are adequate in addressing the Group’s financial, operational and compliance risks in its current business environment.

Communication With ShareholdersPrinciple 14: Regular, effective and fair communication with shareholdersPrinciple 15: Shareholders’ participation at AGM

The Board is accountable to the shareholders and the Company is in regular, effective and fair communication with shareholders. The Company has invested in external & internal resources to ensure timely, fair and detailed disclosure of information is made to the public in compliance with SGX-ST guidelines. Material information is disseminated to the SGX-ST.

In addition to the communication channels described above, the Company has made quarterly report of its financial results since financial year 2004 in compliance with new disclosure requirements.

All shareholders of the Company receive the Annual Report of the Company and notice of AGM within the mandatory period. Participation of shareholders is encouraged at the Company’s general meetings. Each item of special business included in the notices of annual general meeting and extraordinary general meeting is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at the meeting. The Board (including the Chairman of the respective Board Committees), Management, as well as the external auditors attend the Company’s AGM to address any question that shareholders may have.



Communication With Shareholders — continuedPrinciple 14: Regular, effective and fair communication with shareholders — continuedPrinciple 15: Shareholders’ participation at AGM — continued

For greater transparency and fairness in the voting process, voting at shareholders’ meetings were conducted by poll since 2009. This allows all shareholders present or represented at the meetings to vote on a one-share-one vote basis. The voting results of all votes cast for or against each resolution is then screened at the meeting and announced to the SGX-ST after the meeting.

Dealing In SecuritiesThe Company has adopted an internal code on dealings in securities by Directors and officers of the Group to provide guidance to its Directors and officers on dealing in the Company’s securities. All Directors and officers of the Group who have access to unpublished price sensitive information are required to observe this code.

The Directors and officers have been informed not to deal in the Company’s securities whilst in possession of unpublished price sensitive information and during the periods commencing at least two weeks before the announcement of the Company’s full-year results and results for first three quarters. The code also provides that Directors and officers should not deal in the Company’s securities on short-term considerations.

Interested Person Transactions (“IPTs”) And Shareholders’ MandateThe Company has adopted an internal policy governing procedures for the identification, approval and monitoring of interested person transactions. All interested person transactions are subject to review by the AC. The AC reviews the shareholders’ mandate at regular interval to ensure that the IPTs are transacted on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders.

The following are details of the aggregate value of interested person transactions for FY2013 undertaken pursuant to the shareholders’ mandate under Rule 920 of the Listing Manual of the SGX-ST and approved by the AC.

Name of Interested Person

Aggregate value (S$’000) of all IPTsduring the financial year under review

(excluding transactions less than S$100,000and transactions conducted under

shareholders’ mandate pursuant to Rule 920)

Aggregate value of all IPTsconducted during the financial yearunder review under shareholders’

mandate pursuant to Rule 920(excluding transactions less than S$100,000)

(HK$’000) (HK$’000)

Pacific Andes International Holdings Limitedand its subsidiaries

Administrative Expenses — 34,787Interest Expenses 111 —

The current shareholders’ mandate will be expiring on 27 January 2014, being the date of the forthcoming SGM of the Company. The Company is proposing to seek shareholders’ approval at a SGM to be held on 27 January 2014 to renew the shareholders’ mandate pursuant to Chapter 9 of the SGX-ST Listing Manual. IPTs approved by shareholders at the SGM and the Shareholders’ Mandate shall, unless revoked or varied by the Company in a general meeting, continue to be in force until the next AGM.

Material ContractsSave for the service agreements entered with the Executive Directors and the interested person transactions conducted under the Company’s shareholders’ mandate, no material contract involving the interests of any Director or controlling shareholders of the Company has been entered into by the Company or any of its subsidiary companies in FY2013.



Risk Management Policies And ProcessesThe Board has not delegated the oversight responsibility of risk management to a separate committee. However, the Executive Directors and Management regularly review the Company’s business and operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. Management, with the assistance of the internal auditor and external auditor, reviews all significant control policies and procedures and highlights all significant matters to the Directors and AC.

Dated: 27 December 2013


CORPORATE SOCIAL RESPONSIBILITY

PARD is committed to offering a responsibly-derived range of quality seafood products.

A Board-level CSR Committee (“CSRC”) was established in 2010 by its fishery and fish supply arm, China Fishery. The Committee consists of three non-executive directors, one executive director of China Fishery and one executive director of Pacific Andes International Holdings Limited. In 2011 the Committee appointed a marine ecologist, Dr. Keith Sainsbury, as an adviser. Dr. Sainsbury brings to the Committee a wealth of expertise and research on the assessment, ecology, exploitation and conservation of marine resources and ecosystems.

The CSRC continued implementing processes to uphold the Company’s commitment.

Support for sustainable fisheries managementIn May 2013, the Group’s Peruvian operations were audited and approved for Friend of the Sea (“FOS”) certification. This certification covers all Peruvian processing plants and fleet operations and meets fishmeal and fish oil standards set by customers in Europe. This is in addition to our Responsible Sourcing certification from the International Fishmeal and Fish Oil Organisation (“IFFO”) held by all our processing plants in Peru.

PARD continued to support and follow closely the Marine Stewardship Council (“MSC”) certification process for Russian pollock, with the Sea of Okhotsk pollock achieving MSC certification on 24 September 2013. Pollock is a midwater trawl fishery and pelagic trawls rarely come into contact with the seabed. This type of fishing is not associated with damage to marine habitat or significant levels of discarding of unwanted species (by-catch).

Atlantic Pacific FishingPARD’s fishery and fish supply subsidiary China Fishery established a joint venture fishing company, Atlantic Pacific Fishing Company (Pty) Limited (“APF”), in Namibia in 2012. In FY2013 it continued to successfully harvest horse mackerel in partnership with three local Namibian consortium groups. In line with PARD’s sustainability position, “In for the Long Term”, establishing a joint venture company with Namibian citizens not only made good commercial sense, but also enabled management to gain a deeper understanding of Namibia’s historical and social context and the requirements and expectations of Namibia’s labour standards. There was only one new quota holder group formed in Namibia in 2013 and this group decided to partner with APF to harvest their allocated mackerel quota. APF offered a sustainable long term business model, together with the highest return to the quota rights holder shareholders.

APF aims to create long term employment prospects for Namibians, as well as to bring skills and knowledge transfer to the industry. In order to ensure the Group’s strategy meets local stakeholder expectations and needs, PARD conducted a stakeholder engagement exercise, working with a local Namibian consultant and fisheries expert. 17 stakeholder representatives from the Ministry of Fisheries and Marine Resources and other government departments, trade unions, NGOs, community groups, joint venture shareholders and media were invited to provide feedback on its operations in Namibia in terms of performance and expectations on corporate governance, social and environmental issues.

Sustainability audits on fisheriesUnder the guidance of the CSRC, PARD established a list of criteria to review the environmental and social risk profiles of the major fisheries associated with its business. In FY2013 it completed a third audit on the Namibian horse mackerel fishery, covering a range of environmental and social risk issues and identifying management strategies to mitigate each risk. An audit on Peruvian anchovy also commenced and will be completed in FY2014.

Group-wide sustainability platformIn order to ensure a robust system for environmental data collection and management at Group level, PARD embarked on the development of a web-based platform in May 2013. This online platform will be used to capture all relevant environmental data across operations, to set targets and key performance indicators, and reduce our environmental impacts. It also provides a management system for measuring and reporting on the Group’s global carbon footprint.


CORPORATE SOCIAL RESPONSIBILITY

APEC Policy Partnership on Food Security (“PPFS”)In 2012 parent Company Pacific Andes International Holdings Limited became a founding member on APEC’s Policy Partnership on Food Security (“PPFS”), an initiative that brings private sector knowledge and resources to APEC governments to ensure sustainable fisheries and food security by 2020. PARD continued its active participation in FY2013 in two working groups under PPFS — Working Group 1: “Stock-take & Road Map Towards 2020” and Working Group 2: “Sustainable Development of Agriculture and Fisheries Sectors”. As the only direct fishing and fish processing company on the policy group, PARD has an important role to play in driving the sustainable fisheries and aquaculture agendas. The Group’s contribution was thus important for the development of the PFFS Road Map.

Materiality and risk assessmentSubsequent to the year end the CSRC conducted a materiality workshop to identify the priority CSR issues facing the industry. The workshop enabled open discussion amongst executive and non-executive Directors on matters related to environmental compliance, social responsibility and emerging stakeholder expectations and will form the basis for the next Sustainability Report.

Sustainability reportPARD produces a stand-alone Sustainability Report every two years. As a part of the reporting process, the Group engages with its stakeholders to understand how they feel about the Company’s response to economic, environmental and social issues. The Group is in the process of pulling together its second stand-alone Sustainability Report, which will be published in FY2014.


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PACIFIC ANDES RESOURCES DEVELOPMENT LIMITED(incorporated in Bermuda with limited liability)

Report on the Financial StatementsWe have audited the accompanying financial statements of Pacific Andes Resources Development Limited (the Company) and its subsidiaries (the Group) which comprise the statements of financial position of the Group and the Company as at 28 September 2013, and the consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group and statement of changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 37 to 111.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view in accordance with Singapore Financial Reporting Standards and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the 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 management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are properly drawn up in accordance with the Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 28 September 2013 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the year then ended on that date.

Deloitte & Touche LLPPublic Accountants andChartered AccountantsSingapore

Jeremy Toh Yew KuanPartner(Appointed on 29 July 2013)



CONSOLIDATED INCOME STATEMENTFinancial year ended 28 September 2013

THE GROUPNOTES 2013 2012

HK$’000 HK$’000 Revenue 5 8,764,092 9,580,798Cost of sales (7,359,796) (7,689,406)

Gross profit 1,404,296 1,891,392

Other operating income 7 1,193,904 397,573Selling and distribution expenses (247,841) (442,493)Administrative expenses (230,278) (257,582)Other operating expenses (616,635) (285,848)Finance costs 8 (586,186) (430,178)

917,260 872,864Share of results of associates 20 57,540 38,459

Profit before income tax 974,800 911,323Income tax benefit (expense) 11 70,567 (24,205)

Profit for the year 9 1,045,367 887,118

Profit attributable to:Owners of the Company 777,256 627,659Non-controlling interests 268,111 259,459

1,045,367 887,118

Earnings per shareBasic 12 HK$0.16 HK$0.16

Diluted 12 HK$0.16 HK$0.16

See accompanying notes to the financial statements.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFinancial year ended 28 September 2013

THE GROUP2013 2012

HK$’000 HK$’000 Profit for the year 1,045,367 887,118

Other comprehensive income:

Items that will not be reclassified subsequently to profit or lossGain on revaluation of property, plant and equipment 9,201 9,414

Items that may be reclassified subsequently to profit or lossExchange difference on translation of the Group’s overseas operations 30,849 2,430Fair value change of available-for-sale investments 104,317 109,240Reclassification adjustment transfer to profit and loss upon derecognition of

available-for-sale investments (101,035) —

Other comprehensive income for the year, net of tax 43,332 121,084

Total comprehensive income for the year 1,088,699 1,008,202

Total comprehensive income attributable to:Owners of the Company 806,530 746,261Non-controlling interests 282,169 261,941

1,088,699 1,008,202



STATEMENTS OF FINANCIAL POSITIONAt 28 September 2013

THE GROUP THE COMPANYNOTES 2013 2012 2013 2012

HK$’000 HK$’000 HK$’000 HK$’000 NON-CURRENT ASSETSProperty, plant and equipment 14 5,300,991 4,572,851 — —Investment properties 15 52,135 51,449 — —Goodwill 16 2,952,461 2,952,461 — —Prepayment to suppliers 17 1,786,916 887,040 — —Advances to suppliers 17 — 315,900 — —Available-for-sale investments 18 25,393 32,858 — —Interests in subsidiaries 19 — — 5,874,373 6,636,675Interests in associates 20 542,615 505,547 — —Other intangible assets 21 9,539,557 1,826,633 — —

20,200,068 11,144,739 5,874,373 6,636,675

CURRENT ASSETSInventories 22 923,785 1,379,897 — —Trade and bills receivables 23 1,832,860 2,247,314 — —Other receivables and prepayments 24 7,320,136 7,899,487 — 183Current portion of prepayment to suppliers 17 205,123 172,640 — —Advances to suppliers 17 315,900 — — —Interests in subsidiaries 19 — — 731,044 —Prepaid income tax 99,513 15,238 — —Pledged deposits 43 111 207 — —Bank balances and cash 25 615,771 445,854 841 1,203

11,313,199 12,160,637 731,885 1,386

CURRENT LIABILITIESTrade and other payables 26 308,082 356,824 15,832 14,540Income tax payable 22,057 44,201 — —Amounts due to Pacific Andes International

Holdings Limited and its subsidiaries 27 5,371 4,937 — —Derivative financial instruments 28 54,712 202,214 2,760 24,206Bonds 32 721,476 — 721,476 —Bank advances drawn on bills 29 7,060 — — —Current portion of finance leases 30 30,151 29,555 — —Current portion of interest-bearing bank

borrowings 31 7,897,734 5,119,836 — —

9,046,643 5,757,567 740,068 38,746

NET CURRENT ASSETS (LIABILITIES) 2,266,556 6,403,070 (8,183) (37,360)


At 28 September 2013STATEMENTS OF FINANCIAL POSITION

THE GROUP THE COMPANYNOTES 2013 2012 2013 2012

HK$’000 HK$’000 HK$’000 HK$’000 NON-CURRENT LIABILITIESFinance leases 30 3,666 33,817 — —Interest-bearing bank borrowings 31 1,557,980 1,801,956 — —Bonds 32 — 690,082 — 690,082Long term payables 33 237,011 — — —Senior notes 34 4,080,896 2,120,094 — —Deferred tax liabilities 35 2,474,198 473,389 — —

8,353,751 5,119,338 — 690,082

NET ASSETS 14,112,873 12,428,471 5,866,190 5,909,233

CAPITAL AND RESERVESShare capital 36 1,325,005 1,325,005 1,325,005 1,325,005Reserves 37 9,078,936 8,362,489 4,541,185 4,584,228

Attributable to owners of the Company 10,403,941 9,687,494 5,866,190 5,909,233Non-controlling interests 3,708,932 2,740,977 — —

TOTAL EQUITY 14,112,873 12,428,471 5,866,190 5,909,233



STATEMENTS OF CHANGES IN EQUITYFinancial year ended 28 September 2013

Sharecapital

Sharepremium

Capitalreserve

Otherreserve

Investmentrevaluation

reserve

Propertiesrevaluation

reserve

Currencyexchangetranslation

reserveRetainedearnings

Attributableto owners

of theCompany

Non-controllinginterests Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK’000 THE GROUPBalance at 29 September 2011 832,691 3,453,523 283,128 35,482 (109,240) 45,909 (6,959) 3,265,214 7,799,748 2,562,550 10,362,298Total comprehensive income

for the year — — — — 109,240 6,932 2,430 627,659 746,261 261,941 1,008,202Issue of shares on exercise

of rights issue 492,314 886,545 — — — — — — 1,378,859 — 1,378,859Share issue expenses — (21,613) — — — — — — (21,613) — (21,613)Redemption of convertible bonds — — — (35,482) — — — 35,482 — — —Deemed dilution of interest

in a subsidiary — — (3,220) — — — — — (3,220) 3,220 —Dividend paid to non-controlling

shareholders — — — — — — — — — (86,734) (86,734)Final dividend of 1.08 Singapore cents

per ordinary share in respect ofyear ended 28 September 2011 (Note 13) — — — — — — — (212,541) (212,541) — (212,541)

Balance at 28 September 2012 1,325,005 4,318,455 279,908 — — 52,841 (4,529) 3,715,814 9,687,494 2,740,977 12,428,471Total comprehensive income

for the year — — — — 3,282 7,732 18,260 777,256 806,530 282,169 1,088,699Contribution from non-controlling

shareholders — — — — — — — — — 661,742 661,742Dividend paid to non-controlling

shareholders — — — — — — — — — (36,636) (36,636)Non-controlling interests arising from

acquisition of subsidiary — — — — — — — — — 60,680 60,680Final dividend of 0.30 Singapore cent

per ordinary share in respect of year ended 28 September 2012 (Note 13) — — — — — — — (90,083) (90,083) — (90,083)

Balance at 28 September 2013 1,325,005 4,318,455 279,908 — 3,282 60,573 13,731 4,402,987 10,403,941 3,708,932 14,112,873



Financial year ended 28 September 2013STATEMENTS OF CHANGES IN EQUITY

Sharecapital

Sharepremium

Otherreserve

Retainedearnings Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 THE COMPANYBalance at 29 September 2011 832,691 3,453,523 35,482 243,420 4,565,116

Total comprehensive income for the year — — — 199,412 199,412Issue of shares on exercise of rights issue 492,314 886,545 — — 1,378,859Share issue expenses — (21,613) — — (21,613)Redemption of convertible bonds — — (35,482) 35,482 —Final dividend of 1.08 Singapore cents per ordinary

share in respect of year ended 28 September 2011 (Note 13) — — — (212,541) (212,541)

Balance at 28 September 2012 1,325,005 4,318,455 — 265,773 5,909,233

Total comprehensive income for the year — — — 47,040 47,040Final dividend of 0.30 Singapore cent per ordinary

share in respect of year ended 28 September 2012 (Note 13) — — — (90,083) (90,083)

Balance at 28 September 2013 1,325,005 4,318,455 — 222,730 5,866,190



CONSOLIDATED STATEMENT OF CASH FLOWSFinancial year ended 28 September 2013

THE GROUP2013 2012

HK$’000 HK$’000 Operating activitiesProfit before income tax 974,800 911,323

Adjustments for:Share of results of associates (57,540) (38,459)Interest expense 586,186 430,178Interest income (880) (3,894)Statutory employee profit sharing 2,203 38,796Provision for claims 10,756 9,143Amortisation of prepayment to suppliers 237,641 172,640Depreciation expense 790,983 747,426Loss (gain) on revaluation of investment properties 247 (1,972)Impairment loss of property, plant and equipment 350,356 44,067Gain on disposal of property, plant and equipment (3,221) (183)Gain on repurchase of bonds — (4,000)Gain on purchase of senior notes — (7,378)Gain on bargain purchase on acquisition of an associate — (10,515)Gain on bargain purchase on acquisition of subsidiaries (499,584) (19,872)Fair value changes of available-for-sale investments — 1,644Gain on disposal of available-for-sale investments (101,035) —Fair value changes of derivative financial instruments 34,562 202,214

Operating cash flows before movements in working capital 2,325,474 2,471,158Inventories 1,029,326 (273,119)Trade and bills receivables, other receivables and prepayments 1,447,647 (2,542,973)Derivative financial instruments (182,064) (6,013)Trade and other payables 41,542 (235,075)

Cash from (used in) operations 4,661,925 (586,022)

Interest paid (543,202) (373,068)Income tax paid (68,638) (88,887)

Net cash from (used) in operating activities 4,050,085 (1,047,977)


Financial year ended 28 September 2013CONSOLIDATED STATEMENT OF CASH FLOWS

THE GROUPNOTES 2013 2012

HK$’000 HK$’000 Investing activitiesInterest received 880 3,894Dividend received from an associate 20,472 18,515Proceeds from disposal of property, plant

and equipment 3,221 2,490Proceeds on disposal of available-for-sale investments 96,483 —Additions to prepayment to suppliers (1,170,000) —Acquisition of assets (19,500) —Purchase of property, plant and equipment (118,766) (679,763)Acquisition of investment in an associate — (56,085)Acquisition of available-for sale investment (110,234) (26,702)Net cash outflow arising on acquisition

of subsidiaries 38 (5,619,658) (233,480)

Net cash used in investing activities (6,917,102) (971,131)

Financing activitiesDividend paid 13 (90,083) (212,541)Dividend paid to non-controlling shareholders (36,636) (86,734)Proceeds from shares issue by a subsidiary 661,742 —Net cash advanced from Pacific Andes

International Holdings Limited and its subsidiaries 434 598Proceeds from issuing of shares on exercise of rights issue — 1,378,859Net proceeds from issue of senior notes — 2,207,053Share issue expenses — (21,613)Redemption of convertible bonds — (638,104)Repurchase of bonds — (33,352)Purchase of senior notes — (81,003)Bank advances repaid on bills and discounted

trade receivables with insurance coverage 7,060 (3,650)Finance leases repaid (29,555) (31,745)Bank borrowings raised 3,496,186 780,000Repayment of bank borrowings (469,396) (1,160,226)Repayment of working capital loans, net (502,349) (340,754)Decrease in pledged deposits 96 487,806

Net cash from financing activities 3,037,499 2,244,594

Net increase in cash and cash equivalents 170,482 225,486Cash and cash equivalents at beginning of the year 437,512 212,025Exchange difference arising on consolidation — 1

Cash and cash equivalents at end of the year 607,994 437,512

Being:Bank balances and cash 25 615,771 445,854Bank overdrafts 31 (7,777) (8,342)

607,994 437,512


NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 28 September 2013

1 GeneralThe Company is an exempted company incorporated in Bermuda with limited liability. Its registered office is at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda and principal place of business is at Hong Kong Plaza, Rooms 3201-3210, 188 Connaught Road West, Hong Kong. The Company’s shares are listed on the Singapore Exchange (“SGX”). Its immediate holding company is Clamford Holding Limited, a company incorporated in the British Virgin Islands. Its intermediate holding company is Pacific Andes International Holdings Limited (“PAIH”), a company incorporated in Bermuda with its shares listed on The Stock Exchange of Hong Kong Limited. Its ultimate holding company is N. S. Hong Investment (BVI) Limited, a company incorporated in the British Virgin Islands.

The Company acts as an investment holding company and provides corporate management services to Group companies. The principal activities of the subsidiaries and associates are described in Notes 45 and 20 respectively.

These financial statements are presented in Hong Kong dollars consistent with the presentation currency of its holding companies and all values are rounded to the nearest thousand (HK$’000) except when otherwise indicated.

The consolidated financial statements of the Group and statement of financial position and statement of changes in equity of the Company for the year ended 28 September 2013 were authorised for issue by the Board of Directors on 27 December 2013.

2 Summary of Significant Accounting PoliciesBASIS OF ACCOUNTING — The financial statements are prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below, and are drawn up in accordance with the Singapore Financial Reporting Standards (“FRS”).

The financial statements are also prepared in accordance with International Financial Reporting Standards. There are no material differences between the preparation of financial statements in Singapore Financial Reporting Standards and International Financial Reporting Standards that are applicable to the Group and Company.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 102, leasing transactions that are within the scope of FRS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in FRS 2 or value in use in FRS 36.


For the financial year ended 28 September 2013NOTES TO THE FINANCIAL STATEMENTS

2 Summary of Significant Accounting Policies — continuedADOPTION OF NEW AND REVISED STANDARDS — On September 29, 2012, the Group adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) that are effective from that date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group’s and Company’s accounting policies and has no material effect on the amounts reported for the current or prior years except as disclosed below:

The Group has applied the amendments to FRS 1 Presentation of Items of Other Comprehensive Income retrospectively for the first time in the current year, the Group grouped items of other comprehensive income into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Other than the above mentioned presentation changes, the application of the amendments to FRS 1 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.

At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRS that are relevant to the Group and the Company were issued but not effective:

• FRS 27 (Revised) Separate Financial Statements• FRS 110 Consolidated Financial Statements• FRS 112 Disclosure of Interests in Other Entities• FRS 113 Fair Value Measurement• Amendments to FRS 32 Financial Instruments: Presentation• Amendments to FRS 107 Financial Instruments: Disclosure — Offsetting Financial Assets and Financial Liabilities• Amendments to FRS 36 Impairment of Assets• Amendments to FRS 110 Consolidated Financial Statements — Investment Entities• FRS 110, FRS 111, FRS 112 Transition Guidance

Consequential amendments were also made to various standards as a result of these new/revised standards.

FRS 110 Consolidated Financial Statements and FRS 27 Separate Financial StatementsFRS 110 replaces the control assessment criteria and consolidation requirements currently in FRS 27 and INT FRS 12 Consolidation — Special Purpose Entities.

FRS 110 defines the principle of control and establishes control as the basis for determining which entities are consolidated in the consolidated financial statements. It also provides more extensive application guidance on assessing control based on voting rights or other contractual rights. Under FRS 110, control assessment will be based on whether an investor has (i) power over the investee; (ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect the amount of the returns. FRS 27 remains as a standard applicable only to separate financial statements.

FRS 110 will take effect from financial years beginning on or after January 1, 2014, with retrospective application subject to transitional provisions.

When the Group adopts FRS 110, entities it currently consolidates may not qualify for consolidation, and entities it currently does not consolidate may qualify for consolidation. The Group is currently estimating the effects of FRS 110 on its investments in the period of initial adoption.



2 Summary of Significant Accounting Policies — continuedFRS 112 Disclosure of Interests in Other EntitiesFRS 112 requires an entity to provide more extensive disclosures regarding the nature of and risks associated with its interest in subsidiaries, associates, joint arrangements and unconsolidated structured entities.

FRS 112 will take effect from financial years beginning on or after January 1, 2014, and the Group is currently estimating the extent of additional disclosures needed.

FRS 113 Fair Value MeasurementFRS 113 is a single new Standard that applies to both financial and non-financial items. It replaces the guidance on fair value measurement and related disclosures in other Standards, with the exception of measurement dealt with under FRS 102 Share-based Payment, FRS 17 Leases, net realisable value in FRS 2 Inventories and value-in-use in FRS 36 Impairment of Assets.

FRS 113 provides a common fair value definition and hierarchy applicable to the fair value measurement of assets, liabilities, and an entity’s own equity instruments within its scope, but does not change the requirements in other Standards regarding which items should be measured or disclosed at fair value.

The disclosure requirements in FRS 113 are more extensive than those required in the current standards.

For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only under FRS 107.

Financial Instruments: Disclosures will be extended by FRS 113 to cover all assets and liabilities within its scope.

FRS 113 will be effective prospectively from annual periods beginning on or after January 1, 2014. Comparative information is not required for periods before initial application.

The Group is currently estimating the effects of FRS 113 in the period of initial adoption.

Amendments to FRS 32 Financial Instruments: PresentationThe amendments to FRS 32 clarify existing application issues relating to the offsetting requirements. Specifically, the amendments clarify the meaning of ‘currently has a legal enforceable right of set-off’ and ‘simultaneous realisation and settlement’. The amendments to FRS 32 are effective for annual periods beginning on or after January 1, 2014, with retrospective application required.

The management is still evaluating the impact of the amendments to FRS 32 on the financial assets and liabilities that have been set-off on the statement of financial position.



2 Summary of Significant Accounting Policies — continuedAmendments to FRS 107 Financial Instruments: Disclosure — Offsetting Financial Assets and Financial LiabilitiesThe amendments to FRS 107 require entities to disclose information about rights of set-off and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.

The amendments to FRS 107 are required for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. The disclosures should be provided retrospectively for all comparative periods.

Amendments to FRS 36 Impairment of AssetsThe amendments to FRS 36 restrict the requirement to disclose the recoverable amount of an asset or cash generating unit (“CGU”) to periods in which an impairment loss has been recognised or reversed. The amendments also expand and clarify the disclosure requirements applicable when such asset or CGU’s recoverable amount has been determined on the basis of fair value less costs of disposal, such as the level of ‘fair value hierarchy’ within which the fair value measurement of the asset or CGU has been determined, and where the fair value measurements are at Level 2 or 3 of the fair value hierarchy, a description of the valuation techniques used and any changes in that valuation technique, key assumptions used including discount rate(s) used.

Upon adoption of the amendments to FRS 36, the Group expects additional disclosures arising from any asset impairment loss or reversals, and where their respective recoverable amounts are determined based on fair value less costs of disposal.

Management anticipates that the adoption of the above FRSs and amendments to FRSs issued but not effective at the date of authorisation of these financial statements in future periods will not have a material impact on the financial statements of the Group and of the Company in the period of their initial adoption except as discussed above.

BASIS OF CONSOLIDATION — The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss.



2 Summary of Significant Accounting Policies — continuedCOMMON CONTROL BUSINESS COMBINATION OUTSIDE THE SCOPE OF FRS 103 — A business combination involving entities under common control is a business combination in which all the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The restructuring exercise in 2005 resulted in a business combination involving common control entities, and accordingly the accounting treatment is outside the scope of FRS 103 Business Combinations. For such common control business combinations, merger accounting principles are used to include the assets, liabilities, results, equity changes and cash flows of the combining entities in the consolidated financial statements.

In applying merger accounting, financial statement items of the combining entities or businesses for the reporting period in which the common control combination occurs, and for any comparative periods disclosed, are included in the consolidated financial statements of the combined entity as if the combination had occurred from the date when the combining entities or businesses first came under the control of the controlling party or parties.

A single uniform set of accounting policies is adopted by the combined entity. Therefore, the combined entity recognised the assets, liabilities and equity of the combining entities or businesses at the carrying amounts in the financial statements of the constituent entities prior to the common control combination. The carrying amounts are included as if consolidated financial statements had been prepared by the controlling party, including adjustments required for conforming the combined entity’s accounting policies and applying those policies to all periods presented. There is no recognition of any goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combination. The effects of all transactions between the combining entities or businesses, whether occurring before or after the combination, are eliminated in preparing the consolidated financial statements of the combined entity.

Merger reserve represents the difference between the nominal amount of the share capital of the combining entities at the date on which it was acquired by the Group and the nominal amount of the share capital issued as consideration for the acquisition.



2 Summary of Significant Accounting Policies — continuedBUSINESS COMBINATIONS WITHIN THE SCOPE OF FRS 103 — Where there is no common control prior to acquisition, the acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the acquisition date fair values of assets given, liabilities incurred by the Group to the former owners of the acquiree, and equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with FRS 39 Financial Instruments:

Recognition and Measurement, or FRS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under the FRS are recognised at their fair value at the acquisition date, except that:

• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 12 Income Taxes and FRS 19 Employee Benefits respectively;

• liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement of an acquiree’s share-based payment awards transactions with share-based payment awards transactions of the acquirer in accordance with the method in FRS 102 Share-based Payment at the acquisition date; and

• assets (or disposal groups) that are classified as held for sale in accordance with FRS 105 Non current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date — and is subject to a maximum of one year from acquisition date.

The accounting policy for initial measurement of non-controlling interests is described above.



2 Summary of Significant Accounting Policies — continuedFINANCIAL INSTRUMENTS — Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Effective interest methodThe effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transactions costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis for debt instruments.

Financial assetsCash and cash equivalents in the statement of cash flowsCash and cash equivalents in the statement of cash flows comprise cash on hand and balances with banks that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Loans and receivablesTrade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are initially measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial.

Held-to-maturity investmentsSecurities with fixed or determinable payments and fixed maturity dates where the Group has a positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis.

Impairment of financial assetsFinancial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been impacted.

Objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.



2 Summary of Significant Accounting Policies — continuedFinancial assets — continuedImpairment of financial assets — continuedFor financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Derecognition of financial assetsThe Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity instrumentsClassification as debt or equityFinancial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilitiesTrade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis except for short-term payables when the recognition of interest would be immaterial.

Interest-bearing bank loans and senior notes are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs (see below).

Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher of the amount of obligation under the contract recognised as a provision and the amount initially recognised less, when appropriate, cumulative amortisation. The amount amortised on a straight-line basis over the period of the guarantee is the deemed guarantee income for the issuer.



2 Summary of Significant Accounting Policies — continuedFinancial liabilities and equity instruments — continuedDerecognition of financial liabilitiesThe Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

Derivative financial instrumentsThe Group enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risk. Further details of derivative financial instruments are disclosed in Note 28 to the financial statements.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

LEASES — Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessorRental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lesseeAssets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis.



2 Summary of Significant Accounting Policies — continuedDEFERRED EXPENSES — Expenses incurred in catching fish and other marine catches during voyages are deferred in the statement of financial position and released to profit or loss as expenses when the fish and marine catches are sold and revenue is recognised for the sale. Expenses on each voyage are deferred to the extent that there is reasonable probability of recovery from sale of fish and other marine catches from that voyage. When it is probable that the costs incurred or to be incurred on a voyage will exceed the estimated value of the catches, the expected loss is recognised as an expense in profit or loss immediately.

Under the vessel operating agreements, the Group paid charter hire fees based on fixed rates and variable rates based on contracted percentages of the annual operating profit attributable to the vessels procured by the Suppliers (Note 17). As the fixed portions of charter hire cost were payable during the charter hire period regardless of whether the vessels were deployed (save for certain exceptions during the earlier part of the charter hire), the Group expensed fixed charter hire cost on a time-proportionate basis to profit or loss and did not include this cost in deferred expenses. Variable charter hire costs were determined when the revenue from the sale of fish and marine products were determined. Variable charter hire cost was accrued as an expense at the same time when revenue was recognised.

INVENTORIES — Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of processing and costs to be incurred in marketing, selling and distribution.

PROPERTY, PLANT AND EQUIPMENT — Leasehold buildings held for administrative purposes are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from that which would be determined using fair values at the end of the reporting period.

Any revaluation increase arising on the revaluation of such land and buildings is recognised in other comprehensive income and accumulated in revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such land and buildings is charged to profit or loss to the extent that it exceeds the balance, if any, held in the property revaluation reserve relating to a previous revaluation of that asset.

Property in the course of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Depreciation on revalued buildings is charged to profit or loss. On subsequent sale or retirement of a revalued building, the attributable revaluation surplus remaining in the revaluation reserve is transferred to retained earnings.

Property, plant and equipment with the exception of leasehold building are stated at cost less accumulated depreciation and any accumulated impairment losses.



2 Summary of Significant Accounting Policies — continuedProperty, plant and equipment — continuedDepreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the straight-line method on the following bases:

Freehold buildings — 33 yearsLeasehold buildings — 25 years upon every revaluation or the lease term, if shorterProcessing vessel — 20 yearsFishing vessels — 10 to 17 yearsFishing nets — 4 yearsPlant and machinery — 2 to 10 yearsVehicles — 20 yearsFurniture, fittings and office equipment — 4 to 10 years

Freehold land is not depreciated.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Fully depreciated assets still in use are retained in the financial statements.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in profit or loss. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained earnings. No transfer is made from the revaluation reserve to retained earnings except when an asset is derecognised.

INVESTMENT PROPERTY — Investment property, which is property held to earn rentals and/or for capital appreciation, including property under construction for such purposes, is measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment property is measured at fair value. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise.



2 Summary of Significant Accounting Policies — continuedGOODWILL — Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Intangible AssetsIntangible assets acquired separatelyIntangible assets acquired separately are reported at cost less accumulated amortisation and any accumulated impairment losses. Intangible assets with finite useful lives are amortised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives are not amortised. Each period, the useful lives of such assets are reviewed to determine whether events and circumstances continue to support an indefinite useful life assessment for the asset. Such assets are tested for impairment in accordance with the policy below.

Intangible assets acquired in a business combinationIntangible assets acquired in a business combination are identified and recognised separately from goodwill. The cost of such intangible assets is their fair value at the acquisition date.

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.

Prepayment to suppliersThis represents future payment for supply of fishery products under the long term supply agreements which have been prepaid or contractually agreed to be prepaid. They are amortised and charged to profit or loss as cost of sales or charter hire expense proratably over the period for which the prepayment is made and the benefits are expected to accrue.



2 Summary of Significant Accounting Policies — continuedIMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL — At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

PROVISIONS — Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.



2 Summary of Significant Accounting Policies — continuedREVENUE RECOGNITION — Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Sale of fish and marine related productsRevenue from the sale of fishes and related products are recognised when all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Ocean freight incomeOcean freight income is recognised when the shipping and freight services are rendered.

Rental income and sub-contract of vessel operating agreementThose are recognised on a straight-line basis over the term of the relevant lease.

Interest incomeInterest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

BORROWING COSTS — Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

RETIREMENT BENEFIT COSTS — Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

EMPLOYMENT LEAVE ENTITLEMENT — Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.



2 Summary of Significant Accounting Policies — continuedINCOME TAX — Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and subsidiaries operate by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associate except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amounts of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss (either in other comprehensive income or directly in equity, respectively), or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.



2 Summary of Significant Accounting Policies — continuedFOREIGN CURRENCY TRANSACTIONS AND TRANSLATION — The individual financial statements of each Group entity are measured in equity in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the statement of financial position of the Company are presented in Hong Kong dollars, which is different from the functional currency of the Company, which is United States dollars.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.

Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in Hong Kong dollars using exchange rates prevailing at the end of the reporting period. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a separate component of equity under the header of currency exchange translation reserve.

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognised, but they are not reclassified to profit or loss.

In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities not involving a change of accounting basis), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are recognised in other comprehensive income and accumulated in a separate component of equity under the header of currency exchange translation reserve.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.



3 Critical Accounting Judgements and Key Sources of Estimation UncertaintyIn the application of the Group’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumption about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical expense and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis revisions to accounting estimates are recognised in the period in which the estimates is revised if the revision affects only that period, or in the period of the revision and futures periods if the revision affects both current and futures periods.

Critical Judgements in Applying the Group’s Accounting PoliciesFRS 39 requires the recognition of an impairment loss for available-for-sale investment if there is objective evidence of impairment such as a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. Nonetheless, the determination of what constitutes a significant or prolonged decline is a matter of fact that requires the application of judgment.

In making its judgment, management considered if there was objective evidence of impairment and concluded based on its analysis that the fair value was not representative of the intrinsic value of the equity investment and no impairment was necessary.

Key Sources of Estimation UncertaintyThe key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Carrying Amount of Prepayment to Suppliers and Advances to SuppliersAs at 28 September 2013, the carrying amounts of prepayments to suppliers and advances to suppliers (Note 17) was HK$1,992,039,000 (2012: HK$1,059,680,000) and HK$315,900,000 (2012: HK$315,900,000) respectively. The supply of fish under the long term supply arrangements and operation of vessels under the vessel operating agreements with the Suppliers (Note 17) have been profitable after deducting amortisation of the prepayment to suppliers over the periods for which the supply of fish or charter hires have been prepaid. Management has carried out a review of the carrying amounts of prepayment and advances to Suppliers based on the performance of the operations and noted no indications of impairment.



3 Critical Accounting Judgements and Key Sources of Estimation Uncertainty — continuedKey Sources of Estimation Uncertainty — continuedCarrying Amount of Processing Vessel, Fishing Vessels and Fishing and Plant PermitsAs at the end of the financial year, the carrying amounts of processing vessel, fishing vessels and fishing and plant permits totalled HK$256,562,000, HK$1,623,629,000 and HK$9,536,829,000 respectively (2012: HK$552,230,000, HK$1,105,773,000 and HK$1,823,905,000). Determining whether the carrying amounts of these assets can be realised requires an estimation of the value in use of the cash-generating units and a suitable discount rate in order to calculate present value. Management has evaluated these projections using assumptions on catch quantities, prices of catch and operating cost after considering efficiencies that can be achieved when the operations become part of the Group’s larger operations.

With effect from January 2009, the fishing system in Peru changed from the previous “Olympic” system to “Individual Transferable Quota (“ITQ”)” system which entitles fishing companies holding valid licensed fishing vessels to a share of fishing quotas determined by the authorities. Management has evaluated the impact of the quota allocation under the ITQ system and included such consideration in the estimation of the value in use.

Management has carried out a review of the recoverable amounts of the property, plant and equipment based on their value-in-use. The assessment has led to the recognition of impairment loss of HK$350,356,000 (2012: HK$44,067,000) in the current year.

Carrying Amount of GoodwillBased on management’s assessment, management is of the view that the carrying amount of goodwill of HK$2,952,461,000 (2012: HK$2,952,461,000) is not impaired. Information relating to the carrying amount and management’s assessment of goodwill is provided in Note 16.

Interests in SubsidiariesManagement has carried out a review of the recoverability of the amounts due from subsidiaries, having regard to the existing performance of the relevant subsidiaries and the carrying value of the net assets in these subsidiaries. No allowance for impairment has been recognised for financial years ended 28 September 2013 and 28 September 2012.

The carrying amounts of the amounts due from subsidiaries are disclosed in Note 19 to the financial statements.

Useful Lives of Property, Plant and EquipmentThe carrying amount of property, plant and equipment amounting to HK$5,300,991,000 (2012: HK$4,572,851,000) have been determined after charging depreciation on a straight-line basis over the estimated useful life of these assets. Components of these carrying amounts are detailed in Note 14.

Management reviews the estimated useful lives of these assets at the end of each reporting period and determined that the useful lives as stated in Note 2 remain appropriate.

Impairment of Property, Plant and Equipment (Excluding Processing Vessel and Fishing Vessels)The Group assesses annually whether property, plant and equipment have any indication of impairment in accordance with the accounting policy. If there is indication of impairment, the recoverable amounts of these assets are then determined based on value-in-use calculations. These calculations require the use of judgement and estimates. Management has carried out a review of the recoverable amount of the property, plant and equipment based on their value-in-use and noted no impairment for the year.

Acquisition of subsidiariesAs disclosed in Note 38, the net assets acquired and previously held interest in relation to the acquisition of subsidiary are stated at fair value based on the valuation performed by an independent professional valuer. The independent professional valuer determined the fair values based on a method of valuation which involves the use of certain estimates. Management is of the view that the estimates used by the professional valuers and the fair values are the best estimate of the likely values at the date of finalisation of these financial statements.



4 Financial Instruments, Financial Risks and Capital Risks Management(a) Categories of Financial Instruments

The following tables set at the financial instruments as at the end of the reporting period:

THE GROUP THE COMPANY2013 2012 2013 2012

HK$’000 HK$’000 HK$’000 HK$’000 Financial assetsLoans and receivables

(including cash and cash equivalents) 3,901,252 4,121,552 841 1,386Available-for-sale investments 25,393 32,858 — —

3,926,645 4,154,410 841 1,386

Financial liabilitiesAmortised cost 14,612,416 10,134,258 737,308 704,622Derivative financial instruments 54,712 202,214 2,760 24,206

14,667,128 10,336,472 740,068 728,828

(b) Financial Risk Management Policies and ObjectivesThe Group’s overall risk management programme seeks to minimise potential adverse effects on the financial performance of the Group.

The Group’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates, interest rates, credit quality of counterparties and liquidity.

There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures these risks. Market risk exposures are measured using sensitivity analysis indicated below.



4 Financial Instruments, Financial Risks and Capital Risks Management — continued(b) Financial Risk Management Policies and Objectives — continued

i) Foreign Exchange Risk ManagementThe Group entities transact largely in their functional currencies, which in most instances is the United States dollars. Foreign exchange risk arises largely from transactions denominated in currencies such as Japanese Yen, Singapore dollars, Peruvian Nuevo Soles, Chinese Renminbi, Hong Kong dollars, Namibian dollars and Euro.

At the reporting date, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the respective Group entities’ functional currencies are as follows:

THE GROUPLiabilities Assets

2013 2012 2013 2012HK$’000 HK$’000 HK$’000 HK$’000

Japanese Yen 896 1,625 139 212Peruvian Nuevo Soles 97,365 108,480 223,775 66,040Chinese Renminbi 737,242 706,430 4,203 11,489Hong Kong dollars 53,331 42,128 2,180 2,638Euro 3,309 5,079 2,877 12,455Singapore dollars 926 424 1,692 1,938Danish Krone — 2,743 — 12Norwegian Krone 1,636 1,056 7,802 226Namibian dollars 9,888 22 45,783 4,371Canadian dollars — — 5 2,819

THE COMPANYLiabilities Assets

2013 2012 2013 2012HK$’000 HK$’000 HK$’000 HK$’000

Chinese Renminbi 736,743 704,570 237 266Hong Kong dollars — — 18 33Singapore dollars 565 52 126 305




i) Foreign Exchange Risk Management — continuedForeign currency sensitivityThe following details the sensitivity to a 10% increase and decrease in the relevant foreign currencies against the functional currency of each Group entity. 10% is the sensitivity rate that represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

If the relevant major currency (Peruvian Nuevo Soles), weakens or strengthens by 10% against the functional currency of each Group’s entity, Group’s profit for the year ended 28 September 2013 will decrease or increase by HK$12,641,000 (2012: increase or decrease by HK$4,244,000). For other currencies, management considers that the amounts involved are insignificant and accordingly no sensitivity analysis is presented.

For both the Group and Company level the Chinese Renminbi foreign exchange risk exposure relates to primarily the Chinese Renminbi bonds (Note 32) which has been covered by a forward foreign exchange contract (Note 28). Management has considered the remaining foreign exchange risk exposure resulting from Chinese Renminbi to be insignificant and accordingly no sensitivity analysis has been presented.

In addition, the Group has entered into foreign currency forward contracts with banks to reduce its exposure to currency fluctuation risk of anticipated sales and purchases transactions which are denominated in foreign currencies. The derivative is not accounted for under hedge accounting. The Group is required to estimate the fair value of the foreign currency forward contract at end of the reporting period, which therefore exposes the Group to other price risk.

The fair value of foreign currency forward contracts amounted to HK$54,712,000 (2012: HK$202,214,000) and has exposure to the forward exchange rate of the relevant foreign currencies against the functional currencies of each Group entity. Management considered that the Group’s exposure to the foreign currency risk on these contracts is minimal. Accordingly, no sensitivity analysis is presented.

ii) Interest Rate Risk ManagementInterest-earning financial assets comprise bank balances and fixed deposits (Notes 25 and 43). Summary quantitative data of the Group’s interest-bearing financial liabilities can be found in section (iv) of this note.

The Group mitigates its exposure to changes in interest rates by locking in fixed rate borrowings through the issue of bonds (Note 32) and senior notes (Note 34) and use of finance leases for which rates are fixed at inception of the finance leases (Note 30). The Group’s policy is to obtain the most favourable interest rates available and also by reviewing the terms of the interest-bearing liabilities to minimise the adverse effects of changes in interest rates.




ii) Interest Rate Risk Management — continuedInterest rate sensitivityThe sensitivity analyses below have been determined based on the exposure to variable interest rates for variable rate borrowings at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50 basis point increase or decrease represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s profit for the year ended 28 September 2013 would decrease or increase by approximately HK$47,341,000 (2012: decrease or increase by HK$34,629,000).

If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Company’s post-tax profit for the year ended 28 September 2013 would decrease or increase by approximately HK$Nil (2012: decrease or increase by HK$Nil).

iii) Credit Risk ManagementCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.

At both 28 September 2013 and 28 September 2012, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties and financial guarantees issued by the Group is arising from:

— the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position.

Sales of fishes and related products are made to companies which the Group assessed to be of good credit rating through their trading and payment history as well as such commercial information which the Group obtains from time to time. Before accepting any new customers, the Group assesses the potential customer’s credit quality and defines credit limits by customers. Limits and credit quality attributed to customers are reviewed periodically. Trade debtors that are neither past due nor impaired are substantially companies with good collection track record with the Group. Management considers that the credit risk associated with the Group’s trade receivables has been mitigated by the above risk management practices. The recoverable amount of individual trade receivable is reviewed at the end of each reporting period and allowance is made for estimated irrecoverable amount.

There is concentration of credit risk as 53% (2012: 60%) of the Group’s receivables at the end of the reporting period relate to 5 entities (2012: 5 entities).

As at the end of the financial year, the Group has balance due from the Suppliers which accounted for HK$801,486,000 or 11% (2012: HK$874,951,000 or 11%) of other receivables and prepayments balances. In addition, the Group also advanced HK$315,900,000 (2012: HK$315,900,000) to the Suppliers (Note 17).

The credit risk on bank balances is limited because the counterparties are reputable financial institutions.




iv) Liquidity Risk ManagementThe Group maintains sufficient cash and cash equivalents and obtains a mix of short-term and long-term external financing to fund its operations. The Company obtains funding from members of the Group as necessary to meet its financial obligations.

Non-derivative financial liabilitiesThe following tables detail the contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and Company can be required to pay. The table includes both interest and principal cash flows. The adjustment column represents the possible future cash flows attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the financial liability on the statements of financial position.

Weighted average effective

interest rate

On demand or within

1 year

Within 2 to 5years

After 5 years Adjustment Total

% HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 THE GROUP

2013

Non-interest bearing — 154,048 154,034 — — 308,082Finance lease liabilities 8.49 37,541 4,376 — (8,100) 33,817Variable interest rate instruments 4.29 7,985,511 1,567,007 — (84,373) 9,468,145Fixed interest rate instruments 10.41 1,170,532 3,331,990 4,471,435 (4,171,585) 4,802,372

9,347,632 5,057,407 4,471,435 (4,264,058) 14,612,416

2012

Non-interest bearing — 333,981 — — — 333,981Finance lease liabilities 8.49 39,798 41,916 — (18,342) 63,372Variable interest rate instruments 4.55 5,218,442 1,857,821 — (150,444) 6,925,819Fixed interest rate instruments 10.08 287,131 1,683,772 2,572,721 (1,732,538) 2,811,086

5,879,352 3,583,509 2,572,721 (1,901,324) 10,134,258

THE COMPANY

2013

Non-interest bearing — 15,832 — — — 15,832Fixed interest rate instruments 7.52 758,368 — — (36,892) 721,476

774,200 — — (36,892) 737,308

2012

Non-interest bearing — 14,540 — — — 14,540Fixed interest rate instruments 7.52 52,059 725,675 — (87,652) 690,082

66,599 725,675 — (87,652) 704,622




iv) Liquidity Risk Management — continuedDerivative financial liabilitiesAs at the end of the reporting period, the undiscounted contractual net cash outflows on foreign exchange forward contracts that settle on a net basis within 1 year from the end of the reporting date were HK$54,712,000 (2012: within 1 year from the end of the reporting date were HK$202,214,000). The carrying amount of financial derivatives in the consolidated statement of financial position has been determined by reference to the quoted forward rates at the end of the reporting period.

v) Other Risk ManagementAs at 28 September, 2013, the Group prepaid HK$1,992 million (2012: HK$1,060 million) for supply of fish by 23 fishing vessels (2012: 17 fishing vessels), the benefits of which are to be realised over 10 to 18 years up to 2030 (2012: 10 to 18 years up to 2025). The Group mitigates the risk relating to obligations of the counterparties in respect of long term supply agreements through the security documents described in Note 17.

vi) Fair Values of Financial Assets and Financial LiabilitiesThe carrying amounts of cash and bank balances, trade and other current receivables and payables and other receivables and liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The fair values of other classes of financial assets and liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions.

The fair values of derivative instruments are calculated using quoted prices. Where such prices are not available, discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives. Foreign currency forwards contracts are measured using quoted forward exchange rates matching maturities of the contracts.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).




vi) Fair Values of Financial Assets and Financial Liabilities — continued

2013Level 1 Level 2 Level 3 TotalHK$’000 HK$’000 HK$’000 HK$’000

Available-for-sale investmentsQuoted equity securities 14,908 — — 14,908Unquoted debt securities 2,685 — — 2,685Unquoted equity securities — — 7,800 7,800

17,593 — 7,800 25,393

Financial liabilities at FVTPLDerivative financial instruments — 54,712 — 54,712

2012Level 1 Level 2 Level 3 TotalHK$’000 HK$’000 HK$’000 HK$’000

Available-for-sale investmentsQuoted equity securities 9,536 — — 9,536Unquoted debt securities 15,522 — — 15,522Unquoted equity securities — — 7,800 7,800

25,058 — 7,800 32,858

Financial liabilities at FVTPLDerivative financial instruments — 202,214 — 202,214

There were no transfers between Level 1, Level 2 and Level 3 in the year.

(c) Capital Risk Management Policies and ObjectivesThe Group’s objectives in managing capital are to maintain an optimal capital structure so as to maximise the return to its shareholders, to protect the interests of its stakeholders, safeguard the Group’s ability to continue as a going concern and to be able to service its debts when they are due. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, obtain various forms of borrowings in the market and issue new shares at an appropriate price when necessary.



4 Financial Instruments, Financial Risks and Capital Risks Management — continued(c) Capital Risk Management Policies and Objectives — continued

The capital structure of the Group is as follow:

Group2013 2012

HK$’000 HK$’000 Debts:

— Finance leases 33,817 63,372— Bank loans 9,462,774 6,921,792— Bonds 721,476 690,082— Senior notes 4,080,896 2,120,094

14,298,963 9,795,340

Cash and cash equivalents 615,771 445,854

Shareholders’ equity 14,112,873 12,428,471

Management constantly reviews the capital structure to achieve the aforementioned objectives. As a part of this review, management considers the cost of capital and the risks associated with each class of capital. The Group will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debt or the redemption of existing debts.

Management also ensures that the Group maintains gearing ratio within a set range to comply with the loan covenants imposed by banks.

The Group’s overall strategy remains unchanged since the last reporting date. The Group is in compliance with externally imposed capital requirements for the financial years 2013 and 2012.



5 Revenue

THE GROUP2013 2012

HK$’000 HK$’000 Sales of frozen seafood 4,060,011 4,484,039Sales of fishes from fishing activities 2,981,084 3,102,044Sub-contract of vessel operating agreements — 162,279Sales of fishmeal and fish oil 1,292,054 1,396,939Shipping and agency services 430,943 435,497

8,764,092 9,580,798

6 Segment InformationFor management reporting purposes, the Group is organised into two operating divisions, frozen fish supply chain management (“Frozen Fish SCM”) and Fishery and Fish Supply. These divisions are on the basis on which the Group reports its segment information to the Group’s chief operating decision maker for the purposes of resource allocation and assessment of performance.

Frozen Fish SCM comprises sales of fish and other seafood products, charter hire services, sales of marine fuel oil and provision of packaging materials to fish suppliers. Fishery and Fish Supply comprises income from fishing and fish supply activities and the production and sale of fishmeal and fish oil.

Segment sales and expenses: Segment sales and expense are the sales and operating expense reported in the Group’s income statement that are directly attributable to a segment and the relevant portion of such sales and expense that can be allocated on a reasonable basis to a segment.

Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of operating cash and cash equivalents, receivables, prepayments, advances, inventories, prepayment to suppliers, property, plant and equipment and intangible assets, net of allowances and provisions. Additions to non-current assets are the total costs incurred during the year to acquire segment assets that are expected to be used for more than one year and comprises purchase of property, plant and equipment, prepayment to suppliers and intangible assets directly attributable to the segment. Segment liabilities include all liabilities and consist principally of accounts payable and accrued expenses.

Inter-segment transfers: Segment sales and expenses include transfers between operating segments. Inter-segment sales are charged at cost plus a percentage profit mark-up. These transfers are eliminated on consolidation.

Investments in associates: Income from associates is allocated as they are specifically attributable to operating segments, and correspondingly the investments in associates are included in segment assets of the Group.



6 Segment Information — continuedProducts and Services from which Reportable Segments Derive Their RevenuesInformation on the Group’s revenue and results by reportable segment are presented below:

Frozen fish SCM

Fishery and Fish Supply Consolidated

HK$’000 HK$’000 HK$’000 2013INCOME STATEMENTExternal sales 4,434,985 4,329,107 8,764,092

Segment result 725,321 1,249,619 1,974,940

Unallocated items:Administrative expense (230,278)Fair value changes of derivative financial instruments (34,562)Rental income from properties 2,129Loss on revaluation of investment properties (247)Other operating expenses (150,996)Finance costs (586,186)Income tax benefit 70,567

Profit for the year 1,045,367

STATEMENT OF FINANCIAL POSITIONSegment assets 7,668,981 23,692,638 31,361,619Unallocated corporate assets 151,648

Consolidated total assets 31,513,267

Segment liabilities 818,447 7,063,299 7,881,746Unallocated corporate liabilities 9,518,648

Consolidated total liabilities 17,400,394

OTHER SEGMENT INFORMATIONAdditions to non-current assets 120,159 1,832,898 1,953,057Depreciation 41,164 749,819 790,983Impairment loss of property, plant and equipment — 350,356 350,356Amortisation of prepayment to suppliers — 237,641 237,641Amortisation of senior notes issuing expenses — 11,590 11,590



6 Segment Information — continuedProducts and Services from which Reportable Segments Derive Their Revenues — continued

Frozen fish SCM

Fishery and Fish Supply Consolidated

HK$’000 HK$’000 HK$’000(restated) (restated) (restated)

2012INCOME STATEMENTExternal sales 4,869,592 4,711,206 9,580,798

Segment result 648,171 1,232,675 1,880,846

Unallocated items:Administrative expense (257,582)Fair value changes of derivative financial instruments (202,214)Rental income from properties 2,113Gain on revaluation of investment properties 1,972Other operating expenses (83,634)Finance costs (430,178)Income tax expense (24,205)

Profit for the year 887,118

STATEMENT OF FINANCIAL POSITIONSegment assets 9,363,843 13,874,846 23,238,689Unallocated corporate assets 66,687

Consolidated total assets 23,305,376

Segment liabilities 926,258 2,921,282 3,847,540Unallocated corporate liabilities 7,026,365

Consolidated total liabilities 10,876,905

OTHER SEGMENT INFORMATIONAdditions to non-current assets 182,009 724,250 906,259Depreciation 38,880 708,546 747,426Impairment loss of property, plant and equipment — 44,067 44,067Amortisation of prepayment to suppliers — 172,640 172,640Amortisation of senior notes issuing expenses — 1,422 1,422



6 Segment Information — continuedProducts and Services from which Reportable Segments Derive Their Revenues — continuedThe accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 2. Segment result represents the profit earned by each segment with the allocation of administrative expenses, gains and losses on revaluation and repurchase of bonds and purchase of senior notes, finance costs, share of results of associates and taxation. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

Geographical InformationGeographical locations of the customers of the Group are organised in accordance with their parent company’s country of origin which principally comprises Hong Kong and other regions in the People’s Republic of China (“PRC”), East Asia, South America, Europe, Africa and other parts of the world.

The Group’s revenue from external customers and information about its segment assets (non-current assets excluding investment in associates and other financial assets) by geographical location are detailed below:

Revenue from external customers

Non-current assets

Geographical segments 2013 2012 2013 2012HK$’000 HK$’000 HK$’000 HK$’000

Hong Kong and other regions in the PRC 7,306,369 6,249,474 1,135,066 1,136,147South America 49,179 9,326 13,361,715 4,459,459Europe 502,070 1,078,921 5,094,172 4,974,586East Asia 357,998 1,006,485 66,500 69,000Africa 485,966 1,210,081 — —Others 62,510 26,511 — —

8,764,092 9,580,798 19,657,453 10,639,192

Information About Major CustomersDuring the year ended 28 September 2013 and 2012, there is no customer from Frozen Fish SCM segment with revenue more than 10% of the Group’s total revenue.

A customer from Fishery and Fish Supply segment with revenue more than 10% of the Group’s total revenue amounted to approximately HK$1,747,200,000 (2012: HK$1,253,460,000).



7 Other Operating Income

THE GROUP2013 2012

HK$’000 HK$’000 Other operating income comprises:

Administrative income charged to associates 996 982Compensation received from suppliers of fish(a) 157,221 184,086Interest income 880 3,894Rental income from properties 2,129 2,113Realised gain on derivative financial instruments 325,670 106,930Exchange gain, net 87,524 37,333Gain on disposal of property, plant and equipment 3,221 183Gain on revaluation of investment properties — 1,972Gain on bargain purchase on acquisition of an associate (Note 20) — 10,515Gain on bargain purchase on acquisition of subsidiaries (Note 38) 499,584 19,872Gain on repurchase of bonds — 4,000Gain on purchase on senior notes — 7,378Gain on disposal of available-for-sale investments, net 101,035 —Sundry income 15,644 18,315

1,193,904 397,573

(a) This relates to compensation for non-delivery of fish from suppliers within the stipulated timeframe.

8 Finance Costs

THE GROUP2013 2012

HK$’000 HK$’000 Amortisation of senior notes issuing expenses 11,590 1,422Interest on bank overdraft and loans 283,240 301,120Interest on finance leases 4,268 7,232Interest on senior notes 233,791 36,768Interest on convertible bonds and bonds 53,186 83,531Interest on amounts due to PAIH and its subsidiaries (Note 27) 111 105

586,186 430,178



9 Profit For The YearProfit for the year has been arrived at after charging (crediting):

THE GROUP2013 2012

HK$’000 HK$’000 Directors’ emoluments:

— of the Company 7,732 8,848— of the subsidiaries 11,122 8,421

Contributions to retirement benefit scheme, net of forfeitures 13,198 12,502Staff costs, excluding directors’ emoluments and retirement benefits contributions 38,195 74,713Crew wages 141,344 540,901Audit fees paid to auditors of the Company 4,904 2,782Audit fees paid to other auditors of the Group 7,691 6,892Non-audit fees paid to auditors of the Company 2,574 1,266Non-audit fees paid to other auditors of the Group 3,120 3,243Amortisation of prepayment to suppliers (included in cost of sales) 237,641 172,640Depreciation of property, plant and equipment 790,983 747,426Loss on revaluation of investment properties 247 —Fair value change on available-for-sale investments — 1,644Fair value changes of derivative financial instruments 34,562 202,214Impairment loss on property, plant and equipment 350,356 44,067Gain on disposal of property, plant and equipment (3,221) (183)Gain on repurchase of bonds — (4,000)Gain on purchase of senior notes — (7,378)Net foreign exchange gains (87,524) (37,333)Cost of inventories included in cost of sales 5,979,033 4,664,460

10 Directors’ and Key Management Personnel’s EmolumentsThe emoluments of directors and other members of key management during the year were as follows:

THE GROUP2013 2012

HK$’000 HK$’000 Short-term benefits 18,206 16,668Post-employment benefits 648 601

Total 18,854 17,269

The emoluments of directors and key management are determined by the Remuneration Committee having regard to the performance of individuals and market trends.

Included in the emoluments of directors and other members of key management for the year of HK$18,854,000 (2012: HK$17,269,000) is an amount of HK$6,597,000 (2012: HK$5,886,000) charged by PAIH and its subsidiaries as administrative expense, which was calculated in accordance with the management agreement signed on 3 September 1996 and updated by a supplemental agreement dated 22 July 2003.



11 Income Tax Benefit (Expense)

THE GROUP2013 2012

HK$’000 HK$’000 The charge comprises:

Profits tax benefit (expense) for the year— Other jurisdictions 3,810 (89,024)

Overprovision in respect of prior years— Other jurisdictions 13,600 —

Deferred tax (Note 35) 53,157 64,819

70,567 (24,205)

The income tax expense varied from the amount of income tax expense determined by applying the Hong Kong profits tax rate of 16.5% (2012: 16.5%) to profit before income tax as a result of the following differences:

THE GROUP2013 2012

HK$’000 HK$’000 Hong Kong profits tax at statutory rate (160,842) (150,368)Non-taxable items 182,680 132,026Overprovision in respect of prior years 13,600 —Effect of different tax rates of subsidiaries operating in other jurisdictions 25,635 (10,889)Tax effect of share of results of associates 9,494 5,026

Total Hong Kong profits tax at effective tax rate 70,567 (24,205)

Taxation in other jurisdictions is calculated at the rate prevailing in the respective jurisdictions.



12 Earnings Per ShareThe calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data:

THE GROUP2013 2012

HK$’000 HK$’000 Earnings

Earnings for the purposes of basic and diluted earnings per share (profit for the year attributable to owners of the Company) 777,256 627,659

2013 2012

Number of shares

Weighted average number of ordinary shares for the purposes of basic earnings per share 4,790,992,338 4,040,256,929

Weighted average number of ordinary shares for purposes of diluted earnings per share 4,790,992,338 4,040,256,929

The effect of dilutive potential ordinary shares from convertible bonds is excluded in the calculation of the diluted earnings per share for the year ended 28 September 2012 as it is anti-dilutive.

The weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share for the year ended 28 September 2012 has been adjusted by incorporating the effects of rights issue during the year ended 28 September 2012.

13 DividendsDuring the financial year, the Company paid dividends as follows:

THE COMPANY2013 2012

HK$’000 HK$’000 Final dividend of 0.30 Singapore cent (2012: 1.08 Singapore cents) per ordinary share

in respect of the previous financial year 90,083 212,541

The final dividend paid in cash during the year ended 28 September 2013 of 0.30 Singapore cent (1.89 HK cents) per ordinary shares was HK$90,083,000.

In respect of the current year, the Directors proposed that a dividend of 0.30 Singapore cent (1.86 HK cents) per ordinary share and is subject to approval by shareholders at the forthcoming Annual General Meeting and has not been included as a liability in these financial statements.



14 Property, Plant and EquipmentTHE GROUP

Leasehold land and buildings

Freehold land

Freehold buildings

Processing vessel Vessels

Fishing vessels

Fishing nets

Furniture and

fixturesOffice

equipmentMotor

vehiclesPlant and machinery

Construction-in-progress Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 COST OR VALUATIONAt 29 September 2011 106,798 45,868 190,076 616,456 368,420 1,395,376 85,603 16,655 45,053 14,622 3,021,074 265,171 6,171,172Acquisition of subsidiaries (Note 38) — 972 6,822 — — 46,373 632 — — — 36,201 3,623 94,623Additions — 19,118 — — 67,860 13,601 9,879 1,418 13,001 11 332,166 222,709 679,763Reclassification — — — — — 25,127 — — — — 46,077 (71,204) —Reclassification to fishing and

plant permits (Note 21) — — — — — — — — — — (144,207) — (144,207)Disposals — — (165) — — (26,728) (19,793) — (492) — (46,850) — (94,028)Adjustment on asset revaluation 5,180 — — — — — — — — — — — 5,180 At 28 September 2012 111,978 65,958 196,733 616,456 436,280 1,453,749 76,321 18,073 57,562 14,633 3,244,461 420,299 6,712,503Acquisition of subsidiaries (Note 38) — 145,491 112,305 — — 615,125 47,076 3,136 15,436 69 718,099 47,626 1,704,363Acquisition of assets — — — — — 19,500 — — — — — — 19,500Additions — — — — — 1,409 — 59 481 — 55,010 61,807 118,766Reclassification — 1,270 27,991 — — 12,136 372 313 2,325 — 82,845 (127,252) —Disposals — — — — — (20,905) — (63) (47) (511) (195) — (21,721)Adjustment on asset revaluation 4,720 — — — — — — — — — — — 4,720Exchange realignment — 1,057 3,737 — — 8,195 1,358 109 310 49 10,467 428 25,710 At 28 September 2013 116,698 213,776 340,766 616,456 436,280 2,089,209 125,127 21,627 76,067 14,240 4,110,687 402,908 8,563,841 Comprising:28 September 2013

At cost — 213,776 340,766 616,456 436,280 2,089,209 125,127 21,627 76,067 14,240 4,110,687 402,908 8,447,143At valuation 116,698 — — — — — — — — — — — 116,698

116,698 213,776 340,766 616,456 436,280 2,089,209 125,127 21,627 76,067 14,240 4,110,687 402,908 8,563,841 28 September 2012

At cost — 65,958 196,733 616,456 436,280 1,453,749 76,321 18,073 57,562 14,633 3,244,461 420,299 6,660,525At valuation 111,978 — — — — — — — — — — — 111,978

111,978 65,958 196,733 616,456 436,280 1,453,749 76,321 18,073 57,562 14,633 3,244,461 420,299 6,712,503 ACCUMULATED DEPRECIATIONAt 29 September 2011 — — 35,040 41,558 128,896 251,288 69,323 13,605 22,464 13,140 852,862 — 1,428,176Depreciation 4,234 — 5,105 22,668 20,518 79,349 17,710 1,000 3,430 786 592,626 — 747,426Disposals — — (24) — — (26,728) (17,911) — (208) — (46,850) — (91,721)Adjustment on asset revaluation (4,234) — — — — — — — — — — — (4,234) At 28 September 2012 — — 40,121 64,226 149,414 303,909 69,122 14,605 25,686 13,926 1,398,638 — 2,079,647Depreciation 4,481 — 8,933 22,668 22,227 96,610 20,464 1,231 5,246 489 608,634 — 790,983Disposals — — — — — (20,905) — (63) (47) (511) (195) — (21,721)Adjustment on asset revaluation (4,481) — — — — — — — — — — — (4,481)Exchange realignment — — 869 — — 2,343 867 41 161 49 3,731 — 8,061 At 28 September 2013 — — 49,923 86,894 171,641 381,957 90,453 15,814 31,046 13,953 2,010,808 — 2,852,489 IMPAIRMENTAt 28 September 2011 — — — — — — — — — — 15,938 — 15,938Impairment loss recognised — — — — — 44,067 — — — — — — 44,067 At 28 September 2012 — — — — — 44,067 — — — — 15,938 — 60,005Impairment loss recognised — — — 273,000 — 39,556 411 560 1,605 87 35,137 — 350,356 At 28 September 2013 — — — 273,000 — 83,623 411 560 1,605 87 51,075 — 410,361 CARRYING AMOUNTAt 28 September 2013 116,698 213,776 290,843 256,562 264,639 1,623,629 34,263 5,253 43,416 200 2,048,804 402,908 5,300,991

At 28 September 2012 111,978 65,958 156,612 552,230 286,866 1,105,773 7,199 3,468 31,876 707 1,829,885 420,299 4,572,851



14 Property, Plant and Equipment — continuedIn 2013, the Group made an impairment loss of HK$273,000,000 (2012: HK$Nil) for the processing vessel and HK$77,356,000 (2012: HK$44,067,000) for certain fishing vessels and plant and machineries that management has identified as non-operative. This has been recognised in the consolidated income statement and included in the line item other operating expenses.

The recoverable amount of the relevant assets has been determined on the basis of their value in use. The discount rate used in measuring value in use was 13.65% (2012: 13.41%).

The carrying amount of leasehold land and buildings represents land and buildings in Hong Kong with more than 50 years of lease remaining at the end of the reporting period.

The leasehold land and buildings situated in Hong Kong and Singapore were revalued by BMI Appraisals Limited, a firm of independent professional valuers, on an open market value basis at 28 September 2013 and 28 September 2012. The valuations for the financial years then ended were arrived using Direct Comparison Method and were performed in accordance with International Valuation Standards.

The carrying amounts of the Group’s property, plant and equipment includes an amount of HK$26,442,000 (2012: HK$28,409,000) in respect of assets held under finance leases (Note 30).

During the previous financial year, management obtained legal advice that the plant permit does not have finite term and remain in full force and good standing as long as the applicable legal requirements are complied with. Accordingly, the carrying amount of the plant permit was reclassified to fishing and plant permits in 2012.

If leasehold land and buildings of the Group had not been revalued, they would have been included on a historical cost basis at the following amounts:

2013 2012HK$’000 HK$’000

Cost 62,576 62,576Accumulated depreciation (16,851) (14,737)

Carrying amount 45,725 47,839



15 Investment Properties

THE GROUP2013 2012

HK$’000 HK$’000 Valuation at beginning of year 51,449 49,244Adjustment on asset revaluation (247) 1,972Exchange realignment 933 233

Valuation at end of year 52,135 51,449

The investment properties were valued at HK$52,135,000 (2012: HK$51,449,000) by BMI Appraisals Limited, a firm of independent professional valuers, on an open market value basis at 28 September 2013 and 28 September 2012. The valuations for the financial years then ended were arrived at using Investment Method and were performed in accordance with International Valuation Standards.

The carrying value of investment properties shown above comprises:

THE GROUP2013 2012

HK$’000 HK$’000 Investment properties in the PRC under long leases 17,794 15,696Investment properties in the PRC under medium leases 9,241 9,853Investment properties in Singapore under long leases 25,100 25,900

52,135 51,449

Long leases refer to the leases with terms of more than 50 years remaining at the end of the reporting period and medium leases refer to leases with terms of 50 years or less remaining at the end of the reporting period.

The property rental income earned by the Group from its investment properties, all of which are leased out under operating leases, amounted to HK$2,129,000 (2012: HK$1,855,000). Direct operating expenses arising on the investment properties in the year amounted to HK$722,000 (2012: HK$895,000).

16 Goodwill

THE GROUP2013 2012

HK$’000 HK$’000 At beginning of year 2,952,461 2,903,375Arising on acquisition of subsidiaries (Note 38) — 49,086

At end of year 2,952,461 2,952,461

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (“CGU”) that are expected to benefit from that business combination. The carrying amount of goodwill had been allocated to each CGU as follows:

THE GROUP2013 2012

HK$’000 HK$’000 Contract Supply business 1,784,700 1,784,700Peruvian fishmeal operations 1,167,761 1,167,761

2,952,461 2,952,461



16 Goodwill — continuedThe Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

In 2013, the Group engaged an independent financial advisor located in Hong Kong, BMI Appraisal Limited, to determine the value of Contract Supply business and Peruvian fishmeal operations as of 28 September 2013 (2012: 28 September 2012).

The assessment of recoverability of the carrying amount of goodwill includes:

(i) forecasted projected cash flows up to 2023 (2012: 2022) and projection of terminal value using the perpetuity method;

(ii) growth rate of 3% (2012: 2%); and

(iii) use of 8.93% (2012: 7.61%) for Contract Supply business and use of 18.01% (2012: 17.14%) for Peruvian fishmeal operations to discount the projected cash flows to net present values.

Based on the above assessments, management expects the carrying amount of goodwill to be recoverable and there is no impairment in value of the goodwill.

As at the end of the year, any reasonably possible change to the key assumptions applied is not likely to cause the recoverable amounts to be below the carrying amounts of the CGUs.

17 Prepayment to Suppliers/Advances to Suppliers

THE GROUP2013 2012

HK$’000 HK$’000 Total prepayment to suppliers 3,394,560 2,224,560Less: Accumulated amortisation (1,402,521) (1,164,880)

1,992,039 1,059,680Included as current assets (205,123) (172,640)

Included as non-current assets 1,786,916 887,040

Accumulated amortisation:At beginning of year 1,164,880 992,240Amortisation during the year 237,641 172,640

At end of year 1,402,521 1,164,880

Since 2004, China Fisheries International Limited (“CFIL”), a subsidiary had entered into vessel operating agreements with two companies, Perun Limited (“Perun”) and Alatir Limited (“Alatir”) (collectively as “Suppliers”), to prepay fixed charter hire for 23 (2012: 17) vessels for 10 to 18 years (2012: 10 to 18 years) up to 2030 (2012: 2025).



17 Prepayment to Suppliers/Advances to Suppliers — continuedTo secure the benefits from the prepayments and to ensure that the counterparties comply with their obligations under the vessel operating agreements, the counterparties executed the following documents in favour of CFIL:

(i) charges of all the issued shares of Perun and Alatir;

(ii) debentures over all the present and future assets of Perun and Alatir; and

(iii) entrusted management agreements to vest upon the nominees of CFIL, the management and control of Perun and Alatir in respect of and limited to the performance and obligations of the vessel operating agreements.

With effect from 16 July 2012, these vessel operating agreements were replaced by the long term supply agreements.

To secure the benefits from the prepayments and to ensure that the counterparties comply with their obligations under the long term supply agreements, the counterparties executed the following documents in favour of CFIL:

(i) charges of all the issued shares of Perun and Alatir; and

(ii) debentures over all the present and future assets of Perun and Alatir.

Advances to suppliersThe advances to Suppliers as of 28 September 2012 are unsecured, interest-free and represent advances for working capital under the long term supply agreements. The advance amount will be offset against future payments made to the Suppliers.

During the year, management has reclassified the advances to Suppliers to other receivables as the advance amount is expected to be offset against future payments made to the Suppliers within the next 12 months.

The fair value of the Group’s advances to Suppliers approximates their carrying amount.

18 Available-For-Sale Investments

THE GROUP2013 2012

HK$’000 HK$’000 Unquoted equity securities 7,800 7,800Unquoted debt securities 2,685 15,522Quoted equity securities 14,908 9,536

25,393 32,858

Unquoted equity securities represents 1.9% (2012: 1.9%) interest of a company. The investment is carried at cost as the fair value cannot be reasonably determined. In the opinion of management, no impairment is considered necessary.

19 Interests in Subsidiaries

THE COMPANY2013 2012

HK$’000 HK$’000 Amounts due from subsidiaries 6,605,417 6,636,675

Particulars of the subsidiaries at 28 September 2013 are set out in Note 45. The amounts due from subsidiaries are denominated in Hong Kong dollars, unsecured, bear interest at variable rates ranging from 3.36% to 3.45% (2012: 3.46% to 3.55%) per annum and repayable on demand. Management does not expect any demand to be made for payment within the next twelve months except for the amount shown as current. Interest rates are determined on monthly basis.

Management is of the opinion that the carrying amount of amounts due from subsidiaries approximate their fair value.



20 Interests in Associates

THE GROUP2013 2012

HK$’000 HK$’000 Share of net assets 542,615 505,547

Comprising:Cost of investment in associates 483,411 483,411Share of post-acquisition profits, net of dividend income received 59,204 22,136

542,615 505,547

At the end of the reporting period, the Group had interests in the following associates:

Name of entity

Country ofincorporationor registration/operation

Percentage ofequity interest andvoting power held Principal activities

2013 2012 Pacos Trading Limited Republic of Cyprus/

Worldwide20% 20% Acting as shipping agency

Paco (ET) Limited Republic of Cyprus/Worldwide

20% 20% Inactive

Paco (GT) Limited Republic of Cyprus/Worldwide

20% 20% Inactive

Paco (HT) Limited Republic of Cyprus/Worldwide

20% 20% Inactive

Tassal Group Limited (1) Australia/Australia 22.76% 22.76% Engaged in the hatching, farming, processing, sale and marketing of Atlantic salmon in Australia

(1) Listed on the Australian Securities Exchange.

All the associates are audited by member firms of Deloitte Touche Tohmatsu, of which Deloitte & Touche LLP, Singapore is a member.

During the year ended 28 September 2012, the Group increased its equity interest in Tassal Group Limited (“Tassal”) from 19.76% to 22.76%. Consequently, this entity became an associate of the Group via step-acquisition and gain on bargain purchase on acquisition of HK$10,515,000 was recorded (Note 7). At the end of the reporting period the fair market value of the investment in Tassal is HK$802.5 million (2012: HK$366.5 million).

The financial year end date for Tassal is 30 June. For the purpose of applying the equity method of accounting, the consolidated financial statements of Tassal for the year ended 30 June 2013 have been used as the Group considers that it is impracticable for Tassal to prepare a separate set of financial statements as of 28 September 2013.



20 Interests in Associates — continuedSummarised financial information in respect of the Group’s associates is set out below:

2013 2012HK$’000 HK$’000

Total assets 3,637,546 3,993,098Total liabilities (1,377,755) (1,592,161)

Net assets 2,259,791 2,400,937

Group’s share of associates’ net assets 542,615 505,547

Revenue 2,203,456 1,520,302

Profit for the year 252,651 168,977

Group’s share of associates’ profit for the year 57,540 38,459

21 Other Intangible Assets

THE GROUPFishing and

plant permitsClub

memberships TotalHK$’000 HK$’000 HK$’000

Cost:At 29 September 2011 1,457,904 2,728 1,460,632From acquisition of subsidiaries (Note 38) 221,794 — 221,794Reclassification from property, plant and equipment (Note 14) 144,207 — 144,207

At 28 September 2012 1,823,905 2,728 1,826,633From acquisition of subsidiaries (Note 38) 7,697,914 — 7,697,914Exchange realignment 15,010 — 15,010

At 28 September 2013 9,536,829 2,728 9,539,557

Fishing and plant permits are granted by the authority in Peru. The fishing permits are attached to fishing vessels and are transferable to other fishing vessels.

Management has obtained legal advice that the fishing and plant permits do not have a finite term and remain in full force and good standing as long as the applicable legal requirements are complied with. Accordingly, the costs of fishing and plant permits are not amortised.

As stated in Note 16, the Group has engaged an independent financial advisor located in Hong Kong to determine the value of the Peruvian operations. Based on that report and management’s assessment of business prospects, management expects the carrying amount of fishing and plant permits to be recoverable and there is no impairment in value of the fishing and plant permits.

Club memberships have infinite life and are not amortised.



22 Inventories

THE GROUP2013 2012

HK$’000 HK$’000 (restated)

Inventories at cost consist of the following:Fishmeal 477,806 117,726Frozen seafood 301,550 1,187,170Fuel 30,524 23,870Supplies 113,905 51,131

923,785 1,379,897

Fishmeal with carrying amounts of HK$63,882,000 (2012: HK$41,255,000) have been pledged as security for the Group’s bank overdrafts and certain loans totalling HK$173,300,000 (2012: HK$118,978,000) (Note 31).

23 Trade and Bills Receivables

THE GROUP2013 2012

HK$’000 HK$’000 Outside parties 1,832,860 2,247,314

An allowance for estimated irrecoverable amount from the sale of goods to third parties of HK$172,000 (2012: HK$334,000) has been determined by reference to management’s estimation of irrecoverable amounts. The Group has provided fully for receivables over 180 days based on historical experience.

For the remaining trade receivables of HK$1,832,860,000 (2012: HK$2,247,314,000), the majority is neither past due nor impaired.

The credit period granted on sale of goods is up to 180 days (2012: 180 days). No interest is charged on overdue balances.

The amounts due from associates are unsecured, interest-free and repayable on demand.

Movement in the allowance for doubtful debts:

THE GROUP2013 2012

HK$’000 HK$’000 Balance at beginning of the year 334 4,858Written off against trade receivables during the year (162) (4,524)

Balance at end of the year 172 334



23 Trade and Bills Receivables — continuedThe Group’s trade receivables that are not denominated in the functional currencies of the respective entities are as follows:

THE GROUP2013 2012

HK$’000 HK$’000 Chinese Renminbi 1,503 1,460Namibian dollars 2,910 2,604Peruvian Nuevo Soles 1,252 2,661

5,665 6,725

24 Other Receivables and Prepayments


HK$’000 HK$’000 HK$’000 HK$’000 Suppliers 801,486 874,951 — —Other receivables and prepayments 446,634 237,327 — 183Deferred expenditure 256,901 175,039 — —Prepayments for fish 5,815,115 6,612,170 — —

7,320,136 7,899,487 — 183

The balances with Suppliers as of 28 September 2013 and 2012 are unsecured, interest-free and represent advances to the Suppliers for working capital advances for the supply of fish to the Group under the long term supply agreements (Note 17).

The balances with the Suppliers are stated net of amounts payable to vessel owners in respect of payments made by the vessel owners on behalf of the Group. This offset has been effected on the basis of arrangements amongst members of the Group, the vessel owners and the Suppliers.

The other receivables balances are neither past due nor impaired.

The Group and Company’s other receivables that are not denominated in the functional currencies of the respective entities are as follows:


HK$’000 HK$’000 HK$’000 HK$’000 Chinese Renminbi 40 6,382 — —Euro 1,678 6,921 — —Namibian dollars 32,896 913 — —Peruvian Nuevo Soles 117,909 61,022 — —

152,523 75,238 — —



25 Bank Balances and Cash


HK$’000 HK$’000 HK$’000 HK$’000 Cash at banks 448,962 442,345 841 1,203Cash on hand 4,499 3,509 — —Short term deposits 162,310 — — —

615,771 445,854 841 1,203

The interest rates on cash placed with financial institutions ranged from nil to 0.4% (2012: Nil to 0.4%) per annum.

As of 28 September 2013, short term deposits denominated in USD amounting to HK$162,310,000 which bears a short-term market interest rate of 5.30%.

The Group and Company’s cash and bank balances that are not denominated in the functional currencies of the respective entities are as follows:


HK$’000 HK$’000 HK$’000 HK$’000 United States dollars 154,360 134 — —Chinese Renminbi 2,660 3,647 237 266Euro 1,199 5,534 — —Hong Kong dollars 1,888 1,662 18 33Peruvian Nuevo Soles 1,685 2,357 — —Singapore dollars 1,687 1,924 126 305Namibian dollars 9,978 854 — —Norwegian Krone 7,576 — — —Canadian dollars 5 2,819 — —

181,038 18,931 381 604



26 Trade and Other Payables


HK$’000 HK$’000 HK$’000 HK$’000 Trade creditors and accruals 221,468 269,046 — 52Interest payable 86,614 64,935 15,832 14,488Provision for claims [Note 41(b)] — 22,843 — —

308,082 356,824 15,832 14,540

Trade payables principally comprise amounts outstanding for vessel operating costs and trade purchases.

The average credit period on purchase of goods is 30 days (2012: 30 days). No interest is charged on overdue balances. The Group has financial risk management policies in place to ensure that all payables are within the credit timeframe.

The Group and Company’s trade and other payables that are not denominated in the functional currencies of the respective entities are as follows:


HK$’000 HK$’000 HK$’000 HK$’000 Chinese Renminbi 15,766 16,348 15,832 14,488Euro 3,309 5,079 — —Hong Kong dollars 7,578 1,449 — —Peruvian Nuevo Soles 97,365 108,480 — —Singapore dollars 926 424 — 52Danish Krone — 2,743 — —Norwegian Krone 1,636 1,056 — —Japanese Yen 896 1,625 — —Namibian dollars 9,888 22 — —

137,364 137,226 15,832 14,540



27 Amounts Due to Pacific Andes International Holdings Limited and its Subsidiaries (“PAIH”)The amounts due are unsecured, repayable on demand and bear interest at the funding cost of PAIH (Note 44) and its subsidiaries at rates ranging from 2.18% to 2.21% (2012: 2.21% to 2.30%) per annum.

28 Derivative Financial InstrumentsDuring the year, the Group entered into foreign currency forward contracts with banks to reduce its exposure to currency fluctuation risk of anticipated sales and purchase transactions which are denominated in foreign currencies. These derivatives contracts are not accounted for under hedge accounting. At the end of the reporting period, the fair value of the foreign currency forward contracts is HK$54,712,000 (2012: HK$202,214,000), which is settled on net basis. These amounts are based on quoted market prices for equivalent instruments at the end of the reporting period.

These changes in fair value of HK$34,562,000 (2012: HK$202,214,000) have been charged to profit or loss during the year and included in the line item other operating expenses.

The major terms of the foreign currency forward contracts are as follows:

2013

Aggregate principal amount Maturity dates Contracted exchange rates Sell JPY 37,434,600,000 From September 2015 to July 2016 US$1 at JPY89.9 to JPY94.95

Sell Euro 44,000,000 July 2015 Euro1 at US$1.37

Sell US$ 415,238,000 From June 2014 to May 2016 US$1 at RMB6.30 to RMB6.40

2012

Aggregate principal amount Maturity dates Contracted exchange rates Sell JPY 48,758,362,000 From October 2012 to August 2015 US$1 at JPY73.80 to JPY80.51

Sell Euro 102,000,000 July 2015 Euro1 at US$1.30 to US$1.36

Sell GBP 23,000,000 August 2014 GBP1 at US$1.627

Sell US$ 425,238,000 From January 2014 to June 2015 US$1 at RMB6.30 to RMB7.00



29 Bank Advances Drawn on BillsAs at 28 September 2013, bank advances drawn on bills amounting to HK$7,060,000 were with recourse and bear interest rates at 2.54% per annum. These matured in December 2013.

30 Finance Leases

THE GROUP

Minimum lease payments

Present valueof minimum

lease payments2013 2012 2013 2012

HK$’000 HK$’000 HK$’000 HK$’000 Amount payable under finance leases:

Within one year 37,541 39,798 30,151 29,555In the second to fifth year inclusive 4,376 41,916 3,666 33,817Less: Future finance charges (8,100) (18,342) NA NA

Present value of lease obligations 33,817 63,372 33,817 63,372

Less: Amount due for settlement within 12 months (shown under current liabilities) (30,151) (29,555)

Amount due for settlement after 12 months 3,666 33,817

All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

All lease obligations are denominated in United States dollars.

The carrying amounts of the Group’s lease obligations approximate their fair value.

The Group’s obligations under finance leases are secured by the lessors’ title to the leased assets (Note 14).



31 Interest-Bearing Bank Borrowings

THE GROUP2013 2012

HK$’000 HK$’000 Interest-bearing bank borrowings comprise:

Trust receipt loans and short-term bank loans 4,145,918 3,422,341Club loans and term loans 5,334,238 3,565,318Bank overdrafts 7,777 8,342

9,487,933 6,996,001Less: Issuing costs (32,219) (74,209)

9,455,714 6,921,792

Analysed as:Secured 173,300 118,978Unsecured 9,282,414 6,802,814

9,455,714 6,921,792

Repayable as follows:On demand or within one year 7,897,734 5,119,836In the second year 1,557,980 857,981In the third year — 943,975

9,455,714 6,921,792

Less: Amount due for settlement within one year included under current liabilities (7,897,734) (5,119,836)

Amount due after one year 1,557,980 1,801,956

Short-term bank borrowings of the Group amounting to HK$173,300,000 (2012: HK$118,978,000) bear interest ranging from 2.75% to 2.94% (2012: 2.74% to 4.00%) per annum and are secured over the Group’s fishmeal (Note 43).

Borrowings of HK$910,000 on 28 September 2012 were unsecured, bear fixed interest rates of 8.50% per annum.



31 Interest-Bearing Bank Borrowings — continuedThe remaining unsecured club loans, term loans, revolving loans and trust receipt loans bear interest at variable rates ranging from 2.20% to 3.68% (2012: 2.21% to 3.73%) per annum.

Management estimates that the fair values of the bank borrowings approximate their carrying amounts as the Group’s borrowing rates approximate the market rates available at the end of the reporting period.

The Group’s interest-bearing bank borrowings that are not denominated in the functional currencies of the respective entities are as follows:

THE GROUP2013 2012

HK$’000 HK$’000 Hong Kong dollars 45,753 40,679

32 BondsThe Chinese Renminbi denominated unsecured bonds was issued on 2 June 2011. The Company has the option of redeeming the bonds in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the bondholders.

The bonds will mature on 2 June 2014. Interest of 6.5% per annum will be paid semi-annually until settlement date.

The interest expenses charged to profit or loss is calculated by applying an effective interest rate of 7.5% per annum on the outstanding bonds.

During the year ended 28 September 2012, a principal amount of RMB30,000,000 (approximately HK$37,127,000) bonds was repurchased from market at a consideration of RMB26,175,000 (approximately HK$32,393,000) resulting in a gain on repurchase of bonds of HK$4,000,000 after amortisation cost.

The fair values of the bonds approximate their carrying amounts as the bonds’ effective interest rates approximate the market rates available at the end of the reporting period.

33 Long term payables

THE GROUP2013 2012

HK$’000 HK$’000 Long term trade payables 101,088 –Provision for claims (a) 82,984 –Other payables and accrued expenses 14,227 –Other provisions (b) 38,712 –

237,011 –



33 Long term payables — continued(a) Movements in the provision for claims are as follows:

2013 2012HK$’000 HK$’000

At beginning of year (Note 26) 22,843 —Charged to profit or loss 10,756 —Arising on acquisition of subsidiary 49,385 —

82,984 —

(b) This represents the provision for fishing ban expenses, fishing expenses and laboral reposition of personnel. The long term payables are unsecured, interest-free and not to be repaid within 12 months. The fair values of the Group’s long term payables approximate their carrying amount.

34 Senior Notes

2013 2012HK$’000 HK$’000

At beginning of the year 2,120,094 —Issued during the year (a) — 2,118,672Amortization of issuance cost 11,590 1,422Arising on acquisition of subsidiaries (b) 1,949,212 —

At end of the year 4,080,896 2,120,094

(a) On 24 July 2012, the Group, through its subsidiary, CFG Investment S.A.C. (“CFGI”), issued guaranteed senior fixed rate notes with aggregate nominal value of US$300,000,000 (approximately HK$2,340,000,000) (the “Notes”) which carried fixed interest of 9.75% per annum (interest payable semi-annually in arrears) and was repayable by 30 July 2019.

The Notes are listed on the Singapore Exchange Securities Trading Limited. They are unsecured and guaranteed by China Fishery Group Limited (“China Fishery”) and certain subsidiaries of China Fishery. The guarantees are effectively subordinated to secure obligations of each guarantor, to the extent of the value of assets serving as security.

At any time prior to 30 July 2016, CFGI may redeem the Notes in whole or in part at the principal amount of the Notes plus an applicable premium and accrued interest provided that any partial redemption shall not result in less than US$100 million (approximately HK$780 million) of outstanding Notes. At any time prior to and up to 30 July 2016, CFGI may redeem up to 35% of the Notes, with net cash proceeds from issue of ordinary shares of China Fishery or sale of ordinary shares of CFGI, at the redemption price equal to 109.75% of the principal amount of the Notes plus accrued and unpaid interests, if any, as of the redemption date.



34 Senior Notes — continued(a) — continued

The Notes contained certain covenants that limited China Fishery’s and certain subsidiaries’ abilities to, among other things:

• incur or guarantee additional indebtedness and issue disqualified or preferred shares;

• declare dividends or purchase or redeem shares;

• make investments or other specified restricted payments;

• issue or sell shares of certain subsidiaries;

• sell assets or create any lien; and

• enter into sale and leaseback transactions.

Management estimated the fair value of the Notes at 28 September 2013 to be approximately HK$2,126,982,000. The fair value has been calculated based on the bid price extracted from Bloomberg as at 28 September 2013. In 2012, management estimated the fair value of the Notes at 28 September 2012 to be approximately HK$1,816,996,000. The fair value has been calculated by assuming redemption on 30 July 2019, using effective interest rate of 14.19% per annum with reference to the US Treasury Zero Coupon Bonds and holding the credit risk margin constant.

The net carrying amount of the Notes was stated net of issue expenses totalling HK$132,951,000. Such expenses were amortised over the life of the Notes by charging the expenses to profit or loss and increasing the net carrying amount of the Notes with the corresponding amount. As of 28 September 2013, accumulated amortisation amounted to HK$13,012,000 (2012: HK$1,422,000).

During the year ended 28 September 2012, a total principal amount of US$12,000,000 (approximately HK$93,600,000) of Notes was purchased from market at a consideration of US$10,385,000 (approximately HK$81,003,000) resulting in a gain on purchase of notes of HK$7,378,000 after amortisation cost.

(b) On January 2013, Copeinca S.A.C., reopened its US$175 million (approximately HK$1,365 million) 9.00% senior notes due in 2017 raising gross proceeds of US$75 million (approximately HK$585 million), which are guaranteed by Copeinca ASA. The issue of these notes corresponds to a single issue of the US$175 million (approximately HK$1,365 million) 9.00% senior notes due 2017. The total aggregate principal amount of the 9.00% senior notes due in 2017 outstanding following such reopening amounts to US$250 million (approximately HK$1,950 million).

On 2 February 2010, Copeinca S.A.C. agreed with Credit Suisse Securities (USA) LLC, as representative of several purchasers, to issue and sell to the several purchasers, US$175 million (approximately HK$1,365 million) principal amount of its 9.00% senior notes due in 2017 to be issued under an indenture dated 10 February 2010, between Copeinca S.A.C., the Guarantor and Deutsche Bank Trust Company Americas, as trustee, guaranteed on an unsecured senior basis by the Company. Coupons bear a 9% interest and are payable on a semi-annual basis.



34 Senior Notes — continued(b) — continued

The Notes contained certain covenants that limited the Copeinca’s and certain subsidiaries’ abilities to, among other things:

• incur or guarantee additional indebtedness and issue disqualified or preferred shares;

• declare dividends or purchase or redeem shares;

• make investments or other specified restricted payments;

• issue or sell shares of certain subsidiaries;

• sell assets or create any lien; and

• enter into sale and leaseback transactions.

Management estimated the fair value of the Notes at 28 September 2013 to be approximately US$251,250,000 (approximately HK$1,959,750,000). The fair value has been calculated based on the bid price extracted from Bloomberg as at 28 September 2013.

The net carrying amount of the Notes was stated net of issue expenses totaling US$948,000 (approximately HK$7,394,000). Such expenses were amortised over the life of the Notes by charging the expenses to the profit or loss using effective interest rate of 9.59% per annum and increasing the net carrying amount of the Notes with the corresponding amount. As of 28 September 2013, accumulated amortization amounted to US$112,000 (approximately HK$874,000).

35 Deferred Tax LiabilitiesThe following are the major deferred tax liabilities and assets recognised and movements thereon during the current year:

Acceleratedtax depreciation

Fair valueadjustments (1) Provisions Total

HK$’000 HK$’000 HK$’000 HK$’000 THE GROUP

At 29 September 2011 (8,127) 513,701 (15,834) 489,740Acquisition of subsidiaries (Note 38) — 48,468 — 48,468Charged (Credited) to consolidated income

statement (Note 11) 8,127 (75,300) 2,354 (64,819)

At 28 September 2012 — 486,869 (13,480) 473,389Acquisition of subsidiaries (Note 38) — 2,048,218 — 2,048,218Credited to consolidated income statement (Note 11) — (53,157) — (53,157)Exchange realignment — 5,748 — 5,748

At 28 September 2013 — 2,487,678 (13,480) 2,474,198

(1) Being deferred tax effect on fair value adjustments of property, plant and equipment and fishing and plant permits on business combinations.



36 Share Capital

THE GROUP AND THE COMPANYNumber of shares

at S$0.05 Amountsper share S$’000

Authorised:At 28 September 2012 and 2013 8,000,000,000 400,000

Issued and fully paid:At 29 September 2011 3,193,994,892 159,699Issue of shares as a result of rights issue 1,596,997,446 79,850

At 28 September 2012 and 28 September 2013 4,790,992,338 239,549

THE GROUP AND THE COMPANY2013 2012

HK$’000 HK$’000 Issued and fully paid:

Balance at beginning of year 1,325,005 832,691Issue of shares as a result of rights issue — 492,314

Balance at end of year 1,325,005 1,325,005

During the year ended 28 September 2012, the Company issued 1,596,997,446 new ordinary shares of S$0.05 each at an issue price of S$0.14 per share by way of rights on the basis of one new share for every two existing shares.



37 ReservesCapital reserveThe capital reserve represents the Group’s share of the fair value adjustment to the net assets of subsidiaries on acquisition of additional equity interest from the minority shareholder.

Other reserveThe other reserve represents the equity component of convertible debt instruments.

Investment revaluation reserveThe investment revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, the portion of the reserve that relates to that financial asset, and is effectively realised, is recognised in profit and loss. Where a revalued financial asset is impaired, the portion of the reserve that relates to that financial asset is recognised in profit and loss.

Properties revaluation reserveThe properties revaluation reserve arises on the revaluation of leasehold buildings. Where a revalued leasehold building is sold, the portion of the revaluation reserve that relates to that asset, and is effectively realised, is transferred directly to retained earnings. The revaluation reserve is not available for distribution to the Company’s shareholders.

Currency exchange translation reserveExchange differences relating to the translation from the functional currencies of the Group’s foreign subsidiaries into Hong Kong dollars are brought to account by entries made directly to the currency exchange translation reserve.

38 Acquisition of SubsidiariesDuring the year ended 28 September 2013 and 2012, the Group acquired the following subsidiaries and accounted for these acquisitions using the purchase method of accounting.

28 September 2013

Subsidiary Place of incorporation Date of acquisition Copeinca ASA Norway 30 August 2013

During the year, the Group acquired 99.1% equity interest in Copeinca, Peru’s second largest fishing company listed on the Oslo Børs with a secondary listing on the Lima Stock Exchange. The acquisition was completed on 30 August 2013.

The Group acquired Copeinca primarily to expand the Peruvian operations.



38 Acquisition of Subsidiaries — continuedThe net assets acquired and the goodwill arising are as follows:

Acquirees’carryingamountbefore

combinationFair value

adjustments Fair valueHK$’000 HK$’000 HK$’000

Property, plant and equipment (Note 14) 1,931,654 (227,291) 1,704,363Other intangible assets (Note 21) 1,670,113 6,027,801 7,697,914Goodwill 1,084,941 (1,084,941) —Inventories 380,936 192,278 573,214Trade receivables 270,309 — 270,309Other receivables and prepayments 183,533 — 183,533Prepaid income tax 56,297 — 56,297Trade and other payables (86,021) — (86,021)Income tax payable (35,582) — (35,582)Bank borrowings (10,046) — (10,046)Long term payables (51,356) — (51,356)Senior notes (1,949,212) — (1,949,212)Deferred tax liabilities (Note 35) (575,858) (1,472,360) (2,048,218)Non-controlling interests (33,946) (26,474) (60,420)

2,835,762 3,409,013 6,244,775

Gain on bargain purchase arising on acquisition (Note 7) (499,584)Gain on disposal of available-for-sale investment (125,533)

Total cash consideration 5,619,658

Satisfied by:Cash paid 6,143,981

Net cash outflow arising on acquisition:Cash paid 6,143,981Less: Gain on disposal of available-for-sale investment (125,533)Less: Cash and cash equivalents acquired (398,790)

5,619,658

Gain on bargain purchase arising on acquisition represents the excess of the fair value of the net assets acquired over the purchase consideration.

The initial accounting for the acquisition of Copeinca has only been provisionally determined as the acquisition occurred close to the end of the reporting period. At the date of finalisation of these financial statements, the necessary market valuations and other calculations for the items listed below had not been finalised and they have therefore only been provisionally determined based on the management’s best estimate of the likely values.

Impact of acquisition on the results of the GroupDuring the year, the acquisition of the subsidiary resulted in inclusion of post-acquisition revenue of HK$245,973,000 and profit of HK$55,840,000 in the Group’s financial statements.

Had the business combination during the year been effected at 29 September 2012, the revenue of the Group would have been HK$10,123,538,000 and the profit for the year would have been HK$809,511,000.



38 Acquisition of Subsidiaries — continuedPreviously held interestThe previously held equity interest of 17.19% in Copeinca was previously recorded as available-for-sale investment. It was re-measured at fair value at the date of acquisition. The difference between the fair value of HK$1,042,415,000 and the carrying amount of 17.19% equity interest immediately prior to the date of acquisition of HK$916,882,000 amounting to HK$125,533,000 was recognised in other operating income (Note 7).

Non-controlling interestThe interests of a non-controlling shareholder recognised at the acquisition date was measured at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets.

28 September 2012

Subsidiaries Place of incorporation Date of acquisition Consorcio Vollmacht S.A.C. Peru 7 November 2011

Negocios Rafmar S.A.C. Peru 7 November 2011

Brandberg Namibia Investments Company (Proprietary) Limited Namibia 5 March 2012

Inversiones Pesqueras West S.A.C. Peru 14 June 2012

Pesqueros del Pacifico S.A.C. Peru 14 June 2012

The Group acquired the above subsidiaries to achieve higher operating efficiencies of the Peruvian operations and venture into new market in Namibia.

During the year ended 28 September 2012, the acquisition of the subsidiaries resulted in inclusion of post-acquisition revenue of HK$874,000 and loss of HK$6,474,000 in the Group’s financial statements.

It is not practicable to estimate the change in revenue and operating results for the Group had the above acquisitions being effected at the beginning of the financial year as the financial statements prior to the acquisitions have not been prepared based on International Financial Reporting Standards or Singapore Financial Reporting Standards.



38 Acquisition of Subsidiaries — continuedNon-controlling interest — continuedThe net assets acquired and the goodwill arising are as follows:

Acquirees’carryingamountbefore

combinationFair value

adjustments Fair valueHK$’000 HK$’000 HK$’000

Property, plant and equipment (Note 14) 104,954 (10,331) 94,623Other intangible assets (Note 21) 49,920 171,874 221,794Inventories 1,799 — 1,799Other receivable and prepayments 22,401 (348) 22,053Bank balances and cash 2,000 — 2,000Trade and other payables (87,535) — (87,535)Deferred tax liabilities (Note 35) — (48,468) (48,468)

93,539 112,727 206,266

Gain on bargain purchase arising on acquisition (Note 7) (19,872)Goodwill arising on acquisition (Note 16) 49,086

Total consideration 235,480

Satisfied by:Cash paid 235,480

Net cash outflow arising on acquisition:Cash paid 235,480Cash and cash equivalents acquired (2,000)

233,480

39 Acquisition of AssetsDuring the financial year, the Group acquired the entire issued share capital of J. Wiludi & Asociados Consultores En Pesca S.A.C. (Note 45) which own a fishing vessel for a consideration of HK$19,500,000. The transaction was determined by management to be an acquisition of assets rather than a business combination as defined in FRS 103 Business Combinations.



40 Operating Lease ArrangementsThe Group as lessorThe Group rents out its investment properties in PRC and Singapore and a portion of its freehold building and equipment in Peru under operating leases. Rental income earned during the year ended 28 September 2013 was HK$2,129,000 (2012: HK$2,113,000).

At the end of the reporting period, the Group had contracted with tenants for the following future minimum lease payments:

2013 2012HK$’000 HK$’000

Within one year 1,512 218In second to fifth year inclusive 1,149 —

2,661 218

Leases for premises are negotiated for an average term of 2 years and rentals are fixed for an average of 2 years.

The Group as lessee

2013 2012HK$’000 HK$’000

(a) Minimum lease expenditureunder operating leases recognised as an expense in the year — 372,925

Comprising:Rental of premises — 878Amortisation of prepayment to suppliers (Note 17) — 172,640Variable charter hire — 35,420Fixed charter hire — 163,987

(b) At the end of the reporting period, the Group had no outstanding commitments under non-cancellable operating leases in respect of rented premises.



41 Contingent Liabilities(a) At the end of the reporting period, the Group and the Company had contingent liabilities as follows:


HK$’000 HK$’000 HK$’000 HK$’000 Unsecured guarantees given to bankers

in respect of banking facilities utilised by subsidiaries:— Unsecured — — 4,197,689 4,648,188

The Company also issued unlimited guarantee to bankers in respect of general banking facilities granted to subsidiaries. The secured facilities provided to the Group’s subsidiary is secured by land and buildings held by the Group.

(b) Certain subsidiaries of the Group are parties to legal processes in Peru amounting to approximately HK$233,415,000 (2012: HK$29,629,000). These relate to environmental matters, former employees and miscellaneous claims. The Group’s legal advisor has advised that HK$82,984,000 (2012: HK$22,843,000) of these claims is likely to have unfavourable outcome for the Group and the outcome for claims of HK$150,431,000 (2012: HK$6,786,000) cannot be reasonably ascertained. Additionally, there are claims which the legal advisor has opined to have remote chances of resulting in unfavourable outcomes for the Group.

The Group had made a provision of HK$82,984,000 (2012: HK$22,843,000) for these claims where the outcome is likely to be unfavourable to the Group.

Saved as disclosed above, no member of the Group is engaged in any litigation or claims of material importance known to Directors to be pending or threatened against any member of the Group.

42 Commitments

2013 2012HK$’000 HK$’000

(a) Capital expenditure in respect of acquisition of property, plant and equipment contracted for but not provided in the consolidated financial statements 65,890 2,051

(b) As at 28 September 2013, the Group has ongoing commitment to pay variable price for the supply of fish under the first, second, third and fourth long term supply agreements entered into with Perun and Alatir for a period of 10 to 23 years up to 28 September 2030. Variable price is calculated at 20% of the revenue derived from the sales of fish before deduction of amortisation of fixed prepayment to Suppliers.

43 Pledge of AssetsDeposits amounting to HK$111,000 (2012: HK$207,000) are pledged to a bank to secure an export invoice discounting facility granted to the Group.

Inventories totalling HK$63,882,000 (2012: HK$41,255,000) of a Peruvian subsidiary are pledged as security for certain short term bank borrowings for certain Peruvian subsidiaries.



44 Holding Company and Related Company TransactionsDuring the year, the Group carried out significant transactions with the subsidiaries of PAIH as follows:

2013 2012HK$’000 HK$’000

Interest expenses paid to PAIH and its subsidiaries (note (i)) 111 105Administrative expenses paid to PAIH and its subsidiaries (note (ii)) 34,787 33,419

Notes:

(i) The interest expenses were calculated monthly at interest rates ranging from 2.18% to 2.21% (2012: 2.21% to 2.30%) per annum on the outstanding amounts due to PAIH and its subsidiaries.

(ii) The administrative expenses paid to PAIH and its subsidiaries, were calculated in accordance with the management agreement signed on 3 September 1996 and updated by a supplemental agreement dated 22 July 2003.

45 Particulars of SubsidiariesDetails of the subsidiaries are as follows:

Name

Countryof incorporationor registration/operation

Proportionof ownership

interest

Proportionof voting

power held Principal activities2013 2012 2013 2012

% % % % Admired Agents Limited (5) British Virgin Islands/

Worldwide46.34 46.34 80 80 Agent for procurement of

provisions and supplies for the Group

Alliance Capital Enterprises Limited (2)

Hong Kong/PRC 100 100 100 100 Property holding

Andes Agency Limited (5) Hong Kong/Worldwide 100 100 100 100 Inactive

Andeshali Namibia Investment Holdings (5)

Namibia 57.92 100 100 100 Investment holding

Atlantic Pacific Fishing Company (Pty) Limited (6)

Namibia 28.38 — 49 — Operation of vessel and sale of fish

Brandberg (Mauritius) Investments Holdings Limited (formerly Andeshali Resources Holding Limited (5))

Mauritius 57.92 100 100 100 Investment holding

Brandberg Namibia Investments Company (Proprietary) Limited (5)

Namibia 57.92 57.92 100 100 Fishing operation



Name



interest

Proportionof voting


% % % % CFG Investment S.A.C.. (3) Peru 57.92 57.92 100 100 Investment holding,

operation of fishing vessel, operation of fishmeal plants and sale of fish and marine catches, fishmeal and fish oil

China Fishery Group Limited (Formerly known as CFG Investments (Hong Kong) Ltd) (5)

Hong Kong 57.92 57.92 100 100 Investment holding

CFG Investments (Shanghai) Ltd (5)

PRC 57.92 57.92 100 100 Inactive

CFG Peru Investments Pte Limited (1)

Singapore 57.92 57.92 100 100 Investment holding

CFGL (Singapore) Private Limited (1)

Singapore 57.92 57.92 100 100 Property holding

Champion MaritimeLimited (5)

British Virgin Islands/Worldwide

57.92 57.92 100 100 Inactive

Champion ShippingLimited (5)


100 100 100 100 Vessel holding

Chanery Investment Inc. (5) British Virgin Islands/Worldwide

57.92 57.92 100 100 Property holding

Chiksano Management Limited (5)


57.92 57.92 100 100 Agent for sales of fish and other marine catches of the Group and procurement of provisions and supplies for the Group

China Cold Chain Group Limited (5)

British Virgin Islands 100 100 100 100 Inactive

China FisheriesInternational Limited (5)

Samoa/Worldwide 57.92 57.92 100 100 Management and operation of fishing vessels and sale of fish and other marine catches

45 Particulars of Subsidiaries — continued



Name



interest

Proportionof voting


% % % %

China Fishery GroupLimited (1)(4)

Cayman Islands 57.92 57.92 70.51 70.51 Investment holding

CJSC Invest Group (5) Russia 57.92 57.92 100 100 Investment holding

Concept China Investment Limited (2)

Hong Kong/PRC 100 100 100 100 Property holding

Conred Limited (2) Hong Kong/PRC 100 100 100 100 Inactive

Consorcio VollmachtS.A.C. (3)

Peru 57.92 57.92 100 100 Vessel and fishing quota holding

Copeinca ASA (7) Norway 57.40 — 99.1 — Investment holding

Copeinca Internacional S.L.U (7)

Spain 57.40 — 99.1 — Investment holding

Corporacion Pesquera Inca S.A.C. (3)(7)

Peru 57.40 — 99.1 — Investment holding, operation of fishing vessel, operation of fishmeal plants and sale of fish and marine catches, fishmeal and fish oil

Corporacion PesqueraFrami S.A.C. (3)

Peru 57.92 57.92 100 100 Vessel holding

Davis Limited (2) Hong Kong/PRC 100 100 100 100 Property holding

Emerald Nirwana SdnBhd (5)

Malaysia 100 100 100 100 Inactive

Excel Concept Limited (5) British Virgin Islands/Worldwide

46.34 46.34 80 80 Agent for sales of fish and other marine catches of the Group

Fantastic BuildingsLimited (2)

British Virgin Islands/Hong Kong

100 100 100 100 Property holding

Fortress AgentsLimited (5)






Name



interest

Proportionof voting


% % % % Gain Star Management

Limited (5)



Golden Target Pacific Limited (5)


100 100 100 100 Investment holding

Grandwell InvestmentGroup Ltd (6)

Hong Kong 57.92 — 100 — Investment holding

Grand Success Investment (Singapore) Pte Ltd (1)(6)

Singapore 57.92 — 100 — Investment holding

Growing Management Limited (5)



Hill Cosmos International Limited (5)


57.92 57.92 100 100 Inactive

Inmobiliaria Y Constructora PAHK S.A.C.. (3)

Peru 57.92 57.92 100 100 Investment holding

Inversiones Pesqueras West S.A.C. (3)

Peru 57.92 57.92 100 100 Fishmeal and investment holding

J. Wiludi & Asociados Consultores En Pesca S.A.C. (3)(7)

Peru 57.92 — 100 — Vessel holding

Lions City InvestmentInc. (5)

British Virgin Islands 100 100 100 100 Investment holding

LLC Investment Company Kredo (5)

Russia 57.92 57.92 100 100 Operation of fishing vessel and sale of fish




Name



interest

Proportionof voting


% % % % Loyal Mark Holdings

Limited (5)



Macro Capitales S.A. (3) Panama 57.92 57.92 100 100 Investment holding

Metro Island International Limited (5)



Mission Excel International Limited (5)



Natprop InvestmentsLimited (5)

Cook Islands/Worldwide 100 100 100 100 Ship repairing agency

Negocios RafmarS.A.C. (3)(8)

Peru — 57.92 — 100 Fishmeal processing

Nidaro InternationalLimited (5)


57.92 57.92 100 100 Inactive

Nippon Fishery Holdings Limited (5)


57.92 57.92 100 100 Inactive (since being acquired)

New Millennium Group Holdings Limited (2)


100 100 100 100 Inactive

Ocean Expert International Ltd (5)






Name



interest

Proportionof voting


% % % % Pacific Andes Enterprises

(BVI) Limited (2)


100 100 100 100 Trading of frozen seafood products

Pacific Andes Food(Hong Kong) Company Limited (2)

Hong Kong 100 100 100 100 Trading of frozen seafood products

Pacific Andes Vegetables, Inc. (5)

British Virgin Islands/PRC


Paco Alpha Limited (5) British Virgin Islands/Worldwide

100 100 100 100 Vessel holding

Paco Beta Limited (5) British Virgin Islands/Worldwide

100 100 100 100 Trading of marine fuel

Paco Gamma Limited (5) British Virgin Islands/Worldwide

100 100 100 100 Inactive

Paco Sigma Limited (5) British Virgin Islands/Worldwide

100 100 100 100 Trading agent

Pacos Trading Limited (5) Cayman Islands/Worldwide

100 100 100 100 Inactive

Parkmond Group Limited (2)


100 100 100 100 Trading of frozen seafood products

PARD Trade Limited (2) British Virgin Islands 100 100 100 100 Inactive

Pesqueros del Pacifico S.A.C. (3)(8)

Peru 57.92 57.92 100 100 Vessel Holding

PFB Fisheries B.V. (7) Netherlands 57.40 — 99.1 — Investment holding

Premium Choice Group Limited (5)


57.92 57.92 100 100 Management of fishing vessels

Pioneer Logistics Limited (5)


57.92 57.92 100 100 Inactive

Powertech Engineering (Qingdao) Co. Ltd (5)

PRC 57.92 57.92 100 100 Agent for vessel repairing services for the Group




Name



interest

Proportionof voting


% % % % Protein Trading Limited (5) Samoa 57.92 57.92 100 100 Procurement and

marketing agent for fishmeal

Qingdao Pacific AndesFarm Co. Limited (5)

PRC 100 100 100 100 Inactive

Qingdao New Millennium Food Co., Limited (5)

PRC 100 100 100 100 Inactive

Quality Food(Singapore) Pte. Limited (5)

Singapore 100 100 100 100 Investment holding

Ringston Holdings Ltd (5) Cyprus 57.92 57.92 100 100 Investment holding

Sea CapitalInternational Limited (5)


57.92 57.92 100 100 Inactive

Servicios Pesqueros Chimbote S.A. (3)(8)

Peru — 57.92 — 100 Provision of logistic and warehousing services for fishing industry

Shine Bright Management Limited (5)



Smart Group Limited (5) Cayman Islands 57.92 57.92 100 100 Investment holding

South Pacific Shipping Agency Ltd (5)


57.92 57.92 100 100 Agent for procurement of provisions and supplies for the Group

Super InvestmentLimited (2)

Cayman Islands 81.93 81.93 96.9 96.9 Investment holding

Superb ChoiceInternational Limited (5)


57.92 57.92 100 100 Inactive

Sustainable Pelagic Fishery S.A.C. (3)

Peru 57.92 57.92 100 100 Operation of fishing vessels




Name



interest

Proportionof voting


% % % % Sustainable Fishing

Resources S.A.C. (3)

Peru 57.92 57.92 100 100 Operation of fishing vessels

Richtown Development Limited (5)

British Virgin Islands/Hong Kong


Well HopeInternational Limited (5)

British Virgin Islands 100 100 100 100 Inactive

Toyama HoldingsLimited (5)


57.92 57.92 100 100 Procurement of provisions and supplies for the Group

Target Shipping Limited (5) Hong Kong/Worldwide 57.92 57.92 100 100 Investment holding

Turbo (Asia) Limited (2) Hong Kong 100 100 100 100 Investment holding

Zhonggang Fisheries Limited (5)

British Virgin Islands 70 70 70 70 Investment holding

Notes:

(1) Audited by Deloitte & Touche LLP Singapore.

(2) Audited by Deloitte Touche Tohmatsu, Hong Kong.

(3) Audited by Giris, Hernánder y Associados S.C., a member firm of Deloitte Touche Tohmatsu.

(4) Listed on the Singapore Exchange Securities Trading Limited in January 2006.

(5) Audited by Deloitte & Touche Tohmatsu, Hong Kong for sole purpose of inclusion of their financial position and operating results in the consolidated financial statements of the Group.

(6) Incorporated during the financial year.

(7) The subsidiary was acquired during the financial year.

(8) The subsidiary was merged with CFG Investment S.A.C. during the year.

46 Subsequent EventsOn 8 November 2013, a non-wholly owned subsidiary, Grand Success Investment (Singapore) Pte Ltd, received acceptances of the Second General Offer for a total of 476,500 Copeinca Shares in the final results of the Second General Offer. Settlement of the Second General Offer was completed on 8 November 2013. Following the settlement of the Second General Offer, the Group owns 70,044,592 Copeinca Shares, representing approximately 99.78% of the shares and votes in Copeinca.

On 5 December 2013 entered into the Warrant Issuance Agreement with CAP III-A LIMITED pursuant to which China Fishery has agreed to issue 96,153,846 warrants of China Fishery. The warrants of China Fishery will be issued to CAP III-A LIMITED at the warrants’ subscription consideration of US$1.00, subject to the terms and conditions of the Warrant Issuance Agreement.



SUPPLEMENTARY INFORMATION

The reporting currency of the Group is in Hong Kong Dollars. The Singapore Dollars equivalent of the consolidated income statement and statement of financial position of the Group is provided as supplementary information for shareholders and investors in Singapore.

Consolidated Income StatementFinancial year ended 28 September 2013

THE GROUP(Unaudited)2013 2012

S$’000 S$’000 Revenue 1,412,811 1,517,798Cost of sales (1,186,432) (1,218,162)

Gross profit 226,379 299,636Other operating income 192,463 62,984Selling and distribution expenses (39,953) (70,100)Administrative expenses (37,122) (40,806)Other operating expenses (99,404) (45,284)Finance costs (94,496) (68,149)

147,867 138,281Share of results of associates 9,276 6,093

Profit before income tax 157,143 144,374Income tax benefit (expense) 11,376 (3,835)

Profit for the year 168,519 140,539



Statement of Financial PositionAt 28 September 2013


S$’000 S$’000 NON-CURRENT ASSETSProperty, plant and equipment 854,544 724,435Investment properties 8,404 8,151Goodwill 475,950 467,731Prepayment to suppliers 288,059 140,526Advances to suppliers — 50,045Available-for-sale investments 4,093 5,205Interests in associates 87,472 80,089Other intangible assets 1,537,820 289,377

3,256,342 1,765,559

CURRENT ASSETSInventories 148,918 218,604Trade and bills receivables 295,465 356,021Other receivables and prepayments 1,180,039 1,251,444Current portion of prepayment to suppliers 33,067 27,350Advances to suppliers 50,925 —Prepaid income tax 16,042 2,414Pledged deposits 18 33Bank balances and cash 99,265 70,633

1,823,739 1,926,499

CURRENT LIABILITIESTrade and other payables 49,664 56,528Income tax payable 3,556 7,002Amounts due to Pacific Andes International Holdings Limited

and its subsidiaries 866 782Derivative financial instruments 8,820 32,035Bonds 116,305 —Bank advances drawn on bills and discounted trade receivables

with insurance coverage 1,138 —Current portion of finance leases 4,860 4,682Current portion of interest-bearing bank borrowings 1,273,150 811,089

1,458,359 912,118

NET CURRENT ASSETS 365,380 1,014,381



Statement of Financial Position – continuedAt 28 September 2013


S$’000 S$’000 NON-CURRENT LIABILITIESFinance leases 591 5,357Interest-bearing bank borrowings 251,153 285,467Bonds — 109,323Long term payables 38,207 —Senior notes 657,859 335,867Deferred tax liabilities 398,852 74,995

1,346,662 811,009

NET ASSETS 2,275,060 1,968,931

CAPITAL AND RESERVESShare capital 213,597 209,908Reserves 1,463,566 1,324,795

Attributable to owners of the Company 1,677,163 1,534,703Non-controlling interests 597,897 434,228

TOTAL EQUITY 2,275,060 1,968,931

* Exchange Rate

As at 28.09.2013: S$1 = HK$6.2033

As at 28.09.2012: S$1 = HK$6.3123


SHAREHOLDERS’ INFORMATIONAs at 18 December 2013

Shareholding Information

Authorised Share Capital : S$400,000,000.00Issued and fully Paid-up Capital : S$239,549,616.90Number of Ordinary Shares in Issue (excluding treasury shares) : 4,790,992,338Number of Treasury Shares held : NilClass of Shares : Ordinary Share of S$0.05 eachVoting rights : One vote per share

Statistics of Shareholdings as at 18 December 2013

SIZE OF SHAREHOLDINGSNO. OF

SHAREHOLDERS % NO. OF SHARES % 1 – 999 440 4.95 108,554 0.00

1,000 – 10,000 1,528 17.20 9,740,774 0.2010,001 – 1,000,000 6,805 76.61 640,797,821 13.38

1,000,001 AND ABOVE 110 1.24 4,140,345,189 86.42

TOTAL 8,883 100.00 4,790,992,338 100.00

Twenty Largest Shareholders

NAME NO. OF SHARES % 1 CLAMFORD HOLDING LIMITED 3,131,957,257 65.372 CITIBANK NOMINEES SINGAPORE PTE LTD 159,396,116 3.333 RAFFLES NOMINEES (PTE) LIMITED 147,204,437 3.074 UOB KAY HIAN PRIVATE LIMITED 97,667,430 2.045 DBS NOMINEES (PRIVATE) LIMITED 50,377,684 1.056 UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 41,505,656 0.877 MAYBANK KIM ENG SECURITIES PTE. LTD. 39,089,409 0.828 BNP PARIBAS NOMINEES SINGAPORE PTE LTD 38,146,967 0.809 OCBC SECURITIES PRIVATE LIMITED 37,756,776 0.7910 DBSN SERVICES PTE. LTD. 35,519,000 0.7411 PHILLIP SECURITIES PTE LTD 35,384,517 0.7412 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 25,332,741 0.5313 HSBC (SINGAPORE) NOMINEES PTE LTD 23,101,052 0.4814 HONG LEONG FINANCE NOMINEES PTE LTD 19,228,474 0.4015 NOMURA SINGAPORE LIMITED 17,812,500 0.3716 CIMB SECURITIES (SINGAPORE) PTE. LTD. 11,846,134 0.2517 TAN SUAN KENG 11,250,000 0.2318 CHAN NGON YUE 8,856,564 0.1819 CITIBANK CONSUMER NOMINEES PTE LTD 7,860,632 0.1620 CHAN SEK KEONG 7,000,000 0.15

TOTAL 3,946,293,346 82.37


As at 18 December 2013SHAREHOLDERS’ INFORMATION

Based on information available to the Company as at 18 December 2013, approximately 33.43% of the Company’s shares are held in the held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of SGX-ST.

Substantial Shareholders(As recorded in the Register of Substantial Shareholders as at 18 December 2013)

Direct Interest % Deemed Interest % Clamford Holding Limited (1) 3,131,957,257 65.37 51,824,955 1.08

Pacific Andes International Holdings Limited (2) – – 3,183,782,212 66.45

N.S. Hong Investment (BVI) Limited (3) – – 3,183,782,212 66.45

(1) Clamford Holding Limited’s (“Clamford”) deemed interest comprises 34,012,455 shares held in the name of UOB Kay Hian Pte Ltd and 17,812,500 shares held in the name of Nomura Singapore Limited.

(2) Pacific Andes International Holdings Limited (“PAIH”) is the holding company of Clamford and is deemed to be interested in the shares held by Clamford.

(3) N.S. Hong Investment (BVI) Limited is the holding company of PAIH, which in turn is the holding company of Clamford, and is deemed to be interested in the shares held by Clamford.


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Annual General Meeting of Pacific Andes Resources Development Limited (the “Company” or “PARD”) will be held at Ballroom I & II, InterContinental Singapore, 80 Middle Road, Singapore 188966 on Monday, 27 January 2014 at 2:00 p.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Financial Statements for the year ended 28 September 2013 together with the Auditors’ Report thereon.

(Resolution 1)

2. To declare a first and final dividend of 0.30 Singapore cent per ordinary share (tax not applicable) for the year ended 28 September 2013. [2012: 0.30 Singapore cent per ordinary share (tax not applicable)]

(Resolution 2)

3. To re-elect Lt-Gen (Ret) Ng Jui Ping, who is retiring by rotation pursuant to Bye-law 105 of the Company’s Bye-laws, as Director of the Company.

(Resolution 3)

Lt-Gen (Ret) Ng Jui Ping will, upon re-election as a Director of the Company, remain as Chairmen of the Nominating and Remuneration Committees and as a member of the Audit Committee. He will be considered independent for the purpose of Rule 704(8) of Listing Manual of the Singapore Exchange Securities Trading Limited.

4. To approve the payment of Directors’ fees of S$150,000 for the financial year ending 28 September 2014, to be paid

yearly in arrears. [2013: S$150,000] (Resolution 4)

5. To re-appoint Deloitte & Touche LLP as the Company’s Auditors and to authorise the Directors of the Company (the “Directors”) to fix their remuneration.

(Resolution 5)

6. To transact any other ordinary business which may properly be transacted at Annual General Meeting.



AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:

7. Authority to issue Shares

That pursuant to Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Directors be empowered to:

(a) (i) issue shares of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into Shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(1) the aggregate number of Shares (including Shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the total number of issued Shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Shares issued other than on a pro-rata basis to shareholders of the Company (“Shareholders”) shall not exceed twenty per centum (20%) of the total number of issued Shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (1) above, the total number of issued Shares (excluding treasury shares) shall be based on the total number of issued Shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new Shares arising from the conversion or exercise of any convertible securities;

(b) new Shares arising from exercising of share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of Shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Bye-laws of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force until (a) the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier; or (b) in the case of Shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to this Resolution, until the issuance of such Shares in accordance with the terms of such convertible securities.

[See Explanatory Note (i)] (Resolution 6)



8. Authority to issue Shares under the PARD Share Option Scheme 2012

That the Directors be authorised and empowered to issue Shares in the capital of the Company to all the holders of options granted by the Company, whether granted during the subsistence of this authority or otherwise, under the PARD Share Option Scheme 2012 (“2012 Option Scheme”) upon the exercise of such options and in accordance with the terms and conditions of the 2012 Option Scheme established by the Company.

[See Explanatory Note (ii)] (Resolution 7)

9. Authority to issue Shares under the PARD Share Awards Scheme

That the Directors be authorised to offer and grant awards in accordance with the provisions of the PARD Share Awards Scheme (“Share Awards Scheme”) and to issue from time to time such number of fully-paid Shares as may be required to be issued pursuant to the vesting of the awards under the Share Awards Scheme, provided that the aggregate number of new Shares to be issued pursuant to the Share Awards Scheme, 2012 Option Scheme, and any other share scheme which the Company may have in place, shall not exceed fifteen per centum (15%) of the total issued share capital of the Company (excluding treasury shares) from time to time.

[See Explanatory Note (iii)] (Resolution 8)

10. Authority to issue Shares under the PARD Scrip Dividend Scheme

That the Directors be authorised and empowered to issue such number of Shares as may be required to be issued pursuant to the PARD Scrip Dividend Scheme from time to time set out in the Circular to Shareholders dated 7 July 2008.

[See Explanatory Note (iv)] (Resolution 9)

By Order of the Board

Cheng Soon KeongLynn Wan Tiew LengCompany Secretaries3 January 2014Singapore

Explanatory Notes:

(i) Ordinary Resolution 6 in item 7 above, if passed, will empower the Directors, effective until (a) the conclusion of the next annual general meeting of the Company, or the date by which the next annual general meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier; or (b) in the case of Shares to be issued in accordance with the terms of convertible securities issued, until the issuance of such Shares in accordance with the terms of such convertible securities, to issue Shares, make or grant Instruments convertible into Shares and to issue Shares pursuant to such Instruments, up to a number not exceeding, in total, 50% of the total number of issued Shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to Shareholders.

For determining the aggregate number of Shares that may be issued, the total number of issued Shares (excluding treasury shares) will be calculated based on the total number of issued Shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new Shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of Shares.



(ii) Ordinary Resolution 7 proposed in item 8 above, if passed, will empower the Directors from the date of the above meeting until the next annual general meeting of the Company, to issue Shares subject to the maximum number of Shares prescribed under the terms and conditions of the 2012 Option Scheme.

(iii) Ordinary Resolution 8 proposed in item 9 above, if passed, will empower the Directors from the date of the above meeting until the next annual general meeting of the Company, to offer and grant awards under the Share Awards Scheme in accordance with the provisions of the Share Awards Scheme and to issue from time to time such number of fully-paid Shares as may be required to be issued pursuant to the vesting of the awards under the Share Awards Scheme subject to the maximum number of Shares prescribed under the terms and conditions of the Share Awards Scheme. The aggregate number of ordinary Shares which may be issued pursuant to the Share Awards Scheme, 2012 Option Scheme and any other share scheme is limited to 15% of the total issued share capital of the Company (excluding treasury shares) from time to time.

(iv) Ordinary Resolution 9 proposed in item 10 above, if passed, will empower the Directors, effective until the conclusion of the next annual general meeting of the Company, or the date by which the next annual general meeting of the Company is required by law to be held or when varied or revoked by the Company in a general meeting, whichever is the earlier, to issue Shares from time to time pursuant to the PARD Scrip Dividend Scheme to Shareholders who, in respect of a qualifying dividend, have elected to receive Shares in lieu of the cash amount of that qualifying dividend.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. If a Shareholder being a Depositor whose name appears in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore) wishes to attend and vote at the Annual General Meeting, he/she must be shown to have Shares entered against his/her name in the Depository Register, as certified by The Central Depository (Pte) Limited, at least forty-eight (48) hours before the time of the Annual General Meeting. If he/she wishes to appoint a proxy to attend the Meeting, he/she must complete and deposit the Depositor Proxy Form at the office of the Company’s Share Transfer Agent in Singapore, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 at least forty-eight (48) hours before the time of the Annual General Meeting.

PAC

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