Thursday, 14 July 2016

LED International Holdings Limited 31/07/16

Having been sitting on this pile of excrement  ( riddler`s words , not mine.).
One very much hopes LED returns to the market as promised within the month.
Post capitalisation of liabilities and various spurned takeovers and mergers . This newly formed vision has all the hallmarks as to be very lucrative for the early birds .

Good luck All concerned .

   And May

Although things don`t always work out as one hopes for .
The latest news was extremely disappointing .
Let`s hope the accounts and new NOMAD are awaiting Our pleasure .

Come on Mr Chan



Nigel Somerville writes ;


ShareProphets AIM-China Filthy Forty play LED Holdings (LED) has finally got around to releasing its full year results to June of last year. They are audited numbers, but the Red Flags in the audit report are so shocking that surely the Nomad to this company, Allenby, has to resign on the spot. Is it really good enough for an AIM-listed company to produce numbers against which the auditor issues a disclaimer of opinion?
The numbers are almost six months late in being released, according to AIM Rules. That is why the shares are currently suspended. The company told us on 8 February 2016 that is was:
seeking to publish its audited report…during the second quarter of 2016. The delay is primarily due to the fact that the first quarter is a peak season for audit firms in Hong Kong.
Oh, so all the audit firms in Hong Kong were too busy. Right.
But hold on, now we are told that:
The delay was primarily due to the fact that the Board has been negotiating, finalising and closing the shareholder agreement with Shanghai Guan Dian Asset Management Company Limited, details of which are contained in the Current Outlook and Prospects/Green Pearl Leasing (China) Company Limited section.
Is the discrepancy between the two explanations primarily due to someone telling porkies? Red Flag: get your story straight, chaps.
But it is the Auditor’s series of disclaimers and other Red Flags which is truly shocking. In the light of what follows, I don’t think the reported numbers are even worth reading as I think that what the auditors say means that the numbers could just be a complete Jackanory and cannot be relied upon. It is an utter disgrace: we moan about the standards of behaviour on the Casino, but this really takes the biscuit.
I’ll spare you the full details, but here is some of what Auditor BDO says:
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion and, accordingly, we do not express an opinion on the consolidated financial statements of the Group, and whether the financial statements have been properly prepared in accordance with the Hong Kong Companies Ordinance.
And…
In respect alone of the inability to obtain sufficient appropriate audit evidence about the matters described in the Basis for Disclaimer of Opinion paragraphs above:
 -     We were unable to determine whether adequate accounting records had been kept; and
 -     We have not obtained all the information and explanations that, to the best of our knowledge and belief, are necessary and material for the purpose of our audit.
This is quite astonishing stuff: an AIM-listed company has not kept proper accounting records, was unable to provide the evidence required by the auditor which also tells us that it cannot verify that the accounts have been properly prepared. Is that good enough, Nomad Allenby, or might you just be a tad uncomfortable to be representing a company whose auditor is refusing to stand by the numbers?
But there is also a spot of bother with regard to whether the company can be regarded as a Going Concern:
The Group incurred a loss from continuing operations of approximately HK$31,564,000 for the year ended 30 June 2015 and, as of that date, the Group had net current liabilities and net liabilities of approximately HK$18,701,000 and HK$18,662,000 respectively. These conditions indicate the existence of material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern, with a potential consequence that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. 
…the directors of the Company have prepared a cash flow forecast (the "Forecast") on which their assessment of the appropriateness of the preparation of the Group's consolidated financial statements on a going concern basis was based.  These financial statements have been prepared on a going concern basis, the validity of which depends upon the future successful attainment of the Forecast so that the Group will have sufficient working capital to finance its operations and/or settle or arrange its financial obligations.  However, the Company's directors have not provided us with an [sic] cashflow forecast of up to date details and information relating to the basis of the preparation of the Forecast including the underlying assumptions made and supporting information thereof that we consider necessary to satisfy ourselves as to the reasonableness of the Forecast and there was no other satisfactory evidence on which we could rely for the purpose of our assessment of the appropriateness of the preparation of the Group's consolidated financial statements on a going concern basis. Due to this limitation on our scope of work, we are unable to obtain sufficient appropriate audit evidence to assess whether it is appropriate to use going concern basis in preparing the consolidated financial statements.

Should the use of the going concern basis in preparing the consolidated financial statements be determined to be inappropriate, adjustments might have to be made to reduce the value of assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and liabilities.
Yikes! So the auditor isn’t having a bar of the squirming going on to try to present the company as a going concern because the directors haven’t given BDO up to date information. I particularly like the bit about the potential for reclassifying non-current assets and liabilities as current.
And there is more:
Emphasis of matter
 Without further modifying our disclaimer of opinion, we draw your attention to note 41(a) to the consolidated financial statements, which describes a contingency relating to the Company.
That’ll be this:
 In prior year, the Company received letters from an adjudicator stating its principal and principal's insured have suffered a substantial loss arising from a fire at a hotel in Hong Kong. The Company's legal advisor has made requests to the adjudicator to disclose any reports compiled by the Hotel and/or the government investigator but, to date, these requests have not been responded to. In the absence of further information, the directors, based on the best information available, do not consider that the Company has any obligation relating to the fire and it is not practicable at this stage to make a reliable estimate for any possible loss or expenses arising from this in future. Accordingly, no provision has been made in the consolidated financial statements for this matter.
Now it could all just be an innocent misunderstanding. Or it could be very serious indeed: what might have caused the fire, I wonder? Lighting problems? I think we should be told.
Shares in LED will remain suspended since it is now also almost three months late with its interims. That’ll be a laugh: can we rely on those numbers when they come, given that BDO could satisfy itself that the FY numbers were reliable?
We are told that the interims will be out in the middle of next month, but that if they have not been released by the end of September then the company’s shares will be booted off the Casino.
But I would venture to suggest that this is the least of the problems, and that a Nomad resignation is far more likely to see the company shown to the execution chamber long before that.
Come on Allenby, you can’t let this rum’n’coke continue: if the auditor can’t verify the accounts how can you? Is it a going concern or not? And therefore, is it solvent? How can you check?
I put it to you that Allenby has no choice but to resign in the wake of this: it is an utter scandal.
Half of the Filthy Forty has already departed the Casino, but the dirt just keeps on flowing

Russian Pick-em-up anyone ?

And May





Growing Pains

 

Mid-tier firms are finding that size does matter, as they respond to a stricter compliance environment and try to get their heads, and hands, around big data.

Hong Kong’s mid-tier firms are experiencing growing pains. Bridging the gap in the market between small audit-based accounting firms and the increasingly advisory-focused space the Big Four occupy, Hong Kong’s mid-sized firms are looking at both consolidation and expansion.
An increase in initial public offerings, mergers and acquisitions is creating ample business opportunities in advisory services, while big data and other digital innovation are opening the profession up to new possibilities. However, at the same time it has become more challenging for all firms, whether big or small, to reinvent themselves and fight for the talent in order to thrive.
The challenge for the mid-sized firms is meeting the business world’s growing advisory needs, while maintaining their traditional bread and butter role of supporting small- and medium-sized enterprises with their audits, amid ever tougher compliance and reporting requirements.
“The Big Four are shifting their business focus into advisory services, whereas mid-sized firms are still struggling with the traditional statutory audit work, which is highly commoditized and therefore price competitive,” says Albert Au, Chairman of BDO Hong Kong.
With a headcount of 1,000 and rising, BDO Hong Kong is one of the largest of the medium-sized firms in the city. Au, a past president of the Hong Kong Institute of CPAs, says regulatory issues are determining the type of professionals he is looking to hire.
“Industry or sector specialization is important because of the increasing regulation in clients’ businesses, for example financial regulations such as those from the Securities and Futures Commission, Hong Kong stock exchange and Institute of Internal Auditors, as well as antimoney laundering and know-yourcustomer requirements.”
RSM Hong Kong has a staff of 450, which has been steadily growing, and is looking to hire more graduates in the coming year, driven in part by requirements for new skills, in areas such as data analytics. “Apart from the regulatory issues, the convergence of accounting, finance and IT skills is not only having an impact on hiring demand, but also additional requirements, e.g. feeling comfortable working with various technologies. Accounting professionals need to use technological tools now to create new ways in analysing and presenting clients’ financial data,” says RSM Hong Kong’s Managing Partner Wong Poh Weng.

Talent pool

This competition for data-savvy accounting professionals from both the Big Four and mid-tier firms is putting pressure on the talent pool.
“We would like to recruit more talent to cope with the increased workload,” says Mazars Hong Kong Managing Director Stephen Weatherseed. “However, it has been very difficult to recruit talent of the right calibre and we have been experiencing very tight resources in the past 12 months.”
This workload has come from increased M&A and capital market activity from existing customers along with new businesses from international clients with worldwide operations and new entrants to the Hong Kong and Mainland markets. Weatherseed expects the Hong Kong office to remain steady at around 300 staff this year.
“The 2016 outlook is mixed. While we see our clients continuing to be active, we are cautious in our recruitment because of the uncertainty in the economic and political environments in Hong Kong, the Mainland and Europe.” The prospect is more bullish at ShineWing (HK) CPA, which expects to increase its headcount by up to 10 percent in 2016. It is currently at around 350. Managing Partner Roy Lo identifies more Chinese IPOs, and an emphasis on risk management, and environmental, social and governance reporting as driving the demand.
“There is an increasing awareness on ESG reporting, and professionals who could help issuers on ESG disclosure are highly wanted, since issuers nowadays are required to make disclosure in its annual report or ESG report whether they have complied with the ‘comply or explain’ provisions,” says Lo.
“The HKEx has highlighted the importance of corporate governance and ESG disclosure in recent years, as seen by its proposal on making changes to the Corporate Governance Code and the implementation of ESG disclosure requirements,” he says, adding that there is an increasing expectation from investors and other stakeholders.
It is a similar story with the Big Four. Striving to expand their advisory and consulting services, they are on the hunt for industry specific experience, Mainland tax experts and those with data analytics skills.
“The challenge is to get the best people. Everyone wants to get the best ones,” says Derek Lai, Deloitte China’s Southern Region Managing Partner. “We focus a lot on advisory and there is no longer simply compliance but solution driven. There will continue to be space for small, medium and large firms in Hong Kong.”
Recruitment firms report the demand for professionals with IT and data skills and experience from both mid-sized and large firms is strong and competitive.
Adam Johnston, Managing Director of Robert Half Hong Kong and Japan, says with increased reporting there is strong demand for professionals with compliance experience. “Aside from knowledge of global regulations, the most highly sought after candidates also have several years of experience with local regulators including the Hong Kong Monetary Authority and Securities and Futures Commission.”
Michael Page Hong Kong Director Rebecca Chan says the HKEx’s changes to the Corporate Governance Code earlier this year have led to a demand for experienced professionals as well as a focus on data skills. “There is an increasing demand for talent in compliance, IT auditing and the risk advisory sector,” she says.

To merge or not to merge

While mid-sized firms offer management consultant services to SMEs such as outsourcing, accounting and payroll services, and act as business advisors, it is a matter of debate whether further growth into larger scale advisory work is likely to be organic rather than from mergers with management consultant companies.
BDO’s Au says organic growth may be too slow for those midsized firms in a hurry, but mergers are also problematic.
“For mid-sized firms, mergers with management consultants are not really feasible because they [mid-sized firms] lack a brand name. Also, acquisitions are not viable because of the lack of financial resources,” says Au.
After starting off to build up internally, the Big Four opted for acquisitions: Deloitte acquiring Monitor in 2013; PwC acquiring Booze & Co. in 2014; EY acquiring Parthenon in 2014; and KPMG acquiring Tower Watson’s human resources services delivery practice in 2015.
Mazar’s Weatherseed says there is continuing pressure on resources at an international level to invest in technology and talent and to keep abreast of corporate developments.
“The challenge is to find the optimum operating model to allow for excellent client service, all round technical quality and profitable delivery across borders. All firms, including the Big Four, continue to aim to find the right solution, and hold talks at senior levels to explore possible tie-ups. There is nothing new in this, but as we have seen there have not been sufficient incentives to lead to any global mergers now for some years.”
ShineWing’s Lo says firms will need to explore some kind of partnership with consulting firms to respond to the rising demand for management consultancy services.
“We would expect that more firms would look to partner with consulting firms, so that they could join forces to provide more comprehensive services to meet the diversified needs of clients”.
Nevertheless, many mid-tier firms are continuing to build up their strength internally. “Our other services, especially the specialized advisory and consulting services are continuously expanding, and accounting professionals are embracing the increased responsibilities with a more strategic role,” says Wong of RSM.

Loosening the belt

The ubiquitous One Belt One Road initiative, proposed to encompass 65 countries and more than 4 billion people, is also cited as potentially creating new business for the midtier firms. Hong Kong is perceived to be a key centre for providing professional services to support it.
“This would create a great deal of economic activities, providing immense opportunities for Hong Kong professionals to work in different engagements, including accountants, who could help build a bridge between the Mainland and the rest of the world,” says Lo.
Sentiments echoed by Wong. “Due to the growing economy and the effect of One Belt One Road, the growth-focused entrepreneurial and the new start-up businesses will need professional corporate advisory, M&A, IPO, financial advisory services, hence, business opportunities will rise, and there will be a lot of room to develop on both audit and non-assurance services.”
This means that it is crucial for mid-tier firms to have some form of presence, tie up or partnership with a Mainland domestic firm to service their Hong Kong clients’ business growth with local expertise. According to BDO’s Au, depending on your specific situation, the tie up could take the form of a loose affiliation to a merger of sorts.
In January, Mazars opted for the latter. Mazars had already built up a Mainland practice servicing inbound foreign investment “but we needed a domestic merger to gain access to the local market and the growing outbound opportunities,” says Weatherseed. “This is why we have recently merged with ZhongShen ZhongHuan, giving us the opportunity to grow a truly Chinese practice with international reach.”
ShineWing has branches in 23 Mainland cities while RSM Hong Kong has a close relationship with its China firm, Ruihua Certified Public Accountants, which is a member of the RSM network.
With greater demands for accountability and ESG reporting, along with Hong Kong intricately linking with the Mainland, juggling old roles and new responsibilities will define the space mid-sized firms occupy.
“The market is large and diverse, and so as long as there are mandatory audit requirements there will be a need for firms of all sizes,” says Weatherseed.


 This share shows 00KA in my account , any clues ?

Come on Stephen let`s be ...........#



ShareProphets AIM-China Filthy Forty play LED Holdings (LED) has finally got around to releasing its full year results to June of last year. They are audited numbers, but the Red Flags in the audit report are so shocking that surely the Nomad to this company, Allenby, has to resign on the spot. Is it really good enough for an AIM-listed company to produce numbers against which the auditor issues a disclaimer of opinion?
The numbers are almost six months late in being released, according to AIM Rules. That is why the shares are currently suspended. The company told us on 8 February 2016 that is was:
seeking to publish its audited report…during the second quarter of 2016. The delay is primarily due to the fact that the first quarter is a peak season for audit firms in Hong Kong.
Oh, so all the audit firms in Hong Kong were too busy. Right.
But hold on, now we are told that:
The delay was primarily due to the fact that the Board has been negotiating, finalising and closing the shareholder agreement with Shanghai Guan Dian Asset Management Company Limited, details of which are contained in the Current Outlook and Prospects/Green Pearl Leasing (China) Company Limited section.
Is the discrepancy between the two explanations primarily due to someone telling porkies? Red Flag: get your story straight, chaps.
But it is the Auditor’s series of disclaimers and other Red Flags which is truly shocking. In the light of what follows, I don’t think the reported numbers are even worth reading as I think that what the auditors say means that the numbers could just be a complete Jackanory and cannot be relied upon. It is an utter disgrace: we moan about the standards of behaviour on the Casino, but this really takes the biscuit.
I’ll spare you the full details, but here is some of what Auditor BDO says:
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion and, accordingly, we do not express an opinion on the consolidated financial statements of the Group, and whether the financial statements have been properly prepared in accordance with the Hong Kong Companies Ordinance.
And…
In respect alone of the inability to obtain sufficient appropriate audit evidence about the matters described in the Basis for Disclaimer of Opinion paragraphs above:
 -     We were unable to determine whether adequate accounting records had been kept; and
 -     We have not obtained all the information and explanations that, to the best of our knowledge and belief, are necessary and material for the purpose of our audit.
This is quite astonishing stuff: an AIM-listed company has not kept proper accounting records, was unable to provide the evidence required by the auditor which also tells us that it cannot verify that the accounts have been properly prepared. Is that good enough, Nomad Allenby, or might you just be a tad uncomfortable to be representing a company whose auditor is refusing to stand by the numbers?
But there is also a spot of bother with regard to whether the company can be regarded as a Going Concern:
The Group incurred a loss from continuing operations of approximately HK$31,564,000 for the year ended 30 June 2015 and, as of that date, the Group had net current liabilities and net liabilities of approximately HK$18,701,000 and HK$18,662,000 respectively. These conditions indicate the existence of material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern, with a potential consequence that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. 
…the directors of the Company have prepared a cash flow forecast (the "Forecast") on which their assessment of the appropriateness of the preparation of the Group's consolidated financial statements on a going concern basis was based.  These financial statements have been prepared on a going concern basis, the validity of which depends upon the future successful attainment of the Forecast so that the Group will have sufficient working capital to finance its operations and/or settle or arrange its financial obligations.  However, the Company's directors have not provided us with an [sic] cashflow forecast of up to date details and information relating to the basis of the preparation of the Forecast including the underlying assumptions made and supporting information thereof that we consider necessary to satisfy ourselves as to the reasonableness of the Forecast and there was no other satisfactory evidence on which we could rely for the purpose of our assessment of the appropriateness of the preparation of the Group's consolidated financial statements on a going concern basis. Due to this limitation on our scope of work, we are unable to obtain sufficient appropriate audit evidence to assess whether it is appropriate to use going concern basis in preparing the consolidated financial statements.

Should the use of the going concern basis in preparing the consolidated financial statements be determined to be inappropriate, adjustments might have to be made to reduce the value of assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and liabilities.
Yikes! So the auditor isn’t having a bar of the squirming going on to try to present the company as a going concern because the directors haven’t given BDO up to date information. I particularly like the bit about the potential for reclassifying non-current assets and liabilities as current.
And there is more:
Emphasis of matter
 Without further modifying our disclaimer of opinion, we draw your attention to note 41(a) to the consolidated financial statements, which describes a contingency relating to the Company.
That’ll be this:
 In prior year, the Company received letters from an adjudicator stating its principal and principal's insured have suffered a substantial loss arising from a fire at a hotel in Hong Kong. The Company's legal advisor has made requests to the adjudicator to disclose any reports compiled by the Hotel and/or the government investigator but, to date, these requests have not been responded to. In the absence of further information, the directors, based on the best information available, do not consider that the Company has any obligation relating to the fire and it is not practicable at this stage to make a reliable estimate for any possible loss or expenses arising from this in future. Accordingly, no provision has been made in the consolidated financial statements for this matter.
Now it could all just be an innocent misunderstanding. Or it could be very serious indeed: what might have caused the fire, I wonder? Lighting problems? I think we should be told.
Shares in LED will remain suspended since it is now also almost three months late with its interims. That’ll be a laugh: can we rely on those numbers when they come, given that BDO could satisfy itself that the FY numbers were reliable?
We are told that the interims will be out in the middle of next month, but that if they have not been released by the end of September then the company’s shares will be booted off the Casino.
But I would venture to suggest that this is the least of the problems, and that a Nomad resignation is far more likely to see the company shown to the execution chamber long before that.
Come on Allenby, you can’t let this rum’n’coke continue: if the auditor can’t verify the accounts how can you? Is it a going concern or not? And therefore, is it solvent? How can you check?
I put it to you that Allenby has no choice but to resign in the wake of this: it is an utter scandal.
Half of the Filthy Forty has already departed the Casino, but the dirt just keeps on flowing.
And May

Dr. Chan Wing Bun, Stephen has joined CNI Securities Group Limited as Marketing Executive since August 2016.

Dr. Chan was promoted to Chief Executive Officer of the Company with effect from 30 December 2010. Dr. Chan resigned from the Company and all of its subsidiaries on 19 August 2016.






No comments:

Post a Comment