2011 - Li & Fung Limited

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NOTES TO THE ACCOUNTS (CONTINUED) 38 FAIR VALUE ESTIMATION (CONTINUED) The fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. The fair values of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. Specific valuation techniques used to value financial instruments include: • Quoted market prices or dealer quotes for similar instruments. • The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value. • Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. The following table presents the changes in level 3 instruments for the year ended 31 December 2011. 148 LI & FUNG LIMITED | ANNUAL REPORT 2011 Equity Club securities debentures Total US$’000 US$’000 US$’000 Opening balance 14 2,974 2,988 Fair value gains – 610 610 Disposal – (24) (24) Closing balance 14 3,560 3,574 39 EVENTS AFTER BALANCE SHEET DATE On 19 March 2012, the Court of Appeal delivered a judgement on the appeal, which had been lodged by the HKIR on 16 May 2011 against the judgement of the Court of First Instance in respect of the Offshore Claim and heard before it on 14 and 15 February 2012. The Court of Appeal upheld the judgement of the Court of First Instance on the Offshore Claim and dismissed the HKIR’s appeal (Note 6). 40 APPROVAL OF ACCOUNTS The accounts were approved by the Board of Directors on 22 March 2012.
41 PRINCIPAL SUBSIDIARIES AND ASSOCIATED COMPANIES Note Principal subsidiaries Place of Incorporation and operation Issued and fully paid share capital NOTES TO THE ACCOUNTS (CONTINUED) Percentage of equity held by the Company Principal activities (2) Held directly Integrated Distribution Services Group Limited Bermuda Ordinary US$12,000 100 Investment holding (2) LF Centennial Limited British Virgin Islands Ordinary US$50,000 100 Investment holding (2) LF Credit Limited Bermuda Ordinary US$12,000 100 Investment holding (1) Li & Fung (B.V.I.) Limited British Virgin Islands Ordinary US$400,010 100 Marketing services and investment holding Held indirectly Alster International Trading Singapore Ordinary S$5,000,000 100 Provision of inspection Company Pte. Ltd. services and export trading American Marketing Enterprises Inc. U.S.A. Common Stock US$1,000 100 Wholesaling (2) Appleton Holdings Ltd. British Virgin Islands Ordinary US$1 100 Investment holding Black Cat Fireworks Limited England Ordinary GBP15,500,000 100 Wholesaling Bossini Fashion GmbH Germany EUR 468,000 100 Importer Bravado Star Manufacturing, LLC U.S.A. Capital contribution US$1 75 Wholesaling Briefly Stated Holdings, Inc. U.S.A. Common stock US$1,000 100 Investment holding Briefly Stated, Inc. U.S.A. Common stock US$3,000 100 Wholesaling C Group US LLC U.S.A. Capital contribution US$1,000 100 Marketing services Camberley Enterprises Limited Hong Kong Ordinary HK$250,000 100 Manufacturing and trading Camberley Trading Service The People’s RMB1,500,000 100 Export trading services (Shenzhen) Limited Republic of China foreign-owned enterprise (2) Centennial (Luxembourg) S.a.r.l. Luxembourg Euro 8,931,250 100 Investment holding CGroup HK Limited Hong Kong Ordinary HK$2,970,000 Class B Non-Voting HK$330,000 100 Export trading Character Direct Limited Hong Kong Ordinary HK$2 100 Design and marketing Civati Limited Hong Kong Ordinary US$450,000 100 Export trading (2) Colby Group Holdings Limited British Virgin Islands Ordinary US$45,000 100 Investment holding (2) Colby Property Holdings Limited British Virgin Islands Ordinary US$1 100 Investment holding Colourful Express Trading Pte. Ltd. Singapore Ordinary S$2 100 Investment holding Colourful Lifestyle Productions Hong Kong Ordinary HK$1,170,000 100 Provision of agency Limited services LI & FUNG LIMITED | ANNUAL REPORT 2011 149
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LI & FUNG LIMITED (Incorporated in
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CORPORATE INFORMATION NON-EXECUTIVE
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THE AMERICAS Guatemala City Lima Ma
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CHAIRMAN’S STATEMENT Victor Fung
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CHAIRMAN’S STATEMENT (CONTINUED)
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CONSUMER NEEDS THE SUPPLY CHAIN CON
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MANAGEMENT DISCUSSION & ANALYSIS Wi
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MANAGEMENT DISCUSSION & ANALYSIS (C
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CORPORATE GOVERNANCE The Board of D
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CORPORATE GOVERNANCE (CONTINUED) In
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CORPORATE GOVERNANCE (CONTINUED) LI
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CORPORATE GOVERNANCE (CONTINUED) RI
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CORPORATE GOVERNANCE (CONTINUED) CO
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CORPORATE GOVERNANCE (CONTINUED) As
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CORPORATE GOVERNANCE (CONTINUED) Th
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CORPORATE GOVERNANCE (CONTINUED) CO
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SUSTAINABILITY OVERVIEW In 2011, we
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SUSTAINABILITY (CONTINUED) A summar
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SUSTAINABILITY (CONTINUED) WELL-BEI
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DIRECTORS AND SENIOR MANAGEMENT DIR
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DIRECTORS AND SENIOR MANAGEMENT (CO
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DIRECTORS AND SENIOR MANAGEMENT (CO
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REPORT OF THE DIRECTORS The directo
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Number of Share Options REPORT OF T
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SUBSIDIARIES Details of the Company
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DIRECTORS The directors during the
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REPORT OF THE DIRECTORS (CONTINUED)
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REPORT OF THE DIRECTORS (CONTINUED)
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OPINION INDEPENDENT AUDITOR’S REP
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CONSOLIDATED PROFIT AND LOSS ACCOUN
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CONSOLIDATED BALANCE SHEET As at 31
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BALANCE SHEET As at 31 December 201
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CONSOLIDATED STATEMENT OF CHANGES I
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NOTES TO THE ACCOUNTS 1 BASIS OF PR
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NOTES TO THE ACCOUNTS (CONTINUED) 1
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2 CRITICAL ACCOUNTING ESTIMATES AND
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3 SEGMENT INFORMATION (CONTINUED) Y
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3 SEGMENT INFORMATION (CONTINUED) N
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Page 145 and 146: 36 FINANCIAL RISK MANAGEMENT NOTES
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Page 164: LIFUNG TOWER 888 Cheung Sha Wan Roa
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2011 - Li & Fung Limited

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