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Hong Kong company explains why it switched to IFRSs

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17 Sep 2004

Esprit Holdings Limited, a Hong Kong based clothing and cosmetics wholesaler and retailer, has switched from Hong Kong GAAP to IFRSs for its year ended 30 June 2004, as permitted by the Stock Exchange of Hong Kong.

In its Earnings Announcement, Esprit cited the following reasons for adopting IFRSs:
  • The Group operates internationally in four continents and has diverse international shareholders. The Group believes adoption of internationally recognized accounting standards will allow its financial statements to be better understood by its shareholders, the capital markets and the other users globally;
  • Many of the Group's peers in Europe will be adopting IFRS from 2005 onwards under European Union rules; and
  • Many of the Group's subsidiaries, particularly in Europe which accounts for approximately 80% of the Group's turnover and profits, have historically prepared their financial statements in accordance with IFRS. Consistently using IFRS throughout the Group will lead to efficiencies and is cost effective.
Mr. John Poon, Deputy Chairman and Group CFO, said: "We adopted International Financial Reporting Standards this year for better quality disclosure which is an essential element of good corporate governance. As an international company with operations worldwide and a diverse international shareholder base, we believe adopting an internationally recognized accounting standard will improve transparency and allow our financial statements to be better understood by our shareholders, the capital markets and other users globally."

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