| Auditors' Report |
| To The Securities and Futures Commission (SFC) |
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| We have audited the financial statements of the Unified Exchange Compensation Fund ("the Fund") established under Section 99 of the Securities Ordinance on pages 79 to 84 which have been prepared in accordance with accounting principles generally accepted in Hong Kong. |
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Respective responsibilities of the SFC and auditors
The Securities Ordinance requires the SFC to keep proper accounts of the Fund and to prepare an income and expenditure account and a balance sheet ("the financial statements") of the Fund in respect of each financial year. The directors of the SFC do so on the basis that these financial statements should give a true and fair view. In preparing financial statements which give a true and fair view it is fundamental that appropriate accounting policies are selected and applied consistently, that judgments and accounting estimates are made which are prudent and reasonable and that the reasons for any significant departure from applicable accounting standards are stated. |
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| It is our responsibility to form an independent opinion, based on our audit, on those financial statements and to report our opinion to you. |
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Basis of opinion
We conducted our audit in accordance with Statements of Auditing Standards issued by the Hong Kong Society of Accountants. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the SFC in the preparation of the financial statements and of whether the accounting policies are appropriate to the Fund's circumstances, consistently applied and adequately disclosed. |
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| We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the financial statements are free from material misstatement. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for our opinion. |
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| Opinion |
| In our opinion the financial statements give a true and fair view of the state of affairs of the Fund as at 31st March 1998 and of its surplus and cash flows for the year then ended and have been properly prepared in accordance with accounting principles generally accepted in Hong Kong. |
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| KPMG Peat Marwick |
| Certified Public Accountants |
| Hong Kong |
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| 11th June 1998 |
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