eOperationOnline shop development, setup, promotion, day-to-day management

and customer services

eCommerceITBespoke front-end and middleware technology solutions, project

management and implementation

eFulfillmentBack-end logistics operations and customer order fulfillment

execution

eStudioDigital asset production and product detail photography

eMarketingBrand strategy, digital marketing and social media promotion

management and execution

eCommerceIT

eFulfillmenteStudio

eMarketingeOperation

We are an eCommerce enabler and business partner for designer fashion, branded apparel and retail companies, providing holistic eCommerce solutions and capabilities to

connect them online with the consumers in China, Australia and around the world.

Annual Report 2014

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www.eCargo.com13103N, ATL Logistics Centre B, 3 Kwai Chung Container Terminals, New Territories, Hong Kong.

HONG KONG • SYDNEY • SHANGHAI • SHENZHEN • LONDON

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About

We are dedicated in executing long-term, sustainable, eCommerce strategies for international

Brands who are committed to

developing their Brands in

ChinaMr. John Lau

Executive Chairman

eCargo is a China-based eCommerce solutions provider, providing on-demand digital commerce technology development and related execution capabilities for retailers and fashion brands from around the world. eCargo acts as a “one-stop” enabling partner for designer fashion, branded apparel and retail companies seeking to sell their products online in China, Australia and around the world by providing integrated online and offline technology and supply chain solutions. eCargo connects the brands to the online customers through the development and marketing of brand site transactional platforms and in China, on Alibaba Group’s Tmall, Tencent’s WeChat and JD.com.

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ontentsAnnual

ReportC2014

eCargo

Key Highlights in 2014 6

Chairman and CEO’s Statement 8

Industry Overview 12

Board of Directors and Executive Team 14

Corporate Governance Report 19

Directors’ Report 34

Independent Auditor’s Report 42

Consolidated Financial Statements 44

Notes to the Consolidated Financial Statements 48

ASX Additional Information 81

Corporate Directory 84

Selected financial data translated into Australian dollarsThe financial statements for eCargo Holdings Limited (the “Company”) presented in this document are expressed in Hong Kong dollars (“HK$”). Selected financial data has been translated from HK$ into Australian dollars (“A$”) to enable Share/CHESS Depository Interest (“CDI”) holders to interpret the financial performance of the Company. Such foreign currency translations are unaudited and have been provided to Share/CDI holders for easier reference purposes only and may not present the Company’s financial position or performance in a fair manner.

Except for the acquisition of Amblique Pty Limited, the A$ presented in this document are for reference purposes only. The foreign currency exchange rate applied in translating HK$ into A$ is HK$6.36: A$1.00 in accordance with the foreign currency exchange rate published by the Reserve Bank of Australia as of 31 December 2014.

CopyrightThis document contains copyrighted images and designs generated, authored and/or prepared by individuals or organisations other than the Company, as listed below:Cover page images: a. Apparel Group Australia, b. Cotton On Clothing Pty Limited, c. Factorie Pty Limited; Directors’ Report images: d. Karen Millen Fashion Limited

YoureCommercePartner

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Highlightsey

in2014K

• Successfully completed initial public offering on Australian Securities Exchange on 28 November 2014

• Financial results underpinned by strong revenue growth• Rapid international merchant growth ahead of plan• Solid progress for merchant acquisition in FY2015• Acquisition strategy on track

Tier 12014

Net Assets as at 31 December 2014

MerchantsRevenue

HK$22.611

HK$293 million

million

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StatementCEO’sandhairmanC

Dear Shareholders,

On behalf of the Board of Directors, we are pleased to present the first annual report for eCargo Holdings Limited (the “Company” or “eCargo”) since the Company became a public company listed on the Australian Securities Exchange (“ASX”) last year on 28 November 2014.

We are delighted to report that the Company is off to a strong start, having achieved a solid revenue performance of HK$22.6 million during the eight month period to 31 December 2014, underpinned by strong growth in merchant acquisitions. eCargo continued to develop as a “one-stop” eCommerce business partner for Brands and retailers of technology platform solution, omni-channel digital commerce and retail and integrated online and offline supply chain operations. The Company is carving out an expertise for merchants seeking to incubate or strengthen their Brand positioning and presence in the online market in China and the Asia-Pacific.

We believe the Company is well-positioned in China to help connect many Chinese and Asian consumers to international Brands from around the world through digital commerce. The China eTailing market, which totalled RMB2.8 trillion in 2014, experienced strong growth and momentum growing by 48.7% from the prior year. The eCommerce sales transaction value is

創造無限可能

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StatementCEO’salready the largest single country market in the world, having overtaken the United States in 2013-2014. According to estimates by industry experts, it is expected that the eCommerce market size in China will exceed the combined market size of the next five largest eCommerce markets by 2020. Based on this expected continued growth, we believe there is significant opportunity for the Company and our merchants to grow sales in the online channel in the years to come.

The Company continues to attract great people to our organisation.

Taken together with the strong operating history and experience of our founders and executive team, the Company is uniquely positioned to lead many of the world’s most renowned designer, fashion brands and retailers into a new frontier of growth in the world’s largest online shopping market here in China. It has been an exciting and busy year. This is just the beginning.

Financial performanceAs anticipated, the Company incurred an operating loss for the period ended 31 December 2014. During the period, the Company

Zealand Post and Super Retail Group.

The Company did not propose any dividend distributions or buy backs during the period ended 31 December 2014.

Evolving our strategyeCargo was established with the vision to be a “one-stop” eCommerce enabler and business partner for designer Brands, retailers, and branded manufacturers who wish to develop or further enhance their eCommerce businesses in China and Australia. During the year

earned a gross profit of HK$8.8 million and reported a normalized loss of HK$21.6 million, taking into account significant non-operating items such as a non-recurring expense of HK$8.8 million related to the initial public offering (“IPO”) of the Company’s shares (“Shares”) on the ASX and a foreign exchange loss of HK$6.4 million due to the depreciation of the A$ against the HK$.

The Company achieved significant momentum in attracting new merchants, well ahead of initial expectations. These include a number of leading Australian and international brands: Esprit, Jeanswest, Karen Millen, La Perla, New Look, New

Mr. John Lau and Mr. Christopher Lau

we continued to invest heavily in our infrastructure, people development and marketing of our Brand merchants. Our eCoreOS technology platform was strengthened and further development took place to provide for additional functions and improved operating stability.

On 13 February 2015, the Company announced its first major acquisition of a leading Australian digital commerce player Amblique Pty Limited (“Amblique”). Amblique has developed into one of Australia’s top eCommerce service providers and consultancy firms providing omni-channel

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strategies, retail practice and site optimisation services to help retailers and Brand owners simply “sell more”. Amblique currently serve a diverse range of merchants and well-known brands in Australia including: Cotton On, Michael Hill International, Sportscraft, Matt Blatt and Tarocash amongst numerous others.

The acquisition of Amblique marks a key milestone in the Company’s expansion strategy through the acquisition of complementary businesses and capabilities. We believe the combination of Amblique’s Demandware and enterprise solution expertise and team in Australia and New Zealand combined with eCargo’s existing eCommerce platform solutions, China eCommerce and global supply chain capabilities shall immediately enable eCargo to provide an expanded service and solution offer to eCargo’s existing and potential customers.

Amblique shall remain focused on providing Demandware solutions to Brands and retailers and look for opportunities to integrate Demandware front-end with

eCargo’s proprietary middleware eCoreOS platform in order to provide a seamless integration and operation for Brand merchants to manage operations with different major eCommerce marketplaces, including Tmall and JD.com.

As the Company continues to embark on the dynamic eCommerce journey in China, we are observing numerous opportunities in growing into other product categories, the development of O2O capabilities and the development of eMarketplace-type platforms. The Company shall continue to monitor such opportunities closely and remain nimble to evolve our strategy in the pursuit of such suitable opportunities for the Company as they develop.

Our people The Company and its people shall continue to be our greatest asset and competitive advantage. Commitment, dedication and loyalty is absolutely critical to our business. We are building a terrific organisation with a culture to embrace collaboration and creativity, encourage the iteration of ideas to address complex technical challenges and promote a working environment that encourages open dialogue or what we would like to call “over communication in breadth and depth”.

On 25 February 2015, the Company announced the appointment of Ms. Christina Cheung as the Chief Financial Officer. We are excited and delighted to have attracted someone of Ms. Christina Cheung’s calibre to join the Company. She is a seasoned executive with impressive credentials in business development, financial management and mergers and acquisition. We believe that Ms. Christina Cheung can contribute significantly to our organisation in the development of sound, effective and efficient management, operational and financial processes to cope with our continued rapid growth.

We are grateful for the contributions made to date by the various members of our team. On behalf of the Board of Directors, we would like to thank them for their continued hard work and energy.

Our directionAs we move into 2015, we expect to begin realising some of the benefits of our early investments and a number of strategic initiatives. We are confident in the growing ecosystem we are building at eCargo that will enable us to deliver for our Brands and Shareholders. This is a time of opportunity for us and we will continue to advance quickly, investing in important areas of our business and enhancing our services. We shall to continue to evolve as an organisation, with an aim to build a world-class Company and a leader in eCommerce technologies and operations.

We would like to thank you, as a Shareholder of the Company, for your continued support. We look forward to meeting with you at our upcoming Annual General Meeting.

Mr. John Lau Mr. Christopher LauExecutive Chairman Chief Executive OfficereCargo Holdings Limited eCargo Holdings Limited

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Bridging the Westand the East

Hong Kong

ShanghaiSydney

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eCommerceeCommerce refers to businesses and consumers buying and selling goods and services online. The term eCommerce encapsulates all online activity, whether it be business to business (“B2B”) (or “wholesale”), business to consumer (“B2C”), or consumer to consumer (“C2C”) online activities.

The basic stages of B2C eCommerce can be summarised as follows:

• Consumers choose a product or service on a website;

• Consumers pay electronically on the website using online credit card facilities or via a third party payment provider (for example using Alipay or PayPal);

• Merchant receives the order and payment; and

• Order is fulfilled by post, courier or other delivery service.

The benefits of eCommerce to the consumer include the speed, efficiency and convenience of the transaction, the ability to make product comparisons and the sourcing of lower prices. The benefits of eCommerce to the Merchant are reduced overhead costs, shorter time frame in consummating a transaction and increased consumer reach.

The global eCommerce economy is projected to reach a turnover of US$4.2 trillion by 2016, with over 3 billion users transacting online (Source: “The Internet economy in the G20”, The Boston Consulting Group, 2012).

eTailing in ChinaIn the China Central Government’s twelfth five year plan, eCommerce was identified as one of the priority sectors for development. The Central Government has recognized that the eCommerce sector makes a significant contribution to employment (Source: “China’s connected consumers”, KPMG, 25 Feb 2014).

In China, Central Government policies have helped to drive greater broadband and 3G coverage across the country, have encouraged the development of the mobile network, and have influenced the growth of online payment transactions.

eCommerce accelerates the growth of domestic consumer demand, and has become a major government focus as it seeks to shift the economy from an investment driven growth model to a domestic consumption driven growth model. Service segments in eCommerce technology, operation outsourcing, digital marketing and production, supply chain management and logistics operations all stand to benefit from the country’s transformation agenda.

Industry sizeChina’s eTailing industry has posted 120% compound annual growth since 2003 according to the “China’s e-tail Revolution: Online shopping as a catalyst for growth” issued by the McKinsey Global Institute in March 2013.

While independent research house projections for the China eTailing market vary depending on the components they include in their varied definitions of eTailing products, all research houses predict high growth for the market in the next 4-5 years.

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Based on forecast data prepared by iResearch and presented below, the value of B2C online shopping in China will reach A$373 billion in 2017.

Estimated value of B2C online shopping in China (billions) 2015 2016 2017B2C RMB 1,435 1,778 2,169B2C A$ 247 306 373Growth of B2C year on year 44% 24% 22%

It should be noted that iResearch excludes from its data some segments of B2C purchases, including online travel, so the entire B2C market is larger than the above table indicates. However, it highlights the key factors of interest, being the market’s already significant size, and its anticipated growth over the next few years. (Source: “2013 China Internet Economy Report”, iResearch Consulting Group, 18 February, 2014).

Industry growth driversThe key drivers of growth in the eTailing industry in China are:• The largest, and still growing, online population in

the world (over 800 million internet users);• The Chinese people’s familiarity with purchasing

online;• The relative under development of bricks and

mortar stores in the lower tier cities, rural and remote areas meaning online purchases are the main market channel for many Chinese;

• An increasing number of online users who choose to connect using a mobile device, meaning purchases are taking place more frequently;

• The use of social media sites and bloggers to influence their followers to purchase goods online;

• The increasing recognition by the Chinese people of international brands, driven both by international tourism and internet information; and

• The increasing disposal income of the rising Chinese middle class.

eTailing promotes associated value chain activitiesExamples

Online purchase cycle Related industry Definition USA China

Find and compare Marketing• Online ad• Service

• Online marketing channels such as search engines, portal websites, mobile channels

• Service providers helping Merchants optimise marketing activity

Purchase Payment • Third-party service providers that offer reliable payment methods (e.g., credit card, direct debit, etc.)

Fulfillment Warehousing • Companies providing services, including physical storage and order fulfillment, or warehouse management service without physical fulfillment

Delivery Delivery • Express companies that provide delivery service, some may provide delivery tracking service

Operation IT • Software developers that provide software such as ERP, CRM, and other small online tools, may also provide consulting services

Integrated • Online business operators to whom brands and Merchants can outsource end-to-end or partial eCommerce operations

(Source: “China’s e-tail revolution Online shopping as a catalyst for growth”, McKinsey Global Institute, March 2013)

Despite the demand in China for western brands, according to Thibault Villet CEO & Co-Founder, Glamour Sales: “Only 5 of the top 60 brands operate their own online sites. They have been late with their online strategy because they have focused on expanding their bricks and mortar network in China. Secondly, they did not anticipate how quickly Chinese consumers would shift to online purchasing.” This represents a significant opportunity for eCargo to grow with various world-class brands looking to enter China’s eTailing market in the coming years.

eTailing support serviceseCargo is involved in the eTailing support services industry sub-sector in China. The growth of the industry sub-sector is linked to the growth of eTailing in general. It is widely accepted that 10% to 12% of eTailing total revenue is expended on support services, which include the range of activities detailed in the below graphic. (Source: “China’s e-tail revolution: Online shopping as a catalyst for growth”, McKinsey Global Institute, March 2013).

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The Board of Directors at eCargo have broad experience in the retail supply chain, eCommerce, logistics, finance and retail management. The Board is well-positioned to develop and implement eCargo’s strategic objectives.

Name Position IndependenceMr. John Lau Executive Chairman, Executive Director Non-independentMr. Christopher Lau Chief Executive Officer, Executive Director Non-independentMr. Rupert Myer Non-Executive Director IndependentMr. Christopher Ryan Non-Executive Director IndependentMr. Heath Zarin Non-Executive Director Independent

From left to right:Mr. Christopher Ryan, Mr. Christopher Lau, Mr. John Lau, Mr. Rupert Myer, Mr. Heath Zarin

BoardOfDirectorsExecutive

Team

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Biographies of Board of Directors

Details of each of the Directors at the date of this report are set out below:

Mr. John Lau – Executive ChairmanMr. John Lau is the Executive Chairman, founder and Executive Director of eCargo. He is Chairman and founder of eCargo’s largest shareholder, JL Enterprises Holdings Limited (“JL Enterprises”). He is Group Managing Director and founder of eCargo’s strategic investor, CS Logistics Holdings Limited (“CS Logistic”). He is the Managing Director and founder of Cargo Services Far East Limited (“Cargo Services”), a principal operating subsidiary of the CS Logistics group of companies and Managing Director and founder of Xin Hai Hua Enterprises.

Mr. John Lau brings more than 40 years of experience in trading, shipping and logistics in China. Over the years, he has cooperated successfully with major financial sponsors in Asia such as Prudential Asia and HSBC Principal Investments. His pursuit for excellence in providing professional services is well known and acknowledged by many major retailers and brands worldwide.

Mr. John Lau founded Cargo Services in 1990 as an ocean freight non-vessel operating cargo carrier. He has led the growth of Cargo Services in becoming a leader in international logistics. Today, Cargo Services is the largest privately owned integrated logistics service provider and freight forwarder in China and Hong Kong.

Mr. John Lau founded Midstream Holdings Limited (“MHL”) in 1995. He was Managing Director of MHL from 1995 to 1997. MHL was acquired by Hutchison Port Holdings in 1997.

Mr. John Lau founded Wide Shine Terminals Limited (“WST”) in 1990. He was Managing Director and founder of WST from 1990 to 1995. WST was subsequently acquired by MHL in 1995.

Mr. John Lau founded Hoi Kong Terminals Limited (“Hoi Kong”) in 1986. He was the Managing Director from 1986 to 1990. Hoi Kong was acquired by Jardines Shipping Services Limited in 1990.

Mr. John Lau holds a Bachelor of Arts in Economics from the University of Hong Kong, and joined Dodwell & Co. in their Hong Kong buying office working with many international retailers and trading companies sourcing from China. He quickly rose to become a director at Dodwell & Co. He left Dodwell & Co. in 1983 to start his own businesses in shipping and international logistics.

Mr. John Lau is a member of the People’s Consultative Conference in Nanjing. He was a non-executive director of Golden Eagle Retail Group (HKEx: 3308) from 1999 when it was first listed on the Hong Kong Exchange until 2011.

Mr. Christopher Lau – Chief Executive OfficerMr. Christopher Lau is Chief Executive Officer, founder and Executive Director of eCargo. He is a co-founder of eComLock.com, an alternative last mile delivery solution in China operating in Shenzhen.

Mr. Christopher Lau brings more than 7 years of experience in international retail supply chain and logistics management having worked closely with many major retailers in Australia and the United Kingdom in the development of their global supply chains including the setup of eCommerce operations in China, sourcing offices and QC facilities.

Mr. Christopher Lau was the Group Assistant Managing Director and an Executive Director at Cargo Services from 2006 to 2012. At Cargo Services, he founded the GAM business in 2007.

Mr. Christopher Lau was instrumental in the transformation of Cargo Services to become the leading integrated retail supply chain solutions service provider in Hong Kong, contributed significantly in the development and implementation of the LIMA® platforms for many retail brands and was involved in the acquisition of Allport Limited together with HSBC’s strategic investment in CS Logistics in 2010. He was an Executive Director of CS Logistics from 2010 to 2012.

Mr. Christopher Lau holds a Bachelor of Science in Accounting and Finance from the Leonard Stern School of Business at New York University. He spent several years with Ernst and Young LLP and Deutsche Bank in New York working in audit, structured products and fixed income. He is an Honorary Member since 2012 of the Court at the Hong Kong Baptist University. He is a member of the fundraising committee of the Dragon Foundation, a non-profit organisation in Hong Kong.

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Mr. Christopher Ryan – Non-Executive DirectorMr. Christopher Ryan is Chief Executive Officer of Investorlink Corporate Limited, a Sydney-based corporate

finance and advisory firm, and a director of the Investorlink Group Limited.

Mr. Christopher Ryan is Chairman of ASX listed companies, Central West Gold Limited and TTG Fintech Limited. He is also a non-executive director of Propertylink (Holdings) Limited, an unlisted public company specialising in Australian property and infrastructure.

Mr. Christopher Ryan either chairs or is a member of these companies’ Remuneration and Nomination and Audit, Corporate Governance and Risk Committees.

Mr. Christopher Ryan has been lead adviser in corporate acquisitions and divestments of large national and overseas companies.

Mr. Christopher Ryan has advised on ASX listings since 1986 including capital guaranteed investment products, and convertible debt instruments in the unlisted property market.

Mr. Christopher Ryan’s qualifications include a Bachelor of Financial Administration, University of New England, Fellow of the Institute of Chartered Accountants in Australia, Registered Australian tax agent and holder of Australian Financial Services licence 269899.

Mr. Rupert Myer, AM – Non-Executive DirectorMr. Rupert Myer is Deputy Chairman of Myer Holdings Limited and a Director of Healthscope Limited and Amcil Limited. He serves as Chairman of Nuco Pty Limited, a private Myer family investment

company and is a board member of further family-owned investment companies. He is Chair of the Commonwealth Government’s Australia Council for the Arts.

Since 1986, Mr. Rupert Myer has served as a non-executive board member on a diverse range of organizations including listed and unlisted public companies, private companies, community sector organisations, State and Commonwealth Government boards and philanthropic foundations. Industries and sectors have included retailing, funds management, financial services, visual and performing arts, indigenous affairs, philanthropy and youth employment.

Mr. Rupert Myer’s experience as a director has included IPO listings, rights issues, Special Purchase Plans, Dividend Re-Investment Plans and major re-financings. He has served both as Chair and as a member of Audit and Finance Committees, Remuneration and Nominations Committees and Strategy committees.

Mr. Rupert Myer is currently a member of the University of Melbourne Faculty of Business and Economics Advisory Board and Foundation, a board member of Jawun – Indigenous Corporate Partnerships, the Myer Foundation, the Yulgilbar Foundation and a member of the Felton Bequests’ Committee.

Mr. Rupert Myer holds a Master of Arts from Cambridge University and a Bachelor of Commerce with Honours from the Melbourne University. He is a fellow of the Australian Institute of Company Directors.

Mr. Heath Zarin – Non-Executive DirectorMr. Heath Zarin is Managing Director and founder of EmergeVest, a Hong Kong based private equity firm.

Mr. Heath Zarin was previously Managing Director and Head of Principal Investments, Asia-Pacific, for HSBC, with responsibility for Asian proprietary private investment activities. He founded Emergent Investment Group (“EIG”), a Hong Kong-based private investment firm, where he completed private equity investments and advised on special situations.

Prior to founding EIG, Mr. Heath Zarin held a series of senior executive roles at Credit Suisse, including forming and managing its Asian private equity business. He joined Credit Suisse

through its acquisition of DLJ Merchant Banking, where he had broad experience across LBOs, mezzanine funding, growth capital and other strategies.

Mr. Heath Zarin practiced corporate law with Schulte Roth & Zabel LLP in New York, where he formed and advised hedge funds and private equity funds.

Mr. Heath Zarin’s current and previous board service includes companies across Asia, Europe and North America, in diverse manufacturing and service industries. He currently serves as Chairman of NFT Distribution, Chairman of Allport Cargo Services, Chairman of ediTRACK, non-executive director of CS Logistics and non-executive director of J.D. United Manufacturing.

Mr. Heath Zarin holds a Juris Doctor from the Fordham University School of Law and graduated from the State University of New York at Binghamton. He is CFA, CMT and CAIA charterholder and has completed Certificate programs at Harvard Business School. He serves on the Executive Committee of the CAIA Hong Kong Chapter.

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Executive Team

Ms. Christina Cheung – Chief Financial OfficerMs. Christina Cheung brings more than 17 years of business development and operating finance experience in multi-national corporations across the energy, healthcare and FMCG sectors. She comes to eCargo from General Electric (“GE”), where most recently she was Director of Business Development and Growth responsible to drive strategic growth initiatives for the GE Global Growth and Operations covering 13 regions across the globe. She joined GE in 1997 in its Financial Management program and progressed into various finance leadership roles. She is a Certified Financial Analyst, Certified Public Accountant and Chartered Global Management Accountant. She is a member of AICPA, HKICPA, CFA Institute and HKSFA. She is a certified GE Black Belt.

Mr. John Muir – Sales DirectorMr. John Muir brings over 14 years of experience in developing front-end eCommerce solutions. John is an eCommerce specialist and has developed award-winning international online stores and digital marketing campaigns for over 100 brands including Microsoft, Compaq, Hewlett Packard, Ted Baker, Reiss, Gant, AllSaints Spitalfields, Bench, Esprit, Reebok, Maybeline and L’oreal. Prior to eCargo, he was the founder of ePartner Digital, an eCommerce solutions specialising in fashion.

Mr. Lawrence Lun – Commercial Director Mr. Lawrence Lun is an active entrepreneur who has operated multiple businesses prior to joining eCargo. He was co-Founder of Zingly, a Social Visual Curation Platform that enables brands to make better use of their User Generated Photos from Social Media Platforms to help increase conversion rates. He was responsible for its operations and business development. Prior to starting his company, he was an Institutional Sales Manager at Value Partners Limited, an Asset Management firm based in Hong Kong. He has held roles in retail consultancy and retail management.

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Board of DirectorseCargo’s Memorandum and Articles of Association and the Hong Kong Companies Ordinance provide that the minimum number of Directors is two and that this minimum may only be changed by majority vote of the Shareholders. The Company currently has five Directors serving on the Board.

The Board is responsible for the overall corporate governance of the Company. Issues of substance affecting the Company are considered by the full Board, with advice from external advisors as required.

Each Director must bring an independent view and judgment to the Board and must declare all conflicts of interest including confirmation of Director’s interests in securities and declaration of any trading activities. Any issue concerning a Director must be brought to the attention of the Board as soon as practicable, and unless a resolution has been passed by the non-interested Directors allowing the interested Director to remain in the meeting and participate in discussions, Directors may not participate in discussions or resolutions pertaining to any matter in which the Director has a material personal interest.

The Board’s role in risk oversight includes receiving review of reports

from senior management and the Audit and Risk Management Committee on a regular basis regarding material risks faced by the Company and applicable mitigation strategies and activities.

The reports detail the effectiveness of the risk management program and identify and address material business risks such as technological, strategic, business, operational, financial, human resources and legal/regulatory risks.

The Board and its committees consider these reports, discuss

overnanceCorporateG

matters with management and identify and evaluate any potential strategic or operational risks, and appropriate activity to address those risks. The responsibilities of the Board are set down in the Company’s Board Charter, which has been prepared having regard to the ASX Corporate Governance Council, Corporate Governance Principles and Recommendations, 3rd Edition (“ASX Corporate Governance Principles”).

Board committeesThe Board has established two standing committees to facilitate and assist the Board in fulfilling its responsibilities as set out below. The Board may also establish other committees from time to time to assist in the discharge of its responsibilities.

Each of these committees has the responsibilities described in the committee charters (which have been prepared having regard to the ASX Corporate Governance Principles) adopted by the Company.

Report

Good corporate governance is pivotal in helping the business to deliver

its strategies, generating sustainable shareholder value and

promotes investor confidence.

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Committee Overview Members

Audit and Risk Management Committee

Oversees the Company’s corporate accounting and financial reporting, including auditing of the Company’s financial statements, reviewing the performance of the Company’s internal audit function and the qualifications, independence, performance and terms of engagement of the Company’s external auditor. Manages the process of identification and management of risk.

Mr. Rupert Myer (chairman)Mr. Heath ZarinMr. Christopher Ryan

Nomination and Remuneration Committee

Remuneration:Establishes, amends, reviews and approves the compensation and benefit plans with respect to senior management and employees of the Company including determining individual elements of total compensation of the Chief Executive Officer and other members of senior management.

The Nomination and Remuneration Committee is responsible for forming a view and making a recommendation to the Board on the most appropriate compensation for key employees. For instance, the Nomination and Remuneration Committee may determine that non-monetary compensation, such as employee options or employee shares, is appropriate compensation as a way of:

• recognising ongoing contributions by key employees to the achievement by the Company of long term strategic goals;

• aligning the interests of participants with other holders of shares in the Company through the sharing of a personal interest in the future growth and development of the Company; and

• providing a means of attracting and retaining skilled and experienced employees.

The Nomination and Remuneration Committee is also responsible for reviewing the performance of the Company’s executive officers with respect to these elements of compensation.

Nomination:The Nomination and Remuneration Committee recommends the Director nominees for each annual general meeting and ensures that the Audit and Risk Management, and Nomination and Remuneration Committees of the Board have the benefit of qualified and experienced independent directors.

Mr. Heath Zarin (chairman)Mr. Rupert Myer Mr. Christopher Ryan

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Corporate governance policiesThe Company has also adopted the following policies and charters. Each of these policies and charters are set out in the Corporate Governance Plan adopted by the Board on 18 September 2014. The Corporate Governance Plan is incorporated by reference into this annual report.

A copy of each of the below policies are available on the Company’s website at www.eCargo.com.

The Board CharterThis charter sets out the principles for the operation of the Board and the functions and responsibilities of the Board and management of the Company. The Board Charter contains the Board skills matrix.

Code of ConductThis policy sets out the standards of ethical behaviour that the Company expects from its directors, officers and employees.

Securities Trading PolicyThis policy is designed to maintain investor confidence in the integrity of the Company’s internal controls and procedures and to provide guidance on avoiding any breach of the insider trading laws in Australia.

Audit and Risk Management Committee CharterThis charter sets out the principles for the operation of the Audit and Risk Management Committee.

Nomination and Remuneration Committee CharterThis charter sets out the principles for the operation of the Nomination and Remuneration Committee.

Continuous Disclosure Policy and Communications StrategyThe Company is required with the continuous disclosure requirements of the Listing Rules and the Corporations Act to ensure the Company discloses to ASX any information concerning the Company which is not generally available and which a reasonable person would expect to have a material effect on the price or value of the securities of the Company. This policy sets out certain procedures and measures which are designed to ensure that the Company complies with its continuous disclosure obligations. This policy also sets out practices which the Company will implement to ensure effective communication with its Shareholders.

Diversity PolicyThis policy sets out practices which the Company will implement to establish measurable objectives for achieving gender diversity.

ASX Corporate Governance principlesThe Board has evaluated the Company’s current corporate governance policies and practices in light of the ASX Corporate Governance Principles.

The Board considers that the Company generally complies with the ASX Corporate Governance Principles and, where the Company does not comply, this is primarily due to the current relative size of the Company and scale of its current operations. Comments on compliance and departures are set out below.

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Principles/recommendations

Does eCargocomply?

Particulars of compliance andif not why not

Principle 1 – Lay solid foundations for management and oversight

Recommendation 1.1:Companies should disclose:• the respective roles and

responsibilities of its Board and management; and

• those matters expressly reserved to the Board and those delegated to management.

Complies The Board’s responsibilities are contained in the Company’s Board Charter. The Company’s Board Charter is contained in the Corporate Governance Plan.

The functions of the Board and Chairman are specifically set out in the Board Charter. The functions delegated to senior executives are contained in the Delegation of Authority Agreement, contained in the Corporate Governance Plan.

Recommendation 1.2:Companies should:• undertake appropriate checks

before appointing a person, or putting forward to security holders a candidate for election, as a Director; and

• provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a Director.

Complies The Board’s responsibilities in relation to director appointments are contained in the Company’s Board Charter. The Company’s Board Charter is contained in the Corporate Governance Plan. Appropriate checks, including bankruptcy checks and police checks are part of the listing process.

The requirement for the appropriate checks prior to appointment a Director or putting forward a candidate for election as a Director as well as the provision of all material information in the Board’s possession to shareholders relevant to a decision on whether or not to elect or re-elect a Director is clearly mentioned in the Board Charter.

All material information in relation whether to elect or re-elect a Director is contained in the Company’s notice of annual general meeting and explanatory statement.

Recommendation 1.3:Companies should have a written agreement with each Director and senior executive setting out the terms of their appointment.

Complies The Company has entered into such agreements with each Director and senior executive.

Recommendation 1.4:The Company Secretary must be directly accountable to the Board, through the chair on all matters to do with the proper functioning of the Board.

Complies The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The accountability and details of the role of the Company Secretary are contained in the Company’s Board Charter.

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Recommendation 1.5:Companies should:• have a diversity policy which

includes requirements for the Board or a relevant committee of the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;

• disclose that policy or a summary of it; and

• disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the Board or a relevant committee of the Board in accordance with the entity’s diversity policy and its progress towards achieving them.

Partly complies The Board has established a Diversity Policy. The Diversity Policy is contained in the Corporate Governance Plan. The Board has not yet adopted measurable objectives. The Board will set measurable objectives during the financial year ended 31 December 2015, and in the Annual Report for that financial year will include a summary of progress towards the objectives as well as details of the measurable objectives for the subsequent financial year.

Recommendation 1.6:Companies should:• have and disclose a process

for periodically evaluating the performance of the Board, its committees and individual Directors; and

• disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

Partly complies The Board has established these processes. A summary of the processes are set out below.

The Board and each Board Committee is responsible for the evaluating the performance of the Board and Board Committee on an annual basis by referring to the requirements of the Board Charter.

The Chairman is responsible for the review of individual Directors. Each Director meets privately with the Chairman to discuss the assessment. In addition to the annual review, the Chairman regularly provides informal feedback to individual Directors.

As the Company is still in an early stage of development, it has not yet undertaken a formal review process.

Recommendation 1.7:Companies should:• have and disclose a process

for periodically evaluating the performance of its senior executives; and

• disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

Complies The Board has established these processes. A summary of the processes are set out below.

The Chairman is responsible for the review of the senior management assessment processes from time to time to ensure that they remain consistent with the Company’s overall objectives for the business.

All senior executives undergo a performance and development review on an annual basis, each senior executive meets privately with the Chairman to discuss the assessment and provided with feedback on their performance, when appropriate, a development plan also agreed to support the ongoing contribution of the executive to the needs of business.

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Principle 2 – Structure the Board to add value

Recommendation 2.1:The Board should establish a nomination committee which• consists of a majority of

independent Directors;• is chaired by an independent

Chair; and• has at least three members.

The Board must disclose the charter of the committee, the members of the committee, the number of times the committee has met throughout a reporting period and the individual attendances of the members at those meetings.

Complies The Board has established a Nomination and Remuneration Committee.

The function of the Nomination and Remuneration Committee is contained in the Nomination and Remuneration Committee Charter. The Company’s Nomination and Remuneration Committee Charter is contained in the Corporate Governance Plan.

The Nomination and Remuneration Committee is chaired by Mr. Heath Zarin, an independent Director, and consists three non-executive Directors. Of these members, all are independent non-executive Directors, namely, Mr. Heath Zarin, Mr. Rupert Myer and Mr. Christopher Ryan.

The first Committee meeting was conducted on 30 January 2015, with all committee members in attendance.

Recommendation 2.2:Companies should have and disclose a Board skills matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership.

Complies The Board maintains a Board Skills Matrix of the current Directors of the Board. The Company’s Board Skills Matrix is contained in the Board Charter which is contained in the Corporate Governance Plan.

Recommendation 2.3:Companies should disclose:• the names of the Directors

considered by the Board to be independent Directors;

• if a director has an interest, position, association or relationship of the type described in Box 2.3 (Factors relevant to assessing the independence of a Director) but the Board is of the opinion that it does not compromise the independence of the Director, the nature of the interest, position, association or relationship in question and an explanation of why the Board is of that opinion; and

• the length of service of each Director.

Complies Currently the Board consists of five members, of which three are independent Non-Executive Directors, namely, Mr. Rupert Myer, Mr. Christopher Ryan and Mr. Heath Zarin.

The Board has assessed, using the criteria set out in the ASX Corporate Governance Principles and Recommendations, the independence of Non-Executive Directors in light of their interests and relationships and considers them all to be independent.

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Recommendation 2.4:A majority of the Board should be independent Directors.

Complies The Board determines the size and composition of the Board, subject to limits imposed by the Company’s Constitution.

Of the five Directors, three are Non-Executive Directors namely, Mr. Rupert Myer, Mr. Christopher Ryan and Mr. Heath Zarin and all three Non-Executive Directors are considered by the Board to be independent. As such more than half of the Board is independent Directors.

This Board structure will continue to be reviewed at the appropriate stages of the Company’s development.

Recommendation 2.5:The Chair of the Board should be an independent Director and should not be the same person as the Chief Executive Officer.

Does not comply The current Chairman, Mr. John Lau, is an Executive Director and is not considered independent under the ASX Corporate Governance Principles.

The Board considers that the Chairman, as a founder, is key for the business development and decision making in Hong Kong and the Company has adequate procedures to ensure the independence of the Chairman’s decisions. For example, the Chairman will deal with any conflicts that arise, address differences of opinion and ensure contrary votes are recorded at Board meetings and ensure Directors or the Chairman himself with material personal interests in a matter leave the meeting while the matter is discussed, unless a resolution has been passed by the non-interested Directors allowing the interested Director to remain in the meeting and participate in discussions.

The Chairman is not the Chief Executive Officer of the Company.

Recommendation 2.6: Companies should have a program for inducting new Directors and providing appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their role as Directors effectively.

Complies The Directors that have been recently appointed to the Board, namely Mr. John Lau, Mr. Christopher Lau, Mr. Rupert Myer, Mr. Christopher Ryan, and Mr. Heath Zarin have been provided with a formal letter of appointment setting out the key terms and conditions of appointment, including duties, rights, responsibilities and the Board’s expectations regarding their involvement with committee work.

A formal induction is provided to all new Directors, including meetings with the Chief Executive Officer, Chairman and information on key corporate and Board policies, and visits to the Company’s operations.

The Directors are expected to undertake an appropriate continuing professional development program on education for the purpose of developing and maintaining the skills and knowledge for normal discharge of their formal Director duties effectively.

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Principle 3 – Act ethically and responsibly

Recommendation 3.1:Companies should:(a) establish a code of conduct for

its Directors, senior executives and employees; and

(b) disclose the code or a summary of the code or a summary of it.

Complies The Board has established a Code of Conduct, which is contained in the Corporate Governance Plan.

The Code of Conduct provides that the Directors will act with honesty and integrity, will avoid conflicts of interest, protect confidential and proprietary information and treat others equitably and with professionalism courtesy and respect.

Principle 4 – Safeguard integrity in corporate reporting

Recommendation 4.1:The Board should establish an audit committee which:• consists of at least three members

all of whom are non-executive Directors, the majority of independent Directors;

• is chaired by an independent Chair, who is not the Chairman of the Board.

The Board must disclose the charter of the audit committee, the relevant qualifications and experience of the members of the committee and the number of times the committee has met during a reporting period and the individual attendances of the members at those meetings.

Complies The Board has established an Audit and Risk Management Committee.

The function of the Audit and Risk Management Committee is contained in the Audit and Risk Management Committee Charter. The Company’s Audit and Risk Management Committee Charter is contained in the Corporate Governance Plan.

The Audit and Risk Management Committee is chaired by Mr. Rupert Myer, an independent Director who is not the Chairman of the Board.

The Audit and Risk Management Committee consists of three members namely, Mr. Rupert Myer, Mr. Heath Zarin and Mr. Christopher Ryan. Of these members, all are independent Non-Executive Directors.

In 2014, the Audit and Risk Management Committee held a meeting on 16 September 2014 with all Committee members in attendance.

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Recommendation 4.2:Before approving the Company’s financials, the Board must receive declarations from the Company’s Chief Executive Officer and Chief Financial Officer that in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

Complies The Board has received the necessary declaration from the Chief Executive Officer, Mr. Christopher Lau and Chief Financial Officer, Ms. Christina Cheung prior to approving the unaudited and audited annual financial statements. This process will continue for any future approval of the Company’s financial statements.

Recommendation 4.3: Companies must ensure that its external auditor attends its Annual General Meeting and is available to answer questions from security holders relevant to the audit.

Complies The Company has not yet held its first Annual General Meeting.

The Company will invite the Company’s external auditor to attend its forthcoming Annual General Meeting and any future Annual General Meetings to answer questions from security holders relevant to the audit.

Principle 5 – Make timely and balanced disclosure

Recommendation 5.1:Companies should:(a) have a written policy for

complying with its continuous disclosure obligations under the ASX Listing Rules; and

(b) disclose that policy or a summary of it.

Complies The Board has adopted a Continuous Disclosure Policy and Communications Strategy which is set out in the Corporate Governance Plan.

The Company respects the rights of its shareholders and facilitates the exercise of those rights, the Company is committed to communicating effectively with shareholders, providing shareholders with ready access to balanced and understandable information about the Company and corporate proposals and making it easier for shareholders to participate in general meetings of the Company.

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Principle 6 – Respect the rights of security holders

Recommendation 6.1:A listed entity should provide information about itself and its governance to investors via its website.

Complies The Board of Directors aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of affairs.

The Company has established on its website, www.eCargo.com where shareholders can find information such as financial statements and major development of the Company as well as all relevant corporate governance material under the Media and News and corporate governance landing pages.

Recommendation 6.2: Companies should design and implement an investor relations program to facilitate effective two-way communication with investors.

Complies Shareholders are encouraged to fully participate at the Annual General Meeting or other General Meeting to ensure effective two way communication.

Shareholders are also able to direct any questions relating to the Company’s securities to the share registry, Link Market Services Limited.

Recommendation 6.3:Companies should disclose the policies it has in place to facilitate and encourage participation at meetings of shareholders.

Complies The communication strategy is contained in the Continuous Disclosure Policy and Communications Strategy and is designed to ensure that shareholders are informed of all relevant developments. Details of the information can be found on the Company’s website www.eCargo.com under the corporate governance landing page of the Investor Information section.

The Company encourages full participation of shareholders at the Annual General Meeting. The Chairman encourages shareholders to ask reasonable questions at the Annual General Meeting. The Board makes itself available to all shareholders both before and after the Annual General Meeting.

Recommendation 6.4:Companies should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.

Complies All shareholders have the right to access details of their holdings, provide email address contacts and make certain elections via the Company’s share registry, Link Market Services Limited by accessing the web site www.linkmarketservices.com.au. Shareholders have the right of option of receiving all or a selection of communication electronically.

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Principle 7 – Recognise and manage risk

Recommendation 7.1:The Board should establish a risk management committee which:(a) has at least 3 members,

the majority of whom are independent directors;

(b) is chaired by an independent Chair.

The Board must disclose the charter of the risk management committee, members of the risk management committee, the number of times the committee has met during a reporting period and the individual attendances of the members at those meetings

Complies The Board has established an Audit and Risk Management Committee.

The function of the Audit and Risk Management Committee is contained in the Audit and Risk Management Committee Charter. The Company’s Audit and Risk Management Committee Charter is contained in the Corporate Governance Plan.

The Audit and Risk Management Committee is chaired by Mr. Rupert Myer, an independent Director who is not Chairman of the Board.

The Audit and Risk Management Committee consists of three members namely, Mr. Rupert Myer, Mr. Christopher Ryan and Mr. Heath Zarin. Of these members, all are independent Non-Executive Directors.

In year 2014, Audit and Risk Management Committee held a meeting on 16 September 2014 with all Committee members in attendance.

Recommendation 7.2:The Board should:(a) review the Company’s risk

management framework at least annually; and

(b) disclose whether such review has taken place.

Complies The Audit and Risk Management Committee has reviewed the Risk Management framework.

The Audit and Risk Management Committee will continue the process to review the risk management framework at least annually; and will disclose such review accordingly.

Recommendation 7.3:Companies should disclose;(a) their internal audit function,

how the function is structured and what role it performs; or

(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.

Complies As the Company is still in an early stage of development, the Company does not have an internal audit function.

In order to ensure the Company to accomplish its objectives by bringing a systematic, disciplined approach to evaluating and continually improving the effectiveness of its risk management and internal control processes, the Board is ultimately responsible for maintaining a sound and effective system of internal control and risk management of the Company and considers that the identification and management of key risk associated with the business is vital.

The Board requests the CEO and CFO to provide such assessments at least once a year.

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Recommendation 7.4:Companies should disclose whether they have any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

Complies The Company does not have any material exposure to economic, environmental and social sustainability risks. The material risks are disclosed at Directors’ Report of the Annual Report.

Principle 8 – Remunerate fairly and responsibly

Recommendation 8.1:The Board should establish a remuneration committee which:• have at least 3 members,

the majority of whom are independent Directors;

• is chaired by an independent Chair.

The board must disclose the charter of the remuneration committee, members of the remuneration committee, the number of times the committee has met during a reporting period and the individual attendances of the members at those meetings.

Complies The Board has established a Nomination and Remuneration Committee.

The function of the Nomination and Remuneration Committee is contained in the Nomination and Remuneration Committee Charter contained in the Corporate Governance Plan.

The Nomination and Remuneration Committee is chaired by Mr. Heath Zarin, an independent Director, and consists three non-executive Directors. Of these members, all are independent non-executive Directors, namely, Mr. Heath Zarin, Mr. Rupert Myer and Mr. Christopher Ryan.

The first Committee meeting was conducted on 30 January 2015, with all Committee members in attendance.

Recommendation 8.2:Companies should separately disclose its policies and practices regarding the remuneration of non-executive Directors from that of executive Directors and other senior executives.

Complies The remuneration structure for the non-executive Directors is not related to performance. Non-executive Directors receive fixed fees which reflect their skills, responsibilities and the time commitments required to discharge their duties.

The remuneration structure for senior executives reflects the Company’s performance culture: there is a direct correlation between the executive’s reward and the Company’s performance so as to seek to ensure that the Company’s remuneration policy is aligned with its long term business objectives and the interests of shareholders and other stakeholders.

Recommendation 8.3:Companies which have equity-based remuneration schemes should have and disclose a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme.

Not applicable The Company does not have an equity based remuneration scheme.

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Principal activitiesThe principal activities of the Group are the development and provision of eCommerce technologies, integrated offline and online supply chain operations, and provision of digital commerce solutions services. The activities of the subsidiaries are set out in Note 15 to the consolidated financial statements.

Results and appropriationsThe results of the Group for the period are set out in the consolidated statement of comprehensive income on page 44.

The directors do not recommend the payment of a dividend.

ReservesMovements in the reserves of the Group during the period are set out in the consolidated statement

of changes in equity on page 46. Movements in the reserves of the Company during the period are set out in Note 27 to the financial statements.

Property, plant and equipmentDetails of the movements in property, plant and equipment of the Group are set out in Note 13 to the consolidated financial statements.

Shares issued in the yearDetails of the shares issued in the period ended 31 December 2014 are set out in Note 21 to the consolidated financial statements.

Directors(a) Directors of the Company

The Directors of the Company during the period and up to the date of this report are:

Executive DirectorsMr. Christopher Lau

(appointed on 22 April 2014)Mr. John Lau

(appointed on 9 June 2014)

Independent Non-Executive Directors

Mr. Christopher Ryan (appointed on 9 June 2014)

Mr. Heath Zarin (appointed on 9 June 2014)

Mr. Rupert Myer (appointed on 7 August 2014)

There being no provision in the Company’s Articles of Association for retirement by rotation, all Directors continue in office.

(b) Directors of the Company’s subsidiaries

Reportirectors’DThe Directors submit the first annual report of the Company, since the successful initial public offering on the ASX, together with the audited consolidated financial statements of the Company and its subsidiaries (collectively, the “Group” or “eCargo”) for the period from 22 April 2014 (date of incorporation) to 31 December 2014.

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Reportexpectations and represented the Group’s growth strategy in developing the organisation and continuous investment in research and development of its eCoreOS eCommerce technology platform.

On 13 February 2015, the Company announced that its wholly owned subsidiary, eCargo Enterprise Limited, completed the acquisition of 100% of the issued share capital of a leading Australian eCommerce consultancy, Amblique Pty Limited (“Amblique”) for A$6.0 million (equivalent to HK$36.3 million), providing an expanded services and solution offering to eCargo’s existing merchants.

Amblique is one of the Australia’s leading eCommerce consultancy and technology services providers, providing omni-channel digital commerce strategies, retail practice and site optimisation services to help retailers and merchants “sell more”. Amblique currently serve a diverse range of merchants and well-known brands in Australia, including: Cotton On, Michael Hill International, Sportscraft, Matt Blatt and Tarocash amongst numerous others. Amblique currently employs a team of about 50 professionals based in Sydney and engage a development team of 12, based in Ho Chi Minh, Vietnam. Amblique remains focused on providing Demandware solutions to retailers and merchants.

During the period and up to the date of this report, Mr. Christopher Lau and Mr. John Lau are also directors in certain subsidiaries of the Company. Other Directors of the Company’s subsidiaries during the period and up to the date of this report included: Mr. Gavin Custance.

Review of operationsThe Group is a provider of eCommerce technologies, integrated offline and online supply chain operations, online omni-channel retail operations and digital commerce solutions for merchants or retailers seeking to initiate, incubate, or strengthen their presence in eCommerce in China and international markets. Apart from the general eCommerce market, the key target segment is fashion and apparel.

According to the “China’s e-tail Revolution: Online shopping as a catalyst for growth” issued by the McKinsey Global Institute, China’s online retail (“eTailing”) industry has posted 120% compound annual growth since 2003. According to this report, the fashion and apparel segment was the top product category for eTailing in China in 2011 by sales.

The Group’s businesses involved in the eTailing support services industry is linked to the growth of the overall

eTailing industry in general. It is widely accepted that 10% to 12% of eTailing total revenue is expended on support services. With the lagging of eTailing support infrastructure in China, there is an unique market opportunity for eCargo to fill the gap.

The functional and presentation currency of the Company as of the reporting date is Hong Kong Dollars (“HK$”). Since inception on 22 April 2014 and through the period ended 31 December 2014, the Group generated revenue of HK$22.6 million.

The Group earned a gross profit of HK$8.8 million for the period and reported a normalized loss of HK$21.6 million.

The normalized loss represents a net loss excluding one-time charges of HK$8.8 million related to the initial public offering (“IPO”) share issuance in November 2014 and a foreign exchange loss of HK$6.4 million as Australian Dollar (“A$”) monetary items were translated into HK$.

As at 31 December 2014, there were 535,000,000 shares on issue and net assets amounted to HK$292.6 million, which would convert to a net asset backing of HK$54.7 cents per share.

Operating costs incurred to date were in-line with management

The Group earned a gross profit of HK$8.8 million for the period.

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Review of financial performance

Period ended/As at 31 December 2014

HK$

Prior Corresponding

Period%

change

Revenue from ordinary operations 22,571,718 N/A N/A

Loss after income tax expense (36,761,362) N/A N/A

Total comprehensive loss attributable to members of the Company (36,761,362) N/A N/A

Total assets 309,884,347 N/A N/A

Net assets 292,639,923 N/A N/A

The acquisition of Amblique is a key component of the Company’s expansion strategy to acquire complementary businesses and capabilities. The combination of Amblique’s Demandware and enterprise solutions expertise in Australia and New Zealand with eCargo’s eCommerce platform solutions, China eCommerce and global supply chain capabilities will immediately enable eCargo to provide an expanded service and solution offer to its existing Australian retail and fashion customers.

The Group has achieved significant momentum in attracting new merchants, having contracted with over 30 merchants to date. These include a number of leading Australian and international brands including: Esprit, Jeanswest, Karen Millen, La Perla, Nelly.com, New Look, New Zealand Post and Super Retail Group.

eCargo plans to continue its business development efforts by emphasising the “one-stop” comprehensive menu of services available to brands and retailers, leveraging the established credibility of the Company founders

and executive management team as well as supporting the development of merchants through the specialised capability of eCargo in conjunction with experienced digital marketing agents and online to offline (“O2O”) strategies with merchants offline channels.

It is in the Company’s view that the growth and development of China’s eTailing market will continue to see rapid change in the way in which brands and retailers market to, and connect with, China’s online consumers.

On 28 November 2014, the Company successfully listed on the Australian Securities Exchange (“ASX”). The net proceeds from the Offering was approximately HK$223.3 million, after deducting underwriting fees and relevant listing expenses.

The Group closely reviews and monitors its foreign exchange exposure. As at 31 December 2014, total cash and cash equivalent balance in foreign currency amounted HK$94.5 million, primarily denominated in A$, which represented approximately 49% of the Group’s total bank balance of

HK$191.1 million as at 31 December 2014.

As at 31 December 2014, the Group had no bank loan or non-current liability outstanding. The Group will continue to secure financing (including both equity and debt) as and when the need arises.

Environmental policy and regulationThe Group’s environmental management policy is to promote sustainable economic development in all business units, while, at the same time, endeavoring to measure the impact of activities on the environment and improve the results in terms of their environment-friendliness; lessen the consumption of natural resources by re-use, recycling or reduced use of materials, and using products that are recyclable or come from sustainable sources; and apply environment-friendly practices in all our offices and facilities.

The Group had launched several initiatives at its offices and facilities. An example includes using recycled paper, promoting double-page printing, installing energy-efficient lighting fixtures, and introducing energy-saving equipment.

The Group does not carry out any activities that have a material influence on the environment. As such, the Directors are not aware of any material issues affecting the Group or its compliance with the relevant environment agencies or regulatory authorities.

Risk factorsThe key risks are risks that senior management and the Directors focus on when managing the businesses of the Group that may have the potential, if they occurred, to result in significant adverse consequences for the Group.

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Risks related to the Group’s businesses and risks related to the industry in which the Group operatesRisk Description of risk Risk mitigation strategies

Risk that eCargo’s marketing strategy to recruit merchants is not effective.

There is a risk that eCargo’s marketing strategy to engage merchants is not successful. This would result in eCargo failing to meet revenue targets and have a material and adverse effect on the operating results of the Group.

eCargo has a clear marketing strategy in place. In the event such a marketing strategy proves to be unsuccessful, eCargo shall refocus and look to qualified professional advisors in the industry to assist to refine its marketing strategy.

Risk that eCargo’s management and key personnel may discontinue their services.

eCargo’s businesses and future success heavily depends upon the continued services of management and other key personnel. If one or more of eCargo’s management or key personnel were unable or unwilling to continue in their present positions, eCargo might not be able to replace them easily or at all. eCargo’s businesses may be severely disrupted.

eCargo has a Nomination and Remuneration Committee chaired by an independent non-executive director of the Company. In the event any key personnel were to leave eCargo, the Nomination and Remuneration Committee would aim to ensure a suitable replacement were found within the timeframes required and not at unreasonable cost to eCargo.

In the event a key person were to breach the restrictive covenants in their employment agreements, eCargo would weigh up the cost/benefit ratio of enforcing such provisions.

Risk that eCargo’s intellectual property may be used without authorisation or stolen.

eCargo relies on a combination of copyright, nondisclosure agreements and other methods to protect its intellectual property rights.

To protect its trade secrets and other proprietary information, employees, consultants, advisors and collaborators are required to enter into confidentiality agreements. These agreements might not provide meaningful protection for the trade secrets, know-how or other proprietary information in the event of any unauthorised use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information.

eCargo has tried to mitigate the risk of unauthorised use of intellectual property by only disclosing sensitive intellectual property to particular employees, consultants, advisors, collaborators and merchants on a “needs to know basis”. eCargo requires all such employees, consultants, advisors, collaborators and merchants to enter into confidentiality agreements to protect the confidentiality of such intellectual property. Where necessary eCargo will enforce its intellectual property rights through litigation or arbitration.

In regards to all new merchants, eCargo will ensure that robust intellectual property safeguards are contained in their respective Service Agreements.

Risk that eCargo’s merchants’ online revenues are below expectations.

There is a risk that eCargo’s merchants do not achieve online revenues according to expectations driven by a number of factors including but not limited to the marketing strategy deployed, merchandise mix, product availability and pricing. This would result in eCargo failing to meet revenue targets and have a material and adverse effect on the operating results of the Group.

eCargo has tried to mitigate this risk by redefining its target merchant pipeline and focusing marketing efforts on merchants who have a proven product and well-recognised brands that are relatively more likely to succeed in generating online sales. eCargo shall continue to monitor this closely and allocate resources in accordance with merchants online sales activity and potential.

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Risk Description of risk Risk mitigation strategies

Risk that increases in wages for information technology professionals will increase net cash outflow and gross margin and net profit may decline.

Historically, wages for comparably skilled technical personnel in the Chinese and Hong Kong information technology services industries have been lower than in developed countries, such as in Australia, the United States or Europe. In recent years, wages particularly in China’s information technology services industry have increased and may continue to increase at faster rates. Wage increases will increase eCargo’s cost of software solutions and information technology services of the same quality and increase its cost of operations. As a result, eCargo’s gross margin and net profit may decline.

eCargo will need to pay employees market rate in order to attract and retain skilled employees. eCargo will, however, try to offset increases in wages by increases in efficiency and productivity.

Directors Interest in Shares/Chess Depository Interests (“CDIs”)As at the date of report, the Directors have the following interests in fully-paid shares/CDIs in the Company.

Director

Number of Shares and

equivalent CDIs held directly

Number of Shares and

equivalent CDIs held indirectly

Mr. Christopher Lau 8,142,460 Nil

Mr. John Lau Nil 396,872,460

Mr. Rupert Myer Nil 9,000,000

Mr. Christopher Ryan Nil 225,000

Mr. Heath Zarin Nil Nil

None of the Directors hold any partly-paid Shares or options as of the date of this report.

Directors’ material interests in transactions, arrangements and contracts that are significant in relation to the Company’s businessPursuant to an assignment of rights in software agreement dated 28 May 2014 made between the Company and JL Enterprises Holdings Limited (“JL Enterprises”), the Company agreed to issue Shares to JL Enterprises for the provision of Omni Channel Management System (“OCMS”) and Order Management System (“OMS”).

Pursuant to an assignment of rights in software agreement dated 28 May 2014 made between the Company and CS Logistics Holdings Limited (“CS Logistics”) and CS China Logistics Limited (“CS China Logistics”), the Company agreed to issue Shares to CS China Logistics for the provision of the Warehouse Management System (“WMS”).

Pursuant to a transitional services agreement dated 4 September 2014 made between the Company and CS China Logistics, the Company agreed to pay CS China Logistics services fee for the provision of the logistics services in China.

Pursuant to a novation and suppleme ntal agreement dated 4 September 2014 made between the Company and CS Logistics and CS China Logistics, the Company agreed to issue Shares to CS Logistics for the transfer of office furniture and equipment.

Pursuant to a deed of non-competition agreement dated 4 September 2014 made between the Company and Mr. John Lau, Mr. John Lau agreed to certain terms of confidentially, non-competition and non-solicitation with regards to all the above transactions.

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Pursuant to a personal guarantee signed dated 4 September 2014 made between the Company and Mr. John Lau, Mr. John Lau agreed to provide a personal guarantee in favour of the Company in connection with the performance of the obligations owed by CS Logistics, CS China Logistics and JL Enterprises under the assignment of rights in software agreements, novation and supplemental agreement and transitional services agreement.

Mr. John Lau, an executive director of the Company, has material interests in the above transactions to the extent that JL Enterprises, CS Logistics and CS China Logistics are entities controlled directly or indirectly by him.

Except for contracts amongst Group companies and the aforementioned transactions, there are no other contracts of significance to which the Company, any of its subsidiaries, fellow subsidiaries or its parent company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the period or at any time during the period.

Directors’ right to acquire sharesAt no time during the period was the Company, any of its holding companies or its 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 corporate body.

Subsequent EventsOn 12 February 2015, the Group acquired a 100% interest in Amblique. The consideration of A$6.0 million (equivalent to HK$36.3 million) was settled in cash.

On 28 February 2015, the Group acquired a 20% interest in Purecomm Limited, an eCommerce technology consultant and software developer of an O2O omni-channel retail execution platform. The consideration of British Pounds (“GBP”) 0.52 million (equivalent to HK$6.2 million) was settled in cash.

As of the date of this report, management is in the process of reviewing financial information of the acquisition and performing assessments of purchase price allocation of identifiable assets and liabilities acquired as of the effective acquisition date.

Management contractsNo contracts concerning the management and administration of the whole or any substantial part of the business of the Company were entered into or existed during the period.

AuditorsThe financial statements have been audited by PricewaterhouseCoopers who retire and, being eligible, offer themselves for re-appointment.

On behalf of the Board of the Company,

Director

Hong Kong, 30 March 2015

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eCargoinFigures

2014

eCargo http://www.eCargo.com

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TO THE MEMBERS OF eCARGO HOLDINGS LIMITED(incorporated in Hong Kong with limited liability)

We have audited the consolidated financial statements of eCargo Holdings Limited (the “Company”) and its subsidiaries set out on pages 44 to 80, which comprise the consolidated balance sheet as at 31 December 2014, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the period from 22 April 2014 (date of incorporation) to 31 December 2014, and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Consolidated Financial StatementsThe directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our opinion solely to you, as a body, in accordance with section 405 of the Hong Kong Companies Ordinance and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 the directors, as well as evaluating the overall presentation of the consolidated financial statements.

Independent Auditor’s Report

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Independent Auditor’s Report

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 give a true and fair view of the financial position of the Company and its subsidiaries as at 31 December 2014, and of their financial performance and cash flows for the period from 22 April 2014 (date of incorporation) to 31 December 2014 in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the Hong Kong Companies Ordinance.

PricewaterhouseCoopers Certified Public Accountants

Hong Kong, 30 March 2015

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Consolidated Statement of Comprehensive Income

For the period from 22 April 2014 (Date of Incorporation) to 31 December 2014

Note

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Revenue 6 22,571,718

Cost of sales 7 (13,735,009)

Gross profit 8,836,709

Selling and distribution expenses 7 (1,825,646)

Administrative expenses 7 (32,775,180)

Research and development expenses 7 (5,007,679)

Operating loss (30,771,796)

Other losses – net 8 (6,428,291)

Interest income 438,725

Loss before tax (36,761,362)

Income tax expense 9 -

Loss for the period (36,761,362)

Other comprehensive income -

Total comprehensive loss for the period (36,761,362)

Loss per share for loss attributable to equity holders of the Company

- Basic (HK$ cents per share) 11 (9.18)

- Diluted (HK$ cents per share) 11 (9.18)

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Consolidated Balance Sheet

As at 31 December 2014

NoteAs at

31 December 2014HK$

AssetsNon-current assets

Property, plant and equipment 13 1,121,279

Intangible assets 14 98,875,000

99,996,279

Current assets

Trade receivables 17 15,098,667

Prepayments, deposits and other receivables 18 3,718,513

Cash and cash equivalents 19 191,070,888

209,888,068

Total assets 309,884,347

LiabilitiesCurrent liabilities

Trade payables 20 935,707

Other payables and accruals 20 5,516,386

Amounts due to related parties 25 10,792,331

17,244,424

Net assets 292,639,923

EquityEquity attributable to owners of the Company

Share capital 21 329,401,285

Accumulated losses (36,761,362)

Total equity 292,639,923

The notes on pages 48 to 80 are an integral part of these consolidated financial statements.

The financial statements on pages 46 to 78 were approved by the Board of Directors on 30 March 2015 and were signed on its behalf by

Director Director

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Share capital

HK$

Accumulated lossesHK$

TotalHK$

Balance at 22 April 2014 (date of incorporation) - - -

Comprehensive loss for the period

Loss for the period - (36,761,362) (36,761,362)

Other comprehensive income - - -

Total comprehensive loss for the period - (36,761,362) (36,761,362)

Transactions with owners of the Company recognised directly in equity

Issuance of shares (Note 21) 344,815,350 - 344,815,350

Share issuance costs (Note 21) (15,414,065) - (15,414,065)

Total transactions with owners of the Company recognised directly in equity 329,401,285 - 329,401,285

Balance at 31 December 2014 329,401,285 (36,761,362) 292,639,923

Consolidated Statement of Changes in Equity

For the period from 22 April 2014 (Date of Incorporation) to 31 December 2014

The notes on pages 48 to 80 are an integral part of these financial statements.

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Consolidated Statement of Cash Flows

For the period From 22 April 2014 (Date of Incorporation) to 31 December 2014

Note

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Cash flows from operating activities

Cash used in operations 22 (28,055,572)

Net cash used in operating activities (28,055,572)

Cash flows from investing activities

Interest received 438,725

Purchase of property, plant and equipment 13 (268,509)

Net cash generated from investing activities 170,216

Cash flows from financing activities

Proceeds from issuance of shares 21 238,724,100

Professional expenses paid in connection with the Company’s listing (15,414,065)

Net cash generated from financing activities 223,310,035

Net increase in cash and cash equivalents 195,424,679

Cash and cash equivalents at beginning of period -

Exchange loss on cash and cash equivalents 8 (4,353,791)

Cash and cash equivalents at end of period 19 191,070,888

The notes on pages 48 to 80 are an integral part of these financial statements.

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Notes to the Consolidated Financial Statements

1 General informationThe Company and Group are principally engaged in the development and provision of eCommerce technologies, integrated offline and online supply chain operations, and provision of digital commerce solutions and services.

The Company is a limited liability company incorporated in Hong Kong. The address of its registered office is 13103N, ATL Logistics Centre B, 3 Kwai Chung Container Terminals, New Territories, Hong Kong.

These financial statements are presented in HK$, unless otherwise stated.

These financial statements have been approved by the Board of Directors on 30 March 2015.

2 Summary of significant accounting policiesThe principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.

2.1 Basis of preparationThe consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKAS”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). They have been prepared under the historical cost convention.

The consolidated financial statements cover the period from 22 April 2014 (date of incorporation) to 31 December 2014. This is the first financial period and no comparative period presented.

The preparation of financial statements in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

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Notes to the Consolidated Financial Statements

48

2 Summary of significant accounting policies (Continued)2.1 Basis of preparation (Continued)

The following new and amended standards have been issued but are not yet effective and have not been early adopted:

Effective for annual periods

beginning on or after

HKAS 1 (Amendment) Disclosure initiative 1 January 2016

HKAS 16 and HKAS 38 (Amendment)

Clarification of Acceptable Methods of Depreciation and Amortisation

1 January 2016

HKAS 16 and HKAS 41 Amendment

Agriculture: Bearer Plants 1 January 2016

HKAS 19 (2011) (Amendment) Defined Benefit Plans: Employee Contributions

1 July 2014

HKAS 27 (Amendment) Equity Method in Separate Financial Statements

1 January 2016

HKFRS 9 Financial Instruments 1 January 2018

HKFRS 10 and HKAS 28 (Amendment)

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

1 January 2016

HKFRS 10 12 and HKAS 28 (Amendment)

Investment entities: applying the consolidation exception

1 January 2016

HKFRS 11 (Amendment) Accounting for Acquisitions of Interests in Joint Operations

1 January 2016

HKFRS 14 Regulatory Deferral Accounts 1 January 2016

HKFRS 15 Revenue from Contracts with Customers 1 January 2017

Annual Improvements Projects Annual Improvements 2010-2012 Cycle 1 July 2014

Annual Improvements Projects Annual Improvements 2011-2013 Cycle 1 July 2014

Annual Improvements Projects Annual Improvements 2012-2014 Cycle 1 January 2016

The Group has not early adopted these new and amended standards in the consolidated financial statements for the period. The Group plans to apply the above new and amended standards when they become effective. The Group has already commenced an assessment of the impact of these new and amended standards, which are relevant to the Group’s operation and may give rise to changes in accounting policies, disclosure or measurement of certain items in the financial statements. However, the Group is not yet in a position to ascertain their impact on its results of operations and financial position.

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.1 Basis of preparation (Continued)

The HKICPA has also published a number of amendments to the existing standards and interpretations under its annual improvements project. These amendments are not expected to have a significant financial impact on the results of operations and financial position of the Group.

2.2 Consolidation(a) Subsidiaries

A subsidiary is an entity (including a structured entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated.

(b) Separate financial statementsInvestments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including goodwill.

2.3 Segment ReportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers, who are responsible for allocating resources and assessing performance of the operating segments and making strategic decisions. The chief operating decision-makers (“CODM”) are the key management personnel of the Group and may include members of the Board of Directors.

2.4 Related parties A party is considered to be related to the Group if:

(i) the party, directly or indirectly, through one or more intermediaries, (i) controls, is controlled by, or is under common control with, the Group; (ii) has an interest in the Group that gives it significant influence over the Group; or (iii) has joint control over the Group;

(ii) the party is an associate;

(iii) the party is a joint venture;

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.4 Related parties (Continued)

(iv) the party is a member of the key management personnel of the Group or its holding companies;

(v) the party is a close member of the family of any individual referred to in (i) or (iv); or

(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v).

2.5 Foreign currency translation (a) Functional and presentation currency

Items included in the financial statements of each of the entities of the Group are measured using the currency of the primary economic environment in which the entities operate (the “functional currency”). The financial statements are presented in HK$ which is the Company’s functional and presentation currency and the Group’s presentation currency.

(b) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised within administrative expenses in the consolidated statement of comprehensive income.

Foreign exchange gains and losses that relate to cash and cash equivalents are presented in the consolidated statement of comprehensive income within “other losses – net”.

(c) Group companiesThe results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(b) income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(c) all resulting currency translation differences are recognised in other comprehensive income.

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.6 Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and that cost of the item can be measured reliably. The carrying amount of the replaced part is recognised. All other repairs and maintenance are expensed in the consolidated statement of comprehensive income during the financial period in which they are incurred.

Depreciation of property, plant and equipment is calculated using the straight-line method to allocate their costs to their residual values over their estimated useful lives, as follows:

Leasehold improvements over the shorter of remaining lease term and useful life

Furniture and fixtures 20%

Office equipment 20%

Computer equipment 33.33%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. (Note 2.8)

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognised within administrative expenses in the consolidated statement of comprehensive income.

2.7 Intangible assets - softwareCosts associated with maintaining computer software programs are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:

• It is technically feasible to complete the software product so that it will be available for use;

• Management intends to complete the software product and use or sell it;

• There is an ability to use or sell the software product;

• It can be demonstrated how the software product will generate probable future economic benefits;

• Adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.7 Intangible assets - software (Continued)

• The expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed ten years. The amortisation expense is recognised in administrative expenses of the consolidated statement of comprehensive income.

2.8 Impairment of non-financial assetsAssets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.9 Financial assetsThe Group classifies its financial assets as loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for the amounts that are settled or expected to be settled more than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise trade receivables, deposits and other receivables and cash and cash equivalents in the balance sheet.

Loans and receivables are recognised initially at fair value and subsequently carried at amortised cost using the effective interest method.

2.10 Impairment of financial assets - assets carried at amortised cost The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.10 Impairment of financial assets - assets carried at amortised cost (Continued)

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated statement of comprehensive income. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.

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 was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated statement of comprehensive income.

2.11 Trade and other receivablesTrade receivables are amounts due from customers for services rendered in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.12 Cash and cash equivalentsIn the consolidated statement of cash flows, cash and cash equivalents comprise cash in hand and deposits held at call with banks with original maturities of three months or less.

2.13 Share capitalOrdinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from the proceeds.

2.14 Trade and other payablesTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.14 Trade and other payables (Continued)

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.15 Current and deferred income tax(a) Current income tax

The tax expenses for the period comprise current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

(b) Deferral income taxInside basis differencesDeferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not recognised if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is recognised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Outside basis differencesDeferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.15 Current and deferred income tax(Continued)

(c) OffsettingDeferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.16 Employee benefits(a) Employee leave entitlements

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 balance sheet date. Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

(b) Bonus planThe expected cost of bonus payment is recognised as a liability when the Group has a present legal or constructive obligation as a result of services rendered by employees and a reliable estimate of the obligation can be made. Liabilities for bonus plan are expected to be settled within 12 months and are measured at the amounts expected to be paid when they are settled.

(c) Pension obligations The Group operates a defined contribution plan in Hong Kong, which is the Mandatory Provident Fund Scheme (“MPF Scheme”) established under and pursuant to the Mandatory Provident Fund Ordinance.

The MPF Scheme is generally funded by the payments from employees and by the Group. Contributions to the scheme by the Group and employees are calculated as a percentage of employees’ basic salaries. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

The Group’s contributions to defined contribution plan are expensed as incurred and are reduced by contributions forfeited by those employees who leave the scheme prior to vesting fully in the contributions.

The assets of the scheme are held in separate trustee-administered funds.

2.17 ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

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Notes to the Consolidated Financial Statements

2 Summary of significant accounting policies (Continued)2.17 Provisions (Continued)

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.18 Revenue recognitionRevenue comprises the fair value of the consideration received or receivable for the rendering of services, in the ordinary course of the Group’s activities.

The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the Group; and when specific criteria have been met for each of the Group’s activities, as described below.

(a) Sales of servicesThe Group engages in the provision of eCommerce technologies, integrated offline and online supply chain operations, and provision of digital commerce solutions and services. For sales of services, revenue is recognised in the accounting period in which the services are rendered or by reference to stage of completion of the specific transaction and assessed on the basis of actual services provided as a proportion of the total service to be provided.

(b) Interest income Interest income is recognised on a time-proportion basis using the effective interest method. Interest income is classified as “interest income” in the consolidated statement of comprehensive income.

2.19 Operating leases (as the lessee)Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of comprehensive income on a straight-line basis over the period of the lease.

3 Financial risk management3.1 Capital management

The Group’s objectives when managing capital, which comprises share capital and reserves attributable to owners of the Group, are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

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Notes to the Consolidated Financial Statements

3 Financial risk management (Continued)3.2 Credit risk

At the balance sheet date, 78% of the total receivable was due from the Group’s largest 5 debtors. Accordingly, the Group’s consolidated results would be heavily affected by the financial capability of these debtors to fulfill their obligations with the Group. The Group’s credit risk monitoring activities relating to the debtors include review of the credit profile, business prospects, background and their financial capacity.

Substantially all of the bank deposits and cash at banks are held in a major financial institution, which management believes are of high credit quality.

3.3 Liquidity riskThe Group adopts prudent liquidity risk management and maintains sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

The contractual undiscounted cash flows of the Group’s financial liabilities, which include trade and other payables and amounts due to related parties, are due within 12 months and approximate their carrying amounts as the impact of discounting is not significant.

3.4 Foreign exchange riskThe Group mainly operates in Hong Kong and the People’s Republic of China (“PRC”) and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to Renminbi (“RMB”), A$, United States Dollars (“US$”) and GBP.

Foreign exchange risk arises mainly from future commercial transactions, recognised assets and liabilities.

The Group manages its foreign exchange risks by performing regular review and monitoring its foreign exchange exposure. The Group currently does not have a foreign currency hedging policy.

At 31 December 2014, if HK$ had strengthened/weakened by 5% against the A$ with all other variables held constant, post-tax profit for the year would change by approximately HK$4,699,000, mainly as a result of foreign exchange gains/losses on translation of the bank deposits and trade receivables denominated in A$.

At 31 December 2014, if HK$ had strengthened/weakened by 5% against the RMB with all other variables held constant, post-tax profit for the year would change by approximately HK$460,000, mainly as a result of foreign exchange gains/losses on translation of the trade receivables denominated in the RMB.

The foreign exchange exposure for the US$ is considered minimal as HK$ is pegged with the US$.

3.5 Cash flow and fair value interest rate riskAs the Group has no material interest-bearing assets and liabilities, its income and operating cash flows are substantially independent of changes in market interest rates. Therefore, the Group is not exposed to significant cash flow and fair value interest rate risk.

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Notes to the Consolidated Financial Statements

3 Financial risk management (Continued)3.6 Fair value estimation

The Group’s financial instruments include cash and cash equivalents, trade receivables, deposits and other receivables, trade and other payables, and amounts due from related parties. The carrying amounts less impairment of these balances are a reasonable approximation of their fair values due to their short term maturities.

4 Critical accounting estimates and judgmentsEstimates and judgments are continually evaluated and are based on historical experiences and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(a) Determination of functional currencyThe Group measures foreign currency transactions in the respective functional currencies of the Company and its subsidiaries. In determining the functional currencies of the Group entities, judgement is required to determine the currency that mainly influences sales prices for goods and services and of the country whose competitive forces and regulations mainly determines the sales prices of goods and services. The functional currencies of the Group entities are determined based on management’s assessment of the economic environment in which the entities operate and the entities’ process of determining the sales prices.

(b) Fair value of intangible assets acquiredThe fair value of intangible assets is measured based on the discounted cash flow method. The calculation use pre-tax cash flow projections based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates that do not exceed the long-term average growth for the eCommerce business in which the Group operates. The projection involves estimates of market conditions and the Group’s ability to utilise the intangible assets. Management reassess these estimates at each statement of financial position date, or whenever there is a significant change in the economic circumstances in the eCommerce industry.

(c) Impairment of trade and other receivables The Group’s management determines the provision for impairment of trade and other receivables based on an assessment of the recoverability of the receivables. This assessment is based on the credit history of its customers and other debtors and the current market condition, and requires the use of judgments and estimates. Management reassesses the provision at each statement of financial position date. F

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Notes to the Consolidated Financial Statements

4 Critical accounting estimates and judgments (Continued)(d) Impairment of non-financial assets

In considering the impairment losses that may be required for certain of the Group’s assets which include property, plant and equipment and intangible assets, recoverable amounts of these assets need to be determined. The recoverable amount is the greater of the fair value less costs to disposal and the value in use. It is difficult to precisely estimate fair value less costs to disposal because quoted market prices for these assets may not be readily available. In determining the value in use, expected cash flows generated by the asset are discounted to their present value, which require significant judgement relating to items such as level of sales, selling price and amount of operating costs. The Group uses all readily available information in determining amounts that are reasonable approximations of recoverable amounts, including estimates based on reasonable and supportable assumptions and projections of items such as sales volume, selling price and amount of operating costs. Changing the assumptions selected by management to determine the level, if any, of impairment could significantly affect the Group’s reported financial condition and results of operations.

(e) Useful lives of intangible assetsManagement determines the estimated lives and related depreciation charges for its intangible assets. Management will revise the depreciation charge where useful lives are different from those previously estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

5 Segment informationThe executive directors of the Company are the Group’s CODM. Management have determined the operating segments based on the information reviewed by the Board of Directors for the purpose of allocating resources and assessing performance.

The CODM assesses the operating financial performance of the Group based on a measure of operating profits and losses before tax. The CODM takes into consideration the economic benefits of the eCommerce technology services and supply chain management businesses as a whole as the CODM considers such businesses are mutually dependent and inseparable. As such, no segment information is presented.

No geographical information is presented as the Group generates all revenue by entities operating in Hong Kong and non-current assets are located in Hong Kong as of the reporting date.

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Notes to the Consolidated Financial Statements

5 Segment information (Continued)Information about major customersAn analysis of revenue from customers contributing 10% or more of the Group’s total revenue is as follows:

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Customer A 6,895,503

Customer B 2,976,645

Customer C 2,959,492

6 RevenueThe Group is engaged in the provision of eCommerce technologies, integrated offline and online supply chain operations, and digital commerce solutions and services. Service income recognised during the period was as follows:

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Revenue

- Service income 22,571,718

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Notes to the Consolidated Financial Statements

7 Expenses by nature

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Cost of sales by nature:

- Outsourced services fulfilment expenses 10,606,450

- Outsourced web development and IT consultation costs 3,128,559

13,735,009

Auditor’s remuneration 721,500

Employee benefit expenses (Note 23) 11,720,032

Outsourced labour costs 7,918,900

Amortisation of intangible assets (Note 14) 6,125,000

Depreciation of property, plant and equipment (Note 13) 238,480

Legal and professional expenses 10,946,043

Travel expenses 1,354,720

Other expenses 583,830

8 Other losses – net

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Net foreign exchange loss (6,428,291)

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Notes to the Consolidated Financial Statements

9 Income tax expenseNo Hong Kong and overseas profits tax have been provided as the Group has no estimate assessable profit for the period. The taxation on the Group’s loss before income tax differs from the theoretical amount that would arise using the taxation rate of Hong Kong as follows:

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Loss before income tax (36,761,362)

Tax calculated at a tax rate of 16.5% (6,065,625)

Income not subject to tax (72,390)

Expenses not deductible for tax purposes 2,071,293

Tax losses for which no deferred income tax asset was recognised 4,066,722

Income tax expense -

The Group has unused tax losses available for offset against future profits. Deferred income tax assets are recognised for tax loss carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred income tax assets in respect of losses amounting to HK$24,646,800 arising in Hong Kong. These tax losses can be carried forward indefinitely.

10 Directors’ emoluments (equivalent to key management compensation)The aggregate amounts of emoluments payable to the directors of the Company during the period ended 31 December 2014 were as follows:

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Fees 1,088,100

Salaries, allowances and benefits-in-kind-check 1,072,000

Contributions to pension plan 9,000

Total directors’ emoluments 2,169,100

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Notes to the Consolidated Financial Statements

10 Directors’ emoluments (equivalent to key management compensation) (Continued)The remuneration of each director is set out below:

For the period ended 31 December 2014:

NameFees HK$

Salaries, allowances

and benefit-in-kinds

HK$

Employer’s contribution

to pension plan HK$

Total emoluments

HK$’

Mr. John Lau (Appointed on 9 June 2014) 216,000 - - 216,000

Mr. Christopher Lau (Appointed on 22 April 2014) 216,000 1,072,000 9,000 1,297,000

Mr. Rupert Myer (Appointed on 7 August 2014) # 204,460 - - 204,460

Mr. Christopher Ryan (Appointed on 9 June 2014) # 211,180 - - 211,180

Mr. Heath Zarin (Appointed on 9 June 2014) # 240,460 - - 240,460

1,088,100 1,072,000 9,000 2,169,100

#: Independent non-executive directors

No directors waived their emoluments in respect of the period ended 31 December 2014.

11 Loss per share(a) Basic

Basic loss per share for the period ended 31 December 2014 is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Loss attributable to owners of the Company 36,761,362

Weighted average number of ordinary shares in issue 400,646,102

Basic loss per share (HK$ cents per share) 9.18

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Notes to the Consolidated Financial Statements

11 Loss per share (Continued)(b) Diluted

Diluted loss per share for the period ended 31 December 2014 is the same as the basic loss per share as there were no potential dilutive ordinary shares outstanding during the period.

12 DividendNo dividend has been declared by the Company for the period ended 31 December 2014.

13 Property, plant and equipment

Furniture and fixtures

HK$

Computer equipment

HK$

Office equipment

HK$

Leasehold improvements

HK$Total HK$

As at 22 April 2014 (date of incorporation)

Cost - - - - -

Accumulated depreciation and impairment - - - - -

Net book amount - - - - -

Period ended 31 December 2014 Additions 198,862 716,161 295,219 149,517 1,359,759

Depreciation charge (Note 7) (23,201) (99,680) (28,381) (87,218) (238,480)

Closing net book amount 175,661 616,481 266,838 62,299 1,121,279

As at 31 December 2014

Cost 198,862 716,161 295,219 149,517 1,359,759

Accumulated depreciation and impairment (23,201) (99,680) (28,381) (87,218) (238,480)

Net book amount 175,661 616,481 266,838 62,299 1,121,279

In the consolidated statement of cash flows, cash consideration paid for the additions of property, plant and equipment comprise:

Total HK$

Total additions of property, plant and equipment 1,359,759

Share considerations for acquisition of property, plant and equipment (1,091,250)

Net cash proceeds paid 268,509

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Notes to the Consolidated Financial Statements

13 Property, plant and equipment (Continued)On 28 May 2014, the Company issued 4,365,000 shares at the issue price of HK$0.25 per share as consideration to acquire property, plant and equipment from CS Logistics. The property, plant and equipment received in exchange for shares was measured at fair value of those goods or services in accordance with HKFRS 2 – Share based payments. Management assessed the fair value of the acquired property, plant and equipment with reference to the market value of the property, plant and equipment; the fair value of the property, plant and equipment approximate the value of the share considerations. On 25 August 2014, CS Logistics transferred the shares to CS China Logistics as a result of a CS Logistics and CS China Logistics restructure.

Depreciation expense of HK$238,480 has been charged to administrative expenses.

14 Intangible assets

Total HK$

As at 22 April 2014 (date of incorporation)

Cost -

Accumulated amortisation -

Net book value -

Period ended 31 December 2014

Additions 105,000,000

Amortisation charge (Note 7) (6,125,000)

Closing net book value 98,875,000

As at 31 December 2014

Cost 105,000,000

Accumulated amortisation (6,125,000)

Net book value 98,875,000

No cash considerations were paid for intangible asset additions. On 28 May 2014, the Company issued 400,000,000 shares and 20,000,000 shares at the issue price of HK$0.25 per share as consideration to acquire software assets from JL Enterprises and CS Logistics respectively. The software assets were acquired as the basis for the development of the eCoreOS eCommerce technology platform. The intangible assets received in exchange for shares are measured at fair value of those goods or services in accordance with HKFRS 2 – Share based payments. Management engaged an independent third-party valuer, Roma Appraisal Limited, to determine the fair value of the acquired software assets using the discounted cash flow method. The fair values of the software assets approximate the value of the share considerations. On 25 August 2014, CS Logistics transferred the shares to CS ChinaLogistics as a result of a CS Logistics and CS China Logistics restructure.

Amortisation expense of HK$6,125,000 has been charged to administrative expenses.

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Notes to the Consolidated Financial Statements

15 Subsidiaries Particulars of the subsidiaries as at 31 December 2014 are as follows:

Name

Place of incorporation/Operation Principal activities

Equity interest held by the

Company directly

eCargo Enterprise Limited Hong Kong Provision of eCommerce technologies services

100%

eCargo Australia Pty Limited Australia Dormant 100%

eCargo Limited United Kingdom Dormant 100%

16 Financial instruments by category

Loans and receivables

HK$

As at 31 December 2014

Assets as per balance sheet

Trade and other receivables excluding prepayments 18,048,665

Cash and cash equivalents 191,070,888

Total 209,119,553

Other financial liabilities at

amortised cost HK$

Liabilities as per balance sheet

Amounts due to related parties 10,792,331

Trade and other payables excluding non-financial liabilities 3,421,528

Total 14,213,859

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Notes to the Consolidated Financial Statements

17 Trade receivables

As at 31 December 2014

HK$

Trade receivables 15,098,667

The directors of the Company consider that the carrying amounts of trade receivables approximate their fair values.

Credit terms granted to customers are normally 30 days. The aging analysis of the trade receivables based on invoice date is as follows:

As at 31 December 2014

HK$

1–30 days 4,235,881

31–60 days 3,487,513

61–90 days 3,752,208

Over 90 days 3,623,065

Trade receivables - net 15,098,667

As at 31 December 2014, trade receivables of HK$10,862,786 were past due but not impaired. These related to certain customers with no recent history of default, and as such, the Group believes that no impairment provision is necessary. The past due aging analysis of these receivables is as follows:

As at 31 December 2014

HK$

1–30 days 3,487,513

31–60 days 3,752,208

61–90 days 3,046,409

Over 90 days 576,656

10,862,786

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Notes to the Consolidated Financial Statements

17 Trade receivables (Continued)The carrying amounts of the Group’s trade receivables are denominated in the following currencies:

As at 31 December 2014

HK$

HK$ 4,275,072

RMB 8,835,542

A$ 1,253,597

US$ 397,365

GBP 337,091

15,098,667

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables mentioned above.

18 Prepayments, deposits and other receivables

As at 31 December 2014

HK$

Prepayments 768,515

Rental and utility deposits 181,849

Other receivables 2,768,149

Prepayments, deposits and other receivables 3,718,513

Other receivables were neither past due nor impaired and they were interest-free and repayable on demand as at 31 December 2014. The directors of the Company consider that the carrying amounts of deposits and other receivables approximate their fair values.

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Notes to the Consolidated Financial Statements

18 Prepayments, deposits and other receivables (Continued)The carrying amounts of the Group’s deposits and other receivables are denominated in the following currencies:

As at 31 December 2014

HK$

HK$ 920,927

RMB 355,071

GBP 1,674,000

2,949,998

19 Cash and cash equivalents Cash and cash equivalents are denominated in the following currencies:

Group As at

31 December 2014 HK$

Cash on hand

HK$ 1,820

Cash at banks

HK$ 96,578,559

RMB 4,575

A$ 92,731,223

US$ 1,754,430

GBP 281

191,069,068

Total cash and cash equivalents 191,070,888

As at 31 December 2014, the amount of cash at banks represented the Group’s maximum exposure to credit risk.F

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Notes to the Consolidated Financial Statements

20 Trade payables, other payables and accruals

As at 31 December 2014

HK$

Trade payables 935,707

Accrued expenses 2,485,315

Other payables 3,031,071

5,516,386

Total trade payables, other payables and accruals 6,452,093

The carrying amounts of trade and other payables approximate their fair values and are denominated in HK$.

21 Share capital

Number of shares

Share capital HK$

As at 22 April 2014 (date of incorporation)

- Proceeds from shares issued as at 22 April 2014 (date of incorporation) (Note a) 10,000 100

- Proceeds from shares issued as at 22 May 2014 (Note b) 15,625,000 2,500,000

- Acquisition of intangible assets and property, plant and equipment as at 28 May 2014 (Note c) 424,365,000 106,091,250

- Proceeds from shares issued as at 25 July 2014 (Note d) 20,000,000 36,094,000

- Proceeds from shares issued in connection with the Company’s listing (Note e) 75,000,000 200,130,000

- Share issuance costs (Note e) - (15,414,065)

As at 31 December 2014 535,000,000 329,401,285

Notes:

(a) The Company was incorporated in Hong Kong on 22 April 2014. On the same day, the Company issued 10,000 shares at the issue price of HK$0.01 per share to Mr. Christopher Lau, Founder Chief Executive Officer and Executive Director of the Company.

(b) On 22 May 2014, the Company issued 15,625,000 shares at the issue price of HK$0.16 per share to Mr. Christopher Lau, Chief Executive Officer and Executive Director of the Company. The proceeds were used for the formation of the Company.

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Notes to the Consolidated Financial Statements

21 Share capital (Continued)(c) On 28 May 2014, the Company issued 424,365,000 shares at the issue price of HK$0.25 per share as consideration to acquire

intangible assets and property, plant and equipment from JL Enterprises and CS Logistics. For details, please refer to Note 13 and Note 14.

(d) On 25 July 2014, the Company issued and received proceeds from issuance of 20,000,000 shares at the issue price of HK$1.80 per share to pre-initial public offering investors.

(e) On 28 November 2014, the Company issued 75,000,000 shares at the offer price of HK$2.70 per share in connection with the Company’s listing on the ASX. The share issuance costs relating to the new shares amounted to HK$24,303,572 of which HK$8,889,507 is recognised in the statement of comprehensive income and HK$15,414,065 is credited to the share capital account of the Company.

22 Notes to the consolidated statement of cash flowsCash used in operations for the period comprises:

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Loss before income tax (36,761,362)

Adjustments for:

- Depreciation of property, plant and equipment (Note 13) 238,480

- Amortisation of intangible assets (Note 14) 6,125,000

- Net foreign exchange loss on operating activities 4,353,791

- Finance income from bank deposits (438,725)

(26,482,816)

Changes in working capital:

- Trade receivables (15,098,667)

- Prepayments, deposits and other receivables (3,718,513)

- Trade payables 935,707

- Other payables and accruals 5,516,386

- Amounts due to related parties 10,792,331

Cash used in operations (28,055,572)

The cash used in operations includes the professional expenses incurred in connection with the Company’s listing on the Australian Securities Exchange amounting to HK$8,070,507.

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Notes to the Consolidated Financial Statements

23 Employee benefit expenses (including directors’ emoluments)

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Wages and salaries 11,473,398

Pension costs 212,459

Other staff welfare 34,175

Total employee benefit expenses 11,720,032

24 Operating lease commitments - as lesseeAs at 31 December 2014, the Group had future aggregate minimum lease payments in respect of office premises under non-cancellable operating leases as follows:

As at 31 December 2014

HK$

No later than one year 524,426

Later than one year and no later than five years 869,323

1,393,749

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Notes to the Consolidated Financial Statements

25 Related party transactions The directors of the Company are of the view that the following parties were considered related parties that had transactions or balances with the Group:

Name of related party Relationship with the Group

Mr. John Lau Executive director of the Company/Executive Chairman of the Group

Mr. Christopher Lau Executive director of the Company/Chief Executive Officer of the Group

Mr. Rupert Myer Independent non-executive director of the Company

Mr. Christopher Ryan Independent non-executive director of the Company

Mr. Heath Zarin Independent non-executive director of the Company

JL Enterprises Holdings Limited Shareholder of the Company, controlled by Mr. John Lau

CS China Logistics Limited Shareholder of the Company, controlled by Mr. John Lau

CS Logistics Holdings Limited Controlled by Mr. John Lau

Cargo Services Far East Limited Controlled by Mr. John Lau

Allport Cargo Services Limited Controlled by Mr. John Lau

CN Logistics Limited Controlled by Mr. John Lau

Cargo Services (China) Limited Controlled by Mr. John Lau

CN Logistics (Guangzhou) Limited Controlled by Mr. John Lau

Independent Cargo Consolidators Limited Controlled by Mr. John Lau

Shanghai Tianhong Container Storage and Transportation Limited

Controlled by Mr. John Lau

Cargo Tiancheng Technology Limited Controlled by Mr. John Lau

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Notes to the Consolidated Financial Statements

25 Related party transactions (Continued)The following transactions were carried out with related parties:

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

(a) Sales of services – note (i)

Sales of software development services:

- Cargo Services Far East Limited 2,645,440

Sales of import, storage, and courier fulfillment services:

- Cargo Services Far East Limited 44,729

Total 2,690,169

(b) Purchases of services – note (i)

Purchase of outsourced labour services:

- CS China Logistics Limited 7,918,000

Purchases of outsourced import, storage, and courier fulfillment services:

- Allport Cargo Services Limited 731,502

- Cargo Services Far East Limited 333,142

- Cargo Services (China) Limited 24,272

- CN Logistics (Guangzhou) Limited 7,665

- CN Logistics Limited 144,990

- CS China Logistics Limited 7,132,301

- Independent Cargo Consolidators Limited 72,805

- Shanghai Tianhong Container Storage and Transportation Limited 231,267

Purchase of management and administrative services:

- Cargo Services Far East Limited 471,200

Total 17,067,144For

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Notes to the Consolidated Financial Statements

25 Related party transactions (Continued)

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

(c) Amounts due to related parties – note (ii)

- Allport Cargo Services Limited 717,785

- Cargo Services Far East Limited 1,030,953

- Cargo Services (China) Limited 24,352

- Cargo Tiancheng Technology Limited 134,858

- CN Logistics Limited 35,645

- CN Logistics (Guangzhou) Limited 7,708

- CS China Logistics Limited 8,597,009

- Independent Cargo Consolidators Limited 9,787

- Shanghai Tianhong Container Storage and Transportation Limited 234,234

Total 10,792,331

(d) Payment on behalf of the Group by related parties

- Cargo Services Far East Limited 3,221,957

- Cargo Tiancheng Technology Limited 173,013

3,394,970

(e) Key management compensation – note (iii)Details of the key management compensation are disclosed in Note 10 to this report.

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Notes to the Consolidated Financial Statements

25 Related party transactions (Continued)(f) Amounts due to key management – note (iv)

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

Mr. John Lau 42,968

Mr. Christopher Lau 216,000

Mr. Rupert Myer 37,551

Mr. Christopher Ryan 211,180

Mr. Heath Zarin 37,551

545,250

Period from 22 April 2014

(date of incorporation) to 31 December 2014

HK$

(g) Purchases of intangible assets and property, plant and equipment

Purchases of intangible assets:

- JL Enterprises Holdings Limited (Note 14) 100,000,000

- CS Logistics Holdings Limited (Note 14) 5,000,000

Purchase of property, plant and equipment:

- CS Logistics Holdings Limited (Note 13) 1,091,250

Total 106,091,250

Notes:

(i) These transactions are carried out on terms agreed with the related parties in the ordinary course of business and on commercial terms that would be available to third parties.

(ii) Amounts due to related parties arise mainly from purchase transactions and are due one month after the date of purchase. The payable balances bear no interest.

(iii) Key management personnel are deemed to be the members of the Board of Directors of the Company which have responsibility for planning, directing, and controlling the activities of the Company.

(iv) The payable balances with directors are unsecured, interest free and are repayable on demand. The fair values of these balances approximate their carrying values.

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Notes to the Consolidated Financial Statements

25 Related party transactions (Continued)Directors’ material interests in contractsPursuant to an asset purchase agreement dated 28 May 2014 made between the Company and JL Enterprises and an assignment of rights in software agreement dated 10 September 2014 made between the Company and JL Enterprises, JL Enterprises was issued shares in the Company in consideration of the assignment of all the intellectual property rights in certain software, namely the OCMS and OMS.

Pursuant to an asset purchase agreement dated 28 May 2014 made between the Company and CS Logistics, CS Logistics was issued shares in the Company in consideration of the assignment of all the intellectual property rights in the WMS. On 10 September 2014, an assignment of rights in software agreement was made between the Company, CS Logistics and CS China Logistics where CS China Logistics agreed to assign all the intellectual property rights in the WMS to the Company with an effective date of 28 May 2014.

Pursuant to a transitional services agreement dated 4 September 2014 made between the Company and CS China Logistics, the Company agreed to pay CS China Logistics services fees for the provision of the logistics services in China.

Pursuant to a novation and supplemental agreement dated 4 September 2014 made between the Company and CS Logistics and CS China Logistics, the Company agreed to issue shares to CS China Logistics for the transfer of office furniture and equipment.

Pursuant to a deed of non-competition agreement dated 4 September 2014 made between the Company and Mr. John Lau, Mr. John Lau agreed to certain terms of confidentially, non-competition and non-solicitation with regards to all the above transactions.

Pursuant to a personal guarantee signed dated 4 September 2014 made between the Company and Mr. John Lau, Mr. John Lau agreed to provide a personal guarantee in favour of the Company in connection with the performance of the obligation owed by CS Logistics, CS China Logistics and JL Enterprises under the assignment of rights in software agreements, novation and supplemental agreement and transitional services agreement.

Mr. John Lau, an executive director of the Company, has material interested in the above transactions to the extent that JL Enterprises, CS Logistics and CS China Logistics are effectively controlled by him.

Except for contracts amongst group companies and the aforementioned transactions, no other contracts of significance to which the Company, any of its subsidiaries, fellow subsidiaries or its parent company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the period or at any time during the period.F

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Notes to the Consolidated Financial Statements

26 Events after the balance sheet date(a) Business combinations

The Group acquired 100% of the share capital of Amblique for a cash consideration of A$6.0 million (equivalent to HK$36.3 million) on 12 February 2015.

On 28 February 2015, the Group acquired 20% interest in Purecomm Limited, an eCommerce technology consultant and software developer of an O2O omni-channel retail execution platform. The consideration of GBP0.52 million (equivalent to HK$6.2 million) was settled in cash.

As of the date of this report, management is in the process of reviewing financial information of the acquisition and performing assessments of purchase price allocation of identifiable assets and liabilities acquired as of the effective acquisition date.

27 Balance sheet and reserve movement of the Company

As at 31 December 2014

HK$

Assets

Non-current assets

Property, plant and equipment 855,218

Intangible assets 98,875,000

Investment in subsidiaries 1,743

99,731,961

Current assets

Amount due from a subsidiary 25,317,204

Cash and cash equivalents 183,428,352

208,745,556

Total assets 308,477,517

Equity

Equity attributable to owner of the Company

Share capital 329,401,285

Accumulated losses (20,923,768)

Total equity 308,477,517For

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Notes to the Consolidated Financial Statements

27 Balance sheet and reserve movement of the Company (Continued)Note (a) Reserve movement of the Company

Accumulated losses HK$

As at 22 April 2014 (date of incorporation) -

Loss for the period (20,923,768)

As at 31 December 2014 (20,923,768)

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Issued capitalAs at 10 April 2015, the Company has 535,000,000 ordinary fully paid shares on issue, of which 535,000,000 are held by Chess Depositary Nominees Pty Ltd (“CDN”). CDN has issued 535,000,000 CHESS Depositary Interests (“CDIs”) in relation to these shares. CDN holds the legal title to shares on behalf of holders of CHESS Depositary Receipts. Pursuant to the ASX Settlement Operating Rules, CDI holders receive all of the economic benefits of actual ownership of the underlying shares.

CDIs are traded in a manner similar to shares of Australian companies listed on ASX. CDIs will be held in uncertificated form and settled/transferred through CHESS. No share certificates will be issued to CDI holders. Shareholders cannot trade their Shares on ASX without first converting their Shares into CDIs.

A summary of all shares/CDI showing restrictions is set out below:

Description No of Shares/CDIs

Restricted from trading until 27 November 2016* 440,075,000

Restricted from trading until 27 November 2015~ 7,425,000

unrestricted 87,500,000

* 857,812 of these shares/CDIs have a voluntary restriction until 27 November 2016.~ ASX restriction ends on 25 July 2014, however these holders have agreed to voluntary restriction until 27 November 2015.

There is currently no on-market buyback in place.

Substantial shareholdersThe substantial holders of Share/CDI are the following Share/CDI holders listed below who have notified the Company that they are a substantial holder under the Corporations Act 2001 in Australia. In general, under the Corporations Act (Australia), a person who holds a relevant interest in Shares/CDIs of more than 5% of the Company’s issued share capital is a substantial holder.

Holder No of Shares/CDIs % of issued capital

JL Enterprises Holdings Limited, CS China Logistics Limited and Mr. John Lau 396,872,460 74.18%

ASX Additional Information

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Top 20 Share/CDI Holders as at 13 April 2015

Rank Name Total Units % Issued Capital

1 JL ENTERPRISES HOLDINGS LIMITED 372,937,640 69.71%

2 CS CHINA LOGISTICS LIMITED 23,934,820 4.47%

3 INVESTORLINK CAPITAL PTY LIMITED 19,600,830 3.66%

4 TYCOON SMART LIMITED 17,500,000 3.27%

5 TIGER WEALTH GLOBAL LIMITED 12,500,000 2.34%

6 MR. CHRISTOPHER LAU 8,142,460 1.52%

7 YULGILBAR CUSTODIANS PTY LIMITED 8,000,000 1.50%

8 CASTLE GIANT HOLDINGS LIMITED 7,500,000 1.40%

9 ARANDAY PTY LIMITED 7,000,000 1.31%

10 WASHINGTON H SOUL PATTINSON & COMPANY LIMITED

6,625,000 1.24%

11 MR. YONGJUN SHEN 3,650,000 0.68%

12 GARDIOLE PTY LIMITED 2,000,000 0.37%

12 MUTUAL TRUST PTY LIMITED 2,000,000 0.37%

14 UBS NOMINEES PTY LIMITED 1,529,710 0.29%

15 SHIYIBA PTY LIMITED 1,350,000 0.25%

16 FANDEXA NOMINEES PTY LIMITED 1,310,293 0.24%

16 MR. JUSTUS JOHANNES AURELIUS WILDE 1,310,293 0.24%

18 BROOKES FAMILY INVESTMENTS PTY LIMITED 1,200,000 0.22%

19 INVESTORLINK SECURITIES LIMITED 1,180,000 0.22%

20 JLJ ENTERPRISES LIMITED 1,076,500 0.20%

Top 20 Shareholders 500,347,546 93.52%

Remaining Shareholders 34,652,454 6.48%

Total Shareholders 535,000,000 100%

Distribution of Share/CDI holdersThere were 527 Share/CDI holders at 13 April 2015. Each Share/CDI holder is entitled to one vote for each security held.

Range Total Holders Units % of issued capital

1–1,000 7 8 0.00

1,001–5,000 60 264,892 0.05

5,001–10,000 61 551,535 0.10

10,001–100,000 304 13,086,372 2.45

Over 100,000 95 521,097,193 97.40

Totals 527 535,000,000 100.00

There are 11 Share/CDI holders who hold less than a marketable parcel as at 13 April 2015.

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Voting rightsThe voting rights are that each CDI holder is entitled to 1 vote per CDI at a meeting of members, provided that a CDI Holder undertakes the following steps.1. Instructing CDN as the legal owner to vote the

shares underlying in a particular manner. A voting instruction form will be sent to CDI holders with the notice of meeting and this must be completed and returned to the share registry prior to the meeting.

2. Informing the Company that they wish to nominate themselves or another person to be appointed as CDN’s proxy with respect to their shares underlying the CDIs for the purposes of attending and voting at the general meeting or;

3. Converting their CDIs into a holding of these shares and voting these shares at the meeting.

Use of cash consistent with business objectiveseCargo confirms that, between the time of admission to ASX and 31 December 2014, it has used cash and other assets readily convertible to cash that it held at time of admission, in a way consistent with its business objectives.

eCargo’s place of incorporationAs eCargo is incorporated in Hong Kong and not established in Australia, its corporate activities (apart from the offering of securities in Australia) are not regulated by the Corporations Act of the Commonwealth of Australia or by the Australian Securities and Investments Commission but instead are regulated by the Hong Kong Companies Ordinance and the Hong Kong Securities and Futures Commission. eCargo is not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act 2001 in Australia.

The following information is provided on an annual basis to comply with the conditions on listing on ASX.

TakeoversThe Hong Kong Code on Takeovers and Mergers (the “Takeovers Code”) regulates takeovers and mergers in Hong Kong and applies to public companies in Hong Kong. The Takeovers Code provides that when a person, or two or more persons acting in concert collectively:• acquire 30% or more of the voting rights of a

company; or• hold not less than 30% but not more than 50%

of the voting rights of the company and acquires more than 2% of the voting rights of a company from the lowest percentage holding of that person or persons collectively within a 12 month period,

then a general offer must be made to all other shareholders of the company.

Compulsory acquisitionPart 13 of the Hong Kong Companies Ordinance sets out the right to buy out minority shareholders. If within four months of making an offer to buy shares, a company has acquired 90% in value of the shares, the acquiring company may give notice to the remaining shareholders that it desires to acquire their shares. Provided that notice is given within five months of the original offer, the acquiring company is entitled and bound to acquire those shares on the same terms as the offer.

Substantial Share/CDI holder noticesPart XV of the Hong Kong Securities and Futures Ordinance requires the disclosure by substantial shareholders, directors, shadow directors and chief executives of a listed corporation (collectively “Corporate Insiders”) of their interests in the securities of a listed corporation when their interests reach the notifiable percentage level. The notifiable percentage level is an interest in shares of an aggregate nominal value of 5% or more of the relevant shares in the listed corporation.

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DirectoryCorporate

eCargo Holdings LimitedARBN: 601 083 069

Hong Kong Company registration number: 2088880

Registered Office - Australia Registered Office - Hong Kongc/o Investorlink Corporate Limited c/o eCargo Enterprise LimitedLevel 26, 56 Pitt Street 13103N ATL Logistics Centre BSydney, New South Wales 2000, Australia 3 Kwai Chung Container TerminalsPhone: +61 2 9276 2000 New Territories, Hong KongFax: +61 2 9247 9977 Phone: +852 2481 8308 Fax: +852 2481 8144

Share/CDI Registry Company SecretaryLink Market Services Limited Ms. Irene YipLevel 12, 680 George Street, Mr. Nathan BartropSydney, New South Wales 2000, AustraliaPhone: 1300 554 474 (Australia) +61 1300 554 474 (outside Australia)

Auditor Principal BankersPricewaterhouseCoopers Hang Seng Bank Limited Bank of East Asia Limited

LegalHWL Ebsworth

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This annual report is printed on environmental paper.

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eOperationOnline shop development, setup, promotion, day-to-day management

and customer services

eCommerceITBespoke front-end and middleware technology solutions, project

management and implementation

eFulfillmentBack-end logistics operations and customer order fulfillment

execution

eStudioDigital asset production and product detail photography

eMarketingBrand strategy, digital marketing and social media promotion

management and execution

eCommerceIT

eFulfillmenteStudio

eMarketingeOperation

We are an eCommerce enabler and business partner for designer fashion, branded apparel and retail companies, providing holistic eCommerce solutions and capabilities to

connect them online with the consumers in China, Australia and around the world.

Annual Report 2014

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