Disclosure Records of Recognized Certification Authorities

Archive of Disclosure Record for Joint Electronic Teller Services Limited

Assessment Report (29 April 2002 - 17 April 2003)

JETCO became a recognized certification authority ("CA") under the Ordinance on 29 April 2002. In accordance with section 43(1) of the Ordinance, JETCO must furnish to the Director an assessment report in respect of its CA services at least once in every 12 months.

In accordance with section 43(3) of the Ordinance, the Director must publish in the disclosure record for JETCO the date of and the material information in the assessment report on the CA services of JETCO. Only those parts of the report containing material information are herewith published. JETCO as a CA is hereinafter referred to as "JETCOCA".

A. Date of the Report

• The date of the report is 17 April 2003.

B. Material Information

1. The assessment report is prepared by the assessor for the period between 29 April 2002 and 17 April 2003.

Recognized CA practices

2. The assessor has concluded that in all material respects :
   1. the management assertions in respect of JETCOCA's compliance with the sections of Code of Practice (Footnote 1) set out in Part A of Appendix 3 to Practice Note 870 (Footnote 2) for the period from 29 April 2002 to 17 April 2003 are reasonable. In particular, JETCOCA has:
      1. disclosed its business practices in its CPS (Footnote 3) in accordance with the Ordinance and the Code of Practice and provided its services in accordance with its disclosed business practices;
      2. complied with the requirements in respect of the use of a trustworthy system to support its operations in accordance with section 37 of the Ordinance and the Code of Practice; and
      3. complied with the requirements in respect of recognition of its certificates in accordance with sections 36, 38, 39 and 40 of the Ordinance and the Code of Practice;
   2. no information came to the attention of the assessor during the course of the assessment that would indicate that the management assertions in respect of JETCOCA's compliance with the sections of the Code of Practice set out in Part B of Appendix 3 to Practice Note 870 for the period from 29 April 2002 to 17 April 2003 are not reasonable; and
   3. based on the conclusions drawn in (a) and (b) above, the management assertions in respect of JETCOCA's compliance with the provisions of the Ordinance applicable to a recognized CA for the period from 29 April 2002 to 17 April 2003 are reasonable.

Financial projections

3. In the assessor's opinion, in all material respects, the accounting policies upon which JETCOCA's projected cashflow statement and projected balance sheet for the period from 1 March 2003 to 29 February 2004, and projection of operating costs for the next 90 days from 1 March 2003, in respect of the CA's operations relevant under the Ordinance are based, are consistent with those normally adopted by JETCOCA and conform with generally accepted accounting principles adopted in Hong Kong, and the financial projections have been properly compiled on the basis of the assumptions made by management of JETCOCA.
4. It is revealed that JETCOCA does not have sufficient net current assets to cover the 90-day projection of operating costs. However, the assessor has found that JETCO (Footnote 4) which is the sole owner of the CA's operations has resolved in a Board of Directors meeting that the CA service was not intended to target on revenue generation and JETCO committed to undertake the operating cost for providing the CA service.
5. The assessor has not carried out any verification work on the unaudited management accounts of JETCOCA.

Potential liabilities

6. In the assessor's opinion, in all material respects, the management assertions that JETCOCA has implemented and maintained appropriate procedures to determine and manage its potential liabilities in relation to the issue of certificates are reasonable.

Footnotes

1. Code of Practice for Recognized Certification Authorities issued by the Director under section 33 of the Ordinance.
2. Practice Note 870 "The Assessment of Certification Authorities under the Electronic Transactions Ordinance" issued by the Hong Kong Society of Accountants.
3. Certification practice statement.
4. The term "JETCO" is used by the assessor in explaining the financial situation as in paragraph 4 above. In fact, both "JETCOCA" and "JETCO" refer to the same company limited by shares incorporated under the Companies Ordinance (Cap. 32) (ie. Joint Electronic Teller Services Limited).