19th Mar 2010 12:26
19th March, 2010
Asian Growth Properties Limited
Immediate Release
Results for the year ended 31st December, 2009
Asian Growth Properties Limited (the "Company") (AIM Stock Code: AGP), the Hong Kong based China property development and investment company, announces its audited consolidated results for the year ended 31st December, 2009 as follows:
Financial Highlights
n Profit attributable to the Company's shareholders of HK$1,206.2 million (£96.5 million) (2008: loss of HK$89.3 million (£7.9 million))
n Earnings per share for profit attributable to the Company's shareholders of HK$1.36 (10.88 pence) (2008: loss per share for loss attributable to the Company's shareholders of HK$0.10 (0.89 pence))
n Net asset value per share attributable to the Company's shareholders as at 31st December, 2009 of HK$8.96 (71.7 pence) (31st December, 2008: HK$7.6 (67.6 pence))
n Gearing ratio calculated on the basis of net interest bearing debts minus cash and restricted and pledged deposits as a percentage of total property assets was 10.3% (31st December, 2008: 12.1%)
Operational Highlights
n Rental income for investment properties in both Hong Kong and mainland China increased.
n Crowne Plaza Hong Kong Causeway Bay commenced hotel operations in November 2009.
n Shop at Excelsior Plaza and office floor at 9 Queen's Road Central were sold.
Notes: 1. Figures in Pounds Sterling are translated from Hong Kong dollars based upon the exchange rates prevailing on the latest practicable business day of the respective accounting periods. The relevant exchange rates adopted are stated as follows:-
For 31st December, 2009: £1 = HK$12.5018; and
For 31st December, 2008: £1 = HK$11.2467
2. For shareholders' information, the exchange rate on 17th March, 2010 was £1 = HK$11.9185.
Miscellaneous
The results included in this announcement are extracted from the audited consolidated financial statements of the Company for the year ended 31st December, 2009, which have been approved by the Board of Directors on 18th March, 2010.
The 2009 Annual Report is expected to be posted to shareholders and holders of depositary interests in early / mid April 2010.
For further information, please contact:
|
Lu Wing Chi |
Tel: +852 2828 6363 |
|
Executive Director |
|
|
Asian Growth Properties Limited |
|
|
Richard Gray |
Tel: +44 207 459 3600 |
|
Andrew Potts |
|
|
Panmure Gordon (UK) Limited |
|
|
(Nominated Advisor) |
|
Attached:-
1. Chairman's Review;
2. Executive Directors' Review;
3. Consolidated Income Statement;
4. Consolidated Statement of Comprehensive Income;
5. Consolidated Statement of Financial Position;
6. Consolidated Statement of Changes in Equity;
7. Consolidated Statement of Cash Flows; and
8. Notes to the Consolidated Financial Statements.
CHAIRMAN'S REVIEW
I have pleasure in presenting below the 2009 consolidated results of Asian Growth Properties Limited ("AGP" or the "Company") to the shareholders.
Results
AGP reported a net profit attributable to the Company's shareholders of HK$1,206.2 million (£96.5 million) for the year ended 31 December 2009 (2008: loss of HK$89.3 million (£7.9 million)). The reported profit included a revaluation surplus on investment properties net of deferred taxation of HK$1,125.2 million (£90.0 million). By excluding such net revaluation surplus, the Group's net profit attributable to the Company's shareholders was HK$81.0 million (£6.5 million) (2008: HK$214.5 million (£19.1 million).
As at 31 December 2009, the Group's equity attributable to the Company's shareholders amounted to HK$7,944.8 million (£635.5 million), representing an increase of HK$1,209.2 million (£96.7 million) over 31 December 2008. The net asset value per share attributable to the Company's shareholders as at 31 December 2009 was HK$8.96 (71.7 pence) as compared with HK$7.60 (67.6 pence) as at 31 December 2008.
Figures in Pounds Sterling are converted from Hong Kong dollars based upon exchange rates prevailing on the latest practicable business day of the respective accounting years. The relevant exchange rate for 31 December 2009 was £1=HK$12.5018 (31 December 2008: £1=HK$11.2467).
Operations
During 2009, the Group continued to develop and manage property projects in Hong Kong and mainland China. Occupancy rates in these regions increased during the year with occupancy across all the Groups' office and commercial properties at high levels. Dah Sing Financial Centre in Hong Kong performed well with a pleasing increase in rental income. New Century Plaza in mainland China acquired in July 2008 also made a full year rental contribution with 100% occupancy.
Units in residential developments continue to be marketed with steady sales results. The Group also took the opportunity in a strong market to sell two investment properties namely a shop in the Excelsior Plaza and an office floor at 9 Queen's Road Central, both in Hong Kong. It is also expected that the sale of the commercial podium of The Morrison will be completed in late March 2010.
The development of the Crowne Plaza Hong Kong Causeway Bay was completed during the year. The Hotel commenced operations in November 2009 and the results at its initial stage of operations are within our expectations. We expect its future positive contribution to the Group.
Further details of the Group's operations are set out in the Executive Directors' Review which follows.
Outlook
The Group will continue in its strategy of maintaining stability and exercising caution in the current global financial climate. However, it is in a position to capitalise on good development and investment opportunities in mainland China and Hong Kong as they arise. In 2009, China and Hong Kong experienced economic growth and contributed to the global economic recovery by adopting expansionary fiscal and credit policies, which successfully stimulated the domestic market. This enabled the Group to continue to strengthen its balance sheet for further growth.
During the year, the global economy continued to stabilise although many structural and financial risks at country level remain unaddressed.
Although the Group remains cautious because of these risks, it is optimistic about the medium-to-long-term economic development prospects for mainland China and Hong Kong. The Group will adhere to its focused strategy in these two target markets so as to benefit from their higher growth potential and add value to shareholders and maximize returns.
The Group is actively involved in negotiations to acquire a number of development projects in mainland China. We believe that these could present significant opportunities over the medium to long term. These negotiations are at an advanced stage and, if successful, shareholders will be kept informed.
Dividend
The Board does not propose the payment of a final dividend for the year ended 31 December 2009.
Acknowledgement
I would like to congratulate and express the Board's gratitude to the executive team for an excellent set of financial results.
Richard Prickett
Non-Executive Chairman
England, 18 March 2010
executive directors' Review
FINANCIAL SUMMARY
Turnover for the year ended 31 December, 2009 amounted to HK$516.6 million (2008: HK$1,507.5 million). The turnover comprised principally the recognised sales of residential units of both The Forest Hills in Hong Kong and Westmin Plaza Phase II in Guangzhou, the increased rental contributions from Dah Sing Financial Centre in Hong Kong and the improved occupancy of Plaza Central in Chengdu.
Profit attributable to the Company's shareholders for the year amounted to HK$1,206.2 million (2008: loss of HK$89.3 million), equivalent to an earnings per share of HK$1.36 (2008: a loss per share of HK$0.10). The reported profit included a revaluation surplus on investment properties net of deferred taxation. By excluding such net revaluation surplus, the Group's net profit attributable to the Company's shareholders was HK$81.0 million (2008: HK$214.5 million), equivalent to an earnings per share of HK$0.09 (2008: HK$0.24).
As at 31 December, 2009, the Group's equity attributable to the Company's shareholders amounted to HK$7,944.8 million (2008: HK$6,735.6 million). The net asset value per share as at 31 December, 2009 was HK$8.96 as compared with HK$7.60 as at 31 December, 2008.
For Shareholders' information, figures in Pounds Sterling are translated from Hong Kong dollars based upon the exchange rates prevailing on the latest practicable business day of the respective accounting years. The relevant exchange rate for 31 December, 2009 was £1 = HK$12.5018 (2008: £1 = HK$11.2467).
BUSINESS REVIEW
Property Investment and Development
All of the Group's property development and investment projects are located in Hong Kong and mainland China and are as listed below:
Hong Kong
1. Dah Sing Financial Centre, Gloucester Road, Wanchai
The 39-storey commercial building includes offices and shops (total gross floor area of about 37,000 square metres) and with ancillary car-parking facilities for 137 covered and 27 open car-parking spaces. A satisfactory increase in gross rental income from the Dah Sing Financial Centre was recorded in 2009. During the year, the occupancy rate stayed at a high level and it was 98.7% at 31 December, 2009 with the average monthly rental rate increasing by about 4% owing to higher reversionary rental rate.
This Centre was presented the Best Commercial Building Award 2008 by the Hong Kong Property Management Division of Jones Lang LaSalle in recognition of its outstanding performance.
2. The Forest Hills, Diamond Hill
The property is a 48-storey residential and commercial composite building, with a total gross floor area of approximately 19,000 square metres, comprising 304 residential units above a 7-level retail podium, a clubhouse and car parks. The development was completed in April 2008 and delivery of the residential units to buyers commenced in May 2008. To date, about 84% of the residential units and 55 out of 76 residents' car-parking spaces have been sold while all the non-residents' car-parking spaces have been leased to a car-park operator at satisfactory rentals until end of February 2012.
Marketing for the remaining residential units and residents' car-parking spaces and the leasing activities for the retail podium are continuing.
This property has recently been presented the Best Residential Building Award 2009 by the Hong Kong Property Management Division of Jones Lang LaSalle in recognition of its outstanding performance.
3. The Morrison, Wanchai
The property is a 30-storey residential and commercial composite building, with a total gross floor area of approximately 5,800 square metres, comprising 104 residential units above a club-house floor and a 3-storey commercial podium. During the year, two residential units were sold and marketing for the remaining 5 units is continuing. The development was completed in October 2007 and has won the Best Interior Design Award of the CNBC Asia Pacific Property Awards 2008 organised by the International Homes Magazine and the Best Environmental Design Award 2008 organised by The Hong Kong Institute of Surveyors.
In December 2009, the Group entered into an agreement for sale and purchase with an independent party for the disposal of the entire leased commercial podium of The Morrison for HK$245 million (£19.6 million). The Group expects to realize a profit upon completion of the transaction in late March 2010.
4. Royal Green, Sheung Shui
The Group has a 55% interest in this private residential development comprising 922 residential units contained in three 40-storey residential towers with ancillary recreational and car-parking facilities. The marketing campaign for the remaining 2 duplex residential units (1 of which is furnished) in Tower 3 known as Green Palace and 5 car-parking spaces reserved for the buyers for such units is continuing.
5. Fo Tan, Sha Tin
Rezoning applications with several master layout plans and design schemes have been submitted to the Town Planning Board and relevant parties for consideration. The proposed development will comprise, among other facilities, residential units, car parks, educational facilities and a bus terminus. The Town Planning Board rejected the Group's town planning application in July 2008 due to a number of outstanding environmental, traffic and urban design issues and the hearing of the Group's appeal which commenced in mid October 2009 ended in early January 2010 and the Group is awaiting the outcome.
Mainland China
6. Plaza Central, Chengdu
Plaza Central comprises two 30-storey office blocks erected on a common podium of six commercial/retail floors and two car-parking floors with a total construction floor area of approximately 91,000 square metres. As at 31 December, 2009, the aggregate occupancy rate for the two office towers was 58% (2008:48%) and leasing activities for the remaining areas are continuing. The retail podium with a construction floor area of about 29,000 square metres has been fully let principally to Chengdu New World Department Store on a long term lease. Rental return from this property will benefit from the improved occupancy.
7. New Century Plaza, Chengdu
The property is a shopping arcade with a gross floor area of about 16,300 square metres and 50 car-parking spaces in a commercial development known as New Century Plaza in Chengdu, Sichuan Province acquired from the Group's intermediate holding company in July 2008. The arcade was fully let to a furniture retailer and the tenancy commencing from 1 September, 2009 has been renewed for a further term of five years at a lower rental in view of the current economic conditions.
8. Westmin Plaza Phase II, Guangzhou
The Westmin Plaza Phase II project, which has a total construction floor area of about 118,966 square metres, comprises four residential blocks of 646 units and one office block erected on a 5-storey commercial/car-parking podium. The development has won the Best Mixed Use Development - China Award of the CNBC Asia Pacific Commercial Property Awards 2009.
All the remaining residential units were sold in February 2009. The 14-storey office tower has a total gross floor area of about 16,112 square metres. As at 31 December, 2009, 86% of the tower was leased with more than one-third of the total office space being leased with naming rights to AIA for a term of six years from April 2008. Leasing activities for the remaining office space and the 3-storey shopping arcade with a total gross floor area of about 26,000 square metres are in progress.
9. Huangshan, Anhui Province
In December 2009, the Group entered into a contract with the joint venture partner to acquire the remaining 9% equity interest in the project company which has the right to develop tourist leisure facilities on land located in the famous scenic Huangshan area. The transaction has been completed recently and the project is now wholly owned by the Group.
The land to be developed by the Group has a site area of about 333,500 square metres comprising about 66,700 square metres owned by the project company and about 266,800 square metres leased from the local authority for development. A preliminary master layout plan and the design of the development are being considered by the management.
10. Chi Shan, Nanjing
Through the establishment/acquisition of two 51%-owned joint venture companies since late 2008, the Group started its investment projects in Chi Shan, Nanjing, Jiangsu Province. The joint venture companies are currently participating in the excavation, relocation arrangements and infrastructure works on certain pieces of lands in that locality.
11. Leiyang, Hunan Province
The 50/50 joint venture was established in March 2009 for the development project in Leiyang, Hunan Province. The superstructure work for twelve blocks of residential building with a total gross floor area of approximately 45,000 square metres and two blocks of club-house and commercial buildings has been progressing as scheduled. The pre-sale campaign for Phase I development was launched in May 2009 and so far, 275 out of 285 residential units have been sold, which are expected to be delivered to purchasers from July 2010 to October 2011 according to their respective completion stages.
Hotel Operation
Crowne Plaza Hong Kong Causeway Bay
The project has been developed into a 29-storey five-star hotel comprising 263 guest rooms (gross floor area of approximately 14,945 square metres) with ancillary facilities. A member of the InterContinental Hotels Group has been engaged to manage the operation of the Hotel under the name of "Crowne Plaza Hong Kong Causeway Bay", which commenced operations in early November 2009. So far, the room occupancy rates and room rates have been satisfactory and efforts are being made to enhance operational efficiency and further improve service. Marketing activities for up-scale business travellers for long or short stays are continuing and local promotions for the Hotel's dining facilities have been successful.
Disposal of Investment Properties
During the year, the Group disposed of two of its non-core investment properties in Hong Kong and obtained further funding for its existing and future property development projects.
In August 2009, the Group received an attractive offer from an independent party for the sale of the shop at Excelsior Plaza in Causeway Bay at a consideration of HK$100 million (£8 million) and the transaction was completed in November 2009 and generated a profit when compared with the shop's carrying value as revalued by an independent professional valuer of HK$77 million (£6.2 million) as at 30 June, 2009.
In September 2009, the Group entered into a provisional sale and purchase agreement with an independent purchaser for the disposal of its leased office property of 28/F., 9 Queen's Road Central for HK$252.5 million (£20.2 million). The transaction which was completed in December 2009 generated a profit as the property's carrying value as revalued by an independent professional valuer was HK$210 million (£16.8 million) as at 30 June 2009.
OUTLOOK
In 2010, the global economy is showing signs of recovery as the worst situation of the financial crisis has passed. However, the pace of recovery is slow and the recovery foundation remains weak. The remaining adverse impacts of the financial crisis continue to appear from time to time. In addition, the decreasing influence of expansionary fiscal and monetary policies of major economies towards economic growth and the commencement of the exercise of gradual exit measures of some major economies and holding back excess liquidity from the market resulted in the "Dubai World" event which emerged in early 2010 and affected the Middle East. The credit ratings of national debts of European countries (such as Greece) and emerging markets (such as Mexico) have been downgraded as a result of their debt burden and there was unprecedented crisis for Euro. All of which implies that a second round global recession cannot be ruled out at the moment.
In mainland China, the negative impact of weak foreign demand was offset with the implementation of a series of policy measures to boost economic growth in 2009. Amongst these were an aggressive fiscal policy, "moderately loose" monetary policy, massive investment plans, and the Ten Industry Revitalization Plan, including intensive infrastructure investment, subsidizing private cars and home appliances purchasing, all of which increased domestic demand. More than RMB￥9 trillion was eventually injected into the economic system and the annual target of "8% up in GDP" in terms of domestic economic growth was achieved.
Hong Kong greatly benefited from China as the Mainland's policies drove the economic recovery of surrounding countries and regions well. No doubt, China had many substantial economic achievements last year. However, it did encounter increasing external tariff barriers in foreign trade and increasing pressure to revalue the RMB. It also had to battle a bubble effect in the economy as inflation pressures increased dramatically due to a substantial upsurge in housing prices. Strong movements in share prices also resulted from additional strong internal liquidity.
Against all of these challenges, 2010 looks set to be a critical year for mainland China in optimizing and adjusting its economic structure. Under the macro-economic control policy to be implemented by the Central government, the economic growth momentum will basically be sustained and domestic demand will continue to be a key driver for mainland China replacing its reliance on foreign trade.
Recently, there have been signs that the Central Government is going to introduce various measures to suppress the increase in housing prices, with more focus on large-scale affordable housing projects for low-to-middle income class. In addition, support will be given to citizens who buy houses for self-residence whilst restrictive policies will be implemented to suppress speculative residential purchasing.
The real estate market will be reorganized and regulated by increasing land supply and providing more completed residential stock. The mortgage market will be more closely monitored by tightening the total amount of housing loans and the concessionary tax and credit policies in housing will gradually be withheld. These measures are all aimed at ensuring healthy economic development, reducing over-speculative activities and eliminating the danger of an economic bubble. The Group is confident about the medium-to-long-term development of the property industry of mainland China since the property sector will definitely benefit from future economic growth. In this light, the Group will continue to stick to its principles of maintaining stability and exercising caution, in seeking development and investment opportunities in the mainland property market and will continue to keep a close watch on market changes.
The Company will continue to exert its efforts to secure quality tenants for its office space in Plaza Central in Chengdu and the office and commercial space in Westmin Plaza Phase II in Guangzhou, and proceed with development of the property projects in Huangshan, Nanjing and Leiyang.
Hong Kong is expected to continue to benefit from the economic development of mainland China and achieve considerable growth on the back of the increasingly closer economic and trade relationship between Hong Kong and mainland China. The Hong Kong property market grew rapidly in 2009. Real estate values increased due to the rapid credit expansion in mainland China and an extremely low interest rate environment. Such environment will continue to carry forward to 2010 although any credit tightening measures adopted by the US and Chinese governments may affect the performance of the Hong Kong real estate market in 2010.
For 2010, the rental income from Dah Sing Financial Centre is expected to remain stable and the hotel Crowne Plaza Hong Kong Causeway Bay, which was opened in November 2009, is expected to generate additional income for the Group. However, while it is expected that inflation and a low interest environment will remain in 2010, which will support maintenance of values in the Hong Kong property market, the growth momentum may lag behind that of last year. The Group will continue to actively manage the investment properties and continue its marketing campaign for the sale of the remaining unsold residential units of The Forest Hills, Royal Green and The Morrison.
The outcome of the Appeal Board's planning hearing in respect of the Fo Tan project is anticipated in the first half of this year and the Company will also continue to pursue appropriate development opportunities on the Mainland.
WORKING CAPITAL AND LOAN FACILITIES
As at 31 December, 2009, the Group's total cash balance was HK$1,555.0 million (2008: HK$1,202.2 million) and unutilized facilities were HK$496.0 million (2008: HK$1,002.0 million).
The gearing ratio as at 31 December, 2009 was 10% (2008:12%), calculated on the basis of net interest bearing debt minus cash and restricted and pledged deposits as a percentage of total property assets.
As at 31 December 2009, maturities of the Group's outstanding borrowings were as follows:
|
|
31 December, 2009 HK$' million |
31 December, 2008 HK$' million |
|
Due |
|
|
|
Within 1 year |
671.7 |
1,289.3 |
|
1-2 years |
820.9 |
59.4 |
|
3-5 years |
1,112.9 |
883.6 |
|
Over 5 years |
193.1 |
272.9 |
|
|
2,798.6 |
2,505.2 |
PLEDGE OF ASSETS
For the Company's subsidiaries operating in Hong Kong and mainland China, the total bank loans drawn as at 31 December, 2009 amounted to HK$2,798.6 million (2008: HK$2,505.2 million), which were secured by properties valued at HK$7,163.8 million (31 December, 2008: HK$6,161.8 million).
TREASURY POLICIES
The Group adheres to prudent treasury policies. As at 31 December, 2009, all of the Group's borrowings were raised through the Company and its wholly-owned or substantially controlled subsidiaries on a non-recourse basis.
INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
The Group has adopted IFRS and the audited consolidated financial statements accompanying this Review have been prepared in accordance with IFRS.
On behalf of the Executive Directors
Lu Wing Chi
Executive Director
Hong Kong, 18 March, 2010
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 December 2009
|
|
NOTES |
2009 |
|
2008 |
|
|
||||||
|
|
|
HK$'000 |
|
HK$'000 |
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Revenue |
6 |
516,604 |
|
1,507,500 |
|
||||||
|
|
Interest income |
8 |
8,673 |
|
26,113 |
|
||||||
|
|
Other income |
|
30,763 |
|
23,387 |
|
||||||
|
|
Costs: |
|
|
|
|
|
||||||
|
|
Property and related costs |
9 |
(189,244 |
) |
(1,032,921 |
) |
||||||
|
|
Staff costs |
|
(37,705 |
) |
(18,871 |
) |
||||||
|
|
Depreciation and amortisation |
|
(12,285 |
) |
(1,197 |
) |
||||||
|
|
Other expenses |
10 |
(139,061 |
) |
(129,523 |
) |
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
(378,295 |
) |
(1,182,512 |
) |
||||||
|
|
|
|
__________ |
|
_________ |
|
||||||
|
|
Profit from operations before fair value changes on |
|
|
|
|
|
||||||
|
|
properties |
|
177,745 |
|
374,488 |
|
||||||
|
|
Fair value changes on investment properties |
11 |
1,325,668 |
|
(576,295 |
) |
||||||
|
|
Fair value changes on properties held for sale |
|
|
|
|
|
||||||
|
|
upon transfer to investment properties |
|
- |
|
227,145 |
|
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
Profit from operations after fair value changes on |
|
|
|
|
|
||||||
|
|
properties |
|
1,503,413 |
|
25,338 |
|
||||||
|
|
Share of results of jointly controlled entities |
|
(2,557 |
) |
- |
|
||||||
|
|
Finance costs |
12 |
(58,167 |
) |
(81,071 |
) |
||||||
|
|
|
|
__________ |
|
_________ |
|
||||||
|
|
Profit (loss) before taxation |
13 |
1,442,689 |
|
(55,733 |
) |
||||||
|
|
Income tax expense |
14 |
(239,890 |
) |
(24,290 |
) |
||||||
|
|
|
|
__________ |
|
_________ |
|
||||||
|
|
Profit (loss) for the year |
|
1,202,799 |
|
(80,023 |
) |
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Attributable to: |
|
|
|
|
|
||||||
|
|
Company's shareholders |
|
1,206,220 |
|
(89,256 |
) |
||||||
|
|
Minority interests |
|
(3,421 |
) |
9,233 |
|
||||||
|
|
|
|
__________ |
|
_________ |
|
||||||
|
|
|
|
1,202,799 |
|
(80,023 |
) |
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
HK$ |
|
HK$ |
|
||||||
|
|
Earnings (loss) per share for profit (loss) attributable |
|
|
|
|
|
||||||
|
|
to the Company's shareholders - Basic |
15 |
1.36 |
|
(0.10 |
) |
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
Earnings per share excluding fair value changes |
|
|
|
|
|
||||||
|
|
on properties net of deferred tax - Basic |
15 |
0.09 |
|
0.24 |
|
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
|
|
|
|
_________ |
|
_________ |
|
||||||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 December 2009
|
|
2009 |
|
2008 |
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
Profit (loss) for the year |
1,202,799 |
|
(80,023 |
) |
|
Other comprehensive income |
|
|
|
|
|
Exchange differences arising on translation of foreign operations |
2,830 |
|
72,300 |
|
|
|
_________ |
|
_______ |
|
|
Total comprehensive income for the year |
1,205,629 |
|
(7,723 |
) |
|
|
_________ |
|
_______ |
|
|
|
_________ |
|
_______ |
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
Company's shareholders |
1,208,937 |
|
(16,956 |
) |
|
Minority interests |
(3,308 |
) |
9,233 |
|
|
|
_________ |
|
_______ |
|
|
|
1,205,629 |
|
(7,723 |
) |
|
|
_________ |
|
_______ |
|
|
|
_________ |
|
_______ |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 December 2009
|
|
NOTES |
|
2009 |
|
2008 |
|
|
|
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
Investment properties |
17 |
|
6,267,362 |
|
5,536,702 |
|
|
|
|
Property, plant and equipment |
18 |
|
680,226 |
|
389,936 |
|
|
|
|
Prepaid lease payments |
19 |
|
576,873 |
|
591,995 |
|
|
|
|
Properties for development |
20 |
|
48,956 |
|
49,995 |
|
|
|
|
Interests in jointly controlled entities |
21 |
|
40,613 |
|
- |
|
|
|
|
loans receivable |
22 |
|
63,209 |
|
86,379 |
|
|
|
|
Other receivables |
23 |
|
145,235 |
|
- |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
|
|
|
7,822,474 |
|
6,655,007 |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Properties held for sale |
24 |
|
|
|
|
|
|
|
|
Completed properties |
|
|
693,985 |
|
830,166 |
|
|
|
|
Properties under development |
|
|
603,363 |
|
593,967 |
|
|
|
|
Other inventories |
|
|
1,339 |
|
- |
|
|
|
|
Prepaid lease payments |
19 |
|
15,122 |
|
15,122 |
|
|
|
|
loans receivable |
22 |
|
3,073 |
|
3,429 |
|
|
|
|
Receivables, deposits and prepayments |
23 |
|
438,958 |
|
160,896 |
|
|
|
|
Tax recoverable |
|
|
30,718 |
|
79 |
|
|
|
|
Amount due from a minority shareholder |
|
|
2,397 |
|
558 |
|
|
|
|
Pledged bank deposits |
25 |
|
325,318 |
|
198,422 |
|
|
|
|
Restricted bank deposits |
26 |
|
- |
|
147,322 |
|
|
|
|
Bank balances and cash |
27 |
|
1,555,069 |
|
1,202,230 |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
|
|
|
3,669,342 |
|
3,152,191 |
|
|
|
|
Investment properties held for sale |
28 |
|
245,000 |
|
- |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
|
|
|
3,914,342 |
|
3,152,191 |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Payables, deposits received and accrued charges |
29 |
|
353,166 |
|
202,879 |
|
|
|
|
Sales deposits received |
|
|
969 |
|
9,580 |
|
|
|
|
Provisions |
30 |
|
6,047 |
|
6,807 |
|
|
|
|
Tax liabilities |
|
|
84,203 |
|
123,879 |
|
|
|
|
Amount due to a minority shareholder |
31 |
|
37,256 |
|
- |
|
|
|
|
Bank borrowings - due within one year |
32 |
|
671,685 |
|
1,289,269 |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
|
|
|
1,153,326 |
|
1,632,414 |
|
|
|
|
Liabilities associated with investment properties |
|
|
|
|
|
|
|
|
|
held for sale |
28 |
|
27,200 |
|
- |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
|
|
|
1,180,526 |
|
1,632,414 |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
Net current assets |
|
|
2,733,816 |
|
1,519,777 |
|
|
|
|
|
|
|
__________ |
|
_________ |
|
|
|
|
Total assets less current liabilities |
|
|
10,556,290 |
|
8,174,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES |
|
2009 |
|
2008 |
|
||
|
|
|
|
HK$'000 |
|
HK$'000 |
|
||
|
Capital and reserves |
|
|
|
|
|
|
||
|
Share capital |
33 |
|
345,204 |
|
345,204 |
|
||
|
Reserves |
|
|
7,599,589 |
|
6,390,356 |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
|
Equity attributable to the Company's shareholders |
|
|
7,944,793 |
|
6,735,560 |
|
||
|
Minority interests |
|
|
108,360 |
|
57,918 |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
|
Total equity |
|
|
8,053,153 |
|
6,793,478 |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
|
Non-current liabilities |
|
|
|
|
|
|
||
|
Secured bank borrowings - due after one year |
32 |
|
2,126,938 |
|
1,215,963 |
|
||
|
Deferred taxation |
34 |
|
376,199 |
|
165,343 |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
|
|
|
|
2,503,137 |
|
1,381,306 |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
|
|
|
|
10,556,290 |
|
8,174,784 |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
|
|
|
|
__________ |
|
_________ |
|
||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2009
|
|
|
Attributable to the Company's shareholders |
|
|
|
|
|
|||||||||||
|
|
|
Share |
|
Share |
|
Translation |
|
Other |
|
Retained |
|
|
|
Minority |
|
|
|
|
|
|
Notes |
capital |
|
premium |
|
reserve |
|
reserves |
|
profits |
|
Total |
|
interests |
|
Total |
|
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008 |
|
345,204 |
|
4,836,225 |
|
87,601 |
|
772,376 |
|
711,110 |
|
6,752,516 |
|
134,194 |
|
6,886,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
- |
|
- |
|
- |
|
- |
|
(89,256 |
) |
(89,256 |
) |
9,233 |
|
(80,023 |
) |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for the year |
|
- |
|
- |
|
72,300 |
|
- |
|
- |
|
72,300 |
|
- |
|
72,300 |
|
|
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for the year |
|
- |
|
- |
|
72,300 |
|
- |
|
(89,256 |
) |
(16,956 |
) |
9,233 |
|
(7,723 |
) |
|
|
Acquisition of assets and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assumption of liabilities |
36(b) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
198 |
|
198 |
|
|
|
Contributions from a minority |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholder |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
693 |
|
693 |
|
|
|
Dividend paid to a minority |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholder |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(86,400 |
) |
(86,400 |
) |
|
|
|
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
________ |
|
_______ |
|
________ |
|
|
|
At 31 December 2008 |
|
345,204 |
|
4,836,225 |
|
159,901 |
|
772,376 |
|
621,854 |
|
6,735,560 |
|
57,918 |
|
6,793,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year |
|
- |
|
- |
|
- |
|
- |
|
1,206,220 |
|
1,206,220 |
|
(3,421 |
) |
1,202,799 |
|
|
|
Other comprehensive income for the year |
|
- |
|
- |
|
2,717 |
|
- |
|
- |
- |
2,717 |
|
113 |
|
2,830 |
|
|
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for the year |
|
- |
|
- |
|
2,717 |
|
- |
|
1,206,220 |
|
1,208,937 |
|
(3,308 |
) |
1,205,629 |
|
|
|
Acquisition of assets and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assumption of liabilities |
36(a) |
- |
|
- |
|
- |
|
- |
|
|
- |
- |
|
10,097 |
|
10,097 |
|
|
|
Contributions from minority |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholders |
|
- |
|
- |
|
- |
|
- |
|
|
- |
- |
|
63,903 |
|
63,903 |
|
|
|
Share options issued by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
intermediate holding company |
|
- |
|
- |
|
- |
|
- |
|
296 |
|
296 |
|
- |
|
296 |
|
|
|
Dividend paid to a minority |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholder |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(20,250 |
) |
(20,250 |
) |
|
|
Transfer |
|
- |
|
- |
|
- |
|
(5,615 |
) |
5,615 |
|
- |
|
- |
|
- |
|
|
|
|
|
_______ |
|
________ |
|
_______ |
|
_______ |
|
________ |
|
________ |
|
_______ |
|
________ |
|
|
|
At 31 December 2009 |
|
345,204 |
|
4,836,225 |
|
162,618 |
|
766,761 |
|
1,833,985 |
|
7,944,793 |
|
108,360 |
|
8,053,153 |
|
|
|
|
|
_______ |
|
________ |
|
_______ |
|
_______ |
|
________ |
|
________ |
|
_______ |
|
________ |
|
|
|
|
|
_______ |
|
________ |
|
_______ |
|
_______ |
|
________ |
|
________ |
|
_______ |
|
________ |
|
|
Other reserves arose from acquisition of subsidiaries from the intermediate holding company, S E A Holdings Limited comprising (i) the excess of the consideration price over the market closing price of the shares issued at the amount of HK$289,592,000 (2008: HK$294,736,000) for the acquisition and (ii) a discount of HK$477,169,000 (2008: HK$477,640,000), representing the excess of fair value of assets and liabilities acquired over the purchase consideration. The amount attributable to assets disposed of during the year is transferred to retained profits.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 December 2009
|
|
NOTE |
|
2009 |
|
2008 |
|
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
Operating activities |
|
|
|
|
|
|
|
Profit (loss) before taxation |
|
|
1,442,689 |
|
(55,733 |
) |
|
Adjustments for: |
|
|
|
|
|
|
|
Interest expenses |
|
|
53,328 |
|
76,886 |
|
|
Write down of properties held for sale |
|
|
- |
|
35,916 |
|
|
Depreciation and amortisation |
|
|
12,285 |
|
1,197 |
|
|
Fair value changes on investment properties |
|
|
(1,325,668 |
) |
576,295 |
|
|
Fair value changes on properties held for sale upon |
|
|
|
|
|
|
|
transfer to investment properties |
|
|
- |
|
(227,145 |
) |
|
Fair value loss on initial recognition of |
|
|
|
|
|
|
|
other receivables |
|
|
5,868 |
|
- |
|
|
Share of results of jointly controlled entities |
|
|
2,557 |
|
- |
|
|
Interest income |
|
|
(8,673 |
) |
(26,113 |
) |
|
Loss on disposal of property, plant and equipment |
|
|
153 |
|
106 |
|
|
Loss on acquisition of assets and assumption of |
|
|
|
|
|
|
|
liabilities |
|
|
1,057 |
|
- |
|
|
Share options expense |
|
|
296 |
|
- |
|
|
|
|
|
_________ |
|
_________ |
|
|
Operating cash flows before movements in working |
|
|
|
|
|
|
|
capital |
|
|
183,892 |
|
381,409 |
|
|
Decrease in properties held for sale |
|
|
127,439 |
|
859,722 |
|
|
Increase in other inventories |
|
|
(1,339 |
) |
- |
|
|
(Increase) decrease in receivables, deposits and |
|
|
|
|
|
|
|
prepayments |
|
|
(172,389 |
) |
192,581 |
|
|
Decrease in payables, deposits received and accrued |
|
|
|
|
|
|
|
charges |
|
|
(59,290 |
) |
(147,113 |
) |
|
Decrease in sales deposits received |
|
|
(8,611 |
) |
(344,752 |
) |
|
|
|
|
_________ |
|
_________ |
|
|
Cash generated from operations |
|
|
69,702 |
|
941,847 |
|
|
Interest received |
|
|
9,518 |
|
22,888 |
|
|
Interest paid |
|
|
(53,487 |
) |
(105,894 |
) |
|
Tax paid |
|
|
(99,624 |
) |
(56,978 |
) |
|
|
|
|
_________ |
|
_________ |
|
|
Net cash (used in) from operating activities |
|
|
(73,891 |
) |
801,863 |
|
|
|
|
|
_________ |
|
_________ |
|
|
|
NOTE |
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
Investing activities |
|
|
|
|
|
|
Additional costs on investment properties |
|
- |
|
(1,202 |
) |
|
Proceeds and deposit received on disposal of |
|
|
|
|
|
|
investment properties |
|
377,000 |
|
- |
|
|
Additional costs on properties for development |
|
(157 |
) |
(36,416 |
) |
|
Purchase of and additional costs on property, plant and |
|
|
|
|
|
|
equipment |
|
(194,317 |
) |
(199,848 |
) |
|
Advance of loans |
|
- |
|
(1,225 |
) |
|
Receipt of repayments of loans |
|
23,526 |
|
39,817 |
|
|
(Increase in) release of pledged bank deposits |
|
(126,896 |
) |
119,350 |
|
|
Release of (increase in) restricted bank deposits |
|
147,175 |
|
(5,888 |
) |
|
Loan to a jointly controlled entity |
|
(3,000 |
) |
- |
|
|
Acquisition of assets and assumption of liabilities |
36(a) |
(2,456 |
) |
(64,399 |
) |
|
|
|
_________ |
|
_________ |
|
|
Net cash from (used in) investing activities |
|
220,875 |
|
(149,811 |
) |
|
|
|
_________ |
|
_________ |
|
|
Financing activities |
|
|
|
|
|
|
Repayments of bank borrowings |
|
(1,584,551 |
) |
(2,287,592 |
) |
|
Drawn down of bank borrowings |
|
1,877,018 |
|
2,307,454 |
|
|
Repayments to a minority shareholder |
|
(129,294 |
) |
(87,037 |
) |
|
Advance to a minority shareholder |
|
(22,089 |
) |
- |
|
|
Contributions from minority shareholders |
|
63,903 |
|
693 |
|
|
|
|
_________ |
|
_________ |
|
|
Net cash from (used in) financing activities |
|
204,987 |
|
(66,482 |
) |
|
|
|
_________ |
|
_________ |
|
|
Net increase in cash and cash equivalents |
|
351,971 |
|
585,570 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of the year |
|
1,202,230 |
|
605,634 |
|
|
Effect of foreign exchange rate changes |
|
868 |
|
11,026 |
|
|
|
|
_________ |
|
_________ |
|
|
Cash and cash equivalents at end of the year |
|
|
|
|
|
|
represented by bank balances and cash |
|
1,555,069 |
|
1,202,230 |
|
|
|
|
_________ |
|
_________ |
|
|
|
|
_________ |
|
_________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2009
1. GENERAL
The Company is a public limited company incorporated in the British Virgin Islands ("B.V.I.") with limited liability and its shares are admitted for trading on the AIM market of London Stock Exchange plc. The Company's immediate holding company is Charm Action Holdings Limited, a company incorporated in the B.V.I.. One of the Company's intermediate holding companies is S E A Holdings Limited ("S E A"), the shares of which are listed on the Stock Exchange of Hong Kong Limited (the "Stock Exchange"). The directors of the Company consider that the Company's ultimate holding company is JCS Limited. Both S E A and JCS Limited are companies incorporated in Bermuda as an exempted company with limited liability. The addresses of the registered office and principal place of business of the Company are Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, B.V.I. and 25th Floor, Dah Sing Financial Centre, 108 Gloucester Road, Wanchai, Hong Kong, respectively.
The consolidated financial statements are presented in Hong Kong dollars, which is also the functional currency of the Company.
The Company acts as an investment holding company. The activities of its principal subsidiaries are set out in note 44.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
In the current year, the Group has applied the following new and revised standards, amendments and interpretations ("new and revised IFRSs") issued by the International Accounting Standards Board ("the IASB") and the International Financial Reporting Interpretations Committee of the IASB.
|
IAS 1 (Revised 2007) |
Presentation of Financial Statements |
|
IAS 23 (Revised 2007) |
Borrowing Costs |
|
IAS 32 & 1 (Amendments) |
Puttable Financial Instruments and Obligations Arising |
|
|
on Liquidation |
|
IFRS 1 & IAS 27 (Amendments) |
Cost of an Investment in a Subsidiary, Jointly |
|
|
Controlled Entity or Associate |
|
IFRS 2 (Amendment) |
Vesting Conditions and Cancellations |
|
IFRS 7 (Amendment) |
Improving Disclosures about Financial Instruments |
|
IFRS 8 |
Operating Segments |
|
IFRIC 9 & IAS 39 (Amendments) |
Embedded Derivatives |
|
IFRIC 13 |
Customer Loyalty Programmes |
|
IFRIC 15 |
Agreements for the Construction of Real Estate |
|
IFRIC 16 |
Hedges of a Net Investment in a Foreign Operation |
|
IFRIC 18 |
Transfers of Assets from Customers |
|
IFRSs (Amendments) |
Improvements to IFRSs issued in 2008, except for the |
|
|
amendment to IFRS 5 that is effective for annual |
|
|
periods beginning on or after 1 July 2009 |
|
IFRSs (Amendments) |
Improvements to IFRSs issued in 2009 in relation to |
|
|
the amendment to paragraph 80 of IAS 39 |
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS - continued
Except as disclosed below, the adoption of the new and revised IFRSs has had no material effect on the consolidated financial statements of the Group for the current or prior accounting periods.
IFRS 8 Operating Segments
IFRS 8 is a disclosure standard that has resulted in a redesignation of the Group's reportable segments and changes in the basis of measurement of segment profit or loss. Details are disclosed in note 7.
IAS 1 (Revised 2007) Presentation of Financial Statements
IAS 1 (Revised 2007) has introduced a number of terminology changes, including revised titles for the consolidated financial statements, and changes in the format and content of the consolidated financial statements.
Improving Disclosures about Financial Instruments
(Amendments to IFRS 7 Financial Instruments: Disclosures)
The amendments to IFRS 7 expand the disclosures required in relation to fair value measurements in respect of financial instruments which are measured at fair value. The amendments also expand and amend the disclosures required in relation to liquidity risk. The Group has not provided maturity analysis in respect of the maximum amount of financial guarantees provided to banks in relation to their mortgage loans granted to the purchasers of the Group's properties located in the People's Republic of China ("PRC") as at 31 December 2008 in accordance with the transitional provision set out in the amendments.
The Group has not early applied the new and revised standards, amendments or interpretations that have been issued but are not yet effective.
The adoption of IFRS 3 (Revised) "Business Combinations" may affect the Group's accounting for business combinations for which the acquisition dates are on or after 1 January 2010. IAS 27 (Revised) "Consolidated and Separate Financial Statements" will affect the accounting treatment for changes in a parent's ownership interest in a subsidiary.
In addition, as part of "Improvements to IFRSs" issued in 2009, IAS 17 Leases has been amended in relation to the classification of leasehold land. The amendments will be effective from 1 January 2010, with earlier application permitted. Before the amendments to IAS 17, leases were required to classify leasehold land as operating leases and presented as prepaid lease payments in the consolidated statement of financial position. The amendments have removed such a requirement. Instead, the amendments require the classification of leasehold land to be based on the general principles set out in IAS 17, that are based on the extent to which risks and rewards incidental to ownership of a leased asset lie with the lessor or the lessee. The application of the amendments to IAS 17 might affect the classification and measurement of the Group's leasehold land.
The directors of the Company anticipate that the application of other new and revised standards, amendments or interpretations will have no material impact on the consolidated financial statements.
3. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared on the historical cost basis except for investment properties, which are measured at fair values, as explained in the accounting policies set out below.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Minority interests in the net assets of consolidated subsidiaries are presented separately from the Group's equity therein. Minority interests in the net assets consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.
Jointly controlled entities
Joint venture arrangements that involve the establishment of a separate entity in which venturers have joint control over the economic activity of the entity are referred to as jointly controlled entities.
The results and assets and liabilities of jointly controlled entities are incorporated in the consolidated financial statements using the equity method of accounting. Under the equity method, investments in jointly controlled entities are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the jointly controlled entities, less any identified impairment loss. When the Group's share of losses of a jointly controlled entity equals or exceeds its interest in that jointly controlled entity (which includes any long-term interests that, in substance, form part of the Group's net investment in the jointly controlled entity), the Group discontinues recognising its share of further losses. An additional share of losses is provided for and a liability is recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of that jointly controlled entity.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Jointly controlled entities - continued
Goodwill arising on acquisition of jointly controlled entity representing the excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the jointly controlled entity recognised at the date of acquisition is included within the carrying amount of the investment in the jointly controlled entity and is not tested for impairment separately. Instead, the entire carrying amount of the investment is tested for impairment as a single asset. Any impairment loss recognised is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment in the jointly controlled entity. Any reversal of impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.
Where a group entity transacts with a jointly controlled entity of the Group, profits and losses are eliminated to the extent of the Group's interest in the jointly controlled entity.
Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition.
Investment properties that are classified as held for sale are measured at their fair values at the end of the reporting period. Other non-current assets classified as held for sale are measured at the lower of the previous carrying amount of the assets and their fair value less costs to sell.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods sold in the normal course of business, net of discounts and sales related taxes.
Sales of properties
Revenue from sale of properties in the ordinary course of business is recognised when the respective properties have been completed and delivered to the buyers. Deposits and instalments received from purchasers prior to meeting the revenue recognition criteria are recorded as sales deposits under current liabilities.
Others
Rental income is recognised on a straight-line basis over the term of the relevant lease.
Hotel operation and other service income is recognised when services are provided.
Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Investment properties
investment properties, which are properties held to earn rentals and/or for capital appreciation, are measured initially at costs, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at their fair values using the fair value model. Gains or losses arising from changes in the fair value of investment properties are included in profit or loss for the period in which they arise.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use or no future economic benefits are expected from its disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the item is derecognised.
Property, plant and equipment
Property, plant and equipment other than properties under development and crockery, utensils and linens are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write off the cost of items of property, plant and equipment, other than properties under development and crockery, utensils and linens, over their estimated useful lives and after taking into account of their estimated residual value, using the straight-line method.
Initial expenditure incurred for crockery, utensils and linens is capitalised and no depreciation is provided thereon. The cost of subsequent replacement for these items is recognised in profit or loss as and when incurred.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is derecognised.
Properties for development
Properties for development represents consideration and other direct costs for acquisition of leasehold interest in land held for future development.
Properties for development is stated at cost and amortised to profit or loss on a straight-line basis over the term of the relevant lease until the commencement of development, upon which the remaining carrying value of the properties would be transferred to the appropriate categories according to the management's intention of use of the properties after completion of development.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Properties under development
When the leasehold land and buildings are in the course of development for hotel operation or for administrative purposes, the leasehold land component is classified as a prepaid lease payment and amortised over a straight-line basis over the lease term. During the construction period, the amortisation charge provided for the leasehold land is capitalised as part of the cost of the building. Buildings under construction are carried at cost, less any identified impairment losses. Cost comprises development costs including attributable borrowing costs, prepaid lease payments and directly attributable costs capitalised during the development period. Depreciation of buildings commences when they are available for use (i.e. when they are in the condition necessary for them to be capable of operating in the manner intended by management).
When leasehold land is intended for sale in the ordinary course of business after completion of development, the leasehold land component is included within the carrying amount of the properties and is classified under current assets.
Inventories
Properties for sale
Completed properties for sale in the ordinary course of business are stated at the lower of cost and net realisable value. Net realisable value is determined by reference to estimated selling price less selling expenses.
Properties for or under development intended for sale after completion of development are stated at the lower of cost and net realisable value. Net realisable value is determined by reference to estimated selling price less anticipated costs of completion of the development and costs to be incurred in marketing and selling the completed properties.
Cost of properties comprises land cost, development costs and other direct costs attributable to the development and borrowing costs capitalised during the development period that have been incurred in bringing the properties to their present condition.
Other inventories
Other inventories comprising food and beverage are stated at the lower of cost and net realisable value. Cost is calculated using weighted average method.
Impairment on assets
At the end of each reporting period, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Financial instruments
Financial assets and financial liabilities are recognised on the consolidated statement of financial position when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Financial assets
The Group's financial assets are all classified as loans and receivables.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period to the net carrying amount on initial recognition.
Interest income is recognised on an effective interest basis.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At the end of each reporting period subsequent to initial recognition, loans and receivables (including loans receivable, loan to a jointly controlled entity, amount due from a minority shareholder, trade and other receivables and bank deposits and cash) are carried at amortised cost using the effective interest method, less any identified impairment losses.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected.
objective evidence of impairment could include:
·; significant financial difficulty of the issuer or counterparty; or
·; default or delinquency in interest or principal payments; or
·; it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
Financial assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, as well as observable changes in national or local economic conditions that correlate with default on receivables.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Financial instruments - continued
Financial assets - continued
Impairment of financial assets - continued
An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of loans receivable and trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.
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 loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
Financial liabilities and equity
Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fee paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition.
Interest expense is recognised on an effective interest basis.
financial liabilities
financial liabilities including payables, amount due to a minority shareholder and bank borrowings are subsequently measured at amortised cost, using the effective interest method.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Financial instruments - continued
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the assets expire, or the financial assets are transferred and the Group has transferred substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised directly in other comprehensive income is recognised in profit or loss.
Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged or cancelled or expires. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the directors' best estimate of the expenditure required to settle the obligation at the end of the reporting period, and are discounted to present value where the effect is material.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group as lessor
Rental income from operating leases is recognised in the consolidated income statement on a straight-line basis over the term of the relevant lease.
The Group as lessee
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are recognised as a reduction of rental expense over the lease term on a straight-line basis.
Leasehold land and building
The land and building elements of a lease of land and building are considered separately for the purpose of lease classification, unless the lease payments cannot be allocated reliably between the land and building elements, in which case, the entire lease is generally treated as a finance lease and accounted for as property, plant and equipment. To the extent the allocation of the lease payments can be made reliably, leasehold interests in land are accounted for as operating leases, except for those classified and accounted for as investment properties under fair value model.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. Capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are recognised in profit or loss in the period in which they arise, except for exchange differences arising on a monetary item that forms part of the Company's net investment in a foreign operation, in which case, such exchange differences are recognised in other comprehensive income and accumulated in equity (translation reserve) and will be reclassified from equity to profit or loss on disposal of the foreign operation.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into the presentation currency of the Group (i.e. Hong Kong dollars) at the rate of exchange prevailing at the end of the reporting period and their income and expense are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case, the exchange rates prevailing at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (translation reserve). Such exchange differences are recognised in profit or loss in the period in which the foreign operation is disposed of.
Equity-settled share-based payment transactions
The fair value of services received determined by reference to the fair value of share options granted under the share option scheme of holding company at the grant date is expensed on a straight-line basis over the vesting period, with a corresponding increase in retained profits.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to ultimately vest. The impact of the revision of the estimates during the vesting period, if any, is recognised in profit or loss, with a corresponding adjustment to retained profits.
At the time when the share options are exercised, forfeited after the vesting date or are still not exercised at the expiry date, the amount previously recognised will continue to be held in retained profits.
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Retirement benefit costs
Payments to defined contribution retirement benefit plans, including state-managed retirement benefit scheme and the Mandatory Provident Fund Scheme, are charged as an expense when employees have rendered service entitling them to the contributions.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case the deferred tax is also recognised in other comprehensive income or directly in equity respectively.
4. KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's accounting policies which are described in note 3, management has made judgements and estimation that have a significant risk of causing a material adjustment to the carrying amounts of assets within next financial year.
Income tax
No deferred tax asset has been recognised in respect of tax losses and deductible temporary differences of HK$160,521,000 and HK$7,043,000 (2008: HK$171,823,000 and HK$36,685,000) respectively as it is not probable that taxable profit will be available due to the unpredictability of future profit streams. The realisability of the deferred tax asset mainly depends on whether sufficient future profits or taxable temporary differences will be available in the future. In cases where the actual future profits generated are more than expected, additional recognition of deferred tax assets may arise, which would be recognised in the consolidated income statement for the period in which it takes place.
Impairment of property, plant and equipment and prepaid lease payments
The Group performs a review annually to determine whether hotel property with aggregate carrying amount of HK$1,111,354,000 (2008: HK$994,704,000) has any indication of impairment by considering the recoverable amount of hotel building which has been determined based on value in use. The calculation of value in use requires an estimation of future profit generated from hotel operating cash flows discounted to arrive at the present value of the asset. Where the actual future cash flows are less than expected, a material impairment loss may arise.
Fair value of investment properties
Investment properties with carrying amount of HK$6,267,362,000 (2008: HK$5,536,702,000) are stated at fair value based on the valuation performed by independent professional valuers. In determining the fair value, the valuers have based on a method of valuation which involves certain assumption of market conditions. In relying on the valuation report or making their own valuation, the directors of the Company have exercised their judgment and are satisfied that the method of valuation is reflective of the current market conditions.
Write-down of properties held for sale
Management's assessment of properties held for sale with aggregate carrying amount of HK$1,297,348,000 (2008: HK$1,424,133,000) is based on an estimation of the net realisable value of the properties held for sale which involves, inter-alia, considerable analyses of the recent transacted prices of the respective properties held for sale, the current market price of properties of comparable standard and location, the estimated costs to complete the development and a forecast of future sales based on available market data and statistics. If the actual net realisable values of the properties held for sale are more or less than expected as a result of change in market condition and/or significant variation in the budgeted development cost, material adjustment for write-down of the properties for sale may result.
4. KEY SOURCES OF ESTIMATION UNCERTAINTY - continued
Impairment of receivables
In determining whether there is any impairment loss on the receivables of HK$349,765,000 (2008: Nil) in relation to cost incurred on certain pieces of land as detailed in note 23(a), the Group takes into consideration objective evidences in the estimation of future cash flows. Where the actual future cash flows are less than expected, a material impairment loss, which is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's effective interest rate at initial recognition, may arise.
5. CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The Group's overall strategy remains unchanged from prior year.
The capital structure of the Group consists of bank borrowings and equity attributable to the Company's shareholders, comprising issued share capital, retained profits and other reserves.
The directors of the Company review the capital structure periodically. As part of this review, the directors consider the cost of capital and the risks associated with the capital. The Group will balance its overall capital structure through the payment of dividends, new share issues as well as raising of new debts or repayment of existing debts.
6. REVENUE
The following is an analysis of the Group's revenue from its major business activities.
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Sale of properties |
230,873 |
|
1,274,469 |
|
|
|
Renting of properties |
269,672 |
|
233,031 |
|
|
|
Hotel operation |
16,059 |
|
- |
|
|
|
|
_______ |
|
_________ |
|
|
|
|
516,604 |
|
1,507,500 |
|
|
|
|
_______ |
|
_________ |
|
|
|
|
_______ |
|
_________ |
|
7. SEGMENT INFORMATION
The Group has adopted IFRS 8 "Operating Segments" with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to segments and to assess their performance. In contrast, the predecessor Standard (IAS 14 "Segment Reporting") required an entity to identify two sets of segments (business and geographical), using a risks and returns approach, with the entity's "system of internal financial reporting to key management personnel" serving only as the starting point for the identification of such segments.
In the past, the Group's primary reporting segment was geographical segments by location of customers with secondary reporting segment by business segment. The application of IFRS 8 has resulted in a redesignation of the Group's reportable segments as compared with the primary reportable segments determined in accordance with IAS 14. The adoption of IFRS 8 has also changed the basis of measurement of segment profit or loss. Information reported to the Group's chief operating decision maker (the executive directors of the Group) for the purposes of resource allocation and assessment of performance is focused on property development, property investment and the hotel operation and these have been identified by the chief operating decision maker as three separate reportable segments. The existing identification of the Group's reportable segments under IFRS 8 is consistent with that of the prior year's presentation of business segment under IAS 14.
Principal activities of each segment of the three operating divisions are as follows:
|
Property investment |
- |
renting of properties |
|
Property development |
- |
development of properties |
|
Hotel operation |
- |
hotel operation and management |
Property investment and development activities are in Hong Kong and PRC whereas the hotel in Hong Kong commenced operation in November 2009.
7. SEGMENT INFORMATION - continued
The following is an analysis of the Group's revenue and results by reportable segment:
Segment revenues and results
For the year ended 31 December 2009
|
|
|
Property |
|
Property |
|
Hotel |
|
|
|
|
|
|
|
|
development |
|
investment |
|
operation |
|
Eliminations |
|
Consolidated |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
SEGMENT REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
External sales |
230,873 |
|
269,672 |
|
16,059 |
|
- |
|
516,604 |
|
|
|
Inter-segment sales |
- |
|
455 |
|
- |
|
(455 |
) |
- |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
_______ |
|
_________ |
|
|
|
Total |
230,873 |
|
270,127 |
|
16,059 |
|
(455 |
) |
516,604 |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
_______ |
|
_________ |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
_______ |
|
_________ |
|
|
|
SEGMENT RESULT |
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
56,371 |
|
1,484,632 |
|
(42,855 |
) |
|
|
1,498,148 |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
|
|
|
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
8,673 |
|
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
(3,408 |
) |
|
|
Share of results of jointly controlled entities |
|
|
|
|
|
(2,557 |
) |
|||
|
|
Finance costs |
|
|
|
|
|
|
|
|
(58,167 |
) |
|
|
|
|
|
|
|
|
|
|
|
_________ |
|
|
|
Profit before taxation |
|
|
|
|
|
|
|
|
1,442,689 |
|
|
|
|
|
|
|
|
|
|
|
|
_________ |
|
|
|
|
|
|
|
|
|
|
|
|
_________ |
|
For the year ended 31 December 2008
|
|
|
Property |
|
Property |
|
Hotel |
|
|
|
|
|
|
|
|
development |
|
investment |
|
operation |
|
Eliminations |
|
Consolidated |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
SEGMENT REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
External sales |
1,274,469 |
|
233,031 |
|
- |
|
- |
|
1,507,500 |
|
|
|
Inter-segment sales |
- |
|
417 |
|
- |
|
(417 |
) |
- |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
_______ |
|
_________ |
|
|
|
Total |
1,274,469 |
|
233,448 |
|
- |
|
(417 |
) |
1,507,500 |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
_______ |
|
_________ |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
_______ |
|
_________ |
|
|
|
RESULT |
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
499,958 |
|
(477,541 |
) |
(15,422 |
) |
|
|
6,995 |
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
|
|
|
|
|
|
|
_________ |
|
_________ |
|
_______ |
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
26,113 |
|
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
(7,770 |
) |
|
|
Finance costs |
|
|
|
|
|
|
|
|
(81,071 |
) |
|
|
|
|
|
|
|
|
|
|
|
_________ |
|
|
|
Loss before taxation |
|
|
|
|
|
|
|
|
(55,733 |
) |
|
|
|
|
|
|
|
|
|
|
|
_________ |
|
|
|
|
|
|
|
|
|
|
|
|
_________ |
|
Inter-segment sales are at mutually agreed terms.
The accounting policies adopted in preparing the reportable segment information are the same as the Group's accounting policies described in note 3.
The Group does not allocate interest income, corporate expenses, share of results of jointly controlled entities and finance costs to individual reportable segment profit or loss for the purposes of resource allocation and performance assessment by the chief operating decision maker.
7. SEGMENT INFORMATION - continued
Other segment information
The following amounts are included in the measurement of segment profit or loss.
For the year ended 31 December 2009
|
|
|
Property |
|
Property |
|
Hotel |
|
|
|
|
|
|
development |
|
investment |
|
operation |
|
Consolidated |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation of prepaid lease payments |
- |
|
- |
|
2,520 |
|
2,520 |
|
|
|
Amortisation of properties for development |
1,253 |
|
- |
|
- |
|
1,253 |
|
|
|
Depreciation |
25 |
|
822 |
|
7,665 |
|
8,512 |
|
|
|
Increase in fair value of investment properties |
- |
|
1,325,668 |
|
- |
|
1,325,668 |
|
|
|
Fair value loss on initial recognition of |
|
|
|
|
|
|
|
|
|
|
other receivables |
5,868 |
|
- |
|
- |
|
5,868 |
|
|
|
Loss on disposal of property, plant and equipment |
- |
|
153 |
|
- |
|
153 |
|
|
|
|
_______ |
|
_________ |
|
_______ |
|
_________ |
|
|
|
|
_______ |
|
_________ |
|
_______ |
|
_________ |
|
For the year ended 31 December 2008
|
|
|
Property |
|
Property |
|
Hotel |
|
|
|
||||||
|
|
|
development |
|
investment |
|
operation |
|
Consolidated |
|
||||||
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Amortisation of properties for development |
637 |
|
- |
|
- |
|
637 |
|
||||||
|
|
Depreciation |
189 |
|
353 |
|
18 |
|
560 |
|
||||||
|
|
Decrease in fair value of investment properties |
- |
|
576,295 |
|
- |
|
576,295 |
|
||||||
|
|
Increase in fair value of properties held for sale |
|
|
|
|
|
|
|
|
||||||
|
|
upon transfer to investment properties |
227,145 |
|
- |
|
- |
|
227,145 |
|
||||||
|
|
Write down of properties held for sale |
35,916 |
|
- |
|
- |
|
35,916 |
|
||||||
|
|
Loss on disposal of property, plant and equipment |
- |
|
106 |
|
- |
|
106 |
|
||||||
|
|
|
_______ |
|
_________ |
|
_______ |
|
_________ |
|
||||||
|
|
|
_______ |
|
_________ |
|
_______ |
|
_________ |
|
||||||
Geographical information
The Group operates in two principal geographical areas, Hong Kong (country of domicile) and PRC.
The Group's revenue from external customers by geographical location of properties is detailed below.
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Hong Kong |
377,052 |
|
1,438,386 |
|
|
|
PRC |
139,552 |
|
69,114 |
|
|
|
|
_______ |
|
_________ |
|
|
|
|
516,604 |
|
1,507,500 |
|
|
|
|
_______ |
|
_________ |
|
|
|
|
_______ |
|
_________ |
|
No revenue from customers for the year or the corresponding year contributes over 10% of the total revenue of the Group.
7. SEGMENT INFORMATION - continued
Geographical information - continued
The Group's information about its non-current assets, which exclude financial instruments, by geographical location are detailed below.
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Hong Kong |
5,923,907 |
|
4,977,904 |
|
|
|
PRC |
1,650,812 |
|
1,590,724 |
|
|
|
|
_________ |
|
_________ |
|
|
|
|
7,574,719 |
|
6,568,628 |
|
|
|
|
_________ |
|
_________ |
|
|
|
|
_________ |
|
_________ |
|
No segment assets and liabilities are presented as the information is not reportable to the chief operating decision maker in the resource allocation and assessment of performance.
8. INTEREST INCOME
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Interest on loans receivable |
4,006 |
|
5,651 |
|
|
|
Interest on bank deposits |
3,677 |
|
20,462 |
|
|
|
Other interest income |
990 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
8,673 |
|
26,113 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
9. PROPERTY AND RELATED COSTS
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Changes in completed properties and properties under |
|
|
|
|
|
|
development held for sale |
126,785 |
|
846,216 |
|
|
|
Costs incurred for development of properties held for sale |
27,304 |
|
118,827 |
|
|
|
Write down of properties held for sale |
- |
|
35,916 |
|
|
|
Direct operating expenses on investment properties |
35,155 |
|
31,962 |
|
|
|
|
_______ |
|
_________ |
|
|
|
|
189,244 |
|
1,032,921 |
|
|
|
|
_______ |
|
_________ |
|
|
|
|
_______ |
|
_________ |
|
10. OTHER EXPENSES
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
Included in other expenses are: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees paid to a related company |
84,424 |
|
98,751 |
|
|
|
legal and professional fees |
10,948 |
|
9,651 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
11. FAIR VALUE CHANGES ON INVESTMENT PROPERTIES
Fair value changes relating to investment properties disposed of during the year and investment properties held for sale amounted to HK$104,500,000 (2008: Nil) and HK$65,000,000 (2008: Nil) respectively.
12. FINANCE COSTS
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
Interest on: |
|
|
|
|
|
|
Bank borrowings wholly repayable within 5 years |
34,182 |
|
97,984 |
|
|
|
bank borrowings not wholly repayable within 5 years |
26,248 |
|
3,267 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
60,430 |
|
101,251 |
|
|
|
Less: Amounts capitalised to property developmentprojects |
(7,102 |
) |
(24,365 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
|
53,328 |
|
76,886 |
|
|
|
Front end fee |
1,908 |
|
1,870 |
|
|
|
other charges |
2,931 |
|
2,315 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
58,167 |
|
81,071 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
13. Profit (LOSS) before taxation
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
Profit (loss) before taxation has been arrived at after charging: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation of prepaid lease payments |
15,122 |
|
15,122 |
|
|
|
Less: Capitalised to hotel building |
(12,602 |
) |
(15,122 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
|
2,520 |
|
- |
|
|
|
Amortisation of properties for development |
1,253 |
|
637 |
|
|
|
Auditor's remuneration |
1,773 |
|
1,575 |
|
|
|
Directors' emoluments |
3,360 |
|
3,128 |
|
|
|
Fair value loss on initial recognition of other receivables |
5,868 |
|
- |
|
|
|
Loss on disposal of property, plant and equipment |
153 |
|
106 |
|
|
|
Loss on acquisition of assets and assumptions of liabilities |
1,057 |
|
- |
|
|
|
|
|
|
|
|
|
|
and crediting: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross rental income from investment properties |
269,672 |
|
233,031 |
|
|
|
Less: Direct operating expenses |
(35,155 |
) |
(31,962 |
) |
|
|
|
|
|
|
|
|
|
Net rental income |
234,517 |
|
201,069 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
14. INCOME TAX EXPENSE
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
The charge (credit) comprise: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax |
|
|
|
|
|
|
Hong Kong |
16,333 |
|
71,169 |
|
|
|
PRC Enterprise Income Tax |
8 |
|
- |
|
|
|
PRC Land Appreciation Tax |
11,283 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
27,624 |
|
71,169 |
|
|
|
|
_______ |
|
_______ |
|
|
|
Under(over)provision in prior years |
|
|
|
|
|
|
Hong Kong |
1,359 |
|
(298 |
) |
|
|
PRC Enterprise Income Tax |
197 |
|
15,719 |
|
|
|
PRC Land Appreciation Tax |
- |
|
(5,839 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
|
1,556 |
|
9,582 |
|
|
|
|
_______ |
|
_______ |
|
|
|
Deferred tax |
|
|
|
|
|
|
Current year |
210,710 |
|
(46,947 |
) |
|
|
Attributable to a change in tax rate |
- |
|
(9,514 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
|
210,710 |
|
(56,461 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
|
239,890 |
|
24,290 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit.
PRC Land Appreciation Tax is calculated at progressive rates on the appreciated property value, less allowable deductions in accordance with the relevant PRC tax laws and regulations.
PRC Enterprise Income Tax is calculated at the rates applicable to respective companies.
Details of deferred taxation are set out in note 34.
14. INCOME TAX EXPENSE - continued
The income tax expense for the year can be reconciled from profit (loss) before taxation per the consolidated income statement as follows:
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Profit (loss) before taxation |
1,442,689 |
|
(55,733 |
) |
|
|
|
_________ |
|
_______ |
|
|
|
|
_________ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Tax charge (credit) at Hong Kong income tax rate of 16.5% |
238,044 |
|
(9,196 |
) |
|
|
Tax effect of share of results of jointly controlled entities |
422 |
|
- |
|
|
|
Tax effect of expenses not deductible for tax purpose |
9,720 |
|
53,061 |
|
|
|
Tax effect of income not taxable for tax purpose |
(16,424 |
) |
(3,116 |
) |
|
|
Reversal of previously recognised deferred tax liabilities on |
|
|
|
|
|
|
disposal of investment properties |
(4,770 |
) |
- |
|
|
|
Utilisation of tax losses previously not recognised |
(1,865 |
) |
(31,184 |
) |
|
|
Utilisation of deductible temporary differences not previously recognised |
(4,891 |
) |
(569 |
) |
|
|
PRC Land Appreciation Tax |
11,283 |
|
- |
|
|
|
Effect of different tax rates of subsidiaries operated in |
|
|
|
|
|
|
other jurisdictions |
5,959 |
|
15,478 |
|
|
|
Effect of change in tax rate |
- |
|
(9,514 |
) |
|
|
Underprovision of Hong Kong Profits Tax and PRC Enterprise |
|
|
|
|
|
|
Income Tax in respect of prior years, net |
1,556 |
|
15,421 |
|
|
|
Overprovision of PRC Land Appreciation Tax in respect of prior years |
- |
|
(5,839 |
) |
|
|
Others |
856 |
|
(252 |
) |
|
|
|
________ |
|
_______ |
|
|
|
Income tax expense for the year |
239,890 |
|
24,290 |
|
|
|
|
________ |
|
_______ |
|
|
|
|
________ |
|
_______ |
|
15. EARNINGS (LOSS) PER SHARE
The calculation of the basic earnings (loss) per share attributable to the Company's shareholders is based on the following data:
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Earnings (loss) for the purpose of basic earnings (loss) |
|
|
|
|
|
|
per share |
1,206,220 |
|
(89,256 |
) |
|
|
|
_________ |
|
________ |
|
|
|
|
_________ |
|
________ |
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
2008 |
|
|
|
number of ordinary shares for |
|
|
|
|
|
|
the purpose of basic earnings (loss) per share |
886,347,812 |
|
886,347,812 |
|
|
|
|
___________ |
|
___________ |
|
|
|
|
___________ |
|
___________ |
|
No diluted earnings (loss) per share is presented as the Company did not have any potential ordinary share in issue during both years or at the end of each reporting period.
15. EARNINGS (LOSS) PER SHARE - continued
For the purpose of assessing the performance of the Group, management is of the view that the profit (loss) for the year should be adjusted for the fair value changes on properties recognised in profit or loss and the related deferred taxation in arriving at the "adjusted profit attributable to the Company's shareholders". A reconciliation of the adjusted earnings is as follows:
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
Profit (loss) attributable to the Company's shareholders as |
|
|
|
|
|
|
shown in the consolidated income statement |
1,206,220 |
|
(89,256 |
) |
|
|
Fair value changes on investment properties |
(1,325,668 |
) |
576,295 |
|
|
|
Fair value changes on properties held for sale upon transfer |
|
|
|
|
|
|
to investment properties |
- |
|
(227,145 |
) |
|
|
Deferred tax thereon |
200,450 |
|
(37,266 |
) |
|
|
Effect of change in tax rate |
- |
|
(8,116 |
) |
|
|
|
________ |
|
________ |
|
|
|
Adjusted profit attributable to the Company's shareholders |
81,002 |
|
214,512 |
|
|
|
|
________ |
|
________ |
|
|
|
|
________ |
|
________ |
|
|
|
Basic earnings per share excluding fair value changes on |
|
|
|
|
|
|
properties net of deferred tax |
HK$0.09 |
|
HK$0.24 |
|
|
|
|
________ |
|
________ |
|
|
|
|
________ |
|
________ |
|
The denominators used in the calculation of adjusted earnings per share are the same as those detailed above.
16. DIVIDENDS
No dividends were paid or proposed during the reported period. The directors do not recommend the payment of any final dividend.
17. INVESTMENT PROPERTIES
|
|
|
Hong Kong |
|
PRC |
|
|
|
||||
|
|
|
|
|
Medium- |
|
|
|
Medium- |
|
|
|
|
|
|
Long lease |
|
term lease |
|
Long lease |
|
term lease |
|
Total |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008 |
318,000 |
|
4,000,000 |
|
1,174,690 |
|
- |
|
5,492,690 |
|
|
|
Additions |
- |
|
- |
|
1,202 |
|
- |
|
1,202 |
|
|
|
Fair value changes |
(110,000 |
) |
(430,000 |
) |
(31,558 |
) |
(4,737 |
) |
(576,295 |
) |
|
|
Transferred from properties |
|
|
|
|
|
|
|
|
|
|
|
|
held for sale |
220,000 |
|
- |
|
- |
|
210,995 |
|
430,995 |
|
|
|
Acquisition of assets |
|
|
|
|
|
|
|
|
|
|
|
|
through acquisition of |
|
|
|
|
|
|
|
|
|
|
|
|
a subsidiary (Note 36(b)) |
- |
|
- |
|
118,290 |
|
- |
|
118,290 |
|
|
|
Exchange adjustments |
- |
|
- |
|
71,976 |
|
(2,156 |
) |
69,820 |
|
|
|
|
_______ |
|
_________ |
|
_________ |
|
________ |
|
_________ |
|
|
|
At 31 December 2008 |
428,000 |
|
3,570,000 |
|
1,334,600 |
|
204,102 |
|
5,536,702 |
|
|
|
Fair value changes |
169,500 |
|
1,100,000 |
|
50,494 |
|
5,674 |
|
1,325,668 |
|
|
|
Disposals |
(352,500 |
) |
- |
|
- |
|
- |
|
(352,500 |
) |
|
|
Reclassified to held for sale |
(245,000 |
) |
- |
|
- |
|
- |
|
(245,000 |
) |
|
|
Exchange adjustments |
- |
|
- |
|
2,164 |
|
328 |
|
2,492 |
|
|
|
|
_______ |
|
_________ |
|
_________ |
|
________ |
|
_________ |
|
|
|
At 31 December 2009 |
- |
|
4,670,000 |
|
1,387,258 |
|
210,104 |
|
6,267,362 |
|
|
|
|
_______ |
|
_________ |
|
_________ |
|
________ |
|
_________ |
|
|
|
|
_______ |
|
_________ |
|
_________ |
|
________ |
|
_________ |
|
17. INVESTMENT PROPERTIES - continued
All of the Group's property interests held under operating leases to earn rentals and/or for capital appreciation purpose. These properties are measured using the fair value model and are classified and accounted for as investment properties.
The fair value of investment properties at 31 December 2009 and 2008 had been arrived at on the basis of valuation carried out at those dates by Savills Valuation and Professional Services Limited ("Savills"), a firm of Chartered Surveyors not connected with the Group. Savills, recognised by The Hong Kong Institute of Surveyors, has appropriate qualifications and recent experiences in the valuation of properties in the relevant locations.
The valuation, which conforms to the appropriate sections of both the current Practice Statements, and United Kingdom Practices Statements contained in the RICS Valuation Standards (January 2008), 6th Edition published by the Royal Institution of Chartered Surveyors in the United Kingdom (the "RICS") as well as the AIM Rules for Companies and Listing Rules published by London Stock Exchange plc., was arrived at on the basis of capitalisation of net income.
18. PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|
|
Furniture, |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel building |
|
|
|
fixtures |
|
|
|
|
|
Crockery, |
|
|
|
||
|
|
|
Under |
|
|
|
Plant and |
|
and |
|
Motors |
|
Leasehold |
|
utensils |
|
|
|
|
|
|
development |
|
Completed |
|
equipment |
|
equipment |
|
Vehicles |
|
improvements |
|
and linens |
|
Total |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
COST |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008 |
156,738 |
|
- |
|
- |
|
2,086 |
|
712 |
|
40 |
|
- |
|
159,576 |
|
|
|
Exchange adjustments |
- |
|
- |
|
- |
|
127 |
|
44 |
|
3 |
|
- |
|
174 |
|
|
|
Additions |
215,727 |
|
- |
|
- |
|
747 |
|
- |
|
- |
|
- |
|
216,474 |
|
|
|
Amortisation of prepaid lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
payments capitalised |
15,122 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
15,122 |
|
|
|
Disposals |
- |
|
- |
|
- |
|
(130 |
) |
- |
|
- |
|
- |
|
(130 |
) |
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2008 |
387,587 |
|
- |
|
- |
|
2,830 |
|
756 |
|
43 |
|
- |
|
391,216 |
|
|
|
Exchange adjustments |
- |
|
- |
|
- |
|
5 |
|
1 |
|
1 |
|
- |
|
7 |
|
|
|
Additions |
274,339 |
|
- |
|
- |
|
6,304 |
|
1,297 |
|
1,195 |
|
3,214 |
|
286,349 |
|
|
|
Amortisation of prepaid lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
payments capitalised |
12,602 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
12,602 |
|
|
|
Reclassification |
(674,528 |
) |
521,536 |
|
46,746 |
|
25,509 |
|
- |
|
80,737 |
|
- |
|
- |
|
|
|
Disposals |
- |
|
- |
|
- |
|
(433 |
) |
- |
|
- |
|
- |
|
(433 |
) |
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2009 |
- |
|
521,536 |
|
46,746 |
|
34,215 |
|
2,054 |
|
81,976 |
|
3,214 |
|
689,741 |
|
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
DEPRECIATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008 |
- |
|
- |
|
- |
|
512 |
|
145 |
|
40 |
|
- |
|
697 |
|
|
|
Exchange adjustments |
- |
|
- |
|
- |
|
34 |
|
10 |
|
3 |
|
- |
|
47 |
|
|
|
Provided for the year |
- |
|
- |
|
- |
|
453 |
|
107 |
|
- |
|
- |
|
560 |
|
|
|
Eliminated on disposals |
- |
|
- |
|
- |
|
(24 |
) |
- |
|
- |
|
- |
|
(24 |
) |
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2008 |
- |
|
- |
|
- |
|
975 |
|
262 |
|
43 |
|
- |
|
1,280 |
|
|
|
Exchange adjustments |
- |
|
- |
|
- |
|
1 |
|
1 |
|
1 |
|
- |
|
3 |
|
|
|
Provided for the year |
- |
|
2,177 |
|
779 |
|
1,730 |
|
247 |
|
3,579 |
|
- |
|
8,512 |
|
|
|
Eliminated on disposals |
- |
|
- |
|
- |
|
(280 |
) |
- |
|
- |
|
- |
|
(280 |
) |
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2009 |
- |
|
2,177 |
|
779 |
|
2,426 |
|
510 |
|
3,623 |
|
- |
|
9,515 |
|
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
CARRYING VALUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2009 |
- |
|
519,359 |
|
45,967 |
|
31,789 |
|
1,544 |
|
78,353 |
|
3,214 |
|
680,226 |
|
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2008 |
387,587 |
|
- |
|
- |
|
1,855 |
|
494 |
|
- |
|
- |
|
389,936 |
|
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
______ |
|
________ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
18. PROPERTY, PLANT AND EQUIPMENT - continued
The above items of property, plant and equipment are depreciated on a straight-line basis after taking into account their estimated residual values at the following rates per annum:
|
|
Completed hotel building |
Shorter of lease term or 40 years |
|
|
Plant and equipment |
10% |
|
|
Furniture, fixtures and equipment |
25% |
|
|
Motor vehicles |
25% |
|
|
Leasehold improvements |
25% |
19. PREPAID LEASE PAYMENTS
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
Leasehold land in Hong Kong held under |
|
|
|
|
|
|
medium-term lease |
591,995 |
|
607,117 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
Analysed for reporting purposes as: |
|
|
|
|
|
|
Current |
15,122 |
|
15,122 |
|
|
|
Non-current |
576,873 |
|
591,995 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
591,995 |
|
607,117 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
Amortisation of prepaid lease payments during the year amounting to HK$12,602,000 (2008: HK$15,122,000) was capitalised to hotel building under development.
20. PROPERTIES FOR DEVELOPMENT
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
COST |
|
|
|
|
|
|
At 1 January |
50,632 |
|
- |
|
|
|
Acquisition of leasehold land through acquisition |
|
|
|
|
|
|
of a subsidiary (Note 35(b)) |
- |
|
13,901 |
|
|
|
Additional costs |
157 |
|
36,416 |
|
|
|
Exchange adjustments |
57 |
|
315 |
|
|
|
|
_______ |
|
_______ |
|
|
|
At 31 December |
50,846 |
|
50,632 |
|
|
|
|
_______ |
|
_______ |
|
|
|
AMORTISATION |
|
|
|
|
|
|
At 1 January |
(637 |
) |
- |
|
|
|
Provided for the year |
(1,253 |
) |
(637 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
At 31 December |
(1,890 |
) |
(637 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
CARRYING VALUE |
|
|
|
|
|
|
At 31 December |
48,956 |
|
49,995 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
The carrying amount represents the Group's cost of interest in certain pieces of lands located in the PRC to be held for development. However, the location of land has not been designated and the legal title of the land use rights has not yet been transferred to the Group.
The carrying amount is amortised on a straight-line basis over the lease term of 40 years of the leasehold land.
21. INTERESTS IN JOINTLY CONTROLLED ENTITIES
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Cost of unlisted investments in jointly controlled entities |
3,859 |
|
- |
|
|
|
Share of post-acquisition losses |
(2,557 |
) |
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
1,302 |
|
- |
|
|
|
Loan to a jointly controlled entity |
39,311 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
40,613 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
As at 31 December 2009, the Group had interests in the following jointly controlled entities:
|
|
|
Place/ |
|
Effective percentage of equity interest held by the Group |
|
|
|
|
Form of |
country of |
Class |
|
||
|
|
business |
Incorporation/ |
of equity |
|
||
|
Name of entity |
structure |
operation |
interest |
Principal activity |
||
|
|
|
|
|
Directly |
Indirectly |
|
|
|
|
|
|
|
|
|
|
Hong Kong Lawdion |
Incorporated |
Hong Kong |
Ordinary shares |
50 |
- |
Investment holding |
|
(Property) Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leiyang Shunhua |
Established |
PRC |
Registered capital |
- |
50 |
Property development |
|
Real Estate Development |
|
|
|
|
|
|
|
Ltd.# |
|
|
|
|
|
|
# English translation of the entity's official name.
The summarised financial information in respect of the Group's interests in the jointly controlled entities which are accounted for using the equity method is set out below:
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Current assets |
64,162 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Non-current assets |
318 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
67,037 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
- |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Income recognised in profit or loss |
2 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Expenses recognised in profit or loss |
2,559 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
- |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
21. INTERESTS IN JOINTLY CONTROLLED ENTITIES - continued
Loan to a jointly controlled entity is unsecured, interest-free and with no fixed repayment terms. As it is the Group's intention not to demand for repayment within one year, the amount is classified as non-current asset.
On application of International Accounting Standard 39 "Financial Instruments - Recognition and Measurement", the fair value of this amount is determined based on effective interest rate of 2% per annum on initial recognition. The difference between the principal amount of HK$42,551,000 and the fair value of HK$38,692,000 of the advance, determined on initial recognition, deemed to be capital contributed to the jointly controlled entity, is included as part of the cost investment in the jointly controlled entity.
22. LOANS RECEIVABLE
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Second mortgage loans |
66,205 |
|
89,808 |
|
|
|
Unsecured loans |
77 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
66,282 |
|
89,808 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
Analysed for reporting purposes: |
|
|
|
|
|
|
Current assets |
3,073 |
|
3,429 |
|
|
|
Non-current assets |
63,209 |
|
86,379 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
66,282 |
|
89,808 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
The loans bear interest at Hong Kong Prime Rate and are repayable by installments over a period of 20 years or as stipulated in the respective agreements.
The second mortgage loans are secured by certain leasehold properties of the borrowers.
The effective interest rate of the loans receivable is 5.0% (2008: 5.2%) per annum.
Loans receivable balances which are past due at the end of the reporting period are minimal and are not considered impaired. In determining the recoverability of the loans receivable, the Group considers any change in value of the properties securing the loans.
The concentration of credit risk is limited due to the customer base being large and unrelated. No single loan receivable is individually material.
23. RECEIVABLES, DEPOSITS AND PREPAYMENTS
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Trade receivables |
4,203 |
|
3,042 |
|
|
|
Other receivables, deposits and prepayments |
579,990 |
|
157,854 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
584,193 |
|
160,896 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
Analysed for reporting purposes: |
|
|
|
|
|
|
Current |
438,958 |
|
160,896 |
|
|
|
Non-current |
145,235 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
584,193 |
|
160,896 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
Included in the other receivables, deposits and prepayments are:
(a) an aggregate amount of HK$349,765,000 (2008: Nil) incurred for the excavation, relocation arrangements and infrastructure works on certain pieces of lands in Nanjing of PRC undertaken by the subsidiaries, one of which was acquired during the year. Details are set out in note 36(a). Based on the latest progress of auction of the relevant land, the directors estimate that the receivable will be fully recovered by 31 December 2011. The carrying amount of receivable expected to be recovered one year after the end of the reporting period is presented under non-current assets; and
(b) deposits of HK$149,500,000 (2008: Nil) for the tendering of certain lands situated in PRC.
Trade receivables mainly comprise rental receivable from tenants for the use of the Group's properties and receivable from corporate customers and travel agents. No credit is allowed to tenants. Rentals are payable upon presentation of demand notes. Average credit period of 30 days are allowed to corporate customers and travel agents.
Receivables from sale of properties are settled according to the payment terms of each individual contract and have to be fully settled before the transfer of legal title of the related properties to the customers.
All trade receivables at the end of the reporting period are aged less than 60 days and within credit period. The Group does not hold any collateral over these balances.
Before granting credit to any customer, the Group uses an internal credit assessment system to assess the potential customers' credit quality and defines credit limits by customers. trade receivables of HK$2,483,00 (2008: HK$3,042,000) at the end of the reporting period which are past due for a period of 1 to 30 days are not considered impaired as these debtors have good repayment history.
24. PROPERTIES HELD FOR SALE
Properties under development are expected to be realised in more than twelve months after the end of the reporting period.
25. PLEDGED BANK DEPOSITS
The deposits carry fixed interest rates ranging from 0.1% to 1.5% (2008: 0.6% to 3.9%) per annum and are pledged to secure short-term bank borrowings.
26. RESTRICTED BANK DEPOSITS
Restricted bank deposits included:
(a) Proceeds received from pre-sale of properties amounted to RMB10,847,000 (equivalent to HK$12,300,000), were used solely for tax payment and settlement of the construction cost of the related properties. These bank deposits carried fixed interest rates ranging from 0.4% to 1.5% per annum. The bank deposits were released during the year; and
(b) Capital of a PRC subsidiary under the process of winding up of US$17,315,000 (equivalent to HK$135,022,000), the use of which was restricted until the winding up process had been completed. During the year, the capital was repaid upon completion of the winding up. The bank deposits carried fixed interest rates ranging from 0.1% to 1.2% per annum.
27. Bank balances and CASH
Bank balances and cash comprise cash held by the Group and short-term bank deposits which carry fixed interest rates ranging from 0.1% to 1.2% (2008: 0.1% to 3.7%) per annum with maturity period of three months or less.
The Group's bank balances and cash that are denominated in currencies other than the functional currencies of the relevant group entities are set out below:
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Hong Kong dollars |
28,613 |
|
4,377 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
United States dollars |
78,007 |
|
- |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
28. INVESTMENT PROPERTIES HELD FOR SALE
On 25 November 2009, the Group entered into an agreement for the disposal of certain investment properties at a consideration of HK$245,000,000. The transaction will be completed by the end of March 2010. The liabilities associated with the disposal of the investment properties at the end of the reporting period are as follows:
|
|
|
HK$'000 |
|
|
|
|
|
|
|
|
Sale deposit received |
24,500 |
|
|
|
Rental deposit received |
2,700 |
|
|
|
|
_______ |
|
|
|
|
27,200 |
|
|
|
|
_______ |
|
|
|
|
_______ |
|
29. PAYABLES, DEPOSITS RECEIVED AND ACCRUED CHARGES
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Trade payables |
2,383 |
|
11,845 |
|
|
|
Rental deposits |
69,980 |
|
63,273 |
|
|
|
Other payables, other deposits received and accrued charges |
280,803 |
|
127,761 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
353,166 |
|
202,879 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
Included in other payables and accrued charges is an amount of HK$130,109,000 (2008: Nil) payable to contractors for the cost in relation to the excavation, relocation arrangements and infrastructure works on certain pieces of the lands as detailed in note 36(a).
30. PROVISIONS
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
At 1 January |
6,807 |
|
15,965 |
|
|
|
Exchange adjustments |
10 |
|
900 |
|
|
|
Reversed during the year |
(770 |
) |
(10,058 |
) |
|
|
|
_______ |
|
_______ |
|
|
|
At 31 December |
6,047 |
|
6,807 |
|
|
|
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
The provisions represent the outstanding compensation payable to the former owners for possession of their properties for redevelopment by the Group. The compensations are either settled in cash or an equivalent value of the Group's properties in other locations or the redeveloped properties as agreed between the relevant parties and the Group. The compensation payable is estimated by the directors based on the PRC relevant statutory requirements.
31. AMOUNT DUE TO A MINORITY SHAREHOLDER
The balances are unsecured, interest-free and repayable on demand.
32. BANK BORROWINGS
|
|
|
2009 |
|
2008 |
|
|||
|
|
|
HK$'000 |
|
HK$'000 |
|
|||
|
|
|
|
|
|
|
|||
|
|
Secured |
2,698,623 |
|
2,505,232 |
|
|||
|
|
Unsecured |
100,000 |
|
- |
|
|||
|
|
|
_________ |
|
_________ |
|
|||
|
|
|
2,798,623 |
|
2,505,232 |
|
|||
|
|
|
_________ |
|
_________ |
|
|||
|
|
|
_________ |
|
_________ |
|
|||
|
|
The variable-rate bank borrowings are repayable as follows: |
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
On demand or within one year |
671,685 |
|
1,289,269 |
|
|||
|
|
More than one year, but not exceeding two years |
820,909 |
|
59,398 |
|
|||
|
|
More than two years, but not exceeding five years |
1,112,960 |
|
883,649 |
|
|||
|
|
More than five years |
193,069 |
|
272,916 |
|
|||
|
|
|
_________ |
|
_________ |
|
|||
|
|
|
2,798,623 |
|
2,505,232 |
|
|||
|
|
Less: Amounts due for settlement within 12 months |
|
|
|
|
|||
|
|
shown under current liabilities |
(671,685 |
) |
(1,289,269 |
) |
|||
|
|
|
_________ |
|
_________ |
|
|||
|
|
Amounts due for settlement after 12 months |
2,126,938 |
|
1,215,963 |
|
|||
|
|
|
_________ |
|
_________ |
|
|||
|
|
|
_________ |
|
_________ |
|
|||
The effective interest rates of these borrowings range from 0.7% to 7.8% (2008: 2.7% to 7.8%) per annum.
All bank borrowings are denominated in the functional currencies of the relevant group entities.
33. SHARE CAPITAL
|
|
|
|
2009 |
2008 |
|
|
|
US$'000 |
HK$'000 |
HK$'000 |
|
|
Authorised: |
|
|
|
|
|
1,300,000,000 ordinary of shares of |
|
|
|
|
|
US$0.05 each |
65,000 |
506,313 |
506,313 |
|
|
|
_______ |
_______ |
_______ |
|
|
|
_______ |
_______ |
_______ |
|
|
Issued and fully paid: |
|
|
|
|
|
886,347,812 ordinary shares of US$0.05 each |
44,317 |
345,204 |
345,204 |
|
|
|
_______ |
_______ |
_______ |
|
|
|
_______ |
_______ |
_______ |
34. DEFERRED TAXATION
The following are the major deferred tax liabilities (assets) recognised and movements thereon during the current and prior reporting periods:
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
temporary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
difference |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in respect |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of fair value |
|
|
|
|
|
|
|
|
Accelerated |
|
Fair value of |
|
Effective |
|
adjustments on |
|
|
|
|
|
|
|
|
tax |
|
investment |
|
rental |
|
acquisition of |
|
Tax |
|
|
|
|
|
|
depreciation |
|
properties |
|
income |
|
subsidiaries |
|
losses |
|
Total |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008 |
2,943 |
|
195,040 |
|
- |
|
26,000 |
|
(4,489 |
) |
219,494 |
|
|
|
Exchange adjustments |
- |
|
2,272 |
|
106 |
|
- |
|
(68 |
) |
2,310 |
|
|
|
(Credit) charge to profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or loss |
(816 |
) |
(37,266 |
) |
12,403 |
|
(14,181 |
) |
(7,087 |
) |
(46,947 |
) |
|
|
Effect of change in tax rate |
(168 |
) |
(8,116 |
) |
- |
|
(1,486 |
) |
256 |
|
(9,514 |
) |
|
|
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2008 |
1,959 |
|
151,930 |
|
12,509 |
|
10,333 |
|
(11,388 |
) |
165,343 |
|
|
|
Exchange adjustments |
- |
|
136 |
|
21 |
|
- |
|
(11 |
) |
146 |
|
|
|
Charge (credit) to profit or loss |
22,627 |
|
200,450 |
|
1,699 |
|
(2,769 |
) |
(11,297 |
) |
210,710 |
|
|
|
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
At 31 December 2009 |
24,586 |
|
352,516 |
|
14,229 |
|
7,564 |
|
(22,696 |
) |
376,199 |
|
|
|
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
For the purpose of presentation of the statement of financial position, deferred tax assets and liabilities above have been offset and shown under non-current liabilities.
At 31 December 2009, the Group has unused tax losses of HK$284,766,000 (2008: HK$224,155,000) available for offset against future profits. A deferred tax asset has been recognised in respect of HK$124,245,000 (2008: HK$52,332,000) of such losses. No deferred tax asset has been recognised in respect of the remaining HK$160,521,000 (2008: HK$171,823,000) as it is not probable that taxable profit will be available due to the unpredictability of future profit streams.
At 31 December 2009, the Group has deductible temporary differences in respect of properties of HK$7,043,000 (2008: HK$36,685,000). No deferred tax asset has been recognised in relation to such deductible temporary difference as it is not probable that taxable profit will be available against which the deductible temporary differences can be utilised.
35. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
Financial assets |
|
|
|
|
|
|
Loans and receivables (including cash and cash |
|
|
|
|
|
|
equivalents) |
2,331,727 |
|
1,683,657 |
|
|
|
|
_________ |
|
_________ |
|
|
|
|
_________ |
|
_________ |
|
|
|
Financial liabilities |
|
|
|
|
|
|
Financial liabilities at amortised cost |
3,107,139 |
|
2,630,992 |
|
|
|
|
_________ |
|
_________ |
|
|
|
|
_________ |
|
_________ |
|
(b) Financial risk management objectives and policies
The directors of the Company have overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls to monitor risks and adherence to market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a constructive control environment in which all employees understand their roles and obligations.
The directors of the Company monitor and manage the financial risks relating to the operations of the Group to ensure appropriate measures are implemented on a timely and effective manner. These risks include market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group's overall strategy remains unchanged from prior year.
Market risk
(i) Foreign currency risk
Certain subsidiaries of the Company have foreign currency denominated monetary assets, which expose the Group to foreign currency risk. The Group currently does not have policy to hedge the foreign currency exposure. However, the management monitors the related foreign currency fluctuation closely and will consider entering foreign exchange forward contracts to hedge significant portion of the foreign currency risk should the need arise.
35. FINANCIAL INSTRUMENTS - continued
(b) Financial risk management objectives and policies - continued
Market risk - continued
(i) Foreign currency risk - continued
The carrying amounts of the foreign currency denominated monetary assets at the end of the reporting period are as follows:
|
|
|
2009 |
|
2008 |
|
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
Hong Kong dollars |
28,613 |
|
4,377 |
|
|
|
United States dollars |
78,007 |
|
135,022 |
|
|
|
|
|
|
|
|
The loans to foreign operations within the Group that form part of the Group's net investment in foreign operations, and are denominated in foreign currency of Hong Kong dollars and United States dollars at the reporting date amounted to HK$163,206,000 (2008: HK$96,139,000) and HK$92,541,000 (2008: HK$92,498,000) respectively.
Sensitivity analysis
The following table details the Group's sensitivity to a 5% (2008: 5%) appreciation in Renminbi, which is the functional currency of the relevant subsidiaries, relative to Hong Kong dollars and United States dollars. There would be an equal and opposite impact where Renminbi weakens 5% (2008:5%) against the relevant currencies.
|
|
|
Decrease in profit for the year |
|
Increase in loss for the year |
|
Increase in equity |
||
|
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
|
|
|
Hong Kong dollars |
|
1,431 |
|
219 |
|
8,160 |
|
4,807 |
|
United States dollars |
|
- |
|
6,751 |
|
4,627 |
|
4,625 |
|
|
|
|
|
|
|
|
|
|
Since Hong Kong dollars are pegged to United States dollars under the Linked Exchange Rate System, the management does not expect any significant foreign currency exposure in relation to the exchange rate fluctuation between Hong Kong dollars and United States dollars.
35. FINANCIAL INSTRUMENTS - continued
(b) Financial risk management objectives and policies - continued
Market risk - continued
(ii) Interest rate risk
The Group is exposed to cash flow interest rate risk in relation to variable-rate borrowings and loans receivable. The Group's cash flow interest rate risk is mainly concentrated on the fluctuation of Hong Kong Interbank Money Market Offer Rate, Hong Kong Prime Rate and the People's Bank of China lending rate on the bank borrowings, and Hong Kong Prime Rate on the loans receivable.
The Group currently does not have an interest rate swap hedging policy. However, the management monitors the interest exposure and will consider hedging interest rate risk exposure should the need arise.
Sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates in relation to the Group's variable-rate bank borrowings and loans receivable at the end of the reporting period. The analysis is prepared assuming the amount of asset and liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis points increase or decrease represents management's assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group's profit for the year ended 31 December 2009 would decrease/increase by HK$13,662,000 (2008: loss increase/decrease by HK$12,077,000).
Credit risk
The Group's maximum exposure to credit risk in the event of the counterparties' failure to perform their obligations at the end of the reporting period in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated statement of financial position. In order to minimise the credit risk, the management of the Group has monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group's credit risk is significantly reduced.
At 31 December 2009, the Group has concentration of credit risk on loan to a jointly controlled entity and other receivables from two counterparties which constitute 99% of the total other receivables.
Although the placing of deposits are concentrated on certain banks, the credit risk on the deposits is limited because the counterparties are licensed banks.
The Group has no other significant concentration of credit risk with exposure spread over a number of counterparties and customers.
35. FINANCIAL INSTRUMENTS - continued
(b) Financial risk management objectives and policies - continued
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the directors of the Company, which have built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities, and by continuously monitoring forecast and actual cash flows.
The following table details the Group's remaining contractual maturity for its financial liabilities based on the agreed repayment terms. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest, estimated based on interest rate at the end of the reporting period, and principal cash flows.
|
|
Weighted average effective interest rate |
Within 3 months |
|
3 months to 6 months |
|
6 months to 9 months |
|
9 months to 12 months |
|
Over 1 year |
|
Total undiscounted cash flows |
|
Carrying amount |
|
|
|
% |
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
At 31.12.2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payables and deposits received |
- |
274,748 |
|
3,654 |
|
3,992 |
|
5,836 |
|
55,710 |
|
343,940 |
|
343,940 |
|
|
Amount due to a minority |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholder |
- |
37,256 |
- |
|
- |
|
- |
|
- |
|
37,256 |
|
37,256 |
|
|
|
Variable rates bank borrowings |
2.1 |
566,995 |
|
27,372 |
|
30,582 |
|
88,801 |
|
2,259,767 |
|
2,973,517 |
|
2,798,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
878,999 |
|
31,026 |
|
34,574 |
|
94,637 |
|
2,315,477 |
|
3,354,713 |
|
3,179,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average effective interest rate |
Within 3 months |
|
3 months to 6 months |
|
6 months to 9 months |
|
9 months to 12 months |
|
Over 1 year |
|
Total undiscounted cash flows |
|
Carrying amount |
|
|
|
% |
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|
At 31.12.2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payables and deposits received |
- |
126,023 |
|
6,692 |
|
6,141 |
|
2,089 |
|
48,088 |
|
189,033 |
|
189,033 |
|
|
Variable rates bank borrowings |
2.4 |
720,329 |
|
22,853 |
|
567,929 |
|
20,717 |
|
1,382,957 |
|
2,714,785 |
|
2,505,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
846,352 |
|
29,545 |
|
574,070 |
|
22,806 |
|
1,431,045 |
|
2,903,818 |
|
2,694,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amounts included above for variable rate bank borrowings are subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.
(c) Fair value measurement of financial instruments
the fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing model which is based on discounted cash flows analysis using the relevant prevailing market rates as input.
The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements approximate their fair values.
36. ACQUISITION OF ASSETS AND ASSUMPTION OF LIABILITIES
(a) On 31 May 2009, the Group acquired the following assets and assumed the following liabilities through acquisition of 51 per cent interest in Nanjing Hushu Ecology Travel Development Company Limited, a company established in the PRC ("Nanjing Company") at a consideration of HK$11,566,000. The excess of the consideration over the net assets acquired representing pre-acquisition operating expenses of Nanjing Company of HK$1,057,000 is recognised as loss on acquisition.
|
HK$'000 |
|
|
|
Net assets acquired: |
|
|
|
|
|
|
|
receivables |
298,110 |
|
|
Bank balances and cash |
9,110 |
|
|
payables |
(120,199 |
) |
|
Amount due to a shareholder |
(166,415 |
) |
|
|
|
|
|
|
20,606 |
|
|
Minority interest |
(10,097 |
) |
|
|
|
|
|
|
10,509 |
|
|
Loss on acquisition |
1,057 |
|
|
|
|
|
|
|
|
|
|
Consideration satisfied by cash |
11,566 |
|
|
|
|
|
|
|
|
|
|
Net cash outflow arising on acquisition: |
|
|
|
|
|
|
|
consideration paid |
(11,566 |
) |
|
Bank balances and cash acquired |
9,110 |
|
|
|
|
|
|
|
|
|
|
|
(2,456 |
) |
|
|
|
|
Prior to the acquisition, Nanjing Company had incurred a total amount of HK$298,110,000 for the excavation, relocation arrangements and infrastructure works on certain pieces of lands in Hushu, Nanjing of which a PRC local government is responsible. The amount, together with further costs to complete the work, are wholly refundable out of the proceeds from public auctions of certain portion of the lands. Nanjing Company will then be awarded the portion of the lands at a fixed price if the auction price is below the fixed price or else the excess of the proceeds from the auction above the fixed price will be awarded to the Nanjing Company.
At the date of acquisition, payable to contractors on the work performed amounted to HK$120,199,000.
36. ACQUISITION OF ASSETS AND ASSUMPTION OF LIABILITIES - continued
(b) On 9 July 2008 and 7 March 2008, the Group acquired certain investment properties and certain interest in land respectively, and the related assets and liabilities through the acquisition of Montelima Holdings Inc. ("Montelima") and Huangshan City Huizhou District Feng Dan Bailu Investment and Development Company Limited ("Feng Dan Bailu"):
|
|
Montelima |
|
Feng Dan Bailu |
|
Total |
|
|||||
|
|
HK$'000 |
|
HK$'000 |
|
HK$'000 |
|
|||||
|
Net assets acquired: |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Investment property |
118,290 |
|
- |
|
118,290 |
|
|||||
|
Properties for development |
- |
|
13,901 |
|
13,901 |
|
|||||
|
Receivables, deposits and prepayments |
370 |
|
- |
|
370 |
|
|||||
|
Bank balances and cash |
1,165 |
|
1 |
|
1,166 |
|
|||||
|
Payables, deposits received and accrued |
|
|
|
|
|
|
|||||
|
charges |
(2,698 |
) |
(8,396 |
) |
(11,094 |
) |
|||||
|
Bank borrowings |
(56,870 |
) |
- |
|
(56,870 |
) |
|||||
|
|
|
|
|
|
|
|
|||||
|
|
60,257 |
|
5,506 |
|
65,763 |
|
|||||
|
Minority interest |
- |
|
(198 |
) |
(198 |
) |
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Consideration satisfied by cash |
60,257 |
|
5,308 |
|
65,565 |
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Net cash outflow arising on acquisition: |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Consideration paid |
(60,257 |
) |
(5,308 |
) |
(65,565 |
) |
|||||
|
Bank balances and cash acquired |
1,165 |
|
1 |
|
1,166 |
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
(59,092 |
) |
(5,307 |
) |
(64,399 |
) |
|||||
|
|
|
|
|
|
|
|
|||||
37. MAJOR NON-CASH TRANSACTIONS
(a) Amount due from the joint venture partner and the jointly controlled entity totalling HK$39,537,000 previously classified under other receivables, deposits and prepayments were reclassified to loan to a jointly controlled entity upon acquisition of the jointly controlled entity.
(b) In the preceding year, certain completed properties were transferred to the former owners of the Group's redeveloped properties as compensation for possession of the former owners' properties, details of which are disclosed in note 30.
38. OPERATING LEASE ARRANGEMENTS
The Group as lessee
Minimum lease payments paid under operating lease during the year are HK$389,000 (2008: HK$1,931,000).
At the end of the reporting period, the Group had commitments for future minimum lease payment under non-cancellable operating leases in respect of rented premises which fall due as follows:
|
|
2009 |
|
2008 |
|
||
|
|
HK$'000 |
|
HK$'000 |
|
||
|
|
|
|
|
|
||
|
Within one year |
222 |
|
730 |
|
||
|
In the second to fifth years inclusive |
108 |
|
- |
|
||
|
|
|
|
|
|
||
|
|
330 |
|
730 |
|
||
Leases are negotiated for the range of 1 to 2 years (2008: 1 to 2 years) with fixed monthly rentals.
The Group as lessor
Majority of the Group's investment properties were leased out under operating leases.
Certain properties held for sale are temporarily leased with rental income earned during the year of HK$16,551,000 (2008: HK$12,960,000) included in other income.
At the end of the reporting period, the Group had contracted with tenants for the following future minimum lease payments:
|
|
2009 |
|
2008 |
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
Within one year |
240,058 |
|
213,344 |
|
|
In the second to fifth years inclusive |
453,196 |
|
430,349 |
|
|
Over five years |
498,154 |
|
513,796 |
|
|
|
|
|
|
|
|
|
1,191,408 |
|
1,157,489 |
|
The Group is entitled to, in respect of a lease, additional rental based on specified percentage of revenue earned by the tenant in addition to the annual minimum lease payments.
The lease terms of the remaining leased properties range from 1 to 17 years (2008: 1 to 18 years).
39. CAPITAL COMMITMENTS
At the end of the reporting period, capital expenditure in relation to development of hotel property are as follows:
|
|
2009 |
|
2008 |
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
Authorised but not contracted for |
- |
|
132,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracted but not provided for in the consolidated financial statements |
- |
|
113,137 |
|
|
|
|
|
|
|
40. PLEDGE OF ASSETS
At the end of the reporting period, the following assets were pledged to secure banking facilities granted to the Group:
(a) Fixed charges on investment properties with an aggregate carrying value of HK$5,449,090,000 (2008: HK$4,573,177,000).
(b) Fixed charges on hotel properties presented in the consolidated statement of financial position as property, plant and equipment and prepaid lease payments with aggregate carrying values of HK$519,359,000 and HK$591,995,000 (2008: HK$387,587,000 and HK$607,117,000) respectively.
(c) Fixed charges on properties under development held for sale with an aggregate carrying value of HK$603,363,000 (2008: HK$593,967,000).
(d) Bank deposits of HK$325,318,000 (2008: HK$198,422,000).
41. SHARE-BASED PAYMENTS
S E A operates an employee share option scheme (the "Scheme") for the primary purpose of providing incentive to directors and eligible employees. The Scheme was approved and adopted on 19 August 2005, and will expire on 18 August 2015.
Under the Scheme, the board of directors of S E A may offer to any director or full time employee/chief executive of S E A, or any of its subsidiaries, options to subscribe for shares in S E A at a price equal to the highest of the nominal value of the shares, and the average of the closing prices of shares on the Stock Exchange on the five business days immediately preceding the date of the grant of the options and the closing price of the shares on the Stock Exchange on the date of grant. The number of shares in respect of which options may be granted to any individual in any one year is not permitted to exceed 10% of the shares of S E A in issue at any point in time, without prior approval from the S E A's shareholders. The period during which an option may be exercised is determined by the board of directors of S E A at its absolute discretion, save that no option may be exercised more than 10 years after it has been granted.
41. SHARE-BASED PAYMENTS - continued
Options granted must be taken up within 28 days from the date of grant or such period as the
S E A's directors determine, upon payment of HK$10.
On 31 December 2008, S E A has granted share options to a director of the Company entitling the holder to subscribe for 2,000,000 S E A shares at an exercise price of HK$2.262 per share. The vesting period is from 31 December 2008 to 30 December 2010.
These granted share options have not lapsed or exercised during the year. In addition, no options were granted during the year.
The option is exercisable within a term of two years commencing from 31 December 2010. The directors determined the fair value of the share option with reference to the calculation made by an independent professional valuer to be HK$592,000. The fair value was calculated using the Binominal Option Pricing model. The inputs in the model were as follows:
|
Share price as at grant date: |
HK$2.260 |
|
Exercise price: |
HK$2.262 |
|
Expected volatility: |
35.083% |
|
Expected dividend yield: |
6.19% |
|
Risk-free rate: |
0.539% |
|
Suboptimal factor: |
2.64 |
Expected volatility was determined by using the historical volatility of S E A's share price before the grant date for previous three years. The suboptimal factor was to account for the exercise behaviour of the share option granted by S E A.
42. RETIREMENT BENEFIT PLANS
The Group participates in a defined contribution scheme which is registered under a Mandatory Provident Fund Schemes (the "MPF Scheme") established under the Mandatory Provident Fund Schemes Ordinance of Hong Kong in December 2000 for eligible employees in Hong Kong. The assets of the MPF Scheme are held separately from those of the Group, in funds under the control of trustees. The Group contributes 5% to 15% of relevant payroll costs per month to the scheme for members of the MPF Scheme, depending on the length of service with the Group.
The employees of the Group's subsidiaries in the PRC are members of state-managed retirement benefit scheme operated by the government of the PRC.
The total contribution paid to the retirement benefit schemes by the Group charged to profit or loss for the year amounted to HK$1,684,000 (2008: HK$800,000).
43. RELATED PARTY TRANSACTIONS
(a) The Group had the following transactions with fellow subsidiaries, the wholly-owned subsidiaries of S E A during the year and the prior year:
(i) Rental income of HK$8,853,000 (2008: HK$9,158,000) from the renting of the Group's premises;
(ii) Management fees of HK$84,424,000 (2008: HK$113,611,000) in respect of provision of property development management services to the Group on the Group's property portfolio; and
(iii) Acquisition of Montelima as detailed in note 36(b).
(b) The Group made interest-free advances of HK$3,000,000 (2008: Nil) to a jointly controlled entity during the year. The principal due from the jointly controlled entity at the end of the reporting period is HK$42,551,000 (2008: Nil).
(c) Compensation to directors who are the Group's key management personnel is as follows:
|
|
2009 |
|
2008 |
|
|
|
HK$'000 |
|
HK$'000 |
|
|
|
|
|
|
|
|
Short-term benefits |
2,884 |
|
2,994 |
|
|
Post-employment benefits |
180 |
|
134 |
|
|
Share-based payments |
296 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,360 |
|
3,128 |
|
|
|
_ |
|
|
|
Details of share options are disclosed in note 41.
44. PRINCIPAL SUBSIDIARIES
|
|
|
|
|
Issued share capital/registered capital held by the Company |
|
|
|
|
|
Place/country of |
Issued and paid |
|
||
|
|
|
incorporation/ |
up share capital/ |
Principal activities |
||
|
|
Name of subsidiary |
operation |
registered capital |
|||
|
|
|
|
|
2009 |
2008 |
|
|
|
|
|
|
% |
% |
|
|
|
Direct subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Strong Group Limited |
B.V.I./Hong Kong |
1 ordinary share |
100 |
100 |
Investment holding |
|
|
|
|
of HK$1 |
|
|
|
|
|
Indirect subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGP (Diamond Hill) Limited |
Hong Kong |
2 ordinary shares |
100 |
100 |
Property development |
|
|
|
|
of HK$1 each |
|
|
|
|
|
|
|
|
|
|
|
|
|
AGP (Sha Tin) Limited |
Hong Kong |
1 ordinary share |
100 |
100 |
Property development |
|
|
|
|
of HK$1 |
|
|
|
44. PRINCIPAL SUBSIDIARIES - continued
|
|
|
|
|
Issued share capital/registered capital held by the Company |
|
|
|
|
|
Place/country of |
Issued and paid |
|
||
|
|
|
incorporation/ |
up share capital/ |
Principal activities |
||
|
|
Name of subsidiary |
operation |
registered capital |
|||
|
|
|
|
|
2009 |
2008 |
|
|
|
|
|
|
% |
% |
|
|
|
Indirect subsidiaries - continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGP (Wanchai) Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Property development and investment |
|
|
|
|
|
|
|
|
|
|
AGP Hong Kong Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Property investment |
|
|
|
|
|
|
|
|
|
|
Concord Way Limited |
Hong Kong |
100 ordinary shares of HK$1 each |
100 |
100 |
Hotel operation |
|
|
|
|
|
|
|
|
|
|
Giant Well Enterprises Limited |
B.V.I./Hong Kong |
1 ordinary share of US$1 |
100 |
100 |
Investment holding |
|
|
|
|
|
|
|
|
|
|
Grace Art Development Limited |
Hong Kong |
1 ordinary share of HK$1 |
100 |
100 |
Treasury services |
|
|
|
|
|
|
|
|
|
|
Handy View Company Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Property investment |
|
|
|
|
|
|
|
|
|
|
Harvest Hill Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Financing |
|
|
|
|
|
|
|
|
|
|
Kingston Pacific Investment Limited |
B.V.I./Hong Kong |
100 ordinary shares of US$1 each |
55 |
55 |
Property development |
|
|
|
|
|
|
|
|
|
|
SEA Group Treasury Limited |
Hong Kong |
10,000,000 ordinary shares of HK$1 each |
100 |
100 |
Treasury services |
|
|
|
|
|
|
|
|
|
|
Shine Concord Investments Limited |
Hong Kong |
1 ordinary share of HK$1 |
100 |
100 |
Hotel operation |
|
|
|
|
|
|
|
|
|
|
Shinning Worldwide Limited |
B.V.I./Hong Kong |
1,000 ordinary shares of US$1 each |
55 |
55 |
Investment holding |
|
|
|
|
|
|
|
|
|
|
Sky Trend Investments Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Hotel operation |
|
|
|
|
|
|
|
|
|
|
Sunfold Development Limited |
Hong Kong |
1 ordinary share of HK$1 |
100 |
100 |
Hotel operation |
|
|
|
|
|
|
|
|
|
|
Wing Siu Company Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Property investment |
|
|
|
|
|
|
|
|
|
|
Chengdu Huashang House Development Co., Ltd.* |
PRC |
RMB200,000,000 registered capital |
100 |
100 |
Property investment |
|
|
|
|
|
|
|
|
|
|
Guangzhou Yingfat House Property Development Co., Ltd.** |
PRC |
US$20,110,000 registered capital |
100 |
100 |
Property development and investment |
|
|
|
|
|
|
|
|
|
|
Montelima Holdings Inc. |
B.V.I./ Hong Kong |
1 ordinary share of US$1 |
100 |
100 |
Investment holding
|
|
|
|
|
|
|
|
|
|
|
Sino Harvest Investment Limited |
Hong Kong |
2 ordinary shares of HK$1 each |
100 |
100 |
Investment holding |
44. PRINCIPAL SUBSIDIARIES - continued
|
|
|
|
|
Issued share capital/registered capital held by the Company |
|
||
|
|
|
Place/country of |
Issued and paid |
|
|||
|
|
|
incorporation/ |
up share capital/ |
Principal activities |
|||
|
|
Name of subsidiary |
operation |
registered capital |
||||
|
|
|
|
|
2009 |
2008 |
|
|
|
|
|
|
|
% |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect subsidiaries - continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sino Harvest Real Estate Development (Chengdu) Company Limited* |
PRC |
US$3,000,000 registered capital |
100 |
100 |
Property investment |
|
|
|
|
|
|
|
|
|
|
|
|
Huangshan City Huizhou District Feng Dan Bailu Investment and Development Company Limited@# |
PRC |
RMB35,000,000 registered capital |
91 |
91 |
Property and tourist leisure facilities development |
|
|
|
|
|
|
|
|
|
|
|
|
Prime Sign Limited |
Hong Kong |
1 ordinary |
100 |
100 |
Investment holding |
|
|
|
|
|
share of HK$1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nanjing Hushu Ecology |
PRC |
RMB100,000,000 |
51 |
- |
Property, cultural and |
|
|
|
Travel Development Company |
|
registered capital |
|
|
tourism development |
|
|
|
Limited@ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nanjing Taligang Tourist Leisure |
PRC |
RMB35,000,000 |
51 |
51 |
Property, cultural and |
|
|
|
Facilities Company Limited@ |
|
registered capital |
|
|
tourism development |
|
|
|
|
|
|
|
|
|
|
|
|
* |
Wholly foreign owned enterprise |
|||||
|
|
|
|
|||||
|
|
** |
The Group entitled to the remaining profit/asset after the PRC partner's entitlement which is the higher of a fixed sum of return or 5% of the profit generated from the related property development project. |
|||||
|
|
|
|
|||||
|
|
@ |
Sino-foreign equity joint venture |
|||||
|
|
|
|
|||||
|
|
# |
English translation of the entity's official name. |
|||||
|
|
|
|
|||||
|
|
The directors of the Company are of the opinion that a complete list of the particulars of all subsidiaries of the Company will be of excessive length and therefore the above list contains only the particulars of subsidiaries which principally affect the results or assets of the Group. |
||||||
Related Shares:
AGP.L