TIDMAGP
RNS Number : 3237P
Asian Growth Properties Limited
30 August 2017
30 August 2017
Asian Growth Properties Limited
Results for the period ended 30 June 2017
Asian Growth Properties Limited (the "Company") (AIM Stock Code:
AGP), the Hong Kong based China property development and investment
company, announces its unaudited condensed consolidated results for
the period ended 30 June 2017. These financial results are the
first results since the completion of the disposal of the Company's
non-China properties on 15 May 2017.
Financial Highlights
n Profit attributable to the Company's shareholders of
HK$2,599.4 million (GBP256.7 million) (2016: HK$561.3 million
(GBP53.7 million)).
n Profit attributable to the Company's shareholders (excluding
revaluation surplus net of deferred tax) was HK$2,590.6 million
(GBP255.9 million) (2016: HK$573.9 million (GBP54.9 million)
excluding revaluation deficit net of deferred tax). The increment
was a result of a realized gain of HK$2,549.9 million (GBP251.9
million) on the sale of the entire issued share capital of Benefit
Strong Group Limited which holds the non-PRC assets pursuant to the
sale and purchase agreement dated 31 March 2017 made between the
Company and S E A Holdings Limited ("SEA").
n Earnings per share for profit attributable to the Company's
shareholders of HK293.3 cents (29.0 pence) (2016: HK63.3 cents (6.1
pence)).
n Net asset value per share attributable to the Company's
shareholders as at 30 June 2017 of HK$4.9 (48.4 pence) (31 December
2016: HK$14.4 (150.5 pence)).
n The Group's equity attributable to the Company's shareholders
amounted to HK$4,295.6 million (GBP424.3 million) as at 30 June
2017 (31 December 2016 pro forma (unaudited) (Note 1) : HK$4,263.5
million (GBP445.5 million)).
n Geographical location of the Group's property assets were as follows:
30 June 2017 31 December 2016
---------- -------------------------- --------------------
Hong Kong - HK$892.2 million
(GBP93.2 million)
---------- -------------------------- --------------------
United - HK$1,494.1 million
Kingdom (GBP156.1 million)
---------- -------------------------- --------------------
Mainland HK$2,486.6 million HK$2,413.1 million
China (GBP245.6 million) (GBP252.1 million)
---------- -------------------------- --------------------
Total HK$2,486.6 million HK$4,799.4 million
(GBP245.6 million) (GBP501.4 million)
========== ========================== ====================
n As at 30 June 2017, bank balances and cash of the Group
amounted to HK$1,724.5 million (GBP170.3 million). After netting
off bank borrowings of HK$129.0 million (GBP12.7 million), the
Group had a net cash position of HK$1,595.5 million (GBP157.6
million) at period end date, compared to a net cash position of
HK$6,320.3 million (GBP660.4 million) as at 31 December 2016.
n The Board declared a special dividend of HK$10.35 (GBP1.06
(Note 2) ) per common share to the shareholders of the Company and
the special dividend was paid on 15 May 2017.
Operational Highlights
n On 31 March 2017, the Company entered into a sale and purchase
agreement with SEA pursuant to which the Company conditionally
agreed to sell the entire issued share capital of Benefit Strong
Group Limited, which owns Crowne Plaza Hong Kong Causeway Bay in
Hong Kong and a commercial property at 20 Moorgate in UK, at an
aggregate consideration of HK$8,913.4 million (GBP913.6 million
(Note 2) ). Completion of the disposal took place on 15 May
2017.
n The sale of Benefit Strong Group Limited realised a gain on
disposal of HK$2,549.9 million (GBP251.9 million). The
consideration of HK$8,913.4 million (GBP913.6 million (Note 2) )
was settled by offsetting the special dividend of HK$10.35 (GBP1.06
(Note 2) ) per share that SEA was entitled to receive.
n Prior to the completion of disposal of Benefit Strong Group
Limited in May 2017, stable gross rental income was generated from
an investment property in UK and the hotel operation results of
Crowne Plaza Hong Kong Causeway Bay were in general in line with
the weaker hotel business environment in 2017.
n The rental income from investment properties situated in the
PRC continued to provide stable returns to the Company.
Notes:
1. The unaudited pro forma financial information was disclosed
by the Company in the Circular dated 31 March 2017.
2. Amounts in Pounds Sterling use the exchange rates which were
previously disclosed by the Company in the relevant
announcements.
3. Other 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 30 June GBP1 = HK$10.1244
2017:
For 31 December GBP1 = HK$9.5710
2016:
For 30 June GBP1 = HK$10.4562
2016:
4. For the Company's shareholders' information, the exchange
rate on 29 August 2017 was GBP1 = HK$10.1375.
Miscellaneous
The results included in this announcement are extracted from the
unaudited condensed consolidated financial statements of the
Company for the period ended 30 June 2017, which have been approved
by the Board of Directors on 30 August 2017.
The 2017 Interim Report is expected to be posted to the
Company's shareholders and holders of depositary interests in late
September 2017.
This announcement contains inside information for the purpose of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
For further information, please contact:
Lincoln Lu TEL: +852 2828
3232
Chief Executive Officer
and Executive Director
Asian Growth Properties
Limited
Richard Gray/Andrew Potts/Atholl TEL: +44 207 886
Tweedie 2500
Panmure Gordon (UK) Limited
(Nominated Advisor)
Attached:-
1. Chairman's Review;
2. Executive Directors' Review;
3. Condensed Consolidated Statement of Profit or Loss;
4. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income;
5. Condensed Consolidated Statement of Financial Position;
6. Condensed Consolidated Statement of Changes in Equity;
7. Condensed Consolidated Statement of Cash Flows; and
8. Notes to the Condensed Consolidated Financial Statements.
This announcement can also be viewed on the Company's website
at:
http://www.asiangrowth.com/html/eng/news.asp
CHAIRMAN'S REVIEW
I am pleased to present the unaudited condensed consolidated
financial results of Asian Growth Properties Limited ("AGP" or the
"Company", together with its subsidiaries, the "Group") for the
first six months of 2017 to the shareholders of the Company.
Results
AGP reported a profit attributable to the Company's shareholders
of HK$2,599.4 million (GBP256.7 million) for the period ended 30
June 2017 (2016: HK$561.3 million (GBP53.7 million)). The reported
profit included a revaluation surplus on investment properties net
of deferred taxation of HK$8.8 million (GBP0.9 million) (2016:
revaluation deficit of HK$12.6 million (GBP1.2 million)). By
excluding the net effect of such surplus, the Group's net profit
attributable to the Company's shareholders was HK$2,590.6 million
(GBP255.9 million) (2016: HK$573.9 million (GBP54.9 million)
excluding revaluation deficit net of deferred tax), including a
realised gain of HK$2,549.9 million (GBP251.9 million) on the sale
of the entire issued share capital of Benefit Strong Group Limited
which holds the non-PRC assets pursuant to the sale and purchase
agreement dated 31 March 2017 made between the Company and SEA.
As at 30 June 2017, the Group's equity attributable to the
Company's shareholders amounted to HK$4,295.6 million (GBP424.3
million) (31 December 2016 pro forma (unaudited) (Note 1) :
HK$4,263.5 million (GBP445.5 million)). The net asset value per
share attributable to the Company's shareholders as at 30 June 2017
was HK$4.9 (48.4 pence) as compared with pro forma (unaudited)
(Note 1) HK$4.8 (50.2 pence) as at 31 December 2016.
Unless stated otherwise, 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.
Operations
During the period ended 30 June 2017, the Group has continued to
focus on property development and property investment projects. The
rental income from investment properties situated in the PRC
continued to provide stable returns to the AGP Group.
The Company completed the sale of the entire issued share
capital of Benefit Strong Group Limited, which owns the Crowne
Plaza Hong Kong Causeway Bay in Hong Kong and a commercial property
at 20 Moorgate in UK, at an aggregate consideration of HK$8,913.4
million (GBP913.6 million (Note 2) ). Completion of the disposal
took place on 15 May 2017 and realised a gain on disposal of
HK$2,549.9 million (GBP251.9 million). The consideration in
relation to the sale was satisfied by AGP offsetting an amount
equal to the consideration against the proportion of the Company's
special dividend of HK$10.35 (GBP1.06 (Note 2) ) per share that SEA
was entitled to receive.
The Group will continue to monitor the property markets of the
PRC and other markets closely, in order to identify potential
acquisition targets at opportune times.
For details of the Group's operations, please refer to the
Executive Directors' Review.
Share Exchange and Cash Offer
Reference is made to the joint announcement dated 28 August 2017
made by the Company and Nan Luen International Limited ("NLI")
regarding the results of the share exchange and cash offer by NLI.
Upon the close of the offer on 28 August 2017, NLI had received
acceptances totalling 304,264,521 shares in the Company (including
all acceptances with cooling-off period and without cooling-off
period elected as at 28 August 2017) which represents approximately
34.33% of the entire issued share capital of the Company. If there
is no withdrawal in respect of those acceptances which are subject
to a cooling-off period, NLI will hold a total of 866,605,133
shares in the Company, representing approximately 97.77% interest
therein. The Company and NLI will make further announcement on the
results of final acceptances including any remaining withdrawal of
acceptances on 11 September 2017.
Outlook
The global economy is likely to improve gradually, given that
many advanced economies are poised for sustaining modest to
moderate growth. Many countries also adopt a somewhat relaxing
fiscal policy stance. However, the downside risks in the external
environment such as US interest rate normalization, Brexit-related
negotiations & various uncertainties surrounding policy and
political developments in the US and Europe, still warrant
attention.
China's economy continued its stabilizing trend with 6.9% GDP
growth in the second quarter of 2017 compared with 6.7% in 2016.
Growth momentum has stayed pretty high. Infrastructure investment
is picking up on the back of regional development initiatives,
including the "Belt and Road". Real estate investment is expected
to remain buoyant, private investment growth has bottomed out and
consumption growth is expected to remain stable, underpinned by
continued strong job creation.
Interim Dividend
The Board does not propose the payment of an interim dividend
for the period ended 30 June 2017 (2016: Nil).
Acknowledgement
The Board would like to take this opportunity to thank the
executive and management team for the execution of the Board's
strategy and their ongoing support.
Richard Prickett
Non-executive Chairman
Hong Kong, 30 August 2017
EXECUTIVE DIRECTORS' REVIEW
FINANCIAL SUMMARY
Turnover for the period ended 30 June 2017 amounted to HK$232.2
million (GBP22.9 million) (2016: HK$294.6 million (GBP28.2
million)). The turnover was principally attributable to the
recognition of rental income from investment properties, revenue
from hotel operation and the income from financial investment.
Profit attributable to the Company's shareholders for the period
amounted to HK$2,599.4 million (GBP256.7 million) (2016: HK$561.3
million (GBP53.7 million)), equivalent to a basic earnings per
share of HK293.3 cents (29.0 pence) (2016: HK63.3 cents (6.1
pence)). The reported profit included a revaluation surplus on
investment properties net of deferred taxation of HK$8.8 million
(GBP0.9 million) (2016: revaluation deficit of HK$12.6 million
(GBP1.2 million)). By excluding the net effect of such surplus, the
Group's net profit attributable to the Company's shareholders was
HK$2,590.6 million (GBP255.9 million) (2016: HK$573.9 million
(GBP54.9 million) excluding revaluation deficit net of deferred
tax), equivalent to HK292.3 cents (28.9 pence) (2016: HK64.8 cents
(6.2 pence)) per share.
As at 30 June 2017, the Group's equity attributable to the
Company's shareholders amounted to HK$4,295.6 million (GBP424.3
million) (31 December 2016: HK$12,789.5 million (GBP1,336.3
million)). The net asset value per share attributable to the
Company's shareholders as at 30 June 2017 was HK$4.9 (48.4 pence)
as compared with HK$14.4 (150.5 pence) as at 31 December 2016.
For the Company's 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 periods and the relevant exchange rates
adopted are stated as follows:
For 30 June 2017: GBP1 = HK$10.1244
For 31 December 2016: GBP1 = HK$9.5710
For 30 June 2016: GBP1 = HK$10.4562
BUSINESS REVIEW
Property Investment and Development
The Group continues to focus on its development and investment
projects. It is the Group's approach to review and optimise the
project portfolios from time to time. The Group's projects located
in Mainland China are listed below.
Following the disposal of certain properties as summarized in
these results, the Group owns four properties in China (one
property held for sale and three investment properties).
Chengdu, Sichuan Province
Plaza Central
During the period under review, the occupancy rate for the two
30-storey office towers of Plaza Central remained at a high level
and its retail podium with a gross floor area of about 29,000
square metres is fully let principally to Chengdu New World
Department Store on a long-term lease. As at 30 June 2017, the
aggregate occupancy rate for the two office towers and the retail
podium was approximately 77% (31 December 2016: 79%) with a
weighted average lease length of 10.9 years) (31 December 2016:
10.8 years). Leasing activities for the remaining areas of Plaza
Central continue.
New Century Plaza
The shopping arcade of New Century Plaza with a gross floor area
of about 16,300 square metres is fully let to a hotel operator on a
long-term lease of approximately 12.5 years (31 December 2016: 12.5
years).
Guangzhou, Guangdong Province
Westmin Plaza Phase II, office tower
As at 30 June 2017, the occupancy rate of the 14-storey office
tower of Westmin Plaza Phase II of about 16,100 square metres was
100% with more than one-third of the total office space being
leased to AIA (31 December 2016: 95%) with a weighted average lease
length of 4.2 years) (31 December 2016: 4.3 years).
Westmin Plaza Phase II, commercial podium (held for sale)
Leasing activities for the 3-storey shopping arcade of Westmin
Plaza Phase II with a total gross floor area of about 26,400 square
metres are in progress.
New Cost Sharing Agreement
The Company and its various subsidiaries and South-East Asia
Investment And Agency Company, Limited ("SEAI"), a wholly-owned
subsidiary of SEA, entered into a cost sharing agreement on 29 July
2014 (the "Old Cost Sharing Agreement") whereby SEAI agreed to
provide to AGP and its subsidiaries and associates personnel and
facilities.
With respect of the restructuring of the Company and SEA (the
"Restructuring"), the Company and SEAI entered into a new cost
sharing agreement on 31 March 2017 (the "New Cost Sharing
Agreement") to terminate and replace the Old Cost Sharing Agreement
whereby SEAI will continue to provide the Company and its
subsidiaries with certain services such as compliance and company
secretarial support for a period of up to 1 year from 15 May
2017.
The Company currently has its own administrative, finance and
operational staff separate from those of SEA. Furthermore, it
operates & manages its own business at separate office
premises.
WORKING CAPITAL AND LOAN FACILITIES
As at 30 June 2017, the Group's total cash balance was
HK$1,724.5 million (GBP170.3 million) (31 December 2016: HK$9,778.9
million (GBP1,021.7 million)) without unutilised facilities (31
December 2016: unutilised facilities of HK$627.4 million (GBP65.6
million)).
As at 30 June 2017, after netting off bank borrowings of
HK$129.0 million (GBP12.7 million), the Group had a net cash
position of HK$1,595.5 million (GBP157.6 million) (31 December
2016: HK$6,320.3 million (GBP660.4 million)).
As at 30 June 2017, the maturity of the Group's outstanding
borrowings was as follows:
30 June 2017 31 December 2016
HK$' million HK$' million
---------------- ------------------------- ----------------
Due
Within 1 year 50.4 1,467.8
1-2 years 46.4 97.6
3-5 years 13.8 1,887.1
Over 5 years 21.3 23.5
---------------- ------------------------- ----------------
131.9 3,476.0
Less: Front-end
fee (2.9) (17.4)
---------------- ------------------------- ----------------
129.0 3,458.6
================ ========================= ================
Pledge of Assets
For the Company's subsidiaries operating in Hong Kong and
Mainland China, the total bank loans drawn as at 30 June 2017
amounted to HK$131.9 million (GBP13.0 million) (31 December 2016:
HK$3,476.0 million (GBP363.2 million)) which comprised secured bank
loans of HK$131.9 million (GBP13.0 million) (31 December 2016:
HK$3,396.0 million (GBP354.8 million)). The secured bank loans were
secured by properties valued at HK$1,401.9 million (GBP138.5
million) (31 December 2016: properties valued at HK$3,747.0 million
(GBP391.5 million), listed debt securities of HK$882.1 million
(GBP92.2 million), pledged cash of HK$533.1 million (GBP55.7
million) and note receivables of HK$54.3 million (GBP5.7
million)).
Treasury Policies
The Group adheres to prudent treasury policies. As at 30 June
2017, all of the Group's borrowings were raised through its
wholly-owned subsidiaries on a non-recourse basis.
International Financial Reporting Standards ("IFRS")
The Group has adopted IFRS and the unaudited condensed
consolidated financial statements accompanying this Review have
been prepared in accordance with IFRS.
OUTLOOK
Mainland China economy growth accelerated to 6.9% in the second
quarter of 2017 as compared with a 6.7% GDP growth rate in 2016. It
was achieved by implementing a proactive fiscal policy and prudent
monetary policy, which was within the China Central Government's
targeted range. Steady growth continued in early 2017. The "Belt
and Road" initiative has continued to promote development and
business co-operation among the participating regions and nations,
which is expected to benefit Hong Kong and Mainland China.
The Hong Kong economy expanded 3.8% in the second quarter
compared with 4.3% in the first quarter of 2017, after growing by
2% in 2016. Even though the tourism and retail industries are still
suffering from structural adjustment, major economies around the
world, including the US, China and Eurozone, maintained stable
growth and the global political uncertainties did not derail the
recovery.
The global economic conditions are solidly improving as healthy
global demand and rising consumer spending are propelling economic
growth. The global economy is benefiting from accommodative
monetary policies and less tight fiscal policies. The downside
risks such as political instability in Europe and rising trade
protectionism have not disappeared, but have certainly receding.
The Group is closely monitoring the evolving market developments
and intends to adopt a prudent and effective policy in managing
risks associated with the various challenges ahead.
After the completion of the disposal of the non-China assets,
the Group is currently focusing on the property developments &
investments in Mainland China. However, the Group has not committed
to limit its sphere of activities solely to China. The Group's
strategy will be determined by the Company's board taking into
consideration market opportunities, its financial resources and
core competence.
On behalf of the Executive Directors
Lincoln Lu
Chief Executive Officer and Executive Director
Hong Kong, 30 August 2017
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE SIX MONTHSED 30 JUNE 2017
Six months ended
30 June
NOTES 2017 2016
HK$'000 HK$'000
(unaudited) (unaudited)
Revenue 4 232,207 294,638
Other income 13,888 10,802
Costs:
Property and related costs 5 (15,407) (25,473)
Staff costs (30,130) (52,060)
Depreciation and amortisation (13,746) (29,646)
Other expenses 6 (105,915) (164,477)
-------------- -----------------
(165,198) (271,656)
-------------- -----------------
Profit from operations
before fair value changes
on investment properties 80,897 33,784
Fair value changes on investment
properties 8,775 (16,813)
-------------- -----------------
Profit from operations
after fair value changes
on investment properties 89,672 16,971
Gain on disposal of subsidiaries 23 2,549,927 520,974
Finance costs 7 (29,496) (46,749)
-------------- -----------------
Profit before taxation 8 2,610,103 491,196
Income tax (expense) credit 9 (11,346) 67,234
-------------- -----------------
Profit for the period 2,598,757 558,430
========== ==========
Attributable to:
Company's shareholders 2,599,387 561,348
Non-controlling interests (630) (2,918)
-------------- -----------------
2,598,757 558,430
========== ==========
HK cents HK cents
Earnings per share for
profit attributable to
the Company's shareholders 10
* Basic 293.3 63.3
========== ==========
Earnings per share excluding
fair value changes on investment
properties
net of deferred tax
* Basic 10 292.3 64.8
========= =========
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2017
Six months ended
30 June
2017 2016
HK$'000 HK$'000
(unaudited) (unaudited)
Profit for the period 2,598,757 558,430
---------------- -----------------
Other comprehensive income (expense):
Item that may be subsequently
reclassified to profit or loss:
Exchange differences arising
on translation of foreign operations 68,176 (62,379)
Reclassification adjustments
for amounts transferred to profit
or loss:
* upon disposal of subsidiaries (note 23) (5,486) (6,654)
Fair value change on available-for-sale
investments 5,759 -
---------------- -----------------
Total comprehensive income for
the period 2,667,206 489,397
========== ==========
Total comprehensive income (expense)
attributable to:
Company's shareholders 2,674,102 493,014
Non-controlling interests (6,896) (3,617)
---------------- -----------------
2,667,206 489,397
========== ==========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2017
NOTES 30.6.2017 31.12.2016
HK$'000 HK$'000
(unaudited) (audited)
Non-current assets
Investment properties 12 2,002,581 3,445,337
Property, plant and equipment 54,500 951,687
Loan receivables - 3,160
Note receivables - 38,773
Other receivables 13 - -
Available-for-sale investments 14 7,806 1,253,243
Restricted bank deposits 5,761 5,589
-------------- ----------------
2,070,648 5,697,789
-------------- ----------------
Current assets
Properties held for sale
Completed properties 436,041 423,061
Inventories - 1,196
Loan receivables - 376
Note receivables - 15,509
Available-for-sale investments 14 3,902 137,204
Receivables, deposits and
prepayments 15 525,955 585,379
Tax recoverable - 3,088
Amounts due from non-controlling
interests 16 - 38
Pledged bank deposits - 533,105
Bank deposits with original
maturity over three months 245,654 4,460,201
Bank balances and cash 1,473,098 4,779,967
-------------- ----------------
2,684,650 10,939,124
-------------- ----------------
Current liabilities
Payables, rental deposits
and accrued charges 17 98,996 157,629
Tax liabilities 7,676 7,424
Amounts due to non-controlling
interests 16 90,446 87,754
Bank borrowings - due within
one year 18 48,466 1,464,928
-------------- ----------------
245,584 1,717,735
-------------- ----------------
Net current assets 2,439,066 9,221,389
-------------- ----------------
Total assets less current
liabilities 4,509,714 14,919,178
========= =========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION -
continued
AT 30 JUNE 2017
NOTES 30.6.2017 31.12.2016
HK$'000 HK$'000
(unaudited) (audited)
Capital and reserves
Share capital 19 345,204 345,204
Reserves 3,950,430 12,444,309
--------------- -----------------
Equity attributable to the
Company's shareholders 4,295,634 12,789,513
Non-controlling interests (87,140) (80,244)
--------------- -----------------
Total equity 4,208,494 12,709,269
--------------- -----------------
Non-current liabilities
Bank borrowings - due after
one year 18 80,547 1,993,705
Deferred taxation 20 220,673 216,204
--------------- -----------------
301,220 2,209,909
--------------- -----------------
Total equity and non-current
liabilities 4,509,714 14,919,178
========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2017
Attributable to the Company's
shareholders
------------------------------------------------------------------------------------------------------------------------
Investment Non-
Share Share Contributed Translation Other revaluation Retained controlling
capital premium surplus reserve reserves reserve profits Total interests Total
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
(note (note (note
iii) i) ii)
At 1 January
2016 (audited) 345,204 4,836,225 - 247,899 766,370 - 8,023,060 14,218,758 41,639 14,260,397
Profit for
the period - - - - - - 561,348 561,348 (2,918) 558,430
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Exchange
differences
arising on
translation
of foreign
operations - - - (61,680) - - - (61,680) (699) (62,379)
Disposal
of subsidiaries - - - (6,654) (340,096) - 340,096 (6,654) - (6,654)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Other comprehensive
(expense)
income for
the period - - - (68,334) (340,096) - 340,096 (68,334) (699) (69,033)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ------------ ------------
Total comprehensive
income (expense)
for the period - - - (68,334) (340,096) - 901,444 493,014 (3,617) 489,397
Dividends
paid - - - - - - (1,684,061) (1,684,061) - (1,684,061)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
At 30 June
2016 (unaudited) 345,204 4,836,225 - 179,565 426,274 - 7,240,443 13,027,711 38,022 13,065,733
Loss for
the period - - - - - - (135,970) (135,970) (121,488) (257,458)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Exchange
differences
arising on
translation
of foreign
operations - - - (104,179) - - - (104,179) 3,569 (100,610)
Disposal
of subsidiaries - - - 8,502 (164,726) - 164,726 8,502 - 8,502
Fair value
change on
available-for-sale
investments - - - - - (6,551) - (6,551) - (6,551)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Other comprehensive
(expense)
income for
the period - - - (95,677) (164,726) (6,551) 164,726 (102,228) 3,569 (98,659)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ------------ ------------
Total comprehensive
income (expense)
for the period - - - (95,677) (164,726) (6,551) 28,756 (238,198) (117,919) (356,117)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Transfer
from share
premium to
contribution
surplus - (4,836,225) 4,836,225 - - - - - - -
Dividends
paid to
non-controlling
interests - - - - - - - - (347) (347)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
At 31 December
2016 (audited) 345,204 - 4,836,225 83,888 261,548 (6,551) 7,269,199 12,789,513 (80,244) 12,709,269
Profit for
the period - - - - - - 2,599,387 2,599,387 (630) 2,598,757
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Exchange
differences
arising on
translation
of foreign
operations - - - 70,762 - - - 70,762 (2,586) 68,176
Disposal
of subsidiaries - - - (2,598) (41,243) 792 41,243 (1,806) (3,680) (5,486)
Fair value
change on
available-for-sale
investments - - - - - 5,759 - ' 5,759 - 5,759
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Other comprehensive
income (expense)
for the period - - - 68,164 (41,243) 6,551 41,243 74,715 (6,266) 68,449
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ------------ ------------
Total comprehensive
income (expense)
for the period - - - 68,164 (41,243) 6,551 2,640,630 2,674,102 (6,896) 2,667,206
Dividends
declared - - (4,836,225) - - - (6,331,756) (11,167,981) - (11,167,981)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
At 30 June
2017 (unaudited) 345,204 - - 152,052 220,305 - 3,578,073 4,295,634 (87,140) 4,208,494
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Notes:
(i) Other reserves comprise (i) a discount on
acquisition/assumption of certain assets and liabilities from the
intermediate holding company prior to the completion of
Distribution in Specie (as defined on page 16), S E A Holdings
Limited ("SEA"), and the excess of the consideration over the
market closing price of the shares issued for the acquisition. The
amounts attributable to those assets and liabilities derecognised
in subsequent years will be recognised in retained profits; and
(ii) the excess of the consideration paid for acquisition of an
additional interest in a subsidiary from a non-controlling
shareholder over the carrying amount of the non-controlling
interests acquired.
(ii) Based on the cooperation agreement, profit and loss of the
subsidiaries should be shared by the Group and the counterparties
in proportion to the capital contribution of respective parties.
Thus, the deficit balance represents the losses attributable to the
non-controlling interest.
(iii) Pursuant to a special resolution passed on 10 November
2016, the Company has changed its domicile from the British Virgin
Islands to Bermuda with effect from 5 December 2016. The balance of
approximately HK$4,836 million, which was formerly known as "Share
Premium" has been transferred to "Contributed Surplus" under the
Laws of Bermuda, Amended Bye-laws and the Companies Act.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2017
Six months ended
30 June
NOTE 2017 2016
HK$'000 HK$'000
(unaudited) (unaudited)
Net cash from operating
activities 39,048 16,671
-------------- -----------------
Investing activities
Purchase of property, plant
and equipment (7,549) (854)
Acquisition of and additional
costs on properties for
development - (44,946)
Fixed deposits placement (245,654) (7,929,290)
Pledged bank deposits placement (27,783) -
Fixed deposits released 4,460,201 364,164
Purchase of available-for-sale
investments (559,898) -
Decrease in note receivables 15,542 -
Decrease in loan receivables 402 461
Interest received 1,495 10,528
Net cash (outflow) inflow
on disposal of subsidiaries 23 (4,873,173) 10,486,748
-------------- -----------------
Net cash (used in) from
investing activities (1,236,417) 2,886,811
-------------- -----------------
Financing activities
Draw down of bank loans 283,508 11,924
Repayments of bank loans (140,138) (2,410,088)
Dividend paid (2,254,627) (1,684,061)
Advances to non-controlling
interests (208) (272)
-------------- -----------------
Net cash used in financing
activities (2,111,465) (4,082,497)
-------------- -----------------
Net decrease in cash and
cash equivalents (3,308,834) (1,179,015)
Cash and cash equivalents
at beginning of period 4,779,967 3,298,440
Effect of foreign exchange
rate changes 1,965 (8,468)
-------------- -----------------
Cash and cash equivalents
at end of period 1,473,098 2,110,957
========== ==========
Represented by:
Bank balance and cash 1,473,098 2,110,957
========== ==========
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2017
1. GENERAL
The Company is a public company incorporated in the British
Virgin Islands and migrated to Bermuda on 5 December 2016 with
limited liability and its shares are admitted for trading on the
AIM Market of The London Stock Exchange plc..
On 15 May 2017, pursuant to the distribution in specie by the
Company's intermediate holding company, SEA, a limited liability
company incorporated in Bermuda with its shares listed on the Stock
Exchange of Hong Kong Limited, the shares of the Company held by
SEA have been distributed to the SEA's shareholders ("Distribution
in Specie"). After the completion of Distribution in Specie, the
Company ceased to be a subsidiary of SEA and SEA is no longer the
Company's immediate holding company. The Company's immediate
holding company become Nan Luen International Limited, a company
incorporated in Bermuda as exempted company with limited liability.
The directors of the Company considered that the Company's ultimate
holding company is JCS Limited, a company incorporated in Bermuda
as exempted company with limited liability.
The addresses of the registered office and the principal place
of business of the Company are Clarendon House, 2 Church Street,
Hamilton HM 11, Bermuda and Suites 2506-10, 25/F., Everbright
Centre, 108 Gloucester Road, Wanchai, Hong Kong, respectively.
The Company acts as an investment holding company. The principal
subsidiaries of the Company are engaged in property investment,
property development and hotel operation.
2. BASIS OF PREPARATION
The condensed consolidated financial statements have been
prepared in accordance with International Accounting Standard
("IAS") 34 "Interim Financial Reporting" issued by the
International Accounting Standards Board (the "IASB").
3. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been
prepared on the historical cost basis except for investment
properties, which are measured at fair values, as appropriate.
Except as described below, the accounting policies and methods
of computation used in the condensed consolidated financial
statements for the six months ended 30 June 2017 are the same as
those followed in the preparation of the Group's annual financial
statements for the year ended 31 December 2016.
In the current interim period, the Group has applied, for the
first time, the following new and amendments to International
Financial Reporting Standards ("IFRS") issued by the International
Accounting Standards Board that are mandatorily effective for an
accounting period that begins on or after 1 January 2017:
Amendments to Disclosure Initiative
IAS 7
Amendments to Recognition of Deferred Tax Assets
IAS 12 for Unrealised Losses
Amendments to As part of the Annual Improvements
IFRS 12 to IFRSs 2014-2016 Cycle
3. PRINCIPAL ACCOUNTING POLICIES - continued
The application of the above new and amendments to IFRSs in the
current interim period has had no material effect on the amounts
reported in these condensed consolidated financial statements
and/or disclosures set out in these condensed consolidated
financial statements, but additional disclosures about changes in
liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes on application
of amendments to IAS 7 will be provided in the consolidated
financial statements for the year ending 31 December 2017.
4. SEGMENT INFORMATION
Information reported to the executive directors of the Company,
being the chief operating decision makers, for the purposes of
resource allocation and assessment of segment performance is mainly
focused on the property development, property investment, hotel
operation and financial investment. No operating segments
identified by the chief operating decision markers have been
aggregated in arriving at the reportable segments of the Group.
Property investment activity is in the People's Republic of
China (the "PRC"). The Group has disposed of an investment property
in United Kingdom (the "UK") and the hotel operation in Hong Kong
as set out in note 23 during the period.
The financial investment segment includes investment income from
bank balances and investment income from equity or bond investments
under investment portfolio.
The following is an analysis of the Group's revenue and results
by reportable segment:
Six months ended 30 June 2017
Property Property Financial
development investment Hotel operation investment Consolidated
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
SEGMENT REVENUE
External revenue - 86,964 80,965 64,278 232,207
========= ========= ========= ========= ==========
SEGMENT RESULTS
Segment (loss)
profit (17,214) 61,824 (8,563) 66,922 102,969
========= ========= ========= =========
Unallocated
interest income 1,158
Corporate income
less expenses (14,455)
Gain on disposal
of subsidiaries 2,549,927
Finance costs (29,496)
---------------
Profit before
taxation 2,610,103
==========
4. SEGMENT INFORMATION - continued
Six months ended 30 June 2016
Property Property Financial
development investment Hotel operation investment Consolidated
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
SEGMENT REVENUE
External revenue 6,681 168,935 107,275 11,747 294,638
========== ========= ========= ========= ==========
SEGMENT RESULTS
Segment (loss)
profit (168,681) 698,713 6,650 12,152 548,834
========== ========= ========= =========
Unallocated
interest income 3,312
Corporate income
less
expenses (14,201)
Finance costs (46,749)
----------------
Profit before
taxation 491,196
==========
Segment profit of the property investment division for the six
months ended 30 June 2017 included an increase in fair value of
investment properties of HK$8,775,000 (1.1.2016 - 30.6.2016: a
decrease in fair value of investment properties of
HK$16,813,000).
The Group does not allocate general interest income, corporate
income less expenses, gain on disposal of subsidiaries in current
period and finance costs to individual reportable segment profit or
loss for the purposes of resource allocation and performance
assessment by the chief operating decision makers.
The accounting policies adopted in preparing the reportable
segment information are the same as the Group's accounting
policies.
No segment assets and liabilities are presented as the
information is not reportable to the chief operating decision
makers in the resource allocation and assessment of
performance.
5. PROPERTY AND RELATED COSTS
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Cost of properties sold and
related expenses - 5,007
Selling and marketing expenses 428 2,587
Direct operating expenses
on investment properties 14,979 17,879
-------------- ----------------
15,407 25,473
========= =========
6. OTHER EXPENSES
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Included in other expenses
are:
Fees paid to a related company
(note 22 (a)) 66,621 108,200
Hotel operating expenses 19,976 30,195
Legal and professional fees 7,115 1,443
========= =========
7. FINANCE COSTS
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Interest on bank borrowings 26,880 43,150
Less: Amount capitalised to
property development
project - (376)
--------------- ------------------
26,880 42,774
Front end fee 1,308 2,311
Other charges 1,308 1,664
--------------- ------------------
29,496 46,749
========== ==========
8. PROFIT BEFORE TAXATION
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Profit before taxation has
been arrived at after crediting:
Net exchange gain 4,254 1,083
Interest earned on bank deposits 36,359 14,916
Interest income from second
mortgage loans 63 97
========== ==========
9. INCOME TAX (EXPENSE) CREDIT
Six months ended 30 June
2017 2016
HK$'000 HK$'000
Current tax
Hong Kong Profits Tax (546) (9,995)
PRC Enterprise Income Tax (7,173) (5,652)
UK Profit Tax (2,203) -
--------------- -----------------
(9,922) (15,647)
--------------- -----------------
Over(under)provision in prior
years
Hong Kong Profits Tax 53 -
PRC Enterprise Income Tax (8) -
PRC Land Appreciation Tax - 80,848
--------------- -----------------
45 80,848
--------------- -----------------
(9,877) 65,201
Deferred tax (1,469) 2,033
--------------- -----------------
(11,346) 67,234
========== ==========
Hong Kong Profits Tax is calculated at 16.5% of the estimated
assessable profits for each of the periods.
PRC Enterprise Income Tax is calculated at 25% of the estimated
assessable profits for each of the periods.
UK Profit Tax is calculated at 20% of the estimated assessable
profits for the period.
10. EARNINGS PER SHARE
The calculation of the basic earnings per share attributable to
the Company's shareholders is based on the following data:
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Earnings for the purpose of
basic earnings per share
Profit for the period attributable
to the Company's shareholders 2,599,387 561,348
=========== ===========
2017 2016
Number of common shares for
the purpose of basic earnings
per share (Note: change from
ordinary shares to common
shares after migration on
5 December 2016) 886,347,812 886,347,812
=========== ===========
10. EARNINGS PER SHARE - continued
No diluted earnings per share is presented as the Company did
not have any potential ordinary shares in issue during both periods
or at the end of each reporting period.
For the purpose of assessing the performance of the Group, the
directors of the Company are of the view that the profit for the
period should be adjusted for the fair value changes on investment
properties recognised in profit or loss and the related deferred
taxation in arriving at the "adjusted profit attributable to the
Company's shareholders". A reconciliation of the adjusted earnings
is as follows:
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Profit for the period attributable
to the Company's shareholders
as shown in the condensed
consolidated statement of
profit or loss 2,599,387 561,348
Fair value changes on investment
properties (8,775) 16,813
Deferred tax thereon - (4,203)
---------------- --------------------
Adjusted profit attributable
to the Company's shareholders 2,590,612 573,958
=========== ===========
Basic earnings per share excluding
fair value changes on investment
properties net of deferred HK292.3 HK64.8
tax cents cents
=========== ===========
The denominators used in the calculation of adjusted earnings
per share are the same as those detailed above.
11. DIVIDS
Six months ended
30 June
2017 2016
HK$'000 HK$'000
Dividends recognised as a
distribution during the period:
Special dividend of HK$2.25
per share
(1.1.2016 - 30.6.2016: HK$1.90
per share) 1,994,281 1,684,061
=========== ===========
Special dividend of HK$10.35
per share
(1.1.2016 - 30.6.2016: HK$Nil
per share) 9,173,700 -
=========== ===========
The directors of the Company do not recommend the payment of any
interim dividend.
12. INVESTMENT PROPERTIES
In estimating the fair value of investment properties, the Group
uses market-observable data to the extent it is available. The
Group engages third party qualified valuers to perform the
valuation of the Group's investment properties. At the end of each
reporting period, the Group works closely with the qualified
external valuers to establish and determine the appropriate
valuation techniques and inputs to the model.
The fair values of investment properties as at 30 June 2017 and
31 December 2016 were arrived at on the basis of valuations carried
out at those dates by Savills Valuation and Professional Services
Limited ("Savills"), a firm of Chartered Surveyors not connected to
the Group, recognised by The Hong Kong Institute of Surveyors, that
has appropriate qualifications and recent experience in the
valuation of properties in the relevant locations.
The valuation, which conforms to the appropriate sections
contained in "The HKIS Valuation Standards (2012 Edition)"
published by The Hong Kong Institute of Surveyors in Hong Kong, was
arrived at by reference to market evidence of transaction prices of
similar properties at similar location or by capitalisation of
future rental which is estimated by reference to comparable rental
as available in the relevant markets. In the valuation, which falls
under Level 3 of the fair value hierarchy, the market rentals of
all lettable units as well as those of similar properties are made
by reference to the rentals achieved by the Group in the lettable
units as well as those of similar properties in the neighbourhood.
The capitalisation rate adopted is by reference to the yield rates
observed by the valuer for similar properties in the locality and
adjusted for the valuer's knowledge of factors specific to the
respective properties.
The resulting increase in the fair value of investment
properties of HK$8,775,000 (1.1.2016 -30.6.2016: decrease in the
fair value of investment properties of HK$16,813,000) has been
recognised directly in the condensed consolidated statement of
profit or loss.
13. OTHER RECEIVABLES
At 30 June 2017, the Group incurred a total amount of
RMB321,060,000 (31.12.2016: RMB321,060,000) equivalent to
HK$369,925,000 (31.12.2016: HK$358,913,000) for the tenant
relocation arrangements, excavation and infrastructure work on
certain pieces of land in Nanjing, the PRC. The amount, together
with further costs to complete the work, are wholly refundable from
the relevant PRC local government either by deduction against the
consideration payable if the Group is successful in bidding for the
land or out of the proceeds received by the relevant PRC local
government from another successful tenderer.
During the year ended 31 December 2016, the Group recognised a
full impairment of other receivables. Management reviews the status
of the underlying project annually. Since there had been a
substantial delay of the time schedule from the original plan,
management was of the view that the release of the land for auction
and amount to be recovered in the foreseeable future is unlikely,
and therefore a full impairment has been made for the amount as at
30 June 2017 and 31 December 2016.
14. AVAILABLE-FOR-SALE INVESTMENTS
30.6.2017 31.12.2016
HK$'000 HK$'000
Unlisted investments at cost:
* Equity securities (Note a) 5,854 5,817
* Convertible loan (Note b) 5,854 5,817
Unlisted investments at fair
value:
* Debt securities (Note c) - 496,719
-------------- ----------------
11,708 508,353
Listed investments at fair
value:
* Debt securities maturing between January 2017 to
September 2019 with fixed interests ranging from 1.9%
to 8.0% per annum (Note d) - 882,094
-------------- ----------------
Total 11,708 1,390,447
========= =========
Analysed for reporting purposes
as:
Current assets 3,902 137,204
Non-current assets 7,806 1,253,243
-------------- ----------------
11,708 1,390,447
========= =========
(a) As at 30 June 2017, unlisted equity securities classified as
available-for sale held by the Group amounting to US$750,000
(equivalent to HK$5,854,000) (31.12.2016: US$750,000 (equivalent to
HK$5,817,000)), representing approximately 8% (31.12.2016: 8%)
equity interest of the investee company, were measured at cost less
impairment at the end of the reporting period because the range of
reasonable fair value estimates is so significant that the
directors of the Company were of the opinion that the fair value
cannot be measured reliably.
(b) The Group committed and contributed an unsecured
interest-free loan in the sum of US$750,000 (equivalent to
HK$5,854,000) (31.12.2016: US$750,000 (equivalent to HK$5,817,000))
to the party set out in note (a) which was measured at cost less
impairment at the end of the reporting period.
The party is scheduled to repay the convertible loan at its
principal amount of US$500,000 on 14 October 2017 and US$250,000 on
30 July 2018 (the "Maturity date"). The Group has the right to
convert into shares representing not more than a 7% (31.12.2016:
7%) equity interest of the investee company.
The conversion option feature is regarded as a derivative
embedded in but not closely related to the convertible loan in
accordance with IAS 39 Financial Instruments: Recognition and
Measurement. However, in the opinion of the directors of the
Company, the fair value of the embedded derivative at the end of
the reporting period is insignificant and therefore it has not been
accounted for it as a separate component in the consolidated
financial statements.
(c) In December 2016, the Group subscribed for a note issued by
an independent third party in an aggregate principal amount of
HK$500 million with a maturity date in December 2018 at a coupon
rate of 7% per annum for the first year and 8% per annum for the
second year (the "Note"). The Note entitles the issuer to early
redeem on the first anniversary of the issue date of the Note, in
whole but not in part, at 100% of the principal amount outstanding,
together with the accrued and unpaid interest at the date fixed for
redemption. As at 31 December 2016, the Note was measured at fair
value determined based on the valuation conducted by an independent
professional valuer.
(d) As at 31 December 2016, the Group's listed debt securities
have been pledged as security for the bank borrowings.
The Group's listed investments are measured at fair value for
financial reporting purposes. In estimating the fair value, the
Group uses market-observable data which falls under Level 1 of the
fair value hierarchy.
15. RECEIVABLES, DEPOSITS AND PREPAYMENTS
30.6.2017 31.12.2016
HK$'000 HK$'000
Trade receivables 3,169 8,001
Amount receivables from disposal
of subsidiaries 445,000 445,000
Accrued income 72,924 72,366
Deposits and prepayments 4,862 60,012
-------------- ----------------
525,955 585,379
========= =========
Trade receivables mainly represent rental receivables from
tenants for the use of the Group's properties. No credit is allowed
to tenants. Rentals are payable upon presentation of demand
notes.
16. AMOUNTS DUE FROM/TO NON-CONTROLLING INTERESTS
The balances are unsecured, interest-free and repayable on
demand.
17. PAYABLES, RENTAL DEPOSITS AND ACCRUED CHARGES
30.6.2017 31.12.2016
HK$'000 HK$'000
Trade payables - 2,432
Rental deposits 32,130 37,739
Rental received in advance 11,336 30,657
Other payables, other deposits
and accrued charges 55,530 86,801
-------------- ----------------
98,996 157,629
========= =========
Included in other payables is an aggregate amount of
HK$28,584,000 (31.12.2016: HK$24,609,000) payable to contractors
for the cost in relation to the tenant relocation arrangements,
excavation and infrastructure work on certain pieces of land as
detailed in note 13.
As at 30 June 2017, rental deposits to be settled after twelve
months from the end of the reporting period based on the respective
lease terms amounted to HK$23,105,000 (31.12.2016:
HK$25,610,000).
18. BANK BORROWINGS
During the current interim period, the Group repaid bank loans
amounting to HK$140,138,000 (1.1.2016 - 30.6.2016:
HK$2,410,088,000) and drew bank loans which carry interest at
variable rates amounting to HK$283,508,000 (1.1.2016 - 30.6.2016:
HK$11,924,000).
19. SHARE CAPITAL
30.6.2017 31.12.2016
US$'000 US$'000
Authorised:
1,300,000,000 common shares
of US$0.05 each 65,000 65,000
========= =========
US$'000 US$'000
Issued and fully paid:
886,347,812 common shares
of US$0.05 each 44,317 44,317
========= =========
HK$'000 HK$'000
Shown in the condensed consolidated
financial statements as 345,204 345,204
========= =========
20. DEFERRED TAXATION
The balance at the end of reporting period mainly represents
deferred tax liabilities recognised on the fair value changes of
the investment properties amounting to HK$203,756,000 (31.12.2016:
HK$197,690,000).
21. PLEDGE OF ASSETS
At the end of the reporting period, the Group had pledged the
following assets to secure banking facilities granted to the
Group:
(a) Fixed charges on investment properties and property, plant
and equipment with an aggregate carrying value of HK$1,401,907,000
(31.12.2016: HK$2,854,807,000) together with a floating charge over
all the assets of the properties owning subsidiaries and benefits
accrued to the relevant properties.
(b) Fixed charges on hotel properties with an aggregate carrying
value of HK$892,175,000 as at 31 December 2016 together with a
floating charge over all the assets of the property owning
subsidiaries and benefits accrued to the relevant properties, which
were released in the current period.
(c) Note receivables of HK$54,282,000 as at 31 December 2016,
which were released in the current period.
(d) Pledged cash of HK$533,105,000 as at 31 December 2016, which
were released in the current period.
(e) Listed debt securities of HK$882,094,000 as at 31 December
2016, which were released in the current period.
22. RELATED PARTY BALANCES AND TRANSACTIONS
(a) For the six months ended 30 June 2017, the Group paid fees
of HK$66,621,000 (1.1.2016 -30.6.2016: HK$108,200,000) to
South-East Asia Investment and Agency Company, Limited ("SEAI"), a
wholly-owned subsidiary of SEA (an fellow subsidiary of the
Company), pursuant to the agreement entered into between the
Company, certain subsidiaries of the Company and SEAI for using
SEAI's personnel and facilities on a cost-sharing basis to carry
out the Group's business activities.
(b) The remuneration of directors of the Company who are the
Group's key management personnel during the period amounted to
HK$2,514,000 (1.1.2016 - 30.6.2016: HK$12,597,000).
23. DISPOSAL OF SUBSIDIARIES
(a) Disposal of subsidiaries during the current interim period
On 31 March 2017, the Company entered into a sale and purchase
agreement with SEA pursuant to which the Company conditionally
agreed to sell the entire issued share capital of Benefit Strong
Group Limited, which owns Crowne Plaza Hong Kong Causeway Bay in
Hong Kong and a commercial property at 20 Moorgate in UK, to SEA at
an aggregate consideration of HK$8,913,354,000. The disposal was
completed on 15 May 2017.
SEA has applied its entitlement to HK$8,913,354,000 of the
Company's special dividend in discharging its obligation to pay the
whole amount of the consideration in respect of the
acquisition.
23. DISPOSAL OF SUBSIDIARIES - continued
(a) Disposal of subsidiaries during the current interim period - continued
The major classes of assets and liabilities of the disposed
subsidiaries at the date of the disposal were as follows:
HK$'000
Investment properties 1,580,959
Property, plant and equipment 900,556
Loan receivables 3,134
Note receivables 38,937
Available-for-sale investments 1,963,188
Inventories 934
Receivables, deposits and prepayments 87,438
Tax recoverable 1,824
Amount due from non-controlling
interests 246
Pledged bank deposits 560,888
Bank balances and cash 4,868,913
Payables, rental deposits and accrued
charges (81,304)
Tax liabilities (2,923)
Bank borrowings (3,554,565)
Deferred tax liabilities (3,572)
-----------------
Net assets disposed of 6,364,653
==========
Gain on disposal of subsidiaries:
Cash consideration 8,913,354
Add: Realisation of translation
reserve upon disposal 2,598
Add: Non-controlling interests 3,680
Less: Realisation of investment
revaluation reserve upon disposal (792)
Less: Transaction costs incurred (4,260)
Less: Net assets disposed of (6,364,653)
-----------------
Gain on disposal of subsidiaries 2,549,927
==========
Cash consideration 8,913,354
Less: Offset by the special dividend
declared (note 24) (8,913,354)
Less: Cash and cash equivalents
disposed of (4,868,913)
Less: Transaction costs paid (4,260)
-----------------
Net cash outflow arising on disposal (4,873,173)
==========
23. GAIN ON DISPOSAL OF SUBSIDIARIES - continued
(b) Disposal of subsidiaries during prior interim period
During the period from 1 January 2016 to 30 June 2016, the Group
had disposed of certain subsidiaries which owned the following
property/projects:
(i) Dah Sing Financial Centre (now known as Everbright Centre)
On 25 February 2016, the Group entered into a sale and purchase
agreement, pursuant to which the Group agreed to sell the entire
issued shares of SEA (BVI) Limited, which wholly owns the issued
shares of Wing Siu Company Limited (the sole registered and
beneficial owner of Dah Sing Financial Centre (now known as
Everbright Centre)), to an independent third party at an aggregate
consideration of HK$10,101 million in cash. The disposal was
completed on 24 May 2016.
(ii) Kaifeng Nova City
On 19 April 2016, the Group entered into a sale and purchase
agreement, pursuant to which the Group agreed to sell the entire
issued share of New Insight Holdings Limited, which wholly owns the
issued shares of all investment companies (the beneficial owners of
a property development project at Kaifeng Nova City, Henan
Province, the PRC), to an independent third party at an aggregate
consideration of HK$900 million in cash. The disposal was completed
on 26 April 2016.
The major classes of assets and liabilities of the disposed
subsidiaries at the respective date of each disposal were as
follows:
Dah Sing
Financial Kaifeng
Centre Nova City Total
HK$'000 HK$'000 HK$'000
Investment property 8,983,000 - 8,983,000
Property for development - 531,322 531,322
Property, plant
and equipment 390,012 2,129 392,141
Properties held
for sale
Completed properties - 419,107 419,107
Properties under
development - 148,832 148,832
Trade receivables,
deposits and prepayments 18,719 2,360 21,079
Tax recoverable
(tax liabilities) (4,130) 3,449 (681)
Bank balances and
cash 44,229 118,580 162,809
Payables, deposits
and accrued charges (86,256) (52,754) (139,010)
Sales deposits - (17,671) (17,671)
Bank borrowings - (159,078) (159,078)
Deferred tax liabilities (17,179) - (17,179)
----------------- ----------------- -----------------
Net assets disposed
of 9,328,395 996,276 10,324,671
========== ========== ==========
23. GAIN ON DISPOSAL OF SUBSIDIARIES - continued
(b) Disposal of subsidiaries during prior interim period - continued
Dah Sing
Financial Kaifeng
Centre Nova City Total
HK$'000 HK$'000 HK$'000
Gain (loss) on disposal
of subsidiaries:
Cash Consideration 10,100,710 900,000 11,000,710
Add: Realisation
of translation reserve
upon disposal - 6,654 6,654
Less: Transaction
costs incurred (150,250) (903) (151,153)
Less: Write off of
unamortised front
end fee (10,566) - (10,566)
Less: Net assets
disposed of (9,328,395) (996,276) (10,324,671)
----------------- ----------------- ------------------
Gain (loss) on disposal
of subsidiaries 611,499 (90,525) 520,974
========== ========== ==========
Cash consideration 10,100,710 900,000 11,000,710
Less: Cash consideration
receivable - (200,000) (200,000)
Less: Cash and cash
equivalents disposed
of (44,229) (118,580) (162,809)
Less: Transaction
costs paid (150,250) (903) (151,153)
----------------- ----------------- -----------------
Net cash inflow arising
on disposal 9,906,231 580,517 10,486,748
========== ========== ==========
24. MAJOR NON CASH TRANSACTION
During the period under review, the Group has declared totaling
of HK$11,167,981,000 special dividends in which HK$8,913,354,000
was settled by way of offsetting the cash consideration receivable
of disposal of subsidiaries to SEA as disclosed in note 23(a).
25. COMPARATIVE FIGURES
Bank deposits with original maturity over three months of
HK$4,460,201,000 included in bank balances and cash in the
consolidated statement of financial position as at 31 December 2016
has been reclassified to conform with current period's
presentation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDDFESFWSEEA
(END) Dow Jones Newswires
August 30, 2017 08:41 ET (12:41 GMT)
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