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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Asian Growth Properties | LSE:AGP | London | Ordinary Share | BMG054131021 | COM SHS USD0.05 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.05 | 0.10 | 2.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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
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