29 Mar 2007 09:53
Asian Growth Properties Limited29 March 2007 29th March 2007 Asian Growth Properties Limited Immediate Release Results for the year ended 31st December, 2006 Asian Growth Properties Limited (the "Company')(AIM Stock Code: AGP), the HongKong based property development and investment company, announces itsconsolidated results for the year ended 31st December, 2006. Highlights - Total operating revenue up 954% to HK$123.3 million (2005: HK$11.7 million) - Total profit before taxation up 172% to HK$44.4 million (2005: HK$16.3 million) - Net profit up 17% to HK$16.8 million (2005: HK$14.4 million) - Equity attributable to the Company's shareholders as at 31st December, 2006 up 286% to HK$6,069.1 million (2005: HK$1,570.8 million) - Earnings per share of HK$0.2 (1 pence) (2005: HK$0.4 (3 pence)) - Net asset value per share as at 31st December, 2006 of HK$6.8 (44 pence per share)(2005: HK$7.2 (47 pence)) - Acquisition of six investment and development properties from S E A Holdings Limited for HK$4,463.4 million (£291.0 million) enabled a significant entry into the China market - AGP seeking further development and investment opportunities in China following sale of certain existing projects - Continued progress on AGP's development projects Significant post year event - Acquisition of land adjoining the Company's existing Wanchai development site in Hong Kong for HK$43.1 million (£2.8 million), which will enable an additional 977 square metres of residential development on the site The 2006 Annual Report is expected to be posted to shareholders and holders ofdepositary interests in mid April 2007. Remark: An exchange rate of £1.0 = HK$15.34 is used in this announcement. For further information, please contact: Don Fletcher TEL: +61 414 693 968 Chief Executive Officer Asian Growth Properties Limited Richard Gray TEL: +44 207 459 3600 Andrew Potts Panmure Gordon & Co Leesa Peters/ Ed Portman TEL: +44 207 429 6666 Conduit PR leesa@conduitpr.com CHAIRMAN'S REVIEW I am pleased to report on the first year of operation of Asian Growth PropertiesLimited ("AGP" or the "Company") as an AIM company. Results AGP reports a net profit attributable to shareholders (before minorityinterests) of HK$80.7 million (£5.3 million) for the year ended 31 December2006, an increase of 460.4% on last year (2005: HK$14.4 million (£0.9 million)). After accounting for the loss attributable to the minority interests of HK$64.0million (£4.2 million), the net profit of the Group for the year rose 17% toHK$16.8 million (£1.1 million) (2005 : HK$14.4 million (£0.9 million)). As at 31 December 2006, the Group's equity attributable to the Company'sshareholders (after minority interests) amounted to HK$6,069.1 million (£395.6million), an increase of HK$4,498.3 million (£293.2 million) over 31 December2005. The net asset value per share as at 31 December 2006 was HK$6.8 (44pence). Milestone In January 2006, AGP was admitted to the AIM Market operated by the London StockExchange with assets comprising a portfolio of three development properties andone investment property, all located in Hong Kong. Acquisition In September 2006, AGP concluded via company purchases the acquisition of sixproperties in China and Hong Kong from its major shareholder S E A HoldingsLimited ("S E A"). The transaction was undertaken on an arms' length basis and the propertiesacquired were valued at market by Savills Valuation and Professional ServicesLimited, an independent internationally recognised valuer. The total asset valueand the net asset value of the acquired companies as at 30 June 2006 wereHK$7,741.9 million (£526.9 million) and HK$4,429.7 million (£301.5 million)respectively. The consideration for the acquisition was via the issue of 668,653,817 AGPshares at a price of 40 pence per ordinary share (based on an exchange rate of£1.00: HK$14.693). The balance of HK$500.0 million (£34.0 million) was settledin cash from existing AGP cash resources. The combined portfolio (as at 30 June 2006 valuations) after deducting the cashconsideration increased AGP's total asset value and net asset value toHK$9,462.7 million (£644.0 million) and HK$5,504.9 million (£374.7 million)respectively. The above issue price represented a premium of 19.74% over the average quotedprice of the AGP shares on AIM over the three months preceding 15 September 2006which was 33 pence per share and a discount of 18.78% to the net asset value pershare as at 30 June 2006 which was HK$7.2 (49 pence). The Board of AGP considered the acquisition to be fair and reasonable to all AGPshareholders. The 14.17% dilution in net asset value per ordinary share uponcompletion of the transaction contributed to a decrease in net asset value perordinary share at 31 December 2006 compared with 30 June 2006 of HK$0.4 However,in the opinion of the Board, the net asset value dilution in the short term wasmore than compensated for by the quality, value and potential of the propertyportfolio being acquired. The transaction enabled AGP to make a significant and immediate entry into theChina market. Of the Group's six development properties, three are planned to becompleted and sold in the 2007 year, which will enable the Company to seekfurther development and investment opportunities in China. Revaluation In compliance with international financial reporting standards, the Group'sproperties were independently valued as at 31 December 2006 by Savills Valuationand Professional Services Limited, independent internationally recognisedvaluers. The revaluation surplus of HK$185.1 million (£12.1 million) has beenincluded within profit for the year. Although it is the policy of the Board to record development properties at cost,the Board reviewed all AGP's developments as at 31 December 2006 and resolved towrite down the value of the 55% owned Hong Kong Royal Green residentialdevelopment project by HK$120.8 million (£7.9 million) due to weak purchasers'demand at the current asking prices. The Board is more confident of completingthe sale of the Royal Green units at the written down prices. Prospect The Board believes that the above transaction with S E A and the re-weighting ofthe Company's future development initiatives in China will be beneficial to theCompany as it works to increase its net asset value. AGP is currently concentrating its efforts for expansion in China. AGP has builta good reputation and as a result, there are significant opportunities availableto the Company. Dividend The Board does not propose the payment of a final dividend for the year ended 31December 2006 and will retain all earnings to finance further growth in theChina and Hong Kong markets. Acknowledgement The Board would like to take this opportunity to thank the executive andmanagement team for the execution of the Board's strategy and their ongoingsupport. David Mathewson Non-executive Chairman United Kingdom, 29 March 2007 Chief executive's Review FINANCIAL SUMMARY Following the acquisition of six investment and development properties from S EA Holdings Limited ("SEA"), the major shareholder of the Company, during thesecond half of the year, the Company's size and revenue generating potentialhave been significantly increased. Turnover for the year ended 31 December 2006 amounted to HK$123.3 million, anincrease of HK$111.6 million over last year. The increase was mainly due to therecognition of the sales of Royal Green residential units in Hong Kong and therental contribution from Dah Sing Financial Centre, Hong Kong. Net profit attributable to the Company's shareholders (before minorityinterests) for the year amounted to HK$80.7 million (2005: HK$14.4 million),representing a 460.4% increase compared with last year. The increase was mainlydue to the revaluation surplus recognized on the investment properties which,however, was partially off-set by the Group's 55% share of the provision fordiminution in value of the completed properties in Royal Green project, andmanagement and administrative costs. As at 31 December 2006, the Group's equity attributable to the Company'sshareholders amounted to HK$6,069.1 million, an increase of HK$4,498.3 millionover 31 December 2005. The net asset value per share to the Company'sshareholders was HK$6.8 or approximately 44 pence (2005: HK$7.2 or approximately47 pence). The Group's investment properties, namely Dah Sing Financial Centre, Hong Kong,28/F., 9 Queen's Road Central, Hong Kong, Plaza Central, China and the ExcelsiorPlaza Shop, Hong Kong have been revalued as at 31 December 2006 on an openmarket value basis by Savills Valuation and Professional Services Limited at anaggregate amount of about HK$4,584.9 million. This is an increase in aggregateof HK$185.1 million for the above properties, and can be summarised as follows: Amount in HK$ (in Valuation as at 31/ Acquisition in Valuation as at 31/million) 12/2005 October 2006 12/2006 Dah SingFinancialCentre not applicable 3,250.0 #28/F., 9Queen's RoadCentral not applicable 197.0 #Plaza Central not applicable 866.8 #ExcelsiorPlaza Shop 56.0 0 #Aggregate 56.0 4,313.8 4,584.9 # Not separately disclosed Please refer to Note 16 to the audited financial statements of the Company forthe year ended 31 December 2006 for further details of the above investmentproperties. BUSINESS REVIEW Property Investments and Developments All of the Group's property development and investment projects are located inHong Kong and China and are as listed below: Hong Kong 1. Dah Sing Financial Centre, Gloucester Road, Wanchai The Dah Sing Financial Centre ("DSFC") comprises a 39-storey commercial buildingwith ancillary car parking facilities completed in 1991. The ground and 1stfloors of the building are used for retail purposes and the 6th to 38th floorsare used for office purposes. The property also comprises 137 coveredcar-parking spaces and 27 open car-parking spaces located on the 2nd to 4thfloors. Gross rental income generated since acquisition for the financial year ended 31December 2006 was HK$24.2 million. The building is currently 88.1% let and theaverage base rent has been increased from HK$17.2 per square foot to HK$21.2 persquare foot, an increase of approximately 23.3% in 2006. Two floors of the DSFC are currently occupied by the SEA Group (other than theGroup) and the Group presently occupies four-fifths of another floor. Arms'length leases to market have been negotiated between the Company and SEA. Wanchai is an area situated at the north of Hong Kong Island, stretching fromCanal Road in the east, to Arsenal Street in the west and Bowen Road in thesouth. It is one of the busiest commercial areas in Hong Kong and includes a mixof residential developments, hotels, shopping centres, entertainment facilitiesand restaurants. Wanchai North features office towers, parks, hotels and aworld-class conference centre. The locality includes a highly-populatedresidential zone (with approximately 170,000 inhabitants) in which the Hong KongGovernment has led a major district regeneration program over recent years. 2. Royal Green, Sheung Shui The Royal Green is a private residential development comprising 922 residentialunits contained in three 40-storey residential towers with ancillaryrecreational and car- parking facilities. The Group has a 55% interest in thedevelopment, which is divided into two phases: Phase I was completed in 2005 andPhase II was completed in December 2006. As at 31 December 2006, there were inaggregate 310 unsold residential units in both phases. There are nine visitors'car-parking spaces, 126 private car-parking spaces and 13 motorcycle parkingspaces on the ground floor of the development. There is also a clubhouseexclusive to the residents. Property sales in the North District in Hong Kong where Royal Green is situatedare slow. The Hong Kong property market has been volatile and buyers' sentimentis highly susceptible to any political, social and economic changes. Despite asustained economic recovery, low unemployment levels and favourable borrowingenvironment in Hong Kong at the present moment which should boost the demand forresidential premises, the Group finds it prudent to make a write down ofHK$120.8 million for Royal Green. To date, approximately two-thirds of the unitsin Royal Green have been sold. Sheung Shui is part of the North District in Hong Kong. The North District isone of Hong Kong's largest administrative districts and is separated fromShenzhen by a river and three of the checkpoints leading to China - Lo Wu, ManKam To and Shau Tau Kok - are located here. Historically, farm land, asurbanization continues, the rural areas of the North District are graduallygiving way to multi-storey residential blocks and various industrial andcommercial developments. 3. Leighton Road, Causeway Bay The Leighton Road development comprises two adjoining lots, which are currentlyunder construction. At the end of February 2007, the Group unified its interestsin a 5-storey residential building at 4 Leighton Road (having been demolished)on another adjoining lot, which will be amalgamated with the existing lots. Itis intended that the site will be developed into a 30-storey hotel comprising283 guest rooms with two car-parking spaces, one coach parking space, twolay-bys and one loading/unloading bay. The proposed hotel is scheduled to becompleted by the end of 2008. The Leighton Road development is located at the junction of Causeway Bay andHappy Valley. Causeway Bay is popular for its nightlife and restaurants and alsohas shopping malls favoured by locals. Happy Valley is mainly a residentialarea. The Hong Kong Jockey Club's Hong Kong racecourse is situated in HappyValley. 4. 28/F., 9 Queen's Road Central, Central The Queen's Road unit is the entire floor of a 35-storey Grade A commercialbuilding in Central. It is currently 100% let. 9 Queen's Road Central is a 35-storey commercial building completed in 1991. Theground to 2nd floors are for retail use while the remaining floors are used asoffices. Central is the seat of the Hong Kong government and the financial and bankinghub of Hong Kong. 5. The Morrison, Wanchai The development is located at 28 Yat Sin Street. In April 2006, the Groupcompleted the purchase of an adjoining property at 2 Morrison Hill Road forHK$77.2 million. The Group's purchase of another adjoining lot from theGovernment for HK$43.1 million has just been completed. Upon amalgamation ofthese sites, the total gross floor area of the development will be increased toapproximately 5,837 square metres, and an additional eight floors to theexisting development will be added. The property is being developed into acommercial and residential tower comprising 26 storeys with a total of 104residential units erected over a club-house floor and a 3-storey commercialpodium. Superstructure works are in good progress. The residential pre-sales of theproject, now known as "The Morrison", are expected to commence soon. Thedevelopment is expected to be completed by the fourth quarter of 2007. Wanchai is a mixed commercial and residential area where developments in theimmediate locality comprise mainly medium to high-rise commercial andresidential buildings of various ages intermingled with commercial buildings,hotels, tenement blocks and institutional developments. Shopping facilities inthe form of high street retail and shopping arcades are available in theimmediate vicinity. Public transportation, such as franchised buses, public light buses, trams andtaxis are conveniently available. The MTR - Causeway Bay station is situatedwithin ten minutes' walk from the property. 6. Po Kong Village Road, Diamond Hill The Diamond Hill development site is being developed into a 48-storeyresidential and commercial composite building, with a total gross floor area ofapproximately 18,825 square metres, comprising 304 residential units above a7-level retail podium, a clubhouse and car parks. Application to the Governmentfor the pre-sale consent has been made and approval is expected to be obtainedshortly. Pre-sale of the residential units will commence soon after.Superstructure construction work has already commenced and the project isexpected to be completed by the fourth quarter of 2007. The property is situated on the northwestern side of Po Kong Village Roadbetween the junctions of Shung Wah Street and Po Kong Lane in the Diamond Hilldistrict of the Kowloon Peninsula. Developments in the vicinity are mainly private residential developments andpublic housing estates intermingled with schools, church and welfare centres.Major landmarks in the vicinity include Fung Tak Tsuen, Lung Poon Court andGalaxia. Public transport facilities such as franchised buses, public light buses andtaxis are available along Po Kong Village Road. The Mass Transit Railway (the"MTR") - Diamond Hill and Wong Tai Sin stations are both within a few minutes'driving distance from the property. 7. Fo Tan, Sha Tin The Fo Tan development will comprise amongst other facilities, residentialunits, car parks, educational facilities and a bus terminus. The property iscurrently being leased out as an industrial site. Planning works for the extensive residential development of the Fo Tandevelopment site continue. Several master layout plans have been submitted tothe Town Planning Board for consideration. The property comprises a site of about 20,092 square metres situated adjacent tothe Kowloon Canton Railway Corporation ("KCRC") - Fo Tan Station in the Fo Tandistrict, Sha Tin, New Territories. Public transportation such as franchised buses, public light buses and taxis areconveniently available along Au Pui Wan Street where the development issituated. The KCRC - Fo Tan Station is immediately next to the property. 8. Excelsior Plaza Shop, Causeway Bay The retail sector in Hong Kong has shown continued growth. A new two-year leasecommenced on 1 July 2006 for the Shop at an annual rental approximately 22%above the prior lease rate. Excelsior Plaza comprises a 3-storey podium surmounted by two high-riseresidential developments completed in 1972. The property is situated at the junction of Lockhart Road and East Point Road inthe heart of the Causeway Bay on the Hong Kong Island. The area is a traditional shopping, commercial and tourist area and comprisesmainly commercial and residential composite buildings mixed with high-riseoffice and tenement blocks of various ages. Medium to large shopping arcadessuch as World Trade Centre, Windsor House, Times Square and branded retaildevelopments like Fashion Island, Causeway Bay Plaza I and II all congregate inthis prime location. Landmark department stores such as Sogo are also found inthe neighbourhood. Causeway Bay is popular for its wide range of entertainment,dining and recreational facilities that attract both locals and tourists. In terms of public transportation, franchised buses, public light buses, tramsand taxis are conveniently available along Hennessy Road. The MTR - Causeway Baystation is situated within a few minutes' walking distance from the property. China 9. Westmin Plaza Phase II, Guangzhou The Westmin Plaza Phase II project, which has a total construction floor area ofabout 118,000 square metres, will comprise four residential blocks and an officeblock erected on a six-storey commercial/car-parking podium. The project isexpected to be completed in the third quarter of 2007. As at 31 December 2006,93% of the planned 646 residential units were pre-sold, sales proceeds of whichwill be recognized in 2007 upon completion of the development. Guangzhou, with a population of about 8 million, is the largest city in southernChina. 10. Plaza Central, Chengdu Plaza Central was completed in the fourth quarter of 2005 and comprises two30-storey office blocks erected on a common podium having six commercial/retailfloors and two car-parking floors at basement level. Leasing for the officespace is progressing steadily and all the retail space with a total constructionfloor area of approximately 30,000 square metres has been leased. Stablerecurrent income from this property is expected. Chengdu, with a population of about 12 million, is the provincial capital ofSichuan Province. Working Capital and Loan Facilities As at 31 December 2006, the Group's cash balance was HK$106.3 million (2005:HK$620.0 million) and unutilized facilities were HK$869.5 million (2005:HK$241.0 million). Gearing ratio as at 31 December 2006, calculated on the basis of net interestbearing debts minus cash and restricted and pledged deposits as a percentage oftotal property assets, was 16.7%. As at 31 December 2006, maturities of the Group's outstanding borrowings were asfollows: 31 December 31 December 2006 2005 HK$' million HK$' million DueWithin 1 year 1,252.5 1.21-2 years 43.0 490.23-5 years 639.3 3.6Over 5 years 81.3 14.4 _______ _______ 2,016.1 509.4 Pledge of Assets For the Company's subsidiaries operating in Hong Kong and mainland China, thetotal bank loans drawn as at 31 December 2006 amounted to HK$2,016.1 million(2005: HK$509.4 million), which were secured by properties valued at HK$6,437.2million (2005: HK$918.6 million). Treasury Policies The Group adheres to prudent treasury policies. As at 31 December 2006, all ofthe Group's borrowings were raised through its wholly-owned or substantiallycontrolled subsidiaries on a non-recourse basis. Currently, borrowings areprimarily denominated in Hong Kong dollars and mainly based on floating rateterms. There were no derivative financial instruments employed during the year. International Financial Reporting Standards ("IFRS") The Group has adopted IFRS and the audited financial statements included in thisreport have been prepared in accordance with IFRS. Outlook In China, the Company continues to see very interesting opportunities as aresult of structural change imposed by the central government. The mainlandgovernment has introduced several measures for the strict collection of landappreciation tax, the acceleration of the payment of land use right premia andan increase in interest rates. These moves will likely result in a consolidationof market players and somewhat reduce land acquisition costs. The Companycontinues to believe that the Chinese economy will remain robust over the coming5-7 years and that judiciously acquired land parcels particularly forresidential development are likely to appreciate in value for the foreseeablefuture both from a perspective of completed product as well as the underlyingvalue. In addition, following the unification of Enterprise Income Tax effective1 January 2008, the income tax rate applicable to our China property businesswill be reduced from 33% to 25%. In Hong Kong, home mortgage rates are extremely competitive with banks earningvery thin margins on lending. The incidence of bad debt is minimal, unlike inthe US, and Hong Kong continues to prosper as a service centre for China. Inparticular, prospects for middle class and high quality housing remaingood. This should benefit the Company's existing development projects.However, the government continues to pursue a policy of selected listing ofsites in Hong Kong which are not released for public auction until certainbenchmark prices are reached, thus limiting the range of sites that areavailable for purchase at sensible margins. Accordingly, whilst there will beopportunities that arise for purchase of properties or development sites byprivate treaty, the competitive environment is such that the Company believesthat potentially better value is to be had by pursuing acquisitions on themainland. The Group has during the year further strengthened its financial position withthe acquisition of six investment and development properties. The Group will focus on the planned completion this year of three existingdevelopment projects, namely The Morrison, Diamond Hill project and WestminPlaza Phase II. At the same time, the Group will devote its effort to marketingthe sale of the remaining residential units of Royal Green. Going forward, the Group will continue to actively look for development andinvestment opportunities within mainland China and Hong Kong in order to createvalue for our shareholders. Don Fletcher Chief Executive Officer and Executive Director Hong Kong, 29 March 2007 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 December 2006 NOTES 2006 2005 ------- ------ ------ HK$'000 HK$'000 Revenue 6 123,293 11,700Other income 29,131 8,682Operating costs: ------------- -------------Property and related costs 8 (78,500) -Staff costs (7,681) -Depreciation (127) -Other expenses 12(a) (79,403) (9,334) ------------- ------------- (165,711) (9,334)Write down of properties held for sale 9 (120,819) - _______ _______(Loss) profit from operations before fairvaluechanges on investment properties (134,106) 11,408Fair value changes on investment 185,141 6,000properties _______ _______Profit from operations after fair valuechangeson investment properties 51,035 17,048Recognition of discount on acquisition 10 7,484 -Finance costs 11 (14,110) (715) _______ _______Profit before taxation 12(b) 44,409 16,333Income tax expense 13 (27,648) (1,921) _______ _______Profit for the year 16,761 14,412 _______ _______ _______ _______ Attributable to:Company's shareholders 80,722 14,412Minority interest (63,961) - _______ _______ 16,761 14,412 _______ _______ _______ _______ HK$ HK$ Earnings per share - Basic 14 0.2 0.4 _______ _______ _______ _______ CONSOLIDATED BALANCE SHEET AS AT 31 December 2006 NOTES 2006 2005 ------ HK$'000 HK$'000Non-current AssetsInvestment properties 16 4,584,860 56,000Property, plant and equipment 17 62,431 -Prepaid lease payments 18 615,515 -Other loans receivable 19 126,536 - _________ _________ 5,389,342 56,000 _________ _________ Current AssetsProperties held for sale 20 892,491 -Properties under development held for sale 20 2,348,451 1,440,725Prepaid lease payments 18 16,742 -Other loans receivable 19 973 -Receivables, deposits and prepayments 21 149,882 2,764Income tax recoverable 14,923 -Pledged bank deposits 22 153,487 -Restricted bank balances and deposits 23 332,404 -Bank balances and deposits 24 106,327 619,958 _________ _________ 4,015,680 2,063,447 _________ _________ Current LiabilitiesPayables, deposits received and accrued charges 25 320,556 9,137Sales deposits on properties held for sale 449,094 -receivedProvisions 26 14,881 -Income tax payable 31,379 989Secured bank borrowings - due within one year 27 1,252,499 1,200Amount due to a minority shareholder 28 36,209 - _________ _________ 2,104,618 11,326 _________ _________Net Current Assets 1,911,062 2,052,121 _________ _________ 7,300,404 2,108,121 _________ _________Capital and ReservesShare capital 29 345,204 84,429Reserves 5,723,928 1,486,365 _________ _________Equity attributable to the Company's 6,069,132 1,570,794shareholdersMinority interest 408,978 _________ _________Total equity 6,478,110 1,570,794 _________ _________Non-current LiabilitiesSecured bank borrowings - due after one year 27 763,576 508,200Deferred taxation 30 58,718 29,127 _________ _________ 822,294 537,327 _________ _________ 7,300,404 2,108,121 _________ _________ The consolidated financial statements were approved and authorised for issue bythe Board of Directors on 15 March 2007 and are signed on its behalf by: David Mathewson Don FletcherNON-EXECUTIVE CHAIRMAN DIRECTOR CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 December 2006 Attributable to the Company's shareholders --- ------------------------------------- --- --- --- --- Share Share Other Translation Retained Minority ------- ------- ------- ------------- ---------- --- ---------- --- capital premium reserve reserve profits Total interest Total --------- --------- --------- --------- --------- ------- ---------- ------- HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 At 1 January2005 - - - - 10,029 10,029 - 10,029Profit forthe year andtotalrecognisedincomefor the year - - - - 14,412 14,412 - 14,412Issue of 84,429 1,461,924 - - - 1,546,353 - 1,546,353shares _______ _________ _______ _______ _______ _________ _______ _________At 31December 84,429 1,461,924 - - 24,441 1,570,794 - 1,570,7942005Exchangemovementduringthe yearrecogniseddirectlyin equity - - - 10,164 - 10,164 - 10,164Profit forthe - - - - 80,722 80,722 (63,961) 16,761year _______ _________ _______ _______ _______ _________ _______ _________Totalrecognisedincomefor the year - - - 10,164 80,722 90,886 (63,961) 26,925 _______ _________ _______ _______ _______ _________ _______ _________Issue of 260,775 3,374,301 294,736 - - 3,929,812 - 3,929,812sharesAcquisitionof assetsandliabilitiesthroughacquisitionof - - 477,640 - - 477,640 482,380 960,020subsidiariesAcquisitionofadditionalinterest ina - - - - - - (9,441) (9,441)subsidiary _______ _________ _______ _______ _______ _________ _______ _________At 31December 345,204 4,836,225 772,376 10,164 105,163 6,069,132 408,978 6,478,1102006 _______ _________ _______ _______ _______ _________ _______ _________ On 5 October 2006, the Group acquired assets and liabilities from the holdingcompany by way of acquisition of subsidiaries, with part of the considerationpaid in form of issuing new shares. The share issue price is in excess of themarket closing price of the shares issued at the amount of HK$294,736,000 andcredited to other reserve (Note 31(b)). In addition, a discount ofHK$477,640,000, which represented the excess of fair value of assets andliabilities acquired through the acquisition of subsidiaries over theconsideration paid or payable is deemed as capital contribution from holdingcompany and credited to other reserve (Note 31). CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 December 2006 NOTE 2006 2005 ------ ------ ------ HK$'000 HK$'000OPERATING ACTIVITIESProfit before taxation 44,409 16,333Adjustments for:Interest expenses 13,522 715Write down of properties held for sale 120,819 -Depreciation 127 -Fair value changes on investment properties (185,141) (6,000)Interest income (23,983) (8,604)Recognition of discount on acquisition (7,484) - _______ _______Operating cash flows before movements in workingcapital (37,731) 2,444Decrease in properties held for sale 114,401 -Increase in properties under development held for (235,896) -saleDecrease (increase) in receivables, deposits andprepayments 85,156 (2,560)Increase in payables, deposits received andaccrued charges 29,174 6,002Increase (decrease) in sales deposits onpropertiesheld for sale received 13,077 (57,405)Payment of rehousing compensation (722) - _______ _______Cash used in operations (32,541) (51,519)Interest received 21,703 8,604Interest paid on bank borrowings (42,545) (16,121)Hong Kong Profits Tax paid (89,687) -Taxation paid in other jurisdictions (6,574) - _______ _______NET CASH USED IN OPERATING ACTIVITIES (149,644) (59,036) _______ _______INVESTING ACTIVITIESPurchase of investment properties (14,432) -Purchase of property, plant and equipment (13,055) -Purchase of leasehold land (51,086) -Additions of other loans receivable (9,658) -Repayments of other loans receivable 6,477 -Increase in pledged bank deposits (53,900) -Decrease in restricted bank balances and deposits 28,280 -Acquisition of assets and liabilities throughacquisitionof subsidiaries 31 (335,129) -Acquisition of additional interest in a subsidiary (1,957) - _______ _______NET CASH USED IN INVESTINGACTIVITIES (444,460) - _______ _______FINANCING ACTIVITIESRepayment of secured bank borrowings (17,300) (1,200)Proceeds from secured bank borrowings 154,199 28,000Funds received from immediate holding company - 633,435Funds repaid to fellow subsidiaries - (19,896)Repayment to a minority shareholder (65,730) -Advance from a minority shareholder 8,544 - _______ _______NET CASH FROM FINANCING ACTIVITIES 79,713 640,339 _______ _______NET (DECREASE) INCREASE IN CASH AND CASHEQUIVALENTS (514,391) 581,303 CASH AND CASH EQUIVALENTS AT BEGINNINGOF THE YEAR 619,958 38,655Effect of foreign exchange rate changes 760 - _______ _______CASH AND CASH EQUIVALENTS AT END OF THE YEARrepresented by bank balances and deposits 106,327 619,958 _______ _______ _______ _______ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2006 1. GENERAL The Company is a public limited company incorporated in the British VirginIslands ("B.V.I."). On 16 January 2006, the Company was listed in AlternativeInvestment Market ("AIM") operated by London Stock Exchange plc. its parentcompany is Charm Action Holdings Limited, a company incorporated in the B.V.I..The directors consider that the Company's ultimate holding company is JCSLimited, a company incorporated in Bermuda, as an exempted company with limitedliability. The addresses of the registered office and principal place ofbusiness of the Company are disclosed in the directory to the annual report. The consolidated financial statements are presented in Hong Kong dollars, whichis also the functional currency of the Company. The Company acts as an investment holding company. The activities of itsprincipal subsidiaries are set out in note 39. 2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIALREPORTING STANDARDS/CHANGE OF ACCOUNTING POLICY In the current year, the Group has applied, for the first time, a number of newstandard, amendments and interpretations ("new IFRSs") issued by theInternational Accounting Standards Board ("the IASB") and the InternationalFinancial Reporting Interpretations Committee of the IASB, which are eithereffective for accounting periods beginning on 1 December 2005 or 1 January 2006.The adoption of the new IFRSs had no material effect on how the results and thefinancial position for the current or prior accounting periods have beenprepared and presented. Accordingly, no prior period adjustment has beenrequired. The Group has not early applied the following new standard, amendment orinterpretations that have been issued but are not yet effective. The directorsof the Company anticipate that the application of these new standard, amendmentor interpretations will have no material impact on the results and the financialposition of the Group. IAS 1 (Amendment) Capital Disclosures1IFRS 7 Financial Instruments: Disclosures1IFRS 8 Operating Segments2IFRIC 7 Applying the Restatement Approach under IAS 29, Financial Reporting in Hyperinflationary Economies3IFRIC 8 Scope of IFRS 24IFRIC 9 Reassessment of Embedded Derivatives5IFRIC 10 Interim Financial Reporting and Impairment6IFRIC 11 IFRS 2 - Group and Treasury Share Transactions7IFRIC 12 Service Concession Arrangments8 1 Effective for annual periods beginning on or after 1 January 2007 2 Effective for annual periods beginning on or after 1 January 2009 3 Effective for annual periods beginning on or after 1 March 2006 4 Effective for annual periods beginning on or after 1 May 2006 5 Effective for annual periods beginning on or after 1 June 2006 6 Effective for annual periods beginning on or after 1 November 2006 7 Effective for annual periods beginning on or after 1 March 2007 8 Effective for annual periods beginning on or after 1 January 2008 3. SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance withInternational Financial Reporting Standards. The consolidated financial statements have been prepared on the historical costbasis except for investment properties, which are measured at fair values, asexplained in the accounting policies set out below. The principal accountingpolicies adopted are set out below. Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe Company and entities controlled by the Company (its subsidiaries). Controlis achieved where the Company has the power to govern the financial andoperating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are includedin the consolidated income statement from the effective date of acquisition orup to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring their accounting policies into line with those used byother members of the Group. All intra-group transactions, balances, income and expenses are eliminated onconsolidation. Minority interest in the net assets of consolidated subsidiaries are presentedseparately from the Group's equity therein. Minority interests in the net assetsconsist of the amount of those interests at the date of the original businesscombination and the minority's share of changes in equity since the date of thecombination. Losses applicable to the minority in excess of the minority'sinterest in the subsidiary's equity are allocated against the interests of theGroup except to the extent that the minority has a binding obligation and isable to make an additional investment to cover the losses. Acquisition of additional interests in subsidiaries is recorded at the bookvalue of the net assets attributable to the interests. The excess of thecarrying amounts of net assets attributable to the interests over the cost ofacquisition is recognised as discount on acquisition. Common control combinations The Group has elected to apply principles of uniting of interests (mergeraccounting) in respect of business combination under common control. In applyingmerger accounting, financial statement items of the combining entities orbusiness for the reporting period in which the common control combinationoccurs, and for any comparative periods disclosed, are included in theconsolidated financial statements of the combined entity as if the combinationhad occurred form the date when the combining entities or businesses first cameunder the control of the controlling party or parties. The combined entityrecognises the assets, liabilities and equity of the combining entities orbusiness at the carrying amounts in the consolidated financial statements of thecontrolling party or parties prior to the common control combinations. Revenue recognition Revenue is measured at the fair value of the consideration received orreceivable and represents amounts receivable for goods sold in the normal courseof business, net of discounts and sales related taxes. Sales of properties Revenue from sale of properties in the ordinary course of business is recognisedwhen all of the following criteria are met: • the significant risks and rewards of ownership of the properties are transferred to buyers; • neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the properties are retained; • the amount of revenue can be measured reliably; • it is probable that the economic benefits associated with the transaction will flow to the Group; and • the costs incurred or to be incurred in respect of the transaction can be measured reliably. Payments received from purchasers prior to this stage are recorded as salesdeposits under current liabilities. Others Rental income, including rentals invoiced in advance from properties let underoperating leases, is recognised on a straight-line basis over the term of therelevant lease. Interest income from a financial asset is accrued on a time basis, by referenceto the principal outstanding and at the effective interest rate applicable,which is the rate that exactly discounts the estimated future cash receiptsthrough the expected life of the financial asset to that asset's net carryingamount. Investment properties investment properties, which are properties held to earn rentals and/or forcapital appreciation, are measured initially at costs, including any directlyattributable expenditure. Subsequent to initial recognition, investmentproperties are measured at fair value. Gains or losses arising from changes inthe fair value of investment properties are included in profit or loss for theperiod in which they arise. An investment property is derecognised upon disposal or when the investmentproperty is permanently withdrawn from use or no future economic benefits areexpected from its disposals. Any gain or loss arising on derecognition of theasset (calculated as the difference between the net disposal proceeds and thecarrying amount of the asset) is included in the consolidated income statementin the year in which the item is derecognised. Property, plant and equipment Property, plant and equipment other than properties under development are statedat cost less subsequent accumulated depreciation and accumulated impairmentlosses. Depreciation is provided to write off the cost of items of property, plant andequipment other than properties under development over their estimated usefullives and after taking into account of their estimated residual value, using thestraight-line method. An item of property, plant and equipment is derecognised upon disposal or whenno future economic benefits are expected to arise from the continued use of theasset. Any gain or loss arising on derecognition of the asset (calculated as thedifference between the net disposal proceeds and the carrying amount of theitem) is included in the consolidated income statement in the year in which theitem is derecognised. Prepaid lease payments/properties under development When the leasehold land and buildings are in the course of development forproduction, rental or for administrative purposes, the leasehold land componentis classified as a prepaid lease payment and amortised over a straight-linebasis over the lease term. During the construction period, the amortisationcharge provided for the leasehold land is included as part of costs of buildingsunder construction. Buildings under construction are carried at cost, less anyidentified impairment losses. Cost comprises property development costsincluding attributable borrowing costs and directly attributable costscapitalised during the development period. Depreciation of buildings commenceswhen they are available for use (i.e. when they are in the location andcondition necessary for them to be capable of operating in the manner intendedby management). Properties held for sale/Properties under development held for sale Properties held for sale and properties under development held for sale in theordinary course of business are classified under current assets and are statedat the lower of cost and net realisable value. Cost comprises property interestin leasehold land and development costs including attributable borrowings costsand directly attributable costs capitalised during the development period thathave been incurred in bringing the properties held for sale/properties underdevelopment held for sale to their present location and condition. Netrealisable value represents the estimated selling price less all anticipatedcosts of completion and costs to be incurred in marketing, selling anddistribution. Impairment At each balance sheet date, the Group reviews the carrying amounts of its assetsto determine whether there is any indication that those assets have suffered animpairment loss. If the recoverable amount of an asset is estimated to be lessthan its carrying amount, the carrying amount of the asset is reduced to itsrecoverable amount. An impairment loss is recognised as an expense immediately. Impairment Where an impairment loss subsequently reverses, the carrying amount of the assetis increased to the revised estimate of its recoverable amount, but so that theincreased carrying amount does not exceed the carrying amount that would havebeen determined had no impairment loss been recognised for the asset in prioryears. A reversal of an impairment loss is recognised as income immediately. Borrowing costs Borrowing costs directly attributable to the acquisition, construction orproduction of qualifying assets, are capitalised as part of the cost of thoseassets. Capitalisation of such borrowing costs ceases when the assets aresubstantially ready for their intended use or sale. Investment income earned onthe temporary investment of specific borrowings pending their expenditure onqualifying assets is deducted from the borrowing costs eligible forcapitalisation. All other borrowing costs are recognised in profit or loss in the period inwhich they are incurred. Provisions Provisions are recognised when the Group has a present obligation as a result ofa past event, and it is probable that the Group will be required to settle thatobligation. Provisions are measured at the directors' best estimate of theexpenditure required to settle the obligation at the balance sheet date, and arediscounted to present value where the effect is material. Leasing Leases are classified as finance leases whenever the terms of the lease transfersubstantially all the risks and rewards of ownership to the lessee. All otherleases are classified as operating leases. The Group as lessor Rental income from operating leases is recognised in the consolidated incomestatement on a straight-line basis over the term of the relevant lease. The Group as lessee Rentals payable under operating leases are charged to profit or loss on astraight-line basis over the term of the relevant lease. Benefits received andreceivable as an incentive to enter into an operating lease are recognised as areduction of rental expense over the lease term on a straight-line basis. Financial instruments Financial assets and financial liabilities are recognised on the consolidatedbalance sheet when the Group becomes a party to the contractual provisions ofthe instrument. Financial assets and financial liabilities are initiallymeasured at fair value. Financial assets Loans and receivables Loans and receivables are non-derivative financial assets with fixed ordeterminable payments that are not quoted in an active market. At each balancesheet date subsequent to initial recognition, loans and receivables (includingreceivables, pledged bank deposits, restricted bank deposits, bank balances andother loans receivable) are carried at amortised cost using the effectiveinterest method, less any identified impairment loss. An impairment loss isrecognised in profit or loss when there is objective evidence that the asset isimpaired, and is measured as the difference between the asset's carrying amountand the present value of the estimated future cash flows discounted at theoriginal effective interest rate. Impairment losses are reversed in subsequentperiods when an increase in the asset's recoverable amount can be relatedobjectively to an event occurring after the impairment was recognised, subjectto a restriction that the carrying amount of the asset at the date theimpairment is reversed does not exceed what the amortised cost would have beenhad the impairment not been recognised. Financial liabilities and equity Financial liabilities and equity instruments issued by the Group are classifiedaccording to the substance of the contractual arrangements entered into and thedefinitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in theassets of the group after deducting all of its liabilities. The accountingpolicies adopted in respect of financial liabilities and equity instruments areset out below. Bank borrowings Bank borrowings are subsequently measured at amortised cost, using the effectiveinterest method. Any difference between the proceeds (net of transaction costs)and the settlement or redemption of borrowings is recognised over the term ofthe borrowings in accordance with the Group's accounting policy for borrowingcosts. Other financial liabilities Other financial liabilities including payables and amount due to a minorityshareholder are subsequently measured at amortised cost, using the effectiveinterest method. Equity instruments Equity instruments issued by the Company are recorded at the proceeds received,net of direct issue costs. Financial instruments Derecognition Financial assets are derecognised when the rights to receive cash flows from theassets expire or, the financial assets are transferred and the Group hastransferred substantially all the risks and rewards of ownership of thefinancial assets. On derecognition of a financial asset, the difference betweenthe asset's carrying amount and the sum of the consideration received andreceivable and the cumulative gain or loss that had been recognised directly inequity is recognised in profit or loss. Financial liabilities are derecognised when the obligation specified in therelevant contract is discharged, cancelled or expires. The difference betweenthe carrying amount of the financial liability derecognised and theconsideration paid and payable is recognised in profit or loss. Taxation Income tax expense represents the sum of the tax currently payable and deferredtax. The tax currently payable is based on taxable profit for the year. Taxableprofit differs from profit as reported in the consolidated income statementbecause it excludes items of income and expense that are taxable or deductiblein other years, and it further excludes items that are never taxable ordeductible. The Group's liability for current tax is calculated using tax ratesthat have been enacted or substantively enacted by the balance sheet date. Deferred tax is recognised on differences between the carrying amounts of assetsand liabilities in the consolidated financial statements and the correspondingtax bases used in the computation of taxable profit, and is accounted for usingthe balance sheet liability method. Deferred tax liabilities are generallyrecognised for all taxable temporary differences and deferred tax assets arerecognised to the extent that it is probable that taxable profits will beavailable against which deductible temporary differences can be utilised. Suchassets and liabilities are not recognised if the temporary difference arisesfrom goodwill or from the initial recognition of (other than in a businesscombination) other assets and liabilities in a transaction that affects neitherthe taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries, except where the Group is able tocontrol the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset realised. Deferred tax ischarged or credited to the consolidated income statement, except when it relatesto items charged or credited directly to equity, in which case the deferred taxis also dealt with in equity. Foreign currencies In preparing the financial statements of each individual group entity,transactions in currencies other than the functional currency of that entity(foreign currencies) are recorded in its functional currency (i.e. the currencyof the primary economic environment in which the entity operates) at the ratesof exchanges prevailing on the dates of the transactions. At each balance sheetdate, monetary items denominated in foreign currencies are retranslated at therates prevailing on the balance sheet date. Non-monetary items carried at fairvalue that are denominated in foreign currencies are retranslated at the ratesprevailing on the date when the fair value was determined. Non-monetary itemsthat are measured in terms of historical cost in a foreign currency are notretranslated. Exchange differences arising on the settlement of monetary items, and on thetranslation of monetary items, are recognised in profit or loss in the period inwhich they arise. Exchange differences arising on the retranslation ofnon-monetary items carried at fair value are included in profit or loss for theperiod except for differences arising on the retranslation of non-monetary itemsin respect of which gains and losses are recognised directly in equity, in whichcases, the exchange differences are also recognised directly in equity. For the purpose of presenting consolidated financial statements, the assets andliabilities of the Group's foreign operations are expressed in Hong Kong dollarsusing exchange rates prevailing on the balance sheet date. Income and expenseitems are translated at the average exchange rates for the period, unlessexchange rates fluctuated significantly during that period, in which case theexchange rates at the dates of the transactions are used. Exchange differencesarising, if any, are classified as equity and transferred to the Group'stranslation reserve. Such translation differences are recognised in profit orloss in the period in which the foreign operation is disposed of. Retirement benefit costs Payments to defined contribution retirement benefit plans/state-managedretirement benefit scheme/the Mandatory Provident Fund Scheme are charged as anexpense when employees have rendered service entitling them to thecontributions. 4. KEY SOURCES OF ESTIMATION UNCERTAINTY In the process of applying the Group's accounting policies, which are describedin note 3, management has made the following estimation that have the mostsignificant effect on the amounts recognised in the consolidated financialstatements of next year. Write down of properties held for sale The Group makes a write down of properties held for sale based on an assessmentof the net realisable value of properties held for sale. Allowances are appliedto properties held for sale where events or changes in circumstances indicatethat the net realisable value is lower than the cost of properties held forsale. The determination requires the use of estimates with reference to theestimated selling price in the ordinary course of business less the estimatedcosts of completion and the estimated costs necessary to make the sale. Income tax No deferred tax asset has been recognised in respect of tax losses ofHK$300,967,000 due to the unpredictability of future profit streams. Therealisability of the deferred tax asset mainly depends on whether sufficientfuture profits or taxable temporary differences will be available in the future.In cases where the actual future profits generated are more than expected,additional recognition of deferred tax assets may arise, which would berecognised in the consolidated income statement for the period in which it takesplace. Fair value of investment properties Investment properties are stated at fair value based on the valuation performedby an independent professional valuer. In determining the fair value, the valuerhave based on a method of valuation which involves certain estimates. In relyingon the valuation report, the directors of the Group have exercised theirjudgment and are satisfied that the method of valuation of is reflective of thecurrent market conditions. 5. FINANCIAL INSTRUMENTS Financial risk management objectives and policies The Group's major financial instruments include loans and receivables,borrowings and other financial liabilities. Details of these financialinstruments are disclosed in respective notes. The risks associated with thesefinancial instruments and the policies on how to mitigate these risks are setout below. The management manages and monitors these exposures to ensureappropriate measures are implemented on a timely and effective manner. Market risk Currency risk Certain bank loans of the Group are denominated in foreign currencies (note 27).The Group currently does not have a foreign currency hedging policy in respectof foreign currency debt. However, management monitors the related foreigncurrency exposure closely and will consider hedging significant foreign currencyexposure should the need arise. Cash flow interest rate risk The Group has exposures to interest rate risk as its bank borrowings and otherloans receivable are subject to floating interest rates. Currently, interestrate risk is not hedged. However, from time to time, if interest rate fluctuatessignificantly, interest rate swaps may be used to convert some of the floatinginterest rates to fixed rates, to manage interest rate exposure. The interest rate risk for bank balances exposed is considered minimal as suchamounts are placed in banks with maturity less than three months. Credit risk The Group's maximum exposure to credit risk in the event of the counterpartiesfailure to perform their obligations at the balance sheet date in relation toeach class of recognised financial assets is the carrying amount of those assetsas stated in the consolidated balance sheet. In order to minimise the creditrisk, the management of the Group has monitoring procedures to ensure thatfollow-up action is taken to recover overdue debts. In addition, the Groupreviews the recoverable amount of each individual debt at each balance sheetdate to ensure that adequate impairment losses are made for irrecoverableamounts. In this regard, the directors of the Company consider that the Group'scredit risk is significantly reduced. Although the bank balances are concentrated on certain counterparties, thecredit risk on liquid funds is limited because the counterparties are licensedbanks. The Group has no other significant concentration of credit risk, with exposurespread over a number of counterparties and customers. Liquidity risk In the management of the liquidity risk, the Group monitors and maintains alevel of cash and cash equivalents deemed adequate by the management to financethe Group's operations and mitigate the effects of fluctuations in cash flows.The management monitors the utilisation of bank borrowings and ensurescompliance with loan covenants. Fair value the fair value of financial assets and financial liabilities are determined inaccordance with generally accepted pricing models based on discounted cash flowsanalysis using the relevant prevailing market rates. The directors consider that the carrying amounts of financial assets andfinancial liabilities recorded at amortised cost in the consolidated financialstatements approximate their fair values. 6. REVENUE 2005 2006 ------ ------ HK$'000 HK$'000 Gross rental income 47,679 11,700Gross proceeds from sale of properties 75,614 - _______ _______ 123,293 11,700 _______ _______ _______ _______ 7. GEOGRAPHICAL AND BUSINESS SEGMENTS Geographical segments Last year, the Group operated in Hong Kong only and the Group's primary segmentinformation was reported in two divisions, which are property development andproperty investment. Due to the acquisition of assets and liabilities throughacquisitions of subsidiaries during the year as disclosed in note 31 (the"Acquisition"), the size of the Group's property portfolio has increasedsignificantly. In particular, the Group has made an entry into the propertymarket of Greater China other than Hong Kong (The People's Republic of China,the "PRC") due to the Acquisition. Since then, the Group reorganised itsbusiness activities by geographical segments. The operations of the Group are currently located in Hong Kong and the PRC. Thecorresponding geographical locations of the Group's assets are the basis onwhich the Group reports its primary segment information. Comparative figureshave been restated to conform with current year's presentation. Consolidated Income statement for the year ended 31 December 2006 Hong Kong PRC Consolidated --- ------------ ----- -------------- HK$'000 HK$'000 HK$'000REVENUEExternal sales 115,546 7,747 123,293 _______ _______ _______ RESULTSegment profit (loss) 54,426 (5,235) 49,191 _______ _______ Interest income 23,983Recognition of discount on acquisition 7,484Unallocated corporate expenses (22,139)Finance costs (14,110) _______Profit before taxation 44,409Income tax expense (27,648) _______Profit for the year 16,761 _______ _______ Consolidated Balance Sheet at 31 December 2006 Hong Kong PRC Consolidated ------------ ----- -------------- HK$'000 HK$'000 HK$'000ASSETSSegment assets 7,112,983 1,684,898 8,797,881Restricted bank balances and deposits - 332,404 332,404Income tax recoverable 14,923Unallocated corporate assets 259,814 _________Consolidated total assets 9,405,022 _________ _________LIABILITIESSegment liabilities 261,435 523,096 784,531Bank borrowings 2,016,075Income tax payable 31,379Amount due to a minority shareholder 36,209Deferred taxation 58,718 _________Consolidated total liabilities 2,926,912 _________ Other information for the year ended 31 December 2006 Hong Kong PRC Consolidated ------------ ----- -------------- HK$'000 HK$'000 HK$'000 Capital additions 3,503,802 883,262 4,387,064Depreciation 6 121 127Fair value changes on investment 186,000 (859) 185,141propertiesWrite down of properties held for sale 120,819 - 120,819 _________ _______ _________ Consolidated Income statement for the year ended 31 December 2005 Hong Kong PRC Consolidated ------------ ----- -------------- HK$'000 HK$'000 HK$'000REVENUEExternal sales 11,700 - 11,700 _______ _______ _______ RESULTSegment profit 10,625 - 10,625 _______ _______ Interest income 8,604Unallocated corporate expenses (2,181)Finance costs (715) _______Profit before taxation 16,333Income tax expense (1,921) _______Profit for the year 14,412 _______ Consolidated Balance Sheet at 31 December 2005 Hong Kong PRC Consolidated ------------ ----- -------------- HK$'000 HK$'000 HK$'000ASSETSSegment assets 1,496,804 - 1,496,804Unallocated corporate assets 622,643 _________Consolidated total assets 2,119,447 _________ LIABILITIESSegment liabilities 9,137 - 9,137Bank borrowings 509,400Income tax payable 989Deferred taxation 29,127 _________Consolidated total liabilities 548,653 _________ Other information for the year ended 31 December 2005 Hong Kong PRC Consolidated --- ------------ ----- -------------- HK$'000 HK$'000 HK$'000 Fair value changes on investment 6,000 - -properties _______ _______ _______ Business segments The Group is currently organised into two operating divisions - propertyinvestment and property development. Principal activities are as follows: Property investment - rental of properties Property development - development of properties Both divisions above are operating in Hong Kong and the PRC. The following table provides an analysis of the Group's sales revenue bybusiness segment: Sales revenue by business segment 2006 2005 ------ ------ HK$'000 HK$'000 Property investment 34,719 1,860Property development 88,574 9,840 _______ _______ 123,293 11,700 _______ _______ The following is an analysis of the carrying amount of segment assets, andadditions to investment properties and property, plant and equipment analysed bybusiness segments: Additions to --- --- -------------- Carrying investment ---------- --- properties ------------------- amount of and property, plant ----------- --- ------------------- segment assets and equipment ---------------- --------------- 2006 2005 2006 2005 ------ ------ ------ ------ HK$'000 HK$'000 HK$'000 HK$'000 Property investment 5,302,990 56,000 4,328,208 -Property development 3,494,891 1,440,804 58,856 -Unallocated corporate 607,141 622,643 - -assets _________ _________ _________ _______ 9,405,022 2,119,447 4,387,064 - _________ _________ _________ _______ 8. PROPERTY AND RELATED COSTS 2006 2005 ------ HK$'000 HK$'000 Changes in properties held for sale/properties under development held for sale 1,800,217 1,440,725Costs incurred on properties held for sale/properties under development held for sale (1,721,717) (1,440,725) _________ _________ 78,500 - _________ _________ 9. WRITE DOWN OF PROPERTIES HELD FOR SALE The write down of properties held for sale arose from the director's assessmentof the estimated realisable value at properties with reference to the estimatedselling price in the ordinary course of business less the estimated costs ofcompletion and the estimated costs necessary to make the sale. 10. RECOGNITION OF DISCOUNT ON ACQUISITION In December 2006, the Group acquired 3% additional interest in Chengdu HuashangHouse Development Co., Ltd from another shareholder of that company. Since then,that company has become a wholly owned subsidiary of the Group. The directorsconsider the acquisition is conducted at arm's length. 11. FINANCE COSTS 2006 2005 ------ ------ HK$'000 HK$'000Interest on:Bank borrowings wholly repayable within 5 years 40,289 15,406Bank borrowings not wholly repayable within 5 years 2,256 715 _______ _______ 42,545 16,121Less: Amounts capitalised to property development projects (29,225) (15,406) _______ _______ 13,320 715 _______ _______Facilities charges 588 -Imputed interest on amount due to a minority shareholder 202 - _______ _______ 790 - _______ _______ 14,110 715 _______ _______ Borrowing costs capitalised during the year arose on the general borrowing pooland are calculated by applying a capitalisation rate of 11.9% (2005: 21.3%) perannum to expenditure on qualifying assets. 12. OTHER EXPENSES/PROFIT BEFORE TAXATION (a) Other expenses 2006 2005 ------ ------ HK$'000 HK$'000Included in other expenses are: Legal and professional fees in respect of listing andre-admission to AIM upon the Acquisition 16,943 -Management fee paid to a related company 24,938 5,138Selling and marketing expenses 23,436 -Other legal and professional fees 4,774 2,686 _______ _______ (b) Profit before taxation 2006 2005 ------ ------ HK$'000 HK$'000Profit before taxation has been arrived at aftercharging: Auditor's remuneration 1,248 375Directors' emoluments 5,905 23Minimum lease payments under operating leases 43 - and crediting: ------------- -------------Gross rental income from investment properties 34,719 1,860Less: direct operating expenses from investmentproperties that generate rental income during the (10,494) (635)year ------------- ------------- Net rental income from investment properties 24,225 1,225 ------------- -------------Interest earned on bank deposits 21,315 8,604Other interest income 2,668 - ------------- ------------- 23,983 8,604 _______ _______ 13. INCOME TAX EXPENSE 2006 2005 ------ ------ HK$'000 HK$'000The charge comprise: Current year - Hong Kong 7,191 783 _______ _______(Over)underprovision in prior yearsHong Kong 552 -Other regions in the PRC (7,439) - _______ _______ (6,887) - _______ _______Deferred taxCurrent year 27,344 1,138 _______ _______ 27,648 1,921 _______ _______ Hong Kong Profits Tax is calculated at 17.5% (2005: 17.5%) of the estimatedassessable profit for the year. Taxation arising in other jurisdictions is calculated at the rates prevailing inthe relevant jurisdictions. Details of deferred taxation are set out in note 30. The income tax expense for the year can be reconciled from profit beforetaxation per the consolidated income statement as follows: 2006 2005 ------ ------ HK$'000 HK$'000 Profit before taxation 44,409 16,333 _______ _______ Tax at the domestic income tax rate of 17.5% (2005: 17.5%) 7,772 2,858Tax effect of expenses not deductible for tax purpose 29,771 424Tax effect of income not taxable for tax purpose (1,280) (1,506)Overprovision in prior years, net (6,887) -Tax effect of tax losses not recognised 567 157Tax effect of decrease in deferred tax assets on deductibletemporary differences unrecognised (1,897) -Effect of different tax rates of subsidiaries operated inother jurisdictions (146) -Others (252) (12) _______ _______Income tax expense for the year 27,648 1,921 _______ _______ 14. EARNINGS PER SHARE The calculation of the earnings per share attributable to the Company'sshareholders is based on the following data: 2006 2005 ------ ------ HK$'000 HK$'000 Earnings for the purpose of earnings per share 80,722 14,412 _______ _______ Number of shares ------------------ 2006 2005 ------ ------Weighted average number of ordinary shares forthe purposes of earnings per share 377,071,754 33,996,065 ___________ __________ 15. DIVIDENDS No dividend was paid or proposed during the two years ended 31 December 2006,nor has any dividend been proposed since the balance sheet date. 16. INVESTMENT PROPERTIES Hong Kong Hong Kong held under PRC held held under medium- under long long leases term leases leases Total ------------- ------------- -------- ------- HK$'000 HK$'000 HK$'000 HK$'000AT FAIR VALUESAt 1 January 2005 50,000 - - 50,000Increase in fair value 6,000 - - 6,000 _______ _________ _______ _________At 31 December 2005 56,000 - - 56,000Exchange adjustments - - 15,511 15,511Acquisition of assetsthrough acquisition ofsubsidiaries 197,000 3,250,000 866,776 4,313,776Additions - - 14,432 14,432increase (decrease) in 6,000 180,000 (859) 185,141fair value _______ _________ _______ _________At 31 December 2006 259,000 3,430,000 895,860 4,584,860 _______ _________ _______ _________ All of the Group's property interests held under operating leases to earnrentals or for capital appreciation purpose are measured using the fair valuemodel and are classified and accounted for as investment properties. The fair value of the Group's investment properties at 31 December 2006 havebeen arrived at on the basis of valuation carried out at that date by SavillsValuation and Professional Services Limited ("Savills"), a firm of CharteredSurveyors not connected with the Group. Savills is a member of Hong KongInstitute of Suveryors, and has appropriate qualifications and recentexperiences in the valuation of properties in the relevant locations. Thevaluation, which conforms to Royal Institution of Chartered Surveyors of theUnited Kingdom Appraisal and Valuation Standards, was arrived at using twoprimary methods, namely the comparison approach and the income capitalisationapproach. Certain of the Group's investment properties are rented out under operatingleases. 17. PROPERTY, PLANT AND EQUIPMENT Properties ------------ --- --- --- --- under ------- --- --- --- --- development ------------- --- --- --- --- in Hong Kong Furniture, -------------- ------------ --- --- --- held under fixtures ------------ ---------- --- --- --- medium-term and Motor Leasehold ------------- ----- ------- ----------- --- leases equipment vehicles improvements Total -------- ----------- ---------- -------------- ------- HK$'000 HK$'000 HK$'000 HK$'000 HK$'000COSTAt 1 January - - - - -and 31December2005Exchange - 35 2 - 37adjustmentsAcquisitionof assetsthroughacquisition 41,251 1,721 136 37 43,145ofsubsidiariesAdditions 15,526 185 - - 15,711Amortisationof prepaidleasepayments 3,665 - - - 3,665capitalised _______ _______ _______ _______ _______At 31 60,442 1,941 138 37 62,558December2006 _______ _______ _______ _______ _______DEPRECIATIONAt 1 January - - - - -and 31December2005Provided for - 95 18 14 127the year _______ _______ _______ _______ _______At 31 - 95 18 14 127December2006 _______ _______ _______ _______ _______CARRYINGVALUESAt 31 60,442 1,846 120 23 62,431December2006 _______ _______ _______ _______ _______ At 31 - - - - -December2005 _______ _______ _______ _______ _______ The above items of property, plant and equipment are depreciated on astraight-line basis at the following rates per annum: Furniture, fixtures and equipment 25%Motor vehicles 25%Leasehold improvements 25% 18. PREPAID LEASE PAYMENTS 2006 2005 ------ ------ HK$'000 HK$'000Leasehold land in Hong Kong undermedium-term lease 632,257 - _______ _______ Analysed for reporting purposes as:Current 16,742 -Non-current 615,515 - _______ _______ 632,257 - _______ _______ Amortisation of prepaid lease payments since the date of the Acquisitionamounting to HK$3,665,000 (2005: Nil) was capitalised to properties underdevelopment. 19. OTHER LOANS RECEIVABLE 2006 2005 ------ ------ HK$'000 HK$'000Carrying amount analysed for reportingpurposes:Current assets(receivable within 973 -12 months from thebalance sheet date)Non-current assets(receivable after 12 126,536 -months from thebalance sheet date) _______ _______ 127,509 - _______ _______ The other loans receivable are secured by certain leasehold properties, carryinterest at prime rate and are repayable in accordance with their respectiverepayment terms. The loans are repayable as follows: 2006 2005 ------ ------ HK$'000 HK$'000 Within one year 973 -In more than one year but not more than two years 2,548 -In more than two years but not more than three years 4,221 -In more than three years but not more than four years 4,558 -In more than four years but not more than five years 4,923 -In more than five years 110,286 - _______ _______ 127,509 - _______ _______ The interest rate of the other loan receivables is at prime rate. The averageeffective interest rates of other loans receivable are 8% per annum. 20. PROPERTIES HELD FOR SALE/PROPERTIES UNDER DEVELOPMENT HELD FOR SALE At 31 December 2006, the total borrowing costs capitalised to properties heldfor sale and properties under development held for sale were HK$46,949,000(2005: HK$17,724,000). All the Group's properties held for sale are situated in Hong Kong. The Group's properties under development held for sale of HK$1,624,203,000(2005: HK$1,440,725,000) and HK$724,248,000 (2005: Nil) are situated in HongKong and the PRC respectively. Both the Group's properties held for sale and properties under development heldfor sale are held under medium to long term leases. Included in the Group's properties under development held for sale areHK$1,315,745,000 (2005: HK$1,440,725,000) which are expected to be recovered inmore than twelve months after the balance sheet date. 21. RECEIVABLES, DEPOSITS AND PREPAYMENTS 2006 2005 ------ ------ HK$'000 HK$'000 Trade receivables 14,190 -Other receivables, deposits and prepayments 135,692 2,764 _______ _______ 149,882 2,764 _______ _______ 22. PLEDGED BANK DEPOSITS The amount represents deposits pledged to banks to secure short-term bank loansand are therefore classified as current assets. The deposits carry fixed interest rates ranging from 3.6% to 4.4% per annum. Thepledged bank deposits will be released upon the settlement of relevant bankborrowings. 23. RESTRICTED BANK BALANCES AND DEPOSITS Bank deposits of HK$332,404,000 being proceeds received upon the pre-sale ofcertain units of a property under development held for sale are placed inseveral banks and to be used solely for tax payment and settlement of theconstruction cost of the related property. The bank deposits carry fixedinterest rates ranging from 0.7% to 1.4% per annum. 24. BANK BALANCES AND DEPOSITS Bank balances and deposits comprise cash held by the Group and short-term bankdeposits which carry fixed interest rates ranging from 3.5% to 4.1% per annumwith an original maturity of three months or less. 25. PAYABLES, DEPOSITS RECEIVED AND ACCRUED CHARGES 2006 2005 ------ ------ HK$'000 HK$'000 Trade payable 31,560 5,901Other payables, deposits received and accrued charges 288,996 3,236 _______ _______ 320,556 9,137 _______ _______ 26. PROVISIONS HK$'000 At 1 January and 31 December 2005 -Acquisition of liabilities through acquisition of subsidiaries 15,332Exchange adjustments 271Payment for the year (722) _______At 31 December 2006 14,881 _______ The provisions for rehousing compensation represent the compensation for thedelay in handover of rehousing properties to the former commercial unit owners("Affected Owners") whose properties have been demolished due to theconstruction of a property developed for sale in the PRC and the estimated costfor the permanent relocation of certain of the Affected Owners who will not haverehousing properties allocated under management's plan. Such provisions areestimated based on management's best estimate by reference to the PRC statutoryrequirements. Since the Acquisition, some of the compensation arrangements havebeen settled with the Affected Owners. In the opinion of the directors, theremaining compensation is expected to be paid within one year, depending on theprogress of negotiation with the Affected Owners. 27. SECURED BANK BORROWINGS 2006 2005 ------ ------ HK$'000 HK$'000The bank borrowings are repayable as follows: On demand or within one year 1,252,499 1,200More than one year, but not exceeding two years 43,027 490,200More than two years, but not exceeding three years 46,441 1,200More than three years, but not exceeding four years 48,873 1,200More than four years, but not exceeding five years 543,912 1,200More than five years 81,323 14,400 _________ _______ 2,016,075 509,400Less: Amounts due for settlement within 12 monthsshown under current liabilities (1,252,499) (1,200) _________ _______Amounts due for settlement after 12 months 763,576 508,200 _________ _______ The average effective interest rates of the borrowings are ranging from 4.5% to5.9% (2005: 4.6% to 4.9%) per annum. The carrying amounts of the Group's borrowings are analysed as follows: Denominated in 2006 2005 Interest rate---------------- ------ ------ --------------- HK$'000 HK$'000 Hong Kong dollars 1,668,709 509,400 Hong Kong Interbank Money Market Offer Rate plus 0.5% to 0.67% 80,000 - Hong Kong Prime Rate minus 2% _________ _______ 1,748,709 509,400Renminbi 267,366 - 10% discount on People's Bank of China lending rate _________ _______ 2,016,075 509,400 _________ _______ 28. AMOUNT DUE TO A MINORITY SHAREHOLDER The balance is unsecured, interest-free and repayable within twelve months frombalance sheet date. The amount is carried at amortised cost using the effectiveinterest of 4% per annum. 29. SHARE CAPITAL Movements during the year in the share capital of the Company were as follows: Number of shares Nominal value ------------------ --------------- 2006 2005 2006 2005 ------ ------ --- ------ ------ US$'000 US$'000Ordinary shares: Authorised:At beginning of the year 500,000,000 50,000 25,000 50Shares split - 950,000 - -Increase for the year 800,000,000 499,000,000 40,000 24,950 ____________ ___________ _______ _______At end of the year 1,300,000,000 500,000,000 65,000 25,000 ____________ ___________ _______ _______ Issued and fully paid:At beginning of the year 217,693,995 1 10,885 -Shares split - 19 - -Shares issued 668,653,817 217,693,975 33,432 10,885 ____________ ___________ _______ _______At end of the year 886,347,812 217,693,995 44,317 10,885 ____________ ___________ _______ _______ Shown in the consolidated financial statements as 2006 2005 ------ ------ HK$'000 HK$'000 Issued and fully paid capital at end of the year 345,204 84,429 _______ _______ The Company was incorporated on 17 February 2004 with an authorised sharecapital of 50,000 ordinary shares with a par value of US$1 each. At the time ofincorporation, 1 share of US$1 was issued at par to the subscriber to providethe initial capital of the Company. On 2 November 2005, the Company reorganisedits share capital and split its share by the ratio of 20:1. The nominal value ofthe authorised share capital of the Company after the reorganisation was US$0.05per share. On 4 November 2005, the Company increased its authorised share capital to500,000,000 ordinary shares by the creation of 499,000,000 ordinary shares witha par value US$0.05 each. On 4 November 2005, the Company issued 217,693,975 fully paid ordinary shares toTrans Tasman Properties Limited ("TTP") in full satisfaction of the amount dueto TTP of HK$1,546,353,000 as at that date. On 4 October 2006 , the Company increased its authorised share capital to1,300,000,000 ordinary shares by the creation of 800,000,000 ordinary shareswith a par value of US$0.05 each. On 5 October 2006, the Company issued 668,653,817 ordinary shares to S E AHoldings Limited ("SEA"), the Company's intermediate holding company, atUS$0.753 (equivalent to HK$5.8772) per share, with a total amount ofapproximately HK$3,929,812,000 as part of the consideration for acquiring assetsand liabilities through acquisition of certain subsidiaries from SEA. Detailsfor such acquisition are disclosed in note 31. All ordinary shares rank equally with one vote attached to each fully paidordinary share. 30. DEFERRED TAXATION The following are the major deferred tax liabilities (assets) recognised andmovements thereon during the current and prior reporting periods: Other --- --- ------- --- temporary --- --- ----------- --- difference --- --- ------------ --- in respect --- --- ------------ --- of fair value --- --- --------------- --- Accelerated Revaluation adjustments on ------------- ------------- ---------------- --- tax on acquisition of Tax ----- ---- ---------------- ----- depreciation properties subsidiaries losses Total -------------- ------------ -------------- -------- ------- HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 At 1 - 1,989 26,000 - 27,989January2005Charge toincome - 1,138 - - 1,138for theyear _______ _______ _______ _______ _______At 31December - 3,127 26,000 - 29,1272005Exchangeadjustments - 2,247 - - 2,247Charge(credit) toincome for 1,174 29,065 - (2,895) 27,344theyear _______ _______ _______ _______ _______At 31December 1,174 34,439 26,000 (2,895) 58,7182006 _______ _______ _______ _______ _______ For the purposes of balance sheet presentation, deferred tax assets andliabilities above have been offset and shown under non-current liabilities. At 31 December 2006, the Group has unused tax losses of HK$317,509,000 (2005:HK$1,087,000) available for offset against future profits. A deferred tax assethas been recognised in respect of HK$16,542,000 (2005: Nil) of such losses. Nodeferred tax asset has been recognised in respect of the remainingHK$300,967,000 (2005: Nil) due to the unpredictability of future profit streams. At 31 December 2006, the Group has deductible temporary differences in respectof properties of HK$108,792,000 (2005: Nil). No deferred tax asset has beenrecognised in relation to such deductible temporary difference as it is notprobable that taxable profit will be available against which the deductibletemporary can be utilised. 31. ACQUISITION OF ASSETS AND LIABILITIES THROUGH ACQUISITION OF SUBSIDIARIES On 5 October 2006, the Group had acquired a portfolio of six investment anddevelopment properties in Hong Kong and the PRC and its related assets andliabilities, at a consideration of approximately HK$4,463 million from SEA. Thepurchase was by way of acquisition of the entire issued share capital of GiantWell Enterprises Limited. This transaction has been reflected as a purchase ofassets and liabilities. HK$'000Net assets acquired: Investment properties 4,313,776Property, plant and equipment 43,145Prepaid lease payments 584,836Other loans receivable 122,048Properties held for sales 1,089,117Properties under development held for sale 678,057Receivables, deposits and prepayments 231,302Income tax recoverable 8,357Pledged bank deposits 99,587Restricted bank deposits 354,644Bank balances and cash 164,871Payables, deposits received and accrued charges (245,971)Sales deposits on properties held forsales received (428,416)Provisions (15,332)Income tax payable (119,773)Bank borrowings (1,363,400)Amount due to a minority shareholder (93,395) _________ 5,423,453Minority interest (482,380) _________ 4,941,073Discount on acquisition of assets and liabilities throughacquisition of subsidiaries recognised in equity (477,640) _________ 4,463,433 _________ Total consideration satisfied by: Cash consideration 500,000Consideration payable (Note a) 33,621Shares issued (Note b) 3,929,812 _________ 4,463,433 _________ Net cash outflow arising on acquisition:Bank balances and cash acquired 164,871Cash consideration paid (500,000) _________ (335,129) _________ Notes: (a) Consideration payable of HK$33,621,000 was included in payable, deposits andaccrued charges and repayable within twelve months from balance sheet date. (b) As part of the consideration, 668,653,817 ordinary shares of the Companywith par value of US$0.05 each were issued at US$0.753 (equivalent to HK$5.8772)per share at the date of the Acquisition (the 'new shares'), with a total amountof HK$3,929,812,000. The share issue price is in excess of the market closingprice of the shares issued at the amount of HK$294,736,000 and credited to otherreserve. In addition, a discount of HK$477,640,000, which represented the excessof fair value of assets and liabilities acquired through acquisition ofsubsidiaries over the consideration paid or payable is deemed as capitalcontribution from holding company and credited to other reserve. 32. MAJOR NON-CASH TRANSACTIONS As disclosed in note 31, the Company issued 668,653,817 ordinary shares to SEAwith a total amount of HK$3,929,812,000 as part of the consideration foracquiring assets and liabilities through acquisition of certain subsidiariesfrom SEA during the year. During the year ended 31 December 2005, 217,693,975 shares were issued to settlethe amount due to TTP of HK$1,546,353,000. 33. OPERATING LEASE ARRANGEMENTS The Group as lessee At the balance sheet date, the Group had commitments for future minimum leasepayment under non-cancellable operating leases in respect of rented premiseswhich fall due within one year was HK$288,000 (2005: Nil). Leases are negotiatedfor a term of 1 year with fixed monthly rentals. The Group as lessor Certain of the Group's investment properties and properties under developmentheld for sale were leased out under operating leases. Properties underdevelopment held for sale are temporarily leased. At the balance sheet date, the Group had contracted with tenants for thefollowing future minimum lease payments: 2006 2005 ------ ------ HK$'000 HK$'000 Within one year 142,919 878In the second to fifth year inclusive 292,800 -After five years 444,377 - _______ _______ 880,096 878 _______ _______ one of the leases entered with tenants is subject to additional rental based onspecified percentage of revenue recognised by the tenant in accordance withlease agreement over the annual minimum lease payments. All of the properties leased out have committed tenants for the range of 1 to 20years (2005: 1 year). The investment properties are expected to generate rentalyields of 3.0% on an ongoing basis. 34. CAPITAL COMMITMENT At the balance sheet date, the Group had capital commitments in respect of thefollowings: 2006 2005 ------ ------ HK$'000 HK$'000(a) Expenditure to be incurred on properties Authorised but not contracted for in Hong Kong 349,634 - _______ _______ Contracted for but not provided for in theconsolidated financial statements in Hong Kong 21,041 - _______ _______ (b) Acquisition of equipments Contracted for but not provided for in theconsolidated financial statements in the PRC 998 - _______ _______ 35. PLEDGE OF ASSETS At 31 December 2006, the Group had the following mortgages and/or pledges overits assets to secure banking facilities granted to the Group. (a) Fixed and floating charges on investment properties with an aggregatecarrying value of HK$4,584,860,000 (2005: HK$56,000,000). (b) Fixed and floating charges on properties under development held for salewith an aggregate carrying value of HK$1,210,706,000 (2005: HK$862,586,000). (c) Fixed and floating charges on properties under development with an aggregatecarrying value of HK$60,442,000 (2005: Nil). (d) Prepaid lease payments with an aggregate carrying value of HK$581,172,000(2005: Nil). (e) Bank deposits of HK$153,487,000 (2005: Nil). (f) Unlisted shares of certain subsidiaries with assets principally comprised ofinvestment properties, properties under development held for sale, propertiesunder development and prepaid lease payments included in (a), (b), (c) and (d)above. 36. RETIREMENT BENEFITS PLANS The Group participates in a defined contribution scheme which is registeredunder a Mandatory Provident Fund Schemes (the "MPF Scheme") established underthe Mandatory Provident Fund Schemes Ordinance of Hong Kong in December 2000 foreligible employees in Hong Kong. The assets of the MPF Scheme are heldseparately from those of the Group, in funds under the control of trustees. The employees of the Group's subsidiaries in the PRC are members ofstate-managed retirement benefit scheme operated by the Government of the PRC.The total cost charged to income of HK$396,000 (2005: Nil) representscontribution payable to the scheme by the Group in respect of the current year.The only obligation of the Group with respect to the retirement benefit schemeis to made the specified contributions. 37. POST BALANCE SHEET EVENT In March 2007, an indirect wholly-owned subsidiary of the Company, AGP (Wanchai)Limited, completed the purchase of the adjoining properties of an existingdevelopment project from the Government of the Hong Kong Special AdministrativeRegion at a consideration of HK$43,140,000. 38. RELATED PARTY TRANSACTIONS Other than the acquisition of certain subsidiaries as disclosed in note 31, theGroup had the following transactions with a related company, a wholly ownedsubsidiary of SEA, during the year: (a) Rental income received of HK$1,665,000 (2005: Nil); (b) Management fees paid/payable of HK$38,990,000 (2005: HK$6,327,000) inrespect of investment property and development project management services ofthe Group's property portfolio provided by this related company. The unsettledbalance of the management fees of HK$12,030,000 (2005: Nil) was included inpayable, deposits received and accrued charges at 31 December 2006; and (c) On 2 March 2005, the Company acquired entire shares of Ever Reality Limited,Newsland Properties Limited, Rex Capital Development Limited, AGP Shop Limited(formerly known as TTP (BVI) Limited) and Vast Power Development Limited at aconsideration of HK$39 from TTP, the Company's former holding company whichbecame a fellow subsidiary of the Company in November 2005. 39. PRINCIPAL SUBSIDIARIES Details of the principal subsidiaries, all of which are companies with limitedliabilities, at 31 December 2006 are set out below. Issued share --- --- --- -------------- --- Place/country of Issued and paid capital/ --- ------------------ ----------------- registered --- ----------------- incorporation/ up share capital/ capital held --- ---------------- ------------------- -------------- ---Name of subsidiary operation registered capital by the Company Principal activities-------------------- ----------- -------------------- ---------------- ---------------------- Direct subsidiary Giant WellEnterprisesLimited B.V.I./Hong Kong 1 ordinary share 100 Investment holding of US$1 Grace ArtDevelopmentLimited Hong Kong 1 ordinary share 100 Treasury of HK$1 Indirect subsidiary AGP (Sha Tin)Limited Hong Kong 1 ordinary share 100 Property development(formerly known as of HK$1TTP (Sha Tin)Limited) AGP (Wanchai)Limited Hong Kong 2 ordinary shares 100 Property development(formerly known as of HK$1 eachTTP (Wanchai)Limited) AGP Hong KongLimited Hong Kong 2 ordinary shares 100 Property investment(formerly known as of HK$1 eachTTP Hong KongLimited) AGP (DiamondHill) Limited Hong Kong 2 ordinary shares 100 Property development(formerly known as of HK$1 eachTTP (Diamond Hill)Limited) Wing SiuCompanyLimited Hong Kong 2 ordinary shares 100 Property investment of HK$1 each Handy ViewCompanyLimited Hong Kong 2 ordinary shares 100 Property investment of HK$1 each SEA GroupTreasuryLimited Hong Kong 10,000,000 ordinary 100 Property development shares of HK$1 each and financing Harvest HillLimited Hong Kong 2 ordinary shares 100 Financing of HK$1 each ShinningWorldwideLimited B.V.I./Hong Kong 1,000 ordinary 55 Property development shares of US$1 each Sky TrendInvestmentsLimited Hong Kong 2 ordinary shares 100 Property development of HK$1 each Concord WayLimited Hong Kong 100 ordinary shares 100 Property development of HK$1 each SunfoldDevelopmentLimited Hong Kong 1 ordinary share 100 Property development of HK$1 ChengduHuashang House PRC RMB136,000,000 100 Property investmentDevelopment Co., registered capitalLtd. GuangzhouYingfat House PRC US$20,110,000 100 Property developmentProperty Development registered capitalCo., Ltd. The directors are of the opinion that a complete list of the particulars of allsubsidiaries of the Group will be of excessive length and therefore the abovelist contains only the particulars of subsidiaries which principally affect theresults or assets of the Group. This information is provided by RNS The company news service from the London Stock Exchange
- Home
- Share Prices
- AQSE Share Prices
- Euronext
- Stock Screeners
- Share Chat
- FX
- News & RNS
- Events
- Media
- Trading Brokers
- Finance Tools
- Members
Latest Share Chat
AGP.L Regulatory News (AGP)
AGP Share
Price
AGP Share
News
AGP Share
Chat
AGP Share
Trades
AGP
Live RNS
AGP Share
Charts
AGP Broker
Ratings
AGP Directors
Deals
AGP Financial
Diary
AGP
Fundamentals
AGP Short
Positions
AGP
Media
AGP.L Information
- There is currently no data for AGP
Watchlists are a member only feature
Login to your account
Don't have an account? Click here to register.Final Results
Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.
To access our Live RNS you must confirm you are a private investor by using the button below.