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AGP - Asian Growth Properties News Story

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Last Trade - 19/12/17

Sector
Financials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £49.7m
Position in Universe th / 1821

Asian Growth Props - Interim Results - Part 2

Wed 30th August, 2017 1:41pm
- Part 2: For the preceding part double click  ID:nRSd3237Pa 

                                            --------------              -----------------    
 Financing activities                                                                                                          
 Draw down of bank loans                                                      283,508                     11,924               
 Repayments of bank loans                                                     (140,138)                   (2,410,088)          
 Dividend paid                                                                (2,254,627)                 (1,684,061)          
 Advances to non-controlling interests                                        (208)                       (272)                
                                                                              --------------              -----------------    
 Net cash used in financing activities                                        (2,111,465)                 (4,082,497)          
                                                                              --------------              -----------------    
 Net decrease in cash and cash equivalents                                    (3,308,834)                 (1,179,015)          
                                                                                                                               
 Cash and cash equivalents at beginning of period                             4,779,967                   3,298,440            
                                                                                                                               
 Effect of foreign exchange rate changes                                      1,965                       (8,468)              
                                                                              --------------              -----------------    
 Cash and cash equivalents at end of period                                   1,473,098                   2,110,957            
                                                                              ==========                  ==========           
 Represented by:                                                                                                               
  Bank balance and cash                                                       1,473,098                   2,110,957            
                                                                              ==========                  ==========           
 
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017 
 
1.     GENERAL 
 
The Company is a public company incorporated in the British Virgin Islands and
migrated to Bermuda on 5 December 2016 with limited liability and its shares
are admitted for trading on the AIM Market of The London Stock Exchange plc.. 
 
On 15 May 2017, pursuant to the distribution in specie by the Company's
intermediate holding company, SEA, a limited liability company incorporated in
Bermuda with its shares listed on the Stock Exchange of Hong Kong Limited, the
shares of the Company held by SEA have been distributed to the SEA's
shareholders ("Distribution in Specie"). After the completion of Distribution
in Specie, the Company ceased to be a subsidiary of SEA and SEA is no longer
the Company's immediate holding company. The Company's immediate holding
company become Nan Luen International Limited, a company incorporated in
Bermuda as exempted company with limited liability. The directors of the
Company considered that the Company's ultimate holding company is JCS Limited,
a company incorporated in Bermuda as exempted company with limited liability. 
 
The addresses of the registered office and the principal place of business of
the Company are Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and
Suites 2506-10, 25/F., Everbright Centre, 108 Gloucester Road, Wanchai, Hong
Kong, respectively. 
 
The Company acts as an investment holding company. The principal subsidiaries
of the Company are engaged in property investment, property development and
hotel operation. 
 
2.     BASIS OF PREPARATION 
 
The condensed consolidated financial statements have been prepared in
accordance with International Accounting Standard ("IAS") 34 "Interim
Financial Reporting" issued by the International Accounting Standards Board
(the "IASB"). 
 
3.     PRINCIPAL ACCOUNTING POLICIES 
 
The condensed consolidated financial statements have been prepared on the
historical cost basis except for investment properties, which are measured at
fair values, as appropriate. 
 
Except as described below, the accounting policies and methods of computation
used in the condensed consolidated financial statements for the six months
ended 30 June 2017 are the same as those followed in the preparation of the
Group's annual financial statements for the year ended 31 December 2016. 
 
In the current interim period, the Group has applied, for the first time, the
following new and amendments to International Financial Reporting Standards
("IFRS") issued by the International Accounting Standards Board that are
mandatorily effective for an accounting period that begins on or after 1
January 2017: 
 
 Amendments to IAS 7      Disclosure Initiative                                        
 Amendments to IAS 12     Recognition of Deferred Tax Assets for Unrealised Losses     
 Amendments to IFRS 12    As part of the Annual Improvements to IFRSs 2014-2016 Cycle  
 
 
3.     PRINCIPAL ACCOUNTING POLICIES - continued 
 
The application of the above new and amendments to IFRSs in the current
interim period has had no material effect on the amounts reported in these
condensed consolidated financial statements and/or disclosures set out in
these condensed consolidated financial statements, but additional disclosures
about changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes on application of
amendments to IAS 7 will be provided in the consolidated financial statements
for the year ending 31 December 2017. 
 
4.     SEGMENT INFORMATION 
 
Information reported to the executive directors of the Company, being the
chief operating decision makers, for the purposes of resource allocation and
assessment of segment performance is mainly focused on the property
development, property investment, hotel operation and financial investment. No
operating segments identified by the chief operating decision markers have
been aggregated in arriving at the reportable segments of the Group. 
 
Property investment activity is in the People's Republic of China (the "PRC").
The Group has disposed of an investment property in United Kingdom (the "UK")
and the hotel operation in Hong Kong as set out in note 23 during the period. 
 
The financial investment segment includes investment income from bank balances
and investment income from equity or bond investments under investment
portfolio. 
 
The following is an analysis of the Group's revenue and results by reportable
segment: 
 
Six months ended 30 June 2017 
 
                                     Property development    Property investment    Hotel operation    Financial investment    Consolidated     
                                     HK$'000                 HK$'000                HK$'000            HK$'000                 HK$'000          
                                                                                                                                                
 SEGMENT REVENUE                                                                                                                                
 External revenue                    -                       86,964                 80,965             64,278                  232,207          
                                     =========               =========              =========          =========               ==========       
 SEGMENT RESULTS                                                                                                                                
 Segment (loss) profit               (17,214)                61,824                 (8,563)            66,922                  102,969          
                                     =========               =========              =========          =========                                
 Unallocated interest income                                                                                                   1,158            
 Corporate income less expenses                                                                                                (14,455)         
 Gain on disposal of subsidiaries                                                                                              2,549,927        
 Finance costs                                                                                                                 (29,496)         
                                                                                                                               ---------------  
 Profit before taxation                                                                                                        2,610,103        
                                                                                                                               ==========       
 
 
4.     SEGMENT INFORMATION - continued 
 
Six months ended 30 June 2016 
 
                                Property development    Property investment    Hotel operation    Financial investment    Consolidated      
                                HK$'000                 HK$'000                HK$'000            HK$'000                 HK$'000           
                                                                                                                                            
 SEGMENT REVENUE                                                                                                                            
 External revenue               6,681                   168,935                107,275            11,747                  294,638           
                                ==========              =========              =========          =========               ==========        
 SEGMENT RESULTS                                                                                                                            
 Segment (loss) profit          (168,681)               698,713                6,650              12,152                  548,834           
                                ==========              =========              =========          =========                                 
 Unallocated interest income                                                                                              3,312             
 Corporate income less                                                                                                                      
 expenses                                                                                                                 (14,201)          
 Finance costs                                                                                                            (46,749)          
                                                                                                                          ----------------  
 Profit before taxation                                                                                                   491,196           
                                                                                                                          ==========        
 
 
Segment profit of the property investment division for the six months ended 30
June 2017 included an increase in fair value of investment properties of
HK$8,775,000 (1.1.2016 - 30.6.2016: a decrease in fair value of investment
properties of HK$16,813,000). 
 
The Group does not allocate general interest income, corporate income less
expenses, gain on disposal of subsidiaries in current period and finance costs
to individual reportable segment profit or loss for the purposes of resource
allocation and performance assessment by the chief operating decision makers. 
 
The accounting policies adopted in preparing the reportable segment
information are the same as the Group's accounting policies. 
 
No segment assets and liabilities are presented as the information is not
reportable to the chief operating decision makers in the resource allocation
and assessment of performance. 
 
5.     PROPERTY AND RELATED COSTS 
 
                                                       Six months ended 30 June    
                                                       2017                        2016                
                                                       HK$'000                     HK$'000             
                                                                                                       
 Cost of properties sold and related expenses          -                           5,007               
 Selling and marketing expenses                        428                         2,587               
 Direct operating expenses on investment properties    14,979                      17,879              
                                                       --------------              ----------------    
                                                       15,407                      25,473              
                                                       =========                   =========           
 
 
6.     OTHER EXPENSES 
 
                                                 Six months ended 30 June    
                                                 2017                        2016         
                                                 HK$'000                     HK$'000      
                                                                                          
 Included in other expenses are:                                                          
                                                                                          
 Fees paid to a related company (note 22 (a))    66,621                      108,200      
 Hotel operating expenses                        19,976                      30,195       
 Legal and professional fees                     7,115                       1,443        
                                                 =========                   =========    
 
 
7.     FINANCE COSTS 
 
                                                            Six months ended 30 June    
                                                            2017                        2016                  
                                                            HK$'000                     HK$'000               
                                                                                                              
 Interest on bank borrowings                                26,880                      43,150                
 Less: Amount capitalised to property developmentproject    -                           (376)                 
                                                            ---------------             ------------------    
                                                            26,880                      42,774                
 Front end fee                                              1,308                       2,311                 
 Other charges                                              1,308                       1,664                 
                                                            ---------------             ------------------    
                                                            29,496                      46,749                
                                                            ==========                  ==========            
 
 
8.     PROFIT BEFORE TAXATION 
 
                                                                Six months ended 30 June    
                                                                2017                        2016          
                                                                HK$'000                     HK$'000       
                                                                                                          
 Profit before taxation has been arrived at after crediting:                                              
                                                                                                          
 Net exchange gain                                              4,254                       1,083         
 Interest earned on bank deposits                               36,359                      14,916        
 Interest income from second mortgage loans                     63                          97            
                                                                ==========                  ==========    
 
 
9.     INCOME TAX (EXPENSE) CREDIT 
 
                                        Six months ended 30 June    
                                        2017                        2016                 
                                        HK$'000                     HK$'000              
                                                                                         
 Current tax                                                                             
 Hong Kong Profits Tax                  (546)                       (9,995)              
 PRC Enterprise Income Tax              (7,173)                     (5,652)              
 UK Profit Tax                          (2,203)                     -                    
                                        ---------------             -----------------    
                                        (9,922)                     (15,647)             
                                        ---------------             -----------------    
 Over(under)provision in prior years                                                     
 Hong Kong Profits Tax                  53                          -                    
 PRC Enterprise Income Tax              (8)                         -                    
 PRC Land Appreciation Tax              -                           80,848               
                                        ---------------             -----------------    
                                        45                          80,848               
                                        ---------------             -----------------    
                                        (9,877)                     65,201               
 Deferred tax                           (1,469)                     2,033                
                                        ---------------             -----------------    
                                        (11,346)                    67,234               
                                        ==========                  ==========           
 
 
Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable
profits for each of the periods. 
 
PRC Enterprise Income Tax is calculated at 25% of the estimated assessable
profits for each of the periods. 
 
UK Profit Tax is calculated at 20% of the estimated assessable profits for the
period. 
 
10.   EARNINGS PER SHARE 
 
The calculation of the basic earnings per share attributable to the Company's
shareholders is based on the following data: 
 
                                                                                                                                                                Six months ended 30 June    
                                                                                                                                                                2017                        2016           
                                                                                                                                                                HK$'000                     HK$'000        
                                                                                                                                                                                                           
 Earnings for the purpose of basic earnings per share                                                                                                                                                      
 Profit for the period attributable to the Company's shareholders                                                                                               2,599,387                   561,348        
                                                                                                                                                                ===========                 ===========    
                                                                                                                                                                                                           
                                                                                                                                                                2017                        2016           
 Number of common shares for the purpose of basic earnings per share (Note: change from ordinary shares to common shares after migration on 5 December 2016)    886,347,812                 886,347,812    
                                                                                                                                                                ===========                 ===========    
 
 
10.   EARNINGS PER SHARE - continued 
 
No diluted earnings per share is presented as the Company did not have any
potential ordinary shares in issue during both periods or at the end of each
reporting period. 
 
For the purpose of assessing the performance of the Group, the directors of
the Company are of the view that the profit for the period should be adjusted
for the fair value changes on investment properties recognised in profit or
loss and the related deferred taxation in arriving at the "adjusted profit
attributable to the Company's shareholders". A reconciliation of the adjusted
earnings is as follows: 
 
                                                                                                                                        Six months ended 30 June    
                                                                                                                                        2017                        2016                      
                                                                                                                                        HK$'000                     HK$'000                   
 Profit for the period attributable to the Company's shareholders as shown in the condensed consolidated statement of profit or loss    2,599,387                   561,348                   
 Fair value changes on investment properties                                                                                            (8,775)                     16,813                    
 Deferred tax thereon                                                                                                                   -                           (4,203)                   
                                                                                                                                        ----------------            --------------------      
 Adjusted profit attributable to the Company's shareholders                                                                             2,590,612                   573,958                   
                                                                                                                                        ===========                 ===========               
                                                                                                                                                                                              
 Basic earnings per share excluding fair value changes on investment properties net of deferred tax                                     HK292.3 cents               HK64.8 cents              
                                                                                                                                        ===========                 ===========               
                                                                                                                                                                                                
 
 
The denominators used in the calculation of adjusted earnings per share are
the same as those detailed above. 
 
11.   DIVIDENDS 
 
                                                              Six months ended 30 June                 
                                                              2017                        2016           
                                                              HK$'000                     HK$'000        
 Dividends recognised as a distribution during the period:                                               
                                                                                                         
 Special dividend of HK$2.25 per share                        1,994,281                   1,684,061      
 (1.1.2016 - 30.6.2016: HK$1.90 per share)                                                               
                                                              ===========                 ===========    
                                                                                                         
 Special dividend of HK$10.35 per share                       9,173,700                   -              
 (1.1.2016 - 30.6.2016: HK$Nil per share)                                                                
                                                              ===========                 ===========    
                                                                                                             
 
 
The directors of the Company do not recommend the payment of any interim
dividend. 
 
12.   INVESTMENT PROPERTIES 
 
In estimating the fair value of investment properties, the Group uses
market-observable data to the extent it is available. The Group engages third
party qualified valuers to perform the valuation of the Group's investment
properties. At the end of each reporting period, the Group works closely with
the qualified external valuers to establish and determine the appropriate
valuation techniques and inputs to the model. 
 
The fair values of investment properties as at 30 June 2017 and 31 December
2016 were arrived at on the basis of valuations carried out at those dates by
Savills Valuation and Professional Services Limited ("Savills"), a firm of
Chartered Surveyors not connected to the Group, recognised by The Hong Kong
Institute of Surveyors, that has appropriate qualifications and recent
experience in the valuation of properties in the relevant locations. 
 
The valuation, which conforms to the appropriate sections contained in "The
HKIS Valuation Standards (2012 Edition)" published by The Hong Kong Institute
of Surveyors in Hong Kong, was arrived at by reference to market evidence of
transaction prices of similar properties at similar location or by
capitalisation of future rental which is estimated by reference to comparable
rental as available in the relevant markets. In the valuation, which falls
under Level 3 of the fair value hierarchy, the market rentals of all lettable
units as well as those of similar properties are made by reference to the
rentals achieved by the Group in the lettable units as well as those of
similar properties in the neighbourhood. The capitalisation rate adopted is by
reference to the yield rates observed by the valuer for similar properties in
the locality and adjusted for the valuer's knowledge of factors specific to
the respective properties. 
 
The resulting increase in the fair value of investment properties of
HK$8,775,000 (1.1.2016 -30.6.2016: decrease in the fair value of investment
properties of HK$16,813,000) has been recognised directly in the condensed
consolidated statement of profit or loss. 
 
13.   OTHER RECEIVABLES 
 
At 30 June 2017, the Group incurred a total amount of RMB321,060,000
(31.12.2016: RMB321,060,000) equivalent to HK$369,925,000 (31.12.2016:
HK$358,913,000) for the tenant relocation arrangements, excavation and
infrastructure work on certain pieces of land in Nanjing, the PRC. The amount,
together with further costs to complete the work, are wholly refundable from
the relevant PRC local government either by deduction against the
consideration payable if the Group is successful in bidding for the land or
out of the proceeds received by the relevant PRC local government from another
successful tenderer. 
 
During the year ended 31 December 2016, the Group recognised a full impairment
of other receivables. Management reviews the status of the underlying project
annually. Since there had been a substantial delay of the time schedule from
the original plan, management was of the view that the release of the land for
auction and amount to be recovered in the foreseeable future is unlikely, and
therefore a full impairment has been made for the amount as at 30 June 2017
and 31 December 2016. 
 
14.   AVAILABLE-FOR-SALE INVESTMENTS 
 
                                                                                                                                        30.6.2017         31.12.2016          
                                                                                                                                        HK$'000           HK$'000             
                                                                                                                                                                              
 Unlisted investments at cost:                                                                                                                                                
 - Equity securities (Note a)                                                                                                           5,854             5,817               
 - Convertible loan (Note b)                                                                                                            5,854             5,817               
                                                                                                                                                                              
 Unlisted investments at fair value:                                                                                                                                          
 - Debt securities (Note c)                                                                                                             -                 496,719             
                                                                                                                                        --------------    ----------------    
                                                                                                                                        11,708            508,353             
 Listed investments at fair value:                                                                                                                                            
 - Debt securities maturing between January 2017 to September 2019 with fixed interests ranging from 1.9% to 8.0% per annum (Note d)    -                 882,094             
                                                                                                                                        --------------    ----------------    
 Total                                                                                                                                  11,708            1,390,447           
                                                                                                                                        =========         =========           
 Analysed for reporting purposes as:                                                                                                                                          
 Current assets                                                                                                                         3,902             137,204             
 Non-current assets                                                                                                                     7,806             1,253,243           
                                                                                                                                        --------------    ----------------    
                                                                                                                                        11,708            1,390,447           
                                                                                                                                        =========         =========           
 
 
(a)      As at 30 June 2017, unlisted equity securities classified as
available-for sale held by the Group amounting to US$750,000 (equivalent to
HK$5,854,000) (31.12.2016: US$750,000 (equivalent to HK$5,817,000)),
representing approximately 8% (31.12.2016: 8%) equity interest of the investee
company, were measured at cost less impairment at the end of the reporting
period because the range of reasonable fair value estimates is so significant
that the directors of the Company were of the opinion that the fair value
cannot be measured reliably. 
 
(b)     The Group committed and contributed an unsecured interest-free loan in
the sum of US$750,000 (equivalent to HK$5,854,000) (31.12.2016: US$750,000
(equivalent to HK$5,817,000)) to the party set out in note (a) which was
measured at cost less impairment at the end of the reporting period. 
 
The party is scheduled to repay the convertible loan at its principal amount
of US$500,000 on 14 October 2017 and US$250,000 on 30 July 2018 (the "Maturity
date"). The Group has the right to convert into shares representing not more
than a 7% (31.12.2016: 7%) equity interest of the investee company. 
 
The conversion option feature is regarded as a derivative embedded in but not
closely related to the convertible loan in accordance with IAS 39 Financial
Instruments: Recognition and Measurement. However, in the opinion of the
directors of the Company, the fair value of the embedded derivative at the end
of the reporting period is insignificant and therefore it has not been
accounted for it as a separate component in the consolidated financial
statements. 
 
(c)     In December 2016, the Group subscribed for a note issued by an
independent third party in an aggregate principal amount of HK$500 million
with a maturity date in December 2018 at a coupon rate of 7% per annum for the
first year and 8% per annum for the second year (the "Note"). The Note
entitles the issuer to early redeem on the first anniversary of the issue date
of the Note, in whole but not in part, at 100% of the principal amount
outstanding, together with the accrued and unpaid interest at the date fixed
for redemption. As at 31 December 2016, the Note was measured at fair value
determined based on the valuation conducted by an independent professional
valuer. 
 
(d)     As at 31 December 2016, the Group's listed debt securities have been
pledged as security for the bank borrowings. 
 
The Group's listed investments are measured at fair value for financial
reporting purposes. In estimating the fair value, the Group uses
market-observable data which falls under Level 1 of the fair value hierarchy. 
 
15.   RECEIVABLES, DEPOSITS AND PREPAYMENTS 
 
                                                     30.6.2017         31.12.2016          
                                                     HK$'000           HK$'000             
                                                                                           
 Trade receivables                                   3,169             8,001               
 Amount receivables from disposal of subsidiaries    445,000           445,000             
 Accrued income                                      72,924            72,366              
 Deposits and prepayments                            4,862             60,012              
                                                     --------------    ----------------    
                                                     525,955           585,379             
                                                     =========         =========           
 
 
Trade receivables mainly represent rental receivables from tenants for the use
of the Group's properties. No credit is allowed to tenants. Rentals are
payable upon presentation of demand notes. 
 
16.   AMOUNTS DUE FROM/TO NON-CONTROLLING INTERESTS 
 
The balances are unsecured, interest-free and repayable on demand. 
 
17.   PAYABLES, RENTAL DEPOSITS AND ACCRUED CHARGES 
 
                                                       30.6.2017         31.12.2016          
                                                       HK$'000           HK$'000             
                                                                                             
 Trade payables                                        -                 2,432               
 Rental deposits                                       32,130            37,739              
 Rental received in advance                            11,336            30,657              
 Other payables, other deposits and accrued charges    55,530            86,801              
                                                       --------------    ----------------    
                                                       98,996            157,629             
                                                       =========         =========           
 
 
Included in other payables is an aggregate amount of HK$28,584,000
(31.12.2016: HK$24,609,000) payable to contractors for the cost in relation to
the tenant relocation arrangements, excavation and infrastructure work on
certain pieces of land as detailed in note 13. 
 
As at 30 June 2017, rental deposits to be settled after twelve months from the
end of the reporting period based on the respective lease terms amounted to
HK$23,105,000 (31.12.2016: HK$25,610,000). 
 
18.   BANK BORROWINGS 
 
During the current interim period, the Group repaid bank loans amounting to
HK$140,138,000 (1.1.2016 - 30.6.2016: HK$2,410,088,000) and drew bank loans
which carry interest at variable rates amounting to HK$283,508,000 (1.1.2016 -
30.6.2016: HK$11,924,000). 
 
19.   SHARE CAPITAL 
 
                                                                30.6.2017    31.12.2016    
                                                                US$'000      US$'000       
 Authorised:                                                                               
 1,300,000,000 common shares of US$0.05 each                    65,000       65,000        
                                                                =========    =========     
                                                                                           
                                                                US$'000      US$'000       
                                                                                           
 Issued and fully paid:                                                                    
 886,347,812 common shares of US$0.05 each                      44,317       44,317        
                                                                =========    =========     
                                                                                           
                                                                HK$'000      HK$'000       
                                                                                           
 Shown in the condensed consolidated financial statements as    345,204      345,204       
                                                                =========    =========     
 
 
20.   DEFERRED TAXATION 
 
The balance at the end of reporting period mainly represents deferred tax
liabilities recognised on the fair value changes of the investment properties
amounting to HK$203,756,000 (31.12.2016: HK$197,690,000). 
 
21.   PLEDGE OF ASSETS 
 
At the end of the reporting period, the Group had pledged the following assets
to secure banking facilities granted to the Group: 
 
(a)    Fixed charges on investment properties and property, plant and
equipment with an aggregate carrying value of HK$1,401,907,000 (31.12.2016:
HK$2,854,807,000) together with a floating charge over all the assets of the
properties owning subsidiaries and benefits accrued to the relevant
properties. 
 
(b)    Fixed charges on hotel properties with an aggregate carrying value of
HK$892,175,000 as at 31 December 2016 together with a floating charge over all
the assets of the property owning subsidiaries and benefits accrued to the
relevant properties, which were released in the current period. 
 
(c)    Note receivables of HK$54,282,000 as at 31 December 2016, which were
released in the current period. 
 
(d)    Pledged cash of HK$533,105,000 as at 31 December 2016, which were
released in the current period. 
 
(e)    Listed debt securities of HK$882,094,000 as at 31 December 2016, which
were released in the current period. 
 
22.   RELATED PARTY BALANCES AND TRANSACTIONS 
 
(a)    For the six months ended 30 June 2017, the Group paid fees of
HK$66,621,000 (1.1.2016 -30.6.2016: HK$108,200,000) to South-East Asia
Investment and Agency Company, Limited ("SEAI"), a wholly-owned subsidiary of
SEA (an fellow subsidiary of the Company), pursuant to the agreement entered
into between the Company, certain subsidiaries of the Company and SEAI for
using SEAI's personnel and facilities on a cost-sharing basis to carry out the
Group's business activities. 
 
(b)    The remuneration of directors of the Company who are the Group's key
management personnel during the period amounted to HK$2,514,000 (1.1.2016 -
30.6.2016: HK$12,597,000). 
 
23.   DISPOSAL OF SUBSIDIARIES 
 
(a)    Disposal of subsidiaries during the current interim period 
 
On 31 March 2017, the Company entered into a sale and purchase agreement with
SEA pursuant to which the Company conditionally agreed to sell the entire
issued share capital of Benefit Strong Group Limited, which owns Crowne Plaza
Hong Kong Causeway Bay in Hong Kong and a commercial property at 20 Moorgate
in UK, to SEA at an aggregate consideration of HK$8,913,354,000. The disposal
was completed on 15 May 2017. 
 
SEA has applied its entitlement to HK$8,913,354,000 of the Company's special
dividend in discharging its obligation to pay the whole amount of the
consideration in respect of the acquisition. 
 
23.   DISPOSAL OF SUBSIDIARIES - continued 
 
(a)    Disposal of subsidiaries during the current interim period - continued 
 
The major classes of assets and liabilities of the disposed subsidiaries at
the date of the disposal were as follows: 
 
                                                                      HK$'000              
                                                                                           
 Investment properties                                                1,580,959            
 Property, plant and equipment                                        900,556              
 Loan receivables                                                     3,134                
 Note receivables                                                     38,937               
 Available-for-sale investments                                       1,963,188            
 Inventories                                                          934                  
 Receivables, deposits and prepayments                                87,438               
 Tax recoverable                                                      1,824                
 Amount due from non-controlling interests                            246                  
 Pledged bank deposits                                                560,888              
 Bank balances and cash                                               4,868,913            
 Payables, rental deposits and accrued charges                        (81,304)             
 Tax liabilities                                                      (2,923)              
 Bank borrowings                                                      (3,554,565)          
 Deferred tax liabilities                                             (3,572)              
                                                                      -----------------    
 Net assets disposed of                                               6,364,653            
                                                                      ==========           
 Gain on disposal of subsidiaries:                                                         
                                                                                           
 Cash consideration                                                   8,913,354            
 Add: Realisation of translation reserve upon disposal                2,598                
 Add: Non-controlling interests                                       3,680                
 Less: Realisation of investment revaluation reserve upon disposal    (792)                
 Less: Transaction costs incurred                                     (4,260)              
 Less: Net assets disposed of                                         (6,364,653)          
                                                                      -----------------    
 Gain on disposal of subsidiaries                                     2,549,927            
                                                                      ==========           
                                                                                           
 Cash consideration                                                   8,913,354            
 Less: Offset by the special dividend declared (note 24)              (8,913,354)          
 Less: Cash and cash equivalents disposed of                          (4,868,913)          
 Less: Transaction costs paid                                         (4,260)              
                                                                      -----------------    
 Net cash outflow arising on disposal                                 (4,873,173)          
                                                                      ==========           
 
 
23.   GAIN ON DISPOSAL OF SUBSIDIARIES - continued 
 
(b)    Disposal of subsidiaries during prior interim period 
 
During the period from 1 January 2016 to 30 June 2016, the Group had disposed
of certain subsidiaries which owned the following property/projects: 
 
(i)     Dah Sing Financial Centre (now known as Everbright Centre) 
 
On 25 February 2016, the Group entered into a sale and purchase agreement,
pursuant to which the Group agreed to sell the entire issued shares of SEA
(BVI) Limited, which wholly owns the issued shares of Wing Siu Company Limited
(the sole registered and beneficial owner of Dah Sing Financial Centre (now
known as Everbright Centre)), to an independent third party at an aggregate
consideration of HK$10,101 million in cash. The disposal was completed on 24
May 2016. 
 
(ii)    Kaifeng Nova City 
 
On 19 April 2016, the Group entered into a sale and purchase agreement,
pursuant to which the Group agreed to sell the entire issued share of New
Insight Holdings Limited, which wholly owns the issued shares of all
investment companies (the beneficial owners of a property development project
at Kaifeng Nova City, Henan Province, the PRC), to an independent third party
at an aggregate consideration of HK$900 million in cash. The disposal was
completed on 26 April 2016. 
 
The major classes of assets and liabilities of the disposed subsidiaries at
the respective date of each disposal were as follows: 
 
                                                Dah Sing Financial Centre    Kaifeng Nova City    Total                
                                                HK$'000                      HK$'000              HK$'000              
                                                                                                                       
 Investment property                            8,983,000                    -                    8,983,000            
 Property for development                       -                            531,322              531,322              
 Property, plant and equipment                  390,012                      2,129                392,141              
 Properties held for sale                                                                                              
 Completed properties                           -                            419,107              419,107              
 Properties under development                   -                            148,832              148,832              
 Trade receivables, deposits and prepayments    18,719                       2,360                21,079               
 Tax recoverable (tax liabilities)              (4,130)                      3,449                (681)                
 Bank balances and cash                         44,229                       118,580              162,809              
 Payables, deposits and accrued charges         (86,256)                     (52,754)             (139,010)            
 Sales deposits                                 -                            (17,671)             (17,671)             
 Bank borrowings                                -                            (159,078)            (159,078)            
 Deferred tax liabilities                       (17,179)                     -                    (17,179)             
                                                -----------------            -----------------    -----------------    
 Net assets disposed of                         9,328,395                    996,276              10,324,671           
                                                ==========                   ==========           ==========           
 
 
23.   GAIN ON DISPOSAL OF SUBSIDIARIES - continued 
 
(b)    Disposal of subsidiaries during prior interim period - continued 
 
                                                          Dah Sing Financial Centre    Kaifeng Nova City    Total                 
                                                          HK$'000                      HK$'000              HK$'000               
                                                                                                                                  
 Gain (loss) on disposal of subsidiaries:                                                                                         
                                                                                                                                  
 Cash Consideration                                       10,100,710                   900,000              11,000,710            
 Add: Realisation of translation reserve upon disposal    -                            6,654                6,654                 
 Less: Transaction costs incurred                         (150,250)                    (903)                (151,153)             
 Less: Write off of unamortised front end fee             (10,566)                     -                    (10,566)              
 Less: Net assets disposed of                             (9,328,395)                  (996,276)            (10,324,671)          
                                                          -----------------            -----------------    ------------------    
 Gain (loss) on disposal of subsidiaries                  611,499                      (90,525)             520,974               
                                                          ==========                   ==========           ==========            
 Cash consideration                                       10,100,710                   900,000              11,000,710            
 Less: Cash consideration receivable                      -                            (200,000)            (200,000)             
 Less: Cash and cash equivalents disposed of              (44,229)                     (118,580)            (162,809)             
 Less: Transaction costs paid                             (150,250)                    (903)                (151,153)             
                                                          -----------------            -----------------    -----------------     
 Net cash inflow arising on disposal                      9,906,231                    580,517              10,486,748            
                                                          ==========                   ==========           ==========            
 
 
24.   MAJOR NON CASH TRANSACTION 
 
During the period under review, the Group has declared totaling of
HK$11,167,981,000 special dividends in which HK$8,913,354,000 was settled by
way of offsetting the cash consideration receivable of disposal of
subsidiaries to SEA as disclosed in note 23(a). 
 
25.   COMPARATIVE FIGURES 
 
Bank deposits with original maturity over three months of HK$4,460,201,000
included in bank balances and cash in the consolidated statement of financial
position as at 31 December 2016 has been reclassified to conform with current
period's presentation. 
 
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