TYSAN HOLDINGS LIMITED NOTES TO FINANCIAL STATEMENTS 31 March 公司及集團資料 Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda 2 One Island S

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1 1. 公司及集團資料 Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda 2 One Island South CORPORATE AND GROUP INFORMATION Tysan Holdings Limited is a limited liability company incorporated in Bermuda. The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The principal place of business of the Company is located at 20th Floor, One Island South, No. 2 Heung Yip Road, Wong Chuk Hang, Hong Kong. During the year, the Group was involved in the following principal activities: foundation piling and site investigation property development property investment and management Tides Holdings II Ltd. Tides Holdings II Ltd. The Blackstone Group L.P. HNA Finance I Co., Ltd. HNA Finance I Tides Holdings II Ltd. HNA Finance I66% 43(a) The holding company of the Company is Tides Holdings II Ltd., a company incorporated in the British Virgin Islands ( BVI ) and ultimately controlled by The Blackstone Group L.P., which is listed on the New York Stock Exchange. Pursuant to a joint announcement made by the Company and HNA Finance I Co., Ltd. ( HNA Finance I ) dated 19 April 2016 ( Joint Announcement ), Tides Holdings II Ltd. conditionally agreed to sell its 66% interest in the issued shares of the Company to HNA Finance I. Further details of this event are set out in note 43(a) to the financial statements. 76 ANNUAL REPORT 2015/2016

2 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 Information about subsidiaries Particulars of the Company s principal subsidiaries are as follows: 名稱 Name 註冊成立 註冊及營業地點 已發行股份 本公司應佔 Place of 繳足註冊資本 之股權百分比 incorporation/ Issued share/ Percentage of equity registration paid-up attributable to and business registered capital the Company 二零一六年 主要業務 Principal activities Hong Kong Ordinary HK$100 Investment Tysan Foundation (Hong Kong) Limited holding ( TFHK ) Hong Kong Ordinary HK$2 Tysan Contractors (Hong Kong) Limited Project (note 1) management and provision of consultancy and management services 1 25, Tysan Construction (Macau) Limited Macau Ordinary MOP25,000 Foundation (note 1) piling ,000, Tysan Foundation Limited (notes 1 and 2) Hong Kong Ordinary HK$141,000,000 3,000,000 Foundation DeferredHK$3,000,000 piling and site investigation 1 10,000, Tysan Foundation Geotechnical Limited Hong Kong Ordinary HK$10,000,000 (note 1) Foundation piling and site investigation 年報 2015/

3 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 Information about subsidiaries (Cont d) Particulars of the Company s principal subsidiaries are as follows: (Cont d) 名稱 Name 註冊成立 註冊及營業地點 已發行股份 本公司應佔 Place of 繳足註冊資本 之股權百分比 incorporation/ Issued share/ Percentage of equity registration paid-up attributable to and business registered capital the Company 二零一六年 主要業務 Principal activities , Tysan Machinery Hire Limited Hong Kong Ordinary HK$10,000 Machinery hiring (notes 1 and 2) 200,000 Deferred HK$200, ,480, Proficiency Equipment Limited (note 1) Hong Kong Ordinary HK$24,480,000 Machinery hiring and trading Proficiency Engineering Limited (note 1) Hong Kong Ordinary HK$2 Provision of engineering services and machinery hiring Lion Bright Limited (note 1) Hong Kong Ordinary HK$2 Machinery hiring and trading 1 25, Mac Proficiency Limited (note 1) Macau Ordinary MOP25,000 Provision of engineering services and machinery hiring 78 ANNUAL REPORT 2015/2016

4 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 Information about subsidiaries (Cont d) Particulars of the Company s principal subsidiaries are as follows: (Cont d) 名稱 Name 註冊成立 註冊及營業地點 已發行股份 本公司應佔 Place of 繳足註冊資本 之股權百分比 incorporation/ Issued share/ Percentage of equity registration paid-up attributable to and business registered capital the Company 二零一六年 主要業務 Principal activities 2 16,720, Tysan Management Limited (note 2) Hong Kong Ordinary HK$16,720,850 Corporate 2 management Deferred HK$ Great Unison Limited Hong Kong Ordinary HK$1 Corporate financing Tysan Investment Limited Hong Kong Ordinary HK$2 Investment holding Tysan Construction Company Limited Hong Kong Ordinary HK$2 Investment holding Cottontree Pacific Limited* BVI Ordinary HK$1 Investment holding Tysan Foundation Holdings Limited* (note 1) Bermuda Ordinary HK$0.1 Investment holding Tysan Property Development Hong Kong Ordinary HK$2 Investment & Investment Limited holding Sure Faith Investment Limited (note 1) Hong Kong Ordinary HK$2 Property holding 年報 2015/

5 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 Information about subsidiaries (Cont d) Particulars of the Company s principal subsidiaries are as follows: (Cont d) 名稱 Name 註冊成立 註冊及營業地點 已發行股份 本公司應佔 Place of 繳足註冊資本 之股權百分比 incorporation/ registration and business Issued share/ paid-up registered capital Percentage of equity attributable to the Company 二零一六年 主要業務 Principal activities Duncan Properties Limited (note 1) Hong Kong Ordinary HK$2 Investment holding Dragonhill Limited (note 1) Hong Kong Ordinary HK$2 Investment holding CG (HY) International Limited (note 1) Hong Kong Ordinary HK$100 Investment holding * Shanghai China Garden International Real Estate Development & Management Company Limited ( Shanghai China Garden )* (notes 1, 3 and 10) PRC/ Mainland China 5,000,000 US$5,000, Property investment Ironwood Pacific Limited* (note 1) BVI Ordinary US$100 Investment holding * 1 9 Hiat Investment Limited ( Hiat Investment )* (notes 1 and 9) Hong Kong 2 Ordinary HK$2 100 Property investment Beneficial Enterprises Limited* (note 1) BVI Ordinary US$100 Investment holding Fund House Limited (note 1) Hong Kong Ordinary HK$2 Investment holding 80 ANNUAL REPORT 2015/2016

6 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 Information about subsidiaries (Cont d) Particulars of the Company s principal subsidiaries are as follows: (Cont d) 名稱 Name 註冊成立 註冊及營業地點 已發行股份 本公司應佔 Place of 繳足註冊資本 之股權百分比 incorporation/ Issued share/ Percentage of equity registration paid-up attributable to and business registered capital the Company 二零一六年 主要業務 Principal activities * ,000 US$500, Property Duncan Property Management (Shanghai) PRC/ management Company Limited* (notes 1 and 3) Mainland China Allbright Investment Limited* (note 1) BVI Ordinary US$100 Investment holding Red Shine Investment Limited (note 1) Hong Kong Ordinary HK$2 Investment holding Federated Resources Limited* (note 1) BVI Ordinary US$100 Investment holding Carriway Limited (note 1) Hong Kong Ordinary HK$2 Investment holding * ,000 RMB200, Property Shanghai Changning Duncan Property PRC/ consulting Consulting Company Limited* Mainland China (notes 1, 3, 5 and 6) 年報 2015/

7 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 Information about subsidiaries (Cont d) Particulars of the Company s principal subsidiaries are as follows: (Cont d) 名稱 Name 註冊成立 註冊及營業地點 已發行股份 本公司應佔 Place of 繳足註冊資本 之股權百分比 incorporation/ Issued share/ Percentage of equity registration paid-up attributable to and business registered capital the Company 二零一六年 主要業務 Principal activities Great Regent Investments Limited (note 1) Hong Kong Ordinary HK$2 Investment holding and provision of sales and marketing services * ,000,000 US$1,000, Property Tysan Land (Shanghai) Limited* PRC/ development (notes 1, 4 and 7) Mainland China Great Prosper Limited (note 1) Hong Kong Ordinary HK$100 Investment holding and provision of sales and marketing services * ,500,000 US$15,500, Property Tysan Property Development (Tianjin) PRC/ development Company Limited*(notes 1 and 3) Mainland China 1 10, Sparkle Key Limited (note 1) Hong Kong Ordinary Investment HK$10,000 holding * ,300,000 US$108,300, Property Tysan Land (Shenyang) Limited* PRC/ development (notes 1, 3 and 8) Mainland China 82 ANNUAL REPORT 2015/2016

8 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) 附屬公司資料 , ,000, , ,500,000 1,000, ,300, ,300, (a) (b) * Information about subsidiaries (Cont d) Notes: 1. Held through subsidiaries. 2. The deferred shares carry no rights to dividends (other than a fixed noncumulative dividend at the rate of 5% per annum for any financial year during which the net profit of the relevant company available for dividends exceeds HK$1 billion), no rights to vote at general meetings, no rights to receive any surplus on a return of capital on a winding-up (other than the amount paid up on such shares, provided that the holders of the ordinary shares of that company have been distributed in such a winding-up of a sum of HK$1,000 billion in respect of each ordinary share). 3. These entities are registered as wholly-foreign-owned enterprises under the PRC law. 4. This entity is registered as an Sino-foreign joint venture under the PRC law. 5. The name of this entity was changed from Shanghai Changning Duncan Property Development Company Limited to Shanghai Changning Duncan Property Consulting Company Limited with effect from 10 August The registered capital of this entity decreased from US$10,000,000 to RMB200,000 in September The registered capital of this entity decreased from US$20,500,000 to US$1,000,000 in July In April 2015, the increase of registered capital of this entity from US$58,300,000 to US$108,300,000 was approved by the relevant government authority and the amount was paid in November On 11 December 2015, the Group disposed of its entire interests in Hiat Investment. Further details of the disposal are set out in note 39(a) to the financial statements. 10. On 1 February 2016, the Group disposed of its entire interests in Shanghai China Garden. Further details of the disposal are set out in note 39(b) to the financial statements. * Subsidiaries whose statutory financial statements were not audited by Ernst & Young, Hong Kong or another member firm of the Ernst & Young global network. 年報 2015/

9 1. 公司及集團資料 1. CORPORATE AND GROUP INFORMATION (Cont d) The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length. 2.1 編製賬目之基準 2.1 BASIS OF PREPARATION These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ( HKFRSs ) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ( HKASs ) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties and derivative financial instruments which have been measured at fair value. These financial statements are presented in Hong Kong dollars ( HK$ ) and all values are rounded to the nearest thousand except when otherwise indicated. 綜合賬目基準 Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries (collectively referred to as the Group ) for the year ended 31 March A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee). When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: (a) (a) the contractual arrangement with the other vote holders of the investee; (b) (b) rights arising from other contractual arrangements; and (c) (c) the Group s voting rights and potential voting rights. 84 ANNUAL REPORT 2015/2016

10 2.1 編製賬目之基準 2.1 BASIS OF PREPARATION (Cont d) 綜合賬目基準 (i) (ii) (iii) (i) (ii) (iii) Basis of consolidation (Cont d) The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Profit or loss and each component of other comprehensive income are attributable to the ordinary equity holders of the Company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Group s share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or liabilities. 年報 2015/

11 2.2 會計政策及披露之變動 2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES The Group has adopted the following revised standards for the first time for the current year s financial statements. Amendments to HKAS 19 Defined Benefit Plans: 19 Employee Contributions 622 Annual Improvements to HKFRSs Cycle Annual Improvements to HKFRSs Cycle The adoption of the above revised standards has had no significant financial effect on these financial statements. In addition, the Company has adopted the amendments to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the Listing Rules ) issued by the Hong Kong Stock Exchange relating to the disclosure of financial information with reference to the Hong Kong Companies Ordinance (Cap. 622) during the current financial year. The main impact to the financial statements is on the presentation and disclosure of certain information in the financial statements. 86 ANNUAL REPORT 2015/2016

12 2.3 己頒佈但未生效之香港財務報告準則 2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these financial statements. 9 2 HKFRS 9 Financial Instruments 2 Amendments to HKFRS 10 Sale or Contribution of Assets 10 and HKAS 28 (2011) between an Investor 28 and its Associate or Joint Venture 5 5 Amendments to HKFRS 10, Investment Entities: Applying 10 HKFRS 12 and the Consolidation Exception 1 1 HKAS 28 (2011) Amendments to HKFRS 11 Accounting for Acquisitions 11 1 of Interests in Joint Operations HKFRS 14 Regulatory Deferral Accounts 4 2 HKFRS 15 Revenue from Contracts 15 with Customers HKFRS 16 Leases 3 年報 2015/

13 2.3 己頒佈但未生效之香港財務報告準則 2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS (Cont d) 1 1 Amendments to HKAS 1 Disclosure Initiative 1 Amendments to HKAS 16 Clarification of Acceptable 16 and HKAS 38 Methods of Depreciation and 38 1 Amortisation 1 Amendments to HKAS 16 Agriculture: Bearer Plants and HKAS Amendments to HKAS 27 Equity Method in Separate 27 1 (2011) Financial Statements 1 Annual Improvements Amendments to a number Cycle of HKFRSs Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 January Effective for an entity that first adopts HKFRSs for its annual financial statements beginning on or after 1 January 2016 and therefore is not applicable to the Group 5 No mandatory effective date is determined but is available for early adoption 88 ANNUAL REPORT 2015/2016

14 2.3 己頒佈但未生效之香港財務報告準則 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS (Cont d) Further information about those HKFRSs that are expected to be applicable to the Group is as follows: HKFRS 15 establishes a new five-step model to account for revenue arising from contracts with customers. Under HKFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in HKFRS 15 provide a more structured approach for measuring and recognising revenue. The standard also introduces extensive qualitative and quantitative disclosure requirements, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods and key judgements and estimates. The standard will supersede all current revenue recognition requirements under HKFRSs. Amendments to HKAS 1 include narrow-focus improvements in respect of the presentation and disclosure in financial statements. The amendments clarify: (i) 1 (i) the materiality requirements in HKAS 1; (ii) (ii) that specific line items in the statement of profit or loss and the statement of financial position may be disaggregated; (iii) (iii) that entities have flexibility as to the order in which they present the notes to financial statements; and (iv) (iv) that the share of other comprehensive income of associates and joint ventures accounted for using the equity method must be presented in aggregate in a single line item, and classified between those items that will or will not be subsequently reclassified to profit or loss. Furthermore, the amendments clarify the requirements that apply when additional subtotals are presented in the statement of financial position and the statement of profit or loss. The Group expects to adopt the amendments from 1 April The amendments are not expected to have any significant impact on the Group s financial statements. 年報 2015/

15 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 於聯營公司的投資 20% Investments in associates An associate is an entity in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. The Group s interests in associates are stated in the consolidated statement of financial position at the Group s share of net assets under the equity method of accounting, less any impairment losses. The Group s share of the post-acquisition results and other comprehensive income of associates is included in the consolidated statement of profit or loss and consolidated other comprehensive income, respectively. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and its associates are eliminated to the extent of the Group s investments in the associates, except where unrealised losses provide evidence of an impairment of the assets transferred. Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss. 90 ANNUAL REPORT 2015/2016

16 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 公平值計量 Fair value measurement The Group measures its investment properties and derivative financial instruments at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. 年報 2015/

17 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 公平值計量 Fair value measurement (Cont d) All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 based on quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly Level 3 based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. 92 ANNUAL REPORT 2015/2016

18 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 非金融資產減值 Impairment of non-financial assets When an indication of impairment exists, or when annual impairment testing for an asset is required (other than investment properties, properties under development, properties held for sale, inventories, construction contract assets and financial assets), the asset s recoverable amount is calculated as the higher of the asset s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs. An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to the statement of profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset. An assessment is made at the end of each reporting period as to whether there is an indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/ amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period in which it arises. 年報 2015/

19 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 關連人士 Related parties A party is considered to be related to the Group if: (a) (a) the party is a person or a close member of that person s family and that person (i) (i) has control or joint control over the Group; (ii) (ii) has significant influence over the Group; or (iii) (iii) is a member of the key management personnel of the Group or of a parent of the Group; or (b) (b) the party is an entity where any of the following conditions applies: (i) (i) the entity and the Group are members of the same group; (ii) (ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity); (iii) (iii) the entity and the Group are joint ventures of the same third party; 94 ANNUAL REPORT 2015/2016

20 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 關連人士 Related parties (Cont d) (b) (b) the party is an entity where any of the following conditions applies: (Cont d) (iv) (iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v) (v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group; (vi) (a) (vi) the entity is controlled or jointly controlled by a person identified in (a); (vii) (a)(i) (vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and (viii) (viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group. 年報 2015/

21 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 物業 機器及設備以及折舊 5% 10% / 3 % 20% 20% 10% 10% / 3 % Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the assets to its working condition and location for its intended use. Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows: Leasehold land under finance lease Over the lease terms Buildings 5% Equipment and machinery 10% / 3 % Furniture and fixtures 20% Motor vehicles 20% Motor yacht 10% Leasehold improvements 10% / 3 % Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end. An item of property, plant and equipment including any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in the statement of profit or loss in the year the asset is derecognised is the difference between the net sale proceeds and the carrying amount of the relevant asset. 96 ANNUAL REPORT 2015/2016

22 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 投資物業 Investment properties Investment properties are interests in land and buildings (including the leasehold interest under an operating lease for a property which would otherwise meet the definition of an investment property) held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the end of the reporting period. Gains or losses arising from changes in the fair values of investment properties are included in the statement of profit or loss in the year in which they arise. Any gains or losses on the retirement or disposal of an investment property are recognised in the statement of profit or loss in the year of the retirement or disposal. For a transfer from inventories to investment properties, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the statement of profit or loss. 發展中物業 Properties under development Properties under development are stated at cost less any impairment losses, which include all development expenditure, borrowing costs and other costs directly attributable to such properties incurred during the development period. Properties under development which have either been pre-sold or which are intended for sale and are expected to be completed within one year from the end of the reporting period are classified as current assets. 年報 2015/

23 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 持有供銷售之物業 Properties held for sale Properties held for sale are stated in the statement of financial position at the lower of cost and net realisable value. Cost includes the cost of land, interest capitalised during the period of development and other direct costs attributable to the development of the properties. Net realisable value is determined by reference to the prevailing market prices on an individual property basis, less all costs to completion, if applicable, and costs of marketing and selling. 租賃 Leases Leases that transfer substantially all the rewards and risks of ownership of assets to the Group, other than legal title, are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalised at the present value of the minimum lease payments and recorded together with the obligation, excluding the interest element, to reflect the purchase and financing. Assets held under capitalised finance leases, including prepaid land lease payments under finance leases, are included in property, plant and equipment, and depreciated over the estimated useful lives of the assets. The finance costs of such leases are charged to the statement of profit or loss so as to provide a constant periodic rate of charge over the lease terms. Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Group is the lessor, assets leased by the Group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to the statement of profit or loss on the straight-line basis over the lease terms. Where the Group is the lessee, rentals payable under operating leases are charged to the statement of profit or loss on the straight-line basis over the lease terms. 98 ANNUAL REPORT 2015/2016

24 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 投資及其他金融資產 Investments and other financial assets 初步確認及計量 Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables and availablefor-sale financial investments, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. When financial assets are recognised initially, they are measured at fair value plus transaction costs that are attributable to the acquisition of the financial assets, except in the case of financial assets recorded at fair value through profit or loss. All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace. 其後計量 Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows: 按公平值計入損益之金融資產 39 Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments as defined by HKAS 39. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. These net fair value changes do not include any dividends on these financial assets, which are recognised in accordance with the policies set out for Revenue recognition below. 年報 2015/

25 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 投資及其他金融資產 Investments and other financial assets (Cont d) 按公平值計入損益之金融資產 39 Financial assets at fair value through profit or loss (Cont d) Financial assets designated upon initial recognition as at fair value through profit or loss are designated at the date of initial recognition and only if the criteria in HKAS 39 are satisfied. Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated as at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the statement of profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category. 貸款及應收款項 Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and includes fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in other income and gains in the statement of profit or loss. The loss arising from impairment is recognised in the statement of profit or loss in other expenses. 100 ANNUAL REPORT 2015/2016

26 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 投資及其他金融資產 Investments and other financial assets (Cont d) 可供出售金融投資 (a) (b) Available-for-sale financial investments Available-for-sale financial investments are non-derivative financial assets in unlisted equity investments. Equity investments classified as available for sale are those which are neither classified as held for trading nor designated as at fair value through profit or loss. After initial recognition, available-for-sale financial investments are subsequently measured at fair value, with unrealised gains or losses recognised as other comprehensive income in the available-for-sale investment revaluation reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in the statement of profit or loss in other income, or until the investment is determined to be impaired, when the cumulative gain or loss is reclassified from the available-for-sale investment revaluation reserve to the statement of profit or loss in other gains or losses. Interest and dividends earned whilst holding the available-for-sale financial investments are reported as interest income and dividend income, respectively and are recognised in the statement of profit or loss as other income in accordance with the policies set out for Revenue recognition below. When the fair value of unlisted equity investments cannot be reliably measured because (a) the variability in the range of reasonable fair value estimates is significant for that investment or (b) the probabilities of the various estimates within the range cannot be reasonably assessed and used in estimating fair value, such investments are stated at cost less any impairment losses. 年報 2015/

27 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 投資及其他金融資產 Investments and other financial assets (Cont d) 可供出售金融投資 Available-for-sale financial investments (Cont d) The Group evaluates whether the ability and intention to sell its availablefor-sale financial assets in the near term are still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets, the Group may elect to reclassify these financial assets if management has the ability and intention to hold the assets for the foreseeable future or until maturity. For a financial asset reclassified from the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortised cost and any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the effective interest rate. Any difference between the new amortised cost and the maturity amount is also amortised over the remaining life of the asset using the effective interest rate. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the statement of profit or loss. 金融資產減值 Impairment of financial assets The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that occurred after the initial recognition of the asset have an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. 102 ANNUAL REPORT 2015/2016

28 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 金融資產減值 Impairment of financial assets (Cont d) 按攤銷成本列賬之金融資產 Financial assets carried at amortised cost For financial assets carried at amortised cost, the Group first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. The amount of any impairment loss identified is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset s original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the reduced carrying amount using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a writeoff is later recovered, the recovery is credited to the statement of profit or loss. 年報 2015/

29 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 金融資產減值 Impairment of financial assets (Cont d) 可供出售金融投資 Available-for-sale financial investments For available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that an investment or a group of investments is impaired. If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the statement of profit or loss, is removed from other comprehensive income and recognised in the statement of profit or loss. In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged decline in the fair value of an investment below its cost. Significant is evaluated against the original cost of the investment and prolonged against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss is removed from other comprehensive income and recognised in the statement of profit or loss. Impairment losses on equity instruments classified as available for sale are not reversed through the statement of profit or loss. Increases in their fair value after impairment are recognised directly in other comprehensive income. The determination of what is significant or prolonged requires judgement. In making this judgement, the Group evaluates, among other factors, the duration or extent to which the fair value of an investment is less than its cost. 104 ANNUAL REPORT 2015/2016

30 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 不再確認金融資產 Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group s consolidated statement of financial position) when: (a) (b) the rights to receive cash flows from the asset have expired; or the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a passthrough arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group s continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. 年報 2015/

31 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 金融負債 Financial liabilities 初始確認及計量 Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group s financial liabilities include trade and retention payables, interest-bearing bank borrowings and other payables. 其後計量 Subsequent measurement The subsequent measurement of financial liabilities depends on their classification as follows: 貸款及借貸 Loans and borrowings After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in the statement of profit or loss. 106 ANNUAL REPORT 2015/2016

32 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 金融負債 Financial liabilities (Cont d) 財務擔保合約 (i) (ii) Financial guarantee contracts Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the Group measures the financial guarantee contract at the higher of: (i) the amount of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation. 不再確認金融負債 Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the statement of profit or loss. 抵銷金融工具 Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously. 年報 2015/

33 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 衍生金融工具 Derivative financial instruments 初步確認及其後計量 Initial recognition and subsequent measurement The Group uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreign currency risk and interest rate risk, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Any gains or losses arising from changes in fair value of derivatives are taken directly to the statement of profit or loss, except for the effective portion of cash flow hedges, which is recognised in other comprehensive income and later reclassified to profit or loss when the hedged item affects profit or loss. 流動與非流動分類對比 Current versus non-current classification Derivative instruments that are not designated as effective hedging instruments are classified as current or non-current or separated into current and non-current portions based on an assessment of the facts and circumstances (i.e., the underlying contracted cash flows). Where the Group expects to hold a derivative as an economic hedge (and does not apply hedge accounting) for a period beyond 12 months after the end of the reporting period, the derivative is classified as non-current (or separated into current and non-current portions) consistently with the classification of the underlying item. Embedded derivatives that are not closely related to the host contract are classified consistently with the cash flows of the host contract. Derivative instruments that are designated as, and are effective hedging instruments, are classified consistently with the classification of the underlying hedged item. The derivative instruments are separated into current portions and non-current portions only if a reliable allocation can be made. 108 ANNUAL REPORT 2015/2016

34 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 存貨 Inventories Inventories are stated at the lower of cost, on the first-in, first-out basis, and net realisable value after making due allowance for any obsolete or slow-moving items. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal. 建築合約 Construction contracts Contract revenue comprises the agreed contract amount and appropriate amounts from variation orders, claims and incentive payments. Contract costs incurred comprise direct materials, the costs of subcontracting, direct labour and an appropriate proportion of variable and fixed construction overheads. Revenue from fixed price construction contracts is recognised using the percentage of completion method, measured by reference to the proportion of costs incurred to date to the estimated total cost of the relevant contract. Revenue from cost plus construction contracts is recognised using the percentage of completion method, by reference to the recoverable costs incurred during the period plus the related fees earned, measured by the proportion of costs incurred to date to the estimated total cost of the relevant contract. Provision is made for foreseeable losses as soon as they are anticipated by management. Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is treated as an amount due from a contract customer. Where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is treated as an amount due to a contract customer. 年報 2015/

35 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 現金及等同現金項目 Cash and cash equivalents For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Group s cash management. For the purpose of the consolidated statement of financial position, cash and bank balances comprise cash on hand and at banks, including term deposits, which are not restricted as to use. 撥備 Provisions A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in the statement of profit or loss. 110 ANNUAL REPORT 2015/2016

36 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 所得稅 Income tax Income tax comprises current and deferred tax. Income tax relating to items recognised outside statement of profit or loss is recognised, either in other comprehensive income or directly in equity. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates. Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except: when the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and in respect of taxable temporary differences associated with investments in subsidiaries and associates, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. 年報 2015/

37 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 所得稅 Income tax (Cont d) Deferred tax assets are recognised for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, the carryforward of unused tax credits and unused tax losses can be utilised, except: when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and in respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. 112 ANNUAL REPORT 2015/2016

38 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 收益確認 Revenue recognition Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably, on the following bases: (a) (a) From foundation piling, site investigation and electrical and mechanical ( E&M ) engineering contracts On the percentage of completion basis, as further explained in the accounting policy for Construction contracts above; (b) (b) From the sale of properties held for sale When the significant risks and rewards of ownership have been transferred to the buyer; (c) (c) From machinery trading When the significant risks and rewards of ownership have been transferred to the buyer, provided that the Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the machines sold; (d) (d) Rental income from property and machinery leasing In the period in which the properties and machines are leased and on the straight-line basis over the lease terms; (e) (e) From the rendering of property management services In the period in which such services are rendered; (f) (f) Interest income On an accrual basis using the effective interest rate method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument to the net carrying amount of the financial asset; and (g) (g) Dividend income When shareholder s right to receive payment has been established. 年報 2015/

39 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 僱員福利 Employee benefits 以股份為基礎之付款 Share-based payments The Company operates a share option scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group s operations. Employees (including directors) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments ( equity-settled transactions ). The cost of equity-settled transactions with employees for grants after 7 November 2002 is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an external valuer using a binomial model. The cost of equity-settled transactions is recognised in employee benefit expense, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period. Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions. 114 ANNUAL REPORT 2015/2016

40 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 僱員福利 Employee benefits (Cont d) 以股份為基礎之付款 Share-based payments (Cont d) For awards that do not ultimately vest because non-market performance and/or service conditions have not been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share. 有薪假期結轉 Paid leave carried forward The Group provides paid annual leave to its employees under their employment contracts on a calendar year basis. Under certain circumstances, such leave which remains untaken as at the end of the reporting period is permitted to be carried forward and utilised by the respective employees in the following year. An accrual is made at the end of the reporting period for the expected future cost of such paid leave earned during the year by the employees and carried forward. 年報 2015/

41 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 僱員福利 Employee benefits (Cont d) 退休金計劃 Pension schemes The Group operated a defined contribution provident fund (the Fund ) for certain of its employees in Hong Kong, the assets of which were held separately from those of the Group and were managed by an independent professional fund manager. Contributions under the Fund were made based on a percentage of the eligible employees basic salaries and were charged to the statement of profit or loss as they became payable in accordance with the rules of the scheme. The ongoing contributions to the Fund were terminated on 1 April Following the introduction of the Mandatory Provident Fund retirement benefit scheme (the MPF Scheme ), the Group has restructured its retirement scheme arrangements to comply with the Mandatory Provident Fund Schemes Ordinance. The Group has secured a Mandatory Provident Fund exemption status for the Fund and, in addition, has participated in an approved defined contribution MPF Scheme with effect from 1 December 2001, for all of its employees in Hong Kong. Contributions are made based on a percentage of the employees basic salaries and are charged to the statement of profit or loss as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently administered fund. The Group s employer contributions vest fully with the employees when contributed into the MPF Scheme. The employees of the Group s subsidiaries located in Mainland China are required to participate in a central pension scheme operated by the local municipal government. These subsidiaries are required to contribute a certain percentage of their covered payroll to the central pension scheme. The contributions are charged to the statement of profit or loss as they become payable in accordance with the rules of the central pension scheme. 116 ANNUAL REPORT 2015/2016

42 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 借貸成本 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 外幣 Foreign currencies These financial statements are presented in Hong Kong dollars, which is the Company s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss, respectively). 年報 2015/

43 2.4 主要會計政策概要 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 外幣 Foreign currencies (Cont d) The functional currencies of certain overseas subsidiaries are currencies other than the Hong Kong dollar. As at the end of the reporting period, the assets and liabilities of these entities are translated into Hong Kong dollars at the exchange rates prevailing at the end of the reporting period and their statements of profit or loss are translated into Hong Kong dollars at the weighted average exchange rates for the year. The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the statement of profit or loss. For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are translated into Hong Kong dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are translated into Hong Kong dollars at the weighted average exchange rates for the year. 3. 重大會計判斷及估計 3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES In the process of applying the Group s accounting policies, management makes various judgements and estimates based on past experience, expectations of the future and other information. The key sources of estimation uncertainty that can significantly affect the amounts recognised in the consolidated financial statements are disclosed below: 應收貿易賬款及保固金減值 Impairment of trade and retention receivables The policy for impairment of trade and retention receivables of the Group is based on the evaluation of collectibility and aging analysis of trade and retention receivables and on management s judgement. Significant judgement is required in assessing the ultimate realisation of these receivables, including the current creditworthiness and the past collection history of each customer. If the financial conditions of customers of the Group were to deteriorate, resulting in an impairment of their ability to make payments, additional provisions may be required. 118 ANNUAL REPORT 2015/2016

44 3. 重大會計判斷及估計 建築工程之完工百分比 3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (Cont d) Percentage of completion of construction works The Group recognises revenue according to the percentage of completion of the individual contract of construction works. The Group s management estimates the percentage of completion of construction works if the value of works has not been certified by the customers at the end of the reporting period. These estimates are based on actual cost incurred over the total budgeted cost. Corresponding contract revenue is also estimated by management. Because of the nature of the activity undertaken in construction contracts, the date at which the contract activity is entered into and the date when the activity is completed usually fall into different accounting periods. The Group reviews and revises the estimates of both contract revenue and contract costs in the budget prepared for each construction contract as the contract progresses. 估計總預算成本及完成建築合約成本 (i) (ii) (iii) (i) (ii) (iii) Estimation of total budgeted costs and cost to completion for construction works Total budgeted costs for construction works comprise (i) direct material costs and direct labour, (ii) costs of subcontracting, and (iii) an appropriation of variable and fixed construction and services overheads. In estimating the total budgeted costs for construction works, management makes reference to information such as (i) current offers from subcontractors and suppliers, (ii) recent offers agreed with subcontractors and suppliers, and (iii) professional estimates on material costs, labour costs and other costs. 即期稅項及遞延稅項 Current and deferred tax The Group is subject to income taxes in a number of jurisdictions. Significant judgement is required in determining the amount of the provision for tax and the timing of payment of the related taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will have an impact on the income tax and deferred tax provisions in the period in which such determination is made. 年報 2015/

45 3. 重大會計判斷及估計 中國土地增值稅 ( 土地增值稅 ) 30% 60% 3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (Cont d) Mainland China land appreciation taxes ( LAT ) LAT is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds from sales of properties less deductible expenditures including amortisation of land use rights, borrowing costs, business taxes and all property development expenditures. The tax is incurred upon transfer of property ownership. Subsidiaries of the Group engaging in the property development business in Mainland China are subject to LAT. However, the implementation of these taxes varies amongst various cities in Mainland China. The Group has not yet finalised its LAT calculation and payments for most of its property development projects with various tax authorities. Accordingly, significant judgement is required in determining the amount of land appreciation and its related taxes. The Group recognises these liabilities based on management s best estimates. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the consolidated financial statements in the period in which such determination is made. 4. 經營分類資料 4. OPERATING SEGMENT INFORMATION The Group s operating businesses are structured and managed separately, according to the nature of their operations and the products and services they provide. Operating segments are reported in a manner consistent with internal reporting to the Company s key management personnel as follows: (a) (a) the foundation piling segment (including site investigation operation); (b) (b) the property development segment; (c) (c) the property investment and management segment; and (d) (d) the corporate and others segment comprises, principally, the Group s corporate operation, machinery leasing and trading, and E&M engineering businesses. 120 ANNUAL REPORT 2015/2016

46 4. 經營分類資料 4. OPERATING SEGMENT INFORMATION (Cont d) Management monitors the results of the Group s operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/loss, which is a measure of adjusted profit/loss before tax. The adjusted profit/loss before tax is measured consistently with the Group s profit before tax from continuing operations except that interest income, finance costs, and fair value gains/losses from the Group s financial instruments are excluded from such measurement. Segment assets exclude derivative financial instrument, deferred tax assets, tax prepaid and time deposits as these assets are managed on a group basis. Segment liabilities exclude interest-bearing bank borrowings, tax payable and deferred tax liabilities as these liabilities are managed on a group basis. Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices. 年報 2015/

47 4. 經營分類資料 4. OPERATING SEGMENT INFORMATION (Cont d) 截至二零一六年及二零一五年三月 三十一日止年度 Years ended 31 March 2016 and 2015 物業投資及管理 地基打樁 物業發展 Property investment 企業及其他 抵銷 綜合 Foundation piling Property development and management Corporate and others Elimination Consolidated 二零一六年 二零一六年 二零一六年 二零一六年 二零一六年 二零一六年 千港元 千港元 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 分類收益 : Segment revenue: Sales to external customers 3,018,427 3,752, , ,260 26,177 13,128 52,748 79,811 4,057,316 4,836,413 Intersegment sales (1,158) Other income and gains, net 5,340 5,079 3,701 8, , ,136 1, ,563 15,879 Total 3,023,767 3,757, ,859 1,000, ,563 13,909 55,848 81,079 (1,158) 4,182,879 4,852,292 分類業績 Segment results 393, , , , ,973 (40,356) (90,409) (49,207) 942, ,477 Interest income 15,546 26,211 Fair value gains on derivative instruments - transaction not qualifying as hedge 5, Finance costs (11,496) (14,706) Profit before tax 951, ,211 Income tax expense (439,329) (317,045) Profit for the year 512, , ANNUAL REPORT 2015/2016

48 4. 經營分類資料 4. OPERATING SEGMENT INFORMATION (Cont d) 截至二零一六年及二零一五年三月 三十一日止年度 Years ended 31 March 2016 and 2015 (Cont d) 地基打樁物業發展 物業投資及管理 Property investment 企業及其他 綜合 Foundation piling Property development and management Corporate and others Consolidated 二零一六年 二零一六年 二零一六年 二零一六年 二零一六年 千港元 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 資產及負債 Assets and liabilities Segment assets 1,171,984 1,611,410 2,480,806 2,209, , , , ,555 4,239,320 4,763,432 Unallocated 1,368, ,436 5,608,055 5,567,868 Segment liabilities 1,104,147 1,408, , ,232 6,428 24,619 23,278 11,582 1,554,407 1,777,213 Unallocated 1,276, ,086 2,830,863 2,635,299 其他分類資料 : Other segment information: Depreciation 58,814 56, , ,265 20,763 79,953 78,913 Impairment of items of property, plant and equipment 2,000 2,000 Impairment of trade receivables Impairment/(write-back of impairment) of other receivables, net (194) 1, ,069 Loss/(gain) on disposal and write-off of items of property, plant and equipment 4, (62) 113 (2,118) (277) 2, Loss on disposal of an investment property Loss/(gain) on disposal of subsidiaries, net (112,852) (112,852) 790 Changes in fair value of investment properties (32,390) (60,815) 27,694 (32,390) (33,121) Capital expenditure 23,206 62,497 2,785 1,027 54,971 4,263 19,234 30, ,729 年報 2015/

49 4. 經營分類資料 4. OPERATING SEGMENT INFORMATION (Cont d) 地區分類資料 Geographical information (a) 來自外間客戶收益 (a) Revenue from external customers 香港 澳門 中國其他地區 綜合 Hong Kong Macau Elsewhere in the PRC Consolidated 二零一六年 二零一六年 二零一六年 二零一六年 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue: Sales to external customers 3,053,602 3,507,933 17, , ,141 1,003,785 4,057,316 4,836,413 The revenue information above is based on the locations of the customers. (b) 非流動資產 (b) Non-current assets 香港 澳門 中國其他地區 綜合 Hong Kong Macau Elsewhere in the PRC Consolidated 二零一六年 二零一六年 二零一六年 二零一六年 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ , , ,773 1,836, ,507 2,224,849 The non-current assets information above is based on the locations of the assets and excludes deferred tax assets. 有關一名主要客戶之資料 1,130,196, ,183,000 Information about a major customer R e v e n u e o f a p p r o x i m a t e l y H K $ 1, 1 3 0, 1 9 6, ( : HK$662,183,000) was derived from sales by the foundation piling segment to a single customer. 124 ANNUAL REPORT 2015/2016

50 5. 收益 其他收入及盈利, 淨額 5. REVENUE AND OTHER INCOME AND GAINS, NET Revenue represents the aggregate of the value of foundation piling and site investigation contracts; income derived from property management; rental income from property leasing; and income from the sale of properties held for sale, after eliminations of all significant intragroup transactions. An analysis of revenue and other income and gains, net is as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Revenue: Foundation piling and site investigation 3,018,427 3,752,214 Property development 959, ,260 Property investment and management 26,177 13,128 Others 52,748 79,811 4,057,316 4,836,413 Other income and gains, net: Interest income 15,546 26,211 Insurance claims 4,164 3,458 * Subsidy income* Foreign exchange gains, net 6,731 Fair value gains on derivative instruments - transaction not qualifying as hedge 5, Management service income Gain on disposal of subsidiaries, net (note 39) 112, Others 7,908 4, ,411 42,319 * * There are no unfulfilled conditions or contingencies relating to this income. 年報 2015/

51 6. 融資成本 6. FINANCE COSTS 二零一六年 千港元 HK$ 000 HK$ 000 Interest on bank borrowings and overdrafts 16,860 14, Less: Interest capitalised in properties under development (note 15) (5,364) 11,496 14, 除稅前溢利 7. PROFIT BEFORE TAX The Group s profit before tax is arrived at after charging/(crediting): 二零一六年 Notes 千港元 HK$ 000 HK$ 000 Cost of properties sold 423, ,331 Cost of foundation piling and site investigation work 2,623,854 3,433,818 Cost of services rendered 84, ,164 Depreciation 13 79,953 78,913 Minimum lease payments under operating leases 118, ,966 Auditors remuneration 2,833 2,563 8 Employee benefit expense (including directors remuneration - note 8): Wages and salaries 532, ,960 Pension scheme contributions 15,916 15, , , ANNUAL REPORT 2015/2016

52 7. 除稅前溢利 7. PROFIT BEFORE TAX (Cont d) The Group s profit before tax is arrived at after charging/(crediting): (Cont d) 二零一六年 Notes 千港元 HK$ 000 HK$ 000 * Foreign exchange losses/(gains), net* 2,223 (6,731) * Impairment of items of property, plant and equipment* 13 2,000 * Impairment of trade receivables* * Impairment of other receivables, net* ,069 * Loss on disposal and write-off of items of property, plant and equipment* 2, * Loss on disposal of an investment property* 161 * Loss/(gain) on disposal of subsidiaries, net* 39 (112,852) 790 * Fair value gains on derivative instruments - transaction not qualifying as hedge* (5,302) (229) Changes in fair value of investment properties 14 (32,390) (33,121) * Impairment of an amount due from an associate* Rental income from operating leases of machinery (18,052) (24,389) Rental income from investment properties (29,411) (13,906) Direct operating expenses (including repairs and maintenance) arising from rental-earning investment properties 5,077 6,555 * * These amounts are included in Other expenses, net or Other income and gains, net in the consolidated statement of profit or loss. 年報 2015/

53 8. 董事酬金 8. DIRECTORS REMUNERATION 383(1) (a) (b) (c) (f) 2 Directors remuneration for the year, disclosed pursuant to the Listing Rules, section 383(1)(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information about Benefits of Directors) Regulation, is as follows: Fees: 二零一六年 千港元 HK$ 000 HK$ 000 Executive directors Non-executive directors Independent non-executive directors 1,152 1,152 Other emoluments of executive directors: Salaries, allowances and benefits in kind 38,364 42,911 * Performance related bonuses* 4,458 Pension scheme contributions ,028 44,123 * * Executive directors of the Company are entitled to bonus payments which are determined as a percentage of the dividends declared by the Company, which was referenced to the performance of the Group. 128 ANNUAL REPORT 2015/2016

54 8. 董事酬金 8. DIRECTORS REMUNERATION (Cont d) The remuneration paid or payable to each of the directors is as follows: 薪酬 津貼 及實物利益 退休金 Salaries, 績效花紅 計劃供款 allowances Performance Pension 袍金 and benefits related scheme 總計 Fees in kind bonuses contributions Total 千港元 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 二零一六年 2016 執行董事 : Executive directors: Mr. Fung Chiu Chak, Victor ( Mr. Fung ) 21,936 2, ,740 Mr. Chiu Chin Hung 8, ,234 Mr. Lau Kin Fai 8, ,902 38,364 4, ,876 非執行董事 : Non-executive directors: Mr. Wang Tianbing Stuart Morrison Grant Mr. Stuart Morrison Grant 1 Mr. Yang Han Hsiang 1 Mr. Justin Wai Mr. Law Yiu Fat Richard 獨立非執行董事 : Independent non-executive directors: Mr. Fan Chor Ho Mr. Tse Man Bun Mr. Lung Chee Ming, George Mr. Li Kit Chee ,152 1,152 Total 1,152 38,364 4, ,028 年報 2015/

55 8. 董事酬金 8. DIRECTORS REMUNERATION (Cont d) Salaries, allowances Performance Pension and benefits related scheme Fees in kind bonuses contributions Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 執行董事 : Executive directors: Mr. Fung 21, ,152 2 Miss Jennifer Kwok 2 6, ,195 Mr. Chiu Chin Hung 8, ,106 Mr. Lau Kin Fai 7, ,518 42, ,971 非執行董事 : Non-executive directors: Mr. Wang Tianbing Stuart Morrison Grant Mr. Stuart Morrison Grant 1 Mr. Yang Han Hsiang 1 Mr. Justin Wai Mr. Law Yiu Fat Richard 獨立非執行董事 : Independent non-executive directors: Mr. Fan Chor Ho Mr. Tse Man Bun Mr. Lung Chee Ming, George Mr. Li Kit Chee ,152 1,152 Total 1,152 42, , Mr. Yang Han Hsiang resigned as a non-executive director of the Company with effect from 17 February Miss Jennifer Kwok resigned as an executive director of the Company ( Executive Director ) with effect from 1 July There was no arrangement under which a director waived or agreed to waive any remuneration during the year. 130 ANNUAL REPORT 2015/2016

56 9. 五位最高薪之僱員 8 9. FIVE HIGHEST PAID EMPLOYEES The five highest paid employees during the year included three directors (2015: four directors), details of whose remuneration are set out in note 8 above. Details of the remuneration for the year of the remaining two (2015: one) non-director highest paid employees are as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Salaries, allowances and benefits in kind 9,255 4,807 * Performance related bonuses* 668 Pension scheme contributions ,941 4,825 * * The non-director highest paid employees are entitled to bonus payments which are determined as a percentage of the dividends declared by the Company, which was referenced to the performance of the Group. The number of non-director highest paid employees whose remuneration fell within the following bands is as follows: 僱員人數 Numbers of employees 二零一六年 ,500,000 5,000,000 HK$4,500,000 to HK$5,000, ,000,001 5,500,000 HK$5,000,001 to HK$5,500, 年報 2015/

57 10. 所得稅 16.5% 16.5% 10. INCOME TAX Hong Kong profits tax has been provided at the rate of 16.5% (2015: 16.5%) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere in the PRC have been calculated at the applicable tax rates prevailing in the areas in which the Group operates. 二零一六年 千港元 HK$ 000 HK$ 000 Current: Provision for tax in respect of profit for the year: PRC: Hong Kong 48,947 18,371 Elsewhere 345, , , ,994 Overprovision in the prior years: PRC: Hong Kong (79) (39) Elsewhere (178) (79) (217) 29 Deferred tax (note 29) 45,386 (36,732) Total tax charge for the year 439, , ANNUAL REPORT 2015/2016

58 10. 所得稅 10. INCOME TAX (Cont d) A reconciliation of the tax charge applicable to profit before tax at the statutory rates for the countries or regions in which the Company and its subsidiaries are domiciled to the tax charge at the effective tax rate is as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Profit before tax 951, ,211 Tax at the statutory rates 163, ,467 Provision for land appreciation tax 207, ,195 Tax effect of land appreciation tax 4,445 (21,293) Adjustments in respect of current tax of prior years (79) (217) Income not subject to tax (5,405) (4,513) Expenses not deductible for tax 40,998 23,193 Effect of withholding tax on the distributable profits of the Group s subsidiaries in Mainland China 33,967 (22,071) Tax losses utilised from prior years (9,809) (2,633) Tax losses not recognised 4,332 2,917 Tax charge at the Group s effective rate 439, ,045 年報 2015/

59 11. 股息 11. DIVIDENDS 二零一六年 千港元 HK$ 000 HK$ Dividends paid during the year: Final in respect of the financial year ended 31 March 2015 HK15.0 cents (year ended 31 March 2014: HK10.0 cents) per ordinary share 131,200 87,467 Interim HK20.0 cents (2015: HK5.0 cents) per ordinary share 174,933 43, , , Proposed final dividend: Final Nil (2015: HK15.0 cents per ordinary share) 131, 本公司普通股股東應佔每股盈利 12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY 396,874, ,394, ,665, ,665,903 The calculation of the basic earnings per share amount is based on the profit for the year attributable to ordinary equity holders of the Company of HK$396,874,000 (2015: HK$399,394,000), and the number of ordinary shares of 874,665,903 (2015: 874,665,903) in issue during the year. The Group had no potentially dilutive ordinary shares in issue during the years ended 31 March 2016 and ANNUAL REPORT 2015/2016

60 13. 物業 機器及設備 13. PROPERTY, PLANT AND EQUIPMENT 設備及 傢俬及 機器 裝置 租賃 土地及樓宇 Equipment Furniture 汽車 遊艇 物業裝修 Land and and and Motor Motor Leasehold 總計 buildings machinery fixtures vehicles yacht improvements Total 千港元 千港元 千港元 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 二零一六年三月三十一日 31 March 2016 Cost: At beginning of year 217, ,399 12,663 20,040 6,098 18,784 1,248,514 Additions 26, ,447 2,472 30,254 Disposals/write-off (34,714) (2,164) (2,100) (1,983) (40,961) 39(a) (b)) Disposal of subsidiaries (note 39(a) and (b)) (438) (6,372) (1,245) (8,055) Exchange realignment (182) (206) (7) (249) (217) (861) At 31 March , ,183 4,313 19,138 6,098 17,811 1,228,891 Accumulated depreciation and impairment: At beginning of year 30, ,935 11,271 13,223 6,098 14, ,547 Depreciation provided during the year 7,980 67, ,807 2,236 79,953 Disposals/write-off (26,316) (2,159) (1,997) (1,983) (32,455) 39(a) (b)) Disposal of subsidiaries (note 39(a) and (b)) (384) (6,349) (1,231) (7,964) Exchange realignment (27) (169) (3) (182) (214) (595) At 31 March , ,395 3,361 12,851 6,098 13, ,486 Net carrying amount: At 31 March , , ,287 4, ,405 At 31 March , ,464 1,392 6,817 4, ,967 年報 2015/

61 13. 物業 機器及設備 13. PROPERTY, PLANT AND EQUIPMENT (Cont d) Equipment Furniture Land and and and Motor Motor Leasehold buildings machinery fixtures vehicles yacht improvements Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 二零一五年三月三十一日 31 March 2015 Cost: At beginning of year 217, ,100 12,885 20,850 6,098 18,495 1,201,952 Additions 76, , , Transfer from properties held for sale (note 19) 7 7 Disposals/write-off (29,517) (322) (6,311) (36,150) 39(d)) Disposal of subsidiaries (note 39(d)) (68) (68) Exchange realignment (1) (3) (1) (2) (7) At 31 March , ,399 12,663 20,040 6,098 18,784 1,248,514 Accumulated depreciation and impairment: At beginning of year 22, ,759 10,828 17,228 6,098 10, ,946 Depreciation provided during the year 7,983 66, ,479 2,250 78,913 Impairment provided during the year 242 1,758 2,000 Disposals/write-off (25,541) (212) (5,482) (31,235) 39(d)) Disposal of subsidiaries (note 39(d)) (68) (68) Exchange realignment (1) (3) (2) (3) (9) At 31 March , ,935 11,271 13,223 6,098 14, ,547 Net carrying amount: At 31 March , ,464 1,392 6,817 4, ,967 At 31 March , ,341 2,057 3,622 8, , ANNUAL REPORT 2015/2016

62 13. 物業 機器及設備 28 34(a) 13. PROPERTY, PLANT AND EQUIPMENT (Cont d) Certain of the Group s land and buildings, equipment and machinery were pledged to banks as security for certain banking facilities granted to the Group (note 28). Certain of the Group s equipment and machinery are leased to third parties under operating leases, further summary details of which are included in note 34(a) to the financial statements. 14. 投資物業 14. INVESTMENT PROPERTIES 二零一六年 千港元 HK$ 000 HK$ 000 Carrying amount at beginning of year 618, ,976 Additions 54, Transfer from properties held for sale (note 19) 42,155 22,307 Disposal (2,241) 39(a) (b) (c) Disposal of subsidiaries (note 39(a), (b) and (c)) (488,722) (22,530) Fair value changes 32,390 33,121 Exchange realignment (31,504) (265) Carrying amount at end of year 172, , ,636, ,317,000 34(a) The Group s investment properties as at 31 March 2016 consist of commercial properties in Mainland China (2015: commercial properties and residential properties in Mainland China). The directors of the Company have determined that the investment properties consist of one (2015: two) class of asset, i.e., commercial (2015: commercial and residential), based on the nature, characteristics and risks of each property. The Group s investment properties were revalued on 31 March 2016 based on valuations performed by Vigers Appraisal and Consulting Limited, a firm of independent professionally qualified property valuers, at HK$172,636,000 (2015: HK$618,317,000). Each year, the Company s directors decide to appoint which external valuer to be responsible for the external valuations of the Group s properties. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The Company s directors have discussions with the valuer on the valuation assumptions and valuation results twice a year when the valuation is performed for interim and annual financial reporting. The investment properties are leased to third parties under operating leases, further summary details of which are included in note 34(a) to the financial statements. 年報 2015/

63 14. 投資物業 14. INVESTMENT PROPERTIES (Cont d) 公平值等級架構 Fair value hierarchy The following table illustrates the fair value measurement hierarchy of the Group s investment properties: 於二零一六年三月三十一日 使用以下數據計量公平值 Fair value measurement as at 31 March 2016 using 活躍市場 重大可觀察 重大不可觀察 報價 輸入數據 輸入數據 ( 第 1 層 ) ( 第 2 層 ) ( 第 3 層 ) Quoted Significant Significant prices in observable unobservable active markets inputs inputs 總計 (Level 1) (Level 2) (Level 3) Total 以下項目之經常性 Recurring fair value 千港元 千港元 千港元 千港元 公平值計量 : measurement for: HK$ 000 HK$ 000 HK$ 000 HK$ 000 Commercial properties 172, ,636 Fair value measurement as at 31 March 2015 using Quoted Significant Significant prices in observable unobservable active markets inputs inputs (Level 1) (Level 2) (Level 3) Total Recurring fair value measurement for: HK$ 000 HK$ 000 HK$ 000 HK$ 000 Commercial properties 103, ,042 Residential properties 515, , , , During the year, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 (2015: Nil). 138 ANNUAL REPORT 2015/2016

64 14. 投資物業 14. INVESTMENT PROPERTIES (Cont d) 公平值等級架構 3 Fair value hierarchy (Cont d) Reconciliation of fair value measurements categorised within Level 3 of the fair value hierarchy: 商業物業 Commercial properties 千港元 HK$ 000 住宅物業 Residential properties 千港元 HK$ 000 Carrying amount at 1 April , ,454 Additions 54, Transfer from properties held for sale (note 19) 22,307 Disposal (2,241) 39(c) Disposal of a subsidiary (note 39(c)) (22,530) Fair value changes 60,815 (27,694) Exchange realignment (72) (193) Carrying amount at 31 March 2015 and 1 April , , Transfer from properties held for sale (note 19) 42,155 39(a) (b) Disposal of subsidiaries (note 39(a) and (b)) (488,722) Fair value changes 32,390 Exchange realignment (4,951) (26,553) Carrying amount at 31 March ,636 年報 2015/

65 14. 投資物業 14. INVESTMENT PROPERTIES (Cont d) 公平值等級架構 Fair value hierarchy (Cont d) Below is a summary of the valuation techniques used and the key inputs to the valuation of investment properties: 重大不可觀察輸入數據 估值方法 Significant 範圍 ( 加權平均值 ) Valuation techniques unobservable inputs Range (weighted average) 二零一六年 % 至 -10% -40% -3% Commercial properties Direct comparison Property-specific (-35%) -5% in Mainland China approach adjustment rate -51% to -10% -40% to -3% (-35%) (-5%) 不適用 -10% 2% -8% Residential properties Direct comparison Property-specific N/A -10% to 2% in Mainland China approach adjustment rate (-8%) 15. 發展中物業 The fair value of the Group s investment properties is determined using the direct comparison approach by reference to the recent sales price of comparable properties in the open market, adjusted for size, location, floor level and quality of the Group s investment properties compared to the recent sales. The fair value measurement is positively correlated to the unobservable input that the higher the adjustment rate will result in a higher fair value. 15. PROPERTIES UNDER DEVELOPMENT 二零一六年 千港元 HK$ 000 HK$ 000 Balance at beginning of year 1,275,554 1,171,959 Additions during the year 575, , Transfer to properties held for sale (note 19) (30,846) (413,000) 6 Interest capitalised (note 6) 5,364 Exchange realignment (52,254) (456) Balance at end of year 1,772,959 1,275,554 Less: current portion (1,772,959) (65,506) Non-current portion 1,210, ANNUAL REPORT 2015/2016

66 16. 一間聯營公司權益 16. INTERESTS IN AN ASSOCIATE 二零一六年 千港元 HK$ 000 HK$ 000 Share of net assets Amount due from an associate Less: Impairment (384) (373) The amount due from an associate is unsecured, interest-free and has no fixed terms of repayment. Particulars of the associate are as follows: 所持已發行 註冊成立 註冊及營業地點 本集團應佔所有權權益百分比 股份詳情 Place of Percentage Particulars incorporation/ of ownership 名稱 of issued registration interest attributable 主要業務 Name shares held and business to the Group Principal activity 二零一六年 Turbo Dragon Investment Limited Ordinary share Hong Kong Investment holding 17. 可供出售投資 17. AVAILABLE-FOR-SALE INVESTMENT 二零一六年 千港元 HK$ 000 HK$ 000 Unlisted equity investment, at cost 1,197 1,249 1,197,000 1,249,000 As at 31 March 2016, an unlisted equity investment with a carrying amount of HK$1,197,000 (2015: HK$1,249,000) was stated at cost less impairment because the range of reasonable fair value estimates is so significant that the directors are of the opinion that its fair value cannot be measured reliably. The Group does not intend to dispose of it in the near future. 年報 2015/

67 18. 存貨 18. INVENTORIES 二零一六年 千港元 HK$ 000 HK$ 000 Raw materials Spare parts and others 22,909 13,543 23,551 14, 持有供銷售之物業 19. PROPERTIES HELD FOR SALE 二零一六年 千港元 HK$ 000 HK$ 000 At beginning of year 646, , Transfer to property, plant and equipment (note 13) (7) 14 Transfer to investment properties (note 14) (42,155) (22,307) 15 Transfer from properties under development (note 15) 30, ,000 Properties sold during the year (313,263) (348,806) Exchange realignment (19,491) 139 At end of year 302, , 建築合約 20. CONSTRUCTION CONTRACTS 二零一六年 千港元 HK$ 000 HK$ 000 Amounts due from customers for contract works 116, ,041 Amounts due to customers for contract works (660,898) (686,495) (544,273) (526,454) Contract costs incurred plus recognised profits less recognised losses to date 12,207,275 10,865,475 Less: Progress billings received and receivable (12,751,548) (11,391,929) (544,273) (526,454) 142 ANNUAL REPORT 2015/2016

68 21. 應收貿易賬款及應收保固金 TRADE AND RETENTION RECEIVABLES The Group has established credit policies that follow local industry standards. The average normal credit periods offered to trade customers other than for retention receivables are within 30 days, and are subject to periodic review by management. In view of the aforementioned and the fact that the Group s trade and retention receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade and retention receivable balances. Trade and retention receivables are non-interest-bearing. 二零一六年 千港元 HK$ 000 HK$ 000 Trade and retention receivables 727,634 1,017,028 Impairment (391) (387) 727,243 1,016, , ,000 Included in the trade and retention receivables is an amount due from a related company of HK$572,000 (2015: HK$254,000), which is repayable on credit terms similar to those offered to the major customers of the Group. An aged analysis of the trade receivables as at the end of the reporting period, based on the invoice date and net of provision, is as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Trade receivables: 90 Within 90 days 415, , to 180 days 5, to 360 days 3,535 10, Over 360 days 12,619 2, , ,746 Retention receivables 290, , ,243 1,016,641 年報 2015/

69 21. 應收貿易賬款及應收保固金 21. TRADE AND RETENTION RECEIVABLES (Cont d) The movements in provision for individual impairment of trade receivables are as follows: 二零一六年 千港元 HK$ 000 HK$ 000 At beginning of year Impairment losses recognised (note 7) Disposal of subsidiaries (194) At end of year ,000387, , ,000 Included in the above provision for impairment of trade receivables of HK$391,000 (2015: HK$387,000) is a provision for individually impaired trade receivables with a gross carrying amount before provision of HK$391,000 (2015: HK$387,000). The individually impaired trade receivables relate to customers that were in financial difficulties and the receivables from these customers are not expected to be fully recoverable. The aged analysis of the trade and retention receivables that are not individually nor collectively considered to be impaired is as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Neither past due nor impaired 669, , to 90 days past due 36,615 63, to 270 days past due 4, More than 270 days past due 15,920 12, ,243 1,016, ANNUAL REPORT 2015/2016 Receivables that were neither past due nor impaired relate to a large number of diversified customers for whom there was no recent history of default. Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, the directors of the Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable. The carrying amounts of the trade and retention receivables approximates to their fair values.

70 22. 預付款項 訂金及其他應收款項 22. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES 二零一六年 千港元 HK$ 000 HK$ 000 Deposits for acquisition of items of property, plant and equipment 717 Prepayments and deposits 52,951 51,750 Other receivables 236,192 24,233 Less: Impairment (4,215) (4,292) Less: Prepayments, deposits and other receivables classified as non-current assets 284,928 72,408 (1,386) (1,918) 283,542 70,490 The movements in provision for impairment of other receivables are as follows: 二零一六年 千港元 HK$ 000 HK$ 000 At beginning of year 4,292 3,226 7 Impairment losses recognised, net (note 7) 99 1,069 Exchange realignment (176) ( 3) At end of year 4,215 4,292 4,215,000 4,292,000 Except for o t her r e c e i vables o f HK$4,215,000 (2015: HK$4,292,000) which were fully impaired, none of the above assets is either past due or impaired and the financial assets included in the above balances relate to receivables for which there was no recent history of default. 年報 2015/

71 23. 衍生金融工具 23. DERIVATIVE FINANCIAL INSTRUMENT 二零一六年 千港元 HK$ 000 HK$ 000 Derivative financial instrument under non-current assets: Cross currency swap 8,533 8,533,000 4,113,000 The Group entered into a cross currency swap to manage its exchange rate exposures. This cross currency swap is not designated for hedging purpose and is measured at fair value through profit or loss. Changes in the fair value, net, of the non-hedging derivative amounting to a gain of HK$8,533,000 (2015: Nil) were credited to the statement of profit or loss during the year. The carrying amount of the financial instrument was the same as its fair value. The above transaction involving a derivative financial instrument was conducted with a creditworthy financial institution with no recent history of default. During the year ended 31 March 2015, changes in the fair value, net, of non-hedging interest rate swaps amounting to a gain of HK$4,113,000, were credited to the statement of profit or loss. 24. 現金及銀行結存 定期存款及受限制現金 24. CASH AND BANK BALANCES, TIME DEPOSITS AND RESTRICTED CASH 二零一六年 Notes 千港元 HK$ 000 HK$ 000 Time deposits: other time deposits (a) 1,013, ,862 structured deposits (b) 289, ,570 Total time deposits (c) 1,303, ,432 Cash and bank balances (a) 502, ,064 Restricted cash (d) 24,000 Total 1,806,419 1,311, ANNUAL REPORT 2015/2016

72 24. 現金及銀行結存 定期存款及受限制現金 24. CASH AND BANK BALANCES, TIME DEPOSITS AND RESTRICTED CASH (Cont d) 二零一六年 千港元 HK$ 000 HK$ 000 Denominated in: Renminbi ( RMB ) 536, ,462 HK$ 1,260, ,156 Macao patacas ( MOP ) 9,232 6,966 Other currencies ,806,419 1,311,496 RMB is not freely convertible into other currencies, however, under Mainland China s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through authorised banks to conduct foreign exchange business. Notes: (a) 7 32 (a) Cash at banks earns interest at floating rates based on daily bank deposit rates. Time deposits are made for varying periods of between 7 days to 32 days (2015: within two months) depending on the immediate cash requirements of the Group, and earn interest at the respective time deposit rates. The bank balances and deposits are deposited with creditworthy banks with no recent history of default. (b) (b) The structured deposits are time deposits with fixed maturity dates and are stated at amortised cost. The deposits are made for varying periods of between 14 days to 94 days (2015: within two months). The interest rates on the structured deposits fluctuated based on changes in the currency exchange rate between USD and HK$. The Group uses structured deposits primarily to enhance the return on investment. (c) 42,603,000 (c) Included in the balance are time deposits of HK$42,603,000 (2015: Nil) of which the original maturity is more than three months when acquired. (d) 24,000,000 24,000,00028 (d) As at 31 March 2015, a deposit of HK$24,000,000 was maintained in a bank account for an interest-bearing bank loan of HK$24,000,000 pursuant to the relevant banking facilities (note 28). 年報 2015/

73 25. 應付貿易賬款 應付保固金及應計款項 25. TRADE AND RETENTION PAYABLES AND ACCRUALS An aged analysis of the trade payables as at the end of the reporting period, based on the invoice date, is as follows: Trade payables: 二零一六年 千港元 HK$ 000 HK$ Within 90 days 193, , to 180 days 273 1, Over 180 days 531 1, , ,248 Retention payables 190, ,246 Accruals 253, , , ,682 Less: Accrual classified as non-current liabilities (4,387) 634, ,682 The trade and retention payables are non-interest-bearing and are normally settled on 90-day terms. 26. 其他應付款項 已收訂金及預收款項 26. OTHER PAYABLES, DEPOSITS RECEIVED AND RECEIPTS IN ADVANCE Other payables are non-interest-bearing and have an average term of one month. 27. 已收訂金 27. DEPOSITS RECEIVED Deposits received represented the down payments received from customers upon signing of the pre-sale contracts of properties under development and sale contracts of properties held for sale of the Group. The Group conducted the pre-sale of properties when they were still under development. As contracted with customers, deposits were paid to the Group upon the signing of the pre-sale contracts. Such amounts held by the Group are non-interest-bearing. 148 ANNUAL REPORT 2015/2016

74 28. 附息銀行借貸 28. INTEREST-BEARING BANK BORROWINGS 二零一六年 實際利率 Effective Effective interest rate 期限 千港元 interest rate (%) Maturity HK$ 000 (%) Maturity HK$ 000 Unsecured: Bank loans , ,774 Secured: Bank loans , ,940 Instalment loans , ,185 87,953 96,125 Total bank borrowings 856, ,899 二零一六年 千港元 HK$ 000 HK$ 000 Analysed into: Bank borrowings repayable: Within one year or on demand 198, ,278 In the second year 199, ,200 In the third to fifth years, inclusive 398,840 56,684 Beyond five years 59,669 63, , ,899 Portion due within one year, classified as current liabilities (198,568) (143,278) Long term portion 658, ,621 年報 2015/

75 28. 附息銀行借貸 2,260,000 6,100, ,308, ,178, ,129, ,040, ,840,000 58,944,000 59,669,00063,737, ,895, ,673, ,000,000 24,000,000 24(d)) 36(a) 28. INTEREST-BEARING BANK BORROWINGS (Cont d) For the purpose of the above analysis, the Group s bank loans in the amount of HK$2,260,000 (2015: HK$6,100,000) containing a repayment on demand clause are included within current interestbearing bank borrowings and analysed into bank loans payable within one year or on demand. Based on the maturity terms of the bank loans, the amounts repayable in respect of the bank loans are: HK$196,308,000 and HK$137,178,000 payable within one year or on demand as at 31 March 2016 and 2015, respectively; HK$202,129,000 and HK$108,040,000 payable in the second year as at 31 March 2016 and 2015, respectively; HK$398,840,000 and HK$58,944,000 payable in the third to fifth years, inclusive as at 31 March 2016 and 2015, respectively; HK$59,669,000 and HK$63,737,000 payable beyond five years as at 31 March 2016 and 2015, respectively. As at 31 March 2016, the Group s secured bank borrowings were secured by certain of its land and buildings, equipment and machinery (note 13) with carrying amounts of HK$174,895,000 (2015: HK$182,673,000). As at 31 March 2015, the Group s unsecured bank borrowing amounting to HK$24,000,000 was supported by a deposit of HK$24,000,000 maintained in a bank account pursuant to the relevant banking facilities (note 24(d)). The bank borrowing was fully settled during the year. In addition, the Company has executed guarantees in respect of borrowing facilities granted to certain of its subsidiaries (note 36(a)). Mr. Fung, who is a beneficial shareholder of certain subsidiaries of the Company through Fortunate Pool Limited ( Fortunate Pool ), also provided personal guarantees in respect of borrowing facilities granted to these subsidiaries. All of the bank borrowings of the Group bear interest at floating interest rates. The carrying amounts of the bank borrowings approximate to their fair values. The Group s bank borrowings are denominated in Hong Kong dollars. 150 ANNUAL REPORT 2015/2016

76 29. 遞延稅項 29. DEFERRED TAX The movements in deferred tax liabilities and assets during the year are as follows: 遞延稅項負債 Deferred tax liabilities 撥備 超出有關 重估 折舊部分 投資物業 Allowance in Revaluation excess of 預扣稅 of investment related Withholding 總計 properties depreciation taxes Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1 April 2014 (102,189) (13,812) (139,298) (255,299) 10 Deferred tax credited/(charged) to the statement of profit or loss during the year (note 10) (9,410) 2,778 22,071 15,439 Withholding tax paid on repatriation of earnings from subsidiaries in Mainland China 16,042 16,042 39(c)) Disposal of a subsidiary (note 39(c)) Exchange realignment 53 (112) (59) At 31 March 2015 and 1 April 2015 (110,986) (11,034) (101,297) (223,317) 10 Deferred tax credited/(charged) to the statement of profit or loss during the year (note 10) (10,048) 3,074 (33,967) (40,941) Withholding tax paid on repatriation of earnings from subsidiaries in Mainland China 25,789 25,789 39(a) (b) Disposal of subsidiaries (note 39(a) and (b)) 88,062 88,062 Exchange realignment 5,887 4,216 10,103 At 31 March 2016 (27,085) (7,960) (105,259) (140,304) 年報 2015/

77 29. 遞延稅項 遞延稅項資產 29. DEFERRED TAX (Cont d) Deferred tax assets 土地增值稅撥備 Provision for land appreciation tax HK$ 000 At 1 April , Deferred tax credited to the statement of profit or loss during the year (note 10) 21,293 Exchange realignment (36) At 31 March 2015 and 1 April , Deferred tax charged to the statement of profit or loss during the year (note 10) (4,445) Exchange realignment (2,251) At 31 March , ,457, ,075,000 10% 152 ANNUAL REPORT 2015/2016 The Group has tax losses arising in Hong Kong of HK$238,457,000 (2015: HK$281,075,000) that are available indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised in respect of these losses as they have arisen in subsidiaries that have been loss-making for some time and it is not considered probable that taxable profits will be available against which the tax losses can be utilised. Pursuant to the Corporate Income Tax ( CIT ) Law, a 10% withholding tax is levied on dividends declared to foreign investors from the foreign investment enterprises established in Mainland China. The requirement is effective from 1 January 2008 and applies to earnings after 31 December A lower withholding tax rate may be applied if there is a tax treaty between Mainland China and the jurisdiction of the foreign investors. The Group is therefore liable for withholding taxes on dividends distributed by its subsidiaries established in Mainland China in respect of earnings generated from 1 January There are no income tax consequences attaching to the payment of dividends by the Company to its shareholders.

78 30. 股本 30. SHARE CAPITAL 股份 Shares 二零一六年 千港元 HK$ 000 HK$ 000 2,000,000, ,665, Authorised: 2,000,000,000 ordinary shares of HK$0.10 each 200, ,000 Issued and fully paid: 874,665,903 ordinary shares of HK$0.10 each 87,466 87,466 購股權 Share options 31 Details of the Company s share option schemes are included in note 31 to the financial statements. 31. 購股權計劃 10% 31. SHARE OPTION SCHEMES On 8 August 2012, the Company adopted a share option scheme (the 2012 Scheme ) for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group s operations. The maximum number of unexercised share options currently permitted to be granted under the 2012 Scheme must not in aggregate exceed 10% of the shares of the Company in issue at any time. No share option has been granted under the 2012 Scheme during the year. 年報 2015/

79 31. 購股權計劃 Purpose Eligible Participants 31. SHARE OPTION SCHEMES (Cont d) A summary of the 2012 Scheme of the Company is as follows: To enable the board of directors (the Board ) to grant options to reward eligible participants who, in the sole and absolute opinion of the Board, would contribute or benefit or had contributed or benefited to the business, development and growth (and any other aspect whatsoever) of the Group and/or any of the entities in which any member of the Group holds any equity interest, and to provide incentives to eligible participants to perform their best in achieving the goals of the Group in the interests and benefits of the Company and the shareholders of the Company as a whole, while at the same time allowing the eligible participants to share the fruits of the Company s business achieved through their effort and contribution, as well as to enable the Group to recruit high quality employees who are valuable to the management and long term business and financial goals and success of the Group. A person who is entitled to participate in the 2012 Scheme, being any full-time or part-time employees, executives, officers or directors (including executive, non-executive and independent non-executive directors) of the Company or any of the subsidiaries or any of the interested entities and any contractors, advisors, consultants, agents, suppliers or providers (of, for example, goods, plants and machineries, materials or services), customers, distributors, business ally or joint venture partners of the Group who, in the sole and absolute opinion of the Board, will contribute or benefit or have contributed or benefited to the business, development and growth (and any other aspect whatsoever) of the Company and/or any of the subsidiaries and/or any of the interested entities. 154 ANNUAL REPORT 2015/2016

80 31. 購股權計劃 Total number of ordinary shares available for issue and the percentage of the issued share capital that it represents as at the date of the annual report Maximum entitlement of each participant Period within which the securities must be taken up under an option Minimum period for which an option must be held before it can be exercised Amount payable on acceptance 31. SHARE OPTION SCHEMES (Cont d) A summary of the 2012 Scheme of the Company is as follows: (Cont d) 87,266,590 10% 872,665,903 87,266,590 ordinary shares and 10% of the issued share capital, on the basis of 872,665,903 shares in issue as at the date of the Company s special general meeting on 8 August % Shall not exceed 1% of the issued share capital of the Company in any 12-month period. (10) To be determined by the Board on a case-to-case basis at its absolute discretion and notified to the grantee thereof, provided that the expiry date of the said period shall not be later than ten (10) years from the date of grant of the option concerned. To be determined at the discretion of the Board. Nil. 年報 2015/

81 31. 購股權計劃 Basis for determining the exercise price 31. SHARE OPTION SCHEMES (Cont d) A summary of the 2012 Scheme of the Company is as follows: (Cont d) In respect of any particular option: the price per share payable to the Company on the exercise of the option as may be decided upon and prescribed by the Board on a case-to-case basis, bearing in mind the purpose of the 2012 Scheme, in its absolute discretion upon the grant of the option, provided that such exercise price shall not be less than the highest of the following: (a) (b) (c) the nominal value of a share; the closing price of a share as stated in the Stock Exchange s daily quotation sheet on the date of grant of the option, which must be a business day; and (5) the average closing price of the shares as stated in the Stock Exchange s daily quotations sheets for the five (5) business days immediately preceding the date of grant of the option, or (a) (c) where applicable, the exercise price for the option concerned (referred to (a) to (c) above) as may be adjusted by the Board from time to time pursuant to the rules of the 2012 Scheme concerning adjustments of, inter alia, the exercise price upon the occurrence of any relevant event as defined in the 2012 Scheme. The remaining life of the scheme (10) The 2012 Scheme remains in force for a period of ten (10) years commencing from 8 August 2012 and expiring at the close of business hours of the Company on 7 August ANNUAL REPORT 2015/2016

82 31. 購股權計劃 31. SHARE OPTION SCHEMES (Cont d) Share options do not confer rights on the holders to dividends or to vote at shareholders meetings. During the year ended 31 March 2016 and up to the date of approval of these financial statements, no share option under the 2012 Scheme was granted, exercised, expired or lapsed and there is no outstanding share option under the 2012 Scheme. 32. 儲備 32. RESERVES The amounts of the Group s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity of the financial statements. Pursuant to the relevant laws and regulations for Sino-foreign joint venture enterprises, a portion of the profits of the Group s subsidiaries which are registered in the PRC has been transferred to statutory reserves which are restricted as to use. 年報 2015/

83 33. 擁有重大非控股股東權益之部分擁有附屬公司 33. PARTLY-OWNED SUBSIDIARIES WITH MATERIAL NON- CONTROLLING INTERESTS Details of the Group s subsidiaries that have material non-controlling interests are set out below. The information set out below represents the non-controlling interests in Tysan Foundation (Hong Kong) Limited and its wholly-owned subsidiaries (collectively, Tysan Foundation (Hong Kong) Group ). 二零一六年 Percentage of equity interest held by non-controlling interests 40% 40% 千港元 HK$ 000 HK$ 000 Profit for the year allocated to non-controlling interests 115, ,599 Dividend paid to non-controlling interests 184, ,000 Loan advanced from a non-controlling shareholder (note) 32,000 Accumulated balances of non-controlling interests at the end of the reporting period 88, ,101 Note: The balance was unsecured, interest-free and fully repaid during the year. 158 ANNUAL REPORT 2015/2016

84 33. 擁有重大非控股股東權益之部分擁有附屬公司 33. PARTLY-OWNED SUBSIDIARIES WITH MATERIAL NON- CONTROLLING INTERESTS (Cont d) The following tables illustrate the summarised financial information of Tysan Foundation (Hong Kong) Group. The amounts disclosed are before any inter-company eliminations: 二零一六年 千港元 HK$ 000 HK$ 000 Revenue 3,018,427 3,752,214 Total expenses, net (2,729,277) (3,490,717) Profit for the year 289, ,497 Total comprehensive income for the year 289, ,497 Current assets 1,514,355 1,784,361 Non-current assets 117, ,819 Current liabilities (1,213,386) (1,457,608) Non-current liabilities (196,098) (91,820) Net cash flows from operating activities 438, ,733 Net cash flows from/(used in) investing activities (19,275) 46,225 Net cash flows used in financing activities (315,114) (324,400) Net increase in cash and cash equivalents 104,566 49, 經營租約安排 34. OPERATING LEASE ARRANGEMENTS (a) 作為出租人 (a) As lessor The Group leases certain of its machinery (note 13) and its investment properties (note 14) under operating lease arrangements, with leases negotiated for terms ranging from one to seventy-five months. The terms of the leases generally also require the tenants and customers to pay security deposits and provide for periodic rental adjustments according to the then prevailing market conditions. 年報 2015/

85 34. 經營租約安排 34. OPERATING LEASE ARRANGEMENTS (Cont d) (a) 作為出租人 (a) As lessor (Cont d) At the end of the reporting period, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants and customers falling due as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Within one year 12,620 36,190 In the second to fifth years, inclusive 26,227 19,433 After five years 2, ,856 56,492 (b) 作為承租人 (b) As lessee The Group leases certain of its office properties, warehouses, staff quarters and certain machinery under operating lease arrangements, with leases negotiated for terms ranging from five to thirty-six months. At the end of the reporting period, the Group had total future minimum lease payments under non-cancellable operating leases falling due as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Within one year 17,597 58,700 In the second to fifth years, inclusive 13,602 3,267 31,199 61, ANNUAL REPORT 2015/2016

86 35. 承擔 34(b) 35. COMMITMENTS In addition to the operating lease commitments detailed in note 34(b) above, the Group had the following capital commitments at the end of the reporting period: 二零一六年 千港元 HK$ 000 HK$ 000 Property, plant and equipment and investment properties: contracted, but not provided for 6,586 Construction works relating to properties under development: contracted, but not provided for 393, , 或然負債 36. CONTINGENT LIABILITIES (a) (a) At the end of the reporting period, contingent liabilities not provided for in the financial statements were as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Guarantees in respect of performance bonds in relation to subsidiaries 195, ,775 年報 2015/

87 36. 或然負債 36. CONTINGENT LIABILITIES (Cont d) (b) (b) As at 31 March 2016, the Group provided guarantees in respect of mortgage facilities granted by Shenyang Housing Fund Management Center relating to the mortgage loans arranged for purchases of certain properties developed by a subsidiary of the Company and the outstanding mortgage loans under these guarantees amounted to HK$14,277,000 (2015: Nil). 14,277,000 The Group s guarantee period starts from the dates of grant of the relevant mortgage loans and ends upon issuance of the relevant ownership certificates. The fair value of the guarantees is not significant and the directors consider that in case of default in payments, the net realisable value of the related properties can cover the repayment of the outstanding mortgage principal together with the accrued interest and penalty and therefore no provision has been made for these guarantees in the financial statements. 37. 關連人士交易 37. RELATED PARTY TRANSACTIONS Save as disclosed elsewhere in these financial statements, the Group had the following transactions with related parties during the year: (a) 與關連人士之未償還結存 (a) Outstanding balances with related parties Details of the Group s balances with its associate, a related company and a non-controlling interest as at the end of the reporting period are included in notes 16, 21 and 33, respectively, to the financial statements. The maximum amount 383(1)(d) due from a related company outstanding during the year was HK$3,471,000 as disclosed pursuant to section 383(1)(d) of the 3,471,000 Hong Kong Companies Ordinance. 162 ANNUAL REPORT 2015/2016

88 37. 關連人士交易 37. RELATED PARTY TRANSACTIONS (Cont d) (b) 本集團主要管理人員之報酬 (b) Compensation of key management personnel of the Group 二零一六年 千港元 HK$ 000 HK$ 000 Short term employee benefits 59,795 57,687 Post-employment benefits Total compensation paid to key management personnel 59,903 57,801 8 Further details of directors remuneration are included in note 8 to the financial statements. (c) 與本集團關連公司之其他交 易 : (c) Other transactions with related companies of the Group: (1) 與關連公司之分包工程 (1) Subcontracted works with related companies (i) 150,000 (i) During the year ended 31 March 2016, the Group subcontracted E&M works of approximately HK$150,000 (2015: Nil) to Tysan Engineering (H.K.) Company Limited ( TEHK ) (a then subsidiary of the Company disposed of to Mr. Fung on 19 December 2014). (ii) (ii) During the year ended 31 March 2016, Tysan Building Construction Company Limited ( TBC, a company ultimately controlled by Mr. Fung) subcontracted rental and engineering works relating to tower cranes of approximately HK$993,000 (2015: HK$5,612,000) to the Group. 993,000 5,612,000 年報 2015/

89 37. 關連人士交易 37. RELATED PARTY TRANSACTIONS (Cont d) (c) 與本集團關連公司之其他交易 : (c) Other transactions with related companies of the Group: (Cont d) (1) 與關連公司之分包工程 (1) Subcontracted works with related companies (Cont d) (iii) 691,000 (iii) During the year ended 31 March 2015, the Group subcontracted building and construction works of approximately HK$691,000 to TBC. (iv) 2,600,000 (iv) During the period from 1 April 2014 to 19 December 2014, TBC subcontracted E&M works of approximately HK$2,600,000 to TEHK. (2) 收自關連公司之租賃開支 及管理費用 (2) Rental charges and management fees received from related companies (i) (i) During the year ended 31 March 2016, TBC paid rental charge and management fee of HK$695,000 (2015: Nil) and HK$269,000 (2015: HK$490,000), respectively, to the Group. 695, , ,000 (ii) (ii) During the year ended 31 March 2016, TEHK paid rental charge and management fee of HK$202,000 (2015: Nil) and HK$78,000 (period from 20 December 2014 to 31 March 2015: HK$39,000), respectively, to the Group. 202,000 78,000 39, ANNUAL REPORT 2015/2016

90 37. 關連人士交易 37. RELATED PARTY TRANSACTIONS (Cont d) (c) 與本集團關連公司之其他交易 : (c) Other transactions with related companies of the Group: (Cont d) (2) 收自關連公司之租賃開支及管理費用 (2) Rental charges and management fees received from related companies (Cont d) (iii) (iii) During the year ended 31 March 2016, Cando Trading Limited (a company ultimately controlled by Mr. Fung) paid rental charge and management fee of HK$168,000 (2015: Nil) and HK$66,000 (2015: Nil), respectively, to the Group. 168,000 66,000 (iv) (iv) Subsequent to the resignation of Miss Jennifer Kwok as an Executive Director with effect from 1 July 2014, Tysan Trading Company Limited ( TTCL ) ceased to be a related company of the Group. During the period from 1 April 2014 to 30 June 2014, TTCL paid management fee of HK$110,000 to the Group. 110,000 (3) (3) During the years ended 31 March 2016 and 2015, Mr. Fung provided personal guarantees to financial institutions in connection with general credit facilities and performance bonds granted to certain subsidiaries of the Company. These transactions were entered into by the Group and its related companies in accordance with the terms of the agreements. 年報 2015/

91 37. 關連人士交易 37. RELATED PARTY TRANSACTIONS (Cont d) (c) 與本集團關連公司之其他交易 : (c) Other transactions with related companies of the Group: (Cont d) (c)(1) (c)(2) The related party transactions in respect of items (c)(1) and (c)(2) 39(c) above and the disposals as detailed in notes 39(c) and 39(d) to 39(d) the financial statements also constituted connected transactions as 14A defined in Chapter 14A of the Listing Rules. Personal guarantees (c)(3) provided by Mr. Fung as disclosed in item (c)(3) above constitute connected transactions as defined in Chapter 14A of the Listing 14A Rules and are exempted from the disclosure requirements in 14A Chapter 14A of the Listing Rules. 38. 收購附屬公司之額外權益 3% 10,800,000 15,000,000 4,200,000 10,800,000 15,000, ,000 10,800,000 3,246, ACQUISITION OF ADDITIONAL INTERESTS IN A SUBSIDIARY On 18 March 2015, Tysan Property Development & Investment Limited ( TPDIL ), a wholly-owned subsidiary of the Company, and the noncontrolling shareholder of Sparkle Key Limited, entered into a sale and purchase agreement pursuant to which, TPDIL acquired a 3% equity interest in Sparkle Key Limited from the non-controlling shareholder and the interest-free shareholder s loan of HK$10,800,000 owing by Sparkle Key Limited to the non-controlling shareholder at a cash consideration of HK$15,000,000 (of which HK$4,200,000 was for the acquisition of the equity interest in Sparkle Key Limited and HK$10,800,000 was for the settlement of the shareholder s loan) (the Sparkle Key Acquisition ). The Sparkle Key Acquisition was completed on 18 March Upon the completion of the Sparkle Key Acquisition, Sparkle Key Limited became an indirectly wholly-owned subsidiary of the Company. The Sparkle Key Acquisition did not result in any change in control by the Company over Sparkle Key Limited and such acquisition was accounted for as an equity transaction. Accordingly, the debit balance of HK$3,246,000, between the consideration of HK$15,000,000, and the aggregate of the carrying amount of the non-controlling interest of HK$954,000 and the loan from the then non-controlling shareholder of HK$10,800,000, was recorded in the retained profits in the equity for the year ended 31 March ANNUAL REPORT 2015/2016

92 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (a) 出售海逸投資 (a) Disposal of Hiat Investment On 11 December 2015, the Group and an independent third party (the Hiat Investment Purchaser ), entered into a sale and purchase agreement pursuant to which, the Hiat Investment Purchaser acquired the entire equity interest in Hiat Investment and the interest-free shareholder s loan of HK$23,495,000 23,495,000 owing by Hiat Investment to the Group at a total consideration 87,500, ,577,000 of RMB87,500,000 (equivalent to HK$105,577,000) (the Hiat Investment Disposal ). The Hiat Investment Disposal was completed on 11 December Hiat Investment was principally engaged in property leasing and management business in Shanghai and the registered owner of the whole of Block B and twenty-five car parks of Aidu Apartment located in B 25 Shanghai for residential use. During the year ended 31 March 2016, a cash consideration of RMB83,000,000 (equivalent to HK$100,192,000) was 83,000,000 received. A consideration of RMB4,000,000 (equivalent to 100,192,000 HK$4,787,000) was received subsequent to the end of the 4,000,000 reporting period. According to the terms of the sale and purchase 4,787,000 agreement, the remaining consideration of RMB500,000 (equivalent to HK$598,000) will be settled in December , ,000 年報 2015/

93 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (a) 出售海逸投資 (a) Disposal of Hiat Investment (Cont d) Notes 二零一六年 2016 千港元 HK$ 000 Net assets disposed of: Property, plant and equipment Investment properties ,812 Prepayments, deposits and other receivables 153 Cash and bank balances 63 Trade payables and accruals (132) Other payables (3) Deferred tax liabilities 29 (13,456) Loan from the Group (23,495) 97,985 Release of exchange fluctuation reserve (13,898) Loan from the Group assigned 23,495 Loss on disposal of a subsidiary (2,005) 105,577 Satisfied by: Cash consideration 100,192 Other receivables 5,385 Total consideration 105, ANNUAL REPORT 2015/2016

94 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (a) 出售海逸投資 (a) Disposal of Hiat Investment (Cont d) An analysis of the net inflow of cash and cash equivalents in respect of the Hiat Investment Disposal during the year ended 31 March 2016 is as follows: 二零一六年 2016 千港元 HK$ 000 Cash consideration 100,192 Cash and bank balances disposed of (63) Net inflow of cash and cash equivalents in respect of the Hiat Investment Disposal 100,129 (b) 出售上海華園 (b) Disposal of Shanghai China Garden On 17 November 2015, the Group and an independent third party (the Shanghai China Garden Purchaser ), entered into a sale and purchase agreement, pursuant to which the Shanghai China Garden Purchaser acquired the entire equity 318,527,000 interest in Shanghai China Garden at a consideration of 375,767,000 RMB318,527,000 (equivalent to HK$375,767,000) (the Shanghai China Garden Disposal ). The Shanghai China Garden Disposal was completed on 1 February Shanghai China Garden was principally engaged in property leasing and management business in Shanghai and was the registered owner of the residential properties known as China Garden in Shanghai. During the year ended 31 March 2016, a cash consideration of RMB141,750,000 (equivalent to HK$164,218,000) was 141,750,000 received. A consideration of RMB145,877,000 (equivalent to 164,218,000 HK$174,571,000) was received subsequent to the end of the 145,877,000 reporting period. According to the terms of the sale and purchase 174,571,000 agreement, the remaining consideration of RMB30,900,000 (equivalent to HK$36,978,000) will be settled within five business days after the Group provides the Shanghai China 30,900,000 Garden Purchaser with a copy of the documentary evidence 36,978,000 showing that the Group has paid the tax and duty to the PRC authority in respect of the Shanghai China Garden Disposal. 年報 2015/

95 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (b) 出售上海華園 (b) Disposal of Shanghai China Garden (Cont d) Notes 二零一六年 2016 千港元 HK$ 000 Net assets disposed of: Property, plant and equipment Investment properties ,910 Inventories 9 Prepayments, deposits and other receivables 95 Cash and bank balances 14,265 Trade payables and accruals (3,137) Other payables, deposits received and receipt in advance (7,045) Deferred tax liabilities 29 (74,606) 283,539 Release of exchange fluctuation reserve (22,629) Gain on disposal of a subsidiary 114, ,767 Satisfied by: Cash consideration 164,218 Other receivables 211,549 Total consideration 375, ANNUAL REPORT 2015/2016

96 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (b) 出售上海華園 (b) Disposal of Shanghai China Garden (Cont d) An analysis of the net inflow of cash and cash equivalents in respect of the Shanghai China Garden Disposal during the year ended 31 March 2016 is as follows: 二零一六年 2016 千港元 HK$ 000 Cash consideration 164,218 Cash and bank balances disposed of (14,265) Net inflow of cash and cash equivalents in respect of the Shanghai China Garden Disposal 149,953 Further details of the Shanghai China Garden Disposal were disclosed in the Company s announcement dated 17 November 年報 2015/

97 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (c) 出售 Tremend Yield Limited (c) Disposal of Tremend Yield Limited On 11 December 2014, TPDIL, a wholly-owned subsidiary of the Company, entered into a disposal agreement to dispose of all of its equity interest in Tremend Yield Limited and the rights and Tremend Yield Limited benefits in the interest-free shareholder s loan of HK$6,404,000 Tremend Yield Limited owing by Tremend Yield Limited to TPDIL, at a cash consideration of HK$21,875,000, to Mr. Fung (the Tremend Yield Disposal ). 6,404,000 The Tremend Yield Disposal was completed on 19 December 21,875, Tremend Yield Limited was a property investment company Tremend YieldTremend whose main asset was a shop in Tai Kok Tsui, Kowloon for Yield commercial use. Tremend Yield Limited Notes 2015 HK$ 000 Net assets disposed of: Investment property 14 22,530 Deposits 1 Bank balances 279 Accruals (24) Other payables and deposits received (167) Tax payable (93) Deferred tax liability 29 (560) Loan from the Group (6,404) 15,562 Loan from the Group assigned 6,404 Loss on disposal of a subsidiary (91) 21, ANNUAL REPORT 2015/2016

98 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (c) 出售 Tremend Yield Limited (c) Disposal of Tremend Yield Limited (Cont d) 2015 HK$ 000 Satisfied by: Cash consideration 21,875 Tremend Yield An analysis of the net inflow of cash and cash equivalents in respect of the Tremend Yield Disposal during the year ended 31 March 2015 is as follows: 2015 HK$ 000 Cash consideration 21,875 Bank balances disposed of ( 279) Tremend Yield Net inflow of cash and cash equivalents in respect of the Tremend Yield Disposal 21,596 Tremend Yield Further details of the Tremend Yield Disposal were disclosed in the Company s announcement dated 11 December (d) 出售泰昇建築有限公司 (d) Disposal of Tysan Engineering Company Limited On 11 December 2014, Tysan Construction Company Limited ( TCCL ), a wholly-owned subsidiary of the Company, entered into a disposal agreement to dispose of all of its equity interest in Tysan Engineering Company Limited ( TECL ) and the rights and benefits in the interest-free shareholder s loan of HK$6,433,000 owing by TECL to TCCL, at a cash consideration of HK$5,794,000, to Mr. Fung (the Tysan Engineering Disposal ). 6,433,000 The Tysan Engineering Disposal was completed on 19 December 5,794, TECL and its subsidiaries are principally engaged in the provision of E&M engineering services. Immediately after the completion of the Tysan Engineering Disposal, TECL, which is controlled by Mr. Fung, became a related company of the Group. 年報 2015/

99 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (d) 出售泰昇建築有限公司 (d) Disposal of Tysan Engineering Company Limited (Cont d) 2015 HK$ 000 Net assets disposed of: Amounts due from customers for contract works 6,857 Trade receivables 4,619 Prepayments, deposits and other receivables 90 Bank balances 1,534 Trade payables and accruals (2,514) Other payables (162) Amounts due to customers for contract works (748) Interest-bearing bank borrowing (400) Loan from the Group (6,433) Loan from a non-controlling shareholder (2,757) Non-controlling interests (26) 60 Loan from the Group assigned 6,433 Loss on disposal of subsidiaries (699) 5,794 Satisfied by: Cash consideration 5, ANNUAL REPORT 2015/2016

100 39. 出售附屬公司 39. DISPOSAL OF SUBSIDIARIES (Cont d) (d) 出售泰昇建築有限公司 (d) Disposal of Tysan Engineering Company Limited (Cont d) An analysis of the net inflow of cash and cash equivalents in respect of the Tysan Engineering Disposal during the year ended 31 March 2015 is as follows: 2015 HK$ 000 Cash consideration 5,794 Bank balances disposed of (1,534) Net inflow of cash and cash equivalents in respect of the Tysan Engineering Disposal 4,260 Further details of the Tysan Engineering Disposal were disclosed in the Company s announcement dated 11 December 年報 2015/

101 40. 按類別劃分之金融工具 40. FINANCIAL INSTRUMENTS BY CATEGORY The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows: 金融資產 Financial assets 按公平值 計入損益之 金融資產 - 持作買賣 Financial 二零一六年 assets 可供出售 at fair value 金融資產 貸款及 through Available- Available- 應收款項 profit or for-sale for-sale Loans and loss - held financial 總計 Loans and financial receivables for trading assets Total receivables assets Total 千港元千港元千港元千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Available-for-sale investment 1,197 1,197 1,249 1,249 Derivative financial instrument 8,533 8,533 Trade and retention receivables 727, ,243 1,016,641 1,016,641 Other receivables 231, ,977 19,941 19,941 Time deposits 1,303,589 1,303, , ,432 Restricted cash 24,000 24,000 Cash and bank balances 502, , , ,064 2,765,639 8,533 1,197 2,775,369 2,348,078 1,249 2,349, ANNUAL REPORT 2015/2016

102 40. 按類別劃分之金融工具 金融負債 40. FINANCIAL INSTRUMENTS BY CATEGORY (Cont d) Financial liabilities 二零一六年 按攤銷成本 列賬之 金融負債 Financial Financial liabilities liabilities at amortised at amortised cost cost 千港元 HK$ 000 HK$ 000 Trade and retention payables 385, ,494 Other payables 21,325 10,625 Interest-bearing bank borrowings 856, ,899 1,263, ,018 年報 2015/

103 41. 金融工具之公平值等級架構 AAA 於二零一六年及二零一五年三月三十一日按公平值計量之資產 : 41. FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS The Group entered into a derivative financial instrument with a financial institution with an AAA credit rating. The derivative financial instrument which is a cross currency swap, was measured using valuation techniques similar to forward pricing and swap models, using present value calculations. The model incorporates various market observable inputs including the expected forward rate or price, volatility and interest rate curves. The carrying amount of the cross currency swap is the same as its fair value. The following tables illustrate the fair value measurement hierarchy of the Group s financial instruments: Assets measured at fair value as at 31 March 2016 and 2015: 二零一六年 公平值計量使用 Fair value measurement using Fair value measurement using 活躍 重大 重大 市場報價 可觀察 不可觀察 ( 第 1 層 ) 輸入數據 輸入數據 1 Quoted ( 第 2 層 ) ( 第 3 層 ) Quoted 2 3 price Significant Significant price Significant Significant in active observable unobservable in active observable unobservable markets inputs inputs 總計 markets inputs inputs (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Derivative financial instrument 8,533 8, The Group did not have any financial liabilities measured at fair value as at 31 March 2016 (2015: Nil). During the year, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial liabilities (2015: Nil). 178 ANNUAL REPORT 2015/2016

104 42. 財務風險管理目標及政策 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group s major financial instruments include cash and bank balances, time deposits, trade and retention and other receivables, trade and retention and other payables and bank borrowings. Details of these financial instruments are disclosed in the respective notes to these financial statements. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management of the Group manages and monitors these exposures to ensure that appropriate measures are implemented in a timely and effective manner. 信貸風險 Credit risk The Group s principal financial assets are cash and bank balances, time deposits, and trade and other receivables. The credit risk on bank balances and time deposits is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The Group s credit risk is primarily attributable to its trade and retention and other receivables. The management of the Group monitors each individual trade debt on an ongoing basis and the Group s exposure to bad debts is not significant. The Group has no significant concentration of credit risk, with the exposure spreading over a large number of counterparties and customers. Further quantitative data in respect of the Group s exposure to credit risk arising from trade and retention and other receivables are disclosed in notes 21 and 22 to the financial statements. 年報 2015/

105 42. 財務風險管理目標及政策 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont d) 利率風險 Interest rate risk The Group s exposure to changes in interest rates is mainly attributable to its interest-bearing bank borrowings. Borrowings at variable rates expose the Group to interest rate risk. The Group currently does not have an interest rate hedging policy. However, the management of the Group monitors the Group s interest rate exposure and considers entering into interest rate swaps to reduce its exposure to interest rate fluctuations should the need arise. The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group s profit before tax (through the impact on floating rate borrowings) and the Group s equity (before any impact on tax). 除稅前溢利 增加 ( 減少 ) 利率上調 Increase/ Increase (decrease) 權益減少 * in interest in profit Decrease rate before tax in equity* HK$ 000 HK$ 000 二零一六年 2016 Bank borrowings 100 個基點 100 basis points 2015 Bank borrowings basis points (8,585) (3,686) * * Excluding retained profits 外匯風險 Foreign exchange risk The Group operates mainly in Hong Kong and Mainland China with most of its transactions settled in Hong Kong dollars and Renminbi. In the current year, all of the Group s bank borrowings are denominated in Hong Kong dollars. Management monitors the Group s currency exposure on an ongoing basis and considers entering into forward currency contracts when the need arises. 180 ANNUAL REPORT 2015/2016

106 42. 財務風險管理目標及政策 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont d) 流動資金風險 Liquidity risk The Group s objective is to maintain a balance between continuity of funding and flexibility through the use of bank borrowings. The Group regularly reviews its major funding positions to ensure that it has adequate financial resources in meeting its financial obligations. The maturity profile of the Group s financial liabilities as at the end of the reporting period, based on the contractual undiscounted payments, is as follows: 二零一六年 個月以內 1 至 5 年 5 年以上 按要求償還 Less than 1 to 5 Over 總計 On demand 12 months years 5 years Total 千港元 千港元 千港元 千港元 千港元 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Trade and retention payables 385, ,134 Other payables 21,325 21,325 * Interest-bearing bank borrowings* 6, , ,410 59, ,453 Guarantees in respect of performance bonds in relation to subsidiaries 195, , , , ,410 59,669 1,460,381 年報 2015/

107 42. 財務風險管理目標及政策 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont d) 流動資金風險 Liquidity risk (Cont d) Less than 1 to 5 Over On demand 12 months years 5 years Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Trade and retention payables 484, ,494 Other payables 10,625 10,625 * Interest-bearing bank borrowings* 33, , ,110 63, ,610 Guarantees in respect of performance bonds in relation to subsidiaries 416, , , , ,110 63,737 1,280,504 * 6,100,000 33,940,000 * Included in interest-bearing bank borrowings are bank loans of HK$6,100,000 and HK$33,940,000 as at 31 March 2016 and 2015, respectively, which contain a repayment on demand clause giving the lender the unconditional right to call the loan at any time and therefore, for the purpose of the above maturity profile, these amounts are classified as on demand. 182 ANNUAL REPORT 2015/2016

108 42. 財務風險管理目標及政策 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont d) 流動資金風險 ,114, ,663, ,670, ,210,000 59,669,000 63,737,000 Liquidity risk (Cont d) Notwithstanding the above repayment on demand clause, the directors do not believe that the bank loans will be called in their entirety within 12 months, and they consider that the bank loans will be repaid in accordance with the maturity dates as set out in the respective agreements. This evaluation was made considering: the financial position of the Group at the date of approval of the financial statements; the Group s compliance with the loan covenants; the lack of events of default, and the fact that the Group has made all previously scheduled repayments on time. In accordance with the terms of bank loans, the maturity terms at 31 March 2016 are HK$197,114,000 (2015: HK$137,663,000) payable in less than 12 months; HK$601,670,000 (2015: HK$167,210,000) payable in one to five years, inclusive; and HK$59,669,000 (2015: HK$63,737,000) payable over five years. 資本管理 Capital management The primary objectives of the Group s capital management are to safeguard the Group s ability to continue as a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders value. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2016 and 31 March 年報 2015/

109 42. 財務風險管理目標及政策 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont d) 資本管理 50% Capital management (Cont d) The Group monitors capital using a gearing ratio, which is net debt divided by the total equity of the Group. The Group s policy is to maintain the gearing ratio not more than 50%. Net debt includes trade and retention payables, other payables and interest-bearing bank borrowings less cash and cash equivalents. Capital includes total equity of the Group. The gearing ratios as at the end of the reporting periods were as follows: 二零一六年 千港元 HK$ 000 HK$ 000 Trade and retention payables 385, ,494 Other payables 21,325 10,625 Interest-bearing bank borrowings 856, ,899 Less: Time deposits (1,303,589) (746,432) Restricted cash (24,000) Cash and bank balances (502,830) (541,064) Net cash (543,014) (448,478) Total equity 2,777,192 2,932,569 Gearing ratio N/A 不適用 N/A 184 ANNUAL REPORT 2015/2016

110 43. 報告期後事件 43. EVENTS AFTER THE REPORTING PERIOD (a) HNA Finance I Co., Ltd. 收購 (a) Acquisition of approximately 66% of issued shares of 本公司已發行股份約 66% the Company by HNA Finance I Co., Ltd. HNA Pursuant to the Joint Announcement, the Company and HNA Finance I Co., Ltd. Finance I Co., Ltd. jointly announced that, on 19 April 2016, HNA HNA Finance I Co., Ltd. and Tides Holdings II Ltd., the Finance I Co., Ltd. Company s controlling shareholder, entered into a sale and Tides Holdings II Ltd. purchase agreement pursuant to which, HNA Finance I Co., Ltd. HNA Finance has conditionally agreed to purchase, and Tides Holdings II Ltd. I Co., Ltd. has conditionally agreed to sell, 577,279,496 shares, which Tides Holdings II Ltd. represent approximately 66% of issued shares of the Company 577,279,496 as at the date of entering into the sale and purchase agreement, for an aggregate cash consideration of approximately 66% 2,615,076,000 HK$2,615,076,000 (representing HK$4.53 per share) (the Tides Transaction ) Tides Tides HNA Finance I Upon completion of the Tides Transaction, HNA Finance I Co., Co., Ltd. Ltd. will hold approximately 66% of the issued shares of the 66% Tides Holdings II Ltd. Company and Tides Holdings II Ltd. will remain interested in 9% approximately 9% of the issued shares of the Company, and HNA Finance I Co., HNA Finance I Co., Ltd. will become the controlling shareholder Ltd. of the Company. The Company has adopted an incentive scheme in favour of its executive directors and the Group s senior management. A term of this incentive scheme is that in the event there is change in control of the Company, unvested rights in this incentive scheme will vest immediately and no further grants will be made but an aggregate payment equal to 4.5% of the value of the Company will be made to participants in that incentive scheme. The 4.5% completion of the Tides Transaction will trigger an aggregate Tides payment of approximately HK$197,980,000 under the incentive 197,980,000 scheme which will be determined at the completion date of the Tides Tides Transaction. Tides Further details of the Tides Transaction were disclosed in the Joint Announcement. 年報 2015/

111 43. 報告期後事件 43. EVENTS AFTER THE REPORTING PERIOD (Cont d) (b) 收購泰昇地基 ( 香港 ) 有限公司 (b) Acquisition of a 40% equity interest in Tysan Foundation 40% 股權 (Hong Kong) Limited On 19 April 2016, the Company, Fortunate Pool and Mr. Fung entered into a sale and purchase agreement, pursuant to which the Company has conditionally agreed to purchase and Fortunate Pool has conditionally agreed to sell 40% equity interest 40% in TFHK, for an aggregate cash consideration of approximately 836,790,000 HK$836,790,000 (the Foundation Transaction ). Completion Tides of the Foundation Transaction is conditional upon the completion of the Tides Transaction, and will take place in two phases Tides with phase 1 completion taking place on the same date as the completion of the Tides Transaction and phase 2 completion taking place within one year after that. Immediately after phase 1 completion, the equity interest in TFHK held by the Company will 60% increase from 60% to 95% and after phase 2 completion, TFHK 95% will become a wholly-owned subsidiary of the Company. Further details of the Foundation Transaction were disclosed in the Joint Announcement and the Company s circular dated 23 May Up to the date of approval of these financial statements, the Foundation Transaction has not been completed. 186 ANNUAL REPORT 2015/2016

112 44. 本公司財務狀況表 44. STATEMENT OF FINANCIAL POSITION OF THE COMPANY Information about the statement of financial position of the Company at the end of the reporting period is as follows: 非流動資產 NON-CURRENT ASSETS 二零一六年 千港元 HK$ 000 HK$ 000 Interests in subsidiaries 995,911 1,040,371 流動資產 CURRENT ASSETS Amount due from a subsidiary 73 Prepayments, deposits and other receivables Time deposits 200,000 Bank balances 19,741 9,340 Total current assets 220,013 9,478 流動負債 CURRENT LIABILITIES Amounts due to subsidiaries 47,772 Trade payables and accruals 3,141 1,355 Other payables and deposits received Total current liabilities 3,370 49,252 流動資產 ( 負債 ) 淨值 NET CURRENT ASSETS/(LIABILITIES) 216,643 (39,774) 總資產減流動負債 TOTAL ASSETS LESS CURRENT LIABILITIES 1,212,554 1,000,597 非流動負債 NON-CURRENT LIABILITY Accrual 4,387 Net assets 1,208,167 1,000,597 權益 EQUITY Issued capital 87,466 87,466 Reserves (note) 1,120, ,131 Total equity 1,208,167 1,000,597 年報 2015/

113 44. 本公司財務狀況表 44. STATEMENT OF FINANCIAL POSITION OF THE COMPANY (Cont d) Note: A summary of the Company s reserves is as follows: 股份溢價賬 繳入盈餘 保留溢利 Share premium Contributed Retained 總計 account surplus profits Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1 April ,861 29, , ,092 Profit for the year 258, ,239 Total comprehensive income for the year 258, , final dividend declared and paid (87,467) (87,467) 2015 interim dividend (43,733) (43,733) At 31 March 2015 and 1 April ,861 29, , ,131 Profit for the year 513, ,703 Total comprehensive income for the year 513, , final dividend declared and paid (131,200) (131,200) 2016 interim dividend (174,933) (174,933) Transfer to contributed surplus (563,861) 563,861 At 31 March , ,890 1,120,701 29,950, ,861,000 The contributed surplus of the Company included the excess of the fair value of the shares of the subsidiaries acquired pursuant to the Group reorganisation in 1991 prior to the listing of the Company s shares, over the nominal value of the Company s shares issued in exchange therefor amounting to HK$29,950,000. In addition, pursuant to a special resolution passed at the annual general meeting of the Company held on 7 August 2015, the entire amount of HK$563,861,000 standing to the credit of share premium account of the Company as at 7 August 2015 was cancelled, and the corresponding balance arising therefrom was credited to the contributed surplus account of the Company. Under the Bermuda Companies Act 1981, the Company may make distributions to its members out of the contributed surplus under certain circumstances. 45. 財務報表之核准 45. APPROVAL OF THE FINANCIAL STATEMENTS The financial statements were approved and authorised for issue by the board of directors on 29 June ANNUAL REPORT 2015/2016