Interim Report 2013/14 中期報告

Transcription

1 Interim Report 2013/14 中期報告

2 Contents Corporate Information 2 Condensed Consolidated Income Statement 4 Condensed Consolidated Statement of Comprehensive Income 5 Condensed Consolidated Statement of Financial Position 6 Condensed Consolidated Statement of Changes in Equity 8 Condensed Consolidated Statement of Cash Flows 10 Notes to the Condensed Consolidated Financial Statements 11 Management Discussion and Analysis 35 Financial Review 40 Other Information 44 Page 1

3 Corporate Information EXECUTIVE DIRECTORS Dr CHOW Yei Ching (Chairman) Mr KUOK Hoi Sang (Vice Chairman and Managing Director) Mr TAM Kwok Wing (Deputy Managing Director) Mr CHOW Vee Tsung, Oscar Mr HO Chung Leung Mr MA Chi Wing Miss Lily CHOW NON-EXECUTIVE DIRECTORS Dr CHOW Ming Kuen, Joseph # Mr SUN Kai Dah, George # Mr YANG Chuen Liang, Charles # Professor POON Chung Kwong # Dr KO Chan Gock, William # # # # # Independent Non-Executive Director # SECRETARY Mr MUI Chin Leung AUDITOR PricewaterhouseCoopers Certified Public Accountants, Hong Kong 22nd Floor, Prince s Building Central, Hong Kong PRINCIPAL BANKERS Bank of China (Hong Kong) Limited The Bank of East Asia, Limited Chong Hing Bank Limited DBS Bank, Ltd., Hong Kong Branch General Electric Capital Corporation Hang Seng Bank Limited The Hongkong and Shanghai Banking Corporation Limited Shanghai Commercial Bank Limited SOLICITORS Appleby Deacons Robertsons General Electric Capital Corporation Appleby 2 Chevalier International Holdings Limited Interim Report 2013/14

4 Corporate Information REGISTERED OFFICE Canon s Court 22 Victoria Street Hamilton, HM 12, Bermuda PRINCIPAL PLACE OF BUSINESS 22nd Floor, Chevalier Commercial Centre 8 Wang Hoi Road, Kowloon Bay, Hong Kong Telephone: (852) Facsimile: (852) PRINCIPAL SHARE REGISTRAR MUFG Fund Services (Bermuda) Limited 26 Burnaby Street Hamilton HM 11, Bermuda BRANCH SHARE REGISTRAR AND TRANSFER OFFICE IN HONG KONG Tricor Standard Limited 26th Floor, Tesbury Centre 28 Queen s Road East, Hong Kong SHARE LISTING The Stock Exchange of Hong Kong Limited Stock Code: 25 ADR DEPOSITARY BANK BNY Mellon Depositary Receipts P.O. Box Providence R , US Stock Symbol: CHVLY WEBSITE Canon s Court 22 Victoria Street Hamilton, HM 12, Bermuda (852) (852) MUFG Fund Services (Bermuda) Limited 26 Burnaby Street Hamilton HM 11, Bermuda 25 BNY Mellon Depositary Receipts P.O. Box Providence R , US CHVLY 3

5 Condensed Consolidated Income Statement For the six months ended 30 September 2013 Unaudited Six months ended 30 September Note HK$ 000 HK$ 000 Revenue 3 2,061,661 2,239,845 Cost of sales (1,514,002) (1,693,651) Gross profit 547, ,194 Other income, net 4 78,326 42,427 Other gains, net 5 2,349 92,915 Selling and distribution costs (244,373) (255,089) Administrative expenses (111,605) (85,230) Operating profit 272, ,217 Share of results of associates 53,939 44,933 Share of results of joint ventures (3,096) (15,645) 323, ,505 Finance income 6 7,794 6,546 Finance costs 6 (58,965) (23,490) Finance costs, net 6 (51,171) (16,944) Profit before taxation 7 272, ,561 Income tax expenses 8 (44,782) (41,612) Profit for the period 227, ,949 Attributable to: Equity holders of the Company 209, ,380 Non-controlling interests 17,878 15, , ,949 Earnings per share basic (HK$ per share) diluted (HK$ per share) Dividend 10 58,038 55,513 The notes on pages 11 to 34 are integral parts of these unaudited condensed consolidated financial statements Chevalier International Holdings Limited Interim Report 2013/14

6 Condensed Consolidated Statement of Comprehensive Income For the six months ended 30 September 2013 Unaudited Six months ended 30 September HK$ 000 HK$ 000 Profit for the period 227, ,949 Other comprehensive (expenses)/income for the period Item that may not be reclassified to profit or loss Released upon disposal of a property (123) Items that may be reclassified subsequently to profit or loss Exchange difference on translation of operations of overseas subsidiaries, associates and joint ventures 29,814 (9,336) Gain on disposal of available-for-sale investments transferred to profit or loss Change in fair value of available-for-sale investments, net Fair value adjustments on the derivative financial instruments designated as cash flow hedge in respect of interest rate swap contracts (289) (16,331) (22,732) 1,952 (848) Other comprehensive income/(expenses) for the period, net of tax 15,312 (33,205) Total comprehensive income for the period 242, ,744 Attributable to: Equity holders of the Company 222, ,706 Non-controlling interests 20,202 14, , ,744 Note: Items shown within other comprehensive income/(expenses) have no tax effect. The notes on pages 11 to 34 are integral parts of these unaudited condensed consolidated financial statements

7 Condensed Consolidated Statement of Financial Position As at 30 September 2013 Unaudited Audited 30 September 31 March Note HK$ 000 HK$ 000 Non-current assets Investment properties 11 3,412,202 3,407,266 Property, plant and equipment 11 1,710,188 1,678,889 Goodwill 682, ,743 Other intangible assets 25,070 28,023 Interests in associates 979, ,514 Interests in joint ventures 1,279,791 1,223,129 Available-for-sale investments 393, ,892 Properties under development 747, ,569 Deferred tax assets 26,064 26,323 Other non-current assets 143, ,137 9,398,248 9,020,485 Current assets Amounts due from associates 26,819 33,830 Amounts due from joint ventures 343, ,065 Amount due from a non-controlling interest 15,750 Investments at fair value through profit or loss 384, ,694 Inventories 144, ,694 Properties for sale 54,962 57,248 Properties under development 350, ,974 Debtors, deposits and prepayments 12 1,086, ,101 Amounts due from customers for contract work 169, ,155 Derivative financial instruments 11,639 82,364 Prepaid tax 7,115 5,153 Bank balances and cash 1,246,783 1,280,016 3,841,619 3,775,294 6 Chevalier International Holdings Limited Interim Report 2013/14

8 Condensed Consolidated Statement of Financial Position As at 30 September 2013 Unaudited Audited 30 September 31 March Note HK$ 000 HK$ 000 Current liabilities Amount due to an associate 27,138 Amount due to a non-controlling interest 4,644 4,644 Dividend payable to a non-controlling interest 2,400 2,400 Amounts due to customers for contract work 565, ,625 Derivative financial instruments 28,562 30,921 Dividend payable 182,901 Creditors, bills payable, deposits and accruals , ,430 Unearned insurance premiums and unexpired risk reserves 120, ,391 Outstanding insurance claims 313, ,931 Deferred income 23,298 23,628 Current income tax liabilities 75,967 55,990 Bank and other borrowings 1,123, ,285 3,453,774 2,945,245 Net current assets 387, ,049 Total assets less current liabilities 9,786,093 9,850,534 Capital and reserves Share capital , ,734 Reserves 5,508,540 5,469,085 Shareholders funds 5,860,274 5,820,819 Non-controlling interests 407, ,223 Total equity 6,267,512 6,211,042 Non-current liabilities Unearned insurance premiums 70,410 75,476 Bank and other borrowings 3,263,032 3,378,506 Deferred tax liabilities 185, ,510 3,518,581 3,639,492 Total equity and non-current liabilities 9,786,093 9,850,534 The notes on pages 11 to 34 are integral parts of these unaudited condensed consolidated financial statements

9 Condensed Consolidated Statement of Changes in Equity For the six months ended 30 September 2013 Share capital Share premium Capital reserve Unaudited Equity attributable to equity holders of the Company Capital redemption reserve Investment revaluation reserve Other assets revaluation reserve Hedging reserve Exchange fluctuation reserve Retained profits Noncontrolling interests Total equity Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1 April , , ,480 8,785 23, , ,462 3,897,817 5,820, ,223 6,211,042 Profit for the period 209, ,368 17, ,246 Released upon disposal of a property (123) (123) (123) Exchange difference on translation of operations of overseas subsidiaries, associates and joint ventures 27,490 27,490 2,324 29,814 Change in fair value of available-for-sale investments, net Fair value adjustments on the derivative financial instruments designated as cash flow hedge in respect of interest rate swap contacts (16,331) (16,331) (16,331) 1,952 1,952 1,952 Total comprehensive (expenses)/ income for the period (16,331) (123) 1,952 27, , ,356 20, ,558 Appropriated final dividend for the year ended 31 March 2013 payable (182,901) (182,901) (182,901) Dividends paid to non-controlling interests (5,354) (5,354) Capital contribution by a non-controlling interest 2,167 2,167 At 30 September , , ,480 8,785 7, ,767 1, ,952 3,924,284 5,860, ,238 6,267,512 8 Chevalier International Holdings Limited Interim Report 2013/14

10 Condensed Consolidated Statement of Changes in Equity For the six months ended 30 September 2013 Share capital Share premium Capital reserve Unaudited Equity attributable to equity holders of the Company Capital redemption reserve Investment revaluation reserve Other assets revaluation reserve Hedging reserve Exchange fluctuation reserve Retained profits Total Noncontrolling interests HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1 April , , ,480 8,785 34, , ,118 3,149,580 4,993, ,845 5,317,570 Total equity Profit for the period 296, ,380 15, ,949 Exchange difference on translation of operations of overseas subsidiaries, associates and joint ventures (7,805) (7,805) (1,531) (9,336) Gain on disposal of available-for-sale investments transferred to profit or loss Change in fair value of available-for-sale investments, net Fair value adjustments on the derivative financial instruments designated as cash flow hedge in respect of interest rate swap contracts (289) (289) (289) (22,732) (22,732) (22,732) (848) (848) (848) Total comprehensive (expenses)/ income for the period (23,021) (848) (7,805) 296, ,706 14, ,744 Appropriated special and final dividends for the year ended 31 March 2012 paid (182,234) (182,234) (182,234) payable (25,939) (25,939) (25,939) Dividends paid to non-controlling interests (4,674) (4,674) At 30 September , , ,480 8,785 11, ,057 (848) 485,313 3,237,787 5,050, ,209 5,383,467 The notes on pages 11 to 34 are integral parts of these unaudited condensed consolidated financial statements

11 Condensed Consolidated Statement of Cash Flows For the six months ended 30 September 2013 Unaudited Six months ended 30 September HK$ 000 HK$ 000 Net cash from operating activities 28, ,638 Net cash used in investing activities (116,505) (26,684) Net cash from/(used in) financing activities 5,742 (125,058) (Decrease)/increase in cash and cash equivalents (82,318) 169,896 Cash and cash equivalents at beginning of the period 1,044, ,580 Effect of changes in foreign exchange rates 541 (253) Cash and cash equivalents at end of the period 963,154 1,152,223 Analysis of balances of cash and cash equivalents Bank balances and cash 1,246,783 1,297,846 Less: Pledged deposits (283,629) (145,623) 963,154 1,152,223 The notes on pages 11 to 34 are integral parts of these unaudited condensed consolidated financial statements Chevalier International Holdings Limited Interim Report 2013/14

12 Notes to the Condensed Consolidated Financial Statements 1 BASIS OF PREPARATION The unaudited condensed consolidated interim financial statements have been prepared in accordance with applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities (the Listing Rules ) on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) and with Hong Kong Accounting Standard ( HKAS ) 34, Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2013, which have been prepared in accordance with Hong Kong Financial Reporting Standards ( HKFRS ). 2 PRINCIPAL ACCOUNTING POLICIES Except as described below, the accounting policies applied in these condensed consolidated interim financial statements are consistent with those of the annual financial statements for the year ended 31 March 2013, as described in those annual financial statements. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. The following new or revised standards and amendments and improvements to existing standards, that are relevant to the Group s operation, are mandatory for the financial year of the Group beginning on 1 April 2013: HKAS 1 (amendment), Presentation of items of other comprehensive income HKAS 19 (2011), Employee benefits HKAS 27 (2011), Separate financial statements HKAS 28 (2011), Investments in associates and joint ventures HKFRS 7 (amendment), Disclosures Offsetting financial assets and financial liabilities HKFRS 10, Consolidated financial statements HKFRS 10 (amendment), Consolidated financial statements Transition guidance HKFRS 11, Joint arrangements

13 Notes to the Condensed Consolidated Financial Statements 2 PRINCIPAL ACCOUNTING POLICIES (CONTINUED) HKFRS 11 (amendment), Joint arrangements Transition guidance HKFRS 12, Disclosure of interests in other entities HKFRS 12 (amendment), Disclosure of interests in other entities Transition guidance HKFRS 13, Fair value measurement Annual Improvements Project Improvements to HKFRS published in June 2012 The amendment to HKAS 1 focuses on improving the presentation of components of other comprehensive income items. It requires items presented in other comprehensive income to be grouped on the basis of whether they are potentially reclassifiable to profit or loss subsequently or not. The Group s presentation of other comprehensive income in these condensed consolidated financial statements has been modified accordingly HKFRS 10 changes the definition of control such that an investor controls an investee when it 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. To meet the definition of control in HKFRS 10, all three criteria must be met, including: (a) an investor has power over an investee; (b) the investor has exposure, or rights, to variable returns from its involvement with the investee; and (c) the investor has the ability to use its power over the investee to affect the amount of the investor s returns. The application of this new standard has no impact on the consolidation of investments held by the Group. Under HKFRS 11, investments in joint arrangements are classified either as joint operations or joint ventures, depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. The application of this new standard has no impact on the Group s results of operation or financial position while jointly controlled entities has been superseded by joint ventures following the adoption of HKFRS 11. HKFRS 13 measurement and disclosure requirements are applicable for the year ending 31 March The Group has included the disclosures for financial instruments in note 20 to the condensed consolidated financial statements. Chevalier International Holdings Limited Interim Report 2013/ (a) (b) (c)

14 Notes to the Condensed Consolidated Financial Statements 2 PRINCIPAL ACCOUNTING POLICIES (CONTINUED) The adoption of the other standards, amendments and improvements does not have significant impact on the Group s results of operation and financial position nor any substantial changes in the Group s accounting policies and the presentation of the consolidated financial statements. 2 The following new or revised standards and amendments to existing standards, that are relevant to the Group s operation, have been issued but not yet effective for the financial year of the Group beginning on 1 April 2013 and have not been early adopted: HKAS 32 (amendment), Offsetting financial assets and financial liabilities HKAS 36 (amendment), Recoverable amount disclosures for non-financial assets HKAS 39 (amendment), Novation of derivatives and continuation of hedge accounting HKFRS 9, Financial instruments HKFRS 9 and HKFRS 7 (amendments), Mandatory effective date of HKFRS 9 and transition disclosures HKFRS 10, HKFRS 12 and HKAS 27 (2011) (amendments), Investment entities The Group is in the process of assessing the related impact of these new or revised standards and amendments to existing standards to the Group but is not yet in a position to state whether there will be any substantial changes to the Group s significant accounting policies and presentation of financial information The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements for the year ended 31 March

15 Notes to the Condensed Consolidated Financial Statements 3 SEGMENT INFORMATION Revenue and results For management purposes, the Group is organised on a worldwide basis into five divisions. These divisions are the basis on which the Group reports its segment information. Reportable segment information is presented below: 3 Construction and engineering Insurance and investment Food and beverage Others Total Property HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 For the six months ended 30 September 2013 REVENUE Total revenue 805, , , , ,969 2,102,464 Inter-segment revenue (10,277) (23,728) (6,798) (40,803) Group revenue 805, , , , ,171 2,061,661 Share of revenue of associates and joint ventures Proportionate revenue from a joint venture eliminated 1,118,922 48,362 48,943 1,096,661 2,312,888 (11,700) (11,700) Segment revenue 1,912, , , ,130 1,473,832 4,362,849 RESULTS Segment profit/(loss) 143,118 55, ,177 7,961 (1,322) 336,591 Included in segment profit/(loss) are: Share of results of associates 61, (5,245) (2,839) 53,939 Share of results of joint ventures 411 (3,507) (3,096) Depreciation and amortisation, net of capitalisation (3,100) (779) (29,435) (13,874) (2,754) (49,942) Impairment loss on amount due from an associate (977) (977) Unrealised gain on investments at fair value through profit or loss 17,241 17,241 Write down of inventories to net realisable value, net (39) (1,091) (1,130) Impairment loss (recognised)/written back on trade debtors (1,228) (27) (1,693) 161 (2,787) Unrealised gain/(loss) on derivative financial instruments 7,338 5,685 (182) 12, Chevalier International Holdings Limited Interim Report 2013/14

16 Notes to the Condensed Consolidated Financial Statements 3 SEGMENT INFORMATION (CONTINUED) Revenue and results (continued) 3 Construction and engineering Insurance and investment Food and beverage Others Total Property HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 For the six months ended 30 September 2012 REVENUE Total revenue 1,112, , , , ,431 2,276,470 Inter-segment revenue (10,827) (22,810) (2,988) (36,625) Group revenue 1,112,575 99, , , ,443 2,239,845 Share of revenue of associates and joint ventures Proportionate revenue from a joint venture eliminated 1,034,919 26,899 76, ,785 1,501,976 (26,509) (26,509) Segment revenue 2,120,985 99, , , ,228 3,715,312 RESULTS Segment profit/(loss) 141,389 24, ,228 (11,547) (6,724) 386,673 Included in segment profit/(loss) are: Share of results of associates 54,501 16,326 (14,612) (11,282) 44,933 Share of results of joint ventures 306 (15,951) (15,645) Depreciation and amortisation, net of capitalisation (2,581) (799) (22,562) (14,527) (908) (41,377) Increase in fair value of investment properties 94,000 94,000 Impairment loss on amount due from an associate (2,325) (2,325) Unrealised gain on investments at fair value through profit or loss 3,043 3,043 Write back/(down) of inventories to net realisable value, net 7 (1,335) (1,328) Unrealised gain on derivative financial instruments 5,268 14,683 19,951 Note: Inter-segment revenue is charged at prices determined by management with reference to market prices. 15

17 Notes to the Condensed Consolidated Financial Statements 3 SEGMENT INFORMATION (CONTINUED) Revenue and results (continued) Reconciliation of segment profit to profit before taxation is provided as follows: 3 Six months ended 30 September HK$ 000 HK$ 000 Segment profit 336, ,673 Unallocated corporate expenses (13,392) (16,168) Finance income 7,794 6,546 Finance costs (58,965) (23,490) Profit before taxation 272, ,561 Assets and liabilities Construction and engineering Insurance and investment Property Food and beverage Others Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 As at 30 September 2013 ASSETS SEGMENT ASSETS 1,268,529 1,103,256 8,841, ,437 1,216,004 12,714,258 Included in segment assets are: Interests in associates 416,619 31,140 1, , ,581 Interests in joint ventures 11,351 1,268,440 1,279,791 Amounts due from associates 10, , ,819 Amounts due from joint ventures , ,251 Additions to non-current assets (note) 3, ,347 14,770 1, , Chevalier International Holdings Limited Interim Report 2013/14

18 Notes to the Condensed Consolidated Financial Statements 3 SEGMENT INFORMATION (CONTINUED) Assets and liabilities (continued) 3 Construction and engineering Insurance and investment Property Food and beverage Others Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 LIABILITIES SEGMENT LIABILITIES 1,046, , , ,530 82,309 2,111,010 Included in segment liabilities are: Amount due to an associate 27,138 27,138 As at 31 March 2013 ASSETS SEGMENT ASSETS 1,127,915 1,069,473 8,879, , ,354 12,339,467 Included in segment assets are: Interests in associates 382, ,525 6, , ,514 Interests in joint ventures 10,941 1,212,188 1,223,129 Amounts due from associates 12, ,748 2,779 33,830 Amounts due from joint ventures , ,065 Additions to non-current assets (note) 10, ,050,244 49,613 41,727 1,152,315 LIABILITIES SEGMENT LIABILITIES 1,070, , ,745 99,945 77,228 1,988,802 Note: In this analysis, the non-current assets exclude financial instruments (including interests in associates and joint ventures) and deferred tax assets. Geographical information The Group s operations in construction and engineering are mainly located in Hong Kong, Australia and Macau. Insurance and investment business is conducted in Hong Kong. Property operations are mainly carried out in Hong Kong, Mainland China, the United States of America ( US ), Canada and Singapore. Food and beverage business is carried out in Hong Kong, Australia and Macau. Other businesses are carried out in Hong Kong, US, Canada and Thailand. 17

19 Notes to the Condensed Consolidated Financial Statements 3 SEGMENT INFORMATION (CONTINUED) Geographical information (continued) The associates and joint ventures operations in construction and engineering are mainly located in Hong Kong, Mainland China, Macau and Singapore. Property operations are mainly carried out in Hong Kong and Mainland China. Food and beverage business is carried out in Hong Kong. Other businesses are carried out in Mainland China and Australia. 3 Segment revenue by geographical market Company and subsidiaries Associates and joint ventures Six months ended 30 September 2013 Total Company and subsidiaries Associates and joint ventures Six months ended 30 September 2012 Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 % % Hong Kong 1,124, ,128* 1,369, ,553, ,494* 1,802, Mainland China 30,075 1,254,802 1,284, ,842 1,110,220 1,134, Australia 101, , , ,085 85,085 2 US 298, , , ,407 4 Macau 233,841 3, , ,522 5, ,042 5 Canada 215, , , ,457 5 Singapore 6, , , , , ,117 3 Thailand 45,232 45, ,099 31,099 1 Others 5, ,825 7, , ,061,661 2,301,188 4,362, ,239,845 1,475,467 3,715, * The proportionate revenue from a joint venture is eliminated. * The Group maintains healthy and balanced portfolio of customer basis. No customer accounted for 10% or more of the total revenue of the Group for the six months ended 30 September 2013 and % 18 Chevalier International Holdings Limited Interim Report 2013/14

20 Notes to the Condensed Consolidated Financial Statements 4 OTHER INCOME, NET 4 Six months ended 30 September HK$ 000 HK$ 000 Included in other income, net are: Gain on investments at fair value through profit or loss held-for-trading 20,509 1,395 designated upon initial recognition Gain on derivative financial instruments 13,509 10,014 Commission income 5,161 1,783 Management fee income from associates and joint ventures 13,636 13,831 Sales and marketing services income from an associate 11,426 11,067 5 OTHER GAINS, NET 5 Six months ended 30 September HK$ 000 HK$ 000 Included in other gains, net are: Loss on disposal of a subsidiary (1,223) Increase in fair value of investment properties 94,000 Gain on disposal of property, plant and equipment 9, Loss on disposal of investment properties (300) Gain on disposal of available-for-sale investments 289 Impairment loss on amount due from an associate (977) (2,325) Impairment loss on trade debtors (2,787) Exchange loss (2,462) (435) 19

21 Notes to the Condensed Consolidated Financial Statements 6 FINANCE COSTS, NET 6 Six months ended 30 September HK$ 000 HK$ 000 Interest expenses on bank overdrafts and bank and other borrowings wholly repayable within five years Interest expenses on bank and other borrowings not wholly repayable within five years Less: Amounts capitalised to properties under development (note) 70,054 34, (11,583) (10,614) 58,965 23,490 Less: Interest income from bank deposits (7,794) (6,546) 51,171 16,944 Note: The capitalisation rate applied to funds borrowed and used for the development of properties was between 5.9% and 7.0% per annum during the six months ended 30 September 2013 (2012: 6.3% and 7.8%). 5.9% 7.0% 6.3% 7.8% 20 Chevalier International Holdings Limited Interim Report 2013/14

22 Notes to the Condensed Consolidated Financial Statements 7 PROFIT BEFORE TAXATION 7 Six months ended 30 September HK$ 000 HK$ 000 Profit before taxation has been arrived at after charging the following: Cost of inventories recognised as expenses 378, ,056 Write down of inventories to net realisable value, net 1,130 1,328 Staff costs 476, ,960 Less: Amount capitalised to contract work (54,987) (55,154) 421, ,806 Operating lease payments in respect of leasing of premises 43,924 45,967 premises under contingent rent 1, equipment ,778 47,224 Depreciation of property, plant and equipment 47,781 39,268 Less: Amount capitalised to contract work (830) (931) 46,951 38,337 Amortisation of prepaid lease payments 22 Amortisation of other intangible assets 2,991 3,018 Acquisition-related expenses 7,291 3,684 21

23 Notes to the Condensed Consolidated Financial Statements 8 INCOME TAX EXPENSES 8 Six months ended 30 September HK$ 000 HK$ 000 Current tax Hong Kong 29,722 31,933 Overseas 16,105 8,740 Over-provision in prior years (602) Deferred tax Origination and reversal of temporary differences 45,225 40,673 (443) ,782 41,612 Hong Kong profits tax is calculated at the rate of 16.5% (2012: 16.5%) on the estimated assessable profits. Taxation on overseas profit has been calculated on the estimated assessable profits for the period at the rates of taxation prevailing in the countries in which the Group operates. 9 EARNINGS PER SHARE (a) Basic Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company of HK$209,368,000 (2012: HK$296,380,000) by the weighted average number of 281,386,811 (2012: 277,564,090) ordinary shares in issue during the period. 16.5% 16.5% 9 (a) 209,368, ,380, ,386, ,564,090 (b) Diluted Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all dilutive potential ordinary shares. For the six months ended 30 September 2013, an associate of the Group had potential ordinary shares which were issuable upon exercise of share options granted. There was no potential dilutive effect from such share options during the period. For the six months ended 30 September 2012, the Group did not have any dilutive equity instruments. (b) 22 Chevalier International Holdings Limited Interim Report 2013/14

24 Notes to the Condensed Consolidated Financial Statements 10 DIVIDEND 10 Six months ended 30 September HK$ 000 HK$ 000 Interim dividend of HK$0.20 (2012: HK$0.20) per share ,038 55,513 On 28 November 2013, the Board of Directors declared an interim dividend of HK$0.20 per share, with an option to receive shares of the Company. The interim dividend is not reflected as a dividend payable in these condensed consolidated financial statements, but will be reflected as an appropriation of the retained profits for the year ending 31 March The 2012/13 final dividend of HK$0.65 per share, totalling HK$182,901,000, were approved at the annual general meeting held on 6 September 2013 and paid on 12 November They have been reflected as an appropriation of the retained profits for the six months ended 30 September INVESTMENT PROPERTIES AND PROPERTY, PLANT AND EQUIPMENT The Directors had considered the carrying amounts of the Group s investment properties carried at fair value as at 30 September 2013 and no estimated change in fair value of investment properties (for the six months ended 30 September 2012: HK$94,000,000) from their fair value as at 31 March The valuation was arrived at with reference to market evidence of transaction prices of similar properties. For the six months ended 30 September 2013, the Group did not acquire nor dispose any investment property. An increase in exchange realignment of HK$4,936,000 (2012: HK$3,374,000) for its entire portfolio of investment properties was recorded. For the six months ended 30 September 2012, the Group acquired investment properties of HK$10,304,000 and disposed of investment properties with a carrying value of HK$8,389,000. For the six months ended 30 September 2013, the Group acquired property, plant and equipment at a cost of HK$90,077,000 (2012: HK$329,550,000), including HK$65,875,000 (2012: HK$248,753,000) being acquired in relation to the acquisition of senior housing business (note 15(c)) and disposed of property, plant and equipment with a carrying value of HK$5,398,000 (2012: HK$859,000) ,901, ,000,000 4,936,000 3,374,000 10,304,000 8,389,000 90,077, ,550,000 65,875, ,753,000 15(c) 5,398, ,000 23

25 Notes to the Condensed Consolidated Financial Statements 12 DEBTORS, DEPOSITS AND PREPAYMENTS 12 As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Trade debtors 531, ,237 Less: Provision for impairment (24,356) (18,450) Trade debtors, net 507, ,787 Retention receivables 193, ,763 Less: Provision for impairment (33,591) (33,595) Retention receivables, net 159, ,168 Other debtors, deposits and prepayments 419, ,146 1,086, ,101 The Group has established different credit policies for customers in each of its core businesses. The average credit period granted to trade debtors was 60 days, except for insurance business where credit term granted to certain debtors are over 60 days. The ageing analysis of trade debtors was as follows: As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ days , , days ,314 41,437 Over 90 days , , , , Chevalier International Holdings Limited Interim Report 2013/14

26 Notes to the Condensed Consolidated Financial Statements 13 CREDITORS, BILLS PAYABLE, DEPOSITS AND ACCRUALS 13 As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Trade creditors and bills payable 165, ,121 Accrued contract costs 148, ,423 Other creditors, deposits and accruals 548, ,585 Retention payables 123, , , ,430 The ageing analysis of trade creditors and bills payable was as follows: As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ days , , days ,745 3,381 Over 90 days 90 19,415 30, , , SHARE CAPITAL 14 As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Issued and fully paid: 281,386,811 ordinary shares of HK$1.25 each 281,386, , ,734 25

27 Notes to the Condensed Consolidated Financial Statements 15 ACQUISITION AND DISPOSAL OF BUSINESSES (a) Share subscriptions of CAAM Limited ( CAAM ) Pursuant to the shareholders agreement dated 17 October 2012, the Group had subscribed 5,000,000 ordinary shares (representing approximately 38.46% of all the issued ordinary shares) and 29,471,104 preference shares (representing 100% of all the issued preference shares) of CAAM at aggregated cash considerations of AUD5,000,000 and AUD29,471,000 respectively (equivalent to approximately HK$40,450,000 and HK$238,421,000 respectively). The preference shares are convertible into ordinary shares of CAAM on a 1:1 basis. The subscriptions of ordinary shares and 28,143,000 preference shares were completed on 8 April 2013 and the subscription of 1,328,104 preference shares was completed on 10 April (a) CAAM LimitedCAAM CAAM 5,000, %29,471,104 5,000,000 29,471,000 40,450, ,421, CAAM 28,143,000 1,328,104 CAAM also completed its acquisition of 70% equity interest in Moraitis Group Pty Limited (together with its subsidiaries, being a fruit and vegetable supplier aggregator in Australia) from independent third parties on 8 April CAAM Moraitis Group Pty Limited 70% The ordinary shares in CAAM are accounted for as interests in associates and the convertible preference shares in CAAM are accounted for as available-for-sale investments which are neither classified as held-for-trading nor designated at fair value through profit or loss. CAAM CAAM (b) Acquisitions of senior housing business (b) Pursuant to the agreements dated 4 June 2013 and 1 July 2013, the Group acquired two business operating senior housing communities separately in North Carolina, US from independent third parties at aggregated cash considerations of US$4,500,000 and US$4,150,000 respectively (equivalent 4,500,000 to approximately HK$34,875,000 and HK$32,163,000 4,150,000 respectively). The acquisitions were completed on 12 June 34,875,000 32,163, and 1 July 2013 respectively. 26 Chevalier International Holdings Limited Interim Report 2013/14

28 Notes to the Condensed Consolidated Financial Statements 15 ACQUISITION AND DISPOSAL OF BUSINESSES (CONTINUED) (c) Disposal of 20% equity interest in Pacific Coffee (Holdings) Limited Pursuant to the shareholders agreement dated 7 July 2010, the Group had a put option in relation to the disposal of its 20% equity interest in Pacific Coffee (Holdings) Limited and its subsidiaries at an exercise price of HK$81,660,000. The Group had exercised its put option and the transaction was completed on 11 June CONTINGENT LIABILITIES The Group had contingent liabilities in respect of guarantees issued for utilised borrowings in relation to: 15 (c) Pacific Coffee (Holdings) Limited 20% Pacific Coffee (Holdings) Limited 20% 81,660, As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Financing facilities granted to associates 161, ,255 Financing facilities granted to a joint venture 123, ,975 Financing facilities granted to a joint venture partner 168, , , ,530 The Group s share of contingent liabilities of its joint ventures was as follows: As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Guarantees given to banks for mortgage facilities granted to certain buyers of the joint ventures properties 29,795 24,466 27

29 Notes to the Condensed Consolidated Financial Statements 17 COMMITMENT The Group had commitment as follows: 17 As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Contracted but not provided for in the condensed consolidated financial statements in respect of acquisition of plant and equipment 1,452 1,716 a property development project 394, ,906 Authorised but not contracted for in respect of a property development project 396, ,622 1,926,936 1,782,282 2,323,229 2,256,904 The Group s share of commitment of its joint ventures was as follows: As at 30 September 2013 HK$ 000 As at 31 March 2013 HK$ 000 Contracted but not provided for 215, ,581 Authorised but not contracted for 473, , , , Chevalier International Holdings Limited Interim Report 2013/14

30 Notes to the Condensed Consolidated Financial Statements 18 RELATED PARTY TRANSACTIONS (a) Details of the material transactions entered into during the period with related parties are as follows: 18 (a) Six months ended 30 September HK$ 000 HK$ 000 Contract income from a joint venture 26,963 54,541 Contract services fee to an associate (748) (11,264) Insurance premium from associates 5,670 5,602 Management fee income from associates 12,352 12,811 Management fee income from joint ventures 1,284 1,020 Management fee to an associate (185) (185) Maintenance fee to an associate (2,853) (2,528) Building management fee income from an associate Rental income from associates 10,331 9,461 Rental expenses to an associate (69) (76) Sales and marketing services income from an associate 11,426 11,067 Secondment fee income from an associate Sales of food and beverage to associates 2, Purchases of food and beverage from an associate (51) (b) As at 30 September 2013, amounts due from/to associates are unsecured and bear interest at rates mutually agreed between relevant parties, except for the balance of HK$369,599,000 (31 March 2013: HK$373,442,000) which is interest-free. (b) 369,599, ,442,000 Amounts due from associates under non-current assets are considered equity in nature while amounts due from/to associates under current assets/liabilities are repayable on demand. 29

31 Notes to the Condensed Consolidated Financial Statements 18 RELATED PARTY TRANSACTIONS (CONTINUED) (c) As at 30 September 2013, amounts due from joint ventures are unsecured and bear interest at rates mutually agreed between relevant parties, except for the balance of HK$68,000 (31 March 2013: HK$78,000) which is interestfree. 18 (c) 68,000 78,000 Amounts due from joint ventures under non-current assets of HK$404,000,000 (31 March 2013: HK$404,000,000) are considered equity in nature and HK$540,990,000 (31 March 2013: HK$489,046,000) are not repayable within one year while amounts due from joint ventures under current assets are repayable on demand. 19 FINANCIAL RISK MANAGEMENT (a) Financial risk factors The Group s activities expose it to a variety of financial risks: market risk (including interest rate risk, foreign currency risk and price risk), credit risk and liquidity risk. 404,000, ,000, ,990, ,046, (a) The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group s annual financial statements as at 31 March There have been no changes in the financial risk management policies since the last financial year end date as at 31 March (b) Fair value measurement (b) For the six months ended 30 September 2013, the fair value change of financial assets as disclosed in note 20 to the 20 condensed consolidated financial statements had taken into consideration of current economic circumstances. 30 Chevalier International Holdings Limited Interim Report 2013/14

32 Notes to the Condensed Consolidated Financial Statements 20 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS The Group uses the following fair value measurement hierarchies for disclosing the fair values of financial instruments: 20 Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from price) (level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). The following table presents the Group s assets and liability that were measured at fair value as at 30 September Level 1 Level 2 Level 3 Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 Assets Financial assets at fair value through profit or loss debt securities 98,143 57, ,717 equity securities 167, ,314 exchange-traded funds foreign exchange linked notes 19,787 19,787 mutual and hedge funds 40, ,422 Derivative financial instruments 5,332 6,307 11,639 Available-for-sale financial assets convertible preference shares 217, ,684 equity securities 3,875 3,875 private funds 171, ,441 Total assets 266, , , ,511 Liability Derivative financial instruments (3,562) (25,000) (28,562) 31

33 Notes to the Condensed Consolidated Financial Statements 20 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (CONTINUED) The following table presents the Group s assets and liability that were measured at fair value as at 31 March Level 1 Level 2 Level 3 Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 Assets Financial assets at fair value through profit or loss debt securities 97,407 76, ,131 equity securities 170, ,342 exchange-traded funds foreign exchange linked notes 18,380 18,380 mutual and hedge funds 41, ,235 Derivative financial instruments 82 82,282 82,364 Available-for-sale financial assets equity securities 3,880 3,880 private funds 189, ,012 Total assets 268, , , ,950 Liability Derivative financial instruments (5,921) (25,000) (30,921) The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. The quoted market prices used for financial assets held by the Group is the closing bid price. These instruments are included in level Chevalier International Holdings Limited Interim Report 2013/14

34 Notes to the Condensed Consolidated Financial Statements 20 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (CONTINUED) The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. Specific valuation techniques used to value financial instruments include: Quoted market prices or dealer quotes for similar instruments The fair value of interest rate swap contracts is calculated as the present value of the estimated cash flows based on observable yield curves The fair value of forward foreign exchange contracts is determined using forward exchange rates at the end of the reporting period with the resulting value discounted back to present value For unlisted securities or financial assets without an active market, the Group establishes the fair value by using valuation techniques including the use of recent arm s length transactions, reference to other instruments that are substantially the same, reference to net asset value of investee and discounted cash flow analysis, making maximum use of market inputs and relying as little as possible on entity-specific inputs. If none of the valuation techniques results in a reasonable estimate on the fair value, the investment is stated in the statement of financial position at cost less impairment losses Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments 33

35 Notes to the Condensed Consolidated Financial Statements 20 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (CONTINUED) There were no transfers of financial instruments between the levels in the hierarchy for the six months ended 30 September The following table presents the changes in level 3 instruments for the six months ended 30 September 2013: Foreign exchange linked notes Mutual and hedge funds Performance guarantee Put options Convertible preference shares Equity securities Private funds Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 As at 1 April , ,307 50,975 3, , ,080 Purchases/capital contributions 238,421 1, ,802 Receipt for capital returns (8,524) (8,524) Fair value losses recognised in other comprehensive income, net (5,898) (5) (10,428) (16,331) Fair value gains/(losses) recognised in profit or loss, net 1, ,685 (14,839) (7,400) Disposals (221) (81,660) (81,881) As at 30 September , ,307 (25,000) 217,684 3, , , Chevalier International Holdings Limited Interim Report 2013/14

36 Management Discussion and Analysis During the six months ended 30 September 2013, the Group reported a revenue and profit attributable to the Company s equity holders of HK$2,062 million and HK$209 million respectively. Compared with the same period last year, excluding the gain in fair value of the Group s investment properties of HK$94 million reported last period, the Group recorded a moderate growth in profit for the period to HK$227 million, despite a decrease in revenue of 8.0%. Including the Group s share of revenue of associates and joint ventures, total segment revenue of the Group increased to HK$4,363 million (2012: HK$3,715 million). The Group s earnings per share was HK$0.74 (2012: HK$1.07) for the period. CONSTRUCTION AND ENGINEERING Net profit in the construction and engineering segment reported a healthy increase to HK$143 million from HK$141 million in the same period last year on a 9.8% reduction in revenue to HK$1,913 million from HK$2,121 million in the same period last year. The drop in the revenue was mainly due to completion of several major construction works in the last financial year and deferral of the projects covering environmental engineering, building construction projects and the pipe technology related projects. Nevertheless, the negative impact was partially offset by the increase in the project revenue secured by the aluminium windows and curtain wall work, electrical and mechanical ( E&M ) engineering work in Macau and the share of revenue from associates in lifts and escalators during the period under review. The increase in the segment profit mainly attributable from the completion of aluminium windows and curtain wall, E&M projects and the increased contribution from the lifts and escalators associated companies during the period under review % 9, % Total outstanding construction and engineering contracts as at the period end date of the Group s subsidiaries were valued at HK$1,905 million. Major contracts in hand include: Construction of alteration and addition works at Sha Tin Racecourse; Construction of the superstructure works for the Proposed Composite Building at No Camp Street, Sham Shui Po; Construction of composite development at junction of Plover Cove Road and Po Wu Lane, Taipo; E&M works for expansion of Tai Po Water Treatment Works Stream II and piping works at CLP Black Point Gas Supply project; 4. 35

37 Management Discussion and Analysis 5. E&M works for Galaxy Phase 2, Macau; Supply and installation of Mechanical Ventilation and Air- Conditioning for Kellett School New Campus at Kowloon Bay; Supply of prestige Manhattan kitchen cabinets for luxurious residential in Hing Hon Road, Mid-level West and Lee Tung Street, Wanchai; Design, supply and installation of curtain walls for proposed residential development in Sha Tsui Road, Tsuen Wan and Wing Hong Street, Cheung Sha Wan; Salt water supply for Northwest New Territories Construction of Lok On Pai Salt Water Pumping Station and Associated Works. 9. With continuing shortage of labour and professional staff in the construction and engineering industry, and with increasing statutory safety requirements, upward cost pressure persists in the industry and the Group remains cautious in its tender prices to ensure there is sufficient margin in the contracts. INSURANCE AND INVESTMENT During the period under review, the insurance and investment segment recorded a growth in revenue of 28.8% to HK$128 million as compared with the same period last year. The growth was mainly attributable by the increase in new employees compensation insurance policies issued in the insurance portfolio. Segment results recorded a remarkable rise in profit to HK$55.7 million from HK$24.3 million in the same period last year substantially due to the increase in gains on investment securities from an improved investment market since the last financial year end. 28.8%1.28 2,430 5,570 Although there are large scale infrastructure and construction projects launched by the HKSAR government, keen competition still exists in the employees compensation insurance business in Hong Kong. The insurance division will continue to adopt prudent underwriting approach in running the insurance business. Under the back drop of the prolonged US government shutdown and major euro-zone economies seemingly climbing out of recession, the Group will continue to rebalance the portfolio on the back of the improvement in global growth and stronger corporate cash flows. 36 Chevalier International Holdings Limited Interim Report 2013/14