CONTENTS Corporate Information 2 Managing Director s Statement 4 Management Discussion and Analysis 10 Operational Review 10 Financial Review 14 Proje

Transcription

1 Annual Report 2013

2 CONTENTS Corporate Information 2 Managing Director s Statement 4 Management Discussion and Analysis 10 Operational Review 10 Financial Review 14 Project Review 16 Major Property Development 16 Major Property Investments 22 Other Investments 23 Particulars of Property Development 24 Particulars of Properties under Construction 28 Particulars of Property and Hotel Investments 29 Corporate Governance Report 32 Directors Report 53 Independent Auditor s Report 75 Consolidated Statement of Profit or Loss 77 Consolidated Statement of Profit or Loss and Other Comprehensive Income 78 Consolidated Statement of Financial Position 79 Company s Statement of Financial Position 81 Consolidated Statement of Changes in Equity 82 Consolidated Statement of Cash Flows 84 Notes to the Consolidated Financial Statements 87 Financial Summary 220

3 CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Song Zengbin, Deputy Chairman Patrick Lee Seng Wei, Managing Director Ma Sun, Deputy Managing Director Edwin Lo King Yau Tao Tsan Sang Non-Executive Directors Lee Seng Hui, Chairman Moses Cheng Mo Chi Lee Shu Yin Independent Non-Executive Directors Francis J. Chang Chu Fai Jin Hui Zhi Ngai Wah Sang Lisa Yang Lai Sum EXECUTIVE COMMITTEE Patrick Lee Seng Wei, Chairman Ma Sun Edwin Lo King Yau Tao Tsan Sang AUDIT COMMITTEE Ngai Wah Sang, Chairman Francis J. Chang Chu Fai Moses Cheng Mo Chi Jin Hui Zhi Lisa Yang Lai Sum REMUNERATION COMMITTEE Francis J. Chang Chu Fai, Chairman Jin Hui Zhi Ngai Wah Sang Lisa Yang Lai Sum NOMINATION COMMITTEE Lisa Yang Lai Sum, Chairman Francis J. Chang Chu Fai Jin Hui Zhi Ngai Wah Sang Edwin Lo King Yau 2 Tian An China Investments Company Limited

4 CORPORATE INFORMATION index.htm BANKERS Hong Kong Bank of China (Hong Kong) Limited The Bank of East Asia, Limited China CITIC Bank International Limited The Hongkong and Shanghai Banking Corporation Limited Standard Chartered Bank (Hong Kong) Limited Wing Hang Bank, Limited Mainland China Bank of China Limited Bank of Communications Company Limited The Bank of East Asia (China) Limited China Construction Bank Corporation China Merchants Bank Company Limited Industrial and Commercial Bank of China Limited Ping An Bank Co., Ltd. Wing Hang Bank (China) Limited REGISTERED OFFICE 22nd Floor, Allied Kajima Building 138 Gloucester Road, Wanchai, Hong Kong Tel. : Fax : info@tiananchina.com SHARE REGISTRAR Tricor Secretaries Limited Level 22, Hopewell Centre 183 Queen s Road East Hong Kong COMPANY SECRETARY Cindy Yung Yee Mei AUDITOR Deloitte Touche Tohmatsu SOLICITOR P. C. Woo & Co. STOCK CODE 28 WEBSITES index.htm Annual Report

5 MANAGING DIRECTOR S STATEMENT 1, , % % (1) (2) I am pleased to present to you the annual results for FINANCIAL RESULTS The revenue of the Group for the year ended 31st December, 2013 was HK$1,733.3 million (2012: HK$1,410.1 million), an increase of 23% compared to the year before. The profit attributable to owners of the Company was HK$337.6 million (2012: HK$401.4 million), representing a 16% decrease from The decrease in profit for the year was the result of: (1) a decrease in revaluation gains in respect of the Group s investment properties portfolio; and (2) an increase in tax charge. However, on a positive note, gross profit from operations as well as share of profit of joint ventures have both increased. Earnings per share amounted to HK22.40 cents (2012: HK26.64 cents), while the net asset value per share attributable to owners of the Company was HK$9.33 at the end of 2013 (2012: HK$8.93). DIVIDEND The board of directors of the Company has recommended a final dividend of HK6.5 cents per share for the year ended 31st December, 2013 (2012: HK4 cents per share) payable to the shareholders of the Company ( Shareholders ) whose names appear on the register of members of the Company on Friday, 6th June, Tian An China Investments Company Limited

6 MANAGING DIRECTOR S STATEMENT (1) (2) CLOSURE OF REGISTER OF MEMBERS (1) For determining the entitlement to attend and vote at the forthcoming annual general meeting of the Company ( 2014 AGM ) The 2014 AGM is scheduled to be held on Thursday, 22nd May, For determining the entitlement to attend and vote at the 2014 AGM, the register of members of the Company will be closed on Wednesday, 21st May, 2014 and Thursday, 22nd May, 2014, during which period no transfer of shares of the Company will be registered. In order for a Shareholder to be eligible to attend and vote at 2014 AGM, all transfer forms accompanied by the relevant share certificates must be lodged with the Company s share registrar, Tricor Secretaries Limited of Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 20th May, (2) For determining the entitlement to the proposed final dividend The proposed final dividend is subject to the approval by the Shareholders at the 2014 AGM. For determining the entitlement to the proposed final dividend for the year ended 31st December, 2013, the register of members of the Company will be closed on Thursday, 5th June, 2014 and Friday, 6th June, 2014, during which period no transfer of shares of the Company will be registered. In order for a Shareholder to qualify for the proposed final dividend, all transfer forms accompanied by the relevant share certificates must be lodged with the Company s share registrar, Tricor Secretaries Limited of Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong for registration not later than 4:30 p.m. on Wednesday, 4th June, Subject to approval by the Shareholders at the 2014 AGM, dividend warrants are expected to be despatched to the Shareholders by post on or around Friday, 27th June, Annual Report

7 MANAGING DIRECTOR S STATEMENT (1) (2) 189, ,300 7% 296, ,300 14% 1,332, ,80093% (3) 3% (4) BUSINESS REVIEW The Group is engaged principally in the development of highend apartments, villas, office buildings and commercial properties, property investment and property management in China. During the year and up to 4th February, 2014, it was also engaged in the manufacture, sales and trading of cement and clinker in China (please see below for details). An outline of our achievements in 2013 is described below: (1) We have introduced a strategic investor into our Fuzhou Dengyun Resort and Shanghai Tian An Villa projects. We expect the investor to further improve the potential profitability of these two projects. (2) Total attributable recognised sales (including joint ventures) of the Group amounted to 189,600 m 2 in 2013 (2012: 177,300 m 2 ), an increase of 7%. A total attributable gross floor area ( GFA ) of approximately 296,000 m 2 (2012: 343,300 m 2 ) was completed, a drop of 14%. By the end of 2013, a total attributable GFA of approximately 1,332,700 m 2 (2012: 688,800 m 2 ) was under construction, representing a 93% increase from last year, including Shenzhen Tian An Cloud Park (Phase 1), Shanghai Tian An Villa (Phase 2 Part 1), Shanghai Tian An Place (Phase 1 Part 2), Wuxi Manhattan (Phase 1 Part 2 and Phase 2), Nantong Tian An Garden (Phase 5 Part 2), Changzhou Tian An Villa (Phase 2 Part 2), Huizhou Danshui Tian An Sun Life City (Phase 1 Part 1), Fuzhou Dengyun Resort (Phase 1), Changchun Tian An City One (Phase 4 Part 1), Guangzhou Tian An Panyu Hi-Tech Ecological Park (Phases 7 and 8), Foshan Tian An Nanhai Cyber Park (Phase 6), Foshan Tian An Centre (Phase 1), Nanjing Tian An Cyber Park (Phase 2), Nantong Tian An Cyber Park (Phase 1 Parts 1 and 2), Changzhou Tian An Cyber Park (Phase 3), Jiangyin Tian An Cyber Park (Phase 1), Chongqing Tian An Cyber Park (Phase 2), Qingdao Tian An Cyber Park (Phase 1 Part 1), Tianjin Tian An Cyber Park (Phases 2 and 3) and Tianjin Tian An Intelligent Port (Phase 1). (3) Rental income continued to increase and was up by 3% as compared with Shenzhen Tian An Park Place, being Tower 3 of Tian An Golf Garden (Phase 3), will be retained as investment property and is expected to enter the apartment rental market in the first quarter of 2014 after internal renovations are completed. (4) Cyberpark: Our southern cyberparks have been progressing well. The projects in Shenzhen, Panyu, Longgang, Foshan and Dongguan all performed in line with our expectations. 6 Tian An China Investments Company Limited

8 MANAGING DIRECTOR S STATEMENT (5) 531,600 (6) % (1) (2) As far as our eastern and northern cyberparks are concerned, Tianjin Tian An Cyber Park (Phase 1), Wuxi Tian An Intelligent Park (Phase 1 Part 1), Nanjing Tian An Cyber Park (Phase 1) and Nantong Tian An Cyber Park (Phase 1 Part 1) have completed their construction works and we have commenced sales and letting for these projects. Nanjing Tian An Cyber Park (Phase 2), Nantong Tian An Cyber Park (Phase 1 Part 2), Changzhou Tian An Cyber Park (Phase 3), Jiangyin Tian An Cyber Park (Phase 1), Chongqing Tian An Cyber Park (Phase 2), Qingdao Tian An Cyber Park (Phase 1 Part 1), Tianjin Tian An Cyber Park (Phases 2 and 3) and Tianjin Tian An Intelligent Port (Phase 1) have commenced construction and we expect them to be completed in 2014 or (5) Tian An s urban renewal project in Huawei New City Area in the Longgang District of Shenzhen has been renamed Tian An Cloud Park. This is a large scale cyber park of approximately 4 times our standard size. Construction works of all seven towers of phase 1 of the project with GFA of approximately 531,600 m 2 (including basement) have reached the superstructure stage. We have been clearing the land for future phases. Although this means an increased outlay of capital, it is expected to reduce complications when we start developing these phases. (6) Allied Cement Holdings Limited ( Allied Cement ), which was a listed subsidiary of the Group during the whole of 2013 and engaged principally in the production and trading of cement and related products in Shandong province and Shanghai, reported a profit attributable to its shareholders of HK$32.6 million in 2013, an increase from HK$26.8 million in Tian An s sale of approximately 56.06% of the issued share capital of Allied Cement was completed on 4th February, 2014 at the consideration of HK$532.8 million, with a remaining interest of approximately 18.94%. The gain on the sale amounted to approximately HK$84 million and will be accounted for in We consider that the consideration for the share capital is substantially above its carrying value and represented an attractive opportunity to realise a capital gain on our investment in the cement division. The proceeds are intended to be used as working capital, in particular, for investment in assets that may offer better return. PLANS FOR 2014 Objectives for 2014 are as follows: (1) We will continue to adjust the quality of our landbank through acquisitions and disposals and sale of our end products to balance the demands of short term returns and long term capital appreciation. (2) We will adjust our products and pricing where necessary to assist the sale of our products in the current difficult environment. Annual Report

9 MANAGING DIRECTOR S STATEMENT (3) (4) (1) (2) (3) We hope to responsibly gear up our projects rather than overutilising equity in order to increase our return on equity. (4) We will review our management and cost structure so as to improve efficiency and reduce expenses where possible. LONG TERM CORPORATE STRATEGIES (1) The Group will retain certain development properties for investment where we believe these properties will provide increasing rental streams and corresponding increases in capital value. (2) We will concentrate our effort on developing our cyberpark projects and urban renewal projects where we believe our products are competitive. We may increase our cyberpark landbank if the initial capital outlay is reasonable. BUSINESS OUTLOOK The central government is still concerned with the perceived high property prices. Accordingly, it has restricted the number of homes that can be purchased as well as foreign investment in the property sector and imposed individual income tax on properties sold by individuals. It has also increased the extent of its low cost housing programme in all major cities. Moreover, the monetary policy was still tight in With government controls still in place, the sentiment in the short term is somewhat negative. However, we remain confident of the longer term prospects of the property market in China. APPRECIATION I would like to take this opportunity to thank my fellow Directors and the staff for their diligence and contributions to the Group in the past year, to the Shareholders for their understanding and support, and to the customers for their trust. Patrick Lee Seng Wei Managing Director Hong Kong, 21st March, Tian An China Investments Company Limited

10 MANAGING DIRECTOR S STATEMENT GFA Sold 2013 GFA Sold by Region in 2013 Year % Eastern China 18% Northern China 58% Southern China m 2 ( 000) Properties Under Construction in terms of GFA 2013 GFA of Properties Under Construction by Region in 2013 Year 13 41% 31% Eastern China Northern China m 2 ( 000) 28% Southern China Properties Completed in terms of GFA 2013 GFA of Properties Completed by Region in 2013 Year % Eastern China 20% Northern China m 2 ( 000) 32% Southern China Residential Commercial Annual Report

11 MANAGEMENT DISCUSSION AND ANALYSIS 1. OPERATIONAL REVIEW 1. INCOME SOURCES Income derived from operations in property development, property investment and joint venture investments in the PRC constituted the most significant source of revenue to the Group. An analysis is as follows: (1) (1) Property development Revenue derived from property development of the Group (including subsidiaries but excluding associates and joint ventures increased from HK$177.8 million to HK$487.2 million compared with Projects offered for sale during the year mainly consisted of Nantong Tian An Garden (Phase 5), Wuxi The Manhattan (Phase 1) and Shenzhen Junan Garden. (2) (2) Property investments % During the year, Shanghai Tian An Centre, Shanghai Racquet Club & Apartments, Nanjing Tian An International Building, Dalian Tian An International Tower and Beijing Park Apartments had satisfactory leasing result and led to rental income of the Group increase from HK$407.6 million to HK$418.2 million, representing an increase of approximately 3%. (3) (3) Associate and Joint venture investments HK$ 000 HK$ 000 Contribution to profit: Share of profit (loss) of associates 14,346 (61) Share of profit of joint ventures 324, , , , Tian An China Investments Company Limited

12 MANAGEMENT DISCUSSION AND ANALYSIS MAJOR SALES, the Group s sales activities were concentrated principally on the following projects: Attributable GFA sold Project Use m 2 Danshui Tian An Sun Life City (Phase 1) Residential 21,300 Shenzhen Tian An Longgang Cyber Park Commercial 23,600 (Phase 3) Dongguan Tian An Cyber Park (Phases 1 to 3) Guangzhou Tian An Panyu Hi-Tech Ecological Park (Phases 4, 5 and 6) Foshan Tian An Nanhai Cyber Park (Phases 3, 4 and 5) Commercial/ Residential Commercial/ Residential 28,500 16,900 Commercial 15,600 Chongqing Tian An Cyber Park (Phase 1) Commercial 10,400 Changzhou Tian An Cyber Park (Phase 1) Commercial/ 7,300 Residential Nantong Tian An Garden Residential 7,500 Wuxi The Manhanttan (Phase 1) Residential 5,400 Changchun Tian An City One (Phase 4) Residential 23,000 Tianjin Tian An Cyber Park (Phase 1) Commercial 10,700 Other projects Commercial/ Residential 19,400 Total 189, LAND PORTFOLIO 9,922,500 7,378, ,400 6,988,800 The Group currently has a landbank of total GFA of approximately 9,922,500 m 2 (total GFA attributable to the Group is approximately 7,378,200 m 2, consisting of approximately 389,400 m 2 of completed investment properties and approximately 6,988,800 m 2 of properties under development and for development), located mainly in Shanghai, Shenzhen, Guangzhou, Huizhou, Dongguan, Foshan, Chongqing, Nantong, Wuxi, Changzhou, Jiangyin, Nanjing, Fuzhou, Changchun, Dalian, Tianjin and Qingdao. Annual Report

13 MANAGEMENT DISCUSSION AND ANALYSIS (1) As at 31st December, 2013, the Group s land portfolio principally consisted of the following: (1) Properties under development and for development GFA attributable Commercial Residential to the Group Region m 2 m 2 m 2 Northern China 1,446, ,200 2,402,400 Eastern China 1,436,700 1,161,500 2,598,200 Southern China 745,900 1,242,300 1,988,200 Total 3,628,800 3,360,000 6,988,800 (2) (2) Completed investment properties GFA attributable Commercial Residential to the Group Region m 2 m 2 m 2 Northern China 65,300 23,000 88,300 Eastern China 175,700 68, ,100 Southern China 57,000 57,000 Total 298,000 91, , Tian An China Investments Company Limited

14 MANAGEMENT DISCUSSION AND ANALYSIS EMPLOYEE AND TRAINING 2,315 2,294 As at 31st December, 2013, the Group including its subsidiaries but excluding associates and joint ventures, employed 2,315 (31st December, 2012: 2,294) persons. The Group maintains a policy of paying competitive remuneration packages and employees are also rewarded on performance related basis including salary and bonus. The profile of the Group s management staff as at 31st December, 2013 is listed below: Qualified University Region Professionals Graduates Age 50 or Below Age Over (87%) 30 (77%) 23 (59%) 16 (41%) Hong Kong 39 (74%) 39 (74%) 42 (79%) 11 (21%) Northern China 80 (69%) 92 (79%) 91 (78%) 25 (22%) Eastern China 27 (73%) 33 (89%) 31 (84%) 6 (16%) Southern China Note: The numbers in bracket show the percentage of management staff in the region Quality staff has always been the Group s indispensable intangible asset. Training programmes were organised during the year to ensure that both the market sensitivity of the front line people and the cost consciousness of the back office staff were well maintained. The emoluments of key management personnel can be seen by reference to notes 11, 12 and 46 to the consolidated financial statements. Annual Report

15 MANAGEMENT DISCUSSION AND ANALYSIS 1. 1, , , , , , , % 19% 70% 70% 2. FINANCIAL REVIEW 1. LIQUIDITY AND FINANCING The Group always maintained its liquidity at a healthy level with a balanced portfolio of financial resources. As at 31st December, 2013, the total bank balances and cash reserves of the Group were approximately HK$1,951.8 million, providing sufficient working capital for the daily operations of the Group. As at 31st December, 2013, the total borrowings of the Group amounted to approximately HK$4,754.3 million (31st December, 2012: HK$4,003.4 million), including current liabilities of HK$2,676.3 million (31st December, 2012: HK$2,061.4 million) and non-current liabilities of HK$2,078.0 million (31st December, 2012: HK$1,942.0 million). The gearing ratio (net debt over total equity) of the Group was 19% (31st December, 2012: 19%). The borrowings were mainly used to finance the properties for development and properties under construction. Decrease in finance costs is mainly due to the increase in amount capitalised on property under development. Approximately 70% of the Group s outstanding borrowings will mature within 2 years. Since most of the investments and operation of the Group are carried out in the PRC, most of the bank borrowings are denominated in Renminbi which will be repaid in the same currency. Around 70% of the Group s borrowings bear interest at fixed rates while the remainders are at floating rates. Due to maintaining flexible and sufficient cashflow for acquiring the potential quality landbank and accelerating construction works for our development projects, the Group intends to obtain proper bank borrowings with reasonable pricing terms. The management continuously monitors its gearing ratio and raises new external borrowings when necessary. 2. RISK OF FOREIGN EXCHANGE FLUCTUATION The Group is required to maintain foreign currency exposure to cater for its recurring operating activities and present and potential investment activities, meaning it will be subject to reasonable exchange rate exposure. However, the Group will closely monitor this risk exposure as required. 14 Tian An China Investments Company Limited

16 MANAGEMENT DISCUSSION AND ANALYSIS , , , PLEDGE ON ASSETS As at 31st December, 2013, bank deposits of HK$12.6 million, bills receivable of HK$11.4 million, interest in a subsidiary of HK$425.2 million, other principal protected deposits of HK$79.2 million, aggregate carrying values of property, plant and equipment, development properties and investment properties of approximately HK$326.2 million, HK$3,539.0 million and HK$7,072.1 million respectively, were pledged for banking facilities and other loans granted to the Group and mortgage loans granted to property purchasers and bills payables. 4. CONTINGENT LIABILITIES A portion of a property for development that is held by a joint venture with carrying value of HK$3.0 million is under idle land investigation by the local authority. The piece of land owned by the joint venture was held under several land use right certificates. The development of more than half of the piece of land was either completed or under development, except for a portion which is retained for the remaining development of the whole project. Another property for development that is held by a subsidiary of the Group with carrying value of approximately HK$42.0 million is also under idle land investigation by the local authority. This piece of land owned by the subsidiary has been developed by several phases and more than half was completed, except the last portion which is under the planning approval by the local authority. The Group is currently working diligently to prevent the possible classification as idle land, including negotiating the feasibility of development plans with local authorities. Based on legal advices, the Group has assessed the issue and considers that the idle land confiscation may not materialise. As at 31st December, 2013, guarantees given to banks in respect of mortgage loans granted to property purchasers and bank facilities granted or utilised by the joint ventures amounted to approximately HK$1,985.1 million. All the guarantees provided by the Group were requested by banks and under normal commercial terms. Legal actions were taken against the Group resulting in possible contingent liabilities of approximately HK$154.7 million. The Group has assessed the claims and obtained legal advice, and considers that either it is too early to assess the range of possible liability at this stage or no additional provision is required to be made. Annual Report

17 MANAGEMENT DISCUSSION AND ANALYSIS 1. 50% 273, ,700 48,810 50% 118,850356,500 50% 760,000 2,800, ,600 PROJECT REVIEW 1. MAJOR PROPERTY DEVELOPMENT Southern China Shenzhen Tian An Cyber Park (50%) Located at the heart of Shenzhen and adjacent to Shenzhen Golf Club, this large-scale project occupies a site area of approximately 273,500 m 2 with a total GFA of approximately 787,700 m 2. The Cyber Park consists of industrial buildings, office and commercial buildings, cyber technology buildings, deluxe residential apartments and multifunction clubhouse in an Urban Industrial Complex. The lettable commercial GFA is 48,810 m 2, including remaining areas of Shenzhen Cyber Times Building, Shenzhen Tian An Innovation Science and Technology Plaza (Phases 1 and 2) and Shenzhen Futian Tian An Hi-Tech Venture Park. Shenzhen Tian An Cyber Park has expanded its successful pattern to other cities, including Guangzhou Panyu, Foshan Nanhai, Dongguan, Shenzhen Longgang, Changzhou, Jiangyin, Tianjin, Chongqing and Qingdao, so as to develop into a group company. For accomplishing the upgrade industries transformation and urban renewal of Shenzhen, Shenzhen Tian An Cyber Park plans to have area upgrade and redevelopment. The total GFA of the Park will increase accordingly. Shenzhen Tian An Longgang Cyber Park (50%) Located in the core area of Longgang in Shenzhen, this project has a site area of approximately 118,850 m 2 and total GFA of approximately 356,500 m 2. The model of Shenzhen Tian An Cyber Park is used to develop this project. The construction of Phase 4 will be commenced after the approval of the increase of plot ratio. Shenzhen Tian An Cloud Park (50%) This project is a Model project of urban renewal and located in Huawei New City Area, Longgang District, Shenzhen. Shenzhen Tian An Cloud Park will have a site area of approximately 760,000 m 2 and plan to have a total GFA of approximately 2,800,000 m 2. The project is planned to be developed into a combination of new technology and a modern city complex, including industrial R&D, commercial, residential and apartments properties. Construction work for Phase 1 with a GFA of approximately 531,600 m 2 (including basement) had been commenced and expected to be completed in Tian An China Investments Company Limited

18 MANAGEMENT DISCUSSION AND ANALYSIS 39% 278, ,100 50% 513,088712, ,500 45% 165, ,900 79, % 393, ,000 38,800 Dongguan Tian An Cyber Park (39%) Situated right at the new city central area Nancheng District of Dongguan. Upon acquiring the land nearby the project in 2012, it covers land area of approximately 278,987 m 2 with total GFA of approximately 823,100 m 2.. The project is planned to be developed into an integrated business park with comprehensive science and technology buildings, commercial and residential composite. The construction of Phase 4 of industrial/office buildings will be commenced in Guangzhou Tian An Panyu Hi-Tech Ecological Park (50%) Located in the central district of Panyu in Guangzhou, this large scale project has a site area of 513,088 m 2 and a total GFA of approximately 712,500 m 2. Construction of Phases 7 and 8 with GFA of approximately 160,500 m 2 is expected to be completed in The park development consists of industrial/office buildings, science and technology buildings, high-class residential buildings and multifunction club house. Foshan Tian An Nanhai Cyber Park (45%) Located in Guicheng of Nanhai. Upon acquiring the land nearby the project in 2012, it covers site area of approximately 165,252 m 2 and total GFA of approximately 472,900 m 2. This project is developing with the similar pattern as Shenzhen Tian An Cyber Park and planned to develop into a business district with hotel/office buildings. Phases 6 and 7 with GFA of approximately 79,000 m 2 are under construction and expected to be completed in Huizhou Danshui Tian An Sun Life City (100%) Located in Danshui of Huizhou and lying by both sides of Danshui River, this project has a site area of approximately 393,570 m 2 and total GFA of approximately 783,000 m 2. The project is planned to be developed into a comprehensive commercial/residential composite. Since the local government had modified the surrounding planning of the land, the master planning for property development had been modified accordingly. Phase 1 Part 1 with GFA of approximately 38,800 m 2 is under construction and expected to be completed in Annual Report

19 MANAGEMENT DISCUSSION AND ANALYSIS 99.99% 338, , % 32,200 16, % 1,100 58, % 59, ,500 Eastern China Shanghai Tian An Place (99.99%) This project is situated at the Golden Hongqiao District where the oriental and international residents like to reside and adjacent to the entrance of the transit station of Subway No. 9. The project will be developed to a deluxe residential district with a site area of approximately 338,113 m 2 and a total GFA of approximately 470,000 m 2. Construction of Phase 1 Part 2 of the project will be completed in Shanghai Tian An Villa (100%) This project, located near the Shanghai Sheshan National Travel and Resort Area, combines the art of western architecture and eastern architectural style, integrating island living, water facing, garden and greenery. Construction work for the Phase 1 low density highclass villas with GFA of approximately 32,200 m 2 was completed. Phase 2 Part 1 villas with GFA of approximately 16,300 m 2 are under construction. Since the local government is modifying the surrounding planning of the land, the master planning for property development is being modified accordingly. Construction of new phase will be commenced in Shanghai Tian An Sunshine Peninsula (100%) Located in the Putuo District of Shanghai, this project is to be built along the 1,100 m bank of Suzhou River with a site area of approximately 58,930 m 2. This project has been re-planned as a commercial and entertainment complex. Design planning has been approved. Construction work of Phase 1 will be commenced in Wuxi The Manhattan (100%) This residential project is situated to the southwest of Wuxi city centre on a site of 59,480 m 2 to be developed into a total GFA of approximately 148,500 m 2. Construction of Phase 2 had been commenced in Tian An China Investments Company Limited

20 MANAGEMENT DISCUSSION AND ANALYSIS 100% 106, , ,200 50% 203,061578, % 473, % 92,766210,100 51, % 203, ,300 27,100 Wuxi Tian An Intelligent Park (100%) This project is located in Wuxi New District, with a site area of approximately 106,960 m 2 and a total GFA of approximately 213,900 m 2. The project is planned to be developed into integrated business park with comprehensive science and technology buildings, commercial and residential composite. The construction of Phase 1 Part 1 with a GFA of approximately 107,200 m 2 was completed and under leasing and sales. Changzhou Tian An Cyber Park (50%) This project is located in Changzhou Wujin Hi-Tech Industrial Zone, with a site area of approximately 203,061 m 2 and a total GFA of approximately 578,700 m 2. The project is planned to be developed into comprehensive science and technology buildings, commercial and residential composite. Phase 3 is expected to be completed in Changzhou Tian An Villa (100%) This project is located in the Wu Jin District, the planning and development focus of the Changzhou government. With a favorable location, it is one of the largest deluxe villa district in Changzhou. The project occupies a site of 473,335 m 2. Phase 2 Part 2 is expected to be completed in Nanjing Tian An Cyber Park (100%) This project is located in Nanjing Baixia Hi-Technology Industrial Development Area with a site area of approximately 92,766 m 2 and a total GFA of approximately 210,100 m 2. The project is planned to be developed into comprehensive science and technology buildings, commercial and residential composite. Construction work of Phase 2 with approximately 51,800 m 2 is expected to be completed in Nantong Tian An Garden (100%) Situated on a site of 203,800 m 2 with a total GFA of 239,300 m 2 at the heart of the New City Zone of Nantong, this is the first massive ecological residential project in Nantong. Construction work for Phase 5 Part 2 with GFA of approximately 27,100 m 2 is expected to be completed in Annual Report

21 MANAGEMENT DISCUSSION AND ANALYSIS 100% Nantong Tian An Cyber Park (100%) 160,367398,200 89,700 23,800 This project is located in Nantong Gangzha Economic Development Zone, with a site area of approximately 160,367 m 2 and a total GFA of approximately 398,200 m 2. The project is planned to be developed into integrated business park with comprehensive science and technology buildings and commercial composite. Construction work of Phase 1 Part 1 with GFA of approximately 89,700 m 2 is expected to be completed in Construction of Phase 1 Part 2 with GFA of approximately 23,800 m 2 is expected to be completed in % Jiangyin Tian An Cyber Park (50%) 173,200363,700 64,600 This project is located in Jiangyin Economic Development Zone, Jiangsu, with a site area of approximately 173,200 m 2 and a total GFA of approximately 363,700 m 2. The project is planned to be developed into integrated business park with comprehensive science and technology buildings, commercial and residential composite. Phase 1 of residential with a GFA of approximately 64,600 m 2 is under construction and expected to be completed in the first quarter of % Chongqing Tian An Cyber Park (50%) 357, ,900 89,600 Chongqing Tian An Cyber Park is located in commercial centre area of Dadukou District, Chongqing, with a site area of approximately 357,800 m 2 and a total GFA of approximately 894,900 m 2. The project is planned to be developed into integrated business park with comprehensive science and technology buildings, commercial and residential composite. Phase 2 of residential with a GFA of approximately 89,600 m 2 is under construction and expected to be completed in Northern China 60% Dalian Tian An Seaview Garden (60%) 84,100 This project for high-class residential development is located in the Dalian Economic & Technology Development Zone. Phases 1 and 2 with a total GFA of approximately 84,100 m 2 have been completed. Master plan for Phase 3 is waiting for approval. 100% Dalian Tian An Jinma Centre (100%) 134,400 This project is located at the main road, Jin Ma Road, of the Dalian Economic & Technology Development Zone and will be developed into commercial/residential buildings with a total GFA of 134,400 m Tian An China Investments Company Limited

22 MANAGEMENT DISCUSSION AND ANALYSIS 100% 414, ,100 82,400 50% 588,0751,216, , % 582,000 1,319, ,800 50% 158, , ,200 Changchun Tian An City One (100%) This high class residential project is situated within the Changchun High-Tech Industrial Development Zone. Erected on a site of approximately 414,954 m 2, the project with a total GFA of approximately 413,100 m 2 is being developed by stages. Construction work for Phase 4 Part 1 with a total GFA of 82,400 m 2 will be completed in Tianjin Tian An Cyber Park (50%) This project is located in Zhangjiawo Industrial Zone, Xiqing District, Tianjin, with a site area of approximately 588,075 m 2 and a total GFA of approximately 1,216,100 m 2. The project is planned to be developed into integrated business park with comprehensive science and technology buildings, commercial and residential composite. Phases 2 and 3 with a GFA of approximately 139,700 m 2 are under construction and expected to be completed in Tianjin Tian An Intelligent Port (100%) This project is located in Dongli District, Tianjin, with a site area of approximately 582,000 m 2 and a total GFA of approximately 1,319,400 m 2. The project is planned to be developed into urban integrated business complex with Grade A office buildings, comprehensive science and technology park, commercial and residential composite. Construction work for Phase 1 with a GFA of approximately 185,800 m 2 is expected to be completed in Qingdao Tian An Cyber Park (50%) This project is located in Chengyang District, Qingdao, with a site area of approximately 158,486 m 2 and a total GFA of approximately 244,000 m 2. The project is planned to be developed into urban integrated business complex with Grade A office buildings, comprehensive science and technology park, commercial and residential composite. Phase 1 with a GFA of approximately 153,200 m 2 is under construction and expected to be completed in Annual Report

23 MANAGEMENT DISCUSSION AND ANALYSIS 2. 98% 48,910 24,940 1,620 22,350 98% (100%) (1) 68,380261(2) 10,600 (3) 2, (4) % 100% 66,400 10, % 67,210 14,810 40% 5, MAJOR PROPERTY INVESTMENTS Shanghai Tian An Centre (98%) The office building is situated at the hub of Shanghai central business district of Nanjing Road West and People s Square, adjacent to the entrances to the transit platforms of Subway Nos. 1 and 2. It is a 30-storey Grade A commercial building with a total GFA of 48,910 m 2. 24,940 m 2 were sold, 1,620 m 2 were self occupied and the remaining GFA of 22,350 m 2 have been transferred to property investment. Most of the tenants are multinational companies. The occupancy rate is more than 98%. Shanghai Racquet Club & Apartments (100%) This project is located in the Minhang District, Shanghai, and adjacent to the Hongqiao International Airport, Hongqiao Transport Hub and 6 International Schools. The properties include (1) 261 apartments with 68,380 m 2 ; (2) a club house with 10,600 m 2 and ancillary facilities; (3) 116 car parking spaces with 2,510 m 2 ; and (4) 218 storage rooms with 979 m 2. This project is leased property. Most of the tenants are overseas top management from multinational companies. The occupancy rate is more than 85%. Nanjing Tian An International Building (100%) The project is located at Xinjiekou, the most flourishing shopping district in Nanjing City. The building links up to the subway station. The shopping arcades with a GFA of 66,400 m 2 have been leased to a department store. The office building with a GFA of approximately 10,700 m 2 have been transferred to property investment. Dalian Tian An International Tower (100%) This Grade A office building is situated in the Zhongshan Road central business district and faces the Victory Square in Dalian City. The total GFA is 67,210 m 2. This 52-storey building is the tallest landmark building of Dalian. 14,810 m 2 were sold, the remaining GFA have been transferred to property investment. Beijing Tian An Building (40%) With a total GFA of 5,730 m 2, this office building is located at a prime site near the Beijing Hotel and Tian anmen Square. The whole building has been rented out to a lessee. The lessee had renovated the building as a business hotel. 22 Tian An China Investments Company Limited

24 MANAGEMENT DISCUSSION AND ANALYSIS 100% Beijing Park Apartments (100%) 42,100 This premium residential project is located at the Beijing Chaoyang District to the west of Chaoyang Park and adjacent to the Embassy area. The project has a total GFA of approximately 42,100 m 2. Approximately half of the total number of units have been sold and the remaining units kept for leasing purpose OTHER INVESTMENTS 68.40% Fuzhou Summit Golf Country Club & Dengyun Resort (68.40%) 1,632, , ,300140,000 Built on a site of approximately 1,632,000 m 2, of which will be developed into an 18-hole golf course, driving range and clubhouse, and the remaining site area of approximately 642,770 m 2 will be developed into villas and other deluxe living amenities. Rebuilding of golf course was commenced in The revised master planning of the Resort, which will optimise the application of land resources, includes total GFA of approximately 592,300 m 2 for residential and 140,000 m 2 for ancillary and commercial area. Development of a new phase of villas will be completed in % Zhaoqing Resort & Golf Club (87.97%) An agreement was entered on 3rd December, 2007 to dispose in stages of this project, of which the transaction is estimated to be completed before the end of % Allied Cement Holdings Limited (75%) 1312 Allied Cement Holdings Limited (Stock Code: 1312) has 3 cement operations in Shanghai and Shandong. Its principal activities are the manufacture and sales of cement, clinker and slag, trading of cement and provision of technical services. After the land resumption exercise of its Shanghai operation in 2009, the group is preparing to develop the new cement production facilities at Bailonggang, Pudong, Shanghai, the PRC and the construction of the new factory is subject to the approvals by the relevant government authorities Allied Cement reported a profit attributable to its shareholders of HK$32.6 million for 2013, an increase from HK$26.8 million in Annual Report

25 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Completed Gross Gross Floor Area under Site Area Use Buildable Gross Floor Area Project Progress Floor Area Construction m 2 m 2 m 2 m 2 Interest Held by the Group Shenzhen Tian An Longgang Cyber Park Huangge Road North, Longgang District, Shenzhen 118,850 Commercial 356,500 Phased Construction Stage 51,605 Commercial 414,100 Phased Shenzhen Tian An Cloud Park (Phase 1) Bantian, Longgang District, Shenzhen Construction Stage 245,200 50% 414,100 50% 1 Dongguan Tian An Cyber Park No.1, Huangjin Road, Nancheng District, Dongguan 278,987 Commercial Residential 739,000 84,100 Phased Construction Stage 157,000 84, , ,100 39% 39% ,088 Commercial 568,300 Phased 410, ,500 50% Guangzhou Tian An Panyu Hi-Tech Ecological Park Residential 144,200 Construction Stage 45,300 50% No. 730, Ying Bin Road, Panyu District, Guangzhou 712, , ,500 1 Foshan Tian An Nanhai Cyber Park No.1, Jianping Road, Nanhai District, Foshan 165,252 Commercial 472,900 Phased Construction Stage (1) Huizhou Danshui Tian An Sun Life City (1) Danshui Town, Huiyang District, Huizhou 393,570 Commercial & Residential 783,000 Phased Construction Stage 257,800 79,000 45% 38, % (2) Zhaoqing Resort & Golf Club (2) Huilong Town, Gaoyao City, Zhaoqing 1,441,848 Commercial & Residential (2) Note (2) Phased Construction Stage (2) Note (2) 87.97% (1) ,770 Residential 592,300 Phased 15,100 12, % Fuzhou Dengyun Resort (1) Construction No. 388, Dengyun Road, Fuzhou Ancillary & Stage Commercial 140, % 732,300 15,100 12, Tian An China Investments Company Limited

26 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Completed Gross Gross Floor Area under Site Area Use Buildable Gross Floor Area Project Progress Floor Area Construction m 2 m 2 m 2 m 2 Interest Held by the Group 338,113 Residential 405,800 Phased 35, , % 52 Shanghai Tian An Place Ancillary & Commercial 64,200 Construction Stage 13, % Lot No. 52, Qibao Town, Cao Bao Road, Minhang District, Shanghai 470,000 35, ,800 (1) 654 Shanghai Tian An Villa (1) (Phases 2 & 3) Lot No. 654, Song Jiang, Shanghai 333,717 Residential 401,700 Phased Construction Stage Shanghai Tian An Sunshine Peninsula Chang Hua Road, Putuo District, Shanghai 58,930 Commercial 178,000 Planning & Design Stage GS 1028 Shanghai Central Garden (Phase 3 GS) No. 1028, Jin Xiu Road, Shanghai 3,600 Residential 3,600 Planning & Design Stage 16, % 100% 100% ,480 Residential 137,800 Phased 39,200 98, % Wuxi The Manhattan No. 809, Hubin Road, Wuxi Ancillary & Commercial 10,700 Construction Stage 3,700 7, % 148,500 42, , Wuxi Tian An Intelligent Park No.228, Ling Hu Road, Wuxi New District, Wuxi 106,960 Commercial 213,900 Phased Construction Stage 107, % 588 Changzhou Tian An Cyber Park No. 588, Wunan Road, Wujin Hi-Tech Industrial Zone, Changzhou 203,061 Commercial Residential 338, , ,700 Phased Construction Stage 145,100 75, ,200 19,200 19,200 50% 50% Annual Report

27 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Completed Gross Gross Floor Area under Site Area Use Buildable Gross Floor Area Project Progress Floor Area Construction m 2 m 2 m 2 m 2 Interest Held by the Group 2 Changzhou Tian An Villa No. 2, Fengyuan Road, Wu Jin District, Changzhou 473,335 Residential 137,900 Phased Construction Stage 66,000 27, % Nanjing Tian An Cyber Park Guanghua Road, Nanjing 92,766 Commercial 210,100 Phased Construction Stage 34,800 51, % 88 Nantong Tian An Garden No. 88, Hongjiang Road, Nantong 203,800 Residential 239,300 Phased Construction Stage 212,200 27, % Nantong Tian An Cyber Park South of Changping Road and East of Yongtong Road, Nantong 160,367 Commercial 398,200 Phased Construction Stage 113, % ,200 Commercial 228,700 Phased 81,000 50% Jiangyin Tian An Cyber Park Construction No. 55, Changshan Road, Jiangyin Residential 135,000 Stage 64,600 50% 363,700 81,000 64, ,800 Commercial 586,100 Phased 145,400 89,600 50% Chongqing Tian An Cyber Park Construction Chunhui Road, Dadukou District, Residential 308,800 Stage 50% Chongqing 894, ,400 89, Tian An China Investments Company Limited

28 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Completed Gross Gross Floor Area under Site Area Use Buildable Gross Floor Area Project Progress Floor Area Construction m 2 m 2 m 2 m 2 Interest Held by the Group Dalian Tian An Seaview Garden Liaohe Road West, Economic & Technical Development Zone, Dalian 58,650 Residential 122,100 Phased Construction Stage 84,100 60% (2) 19,421 Commercial 32, % Planning & Dalian Tian An Jinma Centre (2) Residential 102,100 Design Stage 100% Jin Ma Road, Economic & Technical Development Zone, Dalian 134, ,954 Residential & Phased Construction Changchun Tian An City One No. 661, Guigu Street, Changchun Commercial 413,100 Stage 157,500 82, % 1 588,075 Commercial 918,100 Phased 119,600 40,800 50% Tianjin Tian An Cyber Park Construction No.1 Tianan Road, Xiqing District, Tianjin Residential 298,000 Stage 98,900 50% 1,216, , ,700 (1) 582,000 Commercial 934,400 Phased 185, % Tianjin Tian An Intelligent Port (1) Construction Dongli District, Tianjin Residential 385,000 Stage 100% 1,319, ,800 Qingdao Tian An Cyber Park Chengyang District, Qingdao 158,486 Commercial 161,000 Phased 94,000 50% Construction Residential 83,000 Stage 59,200 50% 244, ,200 (1) 50% (2) (3) Notes: (1) Agreement for disposal of 50% interest was signed. (2) Disposal agreement was signed. (3) The above table is based on information as of 31st December, Annual Report

29 PARTICULARS OF PROPERTIES UNDER CONSTRUCTION Project Name Gross Floor Area Interest Held by the Group Gross Floor Area Attributable to the Group m 2 m 2 Estimated Completion Year 1. Shenzhen Tian An Cloud Park (Phase 1) 2. Guangzhou Tian An Panyu Hi-Tech Ecological Park (Phases 7 and 8) 3. Foshan Tian An Nanhai Cyber Park (Phases 6 and 7) 4. Huizhou Danshui Tian An Sun Life City (Phase 1 Part 1) 5. Fuzhou Dengyun Resort (Phase 1) 6. Shanghai Tian An Place (Phase 1 Part 2) 7. Shanghai Tian An Villa (Phase 2 Part 1) 8. Wuxi The Manhattan (Phase 1 Part 2 and Phase 2) 9. Changzhou Tian An Cyber Park (Phase 3) 10. Changzhou Tian An Villa (Phase 2 Part 2) 11. Nanjing Tian An Cyber Park (Phase 2) 12. Nantong Tian An Garden (Phase 5 Part 2) 13. Nantong Tian An Cyber Park (Phases 1 Part 1 and Part 2) 14. Jiangyin Tian An Cyber Park (Phase 1) 15. Chongqing Tian An Cyber Park (Phase 2) 16. Changchun Tian An City One (Phase 4 Part 1) 17. Tianjin Tian An Cyber Park (Phases 2 and 3) 18. Tianjin Tian An Intelligent Port (Phase 1) 19. Qingdao Tian An Cyber Park (Phase 1 Part 1) 414,100 50% 207, ,500 50% 80, ,000 45% 35, , % 38, , % 8, , % 119, , % 16, , % 105, ,200 50% 9, , % 27, , % 51, , % 27, , % 113, ,600 50% 32, ,600 50% 44, , % 82, ,700 50% 69, , % 185, ,200 50% 76, Total: 1,900,400 1,332,700 Note: The above table is based on information as of 31st December, Tian An China Investments Company Limited

30 PARTICULARS OF PROPERTY AND HOTEL INVESTMENTS 1. PROPERTY Property Name Property GFA Car Parking Space GFA Interest Held by the Group GFA Attributable to the Group m 2 m 2 m 2 Use Shenzhen Tian An Cyber Park Shenzhen Tian An Innovation Science and Technology Plaza, Phase 1 Shenzhen Tian An Innovation Science and Technology Plaza, Phase 2 Shenzhen Cyber Times Building Shenzhen Futian Tian An Hi-Tech Venture Park 26 26/F, Shenzhen Cyber Times Building 20 20/F, Shenzhen Tian An International Building Shenzhen Tian Bei Yi Road, shops Shenzhen Tian An Longgang Cyber Park Dongguan Tian An Cyber Park Guangzhou Tian An Panyu Hi-Tech Ecological Park Foshan Tian An Nanhai Cyber Park Shanghai Tian An Centre /F, 8/F & 16/F, Shanghai Tian An Centre Shanghai Racquet Club & Apartments Shanghai The Riverside 10,540 50% 5,270 Commercial and office 4,400 50% 2,200 Commercial and office 20,530 50% 10,260 Commercial and office 13,340 50% 6,670 Commercial and office % 900 Office % 850 Office 1, % 1,460 Commercial 31,350 50% 15,680 Commercial and office 3,130 39% 1,220 Commercial 15,230 50% 7,620 Commercial 10,930 45% 4,920 Commercial 22,350 98% 21,900 Commercial and office 4, % 4,740 Office 68, % 68,380 Residential 1,520 99% 1,510 Commercial Annual Report

31 PARTICULARS OF PROPERTY AND HOTEL INVESTMENTS Property Name Property GFA Car Parking Space GFA Interest Held by the Group GFA Attributable to the Group m 2 m 2 m 2 Use Wuxi Tian An Building Wuxi Redhill Peninsula Wuxi Tian An Intelligent Park Nanjing Tian An International Building Nanjing Tian An Cyber Park 1,420 95% 1,350 Office 2,830 95% 2,690 Commercial 16, % 16,370 Commercial 77, % 77,100 Commercial and office 3, % 3,850 Commercial (1) 24, % 24,400 Changzhou Tian An City Plaza (1) Commercial and office Changzhou New City Garden Changzhou Tian An Cyber Park 4 4/F, Nantong Sun Hai Tung Building /F, Block 17, Nantong Jin Xiu Court Nantong Tian An Garden Beijing Tian An Building Beijing Lakeside Garden Beijing Park Apartments Dalian Tian An Seaview Garden Dalian Tian An International Tower Changchun Tian An City One Tianjing Tian An Cyber Park 9, % 9,090 Commercial 15,600 50% 7,800 Commercial % 720 Office 1, % 1,300 Commercial 2, % 2,900 Commercial 5,730 40% 2,300 Office % 560 Residential 22, % 22,170 Residential % 280 Residential 52, % 52,400 Office 5, % 5,660 Commercial 9,760 50% 4,880 Commercial 461, , Tian An China Investments Company Limited