CONTENTS 2 Corporate Information 4 Managing Director s Statement 10 Management Discussion and Analysis 10 Operational Review 13 Financial Review 15 Pr

Transcription

1 Annual Report 2015

2 CONTENTS 2 Corporate Information 4 Managing Director s Statement 10 Management Discussion and Analysis 10 Operational Review 13 Financial Review 15 Project Review 15 Major Property Developments 20 Major Property Investments 21 Other Investments 22 Particulars of Property Development 26 Particulars of Properties under Construction 27 Particulars of Property and Hotel Investments 31 Corporate Governance Report 52 Directors Report 76 Independent Auditor s Report 78 Consolidated Statement of Profit or Loss 80 Consolidated Statement of Profit or Loss and Other Comprehensive Income 81 Consolidated Statement of Financial Position 83 Consolidated Statement of Changes in Equity 85 Consolidated Statement of Cash Flows 88 Notes to the Consolidated Financial Statements 224 Financial Summary

3 2 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 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

4 CORPORATE INFORMATION info@tiananchina.com 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 OCBC 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

5 4 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGING DIRECTOR S STATEMENT 1, , , , % 3, , (1) I am pleased to present to you the annual results for FINANCIAL RESULTS The revenue of the Group from continuing operations for the year ended 31st December, 2015 was HK$1,029.4 million (2014: HK$1,031.8 million), no material change compared to the year before. The profit attributable to owners of the Company (including continuing and discontinued operations) amounted to HK$2,600.0 million (2014: HK$1,284.5 million), representing an increase of 102% from The increase in profit for the year was the result of a gain of HK$3,012.8 million on disposal of non-core assets. In 2014, a subsidiary was disposed of and resulted in a gain of HK$1,229.5 million. Earnings per share (including continuing and discontinued operations) amounted to HK cents (2014: HK85.25 cents), while the net asset value per share attributable to owners of the Company was HK$11.37 at the end of 2015 (2014: HK$10.25). DIVIDEND The board of directors of the Company has declared an interim dividend of HK15 cents per share (in lieu of a final dividend) for the year ended 31st December, 2015 (2014 final dividend: HK10 cents per share) payable on or around Friday, 22nd April, 2016 to the shareholders of the Company ( Shareholders ) whose names appear on the register of members of the Company on Friday, 8th April, CLOSURE OF REGISTER OF MEMBERS (1) For determining the entitlement to the interim dividend (in lieu of a final dividend) For determining the entitlement to the interim dividend (in lieu of a final dividend) for the year ended 31st December, 2015, the register of members of the Company will be closed on Thursday, 7th April, 2016 and Friday, 8th April, 2016, during which period no transfer of shares of the Company will be registered. In order for a Shareholder to qualify for the interim dividend (in lieu of a 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, 6th April, 2016.

6 MANAGING DIRECTOR S STATEMENT (2) (1) (2) 154, ,800 2% 364, ,300 32% 1,118,500 1,116,100 (2) For determining the entitlement to attend and vote at the forthcoming annual general meeting of the Company ( 2016 AGM ) The 2016 AGM is scheduled to be held on Friday, 20th May, For determining the entitlement to attend and vote at the 2016 AGM, the register of members of the Company will be closed on Thursday, 19th May, 2016 and Friday, 20th May, 2016, 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 2016 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 Wednesday, 18th May, BUSINESS REVIEW The Group is engaged principally in the development of apartments, villas, office buildings and commercial properties, property investment and property management in China. An outline of our achievements in 2015 is described below: (1) We have continued to dispose of non-core assets. (2) Total attributable registered sales (including sales from joint ventures and pre-sales of properties under construction) of the Group amounted to 154,200 m 2 in 2015 (2014: 150,800 m 2 ), an increase of 2%. A total attributable gross floor area ( GFA ) of approximately 364,100 m 2 (2014: 536,300 m 2 ) was completed, a decrease of 32%. By the end of 2015, a total attributable GFA of approximately 1,118,500 m 2 (2014: 1,116,100 m 2 ) was under construction, representing no material change from last year, including Shenzhen Tian An Cloud Park (Phase 2), Wuxi Manhattan (Phase 1 Part 2 and Phase 2), Fuzhou Dengyun Resort (Phase 1), Huizhou Huiyang Tian An Sun Life City (Phase 1 Part 2 and Phase 2), Changchun Tian An City One (Phase 4 Parts 1, 2 and 3), Foshan Tian An Centre (Phases 2 and 3), Longgang Tian An Cyber Park (Phase 4 Part 2), Nantong Tian An Cyber Park (Phase 1 Part 2), Chongqing Tian An Cyber Park (Phase 3), Tianjin Tian An Cyber Park (Phases 2, 3 and 4) and Tianjin Tian An Intelligent Port (Phase 1).

7 6 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGING DIRECTOR S STATEMENT (3) 1.6% (3) Rental income continued to increase and was up by 1.6% as compared with (4) (4) Cyberpark: The overall contribution of our cyberpark unit has been below our expectations as the slowing Chinese economy affected sales and leasing. Where necessary, we have slowed down construction of future phases to alleviate pressure on sales and leasing of current phases. By focusing on sales of existing stock, we also hope to reduce overall bank debt of the cyberpark unit. Our cyberparks on the Pearl River Delta have been the exception and we will concentrate on developing new cyberparks and urban renewal projects in this region where we have ample manpower and marketing resources. (5) 531,600 (5) Tian An s urban renewal project, Tian An Cloud Park, in Huawei New City Area in the Longgang District of Shenzhen is a large scale cyberpark of approximately 4 times our standard size. Construction works of the superstructure of all seven towers of Phase 1 of the project with GFA of approximately 531,600 m 2 (including basement) were fully completed in We have commenced the leasing and pre-sales of Phase 1 since November 2014 and have been clearing the land for future phases. Although this means an increased outlay of resources either through capital injection or loans, it is expected to reduce complications when we start developing these phases. Sales and leasing for Phase 1 have been encouraging and this project has started to contribute to our performance.

8 MANAGING DIRECTOR S STATEMENT (1) (2) (3) (4) (1) (2) PLANS FOR 2016 Objectives for 2016 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 as well as the speed of construction where necessary to assist the sale of our products in the current environment. (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 and urban renewal units where we believe our products are welcomed by the government and the local market.

9 8 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGING DIRECTOR S STATEMENT BUSINESS OUTLOOK After the downward adjustments of property prices in most cities in China since 2014, there have been various measures by the mainland authorities to support the property market. These include successive reductions in bank interest and lowering of the reserve requirement ratio, as well as loosening or reversal of housing disincentives by the various levels of government. Market prices for residential properties have increased substantially in first-tier cities, while those in suburban areas and lower-tier cities are now improving. We are pleased with the improving sentiment and are 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, 18th March, 2016

10 MANAGING DIRECTOR S STATEMENT GFA Sold 2015 GFA Sold by Region in 2015 Year m 2 ( 000) 34% Eastern China 15% Northern China 51% Southern China Properties Under Construction in terms of GFA 2015 GFA of Properties Under Construction by Region in 2015 Year % Eastern China 41% Northern China m 2 ( 000) 45% Southern China Properties Completed in terms of GFA 2015 GFA of Properties Completed by Region in 2015 Year % Eastern China 21% Northern China m 2 ( 000) 57% Southern China Residential Commercial

11 10 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGEMENT DISCUSSION AND ANALYSIS 1. OPERATIONAL REVIEW 1. INCOME SOURCES Income derived from operations in property development, property investment, associate and joint venture investments in the People s Republic of China ( PRC ) constituted the most significant source of revenue to the Group. An analysis is as follows: (1) (1) Property developments Revenue derived from property development of the Group (including subsidiaries but excluding associates and joint ventures) decreased from HK$451.6 million to HK$446.6 million compared with Projects offered for sale during the year mainly consisted of Shanghai Forest Villa, Shanghai Elegant Garden, Changzhou Tian An Villa (Phase 2) and Nantong Tian An Garden (Phase 5). (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$441.8 million to HK$448.7 million, representing an increase of approximately 1.6%. (3) (3) Associate and joint venture investments HK$ 000 HK$ 000 Contribution to profit: Share of profit of associates 6,226 1,263 Share of profit of joint ventures 110,055 72, ,281 73,704

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 Shenzhen Tian An Cyber Park Residential 4,300 Shenzhen Tian An Cloud Park (Phase 1) Commercial 15,300 Shenzhen Tian An Longgang Cyber Park Commercial 8,300 (Phases 1 to 4) Dongguan Tian An Cyber Park Commercial/ 24,100 (Phases 2 to 4) Residential Guangzhou Tian An Panyu Hi-Tech Commercial/ 15,900 Ecological Park (Phases 5 to 8) Residential Foshan Tian An Nanhai Cyber Park Commercial 5,200 (Phases 1 to 7) Changzhou Tian An Cyber Park Commercial/ 17,100 (Phases 1 to 3) Residential Nantong Tian An Garden Residential 8,800 Jiangyin Tian An Cyber Park Commercial/ 6,500 (Phase 1) Residential Chongqing Tian An Cyber Park (Phases 1 & 2) Commercial/ Residential 13,000 Changchun Tian An City One (Phase 4 Part 1) Residential 6,800 Tianjin Tian An Cyber Park (Phases 1 & 3) Commercial/ 13,600 Residential Qingdao Tian An Cyber Park (Phase 1) Commercial/ 3,600 Residential Other projects Commercial/ Residential 11,700 Total 154, ,357,400 6,433, ,200 5,961, LAND PORTFOLIO The Group currently has a landbank of total GFA of approximately 9,357,400 m 2 (total GFA attributable to the Group is approximately 6,433,800 m 2, consisting of approximately 472,200 m 2 of completed investment properties and approximately 5,961,600 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.

13 12 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGEMENT DISCUSSION AND ANALYSIS (1) As at 31st December, 2015, 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 1,506, ,500 2,330,800 Eastern China 1,176, ,500 1,786,800 Southern China 876, ,900 1,844,000 Total 3,558,700 2,402,900 5,961,600 (2) (2) Completed investment properties GFA attributable Commercial Residential to the Group Region m 2 m 2 m 2 Northern China 67,000 23,000 90,000 Eastern China 221,900 72, ,800 Southern China 63,900 23,500 87,400 Total 352, , ,200

14 MANAGEMENT DISCUSSION AND ANALYSIS 4, , , , , , , , % 22% 61% 94% FINANCIAL REVIEW Liquidity and Financing The Group always maintained its liquidity at a healthy level with a balanced portfolio of financial resources. As at 31st December, 2015, the total bank balances and cash reserves of the Group were approximately HK$4,134.8 million (2014: HK$1,514.9 million), providing sufficient working capital for the daily operations of the Group. As at 31st December, 2015, the total borrowings of the Group amounted to approximately HK$5,576.4 million (2014: HK$4,996.6 million), including current liabilities of HK$2,674.5 million (2014: HK$2,369.6 million) and non-current liabilities of HK$2,901.9 million (2014: HK$2,627.0 million). The gearing ratio (net debt over total equity) of the Group was 8% (2014: 22%). The borrowings were mainly used to finance the properties for development and properties under construction. Increase in finance costs is mainly due to the increase in borrowings. Approximately 61% 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 94% 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. 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.

15 14 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGEMENT DISCUSSION AND ANALYSIS , , , Pledge on Assets As at 31st December, 2015, bank deposits of HK$0.1 million, aggregate carrying values of property, plant and equipment, development properties and investment properties of approximately HK$197.9 million, HK$6,921.2 million and HK$8,311.8 million respectively, were pledged for banking facilities and other loans granted to the Group and mortgage loans granted to property purchasers. Contingent Liabilities A portion of a property for development that is held by a joint venture with carrying value of approximately HK$2.7 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$39.6 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, 2015, guarantees given to banks in respect of mortgage loans granted to property purchasers and bank facilities granted or utilised by the joint ventures and available-for-sale investments amounted to approximately HK$1,690.1 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$40.5 million. The Group has assessed the claims and obtained legal advices, and considers that the final outcome of the claims will not have material effect on the financial position of the Group.

16 MANAGEMENT DISCUSSION AND ANALYSIS 1. 50% 273, ,700 48,810 50% 118,850356,500 44,500 50% 760,000 2,800, , ,100 PROJECT REVIEW 1. MAJOR PROPERTY DEVELOPMENTS 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. Phase 4 with GFA of approximately 44,500 m 2 is under construction and expected to be completed in 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) was completed, Phase 2 with GFA of approximately 525,100 m 2 is under construction and expected to be completed in 2018.

17 16 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGEMENT DISCUSSION AND ANALYSIS 39% Dongguan Tian An Cyber Park (39%) 278, ,100 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 % Dongguan Fenggang Tian An Cyber Park (45.05%) 172, ,400 Located in Fenggang Town of Dongguan, this project has a site area of approximately 172,796 m 2 and total GFA of approximately 518,400 m 2. The project is planned to be developed into a comprehensive commercial/industrial composite. 50% Guangzhou Tian An Panyu Hi-Tech Ecological Park (50%) 513,088712,500 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. The park development consists of industrial/office buildings, science and technology buildings, highclass residential buildings and multi-function clubhouse. 45% Foshan Tian An Nanhai Cyber Park (45%) 165, , ,000 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 8 and 9 with GFA of approximately 127,000 m 2 are under construction and expected to be completed in 2016 and 2017 respectively. 100% Huizhou Huiyang Tian An Sun Life City (100%) 393, , ,300 Located in Huiyang 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 2 and Phase 2 with GFA of approximately 157,300 m 2 are under construction and expected to be completed in 2016.

18 MANAGEMENT DISCUSSION AND ANALYSIS 99.99% 338, , , % 1,100 58,930 65, % 59, , % 118, , ,200 50% 203,061578,700 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 work of Phase 1 with total GFA of approximately 155,000 m 2 was completed. 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 with total GFA of approximately 65,100 m 2 will be commenced in 2016 and expected to be completed 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 1 Part 2 and Phase 2 are expected to be completed in Wuxi Tian An Intelligent Park (100%) This project is located in Wuxi New District, with a site area of approximately 118,330 m 2 and a total GFA of approximately 236,100 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. Construction work of Phase 2 Part 2 residential is expected to commence in 2016.

19 18 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGEMENT DISCUSSION AND ANALYSIS 100% 473, % 92,766210,100 25, % 160,367398,200 23,900 50% 173,200363, ,600 50% 357, ,900 44,000 Changzhou Tian An Villa (100%) This project is located in the Wujin District, the planning and development focus of the Changzhou government. With a favorable location, it is one of the largest deluxe villa districts in Changzhou. The project occupies a site of 473,335 m 2. 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 3 with a GFA of approximately 25,000 m 2 is expected to commence in Nantong Tian An Cyber Park (100%) 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 2 with a GFA of approximately 23,900 m 2 is expected to be completed in Jiangyin Tian An Cyber Park (50%) 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 office and residential with a GFA of approximately 145,600 m 2 was completed and under leasing and sales. Chongqing Tian An Cyber Park (50%) 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 3 of office and commercial buildings with a GFA of approximately 44,000 m 2 is under construction and expected to be completed in 2016.

20 MANAGEMENT DISCUSSION AND ANALYSIS 60% 84, % 414, , ,100 50% 588,0751,216, , % 582,000 1,319, ,800 50% 313, ,900 37,000 Northern China Dalian Tian An Seaview Garden (60%) 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. 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, Part 2 and Part 3 with a total GFA of 180,100 m 2 are expected to 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, 3 and 4 with a GFA of approximately 195,100 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 313,466 m 2 and a total GFA of approximately 522,900 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 2 with a GFA of approximately 37,000 m 2 is expected to commence in 2016.

21 20 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 MANAGEMENT DISCUSSION AND ANALYSIS 2. 98% 48,910 24,940 1,620 22,350 90% (100%) (1) 68,660262(2) 10,600 (3) 2, (4) % 66,400 10, % 67,210 14,790 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 90%. 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) 262 apartments with 68,660 m 2 ; (2) a clubhouse 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. Nanjing Tian An International Building (100%) The project is located at Xinjiekou of Nanjing central district, 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. 14,790 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 the Tiananmen Square. The whole building has been rented out to a lessee. The lessee had renovated the building as a business hotel.

22 MANAGEMENT DISCUSSION AND ANALYSIS 100% 42, % 1,632, , ,300140, % Beijing Park Apartments (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. 3. OTHER INVESTMENTS Fuzhou Summit Golf Country Club & Dengyun Resort (34.2%) 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 is expected to 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 2016.

23 22 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Site Area Use Buildable Gross Floor Area Project Progress Completed Gross Floor Area Gross Floor Area under 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 269,300 44,500 50% Shenzhen Tian An Cloud Park (Phases 1 and 2) Bantian, Longgang District, Shenzhen 134,547 Commercial 813,000 Phased 414, ,900 50% Dormitory 126,200 Construction Stage 126,200 50% 939, , ,100 1 Dongguan Tian An Cyber Park No.1, Huangjin Road, Nancheng District, Dongguan 278,987 Commercial Residential 739,000 84,100 Phased Construction Stage 240,700 84, , ,800 39% 39% Dongguan Fenggang Tian An Cyber Park Yan Tian Village, Fenggang Town, Dongguan 172,796 Commercial 518,400 Planning & Design Stage 45.05% ,088 Commercial 667,200 Phased 571,500 50% Guangzhou Tian An Panyu Hi-Tech Ecological Park Residential 45,300 Construction Stage 45,300 50% No. 730, Yingbin Road, Panyu District, Guangzhou 712, ,800 1 Foshan Tian An Nanhai Cyber Park No.1, Jianping Road, Nanhai District, Foshan 165,252 Commercial 472,900 Phased Construction Stage (1) Huizhou Huiyang Tian An Sun Life City (1) Danshui Town, Huiyang District, Huizhou 393,570 Commercial & Residential 783,000 Phased Construction Stage 336, ,000 45% 27, , %

24 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Site Area Use Buildable Gross Floor Area Project Progress Completed Gross Floor Area Gross Floor Area under Construction m 2 m 2 m 2 m 2 Interest Held by the Group (2) Zhaoqing Resort & Golf Club (2) Huilong Town, Gaoyao City 1,441,848 Commercial & Residential (2) Note (2) Phased Construction Stage (2) Note (2) 87.97% ,770 Residential 592,300 Phased 15,100 12, % Fuzhou Dengyun Resort Construction No. 388, Dengyun Road, Fuzhou Ancillary & Stage Commercial 140, % 732,300 15,100 12, ,113 Residential 405,800 Phased 141, % 52 Shanghai Tian An Place Ancillary & 64,200 Construction Stage 13, % Lot No. 52, Qibao Town, Caobao Road, Minhang District, Shanghai Commercial 470, ,000 Shanghai Tian An Sunshine Peninsula Changhua Road, Putuo District, Shanghai 58,930 Commercial 178,000 Planning & Design Stage GS 1028 Shanghai Central Garden (Phase 3 GS) No. 1028, Jinxiu Road, Shanghai 3,600 Residential 500 Planning & Design Stage 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, Linghu Road, Wuxi New District, Wuxi 118,330 Commercial 236,100 Phased Construction Stage 107, %

25 24 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Site Area Use Buildable Gross Floor Area Project Progress Completed Gross Floor Area Gross Floor Area under Construction m 2 m 2 m 2 m 2 Interest Held by the Group 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 164, , ,700 50% 50% 2 Changzhou Tian An Villa No. 2, Fengyuan Road, Wujin District, Changzhou 473,335 Residential 137,900 Phased Construction Stage 93, % Nanjing Tian An Cyber Park Guanghua Road, Nanjing 92,766 Commercial 210,100 Phased Construction Stage 86, % Nantong Tian An Cyber Park South of Changping Road and East of Yongtong Road, Nantong 160,367 Commercial 398,200 Phased Construction Stage 89,700 23, % ,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, , ,800 Commercial 586,100 Phased 145,400 44,000 50% Chongqing Tian An Cyber Park Construction Chunhui Road, Dadukou District, Residential 308,800 Stage 85,600 50% Chongqing 894, ,000 44,000

26 PARTICULARS OF PROPERTY DEVELOPMENT Project Name Site Area Use Buildable Gross Floor Area Project Progress Completed Gross Floor Area Gross Floor Area under 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) Dalian Tian An Jinma Centre (2) Jinma Road, Economic & Technical Development Zone, Dalian (2) (2) 19,421 Commercial & Note (2) Construction Note (2) 100% Residential Stage 661 Changchun Tian An City One No. 661, Guigu Street, Changchun 414,954 Commercial & Residential 413,100 Phased Construction Stage 157, , % 1 588,075 Commercial 918,100 Phased 119,600 96,300 50% Tianjin Tian An Cyber Park Construction No.1 Tianan Road, Xiqing District, Tianjin Residential 298,000 Stage 98,800 50% 1,216, , ,100 (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, , Qingdao Tian An Cyber Park No. 88, Chunyang Road, Chengyang District, Qingdao 313,466 Commercial 328,000 Phased 94,000 50% Construction Residential 194,900 Stage 59,200 50% 522, ,200 (1) 50% (2) Notes: (1) Agreement for disposal of 50% interests was signed. (2) Disposal agreement was signed. (3) (3) The above table is based on information as of 31st December, 2015.

27 26 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 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 2) 2. Shenzhen Tian An Longgang Cyber Park (Phase 4) 3. Foshan Tian An Nanhai Cyber Park (Phases 8 and 9) 4. Huizhou Huiyang Tian An Sun Life City (Phase 1 Part 2 and Phase 2) 5. Fuzhou Dengyun Resort (Phase 1) 6. Wuxi The Manhattan (Phase 1 Part 2 and Phase 2) 7. Nantong Tian An Cyber Park (Phase 1 Part 2) 8. Chongqing Tian An Cyber Park (Phase 3) 9. Changchun Tian An City One (Phase 4 Parts 1, 2 and 3) 10. Tianjin Tian An Cyber Park (Phases 2, 3 and 4) 11. Tianjin Tian An Intelligent Port (Phase 1) 525,100 50% 262, ,500 50% 22, ,000 45% 57, / , % 157, , % 4, , % 105, , % 23, ,000 50% 22, , % 180, ,100 50% 97, , % 185, Total: 1,600,800 1,118,500 Note: The above table is based on information as of 31st December, 2015

28 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 Jin An Garden Shenzhen Tian An Park Place Shenzhen Tian An Cloud Park Phase 1 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 and 16/F, Shanghai Tian An Centre Shanghai Racquet Club & Apartments 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, % 1,300 Residential 22, % 22,200 Residential 12,800 50% 6,400 Commercial and office 26,300 50% 13,200 Commercial and office 5,300 39% 2,050 Commercial 18,700 50% 9,350 Commercial 15,100 45% 6,800 Commercial 22,350 98% 21,900 Commercial and office 4, % 4,740 Office 68, % 68,660 Residential

29 28 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 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 Shanghai The Riverside Shanghai Elegant Garden Wuxi Tian An Building Wuxi Redhill Peninsula Wuxi Tian An Intelligent Park Nanjing Tian An International Building Nanjing Tian An Cyber Park 1,520 99% 1,500 Commercial 2, % 2,800 Residential 1,420 95% 1,350 Office 2,830 95% 2,690 Commercial 22, % 22,900 Commercial 77, % 77,100 Commercial and office 12, % 12,890 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 Nantong Tian An Cyber Park Jiangyin Tian An Cyber Park Chongqing Tian An Cyber Park Beijing Tian An Building 9, % 9,090 Commercial 29,560 50% 14,780 Commercial % 720 Office 1, % 1,300 Commercial 3, % 3,960 Commercial 10, % 10,900 Commercial 16,580 50% 8,290 Commercial 9,630 50% 4,800 Commercial 5,730 40% 2,300 Office

30 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 Beijing Lakeside Garden Beijing Park Apartments Dalian Tian An Seaview Garden Dalian Tian An International Tower Changchun Tian An City One Tianjin Tian An Cyber Park Qingdao Tian An Cyber Park % 560 Residential 22, % 22,170 Residential % 280 Residential 52, % 52,420 Office 5, % 5,660 Commercial 10,340 50% 5,170 Commercial 2,900 50% 1,450 Commercial 575, ,230 Shanghai Tian An Centre, Car Parking Space Shanghai Central Garden, Car Parking Space Shanghai Racquet Club & Apartments, Car Parking Space Shanghai Racquet Club & Apartments, Clubhouse Wuxi The Manhattan, Clubhouse 7,770 98% 7,610 Car Parking Space 3, % 3,180 Car Parking Space 2, % 2,510 Car Parking Space 10, % 10,600 Clubhouse 3, % 3,670 Clubhouse 14,270 13,460 27,570

31 30 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 PARTICULARS OF PROPERTY AND HOTEL INVESTMENTS 2. HOTEL Project Name Expiry Date Interest Held by the Group Hotel Gross Area Year m 2 No. of Rooms 9-12 (1) 9/F to 12/F, Changzhou Tian An City Hotel (1) % 1, Notes: (1) (1) Disposal agreement was signed. (2) (2) The above tables are based on information as of 31st December, 2015.

32 CORPORATE GOVERNANCE REPORT The Company is committed to maintaining a high standard of corporate governance within a sensible framework with an emphasis on the principles of transparency, accountability and independence. The board of directors of the Company ( Board ) believes that good corporate governance is essential to the success of the Company and to the enhancement of shareholders value. CORPORATE GOVERNANCE CODE AND CORPORATE GOVERNANCE REPORT In the light of the Corporate Governance Code and Corporate Governance Report ( CG Code ) contained in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ( Listing Rules ), the Board has reviewed the corporate governance practices of the Company with the adoption of the various enhanced procedures which are detailed in this report. The Company has applied the principles of, and complied with, the applicable code provisions of the CG Code during the year ended 31st December, 2015, except for certain deviations as specified with considered reasons for such deviations as explained below. The Board will review the current practices at least annually, and make appropriate changes if considered necessary.

33 32 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Annual Report 2015 CORPORATE GOVERNANCE REPORT THE BOARD The Board currently comprises twelve directors ( Directors ) in total, with five Executive Directors, three Non-Executive Directors and four Independent Non-Executive Directors ( INEDs ). The composition of the Board during the year and up to the date of this report is set out as follows: 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 INEDs: Francis J. Chang Chu Fai Jin Hui Zhi Ngai Wah Sang Lisa Yang Lai Sum The brief biographical details of the Directors are set out in the Biographical Details of Directors and Senior Management section in the Directors Report on pages 57 to 62. Other than that Mr. Lee Seng Hui, the Chairman of the Board, is a cousin of Mr. Patrick Lee Seng Wei, the Managing Director of the Company, there are no family or other material relationships among members of the Board.

34 CORPORATE GOVERNANCE REPORT THE BOARD (CONTINUED) Board Process During the year, the Non-Executive Directors (a majority of whom are independent) provided the Company and its subsidiaries (collectively Group ) with a wide range of expertise and experience. Their active participation in the Board and committee meetings brought independent judgement on issues relating to the Group s strategy, performance and management process, taking into account the interests of all shareholders of the Company ( Shareholders ). Throughout the year and up to the date of this report, the Company has had four INEDs representing one-third of the Board. At least one of the INEDs has the appropriate professional qualifications or accounting or related financial management expertise under Rule 3.10 of the Listing Rules. The Board has received from each INED an annual confirmation of his/her independence and considers that all the INEDs are independent under the guidelines set out in Rule 3.13 of the Listing Rules. The Board meets regularly to discuss the overall strategy as well as the operation and financial performance of the Group, and to review and approve the Group s annual and interim results and other ad hoc matters which need to be dealt with. During the year, four Board meetings were held and the individual attendance records of each Director at the meetings of the Board, Remuneration Committee, Audit Committee and general meetings during the year ended 31st December, 2015 are set out below: