Interim Report 2019

Transcription

1 Interim Report 2019

2 Interim Report For the six months ended 30th June, 2019

3 CONTENTS Corporate Information Condensed Consolidated Statement of Profit or Loss Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Condensed Consolidated Statement of Financial Position Condensed Consolidated Statement of Changes in Equity Condensed Consolidated Statement of Cash Flows Notes to the Condensed Consolidated Financial Statements Report on Review of Condensed Consolidated Financial Statements Interim Dividend Management Discussion and Analysis Other Information Directors Interests Substantial Shareholders and Other Persons Interests Corporate Governance and Other Information Audit Committee Review Purchase, Sale or Redemption of Shares

4 2 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report 2019 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 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 Chew Chee Choong 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

5 index.htm CORPORATE INFORMATION (continued) 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 Co., Ltd. The Bank of East Asia (China) Limited China Construction Bank Corporation China Merchants Bank Co., Ltd. Industrial and Commercial Bank of China Limited Ping An Bank Co., Ltd. OCBC 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 54, 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

6 4 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report 2019 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS For the six months ended 30th June, 2019 The board of directors ( Board ) of Tian An China Investments Company Limited ( Company ) announces that the unaudited consolidated results of the Company and its subsidiaries ( Group ) for the six months ended 30th June, 2019 with the comparative figures for the corresponding period in 2018 are as follows: (Unaudited) Six months ended 30th June, NOTES HK$ 000 HK$ 000 Revenue 3 1,005,980 2,355,685 Cost of sales (535,497) (1,327,790) Gross profit 470,483 1,027,895 Other income and gains 5 166, ,096 Marketing and distribution expenses (22,271) (28,451) Administrative expenses (171,473) (145,195) Other operating expenses (2,491) (14,069) Net increase (decrease) in fair value of equity securities at fair value through profit or loss 16,340 (15,582) Net decrease in fair value of financial assets at fair value through profit or loss (15,406) (9,482) Fair value gain on transfer of inventories of completed properties to investment properties 32, ,295 Increase in fair value of investment properties 131, ,261 Write-down of inventories of completed properties (1,935) Impairment loss on properties for development (42,330) Amortisation of properties for development (13,549) (14,014) Finance costs 6 (78,949) (82,049) Share of profit of associates 4,867 46,382 Share of profit of joint ventures 527, ,529 Profit before tax 1,000,913 1,306,616 Taxation 7 (135,511) (454,593) Profit for the period 8 865, ,023

7 5 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued) For the six months ended 30th June, 2019 (Unaudited) Six months ended 30th June, NOTES HK$ 000 HK$ 000 Profit for the period attributable to: Owners of the Company 853, ,929 Non-controlling interests 11,930 15, , ,023 HK cents HK cents Earnings per share 9 Basic

8 6 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report 2019 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended 30th June, 2019 (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Profit for the period 865, ,023 Other comprehensive (expense) income Items that will not be reclassified to profit or loss: Exchange differences arising on translation to presentation currency (163,863) (208,442) Share of other comprehensive expense of associates and joint ventures (43,609) (49,470) Net change in fair value of investments in equity instruments at fair value through other comprehensive income (22,689) (15,842) Deferred tax effect on change in fair value of investment in an equity instrument at fair value through other comprehensive income 165 1,513 (229,996) (272,241) Items that may be subsequently reclassified to profit or loss: Exchange differences arising on translation of foreign operations (7,918) (34,295) Others (7,579) (34,041) Other comprehensive expense for the period (237,575) (306,282) Total comprehensive income for the period 627, ,741 Total comprehensive income attributable to: Owners of the Company 618, ,387 Non-controlling interests 9,703 4, , ,741

9 7 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30th June, 2019 (Unaudited) (Audited) 30th June, st December, 2018 NOTES HK$ 000 HK$ 000 Non-current assets Property, plant and equipment , ,312 Right-of-use assets 11 39,587 Investment properties 12 13,712,491 13,622,280 Properties for development 13 3,661,123 3,818,333 Deposits for acquisition of properties for development 191, ,245 Prepaid lease payments on land use rights 39,212 Other assets properties interests 16,783 17,225 Interests in associates 2,893,918 2,891,331 Interests in joint ventures 6,119,686 5,304,245 Loans receivable , ,305 Financial assets at fair value through profit or loss 187, ,790 Equity instruments at fair value through other comprehensive income 316, ,698 Club memberships 10,500 10,500 Deferred tax assets 119, ,962 27,777,987 26,838,438 Current assets Inventories of properties under development 2,125,679 1,797,689 completed 3,559,628 3,993,950 Other inventories 2, Amounts due from associates 189, ,792 Amounts due from joint ventures 1,323,254 1,333,437 Amounts due from non-controlling interests 18,182 18,391 Loans receivable ,564 1,369,144 Trade and other receivables, deposits and prepayments , ,494 Prepaid lease payments on land use rights 892 Financial assets at fair value through profit or loss 176, ,885 Equity securities at fair value through profit or loss 61,685 49,390 Prepaid tax 888 2,791 Pledged bank deposits 23 1,142, ,663 Bank balances and cash 2,038,297 2,293,386 11,955,602 12,176,319

10 8 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report 2019 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) At 30th June, 2019 Current liabilities (Unaudited) (Audited) 30th June, st December, 2018 NOTES HK$ 000 HK$ 000 Trade and other payables 16 1,842,979 1,859,071 Contract liabilities 1,585,491 1,991,420 Tax liabilities 1,432,116 1,431,416 Interest-bearing borrowings 17 1,637,847 1,328,035 Interest-free borrowings 18 1,139, ,768 7,637,433 7,560,710 Net current assets 4,318,169 4,615,609 32,096,156 31,454,047 Capital and reserves Share capital 19 3,788,814 3,788,814 Reserves 20,411,034 20,094,264 Equity attributable to owners of the Company 24,199,848 23,883,078 Non-controlling interests 1,348,568 1,369,933 Total equity 25,548,416 25,253,011 Non-current liabilities Interest-bearing borrowings 17 3,724,505 3,402,238 Deferred rental income from a tenant 20,432 24,800 Rental deposits from tenants 23,331 22,145 Deferred tax liabilities 2,779,472 2,751,853 6,547,740 6,201,036 32,096,156 31,454,047

11 9 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30th June, 2019 Share capital Special capital reserve Attributable to owners of the Company Exchange translation reserve Revaluation reserves Other reserves Retained earnings Total Noncontrolling interests Total equity HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (a) (Note a) At 1st January, 2018 (audited) 3,788,814 1,417, ,217 61,387 (329,167) 17,534,360 23,425,280 1,459,760 24,885,040 Effect on initial application of 9 HKFRS 9 (77,903) 77,903 As restated 3,788,814 1,417, ,217 (16,516) (329,167) 17,612,263 23,425,280 1,459,760 24,885,040 Exchange differences arising on translation to presentation currency (198,974) (198,974) (9,468) (208,442) Exchange differences arising on translation of foreign operation (34,295) (34,295) (34,295) Share of other comprehensive expense of associates and joint ventures (49,470) (49,470) (49,470) Net change in fair value of investments in equity instruments at fair value through other comprehensive income (14,570) (14,570) (1,272) (15,842) Deferred tax effect on change in fair value on investment in an equity instrument at fair value through other comprehensive income 1,513 1,513 1,513 Others Profit for the period 836, ,929 15, ,023 Total comprehensive (expense) income for the period (282,739) (13,057) , ,387 4, , Dividend recognised as distribution (note 10) (301,354) (301,354) (301,354) Dividend distributed to non-controlling interests (77,670) (77,670) At 30th June, 2018 (unaudited) 3,788,814 1,417, ,478 (29,573) (328,913) 18,147,838 23,665,313 1,386,444 25,051,757

12 10 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report 2019 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) For the six months ended 30th June, 2019 Share capital Special capital reserve Attributable to owners of the Company Exchange translation reserve Revaluation reserves Other reserves Retained earnings Total Noncontrolling interests Total equity HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (a) (Note a) At 1st July, 2018 (unaudited) 3,788,814 1,417, ,478 (29,573) (328,913) 18,147,838 23,665,313 1,386,444 25,051,757 Exchange differences arising on translation to presentation currency (98,591) (98,591) (7,459) (106,050) Exchange differences arising on translation of foreign operation (33,310) (33,310) (33,310) Share of other comprehensive expense of associates and joint ventures (15,450) (15,450) (15,450) Net change in fair value of investments in equity instruments at fair value through other comprehensive income (50,385) (50,385) (409) (50,794) Deferred tax effect on change in fair value of investments in equity instrument at fair value through other comprehensive income 2,090 2,090 2,090 Surplus on revaluation of properties and prepaid lease payments upon transfer to investment properties 3,156 3,156 1,054 4,210 Deferred tax effect on revaluation of properties upon transfer to investment properties (4,527) (4,527) (1,512) (6,039) Others Profit for the period 414, ,273 (8,185) 406,088 Total comprehensive (expense) income for the period (147,351) (49,666) , ,765 (16,511) 201,254 Transfer of revaluation reserves to retained earnings upon disposal of equity instrument at fair value through other comprehensive income 4,601 (4,601) At 31st December, 2018 (audited) 3,788,814 1,417, ,127 (74,638) (328,404) 18,557,510 23,883,078 1,369,933 25,253,011

13 11 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) For the six months ended 30th June, 2019 Share capital Special capital reserve Attributable to owners of the Company Exchange translation reserve Revaluation reserves Other reserves Retained earnings Noncontrolling interests Total equity Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (a) (Note a) At 1st January, 2019 (audited) 3,788,814 1,417, ,127 (74,638) (328,404) 18,557,510 23,883,078 1,369,933 25,253,011 Exchange differences arising on translation to presentation currency (161,526) (161,526) (2,337) (163,863) Exchange differences arising on translation of foreign operation (7,918) (7,918) (7,918) Share of other comprehensive expense of associates and joint ventures (43,609) (43,609) (43,609) Net change in fair value of investments in equity instruments at fair value through other comprehensive income (22,799) (22,799) 110 (22,689) Deferred tax effect on change in fair value on investment in an equity instrument at fair value through other comprehensive income Others Profit for the period 853, ,472 11, ,402 Total comprehensive (expense) income for the period (213,053) (22,634) , ,124 9, ,827 b Transfer on voluntary liquidation of a joint venture (Note b) (5,310) 5, Dividend recognised as distribution (note 10) (301,354) (301,354) (301,354) Dividend distributed to non-controlling interests (31,068) (31,068) At 30th June, 2019 (unaudited) 3,788,814 1,417, ,764 (97,272) (328,065) 19,114,938 24,199,848 1,348,568 25,548,416 Notes: (a) (a) Revaluation reserves of the Group comprise the investment revaluation reserve arising from the fair value adjustment on equity instruments at fair value through other comprehensive income and property revaluation reserve arising from revaluation of properties upon transfer to investment properties. (b) 5,310,000 (b) During the period ended 30th June, 2019, a joint venture, which was established in the People s Republic of China ( PRC ) and was inactive, was voluntarily liquidated. Exchange translation reserve of HK$5,310,000 was released to retained earnings.

14 12 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report 2019 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended 30th June, 2019 (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Net cash used in operating activities (139,933) (85,050) Net cash used in investing activities Interest received 107, ,363 Dividends received from joint ventures 13,843 Dividends received from equity instruments at fair value through other comprehensive income 1,500 1,500 Dividends received from financial assets at fair value through profit or loss Dividends received from equity securities at fair value through profit or loss 326 Purchase of property, plant and equipment (3,585) (1,699) Proceeds on disposal of property, plant and equipment 202 Addition of investment properties (1,478) (749) Proceeds from disposal of investment properties, net of value added tax 3,023 7,401 Purchase of equity securities at fair value through profit or loss (11,687) Purchase of equity instrument at fair value through other comprehensive income (128,042) Purchase of financial assets at fair value through profit or loss (38,258) (388,678) Proceeds from disposal of equity instruments at fair value through other comprehensive income 15,970 Proceeds from disposal of equity securities at fair value through profit or loss 12,443 Net cash inflow from voluntary liquidation of a joint venture 10,420 Repayment from associates 13, ,190 Advances to joint ventures (396,779) (193,690) Repayment from joint ventures 1,619 Loans receivable repaid 612, ,235 Loans receivable advanced (219,518) (846,496) Withdrawal of pledged bank deposits 1,294 Placement of pledged bank deposits (590,101) (613,861) (950,789)

15 13 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (continued) For the six months ended 30th June, 2019 (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Net cash from (used in) financing activities Interest paid (115,439) (97,464) Dividend paid (301,354) (301,354) Dividend paid to non-controlling interests (31,068) (77,670) New interest-bearing borrowings raised 1,342, ,039 Repayment of interest-bearing borrowings (658,358) (410,764) New interest-free borrowings raised 207, ,189 Repayment of interest-free borrowings (9,033) 434,945 (67,024) Net decrease in cash and cash equivalents (318,849) (1,102,863) Cash and cash equivalents at the beginning of the period 2,175,526 4,194,781 Effect of foreign exchange rate changes (5,520) 17,402 Cash and cash equivalents at the end of the period 1,851,157 3,109,320 Analysis of the balances of cash and cash equivalents Bank balances and cash 2,038,297 3,556,411 Less: restricted bank deposits (Note) (187,140) (447,091) 1,851,157 3,109,320 Note: The restricted bank deposits are included in bank balances and cash which can only be applied in the designated property development projects.

16 14 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 30th June, BASIS OF PREPARATION 34 The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) as well as the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities ( Listing Rules ) on The Stock Exchange of Hong Kong Limited ( Stock Exchange ). The financial information relating to the year ended 31st December, 2018 that is included in these condensed consolidated financial statements does not constitute the Company s statutory annual consolidated financial statements for that financial year but is derived from those financial statements. Further information relating to these statutory financial statements is as follows: 662(3) (2) 407(2) (3) 2. The Company has delivered the financial statements for the year ended 31st December, 2018 to the Registrar of Companies in accordance with section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance ( CO ). The Company s auditor has reported on those financial statements for The auditor s report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or (3) of the CO. 2. SIGNIFICANT ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis except for certain properties and financial instruments, which are measured at fair values, as appropriate. Other than changes in accounting policies resulting from application of new and amendments to Hong Kong Financial Reporting Standards ( HKFRSs ), the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30th June, 2019 are the same as those followed in the preparation of the Group s annual consolidated financial statements for the year ended 31st December, 2018.

17 SIGNIFICANT ACCOUNTING POLICIES (continued) Application of new and amendments to HKFRSs In the current interim period, the Group has applied, for the first time, the following new and amendments to HKFRSs issued by the HKICPA which are mandatory effective for the annual period beginning on or after 1st January, 2019 for the preparation of the Group s condensed consolidated financial statements: HKFRS 16 HK(IFRIC)-Int 23 Leases Uncertainty over Income Tax Treatments Amendments to HKFRS 9 Prepayment Features with Negative Compensation Amendments to HKAS 19 Plan Amendment, Curtailment or Settlement Amendments to HKAS 28 Long-term Interests in Associates and Joint Ventures Amendments to HKFRSs Annual Improvements to HKFRSs Cycle Except as described below, the application of the new and amendments to HKFRSs in the current period has had no material impact on the Group s financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.

18 16 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases The Group has applied HKFRS 16 for the first time in the current interim period. HKFRS 16 superseded HKAS 17 Leases, and the related interpretations Key changes in accounting policies resulting from application of HKFRS The Group applied the following accounting policies in accordance with the transition provisions of HKFRS 16. Definition of a lease A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. 16 For contracts entered into or modified on or after the date of initial application, the Group assesses whether a contract is or contains a lease based on the definition under HKFRS 16 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed. As a lessee Allocation of consideration to components of a contract For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. As a practical expedient, leases with similar characteristics are accounted on a portfolio basis when the Group reasonably expects that the effect on the financial statements would not differ materially from individual leases within the portfolio.

19 SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases (continued) Key changes in accounting policies resulting from application of HKFRS 16 (continued) As a lessee (continued) Short-term leases and leases of low-value assets 12 The Group applies the short-term lease recognition exemption to leases of machinery and equipment that have a lease term of twelve months or less from the commencement date and do not contain a purchase option. It also applies the recognition exemption for leases of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. Right-of-use assets Except for short-term leases and leases of low value assets, the Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use asset includes: the amount of the initial measurement of the lease liability; any lease payments made at or before the commencement date, less any lease incentives received; any initial direct costs incurred by the Group; and an estimate of costs to be incurred by the Group in dismantling and removing the underlying assets, restoring the site on which it is located or restoring the underlying assets to the condition required by the terms and conditions of the lease. Right-of-use assets in which the Group is reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term are depreciated from commencement date to the end of their useful lifes. Otherwise, right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful lifes and the lease terms.

20 18 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases (continued) Key changes in accounting policies resulting from application of HKFRS 16 (continued) As a lessee (continued) Refundable rental deposits 9 Refundable rental deposits paid are accounted under HKFRS 9 Financial Instruments and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments and included in the cost of right-of-use assets. As a lessor Allocation of consideration to components of a contract 15 Effective on 1st January, 2019, the Group applies HKFRS 15 Revenue from Contracts with Customers to allocate consideration in a contract to lease and non-lease components. Non-lease components are separated from lease component on the basis of their relative stand-alone selling prices. Refundable rental deposits 9 Refundable rental deposits received are accounted under HKFRS 9 and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments from lessees. Lease modification The Group accounts for a modification to an operating lease as a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease.

21 SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases (continued) Transition and summary of effects arising from initial application of HKFRS 16 Definition of a lease The Group has elected the practical expedient to apply HKFRS 16 to contracts that were previously identified as leases applying HKAS 17 and HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease and not apply this standard to contracts that were not previously identified as containing a lease. Therefore, the Group has not reassessed contracts which already existed prior to the date of initial application. 16 For contracts entered into or modified on or after 1st January, 2019, the Group applies the definition of a lease in accordance with the requirements set out in HKFRS 16 in assessing whether a contract contains a lease. As a lessee 16 The Group has applied HKFRS 16 retrospectively with the cumulative effect recognised at the date of initial application, 1st January, Any difference at the date of initial application is recognised in the opening retained earnings and comparative information has not been restated When applying the modified retrospective approach under HKFRS 16 at transition, the Group applied the practical expedient of electing not to recognise right-of-use assets and lease liabilities for leases with lease terms ending within twelve months of the date of initial application to leases previously classified as operating leases under HKAS 17, on leaseby-lease basis, to the extent relevant to the respective lease contracts.

22 20 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases (continued) Transition and summary of effects arising from initial application of HKFRS 16 (continued) 16 As a lessee (continued) On transition, no lease liability is recognised upon application of HKFRS 16. As at 1st January, 2019 HK$ 000 Operating lease commitments disclosed as at 31st December, ,915 Less: Recognition exemption short-term leases (1,915) The carrying amount of right-of-use assets as at 1st January, 2019 comprises the followings: Right-ofuse assets Properties for development Notes HK$ 000 HK$ Right-of-use assets relating to operating leases recognised upon application of HKFRS 16: Reclassified from prepaid lease payments on land use rights (a) 40,104 Amount included in properties for development (b) 3,342,421 40,104 3,342,421 By class: Leasehold lands 3,342,421 Land and buildings 40,104 40,104 3,342,421

23 SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases (continued) Transition and summary of effects arising from initial application of HKFRS 16 (continued) As a lessee (continued) Notes: (a) ,00039,212,000 (a) Upfront payments for leasehold lands in the PRC were classified as prepaid lease payments on land use rights as at 31st December, Upon application of HKFRS 16, the current and non-current portions of prepaid lease payments on land use rights amounting to HK$892,000 and HK$39,212,000 respectively were reclassified to right-of-use assets. (b) 16 3,342,421,000 (b) Payments for leasehold lands and directly attributable costs in the PRC were classified as properties for development as at 31st December, Upon application of HKFRS 16, properties for development amounting to HK$3,342,421,000 were considered as right-of-use assets and included in properties for development. As a lessor In accordance with the transitional provisions in HKFRS 16, the Group is not required to make any adjustment on transition for leases in which the Group is a lessor but accounts for these leases in accordance with HKFRS 16 from the date of initial application and comparative information has not been restated. (a) 16 (a) Upon application of HKFRS 16, new lease contracts entered into but commence after the date of initial application relating to the same underlying assets under existing lease contracts are accounted as if the existing leases are modified as at 1st January, The application has had no impact on the Group s condensed consolidated statement of financial position as at 1st January, However, effective on 1st January, 2019, lease payments relating to the revised lease term after modification are recognised as income on straight-line basis over the extended lease term. (b) (b) Before application of HKFRS 16, refundable rental deposits received were considered as rights and obligations under leases to which HKAS 17 applied. Based on the definition of lease payments under HKFRS 16, such deposits are not payments relating to the rightof-use assets and were adjusted to reflect the discounting effect at transition. The effect has no material impact on the condensed consolidated financial statements of the Group for the current period.

24 22 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Impacts and changes in accounting policies of application on HKFRS 16 Leases (continued) Transition and summary of effects arising from initial application of HKFRS 16 (continued) As a lessor (continued) (c) 15 (c) Effective on 1st January, 2019, the Group has applied HKFRS 15 to allocate consideration in the contract to each lease and non-lease components. The change in allocation basis has had no material impact on the condensed consolidated financial statements of the Group for the current period. The following adjustments were made to the amounts recognised in the condensed consolidated statement of financial position as at 1st January, Line items that were not affected by the changes have not been included. Carrying amounts previously reported as at 31st December, 2018 Adjustments 16 Carrying amounts under HKFRS 16 as at 1st January, 2019 HK$ 000 HK$ 000 HK$ 000 Non-current assets Prepaid lease payments on land use rights 39,212 (39,212) Right-of-use assets 40,104 40,104 Current assets Prepaid lease payments on land use rights 892 (892)

25 SIGNIFICANT ACCOUNTING POLICIES (continued) 2.2 Impacts and changes in accounting policies of application of other new and amendments to HKFRSs 23 Impacts and changes in accounting policies of application on HK(IFRIC)-Int 23 Uncertainty over Income Tax Treatments 23 HK(IFRIC)-Int 23 sets out how to determine the accounting tax position when there is uncertainty over income tax treatments. The interpretation requires the Group to determine whether uncertain tax positions are assessed separately or as a group and assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by individual group entities in their respective income tax filings. If it is probable, the current and deferred taxes are determined consistently with the tax treatment in the income tax filings. If it is not probable that the relevant taxation authority will accept an uncertain tax treatment, the effect of each uncertainty is reflected by using either the most likely amount or the expected value. 23 The application of HK(IFRIC)-Int 23 in the current interim period has had no material effect on the amounts reported and/or disclosures set out in these condensed consolidated financial statements. 9 Impacts and changes in accounting policies of application on Amendments to HKFRS 9 Prepayment Features with Negative Compensation The amendments clarify that for the purpose of assessing whether a prepayment feature meets the condition of representing solely payments of principal and interest on the principal amount outstanding ( SPPI ), the party exercising the option may pay or receive reasonable compensation for the prepayment irrespective of the reason i.e. prepayment features with negative compensation do not automatically fail SPPI. The application of the amendments in the current interim period has had no material effect on the amounts reported and/or disclosures set out in these condensed consolidated financial statements.

26 24 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report SIGNIFICANT ACCOUNTING POLICIES (continued) 2.2 Impacts and changes in accounting policies of application of other new and amendments to HKFRSs (continued) Impacts and changes in accounting policies of application on Amendments to HKFRSs Annual Improvements to HKFRSs Cycle The annual improvement packages amended the following three standards. 12 HKAS 12 Income Taxes The Group recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the Group originally recognised the transactions that generated the distributable profits. This is the case irrespective of whether different tax rates apply to distributed and undistributed profits. 3 HKFRS 3 Business Combinations When the Group obtains control of a business that is a joint operation, the Group applies the requirements for a business combination achieved in stages, including remeasuring its previously held interest in the joint operation at fair value. The previously held interest to be remeasured includes any unrecognised assets, liabilities and goodwill relating to the joint operation. 11 HKFRS 11 Joint Arrangements When the Group obtains joint control of a joint operation in which the Group previously participated in but did not have joint control, the Group does not remeasure its previously held interest in the joint operation. The application of Amendments to HKFRSs Annual Improvements to HKFRSs Cycle in the current interim period has had no material effect on the amounts reported and/or disclosures set out in these condensed consolidated financial statements.

27 REVENUE Disaggregation of revenue (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 At a point in time Sales of completed properties 679,868 2,013,354 Over time Property management 61,004 62,898 Other operations 14,071 24,223 Revenue from goods and services 754,943 2,100,475 Rental income 251, ,210 1,005,980 2,355, SEGMENT INFORMATION The Group s revenue for the period was derived mainly from activities carried out and located in the PRC and Hong Kong. The Group s basis of organisation is determined based on three main operations: property development, property investment and other operations that comprise mainly property management. Similarly, the Group s reportable and operating segments, reported to the Executive Directors of the Company for the purposes of resource allocation and performance assessment, also focused on the three main operations. For the property investment segment, it includes business activities of a listed property investment subsidiary. No reportable and operating segments of the listed property investment subsidiary are separately presented as its results, assets and liabilities are reviewed together with the Group s other property investment activities for the internal performance assessment purposes.

28 26 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report SEGMENT INFORMATION (continued) The following is an analysis of the Group s segment revenue, results, assets and liabilities by reportable and operating segments for the period under review: Property development Property investment Other operations Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 For the six months ended 30th June, 2019 SEGMENT REVENUE External sales 679, ,037 75,075 1,005,980 RESULTS Segment profit (loss) 174, ,648 (12,458) 447,247 Other income and gains 166,006 Unallocated corporate expenses (65,551) Finance costs (78,949) Share of profit of associates 4,867 Share of profit of joint ventures 527,293 Profit before tax 1,000,913 As at 30th June, 2019 ASSETS Segment assets 9,726,681 13,875,831 50,776 23,653,288 Interests in associates 205,258 2,688,660 2,893,918 Interests in joint ventures 2,695,792 3,163, ,237 6,119,686 Amounts due from associates 2, , ,792 Amounts due from joint ventures 1,256,410 66,844 1,323,254 Unallocated corporate assets 5,553,651 Consolidated total assets 39,733,589 LIABILITIES Segment liabilities 4,261,146 2,416, ,482 6,878,912 Unallocated corporate liabilities 7,306,261 Consolidated total liabilities 14,185,173

29 SEGMENT INFORMATION (continued) Property development Property investment Other operations Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 For the six months ended 30th June, 2018 SEGMENT REVENUE External sales 2,013, ,210 87,121 2,355,685 RESULTS Segment profit 751, ,649 4,551 1,141,598 Other income and gains 134,096 Unallocated corporate expenses (93,940) Finance costs (82,049) Share of profit of associates 46,382 Share of profit of joint ventures 160,529 Profit before tax 1,306,616 As at 31st December, 2018 ASSETS Segment assets 9,998,416 13,796,057 47,582 23,842,055 Interests in associates 209,618 2,681,713 2,891,331 Interests in joint ventures 2,284,224 2,827, ,590 5,304,245 Amounts due from associates 2, , ,792 Amounts due from joint ventures 1,264,933 68,504 1,333,437 Unallocated corporate assets 5,440,897 Consolidated total assets 39,014,757 LIABILITIES Segment liabilities 4,603,578 2,404, ,316 7,116,650 Unallocated corporate liabilities 6,645,096 Consolidated total liabilities 13,761,746

30 28 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report OTHER INCOME AND GAINS (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Dividend income unlisted shares 1,903 1,786 listed shares 1, Interest income on bank deposits 24,459 27,163 Interest income from loans receivable 98,410 86,534 Interest income from a joint venture 1,491 4,801 Recoveries of expected credit losses provision 21,872 Net exchange gain 450 2,087 Others 15,588 11, , , FINANCE COSTS (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Interest on: Bank loans 108,593 96,544 Other loans 1,509 1,528 Loans arrangement fee 1, ,973 98,273 Less: am ount capitalised on properties under development (33,024) (16,224) 78,949 82,049

31 TAXATION (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 The charge comprises: Current tax Hong Kong Profits Tax 1,805 1,600 PRC Enterprise Income Tax 46, ,022 Land Appreciation Tax 43, ,417 92, ,039 (Over) under provision in prior years Hong Kong Profits Tax 5 Overseas Tax (6,495) PRC Enterprise Income Tax (240) 450 (6,730) , ,489 Deferred tax 49, , , , % Hong Kong Profits Tax is calculated at the rate of 16.5% on the estimated assessable profit for the period. The PRC Enterprise Income Tax is calculated at the rates applicable to respective subsidiaries.

32 30 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report PROFIT FOR THE PERIOD (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Profit for the period has been arrived at after charging (crediting): Depreciation of property, plant and equipment 9,779 11,979 Less: amount capitalised on properties under development (837) (1,534) Amortisation of: 8,942 10,445 Other assets properties interests Properties for development 13,549 14,014 Right-of-use assets 352 Prepaid lease payments on land use rights 599 Total depreciation and amortisation 23,090 25,317 Cost of inventories recognised as expenses 402,963 1,197,004

33 EARNINGS PER SHARE The calculation of the basic earnings per share attributable to the owners of the Company is based on the following: (Unaudited) Six months ended 30th June, HK$ 000 HK$ 000 Earnings Earnings for the purpose of basic earnings per share (profit for the period attributable to owners of the Company) 853, ,929 (Unaudited) Six months ended 30th June, Number of shares Number of ordinary shares for the purpose of basic earnings per share 1,506,769 1,506,769 No diluted earnings per share for both 2019 and 2018 were presented as there were no potential ordinary shares in issue for both 2019 and 2018.

34 32 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report DIVIDEND (Unaudited) Six months ended 30th June, HK$ 000 HK$ Dividend recognised as distribution during the period: Interim dividend (in lieu of final dividend) of HK20 cents (2018: HK20 cents) per share paid in respect of 2018 (2018: in respect of 2017) 301, , PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS 3,585,000 1,699,000 During the six months ended 30th June, 2019, the Group acquired property, plant and equipment for a cash consideration of HK$3,585,000 (30th June, 2018: HK$1,699,000). During the six months ended 30th June, 2019 and 2018, the Group did not transfer any owner-occupied properties to investment properties. 39,587, As at 30th June, 2019, right-of-use assets amounting to HK$39,587,000 represent the prepaid lease payments on land use rights. 12. INVESTMENT PROPERTIES 64,302, ,123,000 During the six months ended 30th June, 2019, the Group transferred inventories of completed properties of HK$64,302,000 (30th June, 2018: HK$286,123,000) to investment properties upon the inception of operating leases to other parties.

35 INVESTMENT PROPERTIES (continued) 13. The fair values of the Group s investment properties at the date of transfer, 31st December, 2018 and 30th June, 2019 have been arrived at on the basis of valuations carried out on those dates by Norton Appraisals Holdings Limited, a firm of independent and qualified professional valuers not connected with the Group. The valuation was principally based on income approach by taking into account the current rents passing and the reversionary income potential of tenancies. For the properties which are currently vacant, the valuation was based on each of the property interests by capitalisation of the hypothetical and reasonable market rents with a typical lease term and also make reference to the direct comparison approach. For the properties which were transferred from inventories of completed properties to investment properties, the valuation was based on direct comparison approach. The valuations of investment properties held for undetermined future use were arrived at the adoption of the residual approach with the basis that they will be developed and completed in accordance with the latest development proposals and taken into account the constructions cost that will extent to complete the development to reflect the quality of the completed development. There has been no change from the valuation technique used in the prior periods/years. 13. PROPERTIES FOR DEVELOPMENT 3,231,252, As at 30th June, 2019, right-of-use assets for leasehold lands amounting to HK$3,231,252,000 are included in properties for development. 14. LOANS RECEIVABLE Loans receivable consist of: (a) 55,758, ,342,000 30% 30% (a) Loan receivable of HK$55,758,000 (31st December, 2018: HK$172,342,000) bears interest at 30% (31st December, 2018: 30%) per annum, is secured by share mortgage of guarantor and loans receivable of the borrower and is classified as current loans receivable (31st December, 2018: current loans receivable). 200,000,000 18% Loan receivable of HK$200,000,000 (31st December, 2018: nil) bears interest at 18% (31st December, 2018: nil) per annum, is secured by share mortgage of a listed company and is due for repayment in October 2019 (31st December, 2018: nil) and is classified as current loans receivable (31st December, 2018: nil).

36 34 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report LOANS RECEIVABLE (continued) (b) 886,464,000 1,357,105, % 36% 4.75% 36% 185,658, ,810, % 12% 4.75% 12% (b) Loans receivable of HK$886,464,000 (31st December, 2018: HK$1,357,105,000) bear interests ranging from 4.75% to 36% (31st December, 2018: 4.75% to 36%) per annum, are unsecured. Of which HK$185,658,000 (31st December, 2018: HK$166,810,000) are classified as non-current loans receivable and are due for repayment from May 2021 to February 2022 (31st December, 2018: from May 2020 to May 2021) and carry interests ranging from 4.75% to 12% (31st December, 2018: 4.75% to 12%) per annum. (c) 97,495,000 97,495,000 15% 15% (c) Loan receivable of HK$97,495,000 (31st December, 2018: HK$97,495,000) carries a fixed interest rate of 15% (31st December, 2018: 15%) per annum, is secured by share mortgage of subsidiaries of borrower, and is due for repayment in October 2021 (31st December, 2018: October 2021) and is classified as noncurrent loans receivable (31st December, 2018: non-current loans receivable). (d) 6,507,000 4% (d) Loans receivable of HK$6,507,000 as at 31st December, 2018 bore interest at Hong Kong Inter-bank Offered Rate plus 4% per annum, were secured by share mortgage, and were settled during the six months ended 30th June, 2019 and were classified as current loans receivable as at 31st December, TRADE AND OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS Proceeds receivable in respect of sales of properties are settled by customers in accordance with the terms stipulated in the sale and purchase agreements. Except for the proceeds from sales of properties and rental income from lease of properties which are payable in accordance with the terms of the relevant agreements, the Group generally allows a credit period of 30 days to 120 days to its customers.

37 TRADE AND OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (continued) The following is an aged analysis of trade receivables by date of debit note at the end of the reporting period: (Unaudited) As at 30th June, 2019 HK$ 000 (Audited) As at 31st December, 2018 HK$ 000 Within 3 months 5,777 8,334 Between 4 and 6 months 706 1,058 Between 7 and 12 months 85 8 Over 12 months ,144 10, TRADE AND OTHER PAYABLES The following is an aged analysis of trade payables by age, presented based on the invoice date, which are included in trade and other payables, at the end of the reporting period: (Unaudited) As at 30th June, 2019 HK$ 000 (Audited) As at 31st December, 2018 HK$ 000 Within 3 months 597, ,391 Between 4 and 6 months 7,944 14,036 Between 7 and 12 months 53,048 69,338 Over 12 months 344, ,462 1,002,603 1,146,227

38 36 TIAN AN CHINA INVESTMENTS COMPANY LIMITED Interim Report INTEREST-BEARING BORROWINGS 1,342,212, ,039, ,358, ,764, % 10.00% 2.03% 10.00% 18. During the six months ended 30th June, 2019, the Group obtained new loans in the amount of HK$1,342,212,000 (30th June, 2018: HK$573,039,000) and repaid bank and other loans of HK$658,358,000 (30th June, 2018: HK$410,764,000). The majority of the loans as at 30th June, 2019 are repayable within five years and bear interest at fixed or floating market rates ranging from 2.00% to 10.00% (31st December, 2018: 2.03% to 10.00%) per annum. Proceeds from new borrowings were used to finance the progress payments for properties under development and operating activities of the Group. 18. INTEREST-FREE BORROWINGS (Unaudited) As at 30th June, 2019 HK$ 000 (Audited) As at 31st December, 2018 HK$ 000 Amounts due to associates 10,251 7,431 Amounts due to joint ventures 1,128, ,170 Advances from non-controlling interests ,139, ,768 The amounts are unsecured, interest-free and repayable on demand.

39 SHARE CAPITAL Number of ordinary shares Amount HK$ 000 Issued and fully paid: At 31st December, 2018 and 30th June, 2019 Ordinary shares with no par value 1,506,769,491 3,788, CONTINGENT LIABILITIES (a) (a) At 30th June, 2019 and 31st December, 2018, the Group had guarantees as follows: (Unaudited) As at 30th June, 2019 HK$ 000 (Audited) As at 31st December, 2018 HK$ 000 Guarantees given to banks in respect of mortgage loans granted to property purchasers 633, ,469 Guarantees given to banks in respect of banking facilities granted to and utilised by joint ventures 558, ,379 Guarantees given to banks in respect of banking facilities granted to but not yet utilised by joint ventures 59,091 59,770 Guarantees granted in respect of utility supplies and government authorities for the property development works utilised 449 2,399 not yet utilised