Financial Statements 148 Consolidated Income Statement 149 Consolidated Statement of Comprehensive Income 150 Statements of Financial Position 151 Consolidated Statement of Changes in Equity 152 Consolidated Cash Flow Statement 153 Notes to The Financial Statements 153 1. Principal Accounting Policies 171 2. Changes in Accounting Policies 174 3. Turnover and Segment Information 176 4. Other Income 177 5. Net Interest Income 177 6. Profit Before Taxation 178 7. Emoluments of Directors and Senior Management 180 8. Taxation in the Consolidated Income Statement 181 9. Net Profit Attributable to Shareholders 181 10. Dividends 182 11. Earnings Per Share 183 12. Fixed Assets Group 188 13. Interest in Subsidiaries 188 14. Interest in Joint Ventures 189 15. Other Assets 189 16. Cash and Deposits with Banks 190 17. Trade and Other Receivables 190 18. Properties for Sale 191 19. Bank Loans and Other Borrowings 192 20. Trade and Other Payables 192 21. Taxation in the Consolidated Statement of Financial Position 194 22. Share Capital 195 23. Reserves 198 24. Non-Controlling Interests 198 25. Cash Generated from Operations 199 26. Contingent Liabilities 199 27. Commitments 200 28. Employee Benefits 205 29. Related Party Transactions 206 30. Financial Risk Management Objectives and Policies 210 31. Significant Accounting Estimates and Judgments 211 32. Ultimate Holding Company 211 33. Future Changes in Accounting Policies 211 34. Approval of Financial Statements 212 35. Principal Subsidiaries 217 36. Joint Ventures 147
Consolidated Income Statement For the year ended December 31, 2013 in HK$ Million Note 2013 2012 Turnover 3(a) 9,138 7,372 Direct costs and operating expenses (2,301) (1,630) Gross profit 6,837 5,742 Other income 4 36 2,153 Administrative expenses (642) (626) Operating profit before change in fair value of investment properties 6,231 7,269 Increase in fair value of investment properties 12 2,482 2,522 Operating profit after change in fair value of investment properties 8,713 9,791 Interest income 793 621 Finance costs (398) (348) Net interest income 5 395 273 Share of profits of joint ventures 14 96 105 Profit before taxation 3(a) & 6 9,204 10,169 Taxation 8(a) (1,447) (1,249) Profit for the year 7,757 8,920 Attributable to: Shareholders 23 7,212 8,395 Non-controlling interests 24 545 525 7,757 8,920 Earnings per share 11(a) Basic $1.61 $1.88 Diluted $1.61 $1.87 10 The accompanying notes form part of these financial statements. Details of dividends payable to equity shareholders of the Company attributable to the year are set out in note 10. 148 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
Consolidated Statement of Comprehensive Income For the year ended December 31, 2013 in HK$ Million Note 2013 2012 本年度溢利 Profit for the year 7,757 8,920 其他全面收益 Other comprehensive income 8(d) Item that may be reclassified subsequently to profit or loss: Exchange difference arising from translation of overseas subsidiaries 2,676 150 本年度全面收益總額 Total comprehensive income for the year 10,433 9,070 應佔全面收益總額 : Total comprehensive income attributable to: Shareholders 9,712 8,545 Non-controlling interests 721 525 10,433 9,070 The accompanying notes form part of these financial statements. 149
Statements of Financial Position At December 31, 2013 Group Company in HK$ Million Note 2013 2012 2013 2012 非流動資產 Non-current assets Fixed assets Investment properties 107,587 98,223 Investment properties under development 30,478 24,482 Other fixed assets 289 250 12 138,354 122,955 Interest in subsidiaries 13 64,356 71,633 Interest in joint ventures 14 1,030 1,041 Other assets 15 8 Deferred tax assets 21(b) 7 12 139,399 124,008 64,356 71,633 流動資產 Current assets Cash and deposits with banks 16 34,321 36,025 1 1 Trade and other receivables 17 2,865 1,270 3 5 Other assets 15 452 Properties for sale 18 5,695 6,109 42,881 43,856 4 6 流動負債 Current liabilities Bank loans and other borrowings 19 1,657 1,113 Trade and other payables 20 5,977 4,811 22 21 Taxation payable 21(a) 633 392 8,267 6,316 22 21 流動資產 /( 負債 ) 淨值 Net current assets/(liabilities) 34,614 37,540 (18) (15) 資產總值減流動負債 Total assets less current liabilities 174,013 161,548 64,338 71,618 非流動負債 Non-current liabilities Bank loans and other borrowings 19 33,322 28,623 Amounts due to subsidiaries 13(c) 20,869 28,423 Deferred tax liabilities 21(b) 9,524 8,947 42,846 37,570 20,869 28,423 資產淨值 NET ASSETS 131,167 123,978 43,469 43,195 資本及儲備 Capital and reserves Share capital 22 4,479 4,477 4,479 4,477 Reserves 23 120,055 113,451 38,990 38,718 Shareholders equity 124,534 117,928 43,469 43,195 Non-controlling interests 24 6,633 6,050 總權益 TOTAL EQUITY 131,167 123,978 43,469 43,195 陳南祿 何孝昌 Philip N.L. Chen Managing Director H.C. Ho Executive Director The accompanying notes form part of these financial statements. 150 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
Consolidated Statement of Changes in Equity For the year ended December 31, 2013 Shareholders equity in HK$ Million Share capital (22) (Note 22) Other reserves (23) (Note 23) Retained profits (23) (Note 23) Total Noncontrolling interests (24) (Note 24) Total equity At January 1, 2012 4,473 41,067 65,922 111,462 5,556 117,018 Profit for the year 8,395 8,395 525 8,920 Exchange difference arising from translation of overseas subsidiaries 150 150 150 Total comprehensive income for the year 150 8,395 8,545 525 9,070 Final dividends in respect of previous financial year (1,611) (1,611) (1,611) Interim dividends in respect of current financial year (761) (761) (761) Issue of shares 4 56 60 60 Employee share-based payments 8 225 233 233 Dividends paid to non-controlling interests (31) (31) At December 31, 2012 and January 1, 2013 4,477 41,281 72,170 117,928 6,050 123,978 Profit for the year 7,212 7,212 545 7,757 Exchange difference arising from translation of overseas subsidiaries 2,500 2,500 176 2,676 Total comprehensive income for the year 2,500 7,212 9,712 721 10,433 Final dividends in respect of previous financial year (2,553) (2,553) (2,553) Interim dividends in respect of current financial year (761) (761) (761) Issue of shares 2 42 44 44 Employee share-based payments 121 43 164 164 Dividends paid to non-controlling interests (122) (122) Repayment to non-controlling interests (16) (16) 於二零一三年十二月三十一日 At December 31, 2013 4,479 43,944 76,111 124,534 6,633 131,167 The accompanying notes form part of these financial statements. 151
Consolidated Cash Flow Statement For the year ended December 31, 2013 in HK$ Million Note 2013 2012 經營活動 Operating activities Cash generated from operations 25 6,053 6,006 Tax paid Profits Tax paid (385) (439) China Income Tax paid (512) (534) 來自經營活動之現金淨額 Net cash generated from operating activities 5,156 5,033 投資活動 Investing activities Payment for fixed assets (9,886) (5,328) Net sale proceeds from disposal of fixed assets 34 5,170 Receipt of matured held-to-maturity investments 452 450 Interest received 801 586 Dividends received from joint ventures 18 36 Increase in amount due to a joint venture 89 35 Repayment of advances to unlisted investments 2 1 Decrease/(Increase) in bank deposits with maturity greater than three months 7,594 (3,474) 用於投資活動之現金淨額 Net cash used in investing activities (896) (2,524) 融資活動 Financing activities Proceeds from new bank loans and other borrowings 5,535 13,879 Repayment of bank loans (475) (4,700) Proceeds from exercise of share options 44 60 Interest and other borrowing costs paid (1,093) (866) Finance lease charges paid (3) Dividends paid (3,314) (2,372) Dividends paid to non-controlling interests (122) (31) Repayment to non-controlling interests (16) Capital element of finance lease (104) 來自融資活動之現金淨額 Net cash generated from financing activities 559 5,863 現金及現金等價物之增加 Increase in cash and cash equivalents 4,819 8,372 匯率變動之影響 Effect of foreign exchange rate change 953 405 於一月一日之現金及 Cash and cash equivalents at January 1 27,989 19,212 現金等價物 於十二月三十一日之現金及現金等價物 Cash and cash equivalents at December 31 16 33,761 27,989 The accompanying notes form part of these financial statements. 152 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
Notes to the Financial Statements (Expressed in dollars) 1 主要會計政策 (a) 遵例聲明 HKFRSs HKASs 1 PRINCIPAL ACCOUNTING POLICIES (a) Statement of compliance These financial statements have been prepared in accordance with all applicable Financial Reporting Standards ( HKFRSs ), which collective term includes all applicable individual Financial Reporting Standards, Accounting Standards ( HKASs ) and Interpretations issued by the Institute of Certified Public Accountants ( HKICPA ), accounting principles generally accepted in and the requirements of the Hong Kong Companies Ordinance. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Limited. A summary of the principal accounting policies adopted by the Group is set out below. HKFRSs 2 The HKICPA has issued certain new and revised HKFRSs that are first effective or available for early adoption for the current accounting period of the Group and the Company. Note 2 provides information on any changes in accounting policies resulting from initial adoption of these developments to the extent that they are relevant to the Group for the current and prior accounting periods reflected in these financial statements. 33 (b) 財務報表編製基準 The Group has not applied any new standard, amendment or interpretation that is not yet effective for the current accounting period (note 33). (b) Basis of preparation of the financial statements The consolidated financial statements comprise the Company and its subsidiaries (collectively referred to as the Group ) and the Group s interest in joint ventures. The measurement basis used in the preparation of the financial statements is the historical cost basis except as otherwise stated in the accounting policies set out below. 153
Notes to the Financial Statements 1 主要會計政策 (b) 財務報表編製基準 HKFRSs 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (b) Basis of preparation of the financial statements (Continued) The preparation of financial statements in conformity with HKFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. HKFRSs 31 (c) 附屬公司及非控股權益 Judgments made by management in the application of HKFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in note 31. (c) Subsidiaries and non-controlling interests Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered. An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances, transactions and cash flows and any unrealized profits arising from intra-group transactions are eliminated in full in preparing the consolidated financial statements. Unrealized losses resulting from intra-group transactions are eliminated in the same way as unrealized gains but only to the extent that there is no evidence of impairment. 154 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (c) 附屬公司及非控股權益 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (c) Subsidiaries and non-controlling interests (Continued) Non-controlling interests represent the portion of the net assets of subsidiaries attributable to interests that are not owned by the Company, whether directly or indirectly through subsidiaries, and in respect of which the Group has not agreed any additional terms with the holders of those interests which would result in the Group as a whole having a contractual obligation in respect of those interests that meets the definition of a financial liability. Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from equity attributable to the equity shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated income statement and the consolidated statement of comprehensive income as an allocation of the total profit or loss and total comprehensive income for the period between non-controlling interests and the equity shareholders of the Company. Changes in the Group s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognized. When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss being recognized in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognized at fair value and this amount is regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture. 1(j) In the Company s statement of financial position, investments in subsidiaries are stated at cost less impairment losses (note 1(j)). 155
Notes to the Financial Statements 1 主要會計政策 (d) 合營企業 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (d) Joint ventures A joint venture is an arrangement whereby the Group or Company and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the arrangement. The Group s interests in joint ventures are accounted for in the consolidated financial statements under the equity method and are initially recorded at cost and adjusted thereafter for the post-acquisition change in the Group s share of the joint ventures net assets. The consolidated income statement includes the Group s share of the postacquisition, post-tax results of the joint ventures for the year, whereas the Group s share of the post-acquisition, post-tax items of the joint ventures other comprehensive income is recognized in the consolidated statement of comprehensive income. When the Group s share of losses exceeds its interest in the joint venture, the Group s interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture. For this purpose, the Group s interest in the joint venture is the carrying amount of the investment under the equity method together with the Group s long-term interests that in substance form part of the Group s net investment in the joint venture. When the Group ceases to have joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognized in profit or loss. Any interest retained in that former investee at the date when joint control is lost is recognized at fair value and this amount is regarded as the fair value on initial recognition of a financial asset. Unrealized profits and losses resulting from transactions between the Group and its joint ventures are eliminated to the extent of the Group s interest in the joint venture, except where unrealized losses provide evidence of an impairment of the asset transferred, in which case they are recognized immediately in profit or loss. 1(j) In the Company s statement of financial position, investments in joint ventures are stated at cost less impairment losses (note 1(j)). 156 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (e) 商譽 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (e) Goodwill Goodwill represents the excess of the cost of a business combination over the Group s share of the fair value of the acquiree s identifiable assets, liabilities and contingent liabilities. 1(j) Goodwill is stated at cost less accumulated impairment losses and is tested regularly for impairment (note 1(j)). Any excess of the Group s interest in the fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the cost of a business combination is recognized immediately in profit or loss as a gain on a bargain purchase. On disposal of an entity, any attributable amount of purchased goodwill is included in the calculation of the profit or loss on disposal. (f) 物業 1. (f) Properties 1. Investment properties and investment properties under development Investment properties are land and/or buildings which are owned or held under a leasehold interest to earn rental income and/or for capital appreciation. These include land held for a currently undetermined future use and property that is being constructed or developed for future use as investment property. 1(q) Investment properties are stated at fair value, unless they are still in the course of construction or development at the end of the reporting period and their fair value cannot be reliably measured at that time. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognized in profit or loss. Rental income from investment properties is accounted for as described in note 1(q). 1(g) When the Group holds a property interest under an operating lease to earn rental income and/or for capital appreciation, the interest is classified and accounted for as an investment property on a propertyby-property basis. Any such property interest which has been classified as an investment property is accounted for as if it were held under a finance lease, and the same accounting policies are applied to that interest as are applied to other investment properties leased under finance leases. Lease payments are accounted for as described in note 1(g). 157
Notes to the Financial Statements 1 主要會計政策 (f) 物業 2. 1(o) 3. 1(o) (g) 其他固定資產 1. 1(j) 2. 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (f) Properties (Continued) 2. Properties under development for sale Properties under development for sale are classified under current assets and stated at the lower of cost and net realizable value. Costs include the acquisition cost of land, aggregate cost of development, borrowing costs capitalized (note 1(o)) and other direct expenses. Net realizable value represents the estimated selling price less estimated costs of completion and costs to be incurred in selling the property. 3. Completed properties for sale Completed properties for sale are classified under current assets and stated at the lower of cost and net realizable value. Cost is determined by apportionment of the total development costs, including borrowing costs capitalized (note 1(o)), attributable to unsold properties. Net realizable value represents the estimated selling price as determined by reference to management estimates based on prevailing market conditions, less costs to be incurred in selling the property. (g) Other fixed assets 1. Other fixed assets are stated at cost less accumulated depreciation and any impairment losses (note 1(j)). Gains or losses arising from the retirement or disposal of an item of other fixed assets are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognized in profit or loss on the date of retirement or disposal. 2. Leased assets An arrangement, comprising a transaction or a series of transactions, is or contains a lease if the Group determines that the arrangement conveys a right to use a specific asset or assets for an agreed period of time in return for a payment or a series of payments. Such a determination is made based on an evaluation of the substance of the arrangement and is regardless of whether the arrangement takes the legal form of a lease. 158 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (g) 其他固定資產 2. (i) (ii) 1(h) 1(j) 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (g) Other fixed assets (Continued) 2. Leased assets (Continued) (i) Classification of assets leased to the Group The classification is determined based on an evaluation of the substance of the arrangement and is regardless of whether the arrangement takes the legal form of a lease. Leases of assets under which the lessee assumes substantially all the risks and benefits of ownership are classified as finance leases. Leases of assets under which the lessor has not transferred all the risks and benefits of ownership are classified as operating leases, with the following exceptions: property held under operating leases that would otherwise meet the definition of an investment property is classified as an investment property on a property-by-property basis and is accounted for as if held under a finance lease; and land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is also clearly held under an operating lease. For these purposes, the inception of the lease is the time that the lease was first entered into by the Group, or taken over from the previous lessee. (ii) Assets acquired under finance leases Where the Group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present value of the minimum lease payments, of such assets are included in fixed assets and the corresponding liabilities, net of finance charges, are recorded as obligations under finance leases. Depreciation is provided at rates which write off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the Company or the Group will obtain ownership of the asset, the life of the asset, as set out in note 1(h). Impairment losses are accounted for as described in note 1(j). Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Contingent rentals are written off as an expense of the accounting period in which they are incurred. 159
Notes to the Financial Statements 1 主要會計政策 (g) 其他固定資產 2. (iii) (h) 折舊 1. 2. 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (g) Other fixed assets (Continued) 2. Leased assets (Continued) (iii) Operating leases charges Where the Group has the use of assets held under operating leases, payments made under the leases are charged to profit or loss in equal instalments over the accounting periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives received are recognized in profit or loss as an integral part of the aggregate net lease payments made. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred. (h) Depreciation 1. Investment properties No depreciation is provided for investment properties and investment properties under development. 2. Other fixed assets Depreciation on other fixed assets is calculated to write off the cost, less their estimated residual value, if any, on a straight line basis over their estimated useful lives as follows: Buildings Furniture and equipment Motor vehicles 50 years or unexpired lease term, whichever is shorter 4 20 years 5 years (i) 持至到期日投資 1(j) (i) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity which the Group s management has the positive intention and ability to hold to maturity. Held-to-maturity investments are initially recognized in the statement of financial position at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any identified impairment loss. Any impairment loss is recognized in profit or loss when there is objective evidence that the asset is impaired (note 1(j)). Investments are recognized/derecognized on the date the Group commits to purchase/sell the investments or they expire. 160 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (j) 資產減值 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (j) Impairment of assets An assessment is carried out at the end of each reporting period to determine whether there is objective evidence that a current or non-current asset, other than properties carried at revalued amounts, is impaired. If any such indication exists, any impairment loss is determined and recognized as follows: For current receivables carried at amortized cost, the impairment loss is recognized when there is objective evidence of impairment and measured as the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective rate where the effect of discounting is material. Objective evidence of impairment includes observable data that comes to the attention of the Group about events that have an impact on the asset s estimated future cash flows such as significant financial difficulty of the debtor. If in a subsequent period the amount of impairment loss decreases, the impairment loss is reversed through profit or loss. A reversal of an impairment loss is limited to the asset s carrying amount that would have been determined had no impairment loss been recognized in prior years. Impairment losses for receivables whose recovery is considered doubtful but not remote are recorded using an allowance account. When the Group is satisfied that recovery is remote, the amount considered irrecoverable is written off against receivables directly and any amounts held in the allowance account relating to that debt are reversed. Subsequent recoveries of amounts previously charged to the allowance account are reversed against the allowance account. Other changes in the allowance account and subsequent recoveries of amounts previously written off directly are recognized in profit or loss. 161
Notes to the Financial Statements 1 主要會計政策 (j) 資產減值 (k) 應收賬款及其他應收款 1(j) 1(j) (l) 現金及現金等價物 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (j) Impairment of assets (Continued) For other non-current assets, the recoverable amount is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognized as an expense in profit or loss whenever the carrying amount exceeds the recoverable amount. An impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount. A reversal of impairment losses is limited to the asset s carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized. An impairment loss in respect of goodwill is not reversed. (k) Trade and other receivables Trade and other receivables are initially recognized at fair value and thereafter stated at amortized cost using the effective interest method, less impairment losses for bad and doubtful debts (note 1(j)), except where the receivables are interest-free loans or the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts (note 1(j)). (l) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the Group s cash management are also included as a component of cash and cash equivalents for the purpose of the consolidated cash flow statement. 162 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (m) 應付賬款及其他應付款 (n) 計息借貸 (o) 借貸成本 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (m) Trade and other payables Trade and other payables are initially recognized at fair value and thereafter stated at amortized cost unless the effect of discounting would be immaterial, in which case they are stated at cost. (n) Interest-bearing borrowings Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial recognition, interestbearing borrowings are stated at amortized cost with any difference between costs and redemption value being recognized in profit or loss over the period of the borrowings using the effective interest method. (o) Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred. (p) 已發出財務擔保 撥備及或然負債 1. The capitalization of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalization of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying assets for its intended use or sale are interrupted or complete. (p) Financial guarantees issued, provisions and contingent liabilities 1. Financial guarantees issued Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the holder ) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. 163
Notes to the Financial Statements 1 主要會計政策 (p) 已發出財務擔保 撥備及或然負債 1. 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (p) Financial guarantees issued, provisions and contingent liabilities (Continued) 1. Financial guarantees issued (Continued) Where the Company issues a financial guarantee, the fair value of the guarantee is initially recognized as deferred income within trade and other payables. The fair value of financial guarantees issued at the time of issuance is determined by reference to fees charged in an arm s length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. Where consideration is received or receivable for the issuance of the guarantee, the consideration is recognized in accordance with the Company s policies applicable to that category of asset. When no such consideration is received or receivable, an immediate expense is recognized in profit or loss on initial recognition of any deferred income. (i) (ii) 1(p)(2) The amount of the guarantee initially recognized as deferred income is amortized in profit or loss over the term of the guarantee as income from financial guarantees issued. In addition, provisions are recognized in accordance with note 1(p)(2) if and when (i) it becomes probable that the holder of guarantee will call upon the Company under the guarantee, and (ii) the amount of that claim on the Company is expected to exceed the amount currently carried in trade and other payables in respect of that guarantee i.e. the amount initially recognized, less accumulated amortization. 2. 2. Other provisions and contingent liabilities Provisions are recognized for liabilities of uncertain timing or amount when the Group or the Company has a legal or constructive obligation arising as a result of past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. When the time value of the money is material, provisions are stated at the present value of the expenditure expected to settle the obligation. 164 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (p) 已發出財務擔保 撥備及或然負債 2. (q) 收入確認 1. 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (p) Financial guarantees issued, provisions and contingent liabilities (Continued) 2. Other provisions and contingent liabilities (Continued) Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. (q) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognized in profit or loss as follows: 1. Sale of properties Revenue from sale of completed properties is recognized upon the later of the signing of sale and purchase agreements or the issue of occupation permit by the relevant government authorities, which is taken to be the point in time when the risks and rewards of ownership of the property have passed to the buyer. 2. 3. 2. Rental income Rental income under operating leases is recognized on a straight line basis over the terms of the respective leases, except where an alternative basis is more representative of the pattern of benefits to be derived from the use of the leased asset. Lease incentives granted are recognized in profit or loss as an integral part of the aggregate net lease payment receivable. Contingent rentals are recognized as income in the accounting period in which they are earned. 3. Interest income Interest income is recognized as it accrues using the effective interest method. 4. 4. Dividends Dividends are recognized when the right to receive payment is established. 165
Notes to the Financial Statements 1 主要會計政策 (r) 稅項 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (r) Taxation Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognized in profit or loss except to the extent that they relate to items recognized in other comprehensive income or directly in equity, in which case the relevant amounts of tax are recognized in other comprehensive income or directly in equity, respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits. Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilized, are recognized. The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets and liabilities that affect neither accounting nor taxable profits, and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future. 166 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (r) 稅項 1(f)(1) 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (r) Taxation (Continued) When investment properties and investment properties under development are carried at their fair value in accordance with the accounting policy set out in note 1(f)(1), the amount of deferred tax recognized is measured using the tax rates that would apply on sale of those assets at their carrying value at the end of the reporting period unless the property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the property over time, rather than through sale. In all other cases, the amount of deferred tax recognized is measured based on the expected manner of realization or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are not discounted. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilized. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. (s) 外幣換算 Additional income taxes that arise from the distribution of dividends are recognized when the liability to pay the related dividends is recognized. (s) Translation of foreign currencies Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to the entity ( functional currency ). The financial statements of the Group are presented in dollars. Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognized in profit or loss. 167
Notes to the Financial Statements 1 主要會計政策 (s) 外幣換算 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (s) Translation of foreign currencies (Continued) Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rate ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair values are translated using the foreign exchange rates ruling at the dates the fair value was determined. The results of foreign operations are translated in dollars at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Statement of financial position items are translated into dollars at the foreign exchange rates ruling at the end of the reporting period. The resulting exchange differences are recognized in other comprehensive income and accumulated separately in equity in the exchange reserve. (t) 關連人士 1. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the profit or loss on disposal is recognized. (t) Related parties 1. A person, or a close member of that person s family, is related to the Group if that person: (i) (i) has control or joint control over the Group; (ii) (ii) has significant influence over the Group; or (iii) (iii) is a member of the key management personnel of the Group or the Group s parent. 168 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
1 主要會計政策 (t) 關連人士 2. 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (t) Related parties (Continued) 2. An entity is related to the Group if any of the following conditions applies: (i) (i) The entity and the Group are members of the same Group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a Group of which the other entity is a member). (iii) (iii) Both entities are joint ventures of the same third party. (iv) (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) (v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. (vi) 1(t)(1) (vii) 1(t)(1)(i) (vi) The entity is controlled or jointly controlled by a person identified in note 1(t)(1). (vii) A person identified in note 1(t)(1)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). (u) 分部報告 Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity. (u) Segment reporting Operating segments are reported in a manner consistent with the Group s internal financial reporting to the Group s most senior executive management for the purposes of allocating resources to, and assessing the performance of the Group s various lines of business and geographical locations. For disclosure purpose, a reportable segment comprises either one or more operating segments which can be aggregated together because they share similar economic characteristics and nature of the regulatory environment, or single operating segments which are disclosable separately because they cannot be aggregated or they exceed quantitative thresholds. 169
Notes to the Financial Statements 1 主要會計政策 (v) 僱員福利 1. 1 PRINCIPAL ACCOUNTING POLICIES (Continued) (v) Employee benefits 1. Short term employee benefits and contributions to defined contribution retirement schemes Salaries, annual bonuses, paid annual leave, the cost of non-monetary benefits and obligation for contributions to defined contribution retirement schemes, including those payables in mainland China and under relevant legislation, are accrued in the year in which the associated services are rendered by employees of the Group. 2. 2. Share-based payments The fair value of share options granted to employees is measured at grant date, taking into account the terms and conditions upon which the options were granted, and is expensed on a straight line basis over the vesting period taking into account the probability that the options will vest, with a corresponding increase in equity (employee share-based compensation reserve). During the vesting period, the number of share options that is expected to vest is reviewed. Any resulting adjustment to the cumulative fair value recognized in prior years is charged/credited to profit or loss for the year of the review, unless the original employee expenses qualify for recognition as an asset, with a corresponding adjustment to the employee share-based compensation reserve. On vesting date, the amount recognized as an expense is adjusted to reflect the actual number of options that vest (with a corresponding adjustment to the employee share-based compensation reserve). At the time when the share options are exercised, the related employee share-based compensation reserve is transferred to share capital and share premium, together with the exercise price. If the options expire or lapse after the vesting period, the related employee share-based compensation reserve is transferred directly to retained profits. 170 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
2 會計政策之變動 HKFRSs HKAS 1 HKFRS 10 HKFRS 11 HKFRS 12 HKFRS 13 2009-2011 HKFRSs HKFRS 7 (a) HKas 1( 修訂本 ), 財務報表的呈報 其他全面收益項目之呈報 HKAS 1 2 CHANGES IN ACCOUNTING POLICIES The HKICPA has issued a number of new HKFRSs and amendments to HKFRSs that are first effective for the current accounting period of the Group. Of these, the following developments are relevant to the Group s financial statements: Amendments to HKAS 1, Presentation of financial statements Presentation of items of other comprehensive income HKFRS 10, Consolidated financial statements HKFRS 11, Joint arrangements HKFRS 12, Disclosure of interests in other entities HKFRS 13, Fair value measurement Annual Improvements to HKFRSs 2009-2011 Cycle Amendments to HKFRS 7 Disclosures Offsetting financial assets and financial liabilities (a) Amendments to HKAS 1, Presentation of financial statements Presentation of items of other comprehensive income The amendments to HKAS 1 require entities to present the items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met separately from those that would never be reclassified to profit or loss. The Group s presentation of other comprehensive income in these financial statements has been modified accordingly. 171
Notes to the Financial Statements 2 會計政策之變動 (b) HKfrs 10, 綜合財務報表 HKFRS 10 HKAS 27 HK(SIC)-Int 12 2 CHANGES IN ACCOUNTING POLICIES (Continued) (b) HKFRS 10, Consolidated financial statements HKFRS 10 replaces the requirements in HKAS 27 Consolidated and separate financial statements relating to the preparation of consolidated financial statements and HK(SIC)-Int 12 Consolidation Special purpose entities. It introduces a single control model to determine whether an investee should be consolidated, by focusing on whether the entity has power over the investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect the amount of those returns. HKFRS 10 (c) HKfrs 11, 聯合協議 HKFRS 11HKAS 31 HKFRS 11 HKFRS 11 As a result of the adoption of HKFRS 10, the Group has changed its accounting policy with respect to determining whether it has control over an investee. The adoption does not change any of the control conclusions reached by the Group in respect of its involvement with other entities as at January 1, 2013. (c) HKFRS 11, Joint arrangements HKFRS 11, which replaces HKAS 31 Interests in joint ventures divides joint arrangements into joint operations and joint ventures. Entities are required to determine the type of an arrangement by considering the structure, legal form, contractual terms and other facts and circumstances relevant to their rights and obligations under the arrangement. Joint arrangements which are classified as joint operations under HKFRS 11 are recognized on a line-by-line basis to the extent of the joint operator s interest in the joint operation. All other joint arrangements are classified as joint ventures under HKFRS 11 and are required to be accounted for using the equity method in the Group s consolidated financial statements. Proportionate consolidation is no longer allowed as an accounting policy choice. HKFRS 11 HKFRS 11 As a result of the adoption of HKFRS 11, the Group has changed its accounting policy with respect to its interests in joint arrangements and re-evaluated its involvement in its joint arrangements. The adoption of HKFRS 11 does not have any material impact on the financial position and the financial result of the Group. 172 HANG LUNG PROPERTIES LIMITED 2013 ANNUAL REPORT
2 會計政策之變動 (d) HKfrs 12, 其他組織權益披露 HKFRS 12 HKFRS 12 14 (e) HKfrs 13, 公平值之量計 HKFRS 13 HKFRSs HKFRS 13 12 (f) 2009-2011 年 HKfrss 系列之年度改進 (g) HKfrs 7( 修訂本 ) 披露 抵消金融資產及金融負債 HKAS 32 HKAS 32 2 CHANGES IN ACCOUNTING POLICIES (Continued) (d) HKFRS 12, Disclosure of interests in other entities HKFRS 12 brings together into a single standard all the disclosure requirements relevant to an entity s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The disclosures required by HKFRS 12 are generally more extensive than those previously required by the respective standards. To the extent that the requirements are applicable to the Group, the Group has provided those disclosures in note 14. (e) HKFRS 13, Fair value measurement HKFRS 13 replaces existing guidance in individual HKFRSs with a single source of fair value measurement guidance. HKFRS 13 also contains extensive disclosure requirements about fair value measurements for both financial instruments and non-financial instruments. To the extent that the requirements are applicable to the Group, the Group has provided those disclosures in note 12. (f) Annual Improvements to HKFRSs 2009-2011 Cycle This cycle of annual improvements contains amendments to five standards with consequential amendments to other standards and interpretations. The adoption of these amendments does not have significant impact on the financial statements of the Group. (g) Amendments to HKFRS 7 Disclosures Offsetting financial assets and financial liabilities The amendments introduce new disclosures in respect of offsetting financial assets and financial liabilities. Those new disclosures are required for all recognized financial instruments that are set off in accordance with HKAS 32 Financial instruments: Presentation and those that are subject to an enforceable master netting arrangement or similar agreement that covers similar financial instruments and transactions, irrespective of whether the financial instruments are set off in accordance with HKAS 32. HKFRS 7 The adoption of the amendments does not have an impact on these financial statements because the Group has not offset financial instruments, nor has it entered into master netting arrangement or similar agreement which is subject to the disclosures of HKFRS 7 during the periods presented. 173