3SBio Inc. — Annual Report 2017

Jun 29, 2017

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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HONGKONG CHINESE LIMITED 香港華人有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 655)

FINAL RESULTS FOR THE YEAR ENDED 31ST MARCH, 2017

The Directors of Hongkong Chinese Limited (the “Company”) announce the consolidated final results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31st March, 2017 together with the comparative figures for the corresponding period in 2016 as follows:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the year ended 31st March, 2017

Note Revenue 4 Cost of sales 6 Gross profit Administrative expenses Other operating expenses Gain/(Loss) on disposal of subsidiaries Net fair value gain/(loss) on investment properties Net fair value gain on financial instruments at fair value through profit or loss Finance costs Share of results of associates Share of results of joint ventures 7 Profit before tax 6 Income tax 8 Profit for the year Attributable to: Equity holders of the Company Non-controlling interests Earnings per share attributable to equity holders of the Company 9 Basic and diluted	2017 HK$’000 216,404 (46,838) 169,566 (60,987) (52,262) (1,823) (2,190) 15,290 (3,700) (878) (13,213) 49,803 (5,451) 44,352 44,996 (644) 44,352 HK cents 2.3	2016 HK$’000 (Restated)(1) 1,326,874 (827,557) 499,317 (78,929) (70,877) 202,355 29,193 6,461 (417) 8,450 (292,473) 303,080 (71,653) 231,427 229,455 1,972 231,427 HK cents (Restated)(1) 11.5

(1) Refer to Note 13

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31st March, 2017

Profit for the year Other comprehensive income/(loss) Other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods: Available-for-sale financial assets: Changes in fair value Adjustments for disposal Adjustment for impairment losses Income tax effect Exchange differences on translation of foreign operations Adjustments relating to disposal of subsidiaries: Exchange differences on translation of foreign operations Available-for-sale financial assets Income tax effect Share of other comprehensive loss of joint ventures Share of other comprehensive loss of an associate Net other comprehensive loss to be reclassified to profit or loss in subsequent periods and other comprehensive loss for the year, net of tax Total comprehensive income/(loss) for the year Attributable to: Equity holders of the Company Non-controlling interests	2017 HK$’000 44,352 (1,488) 1,509 1,200 — 1,221 (45,989) (2) — — (2) (327,119) (42) (371,931) (327,579) (321,789) (5,790) (327,579)	2016 HK$’000 (Restated)(1) 231,427 (1,288) 70 — 557 (661) 21,485 202 (2,715) 327 (2,186) (176,729) (43) (158,134) 73,293 76,809 (3,516) 73,293

(1) Refer to Note 13

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31st March, 2017

Note Non-current assets Fixed assets Investment properties Interests in associates Interests in joint ventures 7 Available-for-sale financial assets Other financial asset Current assets Properties held for sale Properties under development Loans and advances Debtors, prepayments and deposits 11 Financial assets at fair value through profit or loss Tax recoverable Client trust bank balances Restricted cash Cash and cash equivalents Current liabilities Creditors, accruals and deposits received 12 Tax payable Net current assets Total assets less current liabilities	2017 HK$’000 41,297 111,160 427,158 9,720,889 4,117 21,437 10,326,058 94,600 28,846 19,656 53,327 9,141 25 845,921 1,067 536,878 1,589,461 1,294,070 68,959 1,363,029 226,432 10,552,490	2016 HK$’000 (Restated)(1) 48,566 119,340 456,824 9,212,153 6,039 25,295 9,868,217 141,350 28,613 15,917 143,949 44,173 13 295,784 1,004 904,015 1,574,818 698,460 114,357 812,817 762,001 10,630,218

(1) Refer to Note 13

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Non-current liabilities Bank and other borrowings Deferred tax liabilities Net assets Equity Equity attributable to equity holders of the Company Share capital Reserves Non-controlling interests	2017 HK$’000 476,667 20,405 497,072 10,055,418 1,998,280 8,013,912 10,012,192 43,226 10,055,418	2016 HK$’000 (Restated)(1) — 23,526 23,526 10,606,692 1,998,280 8,528,831 10,527,111 79,581 10,606,692

(1) Refer to Note 13

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Note:

1. BASIS OF PREPARATION

This financial information has been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants and accounting principles generally accepted in Hong Kong. The financial information also includes applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and by the Hong Kong Companies Ordinance.

The accounting policies and methods of computation used in the preparation of the financial information are consistent with those used in the Group’s audited financial statements for the year ended 31st March, 2016, except for the adoption of the new and revised HKFRSs as disclosed in Note 2 to the final results.

2. CHANGES IN ACCOUNTING POLICIES

The Group has adopted the following new and revised HKFRSs for the first time for the current year’s final results:

Amendments to HKFRS 10, HKFRS 12	Investment Entities: Applying the Consolidation Exception
and HKAS 28 (2011)
Amendments to HKFRS 11	Accounting for Acquisitions of Interests in Joint Operations
HKFRS 14	Regulatory Deferral Accounts
Amendments to HKAS 1	Disclosure Initiative
Amendments to HKAS 16 and HKAS 38	Clarification of Acceptable Methods of Depreciation and
	Amortisation
Amendments to HKAS 16 and HKAS 41	Agriculture: Bearer Plants
Amendments to HKAS 27 (2011)	Equity Method in Separate Financial Statements
Annual Improvements 2012-2014 Cycle	Amendments to a number of HKFRSs

The adoption of the above new and revised standards has had no significant impact on the Group’s financial performance and financial position for the current and prior years.

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3. ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS

The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these final results:

Amendments to HKFRS 2	Classification and Measurement of Share-based Payment
	_Transactions_2
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with HKFRS 4
	_Insurance Contracts_2
Amendments to HKFRS 10 and	Sale or Contribution of Assets between an Investor and
HKAS 28 (2011)	_its Associate or Joint Venture_4
HKFRS 9	_Financial Instruments_2
HKFRS 15	_Revenue from Contracts with Customers_2
Amendments to HKFRS 15	Clarifications to HKFRS 15 Revenue from Contracts
	_with Customers_2
HKFRS 16	_Leases_3
Amendments to HKAS 7	_Disclosure Initiative_1
Amendments to HKAS 12	_Recognition of Deferred Tax Assets for Unrealised Losses_1
Amendments to HKAS 40	_Transfers of Investment Property_2
Amendments to HKFRS 12 included in	_Disclosure of Interests in Other Entities_1
Annual improvements 2014-2016 Cycle
Amendments to HKFRS 1 included in	First-time Adoption of Hong Kong Financial Reporting
Annual improvements 2014-2016 Cycle	_Standards_2
Amendments to HKAS 28 included in	_Investment in Associates and Joint Ventures_2
Annual improvements 2014-2016 Cycle
HK(IFRIC)-Int 22	Foreign Currency Transactions and Advance
	_Consideration_2

1 Effective for annual periods beginning on or after 1st January, 2017

2 Effective for annual periods beginning on or after 1st January, 2018

3 Effective for annual periods beginning on or after 1st January, 2019

4 No mandatory effective date yet determined but available for adoption

Other than as disclosed below, the Directors of the Company anticipate that the application of the other new and revised HKFRSs will have no significant impact on the financial performance and the financial position of the Group.

In September 2014, the HKICPA issued the final version of HKFRS 9, bringing together all phases of the financial instruments project to replace HKAS 39 and all previous versions of HKFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting. The Group expects to adopt HKFRS 9 from 1st April, 2018. During the year, the Group performed a high-level assessment of the impact of the adoption of HKFRS 9. This preliminary assessment is based on currently available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Group in the future. The expected impacts arising from the adoption of HKFRS 9 are summarised as follows:

(a) Classification and measurement

The Group does not expect that the adoption of HKFRS 9 will have a significant impact on the classification and measurement of its financial assets. It expects to continue measuring at fair value all financial assets currently held at fair value. Equity investments currently held as available for sale will be measured at fair value through other comprehensive income as the investments are intended to be held for the foreseeable future and the Group expects to apply the option to present fair value changes in other comprehensive income. Gains and losses recorded in other comprehensive income for the equity investments cannot be recycled to profit or loss when the investments are derecognised. Besides, certain available-for-sale financial assets issued by private entities are currently measured at cost less impairment because the range of reasonable fair value estimates is so significant. Such available-for-sale financial assets will be measured at fair value through other comprehensive income upon adoption of HKFRS 9.

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(b) Impairment

HKFRS 9 requires an impairment on debt instruments recorded at amortised cost or at fair value through other comprehensive income, lease receivables, loan commitments and financial guarantee contracts that are not accounted for at fair value through profit or loss under HKFRS 9, to be recorded based on an expected credit loss model either on a twelve-month basis or a lifetime basis. The Group expects to apply the simplified approach and record twelve-month expected losses on all trade receivables. The Group will perform a more detailed analysis which considers all reasonable and supportable information, including forward-looking elements, for estimation of expected credit losses on its trade and other receivables upon the adoption of HKFRS 9.

HKFRS 15 establishes a new five-step model to account for revenue arising from contracts with customers. Under HKFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in HKFRS 15 provide a more structured approach for measuring and recognising revenue. The standard also introduces extensive qualitative and quantitative disclosure requirements, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods and key judgements and estimates. The standard will supersede all current revenue recognition requirements under HKFRSs. In June 2016, the HKICPA issued amendments to HKFRS 15 to address the implementation issues on identifying performance obligations, application guidance on principal versus agent and licences of intellectual property, and transition. The amendments are also intended to help ensure a more consistent application when entities adopt HKFRS 15 and decrease the cost and complexity of applying the standard. The Group expects to adopt HKFRS 15 on 1st April, 2018.

During the year, the Group performed a preliminary assessment on the impact of the adoption of HKFRS 15 which is subject to changes arising from a more detailed ongoing analysis. Contract that contains two or more performance obligations would be accounted for separately and this might have an impact on the pattern of revenue and profit recognition. The Group and some of its associates and joint ventures are engaged in property development. Certain costs incurred in fulfilling a contract which are currently expensed may need to be capitalised as an asset and will be amortised to match the transfer of the development property to the customer under the contract.

HKFRS 16 replaces HKAS 17 Leases , HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease , HK(SIC)-Int 15 Operating Leases — Incentives and HK(SIC)-Int 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise assets and liabilities for most leases. The standard includes two recognition exemptions for lessees — leases of low-value assets and short-term leases. At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). The right-of-use asset is subsequently measured at cost less accumulated depreciation and any impairment losses unless the right-of-use asset meets the definition of investment property in HKAS 40. The lease liability is subsequently increased to reflect the interest on the lease liability and reduced for the lease payments. Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will also be required to remeasure the lease liability upon the occurrence of certain events, such as change in the lease term and change in future lease payments resulting from a change in an index or rate used to determine those payments. Lessees will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. Lessor accounting under HKFRS 16 is substantially unchanged from the accounting under HKAS 17. Lessors will continue to classify all leases using the same classification principle as in HKAS 17 and distinguish between operating leases and finance leases. The Group expects to adopt HKFRS 16 on 1st April, 2019.

HKFRS 16 will primarily affect the accounting for the Group’s operating leases. At 31st March, 2017, the Group had non-cancellable operating lease commitments of HK$6,123,000. Upon adoption of HKFRS 16 the majority of operating lease commitments will be recognised in the consolidated statement of financial position as lease liabilities and right-of-use assets. The lease liabilities would subsequently be measured at amortised cost and the right-of-use assets will be depreciated on a straight-line basis during the lease term.

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4. REVENUE

Revenue represents the aggregate of gross rental income, proceeds from sales of properties, income on treasury investment which includes interest income on bank deposits, income from securities investment which includes gain/(loss) on sales of securities investment, dividend income and related interest income, income from underwriting and securities broking, gross interest income, commissions, dealing income and other revenue from a then banking subsidiary, gross income from project management, and interest and other income from money lending and other businesses.

An analysis of the revenue of the Group is as follows:

Property rental income Sales of properties_(Note(a)) Interest income Dividend income Corporate finance and securities broking Banking business(Note(b))_ Other	2017 HK$’000 6,510 107,507 79,568 4,895 15,691 — 2,233 216,404	2016 HK$’000 10,003 1,225,954 54,177 3,228 18,603 8,062 6,847
		1,326,874

Note:

• (a) The revenue mainly came from sales of properties of the property development project in Macau which was completed during the year ended 31st March, 2016.

• (b) Revenue attributable to the banking business for the year ended 31st March, 2016 represented revenue generated from The Macau Chinese Bank Limited (“MCB”), a licensed credit institution under the Financial System Act of the Macao Special Administrative Region of the People’s Republic of China.

In July 2015, the Group completed the disposal of an aggregate of 49 per cent. equity interest in MCB (the “First Disposal”) and entered into a shareholders’ agreement with the purchasers and MCB to, among other things, regulate the relationship among shareholders of MCB. As a result of the change of composition of the board of directors and the quorum of directors’ meeting, MCB has become a joint venture of the Group since then. Revenue attributable to the banking business up to completion of the First Disposal is analysed as follows:

Interest income Commission income	2016 HK$’000 6,791 1,271
	8,062

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5. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services, and has reportable operating segments as follows:

• (a) the property investment segment includes investments relating to letting and resale of properties;

• (b) the property development segment includes development and sale of properties;

• (c) the treasury investment segment includes investments in money markets;

• (d) the securities investment segment includes dealings in securities and financial assets available-for-sale;

• (e) the corporate finance and securities broking segment provides securities and futures brokerage, investment banking, underwriting and other related advisory services;

• (f) the banking business segment engages in the provision of commercial and retail banking services; and

• (g) the “other” segment comprises principally the development of computer hardware and software, money lending and the provision of project and fund management and investment advisory services.

Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/(loss) and comprises segment results of the Company and its subsidiaries, the Group’s share of results of associates and joint ventures.

Segment results are measured consistently with the Group’s profit/(loss) before tax except that the Group’s share of results of associates and joint ventures, unallocated corporate expenses and certain finance costs are excluded from such measurement.

Segment assets exclude interests in associates and joint ventures, deferred tax assets, tax recoverable and other head office and corporate assets which are managed on a group basis.

Segment liabilities exclude tax payable, deferred tax liabilities and other head office and corporate liabilities which are managed on a group basis.

Inter-segment transactions are on an arm’s length basis in a manner similar to transactions with third parties.

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Year ended 31st March, 2017

Revenue External Inter-segment Total Segment results Unallocated corporate expenses Share of results of associates Share of results of joint ventures Profit before tax Segment assets Interests in associates Interests in joint ventures Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other segment information: Capital expenditure_(Note(a)) Depreciation Interest income Finance costs Loss on disposal of subsidiaries Loss on disposal of available-for-sale financial assets Write-back of provision/(Provisions) for impairment losses on: A joint venture Available-for-sale financial assets Properties under development Properties held for sale Loans and receivables Net fair value gain/(loss) on financial instruments at fair value through profit or loss Net fair value loss on investment properties Unallocated: Capital expenditure(Note(a))_ Depreciation	Property investment HK$’000 81,329 — 81,329 72,491 — (21,882) 146,741 6,102 9,474,183 480,673 276 (218) 74,819 (3,647) — — — — — 388 — — (2,190)	Property development HK$’000 107,507 — 107,507 59,667 (891) (1,046) 133,879 421,026 1,682 20,672 406 (74) — — — — 2,738 — (135) — — — —	Treasury investment HK$’000 4,336 — 4,336 4,336 — — 496,974 — — — — — 4,336 — — — — — — — — — —	Securities investment HK$’000 4,895 — 4,895 22,705 — — 13,258 — — — — — — — — (1,540) — (1,200) — — — 19,148 —	Corporate finance and securities broking HK$’000 15,691 187 15,878 (10,887) — — 872,432 — — 988,473 22 (387) — — — — — — — — 125 — —	Banking business HK$’000 — — — (3,858) — 9,715 21,437 — 245,024 270,630 — — — — — — — — — — — (3,858) —	Other Inter-segment elimination Consolidated HK$’000 HK$’000 HK$’000 2,646 — 216,404 — (187) — 2,646 (187) 216,404 (9,674) — 134,780 (70,886) 13 — (878) — — (13,213) 49,803 13,120 — 1,697,841 30 — 427,158 — — 9,720,889 69,631 11,915,519 56 — 1,760,504 99,597 1,860,101 — — 704 (33) — (712) 413 — 79,568 (53) — (3,700) (1,823) — (1,823) — — (1,540) — — 2,738 — — (1,200) — — (135) — — 388 (159) — (34) — — 15,290 — — (2,190) 491 (6,174)	Other Inter-segment elimination Consolidated HK$’000 HK$’000 HK$’000 2,646 — 216,404 — (187) — 2,646 (187) 216,404 (9,674) — 134,780 (70,886) 13 — (878) — — (13,213) 49,803 13,120 — 1,697,841 30 — 427,158 — — 9,720,889 69,631 11,915,519 56 — 1,760,504 99,597 1,860,101 — — 704 (33) — (712) 413 — 79,568 (53) — (3,700) (1,823) — (1,823) — — (1,540) — — 2,738 — — (1,200) — — (135) — — 388 (159) — (34) — — 15,290 — — (2,190) 491 (6,174)
								216,404
								134,780 (70,886) (878) (13,213)
								49,803
								1,697,841 427,158 9,720,889 69,631
								11,915,519
								1,760,504 99,597
								1,860,101
								704 (712) 79,568 (3,700) (1,823) (1,540) 2,738 (1,200) (135) 388 (34) 15,290 (2,190) 491 (6,174)

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Year ended 31st March, 2016 (restated)

Revenue External Inter-segment Total Segment results Unallocated corporate expenses Finance costs Share of results of associates Share of results of joint ventures Profit before tax Segment assets Interests in associates Interests in joint ventures Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other segment information: Capital expenditure_(Note(a)) Depreciation Interest income Finance costs Gain on disposal of a subsidiary Gain on disposal of available-for-sale financial assets Write-back of provision/(Provisions) for impairment losses on: A joint venture Properties under development Properties held for sale Loans and receivables Net fair value gain/(loss) on financial instruments at fair value through profit or loss Net fair value gain on investment properties Unallocated: Capital expenditure(Note(a))_ Depreciation Finance costs	Property investment HK$’000 51,147 — 51,147 75,439 — (280,764) 151,988 6,465 8,967,010 4,942 — (92) 41,144 — — — — — 310 — — 29,193	Property development HK$’000 1,225,954 — 1,225,954 391,781 8,534 953 254,984 450,341 9,746 48,274 8 (156) — — — — 2,076 (134) — — — —	Treasury investment HK$’000 10,836 — 10,836 10,638 — — 847,595 — — — — — 10,836 — — — — — — — — —	Securities investment HK$’000 5,149 — 5,149 (1,448) — — 68,979 — — — — — 1,921 — — 1,872 — — — — (6,248) —	Corporate finance and securities broking HK$’000 18,603 — 18,603 (8,799) — — 357,768 — — 339,080 12 (1,095) — (29) — — — — — (282) — —	Banking business HK$’000 8,062 — 8,062 216,085 (Note(b)) — (12,662) 25,295 — 235,397 270,630 999 (504) 6,791 — 202,355 — — — — (779) 12,709 —	Other Inter-segment elimination HK$’000 HK$’000 7,123 — 464 (464) 7,587 (464) (5,440) (464) (84) — — — 8,939 — 18 — — — 5,460 — 55 — (65) — 276 — — — — — — — — — — — — — — — — — — —	Consolidated HK$’000 1,326,874 —
								1,326,874
								677,792 (90,301) (388) 8,450 (292,473)
								303,080
								1,715,548 456,824 9,212,153 58,510
								11,443,035
								668,386 167,957
								836,343
								1,074 (1,912) 60,968 (29) 202,355 1,872 2,076 (134) 310 (1,061) 6,461 29,193 344 (6,055) (388)

Note:

(a) Capital expenditure includes additions to fixed assets.

(b) The amount in 2016 included gain on disposal of a subsidiary of HK$202,355,000.

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Geographical information

(a) Revenue from external customers

Hong Kong Macau Mainland China Republic of Singapore Other	2017 HK$’000 17,060 96,822 18,790 80,567 3,165 216,404	2016 HK$’000 24,235 1,213,943 37,301 46,922 4,473
		1,326,874

The revenue information above is based on the locations of the customers.

(b) Non-current assets

Hong Kong Macau Mainland China Republic of Singapore Other	2017 HK$’000 1,528 245,024 75,609 9,935,872 42,471 10,300,504	2016 HK$’000 (Restated) 2,426 235,397 83,119 9,472,327 43,614
		9,836,883

The non-current assets information above is based on the locations of the assets and excludes financial instruments.

Information about major customers

For the year ended 31st March, 2017, revenue of approximately HK$74,819,000 and HK$28,023,000 was derived from interest income from a single customer in the property investment segment and sales by the property development segment to a single customer, respectively. No revenue from a single customer accounted for 10 per cent. or more of the total revenue for the year ended 31st March, 2016.

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6. PROFIT BEFORE TAX

Profit before tax is arrived at after crediting/(charging):

Cost of sales: Cost of properties sold_(Note)_ Other Interest income: Available-for-sale financial assets Loans and advances Banking business Other Net fair value gain/(loss) on: Financial assets at fair value through profit or loss Derivative financial instrument Gain/(Loss) on disposal of available-for-sale financial assets Gain on bargain purchase Write-back of provision/(Provisions) for impairment losses on: A joint venture Available-for-sale financial assets Properties under development Properties held for sale Loans and receivables Interest expense attributable to the banking business Depreciation Foreign exchange losses — net	2017 HK$’000 (36,940) (9,898) (46,838) — 75,232 — 4,336 19,148 (3,858) (1,540) 43 2,738 (1,200) (135) 388 (34) — (6,886) (10,901)	2016 HK$’000 (815,243) (12,314) (827,557) 1,921 41,420 6,791 10,836 (6,248) 12,709 1,872 — 2,076 — (134) 310 (1,061) (1,928) (7,967) (13,841)

Note: The amount mainly represented cost of properties sold of the property development project in Macau which was completed during the year ended 31st March, 2016.

7. SHARE OF RESULTS OF JOINT VENTURES/INTERESTS IN JOINT VENTURES

As at 31st March, 2017, interests in joint ventures mainly included the Group’s interest in Lippo ASM Asia Property Limited (“LAAPL”) of HK$9,474,183,000 (2016 — HK$8,967,010,000, restated with details disclosed in Note 13 to the final results). LAAPL is a joint venture set up to hold the controlling stake in OUE Limited (“OUE”), a listed company in Singapore. OUE is principally engaged in developing and managing assets across the commercial, hospitality, retail, residential and healthcare sectors.

For the year ended 31st March, 2017, the Group’s share of loss in LAAPL amounted to approximately HK$21,882,000 (2016 — HK$280,764,000, restated with details disclosed in Note 13 to the final results). The share of loss recognised during the year was mainly attributable to the net fair value loss on the joint ventures’ investment properties and finance costs incurred by the joint ventures, partially offset by profit from disposal and reversal of impairment loss of its properties held for sale and fair value gain from its investments designated at fair value through profit or loss. The restated share of loss for the year ended 31st March, 2016 was mainly attributable to the impairment loss on properties held for sale, the impairment loss on goodwill arising from the acquisition of a subsidiary and finance costs incurred by the joint ventures.

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8. INCOME TAX

Hong Kong: Charge for the year Overseas: Charge for the year Overprovision in prior years Deferred Total charge for the year	2017 HK$’000 — 10,690 (3,403) (1,836) 5,451 5,451	2016 HK$’000 —
		80,473 — (8,820)
		71,653
		71,653

Hong Kong profits tax has been provided at the rate of 16.5 per cent. (2016 — 16.5 per cent.) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries/jurisdictions in which the Group operates.

9. EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

(a) Basic earnings per share

Basic earnings per share is calculated based on (i) the consolidated profit for the year attributable to equity holders of the Company; and (ii) the weighted average number of approximately 1,998,280,000 ordinary shares (2016 — approximately 1,998,280,000 ordinary shares) in issue during the year.

(b) Diluted earnings per share

The Group had no potentially dilutive ordinary shares in issue during the years ended 31st March, 2017 and 2016.

10. DIVIDENDS/DISTRIBUTIONS

Interim dividend, declared, of HK1 cent (2016 — interim distribution of HK1 cent) per ordinary share Final dividend, proposed, of HK1 cent (2016 — HK2 cents) per ordinary share	2017 HK$’000 19,983 19,983 39,966	2016 HK$’000 19,983 39,966
		59,949

The proposed final dividend for the year is subject to the approval of the Company’s shareholders at the forthcoming annual general meeting.

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11. DEBTORS, PREPAYMENTS AND DEPOSITS

Included in the balances are trade debtors with an aged analysis, based on the invoice date and net of provisions, as follows:

Outstanding balances with ages: Repayable on demand Within 30 days	2017 HK$’000 7,507 3,602 11,109	2016 HK$’000 10,580 32,200
		42,780

Trading terms with customers are either on a cash basis or on credit. For those customers who trade on credit, a credit period is allowed according to relevant business practice. Credit limits are set for customers. The Group seeks to maintain tight control over its outstanding receivables in order to minimise credit risk. Overdue balances are regularly reviewed by senior management.

Except for receivables from certain securities brokers which are interest-bearing, the balances of trade debtors are non-interest-bearing.

12. CREDITORS, ACCRUALS AND DEPOSITS RECEIVED

Creditors, accruals and deposits received mainly comprised deposits received for the further disposal of a 31 per cent. equity interest in MCB, which is subject to the approval of the Monetary Authority of Macao of HK$270,630,000 (2016 — HK$270,630,000), a non-refundable exclusivity payment of HK$130,000,000 (2016 — HK$20,000,000) in relation to the negotiation of the proposed disposal of a majority stake of the Group’s securities broking operation and trade payables relating to cash balances held on trust for the customers in respect of the Group’s securities broking operation of HK$855,803,000 (2016 — HK$336,481,000). As at 31st March, 2017, total client trust bank balances amounted to HK$845,921,000 (2016 — HK$295,784,000).

An aged analysis of trade creditors, based on the invoice date, is as follows:

Outstanding balances with ages: Repayable on demand Within 30 days	2017 HK$’000 815,921 39,882 855,803	2016 HK$’000 288,677 47,856
		336,533

Trade creditors are generally settled on their normal trade terms. Except for certain client payables relating to cash balances held on trust for the customers in respect of the Group’s securities broking operation which are interest-bearing, the balances of creditors are non-interest-bearing.

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13. COMPARATIVE AMOUNTS

During the year ended 31st March, 2016, a joint venture of OUE, which in turn is a subsidiary of LAAPL, a principal joint venture of the Group, acquired additional equity interests in a listed company (the “Acquisitions”). As at 31st March, 2016, the purchase price allocation review in respect of the Acquisitions was not completed. Such purchase price allocation review was completed during the year ended 31st March, 2017 and OUE recorded a share of gain from bargain purchase in relation to the Acquisitions. This gain from bargain purchase represents the excess of fair value of assets and liabilities acquired over the consideration paid.

As a consequence, the Group has made certain adjustments to retrospectively adjust the impact of the Acquisitions, which led to a decrease in share of loss of joint ventures and an increase of net profit attributable to equity holders of HK$25,524,000 in consolidated statement of profit or loss for the year ended 31st March, 2016, an increase in interests in joint ventures of HK$26,111,000 and an increase in the exchange equalisation reserve of HK$587,000 in the Group’s consolidated statement of financial position as at 31st March, 2016. As a result, the equity attributable to equity holders of the Company was increased by HK$26,111,000 as at 31st March, 2016 and the earnings per share amount attributable to the equity holders of the Company was increased by HK1.3 cents for the year ended 31st March, 2016.

Besides, certain comparative amounts have been reclassified and restated to conform with the current year’s presentation and disclosures.

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BUSINESS REVIEW

Overview

The global economy was volatile in the year 2016. The political and economic events such as the Brexit, the result of the U.S. presidential election, the extent of and the timing on increase of U.S. interest rate and devaluation of Renminbi created uncertainties and market volatility. On the positive side, the prevailing low interest rates and ample global liquidity have helped to maintain a more stable economic environment in the region.

The performance of global stock markets has improved since the third quarter of the year 2016. Moving into 2017, the pace of U.S. interest rate increase has become clearer. With the U.S. presidential election over, investors’ confidence towards the U.S. economy has gradually picked up. Renminbi as well as the stock market in mainland China has become more stable and less volatile.

Results for the Year

The Group recorded a consolidated profit attributable to shareholders of approximately HK$45 million for the year ended 31st March, 2017 (the “Year”), as compared to a consolidated profit of approximately HK$229 million (restated following the completion of certain purchase price allocation review under the Group’s joint venture) for the year ended 31st March, 2016 (the “Last Year” or “2016”). The profit for the Year was mainly contributed by the disposal of remaining units of the Group’s property development projects.

— Revenue for the Year decreased to HK$216 million (2016 HK$1,327 million). The higher revenue for 2016 was mainly contributed by a development project in Macau completed in the Last Year and all pre-sale proceeds of this development project were recognised as revenue during the Last Year. No new property development projects were completed during the Year, which accounted for the decrease in revenue.

Property investment

Segment revenue from the property investment business is mainly attributable to rental income from the investment properties portfolio and the interest income from the loans to Lippo ASM Asia Property Limited (“LAAPL”, a principal joint venture of the Company). — The total segment revenue for the Year increased to HK$81 million (2016 HK$51 million), mainly due to the increase of loans to LAAPL during the Year. After the impact of the fair value change of the investment properties, the segment reported a profit of HK$72 million — (2016 HK$75 million) for the Year before accounting for the share of results from the Group’s joint ventures.

LAAPL is the vehicle holding the controlling stake of OUE Limited (“OUE”, together with its subsidiaries, the “OUE Group”), a company listed on the Main Board of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) and is principally engaged in developing and managing assets across the commercial, hospitality, retail, residential and healthcare sectors. The OUE Group has substantial and stable recurrent income stream from its high quality property portfolio at prime locations in Singapore, Shanghai in the People’s Republic of China (“PRC”) and Los Angeles in the United States of America. Asset enhancement initiatives at OUE Downtown in Singapore which transformed the development into a vibrant

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mixed-use development encompassing offices, a retail podium and serviced residences have been completed. The retail podium has been transformed into Downtown Gallery, which offers new retail and dining concepts across six levels and was opened in May 2017. Oakwood Premier OUE Singapore, the new 268 units of serviced residences in OUE Downtown was opened in June 2017. The OUE Group also completed the construction of the extension to Crowne Plaza Changi Airport Hotel (“Crowne Plaza”) in Singapore which was opened during the Year. Crowne Plaza won the Best Airport Hotel (Singapore) at the TTG Travel Awards 2016 and the World’s Best Airport Hotel at the Skytrax World Airport Awards 2017. The iconic U.S. Bank Tower in downtown Los Angeles, a 75-storey Class A office tower, officially opened in June 2016 after completing its enhancement works. The enhancement works include, inter alia, OUE Skyspace LA, a two-storey open-air observation deck at the top of the tower, offering 360-degree views of the city and a first-of-its-kind Skyslide attraction. U.S. Bank Tower contributed positively to the revenue of the OUE Group. The OUE Group has achieved higher sales at OUE Twin Peaks, a residential property in Singapore, during the Year from active marketing activities. As at 31st March, 2017, LAAPL had an aggregate equity interest of approximately 68.63 per cent. in OUE.

OUE Hospitality Trust (“OUE H-Trust”), a real estate investment trust established by OUE in 2013, is listed on the Main Board of the SGX-ST. Its portfolio includes Mandarin Orchard Singapore, Mandarin Gallery and Crowne Plaza in Singapore. In April 2016, OUE H-Trust successfully completed a rights issue (the “Rights Issue”) of 441,901,257 new stapled securities in OUE H-Trust (the “Rights Stapled Securities”) at S$0.54 per Rights Stapled Security and raised funds of approximately S$238.6 million. Such funds were mainly utilised by OUE H-Trust to finance its acquisition of the extension to Crowne Plaza from OUE for a consideration of approximately S$205 million in August 2016.

LAAPL, OUE and an intermediate holding company of the Company took up in full their respective pro-rata entitlements to the Rights Stapled Securities. LAAPL’s subscription amount of approximately S$18 million was funded by a wholly-owned subsidiary of the Company (the “Subsidiary”) by way of interest free exchangeable loans (the “Exchangeable Loans”) in exchange for the Rights Stapled Securities subscribed by LAAPL. After the exchange right under the Exchangeable Loans was exercised to fully settle the Exchangeable Loans, LAAPL further disposed of certain stapled securities in OUE H-Trust in September 2016. As at 31st March, 2017, LAAPL and its subsidiaries held approximately 37.97 per cent. of the total number of stapled securities of OUE H-Trust in issue.

OUE Commercial Real Estate Investment Trust (“OUE C-REIT”) was established by OUE in early 2014 and is listed on the Main Board of the SGX-ST. Its property portfolio includes OUE Bayfront and One Raffles Place in Singapore as well as the properties at Lippo Plaza in Shanghai. The occupancy rates of its property portfolio are high. In March 2017, 233,281,400 new OUE C-REIT units were issued at S$0.643 per unit under a private placement to third parties. As a result, the OUE Group’s interests in OUE C-REIT was decreased from approximately 64.98 per cent. as at 31st March, 2016 to approximately 55.41 per cent. as at 31st March, 2017.

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International Healthway Corporation Limited (“IHC”) became a subsidiary of OUE during the Year. On 16th February, 2017, the OUE Group entered into a sale and purchase agreement to acquire 593,470,029 shares in IHC. Together with the 362,204,008 shares in IHC acquired previously, the OUE Group then owned approximately 57.6 per cent. equity interest in IHC and announced a mandatory unconditional cash offer for all the remaining issued shares in IHC at an offer price of S$0.106 per share. The offer closed on 13th April, 2017 and as at the date of this announcement, the OUE Group owned approximately 86.16 per cent. equity interest in IHC. IHC is a company listed on the sponsor-supervised listing platform of the SGX-ST. It is an integrated healthcare services and facilities provider that currently owns 12 nursing homes in Japan and 2 hospitals in the PRC, and is developing an integrated medical centre in Malaysia.

The Group recorded a share of loss of joint ventures of HK$22 million from its investment — in LAAPL for the Year (2016 HK$281 million, restated). The share of loss for the Year was mainly resulted from net fair value loss on the joint ventures’ investment properties and finance costs incurred by the joint ventures, partially offset by profit from disposal and reversal of impairment loss of its properties held for sale and fair value gain from its investments designated at fair value through profit or loss. The restated share of loss for the Last Year was mainly attributable to the impairment loss on properties held for sale, the impairment loss on goodwill arising from the acquisition of a subsidiary and finance costs incurred by the joint ventures. Besides, affected by the depreciation of the Singapore dollar during the Year, the Group shared a decrease in exchange reserve on translation of LAAPL’s investment of HK$322 million during the Year.

During the Year, the Group advanced loans of approximately S$169 million to a subsidiary of LAAPL (the “LAAPL Subsidiary”). The proceeds of these loans were used to repay part of the existing indebtedness under LAAPL and for working capital purpose. These loans, together with the advances made to the LAAPL Subsidiary in prior years contributed interest income — of HK$75 million (2016 HK$41 million) to the Group for the Year.

As a result, the total interests in LAAPL as at 31st March, 2017 increased to HK$9.5 billion — (2016 HK$9.0 billion, restated).

Property development

“M Residences” is a residential property development at 83 Estrada de Cacilhas, Macau, in which the Group has 100 per cent. interest. “M Residences”, with a site area of approximately 3,398 square metres, has been developed into 311 residential units with a total saleable area of approximately 26,025 square metres. Occupation permit of “M Residences” was obtained in June 2015 and a substantial part of revenue was recorded in the Last Year. Hence, the segment revenue and segment profit for the Year decreased to HK$108 million — — (2016 HK$1,226 million) and HK$60 million (2016 HK$392 million) respectively, mainly from the sale of remaining units of “M Residences”.

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Treasury and securities investments

Treasury and securities investments businesses recorded a total revenue of HK$9 million — during the Year (2016 HK$16 million), mainly attributable to the interest and dividend income received from the investment portfolio. The Group cautiously managed its investment portfolio and looked for opportunities to enhance yields and seek gains. The Group has certain direct investments in OUE H-Trust and OUE C-REIT through the Subsidiary in addition to its interests in them through LAAPL. In September 2016, the Subsidiary sold all the stapled securities in OUE H-Trust and units in OUE C-REIT held to independent third parties through married trades for an aggregate consideration of approximately S$19.2 million and S$6.1 million, respectively. Such disposals provided a good opportunity for the Group to realise its direct investments in OUE H-Trust and OUE C-REIT. The Group recognised a net gain of HK$18 million for the Year from the above disposals. Following the improvement in the global stock market in the third quarter of the year 2016, the Group recorded a net fair value gain on its investments under the securities investment segment for the Year as compared to a net fair value loss for 2016. As a consequence, the treasury and securities investments businesses — recorded a net profit of HK$27 million for the Year (2016 HK$9 million).

Banking business

The Group has an equity interest of 51 per cent. in The Macau Chinese Bank Limited (“MCB”), a licensed bank in Macau and a joint venture of the Company. MCB maintained strong growth in customer deposits and loans during the Year.

As provided in the shareholders’ agreement entered into between MCB and its shareholders in July 2015 to, amongst other things, regulate the relationships among shareholders of MCB (the “Shareholders’ Agreement”), in the event of the Group holding 20 per cent. or less of the issued share capital of MCB, the Group will be entitled to a put option to require Nam Yue (Group) Company Limited (a shareholder of MCB holding 40 per cent. of its equity interest) to purchase all the remaining shares in MCB held by the Group (the “Put Option”). The Put Option is exercisable at any time during a period of 5 years from the date when the Group’s shareholding interest in MCB becomes 20 per cent. or less. The right to exercise the Put Option survives any termination or expiry of the Shareholders’ Agreement. The fair value of the Put Option was included in “Other financial asset” of the Consolidated Statement of Financial Position.

In December 2016, supplemental agreements were entered into to extend the deadline for obtaining approval from the Monetary Authority of Macao in respect of the proposed disposal by the Group of further 31 per cent. equity interest in MCB from 31st December, 2016 to 30th June, 2017.

The share of profit of joint venture in this segment was HK$10 million for the Year — (2016 share of loss of HK$13 million). Due to the change in fair value of the Put Option, this segment reported a segment loss of HK$4 million for the Year, as compared to a segment profit of HK$216 million which included the gain on disposal of subsidiary of HK$202 million for the Last Year.

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Corporate finance and securities broking

Lippo Securities Holdings Limited (“LSHL”) is a wholly-owned subsidiary of the Company and its subsidiaries are principally engaged in underwriting, securities brokerage, corporate finance, investment advisory and other related financial services.

The continuing volatile stock markets in Hong Kong and mainland China make the local operating environment of corporate finance and securities broking business challenging. The outlook for the local stock market will be dependent on the market conditions in mainland China and economic developments globally. This segment registered a total revenue of — HK$16 million for the Year (2016 HK$19 million) and the loss of this segment was — HK$11 million for the Year (2016 HK$9 million).

On 25th January, 2017, a letter of exclusivity (the “Exclusivity Agreement”) was entered into between Norfyork International Limited (“Norfyork”), a wholly-owned subsidiary of the Company, and Cosenza Investments Limited (“Cosenza”), an independent third party, pursuant to which, in consideration of a non-refundable amount of HK$130 million paid by Cosenza to the Company (the “Exclusivity Payment”), Norfyork shall grant Cosenza certain exclusivity rights for a period of 18 months from the date of Exclusivity Agreement (the “Exclusivity Period”) in relation to the negotiation of the proposed sale and purchase of a majority stake in LSHL (the “Proposed Transaction”). The Exclusivity Payment is non-refundable and if closing of the Proposed Transaction takes place, it shall be applied against the consideration payable to Norfyork in relation to the Proposed Transaction. However, in the event that no sale and purchase agreement in respect of the Proposed Transaction is entered into on or before the end of the Exclusivity Period, the Exclusivity Payment shall be forfeited and retained by Norfyork and the Company, unless there is a breach by Norfyork and/or the Company of certain undertakings under the Exclusivity Agreement and/or their obligations to use reasonable endeavours to sign the sale and purchase agreement on or before the end of the Exclusivity Period.

— Segment assets as at 31st March, 2017 increased to HK$872 million (2016 HK$358 million), mainly due to the client money held in trust by LSHL. As a result, together with the Exclusivity Payment received for the Year, segment liabilities increased to HK$988 million (2016 — HK$339 million).

Financial Position

The Group’s financial position remained healthy. As at 31st March, 2017, its total assets — amounted to HK$11.9 billion (2016 HK$11.4 billion, restated). Property-related assets — amounted to HK$10.2 billion as at 31st March, 2017 (2016 HK$9.8 billion, restated), — representing 85 per cent. (2016 86 per cent., restated) of the total assets. The Group maintained a strong cash position. Total cash and cash equivalents as at 31st March, 2017 — amounted to HK$537 million (2016 HK$904 million). Current ratio as at the end of the — reporting period amounted to 1.2 (2016 1.9).

As at 31st March, 2017, the Group’s bank and other borrowings amounted to HK$477 million — (2016 Nil), which were coming from bank loan facilities granted to a subsidiary of the Company. The Company has provided corporate guarantee to the bank for the loans. The bank loans were denominated in Hong Kong dollars, carried interest at floating rate and were not repayable

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within one year. Where appropriate, the Group would use interest rate swaps to modify the interest rate characteristics of its borrowings to limit interest rate exposure. The gearing ratio (measured as total borrowings to equity attributable to equity holders of the Company) was 4.8 per cent. as at 31st March, 2017.

The net asset value attributable to equity holders of the Group remained strong and amounted — to HK$10.0 billion as at 31st March, 2017 (2016 HK$10.5 billion, restated). This was — equivalent to HK$5.0 per share (2016 HK$5.3 per share, restated).

The Group monitors the relative foreign exchange position of its assets and liabilities to minimise foreign currency risk. When appropriate, hedging instruments including forward contracts, swaps and currency loans would be used to manage the foreign exchange exposure.

To secure bank overdraft facilities made available to the Group’s securities broking operation, — bank deposits of HK$1 million were pledged as at 31st March, 2017 (2016 HK$1 million). Such overdraft facilities had not been utilised at the end of the reporting period. Aside from the abovementioned, the Group had neither material contingent liabilities outstanding nor — charges on the Group’s assets at the end of the Year (2016 Nil).

The Group’s commitments are mainly related to the property development projects and securities investments. The decrease in commitments from HK$116 million as at 31st March, 2016 to HK$8 million as at 31st March, 2017 was mainly due to the utilisation of the Exchangeable Loans granted to certain joint ventures of the Group during the Year. The investments or capital assets will be financed by the Group’s internal resources and/or external bank financing, as appropriate.

Staff and Remuneration

— The Group had 70 employees as at 31st March, 2017 (2016 95 employees). Staff costs (including directors’ emoluments) charged to the statement of profit or loss during the Year — amounted to HK$38 million (2016 HK$54 million). The Group ensures that its employees are offered competitive remuneration packages. The Group also provides benefits such as medical insurance and retirement funds to employees to sustain competitiveness of the Group.

PROSPECTS

Looking ahead, the global economy is likely to improve gradually. It is expected that the U.S. economy will grow at a faster pace in 2017. The Asian economies are expected to pick up in 2017, supported by the recovery in exports and domestic demand. However, certain uncertainties and downside risks such as Brexit-related negotiations, the rising deglobalisation sentiments and the geopolitical tensions in various regions remain. The Group will continue to be watchful of market developments. The Group will also continue to take a cautious and prudent approach in managing its assets and assessing new investment opportunities to capture growth opportunities and enhance shareholders’ value.

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DIVIDENDS

The Directors have resolved to recommend to shareholders at the forthcoming Annual General Meeting (the “2017 AGM”) the payment of a final dividend of HK1 cent per share (2016 — HK2 cents per share) amounting to approximately HK$20 million for the year ended 31st March, 2017 (2016 — approximately HK$40 million). Together with the interim dividend of HK1 cent per share (2016 — interim distribution of HK1 cent per share) paid on 25th January, 2017, total dividends for the year ended 31st March, 2017 will be HK2 cents per share (2016 — total distributions/dividends were HK3 cents per share) amounting to approximately HK$40 million (2016 — approximately HK$60 million). Subject to the approval of shareholders at the 2017 AGM, the final dividend will be paid on or about Wednesday, 4th October, 2017 to shareholders whose names appear on the Company’s Register of Members on Friday, 15th September, 2017.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members of the Company will be closed during the following periods:

• (i) from Tuesday, 29th August, 2017 to Friday, 1st September, 2017 (both dates inclusive) during which period no transfer of shares will be registered, for the purpose of ascertaining shareholders’ entitlement to attend and vote at the 2017 AGM. In order to be entitled to attend and vote at the 2017 AGM, all transfers of shares accompanied by the relevant share certificates and transfer forms must be lodged with Tricor Tengis Limited, the Company’s Branch Share Registrar in Hong Kong, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 28th August, 2017; and

• (ii) from Tuesday, 12th September, 2017 to Friday, 15th September, 2017 (both dates inclusive) during which period no transfer of shares will be registered, for the purpose of ascertaining shareholders’ entitlement to the proposed final dividend. In order to qualify for the proposed final dividend, all transfers of shares accompanied by the relevant share certificates and transfer forms must be lodged with Tricor Tengis Limited, the Company’s Branch Share Registrar in Hong Kong, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 11th September, 2017.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the year ended 31st March, 2017, there was no purchase, sale or redemption of the Company’s listed securities by the Company or any of its subsidiaries.

CORPORATE GOVERNANCE

The Company is committed to ensuring high standards of corporate governance practices. The Company’s Board of Directors (the “Board”) believes that good corporate governance practices are increasingly important for maintaining and promoting investor confidence. Corporate governance requirements keep changing, therefore the Board reviews its corporate governance practices from time to time to ensure they meet public and shareholders’ expectation, comply with legal and professional standards and reflect the latest local and international developments. The Board will continue to commit itself to achieving a high quality of corporate governance so as to safeguard the interests of shareholders and enhance shareholders’ value.

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To the best knowledge and belief of the Directors, the Directors consider that the Company has complied with the code provisions of the Corporate Governance Code as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the year ended 31st March, 2017.

AUDIT COMMITTEE

The Company has established an audit committee (the “Committee”). The existing members of the Committee comprise three independent non-executive Directors, namely Mr. King Fai Tsui (Chairman), Mr. Albert Saychuan Cheok and Mr. Victor Ha Kuk Yung and one non-executive Director, Mr. Leon Nim Leung Chan. The Committee has reviewed with the management of the Company the accounting principles and practices adopted by the Group and financial reporting matters including the review of the consolidated financial statements of the Company for the year ended 31st March, 2017.

REVIEW OF PRELIMINARY RESULTS ANNOUNCEMENT BY INDEPENDENT AUDITORS

The figures in respect of the Group’s consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of comprehensive income and the related notes thereto for the year ended 31st March, 2017 (the “Year”) as set out in this preliminary announcement have been agreed by the Group’s independent auditors, Ernst & Young, to the amounts set out in the Group’s draft consolidated financial statements for the Year. The work performed by Ernst & Young in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently, no assurance has been expressed by Ernst & Young on this preliminary announcement.

By Order of the Board Hongkong Chinese Limited John Luen Wai Lee Chief Executive Officer

Hong Kong, 29th June, 2017

As at the date of this announcement, the executive Directors of the Company are Dr. Stephen Riady (Chairman) and Mr. John Luen Wai Lee (Chief Executive Officer); the non-executive Director of the Company is Mr. Leon Nim Leung Chan; and the independent non-executive Directors of the Company are Messrs. Albert Saychuan Cheok, Victor Ha Kuk Yung and King Fai Tsui.

• For identification purpose only

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