Harbour Centre Development Limited - Annual Report 2018

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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FAR EAST CONSORTIUM INTERNATIONAL LIMITED 遠東發展有限公司 *

(Incorporated in the Cayman Islands with limited liability) Website: http://www.fecil.com.hk

(Stock Code: 35)

ANNOUNCEMENT OF RESULTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2018

RESULTS

The board of directors (the “Board”) of Far East Consortium International Limited (the “Company”) is pleased to announce the audited consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the financial year ended 31 March 2018 (“FY2018”) as follows:

FINANCIAL AND BUSINESS HIGHLIGHTS

Revenue and net profit attributable to shareholders of the Company for FY2018 increased by 16.5% and 40.2% respectively to approximately HK$5,831 million and HK$1,567 million respectively as compared to the financial year ended 31 March 2017 (“FY2017”) primarily due to strong recorded sales in residential developments, a solid recovery of the Group’s hotel business, a steadily expanding car park portfolio, as well as a gain on sale of one of the non-core hotels of the Group.
Adjusted cash profit[(i)] reached a record high at HK$1,643 million, a year-on-year increase by 42.0% from HK$1,157 million.
Presale of residential properties remained robust with cumulative presales value of properties under development amounting to approximately HK$13.4 billion as at 31 March 2018 (HK$10.7 billion as at 31 March 2017) following the successful launch of Artra in Singapore, Marin Point in Hong Kong, West Side Place (Tower 4) in Melbourne, Royal Riverside (Tower 3) in Guangzhou, The Star Residences in Gold Coast, MeadowSide (Plots 2 and 3) in Manchester and Astoria Crest in Hong Kong. Including projects secured post year-end, the Group’s residential development pipeline grew to HK$52 billion in projected gross development value.
For identification purposes only

– 1 –

Bank and cash balances and investment securities of the Group increased to approximately HK$8.1 billion as at 31 March 2018 (HK$5.6 billion as at 31 March 2017).
Net gearing ratio[(ii)(iii)] was 28.7% as at 31 March 2018 (31.5% as at 31 March 2017).
Basic earnings per share amounted to HK$0.69 (FY2017: HK$0.51 per share). Final dividend increased to HK$0.18 per share (FY2017: HK$0.15 per share). Including HK$0.040 of interim dividend paid, total full year dividend will amount to HK$0.22 per share (FY2017: HK$0.185 per share), representing a dividend payout ratio of 31.9%, reflecting confidence in the financial position of the Group.
Net asset value per share[(iii)] as at 31 March 2018 increased by HK$1.62 and reached approximately HK$12.41 per share (HK$10.79 as at 31 March 2017).

Notes:

(i) Adjusted cash profit is calculated by adding depreciation and amortization charges to, and subtracting fair value gain in investment properties from, net profit attributable to shareholders. The amounts are adjusted for minority interests.
(ii) Net gearing ratio represents total bank loans, notes and bonds less investment securities, bank and cash balances divided by carrying amount of total equity and hotel revaluation surplus.
(iii) Revaluation surplus on hotel assets of approximately HK$15,593 million was based on independent valuation carried out as at 31 March 2018 (HK$13,354 million as at 31 March 2017) and was not recognized in the Company’s consolidated financial statements, but was adjusted for the calculations of net asset value per share and net gearing ratio.

– 2 –

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 31 MARCH 2018

NOTES Revenue Cost of sales and services Depreciation and amortisation of hotel and car park assets Gross profit Other income Other gains and losses 4 Administrative expenses – Hotel operations and management – Others Pre-operating expenses – Hotel operations and management Selling and marketing expenses Share of results of associates Share of results of joint ventures Finance costs 5 Profit before tax Income tax expense 6 Profit for the year 7 Attributable to: Shareholders of the Company Non-controlling interests Earnings per share Basic_(HK cents) _8 Diluted_(HK cents)_	2018 *HK$’000* 5,831,127 (2,854,767) (342,125) 2,634,235 32,321 504,558 (387,941) (272,669) (7,096) (128,139) 9,819 – (228,955) 2,156,133 (570,735) 1,585,398 1,566,722 18,676 1,585,398 69 69	2017 HK$’000 5,005,309 (2,709,013) (306,701) 1,989,595 25,099 368,458 (372,063) (212,230) (8,116) (46,435) (4,520) 86 (173,235) 1,566,639 (433,780) 1,132,859 1,117,688 15,171 1,132,859 51 51

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2018

Profit for the year Other comprehensive income (expense) for the year Items that will not be reclassified to profit or loss: Gain on revaluation of properties transferred from property, plant and equipment to investment properties Items that may be subsequently reclassified to profit or loss: Exchange differences arising on translation of foreign operations Fair value adjustment on cross currency swap contracts designated as cash flow hedge Other comprehensive income (expense) for the year Total comprehensive income for the year Total comprehensive income attributable to: Shareholders of the Company Non-controlling interests	2018 *HK$’000* 1,585,398 29,831 652,241 115,637 797,709 2,383,107 2,361,950 21,157 2,383,107	2017 HK$’000 1,132,859 8,654 (391,262) (42,640) (425,248) 707,611 692,671 14,940 707,611

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 MARCH 2018

NOTES Non-current Assets Investment properties Property, plant and equipment Prepaid lease payments Goodwill Interests in associates Interests in joint ventures Investment securities Deposits for acquisition of property, plant and equipment Amounts due from associates Amount due from a joint venture Amount due from an investee company Other receivables Pledged deposits Deferred tax assets Current Assets Properties for sale Completed properties Properties for/under development Other inventories Prepaid lease payments Debtors, deposits and prepayments 10 Deposits receivable from stakeholders Other receivables Loan to a joint venture Amounts due from joint ventures Amount due from an associate Tax recoverable Investment securities Derivative financial instruments Pledged deposits Restricted bank deposits Deposit in a financial institution Bank balances and cash Assets classified as held for sale	2018 *HK$’000* 3,229,437 8,175,004 518,752 68,400 943,884 410,417 13,564 100,576 66,831 27,248 119,995 80,489 4,419 48,410 13,807,426 1,148,197 10,094,565 8,547 14,569 522,674 512,548 11,827 – 39,085 27,750 185,745 3,506,479 518 17,604 1,547,853 11,633 3,031,929 20,681,523 – 20,681,523	2017 HK$’000 3,001,786 7,481,570 486,491 68,400 667,416 353,742 692 117,601 70,724 25,372 119,995 79,936 3,723 31,233
		12,508,681
		280,341 8,889,843 8,137 14,466 375,190 252,109 11,688 77,313 51,204 32,748 136,267 1,466,188 67 25,234 267,983 11,331 3,881,894
		15,782,003
		109,277
		15,891,280

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NOTES Current Liabilities Creditors and accruals 11 Customers’ deposits received Obligations under finance leases Amount due to a related company Amounts due to associates Amount due to a joint venture Amounts due to shareholders of non-wholly owned subsidiaries Derivative financial instruments Notes and bonds Tax payable Bank borrowings Liabilities associated with assets classified as held for sale Net Current Assets Total Assets less Current Liabilities Non-current Liabilities Obligations under finance leases Amount due to a shareholder of a non-wholly owned subsidiary Derivative financial instruments Notes and bonds Bank borrowings Deferred tax liabilities Net Assets Capital and Reserves Share capital Share premium Reserves Equity attributable to shareholders of the Company Non-controlling interests Total Equity	2018 *HK$’000* 1,725,479 1,936,950 5,629 19,095 27,149 3,177 8,232 2,211 907,995 361,136 5,285,719 10,282,772 – 10,282,772 10,398,751 24,206,177 11,518 269,491 37,439 3,498,958 6,661,703 583,186 11,062,295 13,143,882 230,179 4,297,682 8,442,951 12,970,812 173,070 13,143,882	2017 HK$’000 889,406 2,109,874 3,775 16,815 7,186 – 26,907 9,176 – 358,917 2,755,293
		6,177,349
		3,600
		6,180,949
		9,710,331
		22,219,012
		7,594 246,740 119,314 3,130,542 7,376,392 394,715
		11,275,297
		10,943,715
		223,837 4,033,779 6,534,186
		10,791,802 151,913
		10,943,715

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FOR THE YEAR ENDED 31 MARCH 2018

NOTES

1. GENERAL

The Company was incorporated as an exempted company with limited liability in the Cayman Islands. The shares of the Company are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The Company and its subsidiaries are together referred to as the Group.

2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

The Group has applied the following amendments to HKFRSs issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) for the first time in the current year:

Amendments to HKAS 7 Disclosure Initiative Amendments to HKAS 12 Recognition of Deferred Tax Assets for Unrealised Losses Amendments to HKFRS 12 As part of Annual Improvements to HKFRSs 2014–2016 Cycle

Except as described below, the application of the above amendments to HKFRSs in the current year has had no material impact on the Group’s financial performance and positions for the current and prior years and/or on the disclosures set out in these consolidated financial statements.

Amendments to HKAS 7 Disclosure Initiative

The Group has applied these amendments for the first time in the current year. The amendments require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both cash and non-cash changes. In addition, the amendments also require disclosures on changes in financial assets if cash flows from those financial assets were, or future cash flows will be, included in cash flows from financing activities.

Specifically, the amendments require the following to be disclosed: (i) changes from financing cash flows; (ii) finance costs; (iii) dividends recognised as distribution; (iv) the effect of changes in foreign exchange rate; and (v) other changes.

A reconciliation between the opening and closing balances of these items is provided. Consistent with the transition provisions of the amendments, the Group has not disclosed comparative information for the prior year. Apart from the additional disclosure, the application of these amendments has had no impact on the Group’s consolidated financial statements.

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New and amendments to HKFRSs and interpretations in issue but not yet effective

The Group has not early applied the following new and amendments to HKFRSs and interpretations that have been issued but are not yet effective:

HKFRS 9	Financial Instruments1
HKFRS 15	Revenue from Contracts with Customers and the related
	Amendments1
HKFRS 16	Leases2
HKFRS 17	Insurance Contracts4
HK(IFRIC) – Int 22	Foreign Currency Transactions and Advance Consideration1
HK(IFRIC) – Int 23	Uncertainty over Income Tax Treatments2
Amendments to HKFRS 2	Classification and Measurement of Share-based Payment
	Transactions1
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with HKFRS 4
	Insurance Contracts1
Amendments to HKFRS 9	Prepayment Features with Negative Compensation2
Amendments to HKFRS 10	Sale or Contribution of Assets between an Investor and its
	Associate or Joint Venture3
Amendments to HKAS 19	Plan Amendment, Curtailment or Settlement2
Amendments to HKAS 28	As part of the Annual Improvements to HKFRSs 2014–2016
	Cycle1
Amendments to HKAS 28	Long-term Interests in Associate and Joint Ventures2
Amendments to HKAS 40	Transfers of Investment Property1
Amendments to HKFRSs	Annual Improvements to HKFRSs 2015–2017 Cycle2

1 Effective for annual periods beginning on or after 1 January 2018 2 Effective for annual periods beginning on or after 1 January 2019 3 Effective for annual periods beginning on or after a date to be determined 4 Effective for annual periods beginning on or after 1 January 2021

3. SEGMENT INFORMATION

The Group determines its operating segments based on internal reporting about components that are regularly reviewed by the chief operating decision maker. Information reported to the Group’s chief operating decision makers, who are the executive directors of the Company, for the purposes of resource allocation and assessment of performance is mainly focused on the property development, property investment, hotel operations and management, car park operations and facilities management in each of the geographical locations as stated below, securities and financial product investments and other operations, which mainly include provision of engineering services and second mortgage loans.

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Segment revenue and results

The following is an analysis of the Group’s revenue and results by reportable and operating segment.

Segment 2018 *HK$’000*	revenue 2017 HK$’000 1,724,234 – – 1,212,454 – 13 2,936,701 5,418 36,243 12,922 54,583 665,300 209,320 218,845 93,534 121,955 1,308,954 628,452 3,581 9,408 641,441 62,478 1,152 5,005,309	Segment profit (loss) 2018 2017 *HK$’000* HK$’000	Segment profit (loss) 2018 2017 *HK$’000* HK$’000
1,310,716 – 385,672 1,733,112 – 1,295	1,724,234 – – 1,212,454 – 13	338,629 (40,461) 184,672 1,108,991 (53,548) (16,056)	513,444 (21,906) (538) 749,779 (7,579) (1,066)
3,430,795		1,522,227	1,232,134
5,894 43,418 16,361	5,418 36,243 12,922	5,317 251,003 (20,090)	2,390 194,131 (19,289)
65,673		236,230	177,232
776,474 237,786 254,898 96,098 172,546	665,300 209,320 218,845 93,534 121,955	476,134 34,703 (27,065) 27,785 20,594	102,517 16,378 (8,985) 28,896 7,551
1,537,802		532,151	146,357
639,086 19,046 8,248	628,452 3,581 9,408	56,770 52,654 6,314	51,385 2,790 5,613
666,380 126,024 4,453 5,831,127		115,738 89,915 19,605 2,515,866 (130,778) (228,955) 2,156,133 (570,735) 1,585,398	59,788 138,433 9,990 1,763,934 (24,060) (173,235) 1,566,639 (433,780) 1,132,859

None of the segments derived any revenue from transactions with other segments.

No revenue from any single customer contributed over 10% of the total revenue of the Group.

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Segment assets

The following is an analysis of the Group’s assets by reportable segment as at the end of the reporting period. Segment assets represent assets held by each segment without allocation of corporate assets which are mainly bank balances and cash and deposit in a financial institution.

Property development – Australia – HK – Malaysia – PRC – Singapore – UK Property investment – Australia – HK – PRC Hotel operations and management – HK – Malaysia – PRC – Singapore – UK Car park operations and facilities management – Australia – Europe – Malaysia Securities and financial product investments Other operations Segment assets Unallocated corporate assets Total assets	2018 *HK$’000* 4,481,620 3,195,592 453,028 2,434,798 3,289,337 827,832 14,682,207 180,808 2,349,987 5,949 2,536,744 4,945,841 992,328 1,963,512 618,394 1,327,038 9,847,113 927,723 394,673 140,375 1,462,771 2,822,261 94,291 31,445,387 3,043,562 34,488,949	2017 HK$’000
		3,241,146 2,299,243 641,354 2,559,895 2,369,355 327,605
		11,438,598
		161,296 2,242,535 4,821
		2,408,652
		3,627,380 819,955 1,887,490 608,915 1,068,067
		8,011,807
		827,631 139,708 137,101
		1,104,440 1,442,422 100,817 24,506,736 3,893,225 28,399,961

– 10 –

4. OTHER GAINS AND LOSSES

Change in fair value of investment properties Change in fair value of financial assets at fair value through profit or loss Gain arising on transfer of completed properties for sale to investment properties Change in fair value of derivative financial instruments Net foreign exchange (losses) gains (Impairment loss) reversal of impairment loss recognised on trade debtors Reversal of impairment loss recognised on interest in a joint venture Gain on disposal of a subsidiary Impairment loss recognised on deposits for acquisition of property, plant and equipment Gain on disposal of property, plant and equipment Impairment loss recognised on interest in an associate FINANCE COSTS Interest on: Bank borrowings Other loans Interest on notes and bonds Less: net interest income from cross currency swap contracts Amortisation of front-end fee Others Total interest costs Less: amounts capitalised to properties under development: – properties for owners’ occupation – properties for sale	2018 *HK$’000* 277,389 (36,959) – (6,153) (31,259) (11,387) 11,715 320,130 (30,000) 11,082 – 504,558 2018 *HK$’000* 343,763 975 162,329 (7,375) 11,729 1,602 513,023 (6,965) (277,103) 228,955	2017 HK$’000 248,742 52,527 31,043 10,421 45,806 1,252 3,667 – – – (25,000) 368,458 2017 HK$’000 269,277 159 102,286 (4,620) 9,709 3,975 380,786 (32,510) (175,041) 173,235

5. FINANCE COSTS

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6. INCOME TAX EXPENSE

The income tax expense comprises: Current tax: Hong Kong Profits Tax PRC Enterprise Income Tax (“PRC EIT”) PRC Land Appreciation Tax (“PRC LAT”) Australia Income Tax Malaysia Income Tax Singapore Income Tax UK Income Tax Under(over)provision in prior years: Hong Kong Profits Tax PRC EIT Australia Income Tax Malaysia Income Tax Singapore Income Tax Deferred taxation	2018 *HK$’000* 22,143 248,385 144,639 44,361 32,602 6,427 3,293 501,850 2,005 25,000 (76,240) (750) (12,171) (62,156) 131,041 570,735	2017 HK$’000 14,721 185,004 63,180 118,368 1,821 13,454 456 397,004 (3,402) – – 70 1,211 (2,121) 38,897 433,780

Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profits for both years of each individual company comprising the Group less tax losses brought forward where applicable.

PRC EIT is calculated in accordance with the EIT Law and Implementation Regulations of the EIT Law at the rate of 25% for both years.

PRC LAT is levied at the deemed levying rates in accordance with the relevant PRC Tax laws and regulations.

The domestic statutory tax rate of Australia, Malaysia, Singapore and UK is 30%, 24%, 17% and 20% of the estimated assessable profits for both years, respectively.

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7. PROFIT FOR THE YEAR

Profit for the year has been arrived at after charging: Cost of properties sold recognised as an expense Auditor’s remuneration Depreciation Amortisation of prepaid lease payments Amortisation of investment in a joint venture (included in share of results of joint ventures) Staff costs (included HK$396,514,000 (2017: HK$351,686,000) in cost of sales and services) – Directors’ emoluments – Other staffs – Share-based payment expenses to staff Share of taxation of associates (included in share of results of associates) and after crediting: Rental income, net of outgoings of HK$10,558,000 (2017: HK$14,503,000) Bank interest income	2018 *HK$’000* 1,725,470 10,131 345,756 9,626 2,420 15,409 713,603 – 729,012 1,540 128,445 16,930	2017 HK$’000 1,664,570 12,754 313,460 10,631 2,904 23,298 612,237 615
		636,150
		1,417
		104,895 15,084

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8. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the shareholders of the Company is based on the consolidated profit for the year attributable to the shareholders of the Company of HK$1,566,722,000 (2017: HK$1,117,688,000) and the number of shares calculated as follows:

Weighted average number of ordinary shares for the purpose of basic earnings per share Effect of dilutive potential ordinary shares – Company’s share options Weighted average number of ordinary shares for the purpose of diluted earnings per share DIVIDENDS Dividends recognised as distribution during the year: 2018 interim dividend of HK4.0 cents per share (2017: 2017 interim dividend of HK3.5 cents per share) 2017 final dividend of HK15.0 cents per share (2017: 2016 final dividend of HK13.0 cents per share)	2018 *’000* 2,267,150 1,938 2,269,088 2018 *HK$’000* 91,574 337,398 428,972	2017 ’000 2,173,825 2,178
		2,176,003
		2017 HK$’000 77,627 277,122
		354,749

9. DIVIDENDS

The 2018 interim dividend and 2017 final dividend was declared in form of a scrip dividend to shareholders who were given an option to elect to receive cash in lieu of all or part of their scrip dividend at a share price of HK$4.718 and HK$4.010 per share respectively. Shares are issued during the year on the shareholders election for shares. These new shares rank pari passu to the existing shares of the Company.

A final dividend for the year ended 31 March 2018 of HK18.0 cents (2017: HK15.0 cents) per share, totalling of HK$414,322,000, has been proposed by the directors of the Company and is subject to approval by the shareholders in the forthcoming annual general meeting.

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10. DEBTORS, DEPOSITS AND PREPAYMENTS

Included in debtors, deposits and prepayments are trade debtors, net of allowance of doubtful debt, of HK$123,034,000 (2017: HK$97,869,000).

Trade debtors aged over 60 days are past due but are not impaired.

Trade debtors mainly represent receivable from renting of properties, use of hotel facilities and sales of properties. Rentals are payable on presentation of demand notes. Hotel room revenue is normally settled by cash or credit card. The Group allows an average credit period of 14 to 60 days to its corporate customers and travel agents.

Proceeds from sales of properties are settled according to the payment terms of the sale and purchase agreements.

In determining the recoverability of trade debtors, the Group considers the subsequent settlement and any change in the credit quality of the debtors from the date credit was initially granted up to the end of each reporting period. There is no concentration of credit risk due to the large and unrelated customer base. The management believes that there is no further credit provision required in excess of the allowance already made. The Group does not hold any collateral over these balances.

The following is an aged analysis of trade debtors, net of allowance of doubtful debt, based on the invoice date at the end of the reporting period, which approximated the respective revenue recognition date:

0–60 days 61–90 days Over 90 days	2018 *HK$’000* 94,203 6,745 22,086 123,034	2017 HK$’000 80,050 3,966 13,853
		97,869

11. CREDITORS AND ACCRUALS

Included in creditors and accruals are trade creditors of HK$983,807,000 (2017: HK$420,514,000). The following is an aged analysis of the trade creditors, based on the invoice date:

0–60 days 61–90 days Over 90 days	2018 *HK$’000* 894,855 16,541 72,411 983,807	2017 HK$’000 406,662 2,442 11,410
		420,514

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FINAL DIVIDEND

The Board has recommended the payment of a final dividend for the year ended 31 March 2018 of HK18.0 cents (2017: HK15.0 cents) per ordinary share (the “Proposed Final Dividend”). The Proposed Final Dividend will be paid to the shareholders of the Company (the “Shareholders”) whose names appear on the Company’s Register of Members on 3 September 2018. The Proposed Final Dividend will be paid in the form of a scrip dividend with Shareholders being given an option to elect to receive cash in lieu of all or part of their scrip dividend entitlements (the “Scrip Dividend Scheme”).

The Scrip Dividend Scheme will be subject to (i) Shareholders’ approval of the Proposed Final Dividend at the Company’s forthcoming annual general meeting to be held on 23 August 2018 (the “2018 AGM”); and (ii) the Stock Exchange granting listing of and permission to deal in the new shares to be allotted thereunder. For the purpose of determining the number of new shares to be allotted, the market value of new shares will be calculated as the average of the closing prices of the existing shares of the Company on the Stock Exchange for the 5 trading days prior to and including 3 September 2018. Full details of the Scrip Dividend Scheme will be set out in a circular which is expected to be sent to the Shareholders together with a form of election on or around 10 September 2018. Dividend warrants and/or new share certificates will be posted on or around 11 October 2018.

CLOSURE OF REGISTER OF MEMBERS

Details of the periods of closure of the Company’s Register of Members are as follows:

(a) For determining the entitlement to attend and vote at the 2018 AGM

As set out above, the 2018 AGM is scheduled to be held on Thursday, 23 August 2018. For determining the entitlement to attend and vote at the 2018 AGM, the Register of Members of the Company will be closed from Monday, 20 August 2018 to Thursday, 23 August 2018, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to be eligible to attend and vote at the 2018 AGM, unregistered holders of shares of the Company should ensure that all share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Tricor Standard Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Friday, 17 August 2018.

(b) For determining the entitlement to the Proposed Final Dividend

As stated above, the Proposed Final Dividend is subject to the approval of Shareholders at the 2018 AGM. For determining the entitlement of the Proposed Final Dividend, the Register of Members of the Company will also be closed from Thursday, 30 August 2018 to Monday, 3 September 2018, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to qualify for entitlement to the Proposed Final Dividend, unregistered holders of shares of the Company should ensure that all share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Tricor Standard Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Wednesday, 29 August 2018.

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MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW

1. Profit and loss analysis

The Company’s consolidated revenue for FY2018 was approximately HK$5.8 billion, an increase of 16.5% as compared with FY2017. Gross profit (before depreciation of hotel and car park assets) came in at HK$3.0 billion, showing a strong growth of 29.6% from HK$2.3 billion during FY2017. A breakdown of the Group’s revenue and gross profit is shown below:

For FY2018 Revenue Gross profit Depreciation Adjusted gross profit Adjusted gross profit margin For FY2017 Revenue Gross profit Depreciation Adjusted gross profit Adjusted gross profit margin	Property development HK$’000 3,430,795 1,705,216 – 1,705,216 49.7% 2,936,701 1,271,897 – 1,271,897 43.3%	Hotel operations and management HK$’000 1,537,802 645,152 313,609 958,761 62.3% 1,308,954 517,713 283,240 800,953 61.2%	Car park operations and facilities management HK$’000 666,380 122,129 28,516 150,645 22.6% 641,441 113,616 23,461 137,077 21.4%	Others HK$’000 196,150 161,738 – 161,738 82.5% 118,213 86,369 – 86,369 73.1%	Total HK$’000 5,831,127
					2,634,235 342,125
					2,976,360
					51.0%
					5,005,309
					1,989,595 306,701
					2,296,296
					45.9%

– 17 –

Revenue from sales of properties amounted to approximately HK$3,431 million in FY2018, up 16.8% as compared with FY2017 owing to the completion of a number of projects in the Group’s pipeline, with gross profit climbing from HK$1,272 million in FY2017 to HK$1,705 million for FY2018, representing a 34.1% increase. During FY2018, four projects were completed, namely Royal Crest II in Shanghai, Dorsett Bukit Bintang in Kuala Lumpur, The FIFTH in Melbourne and Royal Riverside (Towers 1 to 4) in Guangzhou with partial revenue recognised.

Revenue from hotel operations and management amounted to approximately HK$1,538 million in FY2018, an improvement of 17.5% as compared to FY2017, thanks to the solid recovery of the hotel market, in particular in Hong Kong, and the addition of new hotels to the Group’s portfolio, namely Silka Tsuen Wan in Hong Kong (opened in February 2017) and Dorsett City in London (opened in July 2017). Gross margin from the Group’s hotel operations and management (before depreciation and amortisation) improved from 61.2% in FY2017 to 62.3% in FY2018, due to higher overall occupancy rate as well as average room rate.

Revenue from car park operations and facilities management amounted to approximately HK$666 million in FY2018, an increase of 3.9% as compared to FY2017, with adjusted gross profit increasing from HK$137 million for FY2017 to HK$151 million for FY2018, a 9.9% year-on-year growth, as the Group continued to allocate more resources to self-owned car parks which have higher margin compared to third-party car park management contracts. During FY2018, approximately 14,342 car parking bays were added to the Group’s car park management portfolio, including 1,392 car parking bays through the acquisition of a portfolio of car parks in Budapest, Hungary in October 2017, the Group’s first ever acquisition of car parks in continental Europe.

Profit attributable to shareholders of the Company amounted to HK$1,567 million, as a result of the completion of a number of high margin projects, a strong recovery of the hotel business, a steadily expanding car park portfolio, as well as a gain on sale of one of the non-core hotels of the Group during FY2018.

Adjusted cash profit[(i)] was at HK$1,643 million for FY2018 which represented a growth of 42.0% from HK$1,157 million for FY2017, demonstrating the Group’s strong ability to continuously generate cash flow which provides ammunition for the Group’s future growth.

(i) Adjusted cash profit is calculated by adding depreciation and amortization charges to, and subtracting fair value gain in investment properties from, net profit attributable to shareholders. The amounts are adjusted for minority interests.

– 18 –

2. Liquidity, financial resources and net gearing

The following table sets out the Group’s bank and cash balances, investment securities (which are considered as cash equivalent items due to their easily-monetizable nature), bank loans and borrowings and equity as at 31 March 2018.

Bank loans, notes and bonds Due within 1 year(i) Due 1–2 years Due 2–5 years Due more than 5 years Total bank loans, notes and bonds Investment securities Bank and cash balances Liquidity position Net debts(ii) Carrying amount of the total equity Add: hotel revaluation surplus Total adjusted equity Net gearing ratio (net debts to total adjusted equity)	As at 31 March 2018 *HK$ million* 5,005 1,848 7,699 1,820 16,372 3,520 4,591 8,111 8,261 13,144 15,593 28,737 28.7%	As at 31 March 2017 HK$ million 1,431 4,482 6,547 814 13,274 1,467 4,161 5,628 7,646 10,944 13,354 24,298 31.5%

Note (i) The Group’s borrowings amounting to HK$2.6 billion due within 1 year has been either repaid or re-financed with long-term borrowings post year-end.

Note (ii) Net debts represent total bank loans, notes and bonds less investment securities, bank and cash balances.

To better manage the Group’s liquidity position, the Group allocated a portion of its cash position in marketable investment securities. Investment securities shown on the consolidated statement of financial position represent primarily fixed income securities and investments in fixed income funds.

– 19 –

In November 2017, the Company issued US$150 million 4.50 percent 5.5-year notes (the “Issue”) due on 13 May 2023 under the US$1,000 million medium term note programme which is listed on the Stock Exchange. The Issue represented a highly successful fundraising by the Group in the international capital markets, and helped to extend the debt maturity profile of the Group. The proceeds from the Issue will be used for the Group’s business development and general corporate purposes.

The liquidity position of the Group as at 31 March 2018 was approximately HK$8.1 billion, representing an increase of 44.1% from the balance as at 31 March 2017, primarily due to the collection of sales proceeds upon completion of the Group’s residential developments during FY2018, stable cash inflow from the Group’s recurring income business, the net proceeds from the Issue, as well as the proceeds from the sale of Silka West Kowloon hotel at a consideration of approximately HK$450 million, and offset by repayment of bank borrowings and certain capital expenditure.

During FY2018, the Group’s net debts increased by approximately HK$615 million to HK$8,261 million. The Group will continue to repay development construction loans when the relevant projects are completed and to repay loans with shorter maturity and higher cost of funding, with an aim of locking in longer dated funding. The Group’s average cost of borrowing was approximately 3.19% for FY2018 (2.68% for FY2017).

The table below shows the Group’s debts profile.

The Company’s notes Dorsett bonds* Unsecured bank loans Secured bank loans – Property development and investment – Hotel operations and management – Car park operations and facilities management – Others Total bank loans, notes and bonds	As at 31 March 2018 *HK$ million* 3,499 908 1,437 3,954 5,787 576 211 16,372	As at 31 March 2017 HK$ million 2,311 820 1,744 3,418 4,572 398 11 13,274

fully repaid after 31 March 2018

The carrying amounts of the total bank loans, notes and bonds in the Company’s consolidated statement of financial position as at 31 March 2018 include an amount of approximately HK$1,194 million (as at 31 March 2017: HK$1,329 million) which is reflected as current liabilities even though such sum is not repayable within one year, as the relevant banks and/or financial institutions have discretionary rights to demand immediate repayment.

– 20 –

As at 31 March 2018, the Group’s undrawn banking facilities were approximately HK$6.9 billion which were all committed banking facilities, of which approximately HK$3.3 billion was in relation to construction development while the balance of approximately HK$3.6 billion was for the Group’s general corporate use. The available banking facilities together with sale proceeds to be generated from the Group’s upcoming property development projects place the Group in a solid financial position to not only fund its existing business and operations but also to further expand its business.

In addition, upon completion of the disposal of Silka West Kowloon hotel, a total of 6 hotel assets within the Group remain unencumbered. The capital value of these 6 hotels amounted to HK$2.3 billion based on independent valuation assessed as at 31 March 2018. These assets can be used as collateral for further bank borrowings which can provide further liquidity for the Group, should this be necessary.

Adjusting for the unrecognized hotel revaluation surplus of approximately HK$15,593 million, based on independent valuation assessed as at 31 March 2018 (HK$13,354 million as at 31 March 2017), the Group’s total consolidated equity as at 31 March 2018 was approximately HK$28,737 million. The net gearing ratio of the Group was at 28.7%.

3. Foreign exchange management

In general, contributions from the Group’s non-Hong Kong operations were affected by the movement of foreign currencies against Hong Kong dollar. The table below sets forth the exchange rates of Hong Kong dollar against the local currency of countries where the Group has significant operations:

	As at	As at
	31 March	31 March
Rate as at	2018	2017	Change
HK$/Australia Dollar (“AUD”)	5.99	5.93	1.0%
HK$/Renminbi (“RMB”)	1.25	1.13	10.6%
HK$/Malaysian Ringgit (“MYR”)	2.03	1.75	16.0%
HK$/British Pound (“GBP”)	11.02	9.67	14.0%
HK$/Singapore Dollar (“SGD”)	5.97	5.56	7.4%
Average rates for	FY2018	FY2017	Change
HK$/AUD	5.96	5.93	0.5%
HK$/RMB	1.19	1.17	1.7%
HK$/MYR	1.89	1.86	1.6%
HK$/GBP	10.35	10.40	(0.5%)
HK$/SGD	5.77	5.65	2.1%

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The Group adopted a practice whereby investments in its non-Hong Kong operations are hedged by borrowings in the local currencies of the countries where such investments are made. The impact of movement in the above currencies to the Group’s profit attributable to shareholders for FY2018 is analysed below:

Increase (decrease) to the Group’s profit attributable to shareholders for FY2018 assuming exchange rates of the following currencies against Hong Kong dollars remained constant during the year: AUD RMB MYR GBP SGD Total impact	HK$ million (1.4) (10.3) (2.8) 0.1 1 (13.4)

4. Net asset value per share

Equity attributable to shareholders of the Company Add: Hotel revaluation surplus Total net asset value Number of shares issued (million) Net asset value per share	As at 31 March 2018 *HK$ million* 12,971 15,593 28,564 2,302 HK$12.41	As at 31 March 2017 HK$ million 10,792 13,354 24,146 2,238 HK$10.79

Total net asset value of the Group reached approximately HK$28,564 million after adjusting for revaluation surplus on hotel assets of approximately HK$15,593 million, based on independent valuation assessed as at 31 March 2018 (HK$13,354 million as at 31 March 2017). Net asset value per share for the Company as at 31 March 2018 increased by HK$1.62 during the financial year and reached approximately HK$12.41.

– 22 –

5. Capital expenditure

The Group’s capital expenditure consists of expenditure for acquisition, development and refurbishment of hotel properties, plant and equipment.

During FY2018, the Group’s capital expenditure amounted to approximately HK$936 million primarily attributable to the construction works of Ritz Carlton in Perth and Dorsett City in London (opened in July 2017). The capital expenditure was funded through a combination of borrowings and internal resources.

6. Capital commitments

Capital expenditure contracted for but not provided in the consolidated financial statements in respect of: Acquisition, development and refurbishment of hotel properties Others	As at 31 March 2018 *HK$ million* 1,596 31 1,627	As at 31 March 2017 HK$ million 1,175 6 1,181

7. Post balance sheet events

Award of tender for The Estoril, Singapore

In April 2018, FEC Properties Pte. Limited (“FEC Properties”), an indirect whollyowned subsidiary of the Company, submitted a form of tender for a property currently known as The Estoril (“The Estoril”), which is located along Holland Road of Singapore, adjacent to the site currently known as Hollandia for which the Group was awarded the tender in March 2018. Subsequently, FEC Properties received a tender acceptance letter issued by the solicitors of the owners of The Estoril accepting the submitted tender at the tendered sale price of SGD223.9 million. The two acquisitions enable the Group to replenish its landbank and add to the Group’s overall development pipeline in Singapore following the successful launch of Artra during FY2018.

The Estoril is situated in the prime District 10 in Singapore. It enjoys an unparalleled location close to Orchard Road and Singapore Botanic Garden and is bound by Holland Village, Farrer Road and the Dempsey Cluster which are popular among both locals and expatriates. It is currently comprised of two blocks of 6-storey residential apartments with total freehold site area of 85,000 sq. ft.. The Group intends to redevelop The Estoril together with Hollandia as a combined development with a total saleable floor area of 241,000 sq. ft, allowing the Group greater flexibility in the overall planning and design and therefore creating a better residential product for the market.

– 23 –

Completion of the subscription of shares in The Star Entertainment Group Limited

In March 2018, the Company, Chow Tai Fook Group (“CTF”) and The Star Entertainment Group Limited (“The Star”) entered into:

a subscription agreement (the “Subscription Agreement”), pursuant to which the Group and CTF will each subscribe for 45,825,000 fully paid ordinary shares in The Star, which, immediately after the subscription will each represent 4.99% of the total fully paid ordinary shares in The Star, at a subscription price of approximately AUD245.2 million each.
A strategic alliance agreement (the “Strategic Alliance Agreement”), under which the parties agree to form a strategic alliance to facilitate mutual business growth and enable each party to benefit from each other’s capabilities and scale and to leverage each party’s experience and expertise to assist in the future growth and development of each of the parties’ business.

The Subscription Agreement was completed in April 2018. For more details of the Subscription Agreement and the Strategic Alliance Agreement, please refer to the Company’s announcements dated 28 March 2018 and 16 April 2018.

Completion of the acquisition of Trans World Corporation

In March 2018, the Group signed an agreement with Trans World Corporation (“TWOC”) whereby the Group agreed to acquire 100% of the equity interest in TWOC (the “TWOC Acquisition”) in the form of a merger between FEC Investment (US) Limited, an indirectly wholly-owned subsidiary of the Group, and TWOC, at a consideration of USD42 million. The TWOC Acquisition was completed in April 2018.

For more details of the TWOC Acquisition and of TWOC, please refer to the Company’s announcements dated 5 March 2018 and 1 May 2018, and in the section headed “Business Review – Gaming Operations and Management” below.

Auction for the Dantzic Street Site, Manchester

In April 2018, the Group was named winner at an online auction to acquire a 1.96acre Dantzic Street site (the “Dantzic Street Site”) in central Manchester, the United Kingdom, for GBP5.2 million.

For more details of the Dantzic Street Site, please refer to the section headed “Business Review – Property Division” below.

Award of tender for Cuscaden Road, Singapore

In May 2018, a consortium in which the Group has a 10% interest was awarded the tender for a residential development site on Cuscaden Road, Singapore with an attributable saleable floor area of 19,000 sq. ft, further adding to the Group’s pipeline in Singapore.

– 24 –

Acquisition of 21 Anderson Road, Singapore

In June 2018, the Group entered into an agreement to acquire 100% interest, in the form of equity and shareholder’s loan, in Highest Reach Investments Limited, which owns, through its wholly-owned subsidiaries, the development on 21 Anderson Road of Singapore, at a consideration of approximately SGD93 million, with the assumption of bank loans of approximately SGD103 million.

BUSINESS REVIEW

1. Property division

The Group’s property division includes property investment and property development.

Property investment comprises investments in retail and office buildings located mainly in Hong Kong, Mainland China and Australia. For FY2018, a fair value gain of investment properties of approximately HK$277 million was recognized, as a result of an increase in fair value of the investment properties in Shanghai, Hong Kong and Melbourne (following completion of the commercial units of the FIFTH). As at 31 March 2018, valuation of investment properties reached approximately HK$3.2 billion (31 March 2017: HK$3.0 billion), up 7.6% as compared to the balance as at 31 March 2017.

The Group has a diversified portfolio in residential property development in Australia, Mainland China, Hong Kong, Singapore, Malaysia and the United Kingdom. To carry out property development in the various markets, the Group has established strong local teams in each of these markets which, coupled with the regionalisation approach, allow the Group to take advantage of the different property cycles in different markets. This strategy has resulted in a relatively low land cost base for the Group’s development projects. The Group’s property developments are largely focused on mass residential market from which the Group can benefit due to the growing affluence of the middle class.

Total attributable cumulative presales value of the Group’s residential properties under development amounted to approximately HK$13.4 billion as at 31 March 2018. Such presales proceeds are not reflected in the Group’s consolidated income statement until the point in time when the relevant projects are completed and the revenue of the relevant projects is then recognized.

– 25 –

The following table shows a breakdown of the Group’s total cumulative presales value of residential properties under development as at 31 March 2018.

Developments Location Aspen Crest Hong Kong Marin Point Hong Kong Astoria Crest Hong Kong Artra Singapore West Side Place (Towers 1 and 2) Melbourne West Side Place (Tower 4) Melbourne The Towers at Elizabeth Quay Perth The Star Residences Gold Coast MeadowSide (Plots 2 and 3) Manchester Royal Riverside (Towers 1, 2, 3 and 4) Guangzhou Total attributable cumulative presales	Attributable presales Expected financial year of completion HK$ million 1,060 FY2019 212 FY2019 370 FY2019 1,753 FY2021 5,072 FY2021 1,751 FY2022/23 2,030 FY2019/20 333 FY2022 277 FY2021 516 FY2019 13,374

During FY2018, the Group launched presales of seven of its residential development projects, namely (i) Artra in Singapore; (ii) Marin Point in Hong Kong; (iii) West Side Place (Tower 4) in Melbourne; (iv) Royal Riverside (Tower 3) in Guangzhou; (v) The Star Residences in Gold Coast; (vi) MeadowSide (Plots 2 and 3) in Manchester; and (vii) Astoria Crest in Hong Kong. Total expected attributable gross development value (“GDV”) and attributable saleable floor area of these seven development projects are approximately HK$9.1 billion and 1.4 million sq. ft. respectively.

– 26 –

As at 31 March 2018, expected attributable saleable floor area of the Group’s active residential property development projects under various stages of development across the regions was approximately 7.5 million sq. ft..

Post year-end, the Group further replenished its development pipeline in Singapore by entering into the following transactions:

In April 2018, the Group won the bid for a residential development site, currently known as The Estoril in Singapore, which can be co-developed with the adjacent site currently known as Hollandia for which the Group also won the bid in March 2018, in a combined development with a total expected attributable saleable floor area of 192,000 sq. ft..
In May 2018, a consortium in which the Group has a 10% interest was awarded the tender for a residential development site on Cuscaden Road, Singapore with an attributable saleable floor area of 19,000 sq. ft..
In June 2018, the Group entered into a sale and purchase agreement to acquire the development currently known as “21 Anderson Royal Oak Residence” on Anderson Road, Singapore, which comprises 34 residential units with saleable floor area of approximately 86,000 sq. ft..

Details of the Group’s current pipeline are shown below.

	Attributable	Expected	Status/	Expected
	saleable floor	attributable	expected	financial year
Developments	area(i)	GDV(ii)	launch	of completion
	Sq. ft.	HK$ million
Pipeline development
Melbourne
West Side Place
– Towers 1 & 2	1,050,000	5,658	Launched	FY2021
– Tower 3	584,000	2,919	FY2019	FY2022/23
– Tower 4	572,000	2,928	Launched	FY2022/23
Perth
The Towers at Elizabeth Quay	391,000	2,876	Launched	FY2019/20
Perth City Link (Lots 2 and 3A)	224,000	847	FY2019	FY2023
Brisbane
Queen’s Wharf Brisbane(iii)
– Tower 4	259,000	1,115	FY2019	FY2023
– Tower 5	224,000	1,131	Planning	Planning
– Tower 6	224,000	1,131	Planning	Planning
Gold Coast
The Star Residences(iv)	98,000	539	Launched	FY2022

– 27 –

Developments Guangzhou Royal Riverside – Towers 1, 2, 3 & 4(v) – Tower 5 Hong Kong Aspen Crest Tan Kwai Tsuen Marin Point Astoria Crest The Garrison Shatin Heights London Alpha Square Hornsey Townhall Manchester MeadowSide – Plots 2 and 3 – Plot 4 – Plot 5 Northern Gateway(vi) Singapore Artra(vii) Total development pipeline as at 31 March 2018 Completed development available for sale Shanghai King’s Manor The Royal Crest II Kuala Lumpur Dorsett Bukit Bintang Melbourne The FIFTH Hong Kong Total completed development available for sale as at 31 March 2018	Attributable saleable floor area(i) Sq. ft. 254,000 207,000 64,000 48,000 103,000 20,000 27,000 81,000 377,000 107,000 220,000 238,000 99,000 1,768,000 286,000 7,525,000 51,000 80,000 50,000 23,000 3,000 207,000	Expected attributable GDV(ii) Status/ expected launch Expected financial year of completion HK$ million 870 Launched FY2019 817 FY2019 FY2019 1,060 Launched FY2019 532 FY2019 FY2019 1,078 Launched FY2019 420 Launched FY2019 573 FY2019 FY2019 1,292 FY2020 FY2021 4,546 FY2019 FY2024 1,025 FY2019 FY2021 1,019 Launched FY2021 1,223 Planning Planning 449 FY2020 FY2021 7,393 Planning Planning 2,812 Launched FY2021 44,253 340 454 215 99 66 1,174

– 28 –

Developments Total pipeline and completed development available for sale as at 31 March 2018 Additional pipeline post 31 March 2018 Singapore Holland Road(viii) Cuscaden Road(ix) 21 Anderson Road Manchester Northern Gateway Total additional pipeline post 31 March 2018 Total pipeline (including additional pipeline post 31 March 2018) and completed development available for sale	Attributable saleable floor area(i) Sq. ft. 7,732,000 192,000 19,000 86,000 396,000 693,000 8,425,000	Expected attributable GDV(ii) Status/ expected launch Expected financial year of completion HK$ million 45,427 3,275 Planning Planning 408 Planning Planning 1,277 Planning Planning 1,637 Planning Planning 6,597 52,024

Notes:

(i) The figures represent approximate saleable residential floor area which may vary subject to finalization of development plans.
(ii) The amounts represent expected gross development value attributable to the Group, which may change subject to market conditions.
(iii) This residential development consists of a total floor area of approximately 1,800,000 sq. ft.. The Group has 50% interest in the development.
(iv) The Group has 33.3% interest in the development.
(v) Excluding units which were completed and delivered before 31 March 2018.
(vi) The saleable floor area and GDV figure is estimated based on land already acquired and expected number of units to be built. As the master developer of Northern Gateway, the Group is expecting further land acquisitions which will increase both saleable floor area and GDV for this development.
(vii) Total saleable floor area of this development is approximately 410,000 sq. ft.. The Group has 70% interest in the development.
(viii) This development is a combination of Hollandia site and The Estoril site, which the Group was awarded the tender through collective sale in March 2018 and April 2018 respectively, with a combined saleable floor area of 241,000 sq. ft.. The Group has 80% interest in the development.
(ix) Total saleable floor area of this development is approximately 190,000 sq. ft. The Group has 10% interest in the development.

– 29 –

In addition to the above, the Group has entered into the Strategic Alliance Agreement with the partners of Destination Brisbane Consortium, The Star and CTF, whereby the parties are to co-develop the existing sites operated as casinos by The Star in Gold Coast and Sydney, and which gives the Group a first right of refusal for certain nominated developments identified by The Star in Australia, further contributing to the Group’s residential pipeline in Australia.

The Group was also selected as the preferred bidder for Lots 3B, 6 and 7 of the Perth City Link project.

Australia

Melbourne

West Side Place is a mixed-use residential development located in the Central Business District (“CBD”) of Melbourne. This development is expected to have a residential saleable floor area of approximately 2.2 million sq. ft. from 4 towers with approximately 3,000 apartments and a total GDV exceeding HK$11 billion. The development will comprise two hotels, including one under the Group’s Dorsett brand with approximately 300 hotel rooms located in Tower 3, and another hotel to be operated by Ritz Carlton with approximately 250 hotel rooms located at the top of Tower 1. Following the strong response on the presales of Towers 1 and 2 in June 2016, the Group launched the presale of Tower 4 in June 2017, with units worth HK$6.8 billion having been pre-sold as at 31 March 2018, representing approximately 80% of a total expected GDV of these 3 towers of HK$8.6 billion. The Group followed up with the launch of Tower 3 in May 2018. With the first two towers of the development expected to be completed in the financial year ending 31 March 2021 and Towers 4 and 3 expected to be completed in the financial year ending 31 March 2022/2023, this development is expected to strengthen the Group’s cashflow and earnings in the coming few years.

The FIFTH is located next to West Side Place and provides 402 apartments. This development with a total GDV of approximately HK$1.3 billion has been completely presold. Completion of the development was by stages with majority of the units delivered during FY2018 and with the remaining units completely resold post year-end.

Perth

The Towers at Elizabeth Quay is a mixed-use development comprising residential apartments of approximately 391,000 sq. ft. in saleable floor area, a luxury RitzCarlton hotel with more than 200 rooms, approximately 15,000 sq. ft. of commercial or retail area as well as other ancillary facilities. As at 31 March 2018, its presales value reached approximately HK$2.0 billion, representing 71% of the expected GDV. This development is expected to be completed in the financial year ending 31 March 2019/2020.

– 30 –

The Perth City Link is a major project being undertaken by the Western Australian Government to reconnect the Perth CBD and the entertainment district. Lots 2 and 3A of the Perth City Link project is a mixed-use development located adjacent to the Perth Arena. This project is expected to deliver more than 300 residential apartments and approximately 270 hotel rooms to be operated by Dorsett. In May 2017, the Group was also selected as the preferred proponent to develop Lots 3B, 6 and 7 of the Perth City Link project. These three lots will be home to a range of boutique apartments and an integrated retail, entertainment and hospitality complex. Lots 2 and 3A of Perth City Link is expected to launch for pre-sale in the financial year ending 31 March 2019 with completion expected in the year ending 31 March 2023.

Brisbane

The Destination Brisbane Consortium, a joint venture between the Group, The Star and CTF, entered into Development Agreements with the Queensland State, Australia for the delivery of the Queen’s Wharf Project in Brisbane (the “QWB Project”). The QWB Project comprises:

(1) an integrated resort component in which the Group’s ownership is 25% (CTF owns 25% and The Star owns 50%) with an equity investment amount of more than AUD200 million. Payments will be made progressively commencing from signing of the QWB Project documents up to completion of the QWB Project which is expected by the end of the financial year ending 31 March 2023.
(2) The residential component owned in the proportion of 50% by the Group and 50% by CTF.

Together with the Group’s portion of land premium for this residential component, the total capital commitment of the Group is expected to be approximately AUD300 million which the Group intends to fund from its internal resources. The QWB Project encompasses a total area of approximately 9.4 hectares at Queen’s Wharf, Brisbane, and envisages three residential towers, five world-class hotels, high-end food and commercial outlets and a casino in Brisbane’s prime waterfront district. The total core development gross floor area (“GFA”) of the QWB Project is expected to be 386,650 square meters (“sq. m.”) of which approximately 160,250 sq. m. relates to the residential component.

The QWB Project brings together the Group’s experience in international hospitality operation and mixed-use development, CTF’s extensive VIP customer base in Mainland China and Asian markets, as well as The Star’s operational experience in integrated resorts. The QWB Project is expected to contribute significantly to the Group’s recurring cash flow stream as well as to add to its residential development pipeline.

– 31 –

Gold Coast

The Star Residences is a mixed-use development featuring 5 towers in the heart of Gold Coast’s world-class integrated resort on Broadbeach Island. Pre-sale for the first tower with a saleable area of 294,000 sq. ft. and a GDV of HK$1.6 billion was launched in September 2017, with pre-sale contracted for 62% of the GDV of the first tower as at 31 March 2018. The project is an extension of the partnership between the Group, The Star and CTF in Gold Coast, in which the Group has a 33.3% interest. The completion of the first tower of the development is expected to take place in the financial year ending 31 March 2022.

In addition, the Strategic Alliance Agreement with The Star and CTF entered into in March 2018 also stipulated that the parties to the agreement will join forces on the delivery of certain nominated developments including the potential re-development of the Spit Precinct in Gold Coast, the realization of which will undoubtedly add to the Group’s development pipeline in the city, and will benefit the Group through its investment in The Star.

Sydney

Having entered into the Strategic Alliance Agreement with The Star and CTF in March 2018, the Group has agreed to co-develop the existing sites where The Star operates its casino in Sydney. The entire project is currently under planning stage.

The parties to the Strategic Alliance Agreement also agreed that there are certain nominated developments in Australia which the parties will work together to bring forward the planning and delivery, including the potential re-development of the Pyrmont Precinct which is located at a prime location in Sydney.

Mainland China

The Group has been developing California Garden, a premier township development in Shanghai over a number of years. The development comprises a diversified portfolio of residences including low-rise apartments, high-rise apartments and town houses.

King’s Manor consists of 479 apartments and 90 town houses, out of which all the apartments and 67 town houses have been delivered up to 31 March 2018, with the remaining townhouses to be sold on a completed basis.

The Royal Crest II consists of 180 apartments and 42 town houses, with an expected GDV of HK$1.4 billion. All the apartments were pre-sold by the end of FY2017 and delivered during FY2018. Presale for town houses commenced in September 2016 with 10 town houses delivered during FY2018, and with the remaining 32 town houses to be sold on completed basis.

– 32 –

In Guangzhou, Royal Riverside is a 5-tower residential development comprising 607 apartments with a total saleable floor area of approximately 684,000 sq. ft. and a total expected GDV of HK$2.4 billion. Completion of Towers 1, 2, 3 and 4 took place by stages with HK$660 million worth of units having been delivered during FY2018 and with the rest to be delivered in the financial year ending 31 March 2019. Pre-sale for Tower 5 was launched in April 2018 with the entire development expected to be fully completed in the financial year ending 31 March 2019.

Hong Kong

The Group has built its development pipeline in Hong Kong over the years through acquisition of redevelopment sites, participating in government tender and bidding for projects with Urban Renewal Authority (“URA”).

Currently the Group has 6 residential projects in the pipeline in Hong Kong.

Aspen Crest is a redevelopment project consisting of 234 apartments with approximately 64,000 sq. ft. in saleable floor area and approximately 9,100 sq. ft. of commercial component. All the units have been pre-sold as at 31 March 2018 with completion expected to take place in the financial year ending 31 March 2019.

Marin Point is a residential development site at Sha Tau Kok which the Group acquired through a government tender. This development comprises 261 low-rise apartments with approximately 103,000 sq. ft. in saleable floor area. The development was launched for pre-sale during FY2018 with 20% of the units pre-sold as at 31 March 2018. Completion of the development is expected in the financial year ending 31 March 2019.

Astoria Crest is a residential development site at Hai Tan Street, Sham Shui Po which was acquired by the Group through URA. This residential development comprises 72 apartments (mainly 1-bedroom apartment) with approximately 20,000 sq. ft. in saleable floor area. Pre-sale for the development was launched in December 2017 with 88% of the units pre-sold as at 31 March 2018. Completion of the development is expected in the financial year ending 31 March 2019.

The Garrison is a residential development site at Mei Tin Road, Tai Wai, which the Group acquired through a government tender. This development comprises a residential component of approximately 27,000 sq. ft. in saleable floor area and a commercial component of approximately 5,100 sq. ft. in GFA. Pre-sale for the development is expected to be launched in the financial year ending 31 March 2019, with completion of the development expected to be in the same financial year.

A residential development site at Tan Kwai Tsuen consisting of 24 town houses with approximately 48,000 sq. ft. in saleable floor area is expected to be launched for sale on a completed basis, with completion expected to be in the financial year ending 31 March 2019.

– 33 –

The Group also acquired through government tender a residential development site at Tai Po Road, Shatin Heights. This development will comprise more than 60 apartments and 4 houses. The project has a saleable floor area of approximately 81,000 sq. ft. and is currently under planning stage.

Malaysia

Dorsett Bukit Bintang is a residential development adjacent to Dorsett Kuala Lumpur. This development consists of 252 high-rise apartments with approximately 215,000 sq. ft. in saleable floor area. Completion of the development took place during FY2018 with 114 apartments delivered, with the remaining units partly converted into serviced apartments managed by the team of Dorsett Kuala Lumpur which cater to long-stay travelers in the city, and with the rest to be sold on a completed basis.

United Kingdom

London

Alpha Square is a residential development site at Marsh Wall, Canary Wharf, London, which has been granted planning approval for a mixed-use complex including private residences of approximately 377,000 sq. ft. in saleable floor area, a hotel of approximately 230 rooms and commercial facilities. Pre-sale for the residential component of this development is expected to be launched in the financial year ending 31 March 2019, with completion of the development expected to be in the financial year ending 31 March 2024.

Hornsey Townhall, located in North London, is a mixed-use redevelopment project which involves the conversion of an existing townhall into a hotel/serviced apartment tower and a town hall with communal areas, as well as a residential component which will provide 135 apartments with a saleable floor area of approximately 107,000 sq. ft.. Pre-sale for the residential component of this development was launched in May 2018 with completion expected in the year ending 31 March 2021.

Manchester

Northern Gateway is a mega-sized development project in Manchester the Group will deliver, having signed an agreement with the Manchester City Council in April 2017, which spans across an area of more than 350 acres (equivalent to 15 million sq. ft.), sweeping north from Victoria Station and taking in the neighbourhoods of New Cross, the Lower Irk Valley and Collyhurst. This is the latest and arguably the largest residential opportunity for transformational change ever undertaken in Manchester. This investment partnership is expected to deliver in excess of 15,000 new homes over the next decade, allowing the city centre to expand and providing the optimal mix of high quality housing in well-planned new areas. The over-arching vision of this project is essentially to create a series of distinct yet clearly connected communities that make the most of the area’s natural resources.

– 34 –

The Group is currently developing a masterplan of the Northern Gateway development within which the Group will identify infrastructure and building programmes, as well as a land acquisition strategy enabling the Group to acquire land plots within the area progressively as the implementation of the overall masterplan is rolled out. Since the entering into of the development agreement with the Manchester City Council, the Group has acquired various land plots within the Northern Gateway area which will be developed into individual projects as the overall masterplan pans out.

The Northern Gateway project is expected to provide the Group with a significant and long-term pipeline within the UK and signals the fact that the Group is accelerating its expansion into the UK market.

MeadowSide is a residential development site in Manchester at NOMA which is one of the major residential growth areas of the city. The development will feature 4 towers comprising more than 750 apartments with approximately 557,000 sq. ft. of saleable floor area around the historic Angel Meadow park near Victoria Station which is one of the transportation hubs of the city. Presale was launched for the first 2 plots of the development featuring more than 280 apartments in October 2017 and with 27% of the overall GDV pre-sold as at 31 March 2018. Pre-sale of plot 5 of the development is expected to be launched in the year ending 31 March 2020 followed by that of plot 4. Completion of plot 2, 3 and 5 of the development is expected to be in the year ending 31 March 2021 while that of plot 4 is in planning stage.

The Dantzic Street Site is a development site of which the Group was named winner at an online auction in April 2018, which borders the Group’s MeadowSide development around Angel Meadow in the NOMA neighborhood on the northern edge of Manchester city centre.

Both MeadowSide and the Dantzic Street Site sit on the doorstep of the Group’s Northern Gateway development.

Singapore

Artra is a residential project located next to the Redhill MRT station in Singapore with approximately 410,000 sq. ft. in saleable floor area and is owned by a joint venture in which the Group has a 70% interest. Pre-sale of the development was launched in April 2017 with 62% of the overall units pre-sold as at 31 March 2018. Completion of the development is expected to take place during the year ending 31 March 2021.

Hollandia is a residential development site at Holland Road within the highly sought after District 10 of Singapore for which the Group was awarded the tender through collective sale in March 2018. Completion of acquiring this project is subject to certain regulatory approvals.

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The Estoril is a residential development site at Holland Road within District 10 of Singapore for which the Group was awarded the tender through collective sale in April 2018. Completion of acquiring this project is subject to certain regulatory approvals. This site is expected to be redeveloped together with the abovementioned Hollandia site into a residential development with a combined attributable saleable floor area of approximately 192,000 sq. ft., in which the Group has a 80% interest. The development is currently in planning stage.

Cuscaden Road is a residential development site at the prime District 9 of Singapore, for which a consortium of which the Group is part was awarded the tender through URA sale in May 2018. The development is expected to comprise 19,000 sq. ft. in attributable saleable floor area and is owned by a joint venture in which the Group has a 10% interest. The development is currently in planning stage.

21 Anderson Road is a freehold condominium development situated in District 10 of Singapore. It is currently known as “21 Anderson Royal Oak Residence” and comprises 34 residential units with saleable floor area of 86,000 sq. ft., which the Group has the flexibility to resell or to lease for recurring income purposes. The Group signed a sale and purchase agreement in June 2018 to acquire this development, with completion of the transaction expected in July 2018.

2. Hotel operations and management

The following summarises the operating performance of the Group’s owned hotels for FY2018 and FY2017 by region in local currency (“LC”).

	Occupancy rate	Occupancy rate	Average	room rate	RevPAR	RevPAR	Revenue	Revenue
			(LC)	(LC)	(LC)	(LC)	(LC’ 000)	(LC’ 000)
	FY2018	FY2017	FY2018	FY2017	FY2018	FY2017	FY2018	FY2017
Hong Kong_(HK$)_	93.8%	90.1%	739	695	693	626	776,474	665,300
Malaysia_(MYR)_	73.9%	66.8%	193	190	142	127	125,552	112,236
Mainland China_(RMB)_	68.4%	61.2%	408	411	279	251	214,742	188,011
Singapore_(SGD)_	86.1%	80.2%	174	181	149	145	16,658	16,480
United Kingdom_(GBP)_	82.9%	88.0%	106	99	88	87	16,637	11,700
			(HK$)	(HK$)	(HK$)	_(HK$) _	(HK$’000)	(HK$’000)
Group Total	82.8%	77.6%	658	625	545	485	1,537,802	1,308,954

The Group’s hotel operations for FY2018 recorded a total revenue of approximately HK$1.5 billion, representing a solid growth of 17.5% from that in FY2017. Overall occupancy rate (“OCC”) increased approximately 5.2 percentage points to 82.8%. The overall average room rate (“ARR”) increased 5.3% to HK$658 per night. As a result, revenue per available room (“RevPAR”) increased 12.4% to HK$545 for FY2018.

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Hong Kong remained the main contributor to the Group’s hotel operations which accounted for approximately 50.5% of the hotel revenue. The OCC increased approximately 3.7 percentage points to 93.8% and ARR rose by 6.3% to HK$739 per night, contributing to a solid growth of 10.7% in RevPAR to HK$693 per night as compared to prior year. Overall performance of Hong Kong for the FY2018 is shown below.

	FY2018	FY2018	FY2017	FY2017
Hong Kong	2H	1H	2H	1H
Occupancy rate	96.5%	91.2%	92.8%	87.2%
Average room rate_(HK$)_	820	655	751	632
RevPAR_(HK$)_	791	597	697	551

Both OCC and ARR for Hong Kong in the second half of FY2018 recorded a robust growth and reached 96.5% and HK$820 per night respectively, leading to a rise in RevPAR of 13.5% to HK$791 per night, as compared to the same period in FY2017. In FY2018, the Group benefited not only from the strong growth in the return of overnight visitors from China, but also the Group’s continuous effort to attract a wider base of more diverse international visitors, especially from South East Asia and Korea. The growth momentum of the hotel performance in Hong Kong is expected to extend in the coming years given the expected rise in tourism number and as the newly-opened Silka Tsuen Wan is rapidly ramping up its operation since its opening in January 2017.

In Malaysia, revenue from hotel operations for FY2018 increased by 11.9% to approximately MYR126 million as compared to FY2017. ARR was maintained at a similar level to that of FY2017. OCC increased by 7.1 percentage points to 73.9% as compared to the prior year. As a result, RevPAR had recorded a strong growth of 11.8% from FY2017 to MYR142 per night, contributed mainly by the newly-renovated Dorsett Kuala Lumpur and Dorsett Grand Subang which had their RevPAR increased by 29.2% and 12.1% respectively. As can be seen from the operating data below, the operating performance of the hotels in Malaysia demonstrated improvement during FY2018.

	FY2018	FY2018	FY2017	FY2017
Malaysia	2H	1H	2H	1H
Occupancy rate	75.4%	72.4%	65.4%	68.3%
Average room rate_(MYR)_	192	194	194	187
RevPAR_(MYR)_	145	140	126	128

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In Singapore, Dorsett Singapore recorded revenue of approximately SGD16.7 million for FY2018, similar to the level of FY2017. For FY2018, OCC was 86.1% and ARR was SGD174 per night. RevPAR recorded an increase of 2.8% to SGD149 per night. Further details of both years’ operating data of the performance in Singapore are provided in the following.

	FY2018	FY2018	FY2017	FY2017
Singapore	2H	1H	2H	1H
Occupancy rate	86.3%	85.9%	80.8%	79.5%
Average room rate_(SGD)_	174	173	176	187
RevPAR (SGD)	150	149	142	149

In Mainland China, OCC in FY2018 increased by 7.2 percentage points compared with FY2017 while ARR was maintained at a similar level at RMB408 per night. As a result, RevPAR increased by 11.2% to RMB279 per night as compared to FY2017. Revenue increased by 14.2% to approximately RMB215 million for FY2018 mainly due to the strong growth in performance of Dorsett Grand Chengdu and Dorsett Shanghai. OCC of Dorsett Grand Chengdu rose by 6.9 percentage points to 66.2% while RevPAR increased by 15.2% to RMB233 per night in FY2018. Dorsett Shanghai continued to benefit from corporate and exhibition customers which resulted in its RevPAR growth of 6.6% to RMB620 per night for FY2018 as compared to FY2017. It is expected that the operating performance of hotels in Mainland China will continue to grow in the coming year. Operating data for Mainland China are illustrated below.

	FY2018	FY2018	FY2017	FY2017
Mainland China	2H	1H	2H	1H
Occupancy rate	67.6%	69.2%	62.7%	59.7%
Average room rate_(RMB)_	401	415	408	414
RevPAR (RMB)	271	287	256	247

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In the United Kingdom, the total revenue was approximately GBP16.6 million for FY2018, an increase of approximately 42.2% as compared to FY2017, due to the addition of hotel rooms from the newly-opened Dorsett City London which had its soft opening in July 2017. The 13-storey Dorsett City London released its full inventory of 267 rooms to the Group’s current operating portfolio in February 2018. With its location right next to the Aldgate Underground Station, Dorsett City London is in a perfect spot for both business and leisure travelers. Overall OCC in the United Kingdom decreased by 5.1 percentage points to 82.9% due to opening of Dorsett City London which did not have its full inventory available until late in FY2018 but RevPAR increased by 1.1% to GBP88 per night as compared to prior year. The operating performance of hotels in the United Kingdom will continue to grow as Dorsett City London is expected to ramp up the sales and operation in the coming years.

	FY2018		FY2017
United Kingdom	2H	1H	2H	1H
Occupancy rate	79.6%	87.6%	86.4%	89.4%
Average room rate_(GBP)_	107	105	97	102
RevPAR (GBP)	85	92	84	91

In May 2017, the Group disposed of Silka West Kowloon hotel at approximately HK$450 million and made a gain on disposal of HK$320 million with the Group continuing to manage the hotel for a term of 6 years.

As at 31 March 2018, the Group owns 23 hotels (9 in Hong Kong, 6 in Malaysia, 4 in Mainland China, 1 in Singapore, 2 in London and 1 in Gold Coast) with approximately 7,000 rooms. The Group has 14 hotels in the development pipeline, of which two are Ritz Carlton hotels, one each in Melbourne and Perth, and four world-class hotels in the integrated resort of Queen’s Wharf Brisbane in which the Group has a 25% interest, with the remaining expected to be operated by Dorsett. In April 2018, the Group completed the acquisition of TWOC which owns and operates two four-star hotels and one three-star hotel in Germany, one four-star hotel in Austria and one four-star hotel in the Czech Republic (directly connected to one of the casinos in TWOC’s portfolio) with a combined 572 rooms. With the disposal of Silka West Kowloon hotel in May 2017, completion of the TWOC Acquisition and when all the hotels in the pipeline become operational, the Group will own 42 hotels operating approximately 10,800 rooms. The Group also manages 4 other hotels (2 in Hong Kong and 2 in Malaysia) with approximately 880 rooms.

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3. Car park operations and facilities management

The Group’s car park and facilities management business includes car park operations and property management services.

The car park business extends to both third party owned car parks and self-owned car parks and generates a stable recurring income for the Group. This division has been achieving steady growth over the years, with the Group’s portfolio under management growing into 441 car parks with approximately 88,868 car parking bays as at 31 March 2018, having added approximately 14,342 car parking bays during FY2018. Of the Group’s 441 car parks, 36 were self-owned car parks (24 in Australia, 3 in New Zealand, 1 in the United Kingdom, 6 in Hungary and 2 in Malaysia) comprising approximately 10,684 car parking bays, with the remaining 78,184 car parking bays in Australia, New Zealand, the United Kingdom, Hungary and Malaysia under management contracts entered into with third party car park owners, which include local governments, shopping malls, retailers, universities, airports, hotels, hospitals, government departments and commercial and office buildings.

During FY2018, the Group’s car park business continued to deliver consistent profit contribution to the Group through organic growth and acquisitions, having leveraged on its central monitoring system, Care Assist, which enabled the management team of this business to have better control on the day-to-day operations of the business, providing a strong foundation for growth. With a management team rich in experience in car parking operations and the scalability offered by Care Assist, the Group is allocating more resources to the car parking division which is currently actively evaluating a number of acquisition opportunities in regions where the Group has an existing presence, with an aim of adding further self-owned car parks to its portfolio.

With this division further expanding its operation to include property management services in Australia (mainly in Brisbane, Melbourne and Adelaide) and Johor Bahru, Malaysia, where the Group had 81 contracts in relation to facilities management services as at 31 March 2018, it is expected that the car park operations and facilities management business will continue to be a steadily growing source of recurring cash flow stream.

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4. Gaming operations and management

Europe

Following on from the involvement in the QWB Project which will feature a world-class casino in Brisbane, the Group’s venture into the gaming business gathered momentum with the completion of the TWOC Acquisition in April 2018. TWOC owns and operates a portfolio of 3 casinos in Czech Republic and 5 hotels (1 in Czech Republic, 3 in Germany and 1 in Austria).

All the casinos of TWOC operate under the registered brand “American Chance Casinos” featuring gaming tables and slot machines and are situated on the Czech borders with Germany and Austria catering to cross-border guests from these countries. With the Group’s implementation of the “Asian Wallet” strategy, the Group will endeavor to introduce Asian tourists to TWOC’s properties which will not only enrich the Group’s hospitality offerings geographically but will also broaden TWOC’s customer base.

TWOC is the first gaming operation owned by the Group. With its high standard of regulatory compliance and corporate governance practice, having been listed on the over-the-counter market in the United States until being privatized and delisted upon the completion of the TWOC Acquisition, and having adhered to regulatory requirements in the European Union, TWOC will not only bring to the Group recurring earnings and cash flow contribution from its hospitality business, but will also serve as a platform for the Group to pursue expansion in the gaming space in the regions in which the Group already has a business presence.

Australia

In March 2018, the Group entered into the Strategic Alliance Agreement with The Star and CTF and subsequently completed in April 2018 the acquisition of 4.99% of shares in The Star, which is one of the major casino operators in Australia with a dominant position in Sydney, Gold Coast and Brisbane.

The Strategic Alliance Agreement is expected to strengthen the already established relationship with The Star and CTF, with the three parties having teamed up on the QWB Project in Brisbane and subsequently on the Gold Coast and Sydney developments. The developments undertaken by the consortium among the Group, The Star and CTF will undoubtedly bring long-term benefits to The Star’s casinos, and the equity investment in The Star will enable the Group to also share the future growth of The Star. The Group will also enjoy increased exposure to the gaming market in Australia and a steady contribution to the Group’s profit and cash flow going forward, following The Star’s plan to increase its dividend payout ratio to 70% of its normalized net profit. The marketing alliance which forms part of the Strategic Alliance Agreement will also facilitate cross-referral of gaming customers, thus benefitting both the Group and The Star.

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OUTLOOK

The Group continues to be well positioned to deliver sustainable and long-term growth with its regionalization strategy which has resulted in a strong performance during FY2018. Presales value of the Group as at 31 March 2018 was at a record high of HK13.4 billion and a current development pipeline of HK$52 billion provides clear visibility of the Group’s future profitability. The Group will continue to add to the development pipelines by allocating resources to regions where the Group sees long-term fundamental growth prospects and where the region’s property cycle offers higher risk-adjusted returns to the Group.

Since Dorsett has become wholly-owned by the Group in 2015, the Group has been reaping benefits from the increased flexibility in capital allocation which has helped partly fuel the Group’s accelerated growth in recent years. The Group will continue to benefit from a more flexible capital allocation as it continues to grow.

The Group’s hotel business is expected to continue its recovery track, especially those in Hong Kong, whereas new hotels in the pipelines will further add to the future recurring cash flow base. The Group’s direction of allocating more capital to the car park operations and facilities management business ensures that this part of the Group’s business will not only grow organically as it has been for years, but also through acquisitions of car park assets that yield good returns and offer longer-term potential land-banking opportunities.

The recent expansion of the Group’s footprint into the gaming business through the TWOC Acquisition and the investment in The Star will be another major growth driver of the Group’s business. The combination of the Group’s skillset in delivering mixed-use developments and the required licenses and operating team to manage a gaming business, which is a market of high entry barrier, will place the Group in a unique position to develop projects with elements tailored to individual locations.

The Group has a favorable liquidity position at approximately HK$8.1 billion and a net gearing ratio of 28.7%, reflecting the strength of the Group’s balance sheet. Together with the available undrawn credit facility of HK$6.9 billion and with abundant asset base which remains unencumbered, there is a significant war chest to support the growth of the Group.

In conclusion, the Group has laid a solid foundation for growth and will continue to bring to its shareholders long-term growth.

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EMPLOYEES AND REMUNERATION POLICIES

As at 31 March 2018, the Group had approximately 3,500 employees. The Group provides its employees with comprehensive benefit packages and career development opportunities, including medical benefits, both internal and external training appropriate for various level of staff roles and functions.

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

Throughout the year ended 31 March 2018, the Company has complied with the code provisions (the “Code Provisions”) set out in the Corporate Governance Code (the “CG Code”) contained in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange, except for the deviation from Code Provision A.2.1 described below.

Pursuant to Code Provision A.2.1 of the CG Code, the roles of Chairman and Chief Executive Officer should be separate and should not be performed by the same individual. Currently Tan Sri Dato’ David CHIU assumes the roles of both the Chairman and Chief Executive Officer of the Company. The Board believes that this structure provides the Group with strong and consistent leadership and allows for more effective and efficient business planning and decisions as well as execution of long term business strategies. As such, it is beneficial to the business prospects of the Group.

AUDIT COMMITTEE

The Audit Committee, comprising all of the Company’s three independent non-executive directors, namely Mr. Kwok Wai CHAN, Mr. Peter Man Kong WONG and Mr. Kwong Siu LAM, has reviewed the accounting principles, standard and practices adopted by the Company, and discussed matters relating to auditing, risk management and internal control and financial reporting, including the review of the audited consolidated results of the Group for year ended 31 March 2018.

SCOPE OF WORK OF MESSRS. DELOITTE TOUCHE TOHMATSU

The figures in respect of the Group’s consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income and the related notes thereto for the year ended 31 March 2018 as set out in the preliminary announcement have been agreed by the Group’s auditor, Messrs. Deloitte Touche Tohmatsu, to the amounts set out in the Group’s audited consolidated financial statements for the year. The work performed by Messrs. Deloitte Touche Tohmatsu 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 Messrs. Deloitte Touche Tohmatsu on the preliminary announcement.

– 43 –

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

During the year, the Company, through its wholly-owned subsidiary, Singford Holdings Limited, repurchased a total of 900,000 Shares on the Stock Exchange and details of which are as follows:

		Price per	Share
				Aggregate
	Number of			consideration
Month of	shares	Highest	Lowest	paid
repurchase	repurchased	HK$	HK$	HK$
March 2018	900,000	4.39	4.18	3,897,220.00

Save as disclosed above, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company’s listed shares during the year.

The purchase were made for the benefit of the Shareholders with a view to enhancing the net asset value and earnings per share of the Group.

PUBLICATION OF THE RESULTS AND ANNUAL REPORT

This results announcement is published on the website of the Stock Exchange at www.hkexnews.hk and on the website of the Company at www.fecil.com.hk. The Annual Report of the Company for the financial year ended 31 March 2018 and the notice of 2018 AGM will be despatched to the Shareholders and published on the websites of the Stock Exchange and the Company in due course.

By order of the Board of Far East Consortium International Limited Ka Pong CHAN Company Secretary

Hong Kong, 26 June 2018

As at the date of this announcement, the Board comprises four executive directors, namely Tan Sri Dato’ David CHIU, Mr. Cheong Thard HOONG, Mr. Dennis CHIU and Mr. Craig Grenfell WILLIAMS; and three independent non-executive directors, namely Mr. Kwok Wai CHAN, Mr. Peter Man Kong WONG and Mr. Kwong Siu LAM.

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AI assistant

Harbour Centre Development Limited — Annual Report 2018

48902_rns_2018-06-26_b58cb649-f8ee-473e-a03e-0b148ddb413a.pdf

FAR EAST CONSORTIUM INTERNATIONAL LIMITED 遠東發展有限公司 *

ANNOUNCEMENT OF RESULTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2018

RESULTS

FINANCIAL AND BUSINESS HIGHLIGHTS

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 31 MARCH 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2018

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 MARCH 2018

NOTES

1. GENERAL

2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

Amendments to HKAS 7 Disclosure Initiative

New and amendments to HKFRSs and interpretations in issue but not yet effective

3. SEGMENT INFORMATION

Segment revenue and results

Segment assets

4. OTHER GAINS AND LOSSES

5. FINANCE COSTS

6. INCOME TAX EXPENSE

7. PROFIT FOR THE YEAR

8. EARNINGS PER SHARE

9. DIVIDENDS

10. DEBTORS, DEPOSITS AND PREPAYMENTS

11. CREDITORS AND ACCRUALS

FINAL DIVIDEND

CLOSURE OF REGISTER OF MEMBERS

(a) For determining the entitlement to attend and vote at the 2018 AGM

(b) For determining the entitlement to the Proposed Final Dividend

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW

1. Profit and loss analysis

2. Liquidity, financial resources and net gearing

3. Foreign exchange management

4. Net asset value per share

5. Capital expenditure

6. Capital commitments

7. Post balance sheet events

BUSINESS REVIEW

1. Property division

Australia

Melbourne

Perth

Brisbane

Gold Coast

Sydney

Mainland China

Malaysia

United Kingdom

London

Manchester

Singapore

2. Hotel operations and management

3. Car park operations and facilities management

4. Gaming operations and management

Europe

Australia

OUTLOOK

EMPLOYEES AND REMUNERATION POLICIES

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

AUDIT COMMITTEE

SCOPE OF WORK OF MESSRS. DELOITTE TOUCHE TOHMATSU

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

PUBLICATION OF THE RESULTS AND ANNUAL REPORT

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Harbour Centre Development Limited Annual Report 2018