RemeGen Co., Ltd. - Annual Report 2018

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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司 (Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3366)

PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018

RESULTS

The board (the “Board”) of directors (“Directors”) of Overseas Chinese Town (Asia) Holdings Limited (the “Company”) is pleased to present the audited consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2018 (the “Period Under Review”) prepared in accordance with the Hong Kong Financial Reporting Standards (“HKFRSs”), together with the comparative figures for the year ended 31 December 2017.

The audited financial information of the Group for the year ended 31 December 2018 prepared in accordance with the HKFRSs are as follows:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2018

(Expressed in Renminbi)

Note Continuing operations Revenue 3 Cost of sales Gross profit Other income 4 Other net gains 5 Distribution costs Administrative expenses Other operating expenses Profit from operations Finance costs 6(a) Share of profits less losses of associates Share of profit/(loss) of joint ventures Profit before taxation 6 Income tax 7 Profit for the year from continuing operations Discontinued operation Profit for the year from discontinued operation Profit for the year	2018 *RMB’000* 1,584,694 (1,026,106) 558,588 124,257 368,930 (124,736) (334,304) (459) 592,276 (175,061) 418,994 229,244 1,065,453 (206,898) 858,555 68,272 926,827	2017 (Restated) (Note) RMB’000 4,109,462 (2,561,837) 1,547,625 26,431 1,058,258 (215,451) (265,228) (954) 2,150,681 (187,942) 104,060 (8,322) 2,058,477 (642,388) 1,416,089 9,662 1,425,751

Note Attributable to: Equity holders of the Company Non-controlling interests Profit for the year Earnings per share (RMB) 9 Basic earnings per share From continuing operations From discontinued operation Diluted earnings per share From continuing operations From discontinued operation	2018 *RMB’000* 798,702 128,125 926,827 0.68 0.09 0.77 0.67 0.09 0.76	2017 (Restated) (Note) RMB’000 1,106,804 318,947
		1,425,751

		1.58 0.01
		1.59

		1.40 0.01
		1.41

Note: The Group has initially applied HKFRS 15 and HKFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated in this respect. Besides, certain comparative figures have been reclassified as a result of the presentation of discontinued operation.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

(Expressed in Renminbi)

Profit for the year Other comprehensive income for the year (after tax and reclassification adjustments) Item that will not be reclassified to profit or loss: Equity investments at FVOCI – net movement in fair value reserves (non-recycling) Items that may be reclassified subsequently to profit or loss: Exchange differences Share of other comprehensive income of associates Other comprehensive income for the year Total comprehensive income for the year Attributable to: Equity holders of the company Non-controlling interests Total comprehensive income for the year	2018 *RMB’000* 926,827 (176,404) (203,218) (84,124) (287,342) (463,746) 463,081 334,956 128,125 463,081	2017 (Note) RMB’000 1,425,751 – 406,125 (1,900) 404,225 404,225 1,829,976 1,511,029 318,947 1,829,976

Note: The Group has initially applied HKFRS 15 and HKFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated in this respect.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2018

(Expressed in Renminbi)

Note Non-current assets Investment property Other property, plant and equipment Interests in leasehold land held for own use Intangible assets Goodwill Interests in associates Interests in joint ventures Other financial assets Finance lease receivables Trade and other receivables Deferred tax assets Current assets Inventories and other contract costs Finance lease receivables Trade and other receivables 10 Cash at bank and on hand Assets of disposal groups classified as held for sale	2018 *RMB’000* 2,877,838 2,074,898 1,483,911 6,436,647 6,273 570 4,919,831 287,330 1,437,525 230,870 2,476 191,012 13,512,534 7,055,723 65,342 1,222,255 3,222,953 11,566,273 – 11,566,273	2017 (Note) RMB’000 2,744,745 1,232,586 579,654
		4,556,985 1,597 570 2,638,854 11,222 599,711 – – 164,096
		7,973,035
		8,237,853 – 365,154 6,927,464
		15,530,471 242,010
		15,772,481

Note Current liabilities Trade and other payables 11 Contract liabilities Bank and other loans Related party loans Current taxation Liabilities directly associated with assets of disposal groups classified as held for sale Net current assets Total assets less current liabilities Non-current liabilities Bank and other loans Deferred tax liabilities NET ASSETS CAPITAL AND RESERVES Share capital Perpetual capital securities Reserves Total equity attributable to equity holders of the Company Non-controlling interests TOTAL EQUITY	2018 *RMB’000* 2,657,446 143,949 4,979,886 2,037,700 748,884 10,567,865 – 10,567,865 998,408 14,510,942 1,410,771 194,514 1,605,285 12,905,657 67,337 5,294,665 4,104,240 9,466,242 3,439,415 12,905,657	2017 (Note) RMB’000 3,074,121 – 3,989,954 1,385,700 722,847
		9,172,622 43,878
		9,216,500
		6,555,981
		14,529,016
		1,019,751 196,324
		1,216,075
		13,312,941

		67,337 5,293,313 4,311,677
		9,672,327 3,640,614
		13,312,941

Note: The Group has initially applied HKFRS 15 and HKFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated in this respect.

NOTES:

1 BASIS OF PREPARATION

These financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (HKFRSs), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (HKASs) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (HKICPA), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules).

The consolidated financial statements for the year ended 31 December 2018 comprise the Company and its subsidiaries (together referred to as “the Group”) and the Group’s interests in associates and a joint venture.

The measurement basis used in the preparation of the financial statements is the historical cost basis except that other investments in equity securities are stated at their fair value.

Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell.

The consolidated annual results set out in this announcement do not constitute the Group’s consolidated financial statements for the year ended 31 December 2018 but are extracted from those financial statements.

The preparation of financial statements in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.

2 CHANGES IN ACCOUNTING POLICIES

The HKICPA has issued a number of new HKFRSs and amendments to HKFRSs that are first effective for the current accounting period of the Group. Of these, the following developments are relevant to the Group’s financial statements:

HKFRS 9, Financial instruments (i)
HKFRS 15, Revenue from contracts with customers (ii)
HK(IFRIC) 22, Foreign currency transactions and advance consideration

Due to the transition methods chosen by the Group in applying the new standards, comparative information throughout these financial statements has not been restated to reflect the requirements of the new standards.

The adoption of HK(IFRIC) 22 does not have any material impact on the financial statements of the Group.

The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period, except for the amendments to HKFRS 9, Prepayment features with negative compensation which have been adopted at the same time as HKFRS 9.

(i) HKFRS 9, Financial instruments, including the amendments to HKFRS 9, Prepayment features with negative compensation

HKFRS 9 replaces HKAS 39, Financial instruments: recognition and measurement . It sets out the requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.

The Group has applied HKFRS 9 retrospectively to items that existed at 1 January 2018 in accordance with the transition requirements. However, there is no impact to the opening equity at 1 January 2018 by the initial application of HKFRS 9. The comparative information continues to be reported under HKAS 39.

(ii) HKFRS 15, Revenue from contracts with customers

HKFRS 15 establishes a comprehensive framework for recognising revenue and some costs from contracts with customers. HKFRS 15 replaces HKAS 18, Revenue , which covered revenue arising from sale of goods and rendering of services, and HKAS 11, Construction contracts , which specified the accounting for construction contracts.

HKFRS 15 also introduces additional qualitative and quantitative disclosure requirements which aim to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

The Group has elected to use the cumulative effect transition method and has recognised the cumulative effect of initial application as an adjustment to the opening balance of equity at 1 January 2018. Therefore, comparative information has not been restated and continues to be reported under HKASs 11 and 18. As allowed by HKFRS 15, the Group has applied the new requirements only to contracts that were not completed before 1 January 2018.

The following table summarises the impact of transition to HKFRS 15 on retained earnings and noncontrolling interests at 1 January 2018:

Net increase in retained earnings at 1 January 2018 Capitalisation of sales commissions Net increase in non-controlling interests at 1 January 2018 Capitalisation of sales commissions	*RMB’000* 4,732

	1,422

The related tax impact of transition to HKFRS 15 on opening balances as at 1 January 2018 was not significant.

3 REVENUE AND SEGMENT REPORTING

(a) Revenue

The principal activities of the Group are comprehensive development, investment and fund business, finance lease and paper packaging.

Revenue represents the sales value of goods or services supplied to customers (net of value-added tax and business tax), including the sales of properties, rental income from investment properties, ticket sales from theme park, finance lease income and sales of paper cartons and products are as follows:

Revenue from contracts with customers within the scope of HKFRS 15 Disaggregated by business lines – Sale of properties – Sale of tickets of theme park – Construction contracts – Hotel revenue – Consulting services – Paper packaging business Revenue from other sources – Rental income from investment properties – Finance lease income	Continuing operations 2018 2017 (Note) *RMB’000* RMB’000 814,226 3,745,508 304,185 244,639 151,327 – 90,533 – 46,384 1,463 – – 1,406,655 3,991,610 164,850 117,852 13,189 – 1,584,694 4,109,462	Discontinued operation 2018 2017 (Note) *RMB’000* RMB’000 – – – – – – – – – – 400,258 795,332 400,258 795,332 – – – – 400,258 795,332	Total 2018 2017 (Note) *RMB’000* RMB’000 814,226 3,745,508 304,185 244,639 151,327 – 90,533 – 46,384 1,463 400,258 795,332 1,806,913 4,786,942 164,850 117,852 13,189 – 1,984,952 4,904,794	Total 2018 2017 (Note) *RMB’000* RMB’000 814,226 3,745,508 304,185 244,639 151,327 – 90,533 – 46,384 1,463 400,258 795,332 1,806,913 4,786,942 164,850 117,852 13,189 – 1,984,952 4,904,794
				4,786,942 117,852 –
				4,904,794

Note: The Group has initially applied HKFRS 15 using the cumulative effect method. Under this method, the comparative information is not restated in this respect. and was prepared in accordance with HKAS 18 and HKAS 11.

The Group’s customer base is diversified and there was no customer with whom transactions exceeded 10% of the Group’s revenue in 2018.

(b) Segment reporting

The Group manages its businesses by divisions, which are organised by business lines (products and services). In a manner consistent with the way in which information is reported internally to the most senior executive management of the Group for the purposes of resource allocation and performance assessment, the Group has the following four reportable segments.

Comprehensive development business: this segment engaged in the development and operation of tourism theme park, developed and sold residential properties, construction contract, development and management of properties, and property investment.

Investment and fund business: this segment engaged in the investment in new urbanisation industrial ecosphere, such as domestic and overseas direct investments, industrial fund, and education.

Finance lease business: this segment engaged in the finance lease business.

Paper packaging business (discontinued): this segment engaged in the manufacture and sale of paper cartons and products.

The operating results of paper packaging business for the year ended 31 December 2018 are presented as discontinued operation in the consolidated financial statements.

(i) Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources between segments, the Group’s senior executive management monitors the results, assets and liabilities attributable to each reportable segment on the following bases:

Segment assets include all tangible, intangible assets and current assets. Segment liabilities include trade creditors, accruals and bills payable attributable to the manufacturing and sales activities of the individual segments and borrowings managed directly by the segments.

Revenue and expenses are allocated to the reportable segments with reference to sales generated by those segments and the expenses incurred by those segments or which otherwise arise from the depreciation or amortisation of assets attributable to those segments.

The measure used for reporting segment result is “net profit” after taxation. Inter-segment sales are priced with reference to prices charged to external parties for similar orders.

Information regarding the Group’s reportable segments as provided to the Group’s most senior executive management for the purposes of resource allocation and assessment of segment performance for the years ended 31 December 2018 and 2017 is set out below.

		Total	2018 2017	*RMB’000* RMB’000	(Restated)						1,655,586 4,786,942	151,327 –	1,806,913 4,786,942	178,039 117,852	1,984,952 4,904,794	1,984,952 4,904,794		730,831 1,521,405

	Paper Packaging	business (discontinued)	2018 2017	*RMB’000* RMB’000	(Restated)						400,258 795,332	– –	400,258 795,332	– –	400,258 795,332	400,258 795,332		68,272 9,662

	Finance lease	business	2018 2017	*RMB’000* RMB’000	(Restated)						– –	– –	– –	13,189 –	13,189 –	13,189 –		4,375 –
Continuing operations	Investment and	fund business	2018 2017	*RMB’000* RMB’000	(Restated)						– –	– –	– –	– –	– –	– –		50,789 (43,950)

	Comprehensive	development business	2018 2017	*RMB’000* RMB’000	(Restated)						1,255,328 3,991,610	151,327 –	1,406,655 3,991,610	164,850 117,852	1,571,505 4,109,462	1,571,505 4,109,462		607,395 1,555,693
						Revenue from contracts with	customers within the scope of	HKFRS 15	Disaggregated by timing of	revenue recognition	Point in time	Over time		Revenue from other sources	Revenue from external customers	Reportable segment revenue	Reportable segment profit/(loss)	for the year

Comprehensive Investment and Finance lease Paper Packaging	development business fund business business business (discontinued) Total	2018 2017 2018 2017 2018 2017 2018 2017 2018 2017	*RMB’000* RMB’000 *RMB’000* RMB’000 *RMB’000* RMB’000 *RMB’000* RMB’000 *RMB’000* RMB’000	(Restated) (Restated) (Restated) (Restated) (Restated)	Interest income	– Bank deposits 10,588 22,857 144 21 42 – 1,207 9,997 11,981 32,875	– Amount due from associates 13,333 – – – – – – – 13,333 –	Interest expense (82,417) (163,267) (90,135) (24,681) (2,509) – – (3,018) (175,061) (190,960)	Depreciation and amortisation	for the year (299,385) (203,852) – – – – (3,549) (29,112) (302,934) (232,964)	Share of profits less losses of associates 378,491 95,889 40,503 8,171 – – – – 418,994 104,060	Share of profit/(loss) of	joint ventures 229,244 (8,322) – – – – – – 229,244 (8,322)	Reportable segment assets 18,353,661 17,332,385 2,898,604 995,239 307,872 – 45,844 630,783 21,605,981 18,958,407	Additions to non-current segment	assets during the year 2,265,193 530,241 – – – – 6,314 54,436 2,271,507 584,677	Reportable segment liabilities 6,784,503 6,415,544 2,615,678 626,947 38,610 – 10,234 107,350 9,449,025 7,149,841	Interests in associates 3,468,824 2,253,142 1,451,007 385,712 – – – – 4,919,831 2,638,854	Interests in joint ventures 287,330 11,222 – – – – – – 287,330 11,222	_Note:_The Group has initially applied HKFRS 15 using the cumulative effect method. Under this method, the comparative information is not restated	in this respect and was prepared in accordance with HKAS 18 and HKAS 11.

(ii) Reconciliations of reportable segment profit or loss

Reportable segment profit derived from group’s external customers Unallocated head office and corporate gains/(expenses) Consolidated profit *(iii)* *Reconciliations of reportable segment assets and liabilities* Assets Reportable segment assets Elimination of inter-segment receivables Unallocated head office and corporate assets Consolidated total assets Liabilities Reportable segment liabilities Elimination of inter-segment payables Unallocated head office and corporate liabilities Consolidated total liabilities	2018 *RMB’000* 730,831 195,996 926,827 2018 *RMB’000* 21,605,981 – 21,605,981 3,472,826 25,078,807 2018 *RMB’000* 9,449,025 – 9,449,025 2,724,125 12,173,150	2017 RMB’000 (Restated) 1,521,405 (95,654) 1,425,751 2017 RMB’000 (Restated) 18,958,407 (19,599) 18,938,808 4,806,708 23,745,516 2017 RMB’000 (Restated) 7,149,841 (19,599) 7,130,242 3,302,333 10,432,575

4 OTHER INCOME

(iv) Geographic information

The following table sets out information about the geographical location of (i) the Group’s revenue from external customers and (ii) the Group’s investment property, other property, plant and equipment, interests in leasehold land held for own use under operating leases, intangible assets, goodwill and interests in associates and joint ventures and other financial assets (“specified noncurrent assets”). The geographical location of customers is based on the location at which the services were provided or the goods and properties sold. The geographical location of the specified non-current assets is based on the physical location of the assets, in the case of property, plant and equipment, interests in leasehold land held for own use under operating leases and investment properties, the location of the operation to which they are allocated, in the case of intangible assets, goodwill and other financial assets, and the location of operations, in the case of interest in associates and joint ventures.

Mainland China Hong Kong	Revenues from external customers 2018 2017 *RMB’000* RMB’000 1,984,952 4,902,198 – 2,596 1,984,952 4,904,794	Specified non-current assets 2018 2017 *RMB’000* RMB’000 12,851,575 7,586,875 236,601 229,103 13,088,176 7,815,978	Specified non-current assets 2018 2017 *RMB’000* RMB’000 12,851,575 7,586,875 236,601 229,103 13,088,176 7,815,978
			7,815,978

Interest income on financial assets measured at amortised cost: – Bank deposits – Amount due from associates Total interest income Government grants Forfeiture income on deposit on pre-sale of properties	Continuing operations 2018 2017 *RMB’000* RMB’000 100,341 24,390 13,333 – 113,674 24,390 306 1,912 10,277 129 124,257 26,431	Discontinued operation 2018 2017 *RMB’000* RMB’000 1,207 8,485 – – 1,207 8,485 2 1,592 – – 1,209 10,077	Total 2018 2017 *RMB’000* RMB’000 101,548 32,875 13,333 – 114,881 32,875 308 3,504 10,277 129 125,466 36,508	Total 2018 2017 *RMB’000* RMB’000 101,548 32,875 13,333 – 114,881 32,875 308 3,504 10,277 129 125,466 36,508
				32,875 3,504 129
				36,508

5 OTHER NET GAINS

Gain on disposal of subsidiaries Gain on previously held interest in a subsidiary upon loss of control Net realised and unrealised gains on unlisted equity securities Net gain/(loss) on disposal of property, plant and equipment Net exchange gain/(loss) Loss on transfer of available-for-sale securities to interest in an associate Others	Continuing operations 2018 2017 *RMB’000* RMB’000 55,650 712,933 40,101 416,238 116,474 986 1,641 (724) 162,016 (43,855) – (24,121) (6,952) (3,199) 368,930 1,058,258	Discontinued operation 2018 2017 *RMB’000* RMB’000 62,757 17,997 – – – – (636) 1,445 (554) (4,848) – – 85 349 61,652 14,943	Total 2018 2017 *RMB’000* RMB’000 118,407 730,930 40,101 416,238 116,474 986 1,005 721 161,462 (48,703) – (24,121) (6,867) (2,850) 430,582 1,073,201	Total 2018 2017 *RMB’000* RMB’000 118,407 730,930 40,101 416,238 116,474 986 1,005 721 161,462 (48,703) – (24,121) (6,867) (2,850) 430,582 1,073,201
				1,073,201

6 PROFIT BEFORE TAXATION

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

(a) Finance costs

Interest on bank and other loans Interest on related party loans Total interest expense Less: amount capitalised*	Continuing operations 2018 2017 *RMB’000* RMB’000 161,411 161,411 92,093 125,768 253,504 287,179 (78,443) (99,237) 175,061 187,942	Discontinued operation 2018 2017 *RMB’000* RMB’000 – 3,018 – – – 3,018 – – – 3,018	Total 2018 2017 *RMB’000* RMB’000 161,411 164,429 92,093 125,768 253,504 290,197 (78,443) (99,237) 175,061 190,960	Total 2018 2017 *RMB’000* RMB’000 161,411 164,429 92,093 125,768 253,504 290,197 (78,443) (99,237) 175,061 190,960
				290,197 (99,237)
				190,960

The borrowing costs have been capitalised at a weighted average rate of 3.81% per annum (2017: 3.63%)

(b) Staff costs

Contributions to defined contribution retirement plan Salaries, wages and other benefits	Continuing operations 2018 2017 *RMB’000* RMB’000 274,771 10,536 275,525 169,149 295,094 179,685	Discontinued operation 2018 2017 *RMB’000* RMB’000 2,611 6,375 53,702 106,232 56,313 112,607	Total 2018 2017 *RMB’000* RMB’000 22,934 16,911 328,473 275,381 351,407 292,292	Total 2018 2017 *RMB’000* RMB’000 22,934 16,911 328,473 275,381 351,407 292,292
				292,292

(c) Other items

Continuing operations 2018 2017 *RMB’000* RMB’000 Amortisation of intangible assets 1,027 340 Depreciation – investment properties 98,942 79,201 – interests in leasehold land held for own use 37,582 18,341 – other assets 161,834 105,970 298,358 203,512 (Reversal of impairment losses)/ Impairment losses – trade and other receivables (3,082) 954 – finance lease receivables 3,541 – – property, plant and machinery – – 459 954 Operating lease charges in respect of properties Auditors’ remuneration – audit services – other services Rentals receivable from investment properties less direct outgoings of RMB11,773,000 (2017: RMB12,215,000) Cost of inventories#	Discontinued operation Total 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 16 444 1,043 784 – – 98,942 79,201 117 1,967 37,699 20,308 3,416 26,701 165,250 132,671 3,533 28,668 301,891 232,180 (71) 2,299 (3,153) 3,253 – – 3,541 – – 379 – 379 (71) 2,678 388 3,632 2018 2017 *RMB’000* RMB’000 24,748 19,941 2,410 1,859 1,850 442 4,260 2,301 (153,076) (103,729) 1,159,375 3,099,074	Discontinued operation Total 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 16 444 1,043 784 – – 98,942 79,201 117 1,967 37,699 20,308 3,416 26,701 165,250 132,671 3,533 28,668 301,891 232,180 (71) 2,299 (3,153) 3,253 – – 3,541 – – 379 – 379 (71) 2,678 388 3,632 2018 2017 *RMB’000* RMB’000 24,748 19,941 2,410 1,859 1,850 442 4,260 2,301 (153,076) (103,729) 1,159,375 3,099,074

Cost of inventories includes RMB257,000,000 (2017: RMB228,489,000) relating to staff costs, depreciation and amortisation expenses, and operating lease charges, which amount is also included in the respective total amounts disclosed separately above or in note 6(b) for each of these types of expenses.

Note: The Group has initially applied HKFRS 15 and HKFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated in this respect.

7 INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(a) Taxation in the consolidated statement of profit or loss represents:

Current tax Provision for corporate income tax (“CIT”) for the year (Over)/under- provision in respect of prior years PRC LAT Deferred tax Origination and reversal of temporary differences	Continuing operations 2018 2017 *RMB’000* RMB’000 80,202 365,456 (25,594) 58,694 54,608 424,150 182,050 293,617 236,658 717,767 (29,760) (75,379) 206,898 642,388	Discontinued operation 2018 2017 *RMB’000* RMB’000 19,302 16,992 (608) 549 18,694 17,541 – – 18,694 17,541 789 4,360 19,483 21,901	Total 2018 2017 *RMB’000* RMB’000 99,504 382,448 (26,202) 59,243 73,302 441,691 182,050 293,617 255,352 735,308 (28,971) (71,019) 226,381 664,289

(i) CIT

Pursuant to the rules and regulations of the Cayman Islands and the British Virgin Islands, the Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands during the year (2017: Nil).

No provision for Hong Kong Profits Tax is required since the Group has no assessable profit for the year ended 31 December 2018 and 2017.

Pursuant to the income tax rules and regulations of the PRC, taxation for PRC subsidiaries is charged at the appropriate current rates of taxation ruling in the relevant cities in the PRC at 25% (2017: 25%).

Additionally, a 10% withholding tax is levied for income derived from or accruing in PRC. However, as for the dividend income, due to the tax treaty between Hong Kong Special Administrative Region and PRC for avoidance of double taxation and prevention of tax evasion, dividends declared from PRC subsidiaries, associates and joint ventures to Hong Kong holding companies of the Group are subject to 5% withholding income tax since 1 January 2008 and onwards.

(ii) PRC LAT

PRC LAT is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of properties less deductible expenditures including lease charges of land use rights and all property development expenditures, which is included in the consolidated statement of profit or loss as income tax. The Group has estimated the tax provision for PRC LAT according to the requirements set forth in the relevant PRC tax laws and regulations. The actual PRC LAT liabilities are subject to the determination by the tax authorities upon completion of the property development projects and the tax authorities might disagree with the basis on which the provision for PRC LAT is calculated.

(b) Reconciliation between tax expense and accounting profit at applicable tax rates:

Profit before taxation Notional tax on profit before taxation, calculated at the PRC CIT rate of 25% Tax effect of tax rate difference Tax effect of non-deductible expenses Tax effect of non-taxable income Tax effect of temporary difference not recognised Tax effect of temporary difference not previously recognised (Over)/under-provision in respect of prior years PRC LAT Tax effect of PRC LAT Income tax expense	Continuing operations 2018 2017 *RMB’000* RMB’000 1,065,453 2,058,477 266,363 514,619 786 (38,197) 63,099 15,116 (260,585) (119,957) 27,064 69,184 (772) (77,284) (25,594) 58,694 70,361 422,175 182,050 293,617 (45,513) (73,404) 136,537 220,213 206,898 642,388	Discontinued operation 2018 2017 *RMB’000* RMB’000 87,755 31,563 21,939 7,891 (5,926) (532) 4,184 9,845 (106) (278) – 6,940 – (2,514) (608) 549 19,483 21,901 – – – – – – 19,483 21,901	Total 2018 2017 *RMB’000* RMB’000 1,153,208 2,090,040 288,302 522,510 (5,140) (38,729) 67,283 24,961 (260,691) (120,235) 27,064 76,124 (772) (79,798) (26,202) 59,243 89,844 444,076 182,050 293,617 (45,513) (73,404) 136,537 220,213 226,381 664,289

8 DIVIDENDS

(i) Dividends payable to equity shareholders of the Company attributable to the year:

		2018		2017
		*RMB’000*		RMB’000
	Final dividend proposed after the end of the reporting period of
	HK22.00 cents per ordinary share (equivalent to RMB19.28 cents
	per ordinary share) (2017: HK48.00 cents per ordinary share
	(equivalent to RMB40.12 cents per ordinary share))	144,285		261,729
	Final dividend proposed after the end of the reporting period of
	HK$Nil per convertible preference share (equivalent to
	RMBNil per convertible preference share)
	(2017: HK20.25 cents per convertible preference share
	(equivalent to RMB16.93 cents per convertible preference share))	–		16,253
		144,285		277,982

	The final dividend proposed after the end of the reporting period has not been recognised as a liability at
	the end of the reporting period.
(ii)	Dividends payable to equity shareholders of the Company attributable to the		previous financial
	year, approved and paid during the year
		2018		2017
		*RMB’000*		RMB’000
	Final dividend in respect of the previous financial year,
	approved and paid during the year, of HK48.00 cents per
	ordinary share (equivalent to RMB40.47 cents per ordinary
	share) (2017: HK16.00 cents per ordinary share
	(equivalent to RMB13.89 cents per ordinary share))	302,855		90,590
	Final dividend in respect of the previous financial year,
	approved and paid during the year, of HK20.25 cents per
	convertible preference share (equivalent to RMB16.23 cents
	per convertible preference share) (2017: HK20.25 cents per
	convertible preference share (equivalent to RMB17.98 cents per
	convertible preference share))	15,576		17,259
		318,431		107,849

9 EARNINGS PER SHARE

(a) Basic earnings per share

(i) Profit attributable to ordinary shareholders of the Company (basic)

Continuing operations 2018 2017 *RMB’000* RMB’000 Profit for the year, attributable to equity holders of the Company 730,430 1,097,142 Less: Profit attributable to the holders of perpetual capital securities (228,694) (51,114) Profit attributable to the holders of convertible preference shares (15,576) (17,259) Profit attributable to ordinary shareholders (basic) 486,160 1,028,769 *Weighted average number of ordinary shares (basic)* Issued ordinary shares at 1 January Effect of conversion of convertible preference shares Issued ordinary shares at 31 December	Discontinued operation Total 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 68,272 9,662 798,702 1,106,804 – – (228,694) (51,114) – – (15,576) (17,259) 68,272 9,662 554,432 1,038,431 2018 2017 *’000* ’000 652,366 652,366 65,753 – 718,119 652,366	Discontinued operation Total 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 68,272 9,662 798,702 1,106,804 – – (228,694) (51,114) – – (15,576) (17,259) 68,272 9,662 554,432 1,038,431 2018 2017 *’000* ’000 652,366 652,366 65,753 – 718,119 652,366	Discontinued operation Total 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 68,272 9,662 798,702 1,106,804 – – (228,694) (51,114) – – (15,576) (17,259) 68,272 9,662 554,432 1,038,431 2018 2017 *’000* ’000 652,366 652,366 65,753 – 718,119 652,366	Discontinued operation Total 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 68,272 9,662 798,702 1,106,804 – – (228,694) (51,114) – – (15,576) (17,259) 68,272 9,662 554,432 1,038,431 2018 2017 *’000* ’000 652,366 652,366 65,753 – 718,119 652,366
				1,038,431

				2017 ’000 652,366 –
				652,366

(ii) Weighted average number of ordinary shares (basic)

(b) Diluted earnings per share

(i) Profit attributable to ordinary shareholders of the Company (diluted)

Continuing operations Discontinued operation Total 2018 2017 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 *RMB’000* RMB’000 Profit attributable to ordinary shareholders (basic) 486,160 1,028,769 68,272 9,662 554,432 1,038,431 Preference shares dividends saving on conversion of convertible 15,576 17,259 – – 15,576 17,259 Profit attributable to ordinary shareholders (diluted) 501,736 1,046,028 68,272 9,662 570,008 1,055,690 *(ii)* *Weighted average number of ordinary shares (diluted)* 2018 2017 *’000* ’000 Weighted average number of ordinary shares at 31 December 718,119 652,366 Effect of dilutive potential ordinary shares arising from convertible preference shares 30,247 96,000 Weighted average number of ordinary shares (diluted) at 31 December 748,366 748,366	Continuing operations Discontinued operation Total 2018 2017 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 *RMB’000* RMB’000 Profit attributable to ordinary shareholders (basic) 486,160 1,028,769 68,272 9,662 554,432 1,038,431 Preference shares dividends saving on conversion of convertible 15,576 17,259 – – 15,576 17,259 Profit attributable to ordinary shareholders (diluted) 501,736 1,046,028 68,272 9,662 570,008 1,055,690 *(ii)* *Weighted average number of ordinary shares (diluted)* 2018 2017 *’000* ’000 Weighted average number of ordinary shares at 31 December 718,119 652,366 Effect of dilutive potential ordinary shares arising from convertible preference shares 30,247 96,000 Weighted average number of ordinary shares (diluted) at 31 December 748,366 748,366	Continuing operations Discontinued operation Total 2018 2017 2018 2017 2018 2017 *RMB’000* RMB’000 *RMB’000* RMB’000 *RMB’000* RMB’000 Profit attributable to ordinary shareholders (basic) 486,160 1,028,769 68,272 9,662 554,432 1,038,431 Preference shares dividends saving on conversion of convertible 15,576 17,259 – – 15,576 17,259 Profit attributable to ordinary shareholders (diluted) 501,736 1,046,028 68,272 9,662 570,008 1,055,690 *(ii)* *Weighted average number of ordinary shares (diluted)* 2018 2017 *’000* ’000 Weighted average number of ordinary shares at 31 December 718,119 652,366 Effect of dilutive potential ordinary shares arising from convertible preference shares 30,247 96,000 Weighted average number of ordinary shares (diluted) at 31 December 748,366 748,366
		1,055,690

		2017 ’000 652,366 96,000
		748,366

10 TRADE AND OTHER RECEIVABLES

Trade debtors and bills receivable – Amounts due from fellow subsidiaries – Amounts due from third parties Less: allowance for doubtful debts Other receivables: – Amounts due from associates – Amounts due from intermediate parents – Amounts due from fellow subsidiaries – Amounts due from other related parties – Amounts due from third parties Less: allowance for doubtful debts Financial assets measured at amortised cost Deposits and prepayments Presenting as: Non-current assets Current assets	2018 *RMB’000* 6,974 42,129 (1,545) 47,558 583,227 1,157 15,385 9,444 212,568 (11,182) 810,599 858,157 366,574 1,224,731 2018 *RMB’000* 2,476 1,222,255 1,224,731	2017 RMB’000 28,041 91,644 (8,107)
		111,578
		37,015 1,167 30,104 – 54,131 (12,684)
		109,733
		221,311 143,843
		365,154

		2017 RMB’000 – 365,154
		365,154

Except for amounts of RMB18,940,000 (2017: Nil) which are interest bearing at 6% per annum, and amounts of RMB418,932,000 (2017: Nil) which are interest bearing at 2.5% to 3% per annum, the amounts due from associates, intermediate parents, fellow subsidiaries and other related parties are unsecured, non-interest bearing and repayable on demand.

Apart from prepayment of RMB2,476,000 for non-current assets (2017: Nil) is expected to be recovered after one year, all of the trade and other receivables are expected to be recovered within one year.

Ageing analysis

As at the end of the reporting period, the ageing analysis of trade debtors and bills receivable (which are included in trade and other receivables), based on the invoice date and net of allowance for doubtful debts, is as follows:

Within 1 year 1 to 2 years 2 to 3 years Over 3 years	2018 *RMB’000* 45,809 890 859 – 47,558	2017 RMB’000 109,353 1,418 728 79
		111,578

11 TRADE AND OTHER PAYABLES

Trade creditors and bills payable: Amounts due to fellow subsidiaries Amounts due to third parties Other payables and accruals: Amounts due to associates Amounts due to a joint venture Amounts due to ultimate parent Amounts due to intermediate parents Amounts due to fellow subsidiaries Amounts due to third parties_(note ii) Interest payables: Amounts due to an associate Amounts due to intermediate parents Amounts due to fellow subsidiaries Amounts due to third parties Financial liabilities measured at amortised cost Receipts in advance(note i) Deposits(note iii)_	2018 *RMB’000* 23,311 1,158,482 1,181,793 132,431 195,087 – – 311,956 612,711 1,252,185 32,876 23,717 57,723 17,674 131,990 2,565,968 – 91,478 2,657,446	2017 RMB’000 21,717 844,580
		866,297
		632,445 125,587 4 17 114,988 845,953
		1,718,994
		– 22,536 30,533 15,545
		68,614
		2,653,905 371,815 48,401
		3,074,121

Notes:

(i) As a result of the adoption of HKFRS 15, receipts in advance are separately classified as contract liabilities on the consolidated statements of financial position.
(ii) Chengdu Tianfu OCT Industry Development Company Limited (成都天府華僑城實業發展有限公司) (“Chengdu OCT”) received advances amounting to RMB550,000,000 for construction of infrastructure facilities in previous years. As at 31 December 2018, the balance of the advances received deducting the carrying amount of the related infrastructure facilities was RMB145,394,000 (2017: RMB152,644,000), which was included in other payables.
(iii) At 31 December 2018, deposits of RMB55,591,000 (2017: RMB23,022,000) are expected to be settled after more than one year. All of the other payables and accrued expenses and deposits are expected to be settled within one year.

Ageing analysis

As of the end of the reporting period, the ageing analysis of trade creditors and bills payable (which are included in trade and other payables), based on the invoice date, is as follows:

Within 1 year 1 to 2 years 2 to 3 years Over 3 years	2018 *RMB’000* 1,101,819 20,956 31,041 27,977 1,181,793	2017 RMB’000 725,179 109,301 12,211 19,606
		866,297

Proposed Final Dividend and Closure of Register

The register of members of the Company will be closed from 14 June 2019 to 19 June 2019 (both days included), for the purpose of determining shareholders’ entitlement to attend the forthcoming annual general meeting (the “Annual General Meeting”), during which period no transfer of shares of the Company will be registered. In order to qualify for attending the Annual General Meeting, shareholders should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company’s branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Thursday, 13 June 2019.

The Board proposes the payment of a final dividend (the “Final Dividend”) of HK22.00 cents per share to shareholders whose names appear on the register of members of the Company on 27 June 2019. The register of members will be closed from 25 June 2019 to 27 June 2019, both days included. The proposed Final Dividend is expected to be paid on 9 July 2019. The payment of the Final Dividend shall be subject to the approval of the shareholders at the Annual General Meeting to be held on 19 June 2019. In order to be qualified for the proposed Final Dividend, shareholders should deliver share certificates together with transfer documents to the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration no later than 4:30 p.m. on Monday, 24 June 2019.

MANAGEMENT DISCUSSION AND ANALYSIS

OPERATING RESULTS AND BUSINESS REVIEW

In 2018, China faced increasingly complex economic situations internationally and domestically. The escalation of the China-US trade conflict, appearance of risks from financial pressure and volatility and geopolitical tensions have led to continuous intensification of the instability internationally. Besides, the tightening credit resulted from deleveraging within the PRC caused a downturn in the demand from real economy. In light of complicated economic situations both internationally and domestically, the Chinese economic policies have seen significant adjustments with more proactive fiscal policies, faster issue of local government bonds and more rigorous tax and expense reduction measures. Meanwhile, the continuous reduction of fiscal reserve ratio requirement also highlighted the trend of loosening the monetary policies from the beginning of the year. Under these circumstances, the Group was committed to their new strategic positioning. With the new development mode of “comprehensive development + investment in the urbanisation industrial ecosphere” and through various channels along with careful selection, the Group expanded its investment project reserve and successfully completed the full divestiture of its paper packaging business at the end of the year, pushing forward the in-depth strategic transformation.

During the Period under Review, the continuing operations of the Group recorded a revenue of approximately RMB1.58 billion, representing a year-on-year decrease of approximately 61.4%, mainly due to the decrease in revenue from the Shanghai Suhewan Project among the comprehensive development business. Profit attributable to equity holders of the Company amounted to RMB798.70 million, representing a year-on-year decrease of approximately 27.8%. Basic earnings per share attributable to shareholders of the Company was RMB0.77, representing a decrease of approximately 51.6% over the same period of 2017, mainly due to the decrease in profit attributable to comprehensive development business of the period and the increase in profit attributable to the holders of perpetual capital securities.

Comprehensive development business

In 2018, sticking to the philosophy that of “houses are built to be inhabited, not for speculation” and “leasing and purchasing”, the real estate market continued to roll out a system which combined shortermism and longtermism and has seen intensive introduction of numerous control policies and enhancement of this system. The increase of the development and investment real estate and the sources of corporate funding remained stable. The property market was increasingly strong, driven by the commencement of construction, purchase of new land parcels, and an increasing housing price. However, the rise in land price has obviously flattened out and the sales of housing areas is also showing stable decline with continued divergence among different regions. The Group has always upheld the strategy of keeping a positive and prudent attitude to achieve steady development in comprehensive development business in various key cities by leveraging the Group’s brand equity and financial strength.

During the Period under Review, the comprehensive development business of the Group recorded a revenue of approximately RMB1.57 billion, representing a year-on-year decrease of approximately 61.8%. Profit attributable to equity holders of the Company amounted to approximately RMB479.27 million, representing a year-on-year decrease of approximately 61.2%.

Shanghai Suhewan Project (owned as to 50.5% by the Company)

The Shanghai Suhewan Project, which is developed by Overseas Chinese Town (Shanghai) Land Company Limited (華僑城（上海）置地有限公司) (“OCT Shanghai Land”), is favorably situated at the junction of Suzhou River and Huangpu River banks, adjoining the Bund and facing Lujiazui across the river and within the core district of the Inner Ring, Shanghai and possesses a highly sought-after landscape. The project comprises three parcels of land, namely 1 Jiefang, 41 Jiefang and 42 Jiefang with a total site area of approximately 71,000 sq.m., a gross floor area (above ground) of approximately 280,000 sq.m. and a total gross floor area of approximately 430,000 sq.m.. The Shanghai Suhewan Project is an integration of humanities, arts, fashion business, high-end residential area and urban entertainment. Products offered by the Shanghai Suhewan Project include waterfront multi-storey residential buildings, luxury residential properties, apartment-style offices, luxury hotels, boutique business premises and studios for artists, etc.

During the Period under Review, the Shanghai Suhewan Project was mainly engaged in the sales of waterfront multi-storey residential properties which are scarce in the market, luxury high-rise residential tower and some boutique business premises, which continue to draw much interest from the market. The sales volume of unit price over RMB100 million were among the tops in Shanghai high-end luxury residential properties market. During the Period under Review, the contracted sales area and amount of the Shanghai Suhewan Project were approximately 2,500 sq.m. and approximately RMB0.591 billion, respectively, and the settled area and amount were approximately 3,700 sq.m. and approximately RMB0.681 billion, respectively.

During the Period under Review, the building of Shanghai General Chamber of Commerce obtained the Green Building Design Label. On 20 June 2018, a new Bvlgari Hotel, which is ranked sixth in the world and second in China, had its official opening at Suhewan district, Shanghai and won the outstanding award of “China Real Estate International Design Award”. The Shanghai Suhewan Project received numerous awards, which was a recognition for its overall project planning and product design, as well as a general acknowledgement to the development capability and product development of our OCT brand.

Chengdu OCT Project (owned as to 51% by the Company)

The Chengdu OCT Project, which is developed by Chengdu Tianfu OCT Industry Development Company Limited (成都天府華僑城實業發展有限公司) (“Chengdu OCT”), is a large comprehensive development project located at both sides of Shaxi Line of Outer Sanhuan Road of the Jinniu District in Chengdu City in the Sichuan Province. The project comprises a premium residential community, urban entertainment and commercial complex and a Happy Valley theme park, occupying a total site area of approximately 1,827,000 sq.m. and gross floor area of approximately 2,250,000 sq.m..

During the Period under Review, Chengdu OCT recorded a revenue of approximately RMB654.02 million. Its business mainly covers sales of high-end office properties, highrise residential properties, multi-storey residential properties and part of the low-density residential properties. During the Period under Review, the contracted sales area and amount of the residential and office properties of Chengdu OCT reached approximately 8,700 sq.m. and approximately RMB90 million respectively, while the settled area and amount were approximately 17,800 sq.m. and approximately RMB279 million respectively. The current rentable area for commercial use is approximately 123,600 sq.m., of which approximately 93% has been leased. Chengdu Happy Valley has attracted approximately 2.84 million visitors and achieved a revenue of approximately RMB305 million, representing a year-on-year growth of 36.5%.

During the Period under Review, Chengdu OCT along with its “OCT · Cloud Shore” (華僑城•雲 • 岸) and “OCT · Walking Street” (華僑城漫街) projects were awarded the “Award of Brand Real Estate Enterprise of China (Chengdu) Property Market for 2018”, “Award of High-end Masterpiece of China (Chengdu) Property Market for 2018” and “Award of Potential Project of China (Chengdu) Property Market for 2019” from Chengdu Business Daily, respectively.

OCT Chang’an Metropolis Project (owned as to 100% by the Company)

Located at the core business district of Zhonglou at the centre of Xi’an City, the OCT Chang’an Metropolis Project is a commercial landmark along the Chang’an Road. The project has a total gross floor area of approximately 104,700 sq.m., comprising high-end office properties such as Building No. 2 and Building No. 3, as well as part of the car parking space. During the Period under Review, 95% of the units in Building No. 2 of the OCT Chang’an Metropolis Project was leased with its rental rates at the forefront of Xi’an City office properties. Being the major project of the Group, Building No. 3 is a Grade A office properties which is scarce in the market, and its profile enhancement and marketing activities for leasing are underway, with 85% of units being leased. The tenants of OCT Chang’an Metropolis currently include many of the top 500 enterprises in the world.

Chongqing OCT Land Project (owned as to 49% by the Company)

The Chongqing OCT Land Project, developed by Chongqing Overseas Chinese Town Land Co., Ltd. (重慶華僑城置地項目) (“Chongqing OCT Land”), is located at the Lijia Block in the New North Zone of Chongqing City. The project enjoys a supreme location with an attractive landscape, overlooking the panoramic view of the Jialing River with a Happy Valley theme park and the large greenery in the neighborhood. The project has a total site area of approximately 180,000 sq.m. and a total gross floor area of approximately 440,000 sq.m. Its major components comprise mid-to-high end high-rise residential properties and multi-storey residential properties. Several rounds of high-rise and multi-storey residential properties products of Chongqing OCT Land Project was launched in 2018. During the Period under Review, contracted sales area and amount under Chongqing OCT Land Project reached approximately 52,800 sq.m. and approximately RMB855.00 million respectively. The settled area and amount were approximately 167,100 sq.m. and approximately RMB1,694 million, respectively. During the Period under Review, the project contributed approximately RMB41.51 million in investment return to the Group.

Xi’an OCT Project (owned as to 25% by the Company)

Located at No. 2 of Second Beichitou Road, to the east of Tang Paradise, Qujiang New District, Xi’an City, Shaanxi Province, the Xi’an OCT Project is in proximity to several famous scenic spots and has a total site area of approximately 137,000 sq.m. The project mainly comprises low-density residential properties. During the Period under Review, contracted sales area and amount reached approximately 8,800 sq.m. and approximately RMB185 million respectively. The settled area and amount were approximately 8,900 sq.m. and approximately RMB176 million, respectively.

CDCT Development Project (owned as to approximately 33.33% by Chengdu OCT)

Chengdu Culture & Tourism Development Company Limited (成都文化旅遊發展股份有限公司) (“CDCT Development”) owns the Xiling Snow Mountain Ski Resort in the national forest park “Xiling Snow Mountain”, a national 4A tourist attraction, as well as the high-quality assets including the auxiliary hotels and cableway in Dayi County in Chengdu City in the Sichuan Province. Its shares were listed on the National Equities Exchange and Quotation System (also known as the New Third Board). During the Period under Review, CDCT Development attracted approximately 0.91 million visitors. It contributed approximately RMB16.13 million in investment return to the Group.

Chengdu Baoxin Quansheng Project (owned as to 50% by Chengdu OCT)

The Chengdu Baoxin Quansheng Project, developed by Chengdu Baoxin Quansheng Real Estate Development Company Limited (成都保鑫泉盛房地產開發有限公司), is located at Jinniu District in Chengdu City with a total site area of approximately 58,300 sq.m. and the total GFA of not more than 174,900 sq.m., and was mainly used for the development of high-rise residential properties, lower-floor shops, commercial duplexes, apartment buildings and underground car parking spaces. During the Period under Review, contracted sales area and amount under Chengdu Baoxin Quansheng Project reached approximately 203,200 sq.m. and approximately RMB2,365 million respectively. The settled area and amount were approximately 192,500 sq.m. and approximately RMB2,138 million, respectively. During the Period under Review, it contributed approximately RMB229.24 million in investment return to the Group.

OCT (Changshu) Project (owned as to 100% by the Company)

During the Period under Review, OCT (Changshu) Investment and Development Co., Ltd. (華僑城（常熟）投資發展有限公司) obtained the land use rights of an industrial land parcel with a total site area of approximately 53,652 sq.m. located in the Tonggang Industrial Park (通港工業園) within the Economic Development Zone of Changshu City for a consideration of approximately RMB18.78 million, and planned to develop the land parcel into industrial parks.

Yuzhou Properties(owned as to 9.98% by the Company)

During the Period under Review, the Group subscribed 9.9% equity interests in Yuzhou Properties. Yuzhou Properties is primarily engaged in property development, property investment, property management and hotel operation in China and Hong Kong. The Group will positively explore business cooperation with it to form strategic synergy and complementary advantages.

Investment in the Urbanisation Industrial Ecosphere Business

As the only offshore listed platform under Overseas Chinese Town Group Company Limited (華僑城集團有限公司) (“OCT Group”), the controlling shareholder of the Company, the Group will explore and attempt ways to combine financial innovation with our industrial strength through various ways including domestic and overseas investments, mergers and acquisitions as well as industrial investment. In 2018, the Group made investments in Tongcheng-Elong Holdings Limited (“Tongcheng-Elong”, stock code: 0780.HK) in culture and tourism industry, Tianli Education International Holdings Limited (“Tianli Education”, stock code: 1773.HK) in education industry, as well as E-House (China) Enterprise Holdings Limited (“E-House (China)”, stock code: 2048.HK) in real estate service industry.

During the Period under Review, the segregated portfolio of New China Innovation Fund SPC, of which the Group is one of the founding shareholders, achieved profit taking with investment return of approximately RMB113.79 million. The fund invested in the interest of a high technology company.

During the Period under Review, Shanghai Libao Huachen Fund, of which the Group is one of the founding shareholders, invested in a number of projects including those in the culture and sports industries. During the Period under Review, the Capital Fortune Investment New Industries Investment Fund in Shenzhen, of which the Group is one of the founding shareholders, invested in a number of projects including those in the new energy and electronic industries.

Finance Lease Business

During the Period under Review, OCT Financial Leasing Co., Ltd. (華僑城融資租賃有限公司) and Yibin Grace Co., Ltd., the subsidiaries of the Group, kicked off sale and leaseback business of equipments, marking the first step on our finance leasing business. During the Period under Review, the Group recorded a revenue of approximately RMB13.19 million from finance lease business and profit attributable to equity holders of the Company amounted to approximately RMB4.38 million.

Paper packaging business

During the Period under Review, the Group has fully withdrawn from paper packaging business, but kept part of the land and the plants of the original paper packaging companies and transformed them into industrial parks to continue operations.

OUTLOOK

Looking ahead to 2019, economic fluctuations may accelerate amid the growing global economic uncertainties. While slower growth in domestic economy is expected to continue, the pressure posed by downward economic are expected to ease progressively following the continuous adjustments in several policies. As the government has been progressively adjusting with deleveraging policy to release the liquidity and facilitate moderate growth in monetary credit, the proactive fiscal policies and policies to loosening monetary policies were implemented to stabilise downward economic, so as to maintain stable employment and financial market. The government also actively seeks for solutions to alleviate trade friction to further avoid comprehensive economic cold-war, and accelerates the progress of economic reform and liberalization to boost confidence from enterprises and the market, aiming to facilitate the economic transformation and upgrade as well as continuously maintaining its healthy development of real economy.

INNOVATIVE DEVELOPMENT CONCEPTS

OCT Group, the controlling shareholder of the Group, participates in the national new urbanisation construction with the innovative development mode of “culture + tourism + urbanisation”, and of “tourism + internet + finance”, through its five development focus, namely “cultural industry sector, tourism industry sector, new urbanisation, electronic industry sector and relevant business investment”.

As the Group is the only foreign listed company of its controlling shareholder, OCT Group, the Group’s new development mode will be “comprehensive development + investment in the urbanisation industrial ecosphere”. The Group will develop the comprehensive development business with added vigour and on a larger scale by fully leveraging the Group’s brand equity and financial strength, and by securing high-quality projects from the areas of prime cities and OCT urbanisation projects. The Group will also actively leverage the domestic and overseas capital markets along with financial products, helping the Group to create a new urbanisation industrial ecosphere through domestic and overseas investments, mergers and acquisitions, industrial funds, financial leasing and others methods.

Comprehensive development business

In 2019, the Group’s various control policies will continue to be stability-oriented. These policies will ensure the steady development of the real estate market, with philosophy of “houses are built to be inhabited, not for speculation” and “leasing and purchasing” in mind. The Group’s policy may be adjusted in order to ensure reasonable housing consumption for the residents, with the effects of previous controls on the consumption of housing in mind. Meanwhile, the further relaxation on the monetary policy is expected to facilitate improvements in the aspect of real estate market demand.

In 2019, the various comprehensive development projects of the Group are as follows: Shanghai Suhewan Project will push forward the leasing activities for the commercial properties surrounding Bvlgari Hotel in order to consolidate the market benchmark role of Bvlgari Residence. The Chengdu OCT Project will primarily launch high-end apartments and the high-end customised villa in the only eyot of downtown Chengdu, and will continue its sale of boutique community commercial properties with a total saleable area of approximately 189,000 sq.m.. As to the Chongqing OCT Land Project, a new batch of high-rise and multi-storey residential products with a total saleable area of approximately 176,000 sq.m. will be launched. For the OCT (Changshu) project, the planning and design work is expected to be completed and the construction is expected to commence in the first half of 2019, and the project is expected to be released for leasing from 2020. With combined geographical advantages and integrated surrounding resources, the Group will explore and push forward timely planning, development and construction of idle lands for its existing industrial lands.

The Group will also continue to adhere to advanced development philosophy and clear market orientation, pushing forward its comprehensive development business with enhanced strength and size. It will stay on the outlook for diversified investment opportunities, with a view to strengthening the strategic synergy and business cooperation with investment enterprises. Through various ways such as acquisition, cooperation and equity investment, we will acquire high-quality lands at low cost to increase resource reserve for the projects, so as to expand and enhance our comprehensive development business.

Investment in the Urbanisation Industrial Ecosphere Business

In 2019, aiming at key areas including culture, travel, education, healthcare and urbanisation, the investment business of the Group will continuously select high-quality projects that meet our strategic orientation with due care, and strive for new equity investment opportunities, so as to build the urbanisation industrial ecosphere and the industrial cooperation alliance, continuously enriching and expanding the urbanisation projects. In the future, the Group’s fund management companies will be based in Guangdong-Hong Kong-Macao Greater Bay Area, radiating outwards throughout China with its main focus on industries having strong synergy with urbanisation industrial ecosphere so as to reserve high quality merger and cooperation resources for the Company.

Finance Lease Business

In 2019, the Group will continuously engage in the finance lease business in sectors such as theme parks and the manufacturing industry with a primary focus on customer base such as large to mid-scale state-owned enterprises and high quality listed companies, improve its risk management and push forward the development of the business in order to achieve stable operating income.

FINANCIAL REVIEW

As at 31 December 2018, the Group’s total assets amounted to approximately RMB25.08 billion, representing an increase of approximately 5.6% over that as at 31 December 2017; the Group’s total equity amounted to approximately RMB12.91 billion, representing a decrease of approximately 3.1% over that as at 31 December 2017.

For the year ended 31 December 2018, the Group realised revenue from the continuing operations of approximately RMB1.58 billion, representing a decrease of approximately 61.4% over the same period of 2017, of which, revenue of the comprehensive development business was approximately RMB1.57 billion, representing a decrease of approximately 61.8% over the same period of 2017, primarily due to the decrease in revenue from the Shanghai Suhewan Project; and revenue of the finance lease business, a new business of the period, amounted to approximately RMB13.19 million.

For the year ended 31 December 2018, the Group’s gross profit margin from the continuing operations was approximately 35.2% (2017: approximately 37.7%), representing a decrease of 2.5 percentage points over the same period of 2017, of which, the gross profit margin of the comprehensive development business was approximately 34.7%, representing a decrease of 3.0 percentage points over the same period of 2017, mainly due to the increase in unit cost of sales; and the gross profit margin of the finance lease business was approximately 81.0%. The net profit margin of the comprehensive development business attributable to equity holders of the Company was approximately 30.5%, which was approximate to that of the same period of 2017; and the net profit margin of the finance lease business was 33.2%.

Discontinued operation represents paper packaging business. The profit from discontinued operation was approximately RMB68.27 million for the period, representing an increase of approximately 606.6% over the same period of 2017, primarily due to the increase of approximately RMB44.76 million in the gain on disposal of equity interests of subsidiaries engaging in paper packaging business and the rise in gross profit of products.

For the year ended 31 December 2018, profit attributable to equity holders of the Company was approximately RMB798.70 million, representing a decrease of approximately 27.8% over the same period of 2017, of which, profit attributable to the comprehensive development business was approximately RMB479.27 million, representing a decrease of approximately 61.2% over the same period of 2017, mainly due to the decrease in gain on disposal of equity interests in subsidiaries engaging in comprehensive development business; profit attributable to the finance lease business was approximately RMB4.38 million; and profit attributable to the investment and fund business was approximately RMB50.79 million, representing a significant increase of approximately 215.6% over the same period of 2017 (2017: loss of approximately RMB43.95 million), which was mainly due to the significant increase in investment income.

For the year ended 31 December 2018, the basic earnings per share attributable to shareholders of the Company was approximately RMB0.77, representing a decrease of approximately 51.6% over the same period of 2017 (2017: RMB1.59), mainly due to the decrease in profit attributable to comprehensive development business of the period and the increase in profit attributable to the holders of perpetual capital securities.

Distribution Costs and Administrative Expenses

The Group’s distribution costs from the continuing operations for the year ended 31 December 2018 were approximately RMB124.74 million (2017: approximately RMB215.45 million), representing a decrease of approximately 42.1% over the same period of 2017, of which, distribution costs of the comprehensive development business were approximately RMB124.74 million, representing a decrease of approximately 42.1% over the same period of 2017, which was mainly due to the decrease in sales commissions and advertising expenses as a result of decline in revenue from the comprehensive development business.

The Group’s administrative expenses from the continuing operations for the year ended 31 December 2018 were approximately RMB334.30 million (2017: approximately RMB265.23 million), representing an increase of approximately 26.0% over the same period of 2017, of which, administrative expenses of the comprehensive development business were approximately RMB256.88 million, representing an increase of approximately 28.1% over the same period of 2017, which was mainly due to the increase in labor costs and expenses arising from the commencement of the operation of OCT Bvlgari Hotel held by OCT Shanghai Land during the period; administrative expenses of the finance lease business were approximately RMB2.43 million; and administrative expenses of the investment and fund business were approximately RMB15.52 million, representing an increase of 364.7% over the same period of 2017, which were mainly due to the increase in labour costs and professional fee as a result of the expansion in the operation scale of the investment and fund business.

Interest Expenses

The Group’s interest expenses from the continuing operations for the year ended 31 December 2018 were approximately RMB175.06 million (2017: approximately RMB187.94 million), representing a decrease of approximately 6.9% over the same period of 2017, of which interest expenses of the comprehensive development business were approximately RMB82.42 million, representing a decrease of approximately 49.5% over the same period of 2017, mainly due to the decrease in the amount of the loans related to the comprehensive development business; interest expenses of the finance lease business were approximately RMB2.51 million; and interest expenses of the investment and fund business were approximately RMB90.13 million, representing an increase of approximately 265.2% over the same period of 2017, mainly due to the increase in the amount of the loans related to the investment and fund business as a result of the expansion in the operation scale.

Dividends

The Board has resolved to recommend the payment of a final dividend of HK22.00 cents per ordinary share for the year ended 31 December 2018 (2017: HK48.00 cents per ordinary share).

Liquidity, Financial Resources and Capital Structure

The total equity of the Group as at 31 December 2018 was approximately RMB12.91 billion (31 December 2017: approximately RMB13.31 billion). As at 31 December 2018, the Group had current assets of approximately RMB11.57 billion (31 December 2017: approximately RMB15.77 billion) and current liabilities of approximately RMB10.57 billion (31 December 2017: approximately RMB9.22 billion). The current ratio was approximately 1.09 as at 31 December 2018, representing a decrease of 0.62 as compared with that as at 31 December 2017 (31 December 2017: approximately 1.71), mainly due to inventory of approximately RMB1.96 billion being transferred from current assets to non-current assets and a number of additional long-term equity investment projects during the period. The Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2018, the Group had outstanding bank and other loans of approximately RMB6.39 billion, without any fixed-rate loans (31 December 2017: outstanding bank and other loans of approximately RMB5.01 billion, without any fixed-rate loans). As at 31 December 2018, the interest rates of bank and other loans of the Group ranged from 3.14% to 6.38% per annum (31 December 2017: ranged from 1.28% to 6.38% per annum). Some of those bank loans were secured by certain assets of the Group and corporate guarantees provided by certain related companies of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 33.6% as at 31 December 2018, representing an increase of 6.6 percentage points as compared with approximately 27.0% as at 31 December 2017, mainly due to the increase in the amount of loans as at the end of the period.

As at 31 December 2018, approximately 88.9% of the total amount of outstanding bank and other loans of the Group amounting to approximately RMB5.68 billion was in Hong Kong Dollars (31 December 2017: approximately 81.6%); and approximately 11.1% of which amounting to approximately RMB708.50 million was in Renminbi (31 December 2017: approximately 18.4%). As at 31 December 2018, approximately 67.6% of the total amount of cash and cash equivalents of the Group was denominated in United States Dollars (31 December 2017: approximately 54.4%), approximately 30.3% of which was denominated in Renminbi (31 December 2017: approximately 34.4%) and approximately 2.1% of which was denominated in Hong Kong Dollars (31 December 2017: approximately 11.2%).

The Group’s liquidity position remains stable. The Group’s transactions and monetary assets are principally denominated in Renminbi, Hong Kong Dollars and United States Dollars. For the year ended 31 December 2018, the Group has not experienced any material difficulties in or effects on its operations or liquidity as a result of fluctuations in currency exchange rates. For the year ended 31 December 2018, the Group did not enter into any foreign exchange forward contracts and other material financial instruments for hedging foreign exchange risks purpose.

Contingent Liabilities

The Group has entered into agreements with certain banks with respect to mortgage loans provided to buyers of the property units. Pursuant to the mortgage agreements signed between the Group and the banks, the guarantee will be released upon the issuance of the individual property ownership certificate. Should the mortgagors fail to pay the mortgage monthly installment before the issuance of the individual property ownership certificate; the banks can draw down the security deposits up to the amount of outstanding mortgage installments and demand the Group to repay the outstanding balance to the extent that the deposit balance is insufficient.

The amount of guarantee deposits required varies among different banks, but usually within a range of 0% to 5% of the mortgage loans granted to buyers, with prescribed capped amount.

The management does not consider it probable that the Group will sustain a loss under these guarantees as the bank has the rights to sell the property and recovers the outstanding loan balance from the sale proceeds if the property buyers default payment. The management also considers that the market value of the underlying properties is able to cover the outstanding mortgage loans guaranteed by the Group. No liabilities therefore are recognised in respect of these guarantees.

As at 31 December 2018, guarantees given to financial institutions for mortgages facilities granted to buyers of the Group’s properties amounts to RMB823.99 million (31 December 2017: RMB427.79 million).

Employees and Remuneration Policy

As at 31 December 2018, the Group employed approximately 1,735 full-time staff members. The basic remunerations of the employees of the Group are determined with reference to the industry’s remuneration benchmark, the employees’ experience and their performance, and equal opportunities will be offered to all staff members. Salaries of the employees are maintained at a competitive level and are reviewed annually, with reference to the relevant labour market and economic situation. Directors’ remuneration is determined based on a variety of factors such as market conditions and responsibilities assumed by each Director. Apart from the basic remuneration and statutory benefits, the Group also provides discretionary bonuses based on the Group’s results and the individual performance of the staff.

During the Period under Review, the Group has not experienced any significant problems with its employees or disruption to its operations due to labour disputes nor has it experienced any difficulty in the recruitment and retention of experienced staffs. The Group maintains a good relationship with its employees. Most members of senior management have been working for the Group for many years.

IMPORTANT EVENTS

Cancellation of convertible preference shares

On 26 April 2018, the Company has converted 96,000,000 convertible preference shares of the Company (“Convertible Preference Shares”) and issued 96,000,000 new ordinary shares at the conversion price of HK$4.05 per ordinary share to Pacific Climax Limited (“Pacific Climax”).

After the said conversion of the Convertible Preference Shares, the Company has no outstanding Convertible Preference Shares in issue. On 5 June 2018, the Shareholders approved special resolutions in relation to cancellation of the Convertible Preference Shares which had not been taken or agreed to be taken by any person, and diminishing the amount of its share capital by the amount of the Shares so cancelled, and amendments of the memorandum and articles of association of the Company to reflect to the said cancellation. For further details, please refer to the announcements of the Company dated 27 April 2018 and 8 May 2018 and the supplemental circular of the Company dated 8 May 2018.

Disposal of Huali Packaging (Huizhou) Co., Ltd.

Following the completion of transfer of 85% equity interest in Huali Packaging (Huizhou) Co., Ltd. (“Huali Packaging (Huizhou)”) in April 2018, the Group entered into an equity transfer agreement with the successful bidder in June 2018 to sell the 15% equity interest in Huali Packaging (Huizhou) at the consideration of approximately 12.92 million. Upon completion of the disposal, the Group no longer held any equity interest in Huali Packaging (Huizhou). For further details, please refer to the announcement of the Company dated 15 June 2018.

Acquisition of 5.11% equity interest in Tongcheng-Elong

On 10 May 2018, City Legend International Limited (“City Legend”), an indirect wholly-owned subsidiary of the Company, and Suzhou Wan Cheng Sheng Da Travel Development Limited* (蘇州萬程晟達旅遊發展有限公司) (“Suzhou Wancheng”) entered into equity transfer agreements, pursuant to which City Legend agreed to acquire 5.11% equity interest in Tongcheng-Elong at the consideration of approximately RMB1.18 billion. For further details, please refer to the announcements of the Company dated 10 May 2018 and 22 June 2018 and the circular of the Company dated 30 August 2018.

Acquisition of Changshu Land

On 25 June 2018, OCT (Changshu) Investment and Development Co., Ltd. (“OCT Changshu”), a non wholly-owned subsidiary of the Company, won the bid for the land use rights of a land parcel located in Changshu City at the base bid price of approximately RMB18.78 million. OCT Changshu entered into a land transfer agreement with the Land and Resources Bureau to acquire the Changshu Land at the consideration of RMB18.78 million. For further details, please refer to the announcement of the Company dated 27 June 2018.

Cornerstone Investment in Tianli Education

On 26 June 2018, City Legend entered into a cornerstone investment agreement with Tianli Education International Holdings Limited (“Tianli Education”), pursuant to which City Legend agreed to subscribe for the investor shares of Tianli Education at the offer price as part of the international offering. The subscription was completed on 12 July 2018 at a total effective subscription price of approximately HK$268.68 million, representing 4.82% of the issued share capital of Tianli Education after full exercise of over-allotment option. For further details, please refer to the announcement of the Company dated 26 June 2018.

Cornerstone Investment in E-House Enterprise

On 5 July 2018, City Legend entered into a cornerstone investment agreement with E-House (China) Enterprise Holdings Limited (“E-House (China)”), pursuant to which City Legend agreed to acquire the investor shares of E-House (China) at the offer price as part of the international offering. The subscription was completed on 20 July 2018 at a total effective subscription price of approximately HK$1.07 billion, representing 4.99% of the issued share capital of E-House (China). For further details, please refer to the announcement of the Company dated 5 July 2018 and the circular of the Company dated 24 September 2018.

Acquisition of 9.90% equity interest in Yuzhou Properties

On 31 August 2018, City Legend entered into a subscription agreement with Yuzhou Properties Company Limited (“Yuzhou Properties”), pursuant to which City Legend agreed to subscribe 9.90% of the enlarged issued share capital of Yuzhou Properties, at the aggregate subscription price of approximately HK$1.82 billion. For further details, please refer to the announcement of the Company dated 31 August 2018 and the circular of the Company dated 26 October 2018.

Sale and Leaseback Arrangement

On 11 September 2018, OCT Financial Leasing Co., Ltd (華僑城融資租賃有限公司, “OCT Financial Leasing”), a wholly-owned subsidiary of the Company, entered into an acquisition agreement with Yibin Grace Co., Ltd (“Yibin Grace”), pursuant to which OCT Financial Leasing agreed to acquire the equipment and machinery used for manufacturing textile related products (“Equipment”) at the consideration of RMB300.00 million.

On the same date, OCT Financial Leasing also entered into the leaseback agreement with Yibin Grace, pursuant to which OCT Financial Leasing agreed to lease the Equipment to Yibin Grace at the interest rate of 5.45% per annum for a term of 60 months. The lease consideration payable by Yibin Grace to OCT Financial Leasing comprises, a security deposit of RMB30.00 million, a service fee of RMB9.00 million and the aggregate lease payments amounting to approximately RMB342.90 million. For further details, please refer to the announcement of the Company dated 11 September 2018.

Disposal of 51% equity interest in Chengdu Tianfu OCT Lakeside Business Management Co. Ltd.

On 24 December 2018, Chengdu Tianfu OCT, Zhongbao Investment Overseas Chinese Town (Shenzhen) Tourism Cultural City Renewal Equity Investment Fund Partnership (Limited Partnership) (中保投華僑城（深圳）旅遊文化城市更新股權投資基金合夥企業（有限合夥), “Zhongbao Investment Fund”) and Chengdu Tianfu OCT Lakeside Business Management Co. Ltd. (成都天府華僑城湖濱商業管理有限公司, “OCT Lakeside”) (a wholly-owned subsidiary of Chengdu OCT) entered into the equity transfer agreement, pursuant to which Chengdu OCT agreed to sell 51% equity interest in OCT Lakeside to Zhongbao Investment Fund at the consideration of approximately RMB60.53 million. For further details, please refer to the announcement of the Company dated 24 December 2018.

Disposal of 100% equity interest in Zhongshan Huali

On 27 December 2018, Wantex Investment Limited (榮添投資有限公司), an indirectly wholly-owned subsidiary of the Company, entered into the equity transfer agreement with the successful bidders in the public tender to dispose of 100% equity interest in Zhongshan Huali to the successful bidders at the total consideration of approximately RMB150.29 million. The disposal indicated that the Group has fully withdrawn from its paper packaging business. For further details, please refer to the announcements of the Company dated 25 October 2018, 23 November 2018 and 27 December 2018.

SUBSEQUENT EVENT(S)

On 26 March 2019, Shenzhen Huajing Investment Limited (“Shenzhen Huajing”), a wholly-owned subsidiary of the Company, entered into a cooperation agreement with Zhuhai Yiyun Real Estate Limited (“Zhuhai Yiyun”), Xiamen Yuzhou Grand Future Real Estate Development Company Limited (“Xiamen Yuzhou”, an indirect wholly owned subsidiary of Yuzhou Properties), and Zhongshan Yuhong Real Estate Development Limited (“Zhongshan Yuhong”), pursuant to which Shenzhen Huajing agreed to acquire and Xiamen Yuzhou agreed to sell (i) 21% of equity interest in Zhongshan Yuhong at a consideration of approximately 1.26 million; and (ii) debt interest in the principal amount of approximately 331.55 million owing by Zhongshan Yuhong to Xiamen Yuzhou together with the interest at an annual rate of 8% accrued thereon for a consideration equivalent to the amount of the debt interest. Pursuant to the Cooperation Agreement, the total capital commitment to the Target Company to be provided by the shareholders of the Target Company shall not exceed RMB4.5 billion, of which RMB945 million shall be attributable to Shenzhen Huajing, which is in proportion to its equity interest to be held in the Target Company after the completion of the Acquisition.

The acquisition is the first strategic cooperation reached between the Group and Yuzhou Properties after obtaining its 9.98% equity in 2018. For more details, please refer to the announcement of the Company dated 26 March 2019.

PURCHASE, SALE OR REDEMPTION OF SHARES

The Company has not purchased its own listed shares during the Period under Review. During the Period under Review, save as disclosed in this announcement, the Company or any of its subsidiaries has not purchased or sold or redeemed any of the listed shares in the Company.

CORPORATE GOVERNANCE REPORT

The Company believes that high standard corporate governance and highly efficient management team are very important in enhancing the investors’ confidence and the return to the shareholders, and can also increase long-term share value. Therefore, the Company is committed to implementing and maintaining a high standard of corporate governance, emphasizing good communication with shareholders and investors, and nurturing the corporate culture of strict code of conduct, with a view to continuously improving the Company’s transparency in management. This includes timely, comprehensive and accurate disclosure of information of the Company to safeguard the shareholders’ interest and to raise long-term share value.

The Company had complied with all the code provisions as set out in the Corporate Governance Code contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the year ended 31 December 2018.

AUDIT COMMITTEE

This results announcement and audited financial statements of the Company for the year ended 31 December 2018 had been reviewed by the Audit Committee of the Company before they were presented to the Board for approval.

PUBLICATION OF RESULTS ANNOUNCEMENT AND ANNUAL REPORT

This announcement is published on the websites of the Company (www.oct-asia.com) and the Stock Exchange (www.hkexnews.com.hk). The 2018 annual report will be despatched to the shareholders of the Company and available on the above websites in due course.

By Order of the Board Overseas Chinese Town (Asia) Holdings Limited He Haibin Chairman

Hong Kong, 29 March 2019

As at the date of this announcement, the Board comprises seven Directors, including three executive Directors namely Mr. He Haibin, Ms. Xie Mei and Mr. Lin Kaihua, one non-executive Director namely Mr. Zhang Jing and three independent non-executive Directors namely Mr. Lu Gong, Ms. Wong Wai Ling and Mr. Lam Sing Kwong Simon.

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RemeGen Co., Ltd. — Annual Report 2018

51206_rns_2019-03-31_e4557185-7438-4bde-b849-a3fa19d1e8d8.pdf

Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司 (Incorporated in the Cayman Islands with limited liability)

PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018

RESULTS

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

NOTES:

1 BASIS OF PREPARATION

2 CHANGES IN ACCOUNTING POLICIES

(i) HKFRS 9, Financial instruments, including the amendments to HKFRS 9, Prepayment features with negative compensation

(ii) HKFRS 15, Revenue from contracts with customers

(a) Revenue

(b) Segment reporting

(i) Segment results, assets and liabilities

(ii) Reconciliations of reportable segment profit or loss

(iv) Geographic information

5 OTHER NET GAINS

6 PROFIT BEFORE TAXATION

(a) Finance costs

(b) Staff costs

(c) Other items

7 INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(a) Taxation in the consolidated statement of profit or loss represents:

(i) CIT

(ii) PRC LAT

(b) Reconciliation between tax expense and accounting profit at applicable tax rates:

(a) Basic earnings per share

(i) Profit attributable to ordinary shareholders of the Company (basic)

(ii) Weighted average number of ordinary shares (basic)

(b) Diluted earnings per share

(i) Profit attributable to ordinary shareholders of the Company (diluted)

Ageing analysis

Ageing analysis

Proposed Final Dividend and Closure of Register

MANAGEMENT DISCUSSION AND ANALYSIS

OPERATING RESULTS AND BUSINESS REVIEW

Comprehensive development business

Investment in the Urbanisation Industrial Ecosphere Business

Finance Lease Business

Paper packaging business

OUTLOOK

INNOVATIVE DEVELOPMENT CONCEPTS

Comprehensive development business

Investment in the Urbanisation Industrial Ecosphere Business

Finance Lease Business

FINANCIAL REVIEW

Distribution Costs and Administrative Expenses

Interest Expenses

Dividends

Liquidity, Financial Resources and Capital Structure

Contingent Liabilities

Employees and Remuneration Policy

IMPORTANT EVENTS

Cancellation of convertible preference shares

Disposal of Huali Packaging (Huizhou) Co., Ltd.

Acquisition of 5.11% equity interest in Tongcheng-Elong

Acquisition of Changshu Land

Cornerstone Investment in Tianli Education

Cornerstone Investment in E-House Enterprise

Acquisition of 9.90% equity interest in Yuzhou Properties

Sale and Leaseback Arrangement

Disposal of 51% equity interest in Chengdu Tianfu OCT Lakeside Business Management Co. Ltd.

Disposal of 100% equity interest in Zhongshan Huali

SUBSEQUENT EVENT(S)

PURCHASE, SALE OR REDEMPTION OF SHARES

CORPORATE GOVERNANCE REPORT

AUDIT COMMITTEE

PUBLICATION OF RESULTS ANNOUNCEMENT AND ANNUAL REPORT

Hong Kong, 29 March 2019

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