S E A Holdings Limited — Interim / Quarterly Report 2012

Sep 20, 2012

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Interim Report 2012 中期報告
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Stock Code 股份代號 : 251

Directory

Directors

Executive Directors

Mr. Lu Wing Chi (Chairman and Managing Director) Mr. Lu Wing Yuk, Andrew Mr. Lincoln Lu Mr. Lambert Lu

Non-executive Director

Independent Auditor

Deloitte Touche Tohmatsu

Principal Bankers

The Hongkong and Shanghai Banking Corporation Limited Bank of China (Hong Kong) Limited Standard Chartered Bank (Hong Kong) Limited Hang Seng Bank Limited

Mr. Lam Sing Tai

Registered Office

Independent Non-executive Directors

Mr. Walujo Santoso, Wally Mr. Leung Hok Lim Mr. Chung Pui Lam

Audit Committee

Mr. Leung Hok Lim (Chairman) Mr. Walujo Santoso, Wally Mr. Chung Pui Lam

Nomination Committee

Mr. Lu Wing Chi (Chairman) Mr. Walujo Santoso, Wally Mr. Leung Hok Lim

Remuneration Committee

Mr. Chung Pui Lam (Chairman) Mr. Lu Wing Chi Mr. Lambert Lu Mr. Walujo Santoso, Wally Mr. Leung Hok Lim

Authorised Representatives

Mr. Lambert Lu Ms. Chan Yuk Ying

Clarendon House 2 Church Street Hamilton HM11 Bermuda

Principal Place of Business

26/F., Dah Sing Financial Centre 108 Gloucester Road Wanchai, Hong Kong Tel: (852) 2828 6363 Fax: (852) 2598 6861 E-mail: info@seagroup.com.hk

Branch Registrars in Hong Kong

Tricor Standard Limited 26/F., Tesbury Centre 28 Queen’s Road East Wanchai, Hong Kong Tel: (852) 2980 1333 Fax: (852) 2528 3158

Listing

The shares of the Company are listed and traded on the Main Board of The Stock Exchange of Hong Kong Limited.

Stock Code and Board Lot

Company Secretary

Ms. Chan Yuk Ying

Legal Advisers

Stephenson Harwood Mayer Brown JSM Conyers Dill & Pearman

251/2,000

The shares of Asian Growth Properties Limited, a subsidiary of the Company, are admitted for trading on the AIM Market of London Stock Exchange plc.

Website

www.seagroup.com.hk

Contents

Property Portfolio	2
Location of the Group’s Properties/Projects	4
Chairman’s Statement	5
Corporate Governance and Other Information	12
Report on Review of Condensed Consolidated Financial Statements	18
Condensed Consolidated Income Statement	19
Condensed Consolidated Statement of Comprehensive Income	20
Condensed Consolidated Statement of Financial Position	21
Condensed Consolidated Statement of Changes in Equity	23
Condensed Consolidated Statement of Cash Flows	24
Notes to the Condensed Consolidated Financial Statements	25

At 30 June 2012

Property Portfolio

Particulars of Investment Properties

Approximate Group’s Name Location Lease Expiry Usage Gross Floor Area Interest (square metres) (%) HONG KONG Dah Sing Financial 108 Gloucester Road, 30 June 2047 Commercial/ 37,171 and 164 97.2 Centre Wanchai Office car parking spaces MAINLAND CHINA Plaza Central 8 Shunchengda Street, 6 October 2063 Commercial/ 91,455 (including 97.2 Yanshikou, Chengdu, Office car parking floors) Sichuan Province Commercial podium No. 6 Xi Yu Long Street, 18 May 2063 Commercial 19,261 (including 97.2 in Zone B and Qingyang District, car parking spaces) car parking spaces Chengdu, on Basements 2 and 3, Sichuan Province New Century Plaza Office Tower, 50 Zhong Shan 7th Road, 23 May 2050 Office 16,112 97.2 Westmin Plaza Li Wan District, Phase II Guangzhou, Guangdong Province Particulars of Properties Held for Sale Stage of Approximate Group’s Name Location Completion Usage Gross Floor Area Interest (square metres) (%) HONG KONG The Morrison 28 Yat Sin Street, Completed Residential 121 97.2 Wanchai The Forest Hills 99 Po Kong Village Road, Completed Residential/ 2,612 and 15 97.2 Diamond Hill, Kowloon Commercial private car parking spaces and 4 motorcycle spaces MAINLAND CHINA Commercial podium, 48–58 Zhong Shan Completed Commercial 45,984 (including 97.2 Westmin Plaza 7th Road, Li Wan District, car parking floors) Phase II Guangzhou, Guangdong Province NEW ZEALAND Clearwater Resort Harewood, Christchurch Completed Commercial 5,410 34.1

2

S E A HOLDINGS LIMITED

At 30 June 2012

Property Portfolio

Particulars of Hotel Building

Approximate Group’s Name Location Lease Expiry Usage Gross Floor Area Interest (square metres) (%) HONG KONG Crowne Plaza Hong Kong 8 Leighton Road, 6 November 2049 Hotel 14,945 97.2 Causeway Bay Causeway Bay Particulars of Development Properties/Properties under Development Estimated Stage of Completion Approximate Group’s Name of Project Location Completion Date Usage Site Area Interest (square metres) (%) HONG KONG Sha Tin Town 1-11 Au Pui Wan Street, Planning stage Beyond 2015 Residential/ 20,092 97.2 Lot No. 75 and Fo Tan, Sha Tin, Commercial the Remaining New Territories Portion of Lot No. 744 MAINLAND CHINA Huangshan Project Qiankou Town, Planning stage Phase I Tourist 333,500 97.2 Huizhou District, - Beyond 2014 leisure Huangshan City, facilities Anhui Province Nova City South lateral of Planning stage Phase I - 2014 Residential/ 735,000 97.2 Zheng Kai Da Road, Commercial Kaifeng, Henan Province Longquan Project Longquanyi District, Planning stage Phase I - 2015 Residential/ 506,000 97.2 Chengdu, Commercial Sichuan Province NEW ZEALAND Clearwater Resort Harewood, Christchurch Planning stage Beyond 2013 Residential 210,653 34.1 Timperley Block Harewood, Christchurch Planning stage Beyond 2013 Residential 356,505 55.0

3

INTERIM REPORT 2012

Location of the Group’s Properties/Projects

4 S E A HOLDINGS LIMITED

Chairman’s Statement

I am pleased to present the unaudited consolidated financial results of S E A Holdings Limited (the “Company”, together with its subsidiaries, the “Group”) for the six months ended 30 June 2012 to the shareholders of the Company.

FINANCIAL SUMMARY

Turnover for the six months ended 30 June 2012 amounted to HK$299.2 million (2011: HK$305.4 million). The turnover was principally attributable to the recognition of rental income from investment properties, revenue from hotel operation and the sales of properties in Hong Kong, New Zealand and Australia.

Profit attributable to the Company’s shareholders for the period amounted to HK$356.1 million (2011: HK$931.9 million), equivalent to a basic earnings per share of HK53.2 cents (2011: HK138.9 cents). The reported profit attributable to the Company’s shareholders included a revaluation surplus on investment properties net of deferred taxation of HK$333.0 million (2011: HK$887.5 million). By excluding the effect of such surplus, the Group’s net profit attributable to the Company’s shareholders was HK$23.1 million (2011: HK$44.4 million), equivalent to a basic earnings per share of HK3.4 cents (2011: HK6.6 cents).

As at 30 June 2012, the Group’s equity attributable to the Company’s shareholders amounted to HK$10,196.6 million (31 December 2011: HK$9,889.7 million). The net asset value per share attributable to the Company’s shareholders as at 30 June 2012 was HK$15.23 as compared with HK$14.78 as at 31 December 2011.

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Dah Sing Financial Centre

The Group’s property assets by geographical location at the period-end were as follow:

	30 June 2012 31 December 2011 HK$’million HK$’million Hong Kong 8,046 7,814 Mainland China 3,641 3,531 Australia and New Zealand 271 271 Total 11,958 11,616

INTERIM REPORT 2012 5

Chairman’s Statement

INTERIM DIVIDEND

The board of directors of the Company (the “Board”) has declared an interim dividend of HK5 cents (2011: HK5 cents) per share for the six months ended 30 June 2012 to shareholders of the Company whose names appear on the register of members of the Company at the close of business on Friday, 28 September 2012. The relevant dividend warrants are expected to be despatched on or before Monday, 8 October 2012.

BUSINESS REVIEW

Property Investment and Development

The Group continues in focusing on the development and investment projects in Hong Kong and Mainland China. It is the Group’s approach to review and optimise the project portfolios from time to time.

Hong Kong

The office leasing market was stable during the period. The rental income generated from Dah Sing Financial Centre, a 39-storey commercial building, has been stable and satisfactory and its occupancy rate remains at a high level of approximately 99% as at 30 June 2012.

During the period, the Group continued to sell the remaining units of the developed properties. The sales of remaining residential units and residents’ car parking spaces of The Forest Hills and residential units (which are presently leased) of The Morrison are continuing.

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Fo Tan Project (prospective view)

The proposed development project at Fo Tan envisages, among other facilities, residential units, car parks, educational facilities and a bus terminus and has a site area of approximately 20,092 square metres. The revised general building plan was approved by the Buildings Department in October 2011 and the foundation works started in June 2012.

Mainland China

Chengdu, Sichuan Province

During the period, the occupancy rate for the two 30-storey office towers of Plaza Central improved substantially and its retail podium with a gross floor area of about 29,000 square metres has been fully let principally to Chengdu New World Department Store on a long-term lease. As at 30 June 2012, the aggregate occupancy rate for the two office towers and the retail podium was approximately 93%. Leasing activities for the remaining areas of Plaza Central continue.

6

S E A HOLDINGS LIMITED

Chairman’s Statement

The shopping arcade of New Century Plaza with a gross floor area of about 16,300 square metres has been fully let to a furniture retailer on a medium-term lease.

The Group is now finalising the master layout plan of the Longquan project, which has a site area of 506,000 square metres, and targets to submit the master layout plan to the local government before the end of this year. Preliminary site works of the project have been completed and site formation works for Phase I are being planned to commence before the end of this year.

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Longquan Project (foundation laying ceremony)

Kaifeng, Henan Province

The project in Kaifeng, known as “Nova City”, has a site area of 735,000 square metres and it is proposed to be developed into an integrated complex in Zheng-Kai District, a new town in Kaifeng. The proposed development has a gross floor area of approximately 3,000,000 square metres envisages shopping mall, premium offices, exhibition hall, hotel, serviced apartments and residential towers. Master layout plans are being revised to incorporate the latest government comments in order for re-submission. Preliminary site works have been completed while construction works of Phase I of the project are planned to start later this year.

Guangzhou, Guangdong Province

As at 30 June 2012, the occupancy rate of the 14-storey office tower of Westmin Plaza Phase II of about 16,100 square metres was approximately 86% with more than one-third of the total office space being leased to AIA. Leasing activities for the 3-storey shopping arcade of Westmin Plaza

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Kaifeng Project (foundation laying ceremony)

Phase II with a total gross floor area of about 26,400 square metres are in progress.

Huangshan, Anhui Province

The project in Huangshan has a site area of about 333,500 square metres comprising about 66,700 square metres of land owned by the Group and about 266,800 square metres of land leased from the local authority. An overall development plan for a hotel, serviced apar tments and resor t villas in the integrated resort site has been prepared a n d c o n c e p t u a l d e s i g n h a s b e e n completed.

INTERIM REPORT 2012 7

Chairman’s Statement

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Crowne Plaza Hong Kong Causeway Bay

Chi Shan, Nanjing, Jiangsu Province

The Group has established two 51%-owned joint venture companies to participate in the tenant relocation arrangements and excavation and infrastructure works on certain pieces of lands in Chi Shan. The Group intended to acquire such lands through land auctions and has submitted master layout plans for these lands for the government’s assessment.

Australia and New Zealand

Turnover generated from the property investment and development projects in Australia and New Zealand for the six months ended 30 June 2012 was HK$12.5 million (2011: HK$13.8 million). During the period, the Group had disposed the remaining block of Kaikainui Block in New Zealand. The strategy to sell the existing properties in Australia and New Zealand remains unchanged.

Hotel Operation

Crowne Plaza Hong Kong Causeway Bay is a 29-storey five-star hotel comprising 263 guest rooms with ancillar y facilities and is presently managed by the InterContinental Hotels Group. It has achieved satisfactory occupancy and room rates for the period under review.

FINANCIAL RESOURCES AND LIQUIDITY

Working Capital and Loan Facilities

As at 30 June 2012, the Group’s total cash balance was HK$1,884.1 million (31 December 2011: HK$2,486.5 million) and unutilised facilities were HK$910 million (31 December 2011: HK$750 million).

Gearing ratio as at 30 June 2012, calculated on the basis of net interest bearing debt minus cash and pledged deposits as a percentage of total property assets, was 9.6% (31 December 2011: 9.4%).

8 S E A HOLDINGS LIMITED

Chairman’s Statement

As at 30 June 2012, maturity of the Group’s outstanding borrowings was as follows:

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30 June 2012 31 December 2011
HK$’million HK$’million
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	Due Within 1 year 547.0 1,055.2 1-2 years 124.3 116.4 3-5 years 2,038.9 2,081.3 Over 5 years 336.1 349.3 3,046.3 3,602.2 Less: Front-end fee (17.1) (18.8) 3,029.2 3,583.4

Pledge of Assets

For the Company’s subsidiaries operating in Hong Kong and Mainland China, the total bank loans drawn as at 30 June 2012 amounted to HK$2,869.1 million (31 December 2011: HK$3,422.3 million) which comprised secured bank loans of HK$2,519.1 million (31 December 2011: HK$3,162.3 million) and unsecured bank loans of HK$350.0 million (31 December 2011: HK$260.0 million). The secured bank loans were secured by properties valued at HK$9,426.7 million (31 December 2011: HK$9,103.9 million) and fixed deposits of HK$0.8 million (31 December 2011: HK$0.8 million).

Certain subsidiaries of the Company operating in New Zealand and Australia pledged their properties with an aggregate carrying value of HK$270.7 million as at 30 June 2012 (31 December 2011: HK$270.9 million) to secure bank loans of HK$160.1 million (31 December 2011: HK$161.1 million).

Treasury Policies

The Group adheres to prudent treasury policies. As at 30 June 2012, all of the Group’s borrowings were raised through its wholly-owned or substantially controlled subsidiaries on a non-recourse basis.

INTERIM REPORT 2012 9

Chairman’s Statement

STAFF AND EMOLUMENT POLICY

As at 30 June 2012, the Group had a total of 411 employees (31 December 2011: 393 employees) in Hong Kong, Mainland China and New Zealand. Employee costs, including the emoluments of the directors of the Group, amounted to HK$73.2 million for the six months ended 30 June 2012 (2011: HK$63.2 million).

The Group maintains good working relationship with its employees and continues to recruit, retain and develop competent individuals committed for its long-term success and growth. Salary and benefits of employees are reviewed at least annually both in response to market conditions and trends, and in conjunction with individual appraisals based on qualifications, experience, skills, responsibilities, performance and development potentials. Discretionary bonuses are granted in line with the Group’s financial results and employees’ performance. Fringe benefits including medical insurance scheme, study and training allowances, examination leave and voluntary employer contributions to retirement schemes are offered to employees. In addition, to retain and motivate management staff and good performers, the Company has adopted an employee share option scheme and a share award scheme with options to subscribe for shares in the Company and awards of shares being granted by the Board to the Group’s employees (including directors of the Company) on a discretionary basis. To further enhance employee relations and communications, recreational activities for general staff with senior management’s participation are arranged.

OUTLOOK

With deep trouble in the world’s financial markets, there is much to be concerned about. The American economy appears to be slowing with stubbornly high job vacancies. The European financial system is suffering from political inertia with the situation in Spain getting worse by the moment and Greek default imminent. The momentum on economic growth in Germany and China is also slowing down. In Europe, more banks are being involved in the recent scandal on LIBOR and class actions starting to occur from customers as these banks manipulate the system to their advantage with their customers suffering.

The Mainland China housing market has seen signs of bottoming out after a period of government intervention to suppress prices. House buying in the eastern cities was particularly strong in July with a 6.7% increase in national sales over June. However, the PRC government is likely to intervene again if the market economy is improving. In the meantime, the PRC government is trying to tread a fine line between giving stimulus to a slowing economy and keeping a lid on house prices.

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Plaza Central

10 S E A HOLDINGS LIMITED

Chairman’s Statement

In Hong Kong, there has been a change of chief executive and his cabinet since 1 July 2012. The new cabinet has pledged to increase the housing stock particularly at the lower end of the market but we believe that the measures will take some time to implement. In the meantime, property prices remain fairly flat.

Our investment properties in Hong Kong continue to do well. Dah Sing Financial Centre has maintained a high occupancy level with good rental rates being achieved although rents in the central business district have been softening. Crowne Plaza Hong Kong Causeway Bay is enjoying high occupancy whilst the room rates are slightly better than last year.

Foundation works have started at our composite development project in Fo Tan while the foundation work for the first phase of our Kaifeng project will commence in the fourth quarter of 2012. The master layout plan for Chengdu project is at final stage and will be submitted to local government for discussion. The office buildings in Chengdu and Guangzhou continue to perform well with good occupancy.

The Group is nonetheless extremely cautious about the state of the global financial markets and economies and will continue to adopt a conservative policy. The Board believes that this turmoil will bring about opportunity and is prepared to act to accelerate the development projects or consider new opportunities once a clearer pattern emerges from the current hiatus.

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Lu Wing Chi Chairman and Managing Director

Hong Kong, 27 August 2012

INTERIM REPORT 2012 11

Corporate Governance and Other Information

CORPORATE GOVERNANCE PRACTICES

The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) made various amendments to the Code on Corporate Governance Practices (the “Old CG Code”) contained in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and renamed it as the Corporate Governance Code (the “New CG Code”) with effect from 1 April 2012. The Company has applied the principles and complied with all the code provisions set out in the Old CG Code during the period from 1 January 2012 to 31 March 2012 and the New CG Code during the period from 1 April 2012 to 30 June 2012 except for the following deviations:

• Code provision A.2.1 which states that the roles of the chairman and the chief executive officer should be separated and should not be performed by the same individual . The Company does not propose to comply with this code provision for the time being. The Chairman who is holding the office of Managing Director of the Company currently oversees the management and the Group’s business. The Board considers that the present management structure has been effective in facilitating the operation and development of the Group for a considerably long period and has withstood the test of time and that no benefit will be derived from changing it. The current structure allows flexibility and enhances the efficiency of decisionmaking process in response to the constantly changing environment while the market sentiment may vary quite significantly in different areas of the Asia Pacific region in which the Group operates. In addition, the Board believes that a balance of power and authority is adequately ensured by the operations of the Board which comprises conscientious, experienced and high calibre individuals including three Independent Non-executive Directors.

• Code provision A.4.1 which stipulates that non-executive directors should be appointed for a specific term . Each of the existing Non-executive Directors (including the Independent Nonexecutive Directors) of the Company does not have a specific term of appointment but is subject to retirement by rotation and re-election at the annual general meetings pursuant to the Bye-laws of the Company. The Bye-laws require that every director will retire from office no later than the third annual general meeting of the Company after he was last elected or re-elected. In addition, any person appointed by the Board to fill a casual vacancy or as an additional director (including Non-executive Director) will hold office only until the next general meeting and will then be eligible for re-election. As such, the Board considers that such requirements are sufficient to meet the underlying objectives of the relevant code provision and therefore does not intend to take any remedial steps in this regard.

In addition to the above deviations, Mr. Walujo Santoso, Wally, an Independent Non-executive Director, was unable to attend the annual general meeting of the Company held in May 2012 as provided for in Code provision A.6.7 due to other business engagement. However, all other Independent Non-executive Directors were present thereat to be available to answer any question to ensure effective communication with shareholders of the Company.

12 S E A HOLDINGS LIMITED

Corporate Governance and Other Information

SECURITIES TRANSACTIONS BY DIRECTORS AND EMPLOYEES

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) set out in Appendix 10 to the Listing Rules as its own code of conduct regarding securities transactions by the directors of the Company.

In response to the specific enquiry made on them by the Company, all the directors of the Company have confirmed in writing that they had complied with the required standard as set out in the Model Code throughout the period for the six months ended 30 June 2012.

The Company has also adopted a code with no less exacting terms than the Model Code for the directors and employees of the Group (other than the directors of the Company) (the “Relevant Employees”) to regulate their dealings in the listed shares of the Company and Asian Growth Properties Limited (“AGP”, together with its subsidiaries, the “AGP Group”), a subsidiary of the Company as the Relevant Employees are likely to be in possession of unpublished price-sensitive information in relation to such shares because of their office or employment.

DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES

As at 30 June 2012, the interests and short positions of the directors of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”)) as recorded in the register required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, were as follows:

1. Long positions in shares of the Company

Name of directors Lu Wing Chi Lincoln Lu Lambert Lu Lam Sing Tai Leung Hok Lim Chung Pui Lam	Number of shares Approximate % of of HK$0.1 each interest in the Held as beneficial owner issued share capital 6,569,285 0.98 5,342,002 0.80 8,342,002 1.25 101,478 # 0.02 656,928 0.10 656,928 0.10

Note:

Of these shares, 5,739 shares were held by Mr. Lam Sing Tai’s wife.

The total number of issued shares of the Company as at 30 June 2012 was 669,481,726 shares.

INTERIM REPORT 2012 13

Corporate Governance and Other Information

2. Long positions in shares of associated corporations

• (a) JCS Limited (“JCS”) — ultimate holding company of the Company

Name of directors Lu Wing Chi Lincoln Lu Lambert Lu	Number of shares Approximate % of of HK$100.0 each interest in the Held as beneficial owner issued share capital 15,000 32.61 6,000 13.04 6,000 13.04

• (b) Nan Luen International Limited (“NLI”) — immediate holding company of the Company

Name of directors Lu Wing Chi Lincoln Lu Lambert Lu	Number of shares Approximate % of of HK$100.0 each interest in the Held as beneficial owner issued share capital 46,938 30.00 5,021 3.21 5,021 3.21

Saved as disclosed herein, as at 30 June 2012, none of the directors of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be recorded in the register kept by the Company under Section 352 of the SFO or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code.

Saved as disclosed herein, during the six months ended 30 June 2012, none of the directors of the Company nor their spouses or children under 18 years of age were granted or exercised any right to subscribe for any securities of the Company or any of its associated corporations (within the meaning of Part XV of the SFO).

14 S E A HOLDINGS LIMITED

Corporate Governance and Other Information

SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES

As at 30 June 2012, so far as is known to the directors of the Company, the following substantial shareholders and other persons (other than directors of the Company) had interests or short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO:

Long positions in shares of the Company

Name of shareholders JCS NLI	Number of shares of HK$0.1 each Approximate % of Held as Held by controlled interest in the beneficial owner corporation issued share capital — 399,474,754 59.67 399,474,754 — 59.67

Notes:

1. JCS held about 63.58% of the issued shares in NLI. The above 399,474,754 shares held by NLI were deemed to be JCS’s interest and such shares were, therefore, duplicated between these two shareholders for the purpose of the SFO.

2. Messrs. Lu Wing Chi, Lincoln Lu and Lambert Lu, all being directors of the Company, were also directors of JCS and NLI.

Saved as disclosed herein, as at 30 June 2012, none of the substantial shareholders and other persons (other than directors of the Company) had any interests or short positions in the shares or underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO.

INTERIM REPORT 2012 15

Corporate Governance and Other Information

SHARE OPTION SCHEME OF THE COMPANY

The Company has adopted a new employee share option scheme (the “SEA Share Option Scheme”) on 19 August 2005. The following table shows the movements in share options under the SEA Share Option Scheme during the six months ended 30 June 2012 and the options outstanding at the beginning and end of the period:

Exercise Date of price per Vesting Exercise Name grant share period period (HK$) Aggregate of eligible employees 2 31.12.2008 2.262 Various 3 Various 3	Number of underlying shares comprised in share options Exercised Lapsed As at during the during the As at 01.01.2012 period 1 period 30.06.2012 3,150,000 3 (300,000 ) 3 — 2,850,000 3	Number of underlying shares comprised in share options Exercised Lapsed As at during the during the As at 01.01.2012 period 1 period 30.06.2012 3,150,000 3 (300,000 ) 3 — 2,850,000 3	Number of underlying shares comprised in share options Exercised Lapsed As at during the during the As at 01.01.2012 period 1 period 30.06.2012 3,150,000 3 (300,000 ) 3 — 2,850,000 3
	As at 01.01.2012 3,150,000 3	Exercised during the period 1 (300,000 ) 3	Lapsed during the period —

Notes:

1. The weighted average closing price of the shares of the Company immediately before the dates on which the share options were exercised by the eligible employees was HK$3.67 per share.

2. Eligible employees mean any full-time employees of the Company and any member of the Group working under employment contracts that were regarded as “Continuous Contracts” for the purpose of the Hong Kong Employment Ordinance.

3. Further information on the exercise and lapse particulars of the underlying shares comprised in the share options granted on 31 December 2008 under the SEA Share Option Scheme to the eligible employees are as follows:

Number of underlying shares as at 01.01.2012 Vesting period Exercise period 1,100,000 31.12.2008 to 30. 12. 2010 31 . 12. 2010 to 30. 12. 2012 300,000 31.12.2008 to 29. 06. 2011 30 . 06. 2011 to 29. 06. 2013 100,000 31.12.2008 to 30. 12. 2011 31 . 12. 2011 to 30. 12. 2013 500,000 31.12.2008 to 29. 06. 2012 30 . 06. 2012 to 29. 06. 2014 350,000 31.12.2008 to 30. 12. 2012 31 . 12. 2012 to 30. 12. 2014 800,000 31.12.2008 to 29. 06. 2013 30 . 06. 2013 to 29. 06. 2015 3,150,000	Exercised during the period — (200,000) (100,000) — — — (300,000)	Number of Lapsed underlying during shares as at the period 30.06.2012 — 1,100,000 — 100,000 — — — 500,000 — 350,000 — 800,000 — 2,850,000

1. No share options had been granted or cancelled under the SEA Share Option Scheme during the six months ended 30 June 2012.

16 S E A HOLDINGS LIMITED

Corporate Governance and Other Information

SHARE AWARD SCHEME OF THE COMPANY

The Company has also adopted a share award scheme (the “SEA Share Award Scheme”) on 27 May 2010. The SEA Share Award Scheme is an incentive scheme established for the Group as a flexible means to recognise and acknowledge the performance and/or contributions which the eligible participants (as defined under the SEA Share Award Scheme) have made or will make to the Group and promote the long term success of the Company. No award was granted since the date of adoption of the SEA Share Award Scheme and up to the period ended 30 June 2012.

SHARE OPTION AND SHARE AWARD SCHEMES OF AGP

AGP, a 97.17%-owned subsidiary of the Company, has also adopted a share option scheme and a share award scheme (together, the “AGP Share Schemes”) in 2010. The two schemes are incentive arrangement for the AGP Group to recognise and acknowledge the performance and/or contributions which the eligible participants (as defined under the AGP Share Schemes) have made or will make to the AGP Group and promote the long term success of AGP. No option or award was granted since the date of adoption of the AGP Share Schemes and up to the period ended 30 June 2012.

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

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the listed securities of the Company during the six months ended 30 June 2012.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Wednesday, 26 September 2012 to Friday, 28 September 2012, both days inclusive, during which period no transfer of shares will be registered.

In order to qualify for the interim dividend, all duly completed and stamped transfer documents accompanied by the relevant share certificates must be lodged for registration with the Company’s Branch Share Registrars in Hong Kong, Tricor Standard Limited of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Tuesday, 25 September 2012.

REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The condensed consolidated financial statements of the Group for the six months ended 30 June 2012 have not been audited but have been reviewed by the audit committee of the Company, and by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants.

INTERIM REPORT 2012 17

Report on Review of Condensed Consolidated Financial Statements

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TO THE BOARD OF DIRECTORS OF S E A HOLDINGS LIMITED

INTRODUCTION

We have reviewed the condensed consolidated financial statements of S E A Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) set out on pages 19 to 36, which comprises the condensed consolidated statement of financial position as of 30 June 2012 and the related condensed consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the six-month period then ended, and certain explanatory notes. The Main Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard 34 “Interim Financial Reporting” (“HKAS 34”) issued by the Hong Kong Institute of Certified Public Accountants. The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with HKAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong 27 August 2012

18 S E A HOLDINGS LIMITED

Condensed Consolidated Income Statement

For the six months ended 30 June 2012

		NOTES	Six months ended 30 June 2012 2011 HK$’000 HK$’000 (unaudited) (unaudited)
	Revenue	3	299,213 305,439
	Interest income		12,367 7,788
	Other income		6,581 22,828
	Costs:
	Property and related costs	4	(25,321) (56,191)
	Staff costs		(73,185) (63,164)
	Depreciation and amortisation		(41,873) (39,276)
	Other expenses	5	(85,861) (59,066) (226,240) (217,697)
	Profit from operations before fair value changes
	on properties		91,921 118,358
	Fair value changes on investment properties		376,190 936,242
	Profit from operations after fair value changes
	on properties		468,111 1,054,600
	Share of results of associates		703 623
	Share of results of jointly controlled entities		(2,667) 21
	Finance costs	6	(46,926) (51,203)
	Profit before taxation	7	419,221 1,004,041
	Income tax expense	8	(54,704) (45,283)
	Profit for the period		364,517 958,758
	Attributable to:
	Company’s shareholders		356,130 931,919
	Non-controlling interests		8,387 26,839
			364,517 958,758
	Earnings per share for profit attributable to		HK cents HK cents
	the Company’s shareholders	10
	— Basic		53.2 138.9
	— Diluted		53.1 138.5
	Earnings per share excluding fair value changes
	on properties net of deferred tax	10
	— Basic		3.4 6.6
	— Diluted		3.4 6.6

INTERIM REPORT 2012 19

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2012

		Six months ended 30 June 2012 2011 HK$’000 HK$’000 (unaudited) (unaudited)
	Profit for the period	364,517 958,758
	Other comprehensive (expense) income
	Exchange differences arising on translation of
	foreign operations	(14,004) 60,610
	Share of translation differences of jointly
	controlled entities	(250) 912
	Share of translation differences of associates	319 622
		(13,935) 62,144
	Total comprehensive income for the period	350,582 1,020,902
	Total comprehensive income attributable to:
	Company’s shareholders	346,343 996,617
	Non-controlling interests	4,239 24,285
		350,582 1,020,902

20 S E A HOLDINGS LIMITED

Condensed Consolidated Statement of Financial Position

At 30 June 2012

		NOTES	30.6.2012 HK$’000 (unaudited)	31.12.2011 HK$’000 (audited)
	Non-current assets
	Investment properties	11	8,662,672	8,298,288
	Property, plant and equipment	11	1,110,524	1,140,060
	Properties for development	12	1,282,936	1,288,272
	Club memberships		8,574	8,574
	Interests in associates		11,068	10,046
	Interests in jointly controlled entities	13	—	44,574
	Loans receivable		13,667	16,911
	Note receivable	14	15,510	—
	Other receivable	15	379,082	381,183
	Derivative financial instrument		—	80
			11,484,033	11,187,988
	Current assets
	Properties held for sale
	Completed properties		318,986	330,713
	Properties under development		670,912	660,638
	Other inventories		843	1,019
	Loans receivable		807	978
	Trade receivables, deposits and prepayments	16	140,777	137,206
	Tax recoverable		—	2,477
	Amounts due from non-controlling shareholders	17	4,199	1,384
	Pledged bank deposits		785	785
	Bank balances and cash		1,883,296	2,485,688
			3,020,605	3,620,888
	Assets classified as held for sale	18	42,090	—
			3,062,695	3,620,888
	Current liabilities
	Payables, deposits and accrued charges	19	242,944	311,406
	Sales deposits		—	601
	Provisions		—	5,107
	Tax liabilities		115,244	103,074
	Amounts due to non-controlling shareholders	17	206,288	195,966
	Bank borrowings — due within one year	20	546,988	1,054,331
			1,111,464	1,670,485
	Net current assets		1,951,231	1,950,403
	Total assets less current liabilities		13,435,264	13,138,391

INTERIM REPORT 2012 21

Condensed Consolidated Statement of Financial Position

At 30 June 2012

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30.6.2012 31.12.2011
HK$’000 HK$’000
NOTES (unaudited) (audited)
Capital and reserves
Share capital 21 66,949 66,919
Reserves 10,129,645 9,822,750
Equity attributable to the Company’s shareholders 10,196,594 9,889,669
Non-controlling interests 306,275 302,036
Total equity 10,502,869 10,191,705
Non-current liabilities
Bank borrowings — due after one year 20 2,482,197 2,529,036
Deferred taxation 22 448,442 417,650
Derivative financial instrument 1,756 —
2,932,395 2,946,686
13,435,264 13,138,391
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The condensed consolidated financial statements on pages 19 to 36 were approved and authorised for issue by the Board of Directors on 27 August 2012 and are signed on its behalf by:

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Lu Wing Chi Executive Director

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Lambert Lu Executive Director

22 S E A HOLDINGS LIMITED

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2012

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Attributable to the Company’s shareholders
Capital Share Property Non-
Share Share Contributed Translation redemption options revaluation Other Retained controlling
capital premium surplus reserve reserve reserve reserves reserves profits Total interests Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 January 2011 (audited) 66,913 354,721 277,707 365,575 4,451 1,502 — (391) 7,701,787 8,772,265 277,400 9,049,665
Profit for the period — — — — — — — — 931,919 931,919 26,839 958,758
Other comprehensive income
for the period — — — 64,698 — — — — — 64,698 (2,554) 62,144
Total comprehensive income
for the period — — — 64,698 — — — — 931,919 996,617 24,285 1,020,902
Recognition of equity-settled
share-based payments — — — — — 77 — — — 77 — 77
Share repurchased (122) (5,543) — — — — — — — (5,665) — (5,665)
Shares issued on exercise of
share options 246 6,052 — — — (740) — — — 5,558 — 5,558
Dividends paid — — — — — — — — (40,256) (40,256) — (40,256)
At 30 June 2011 (unaudited) 67,037 355,230 277,707 430,273 4,451 839 — (391) 8,593,450 9,728,596 301,685 10,030,281
Profit for the period — — — — — — — — 129,373 129,373 (1,805) 127,568
Other comprehensive income
for the period — — — 69,342 — — 1,428 — — 70,770 11,023 81,793
Total comprehensive income
for the period — — — 69,342 — — 1,428 — 129,373 200,143 9,218 209,361
Recognition of equity-settled
share-based payments — — — — — 78 — — — 78 — 78
Share repurchased (128) (5,788) — — — — — — — (5,916) — (5,916)
Shares issued on exercise of
share options 10 248 — — — (31) — — — 227 — 227
Dividends paid — — — — — — — — (33,459) (33,459) — (33,459)
Disposal of interest in a subsidiary — — — — — — — — — — 1,933 1,933
Dividends paid to non-controlling
shareholders — — — — — — — — — — (10,800) (10,800)
At 31 December 2011 (audited) 66,919 349,690 277,707 499,615 4,451 886 1,428 (391) 8,689,364 9,889,669 302,036 10,191,705
Profit for the period — — — — — — — — 356,130 356,130 8,387 364,517
Other comprehensive income
for the period — — — (9,787) — — — — — (9,787) (4,148) (13,935)
Total comprehensive income
for the period — — — (9,787) — — — — 356,130 346,343 4,239 350,582
Recognition of equity-settled
share-based payments — — — — — 72 — — — 72 — 72
Shares issued on exercise of
share options 30 746 — — — (97) — — — 679 — 679
Dividends paid — — — — — — — — (40,169) (40,169) — (40,169)
At 30 June 2012 (unaudited) 66,949 350,436 277,707 489,828 4,451 861 1,428 (391) 9,005,325 10,196,594 306,275 10,502,869
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Contributed surplus represents the excess of the nominal value of the shares of the acquired company over the nominal value of the Company’s shares issued for the acquisition pursuant to the group reorganisation in previous years.

Other reserves represent the excess of the consideration paid for acquisition of additional interest in a subsidiary from non-controlling shareholder over the carrying amount of non-controlling interests.

INTERIM REPORT 2012 23

Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2012

		Six months ended 30 June 2012 2011 HK$’000 HK$’000 (unaudited) (unaudited)
	Net cash (used in) from operating activities	(19,028) 66,237
	Investing activities
	Purchase of property, plant and equipment	(2,235) (7,148)
	Net proceeds received on disposal of property,
	plant and equipment	149 —
	Deposit received on disposal of jointly controlled entities	20,000 —
	Acquisition of and additional costs on properties
	for development	(12,405) (379,243)
	Investment in index-linked note	(15,510) —
	Decrease in pledged bank deposits	— 263,318
	Increase in other receivable	(6,574) (29,812)
	Other investing cash flows	14,725 17,585
	Net cash used in investing activities	(1,850) (135,300)
	Financing activities
	Draw down of bank loans	1,101,732 1,020,887
	Repayments of bank loans	(1,653,228) (896,417)
	Issue of new shares	679 5,558
	Advance from non-controlling shareholders	7,568 15,427
	Advance to non-controlling shareholders	(2,815) (6,000)
	Repurchase of shares	— (5,665)
	Dividends paid	(40,169) (40,256)
	Net cash (used in) from financing activities	(586,233) 93,534
	Net (decrease) increase in cash and cash equivalents	(607,111) 24,471
	Cash and cash equivalents at beginning of period	2,485,688 2,355,639
	Effect of foreign exchange rate changes	4,719 18,087
	Cash and cash equivalents at end of period,
	represented by bank balances and cash	1,883,296 2,398,197

24 S E A HOLDINGS LIMITED

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

1. BASIS OF PREPARATION

The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

2. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared on the historical cost basis except for investment properties and certain financial instruments, which are measured at fair values, as appropriate.

The accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2012 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended 31 December 2011 and those due to the application of the new or revised Hong Kong Financial Reporting Standards (“HKFRS”). In addition, the Group has applied the accounting policy of embedded derivatives which is applicable to the debt instrument entered during the period.

Embedded derivatives

Derivatives embedded in non-derivative host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognised in profit or loss.

Application of amendments to HKFRS

In the current interim period, the Group has applied, for the first time, the amendments to HKFRS 7 “Disclosures — Transfers of Financial Assets” issued by the HKICPA.

The amendments to HKFRS 7 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. The amendments also require disclosures where transfers of financial assets are not evenly distributed throughout the period.

The application of the above amendments to HKFRS in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/or disclosures set out in these condensed consolidated financial statements.

Amendments to HKAS 12 “Income Taxes” which is mandatorily effective for the current period has been applied in advance in the financial statements for the year ended 31 December 2011.

INTERIM REPORT 2012 25

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

3. SEGMENT INFORMATION

Information reported to the executive directors of the Company, being the chief operating decision maker, for the purposes of resource allocation and assessment of segment performance is mainly focused on property development, property investment and hotel operation.

Property investment and development activities are in Hong Kong, the People’s Republic of China (the “PRC”), Australia and New Zealand whereas the hotel operation is in Hong Kong.

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

Six months ended 30 June 2012

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Property Property Hotel
development investment operation Eliminations Consolidated
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
SEGMENT REVENUE
External sales 24,188 156,176 118,849 — 299,213
Inter-segment sales — 309 — (309) —
Total 24,188 156,485 118,849 (309) 299,213
SEGMENT RESULTS
Segment (loss) profit (6,940) 477,260 34,601 504,921
Interest income 12,367
Corporate expenses (49,177)
Share of results of
associates 703
Share of results of jointly
controlled entities (2,667)
Finance costs (46,926)
Profit before taxation 419,221
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26 S E A HOLDINGS LIMITED

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

3. SEGMENT INFORMATION [(continued)]

Six months ended 30 June 2011

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Property Property Hotel
development investment operation Eliminations Consolidated
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
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	SEGMENT REVENUE External sales 54,900 143,800 106,739 — Inter-segment sales — 319 — (319)	305,439 — 305,439 1,085,303 7,788 (38,491) 623 21 (51,203) 1,004,041
	Total 54,900 144,119 106,739 (319)
	SEGMENT RESULTS Segment profit 4,218 1,061,142 19,943 Interest income Corporate expenses Share of results of associates Share of results of jointly controlled entities Finance costs Profit before taxation

Inter-segment sales are at mutually agreed terms.

The accounting policies adopted in preparing the reportable segment information are the same as the Group’s accounting policies.

The Group does not allocate interest income, corporate expenses, share of results of associates and jointly controlled entities and finance costs to individual reportable segment profit or loss for the purposes of resource allocation and performance assessment by the chief operating decision maker.

No segment assets and liabilities are presented as the information is not reportable to the chief operating decision maker in the resource allocation and assessment of performance.

INTERIM REPORT 2012 27

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

4. PROPERTY AND RELATED COSTS

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Six months ended 30 June
2012 2011
HK$’000 HK$’000
Changes in properties held for sale 10,207 24,727
—
Reversal of provision on relocation compensation (5,095)
—
Write-down of properties held for sale 8,989
Selling and marketing expenses 1,308 3,261
Direct operating expenses on investment properties 18,901 19,214
25,321 56,191
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5. OTHER EXPENSES

Included in other expenses are the hotel operating expenses amounting to HK$30,195,000 (1.1.2011 — 30.6.2011: HK$26,844,000).

6. FINANCE COSTS

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Six months ended 30 June
2012 2011
HK$’000 HK$’000
Interest on:
Bank borrowings wholly repayable within 5 years 25,493 32,115
Bank borrowings not wholly repayable within 5 years 19,070 16,590
44,563 48,705
Less: Amounts capitalised to property development
projects (539) (1,392)
44,024 47,313
Front end fee 1,732 2,208
Other charges 1,170 1,682
46,926 51,203
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28 S E A HOLDINGS LIMITED

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2012

7. PROFIT BEFORE TAXATION

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Six months ended 30 June
2012 2011
HK$’000 HK$’000
Profit before taxation has been arrived at
after charging:
—
Net exchange loss 9,783
and crediting:
Interest earned on bank deposits 11,494 6,486
Interest income from second mortgage loans 440 902
Imputed interest income on loans to jointly
controlled entities 433 400
Net exchange gain — 9,432
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8. INCOME TAX EXPENSE

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Six months ended 30 June
2012 2011
HK$’000 HK$’000
Current tax
Hong Kong Profits Tax 17,967 19,781
PRC Enterprise Income Tax 3,782 906
Other jurisdictions 130 148
21,879 20,835
Deferred tax 32,825 24,448
54,704 45,283
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Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profits for each of the periods.

Income tax arising in PRC and other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

9. DIVIDENDS

During the current period, a dividend of HK6 cents (final dividend of 2010: HK6 cents) per share amounting to HK$40,169,000 (final dividend of 2010: HK$40,256,000) was approved and paid to the shareholders as final dividend for the financial year ended 31 December 2011.

Subsequent to the end of the reporting period, the directors have declared an interim dividend of HK5 cents (2011: HK5 cents) per share payable to the shareholders of the Company whose names appear in the register of members on 28 September 2012.

INTERIM REPORT 2012 29

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

10. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the Company’s shareholders is based on the following data:

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Six months ended 30 June
2012 2011
HK$’000 HK$’000
Earnings for the purpose of basic and diluted
earnings per share 356,130 931,919
Number of shares
2012 2011
Weighted average number of ordinary shares for
the purpose of basic earnings per share 669,306,451 670,862,859
Effect of dilutive potential ordinary shares options 1,080,009 2,056,180
Weighted average number of ordinary shares for
the purpose of diluted earnings per share 670,386,460 672,919,039
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For the purpose of assessing the performance of the Group, the directors are of the view that the profit for the period should be adjusted for the fair value changes on properties recognised in profit or loss and the related deferred taxation in arriving at the “adjusted profit attributable to the Company’s shareholders”. A reconciliation of the adjusted earnings is as follows:

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Six months ended 30 June
2012 2011
HK$’000 HK$’000
Profit attributable to the Company’s shareholders
as shown in the condensed consolidated
income statement 356,130 931,919
Fair value changes on investment properties (376,190) (936,242)
Deferred tax thereon 32,981 21,347
Attributable to non-controlling interests 10,166 27,389
Adjusted profit attributable to the Company’s
shareholders 23,087 44,413
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The denominators used in the calculation of adjusted earnings per share are the same as those detailed above.

30 S E A HOLDINGS LIMITED

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

11. INVESTMENT PROPERTIES AND PROPERTY, PLANT AND EQUIPMENT

The Group’s major investment properties of HK$8,441,160,000 (31.12.2011: HK$8,298,288,000) were fair valued at the end of the reporting period by independent professional valuers, Savills Valuation and Professional Services Limited (31.12.2011: Savills Valuation and Professional Services Limited and CB Richard Ellis Pty Ltd). The valuation was arrived at on the basis of capitalisation of net income. The resulting increase in fair value of HK$376,190,000 (1.1.2011 — 30.6.2011: HK$936,242,000) has been recognised directly in the condensed consolidated income statement. At 30 June 2012, the remaining investment properties of HK$221,512,000 were fair valued by the directors who are of the opinion that fair values of these properties at 30 June 2012 approximate to their fair values at 31 December 2011.

During the period, the Group acquired property, plant and equipment of HK$2,235,000 (1.1.2011 — 30.6.2011: HK$7,148,000).

12. PROPERTIES FOR DEVELOPMENT

The carrying amount represents the Group’s interest in certain pieces of lands located in the PRC with lease terms ranging from 40 to 70 years to be held for future development.

The Group paid HK$333,788,000 for the acquisition of these lands in the preceding period.

INTERIM REPORT 2012 31

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2012

13. INTERESTS IN JOINTLY CONTROLLED ENTITIES

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30.6.2012 31.12.2011
HK$’000 HK$’000
Cost of unlisted investments in jointly controlled entities 3,994 3,994
Share of post-acquisition reserves (5,929) (3,012)
(1,935) 982
Loans to jointly controlled entities 44,025 43,592
42,090 44,574
Transfer to assets classified as held for sale (42,090) —
— 44,574
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Interests in jointly controlled entities were reclassified to assets classified as held for sale upon entering into an agreement for the disposal of the Group’s entire equity interest in these entities to the joint venture partner. Details are set out in note 18.

The loans to the jointly controlled entities are unsecured, interest-free and with no fixed repayment terms. Prior to the disposal, it is the Group’s intention not to demand the jointly controlled entities for repayment of the loans within one year and accordingly the amounts are classified as non-current assets at the end of the prior reporting period.

On application of HKAS 39 “Financial Instruments — Recognition and Measurement”, the fair value of the loans advanced to jointly controlled entities is determined based on effective interest rate of 2% per annum on initial recognition. The difference between the principal amount and the fair value of the advances, determined on initial recognition, deemed to be capital contributed to jointly controlled entities, is included as part of the cost investments in jointly controlled entities.

14. NOTE RECEIVABLE

The amount represents the carrying value of a five-year zero coupon principal protected index-linked note with a principal of USD2,000,000 (equivalent to HK$15,510,000) maturing on 7 February 2017. The index is a proprietary index named Forex Yield Differential Accrual Perpetual Index, which is a proprietary non-discretionary algorithm to calculate the risk filter multiple of non-discretionary trading that observes a basket of ten currencies.

The host contract of the note is measured at amortised cost. The index-linked feature is regarded as a derivative embedded but not closely related to the host contract in accordance with HKAS 39 “Financial Instruments: Recognition and Measurement”. However, in the opinion of the directors, the fair value of the embedded derivative at the end of the reporting period is insignificant and therefore it has not been accounted for as a separate component in the condensed consolidated financial statements.

32

S E A HOLDINGS LIMITED

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

15. OTHER RECEIVABLE

At 30 June 2012, the Group had incurred a total amount of HK$394,397,000 (31.12.2011: HK$396,583,000) for the excavation, relocation arrangements and infrastructure works on certain pieces of lands in Nanjing of the PRC. The amount, together with further costs to complete the work, are wholly refundable from the relevant PRC local government either by deduction against the consideration payable if the Group is successful in bidding for the lands or out of the proceeds received by the relevant PRC local government from the other successful tenderer. The directors estimated that the amount will be recovered by 31 December 2013 based on their best estimate of the latest development of the time schedule for auction of the relevant lands. The balance is carried at amortised cost based on an effective interest rate of 2% per annum.

16. TRADE RECEIVABLES, DEPOSITS AND PREPAYMENTS

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30.6.2012 31.12.2011
HK$’000 HK$’000
Trade receivables 5,782 9,368
Accrued income, deposits and prepayments 135,335 128,168
Less: Allowance for impairment loss (340) (330)
140,777 137,206
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Trade receivables mainly comprise rental receivable from tenants for the use of the Group’s properties and receivable from corporate customers and travel agents for the use of the hotel facilities. No credit is allowed to tenants. Rentals are payable upon presentation of demand notes. Average credit period of 30 days is allowed to corporate customers and travel agents.

The following is an aged analysis of trade receivables, presented based on the invoice date, at the end of the reporting period.

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30.6.2012 31.12.2011
HK$’000 HK$’000
0 to 30 days 5,248 8,294
31 to 60 days 520 782
61 to 90 days 1 153
91 to 365 days 13 129
Over 365 days — 10
5,782 9,368
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17. AMOUNTS DUE FROM/TO NON-CONTROLLING SHAREHOLDERS

The balances are unsecured, interest-free and repayable on demand.

INTERIM REPORT 2012 33

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2012

18. ASSETS CLASSIFIED AS HELD FOR SALE

The assets classified as held for sale comprises:

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30.6.2012 31.12.2011
HK$’000 HK$’000
—
Cost of unlisted investment in jointly controlled entities 3,994
—
Share of post-acquisition reserves (5,929)
—
(1,935)
—
Loans to jointly controlled entities 44,025
—
42,090
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On 7 March 2012, the Group entered into an agreement to dispose of its entire equity interest in, together with the assignment of the loans to the jointly controlled entities to the joint venture partner for a total cash consideration of HK$61,250,000 of which deposit of HK$20,000,000 was received. The disposal will be completed in December 2012 upon final settlement of consideration.

19. PAYABLES, DEPOSITS AND ACCRUED CHARGES

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30.6.2012 31.12.2011
HK$’000 HK$’000
Trade payables 1,588 2,022
Rental deposits 85,627 83,930
Rental received in advance 7,884 10,208
Other payables, other deposits and accrued charges 147,845 215,246
242,944 311,406
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Included in other payables, other deposits and accrued charges are an aggregate amount of HK$82,191,000 (31.12.2011: HK$85,986,000) payable to contractors for the cost in relation to the excavation, relocation arrangements and infrastructure works on certain pieces of lands as referred to in note 15 and deposit of HK$20,000,000 (31.12.2011: nil) received from disposal of the interests in the jointly controlled entities.

Rental deposits to be settled after twelve months from the end of the reporting period based on the respective lease terms amount to HK$66,499,000 (31.12.2011: HK$60,701,000).

Trade payables are aged less than 60 days at the end of the reporting period based on the invoice date.

34 S E A HOLDINGS LIMITED

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

20. BANK BORROWINGS

During the period, the Group repaid bank loans amounting to HK$1,653,228,000 (1.1.2011 — 30.6.2011: HK$896,417,000) and drew bank loans which carry interest at variable rates in the amount of HK$1,101,732,000 (1.1.2011 — 30.6.2011: HK$1,020,887,000).

21. SHARE CAPITAL

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Number of
ordinary shares Nominal
of HK$0.1 each value
HK$’000
Authorised 1,000,000,000 100,000
Issued and fully paid:
At 1 January 2011 669,126,798 66,913
Shares issued upon exercise of share options 2,456,928 246
Shares repurchased and cancelled (1,216,000) (122)
At 30 June 2011 670,367,726 67,037
Shares issued upon exercise of share options 100,000 10
Shares repurchased and cancelled (1,286,000) (128)
At 31 December 2011 669,181,726 66,919
Shares issued upon exercise of share options 300,000 30
At 30 June 2012 669,481,726 66,949
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22. DEFERRED TAXATION

Deferred tax liabilities are mainly provided on the fair value changes of the investment properties located in the PRC and Australia for an amount of HK$391,076,000 (31.12.2011: HK$360,033,000).

INTERIM REPORT 2012 35

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2012

23. PLEDGE OF ASSETS

At the end of the reporting period, the following assets were pledged to secure banking facilities granted to the Group:

• (a) Fixed charges on investment properties and property, plant and equipment with an aggregate carrying value of HK$8,290,317,000 (31.12.2011: HK$7,966,255,000) together with a floating charge over all the assets of the properties owning subsidiaries and benefits accrued to the relevant properties.

• (b) Fixed charges on hotel properties with aggregate carrying values of HK$736,172,000 (31.12.2011: HK$746,177,000) together with a floating charge over all the assets of the property owning subsidiaries and benefits accrued to the hotel properties.

• (c) Fixed charges on properties under development held for sale with an aggregate carrying value of HK$670,912,000 (31.12.2011: HK$660,638,000).

• (d) Fixed charges on completed properties held for sale with aggregate carrying value of HK$Nil (31.12.2011: HK$1,672,000).

• (e) Bank deposits of HK$785,000 (31.12.2011: HK$785,000).

24. RELATED PARTY DISCLOSURES

• (a) Details of loans to jointly controlled entities are disclosed in the condensed consolidated statement of financial position and note 13.

• (b) The remuneration paid to the key management personnel, who are the directors of the Company, during the period amounted to HK$14,197,000 (1.1.2011 — 30.6.2011: HK$9,861,000).

36 S E A HOLDINGS LIMITED

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