Post on 16-Mar-2023
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your
licensed securities dealer, other licensed corporation, bank manager, solicitor, professional accountant or other
professional adviser.
If you have sold or transferred all your shares in Lippo Limited, you should at once hand this circular and the
accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent
through whom the sale or transfer was effected for transmission to the purchaser or transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this circular, make no representation as to its accuracy or completeness and
expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any
part of the contents of this circular.
This circular is being provided to you solely for the purpose of considering the resolution to be voted upon at the
extraordinary general meeting of Lippo Limited. This circular is for information purposes only and does not constitute
and is not an offer to sell or the solicitation of an offer to buy any securities in the United States or elsewhere. The
securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
‘‘U.S. Securities Act’’) and may not be offered or sold in the United States absent registration under the U.S. Securities
Act or an exemption from registration. There will be no public offering of any of these securities in the United States.
LIPPO LIMITED
力 寶 有 限 公 司(Incorporated in Hong Kong with limited liability)
(Stock Code: 226)
VERY SUBSTANTIAL DISPOSAL
PROPOSED DISPOSAL OF THE
ENTIRE ISSUED SHARE CAPITAL OF TECWELL LIMITED
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
A letter from the Board is set out on pages 5 to 15 of this circular. A notice convening the extraordinary general
meeting of Lippo Limited to be held at Harcourt Room, Lower Lobby, Conrad Hong Kong, Pacific Place,
88 Queensway, Hong Kong on Tuesday, 3rd December, 2013 at 11 : 00 a.m. (or so soon thereafter as the
extraordinary general meeting of Lippo China Resources Limited convened for 10 : 45 a.m. on the same date shall
have been concluded or adjourned) or any adjourned meeting thereof to approve matters referred to in this circular
is set out on pages 85 and 86 of this circular.
A form of proxy for use at the extraordinary general meeting is accompanied herewith. Whether or not you are able
or intend to attend the extraordinary general meeting, you are requested to complete and return the accompanying
form of proxy in accordance with the instructions printed thereon to the registered office of Lippo Limited at
24th Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong as soon as possible but in any event not less than
48 hours before the time appointed for the holding of the extraordinary general meeting or any adjourned meeting
thereof. Completion and return of the form of proxy shall not preclude shareholders from attending and voting in
person at the extraordinary general meeting or any adjourned meeting thereof should they so desire.
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
18th November, 2013
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Appendix I — Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Appendix II — Financial information of the Tecwell Group . . . . . . . . . . . . . . . . . . . . 40
Appendix III— Unaudited pro forma financial information
of the Remaining Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Appendix IV — Property valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Appendix V — General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
CONTENTS
In this circular, unless the context requires otherwise, the following terms and
expressions shall have the following meanings:
‘‘Announcement’’ the joint announcement of the Company and LCR dated
16th October, 2013 in relation to the Disposal;
‘‘associates’’ has the same meaning as defined in the Listing Rules;
‘‘Board’’ the board of Directors;
‘‘Business Day’’ a day (other than Saturday, Sunday or any day during which
typhoon no. 8 signal (or above) or black rainstorm warning is
hoisted and not lowered by 12 : 00 noon on that day) on which
commercial banks in Hong Kong and Singapore are open for the
transaction of general banking business by members of the
public;
‘‘Company’’ Lippo Limited 力寶有限公司, a company incorporated in Hong
Kong with limited liability whose shares are listed on the Main
Board of the Stock Exchange;
‘‘Completion’’ completion of the Disposal subject to and pursuant to the terms
and conditions of the Disposal Agreement;
‘‘Completion Date’’ the date of Completion, which shall be the Listing Date;
‘‘Conditional Special
Dividend’’
subject to, among others, Completion, the cash dividend of
HK3.5 cents per share of LCR to be approved and paid by LCR
to LCR’s shareholders following Completion;
‘‘Conditions Precedent’’ the conditions precedent to the completion of the Disposal
Agreement;
‘‘connected person(s)’’ has the meaning ascribed to such term under the Listing Rules;
‘‘Consideration’’ the consideration for the sale and purchase of the Sale Shares;
‘‘Directors’’ directors of the Company;
‘‘Disposal’’ the disposal of the Sale Shares, representing the entire issued
share capital of Tecwell, pursuant to the Disposal Agreement;
‘‘Disposal Agreement’’ the agreement dated 16th October, 2013 entered into by LCR and
the Purchaser in respect of the Disposal;
‘‘EGM’’ an extraordinary general meeting of the Company to be
convened on Tuesday, 3rd December, 2013 to consider and, if
thought fit, to approve the Disposal Agreement and the
Disposal;
DEFINITIONS
– 1 –
‘‘Extended Long Stop
Date’’
a date no later than 30th June, 2014 or such later date as the
parties may mutually agree in writing;
‘‘Group’’ the Company and its subsidiaries;
‘‘HKC’’ Hongkong Chinese Limited (香港華人有限公司*), a company
incorporated in Bermuda whose shares are listed on the Main
Board of the Stock Exchange and an approximately 56.12%
subsidiary of the Company;
‘‘HKFRS’’ the Hong Kong Financial Reporting Standards;
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC;
‘‘Joint Venture’’ Lippo ASM Asia Property Limited, which is jointly controlled by
an indirect wholly-owned subsidiary of HKC and Admiralty
Station Management Limited;
‘‘Lanius’’ Lanius Limited;
‘‘Latest Practicable
Date’’
15th November, 2013, being the latest practicable date prior to
the printing of this circular for ascertaining certain information
contained in this circular;
‘‘LCR’’ Lippo China Resources Limited 力寶華潤有限公司, a company
incorporated in Hong Kong with limited liability whose shares
are listed on the Main Board of the Stock Exchange and an
approximately 71.24% indirect subsidiary of the Company;
‘‘LCR Group’’ LCR and its subsidiaries;
‘‘Lippo Capital’’ Lippo Capital Limited;
‘‘Listing Date’’ the date on which the units of OUE Commercial Trust are listed
and commence trading on the SGX-ST;
‘‘Listing Rules’’ or
‘‘Rule’’
the Rules Governing the Listing of Securities on the Stock
Exchange;
‘‘Long Stop Date’’ 28th February, 2014;
‘‘LRSL’’ 力寶置業(上海)有限公司 (Lippo Realty (Shanghai) Limited), a
company established under the laws of the PRC which is wholly
owned by Tecwell, an indirect wholly-owned subsidiary of LCR;
‘‘Model Code’’ Model Code for Securities Transactions by Directors of Listed
Issuers, as set out in Appendix 10 to the Listing Rules;
DEFINITIONS
– 2 –
‘‘NAV’’ net asset value, computed based on total assets less total
liabilities, which shall exclude any amount due from/to the
shareholders;
‘‘OUE’’ OUE Limited (formerly known as Overseas Union Enterprise
Limited), a company incorporated in the Republic of Singapore
with limited liability and listed on the Main Board of the
SGX-ST, which is a joint venture of HKC;
‘‘OUE Commercial
Trust’’
OUE Commercial Trust constituted under the laws of the Republic
of Singapore which shall invest mainly in commercial properties
and which units are proposed to be listed on the SGX-ST;
‘‘PRC’’ the People’s Republic of China;
‘‘Property’’ collectively, the 36-storey commercial building named as ‘‘Lippo
Plaza’’ located at No. 222 Huaihai Zhong Road, Huangpu
District, Shanghai, the PRC, excluding Unit 2 on Basement 1,
12th, 13th, 15th and 16th Floors and 4 car parking spaces Nos.
15, 16, 17 and 26, with a total gross floor area of approximately
58,521.54 square metres;
‘‘Purchaser’’ OUE Eastern Limited, a company incorporated in the British
Virgin Islands with limited liability, which is a wholly-owned
subsidiary of OUE Commercial Trust;
‘‘RHL’’ RHL Appraisal Limited, an independent valuer;
‘‘Remaining Group’’ the Group other than the Tecwell Group immediately after
Completion;
‘‘Sale Shares’’ 100 ordinary shares of US$1.00 each in, representing the entire
issued share capital of, Tecwell;
‘‘SFO’’ Securities and Futures Ordinance, Chapter 571 of the Laws of
Hong Kong;
‘‘SGX-ST’’ Singapore Exchange Securities Trading Limited;
‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the issued share capital of
the Company;
‘‘Shareholder(s)’’ holder(s) of the Share(s);
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited;
DEFINITIONS
– 3 –
‘‘Tecwell’’ Tecwell Limited, a company incorporated in the British Virgin
Islands with limited liability and an indirect wholly-owned
subsidiary of LCR;
‘‘Tecwell Group’’ Tecwell and its subsidiary, namely, LRSL;
‘‘A$’’ Australia dollars, the lawful currency of Australia;
‘‘C$’’ Canadian dollars, the lawful currency of Canada;
‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong;
‘‘RMB’’ Renminbi, the lawful currency of the PRC;
‘‘Rp’’ Indonesian rupiahs, the lawful currency of the Republic of
Indonesia;
‘‘S$’’ Singapore dollars, the lawful currency of the Republic of
Singapore;
‘‘THB’’ Thai Baht, the lawful currency of Thailand;
‘‘US$’’ United States dollars, the lawful currency of the United States of
America; and
‘‘%’’ per cent.
* for identification purpose
Note: (1) For use in this circular and for illustration purposes only, conversion of RMB into HK$ is based on
an approximate exchange rate of RMB1.00 to HK$1.26124. No representation is made that any
amount in RMB to HK$ could be converted at such rate or any other rates.
(2) If there is any inconsistency between the Chinese name of the PRC entities mentioned in this circular
and its English translation, the Chinese version shall prevail.
DEFINITIONS
– 4 –
LIPPO LIMITED
力 寶 有 限 公 司(Incorporated in Hong Kong with limited liability)
(Stock Code: 226)
Executive Directors:
Mr. Stephen Riady (Chairman)
Mr. John Luen Wai Lee, BBS, JP
(Managing Director and Chief Executive Officer)
Mr. Jark Pui Lee, SBS, OBE, JP
Non-executive Director:
Mr. Leon Nim Leung Chan
Independent Non-executive Directors:
Mr. Edwin Neo
Mr. Victor Ha Kuk Yung
Mr. King Fai Tsui
Registered Office:
24th Floor
Tower One
Lippo Centre
89 Queensway
Hong Kong
18th November, 2013
To the Shareholders
Dear Sir or Madam,
VERY SUBSTANTIAL DISPOSAL
PROPOSED DISPOSAL OF THE
ENTIRE ISSUED SHARE CAPITAL OF TECWELL LIMITED
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
INTRODUCTION
Reference is made to (i) the Announcement; and (ii) the announcement of the
Company dated 4th November, 2013 in relation to the change in use of proceeds from the
Disposal. On 16th October, 2013, the Company announced that, LCR and the Purchaser
entered into the Disposal Agreement, pursuant to which LCR conditionally agreed to
procure the sale of, and the Purchaser conditionally agreed to purchase, the Sale Shares,
LETTER FROM THE BOARD
– 5 –
representing the entire issued share capital of Tecwell, for the Consideration of
approximately HK$843.5 million (subject to adjustment, if any), which shall be satisfied
in cash on the Completion Date.
Tecwell is an indirect wholly-owned subsidiary of LCR which in turn is an indirect
subsidiary of the Company. LRSL, being the owner of the Property, is a wholly-owned
subsidiary of Tecwell.
As one or more of the applicable percentage ratios in respect of the Disposal as
calculated under Rule 14.07 of the Listing Rules exceeds 75%, the Disposal constitutes a
very substantial disposal for the Company under the Listing Rules which is subject to the
reporting, announcement and shareholders’ approval requirements.
The purpose of this circular is to provide, among other things, (i) the details of the
Disposal; (ii) financial information of the Group; (iii) financial information of the Tecwell
Group; (iv) unaudited pro forma financial information of the Remaining Group; (v) the
valuation report of the Property; and (vi) a notice of the EGM.
THE DISPOSAL AGREEMENT
Date: 16th October, 2013
Parties: (1) LCR, a subsidiary of the Company (as vendor)
(2) The Purchaser (as purchaser)
The Purchaser is a wholly-owned subsidiary of OUE Commercial Trust. As at the
Latest Practicable Date, OUE is the sponsor of OUE Commercial Trust and currently holds
the only unit in OUE Commercial Trust. It is currently anticipated that OUE will be
interested in up to 50% of the issued units of OUE Commercial Trust upon the listing of
OUE Commercial Trust. The Joint Venture, being a principal joint venture of HKC, is
interested in approximately 68.02% of the issued share capital of OUE (excluding treasury
shares) as at the Latest Practicable Date. As OUE, being a joint venture of HKC, is
regarded as an associate (as defined in the Listing Rules) of the Company (being the
substantial shareholder of LCR), the Purchaser is therefore deemed to be a connected
person of LCR under the Listing Rules.
The Disposal
Subject to the terms and conditions of the Disposal Agreement, LCR has conditionally
agreed to procure the sale of, and the Purchaser has conditionally agreed to acquire, the
Sale Shares (representing the entire issued share capital of Tecwell), free from all liens,
charges, encumbrances and third party rights and together with all rights attaching thereto
as at the Completion Date.
Tecwell is an indirect wholly-owned subsidiary of LCR which in turn is an indirect
subsidiary of the Company. LRSL, being the owner of the Property, is a wholly-owned
subsidiary of Tecwell.
LETTER FROM THE BOARD
– 6 –
Consideration
The consideration for the Sale Shares shall be the Consideration of approximately
HK$843.5 million (subject to adjustment, if any) and is payable in full by the Purchaser in
cash at Completion. The Consideration may be adjusted upwards or downwards based on
the increase or decrease in NAV of the Tecwell Group (other than the movement of the
value of the Property as it was agreed between the parties as a commercial decision to
include an agreed valuation for the Property to limit exposure to market risks so that any
changes in the value of the Property will not be adjusted) as of the Completion Date when
compared to that of 30th June, 2013. Any adjustment in the Consideration upwards or
downwards post-Completion shall be settled by the Purchaser or LCR (as the case may be)
in cash within 5 Business Days after agreement of such adjustment. For the purpose of
calculating the adjustment amount, the NAV (excluding the value of the Property) based on
the unaudited consolidated management accounts of the Tecwell Group prepared in
accordance with HKFRS as of the Completion Date will be compared against the NAV
(excluding the value of the Property) based on the unaudited consolidated management
accounts of the Tecwell Group prepared in accordance with HKFRS as of 30th June, 2013,
any increase or decrease in the NAV will form the basis of the adjustment amount.
The Consideration was determined after arm’s length negotiations between LCR and
the Purchaser by reference to:
(i) the unaudited NAV of the Tecwell Group in the amount of approximately
HK$849.9 million as at 30th June, 2013;
(ii) a valuation of the Property by RHL of approximately RMB2,030 million
(equivalent to approximately HK$2,560.3 million) as at 30th September, 2013;
and
(iii) the book value of the Property as at 30th June, 2013 of approximately
HK$2,548.5 million.
Based on the unaudited accounts of the Tecwell Group as of 30th June, 2013, the book
value of the Property amounted to approximately HK$2,548.5 million, which is comparable
to the valuation made by RHL of approximately HK$2,560.3 million as at 30th September,
2013. The NAV of approximately HK$849.9 million was arrived at based on the above book
value of the Property of approximately HK$2,548.5 million, the other assets of
approximately HK$129.9 million and other liabilities of HK$1,828.5 million of the
Tecwell Group as of 30th June, 2013 with details set out in the unaudited consolidated
statement of financial position of the Tecwell Group on pages 43 and 44 of this circular.
These assets and liabilities will be disposed of under the Disposal. Accordingly, the
Directors are of the view that there is no significant premium in the value of the Property
when compared with the Consideration, which was derived from the NAV.
The valuation in item (ii) above refers to the valuation of the Property in its existing
state as at 30th September, 2013 prepared by RHL using the direct comparison approach.
Given the Disposal is a disposal of the entire issued share capital of Tecwell, the
LETTER FROM THE BOARD
– 7 –
consideration for the Disposal also takes into consideration other assets and liabilities on
the books of the Tecwell Group which include cash balances, rental deposits received, bank
loans and tax liabilities.
Conditions Precedent of the Disposal Agreement
Completion of the Disposal Agreement shall be conditional upon:
(i) the approvals of the independent shareholders of LCR and the Shareholders for
the entering into by LCR of the Disposal Agreement and the Disposal having been
obtained in accordance with the requirements of the Listing Rules or any other
applicable laws or regulations, if so required;
(ii) the obligations of the underwriters under the underwriting agreement to be
entered into between, among others, OUE Commercial Trust and the underwriters
in respect of the offering and listing on the SGX-ST of the units of OUE
Commercial Trust becoming unconditional in all respects (including, if relevant,
as a result of the waiver of any condition(s) by or on behalf of the underwriters)
and the underwriting agreement not being terminated in accordance with its terms
or otherwise, on or before the dates and times to be specified therein;
(iii) all necessary consents as required by LCR, the Purchaser and/or their respective
holding companies to complete the Disposal Agreement and the Disposal being
obtained; and
(iv) no event or circumstance shall have occurred in respect of or in connection with
the affairs of Tecwell, LRSL and/or the Property which has or will have a material
adverse effect.
If the Conditions Precedent were not fulfilled on or before the Long Stop Date, LCR
may serve a written notice to extend the Long Stop Date to the Extended Long Stop Date.
If the Conditions Precedent are still not fulfilled by the Extended Long Stop Date, the
Disposal Agreement will be terminated and cease to be of effect and none of the parties
shall have any rights against any other party except for (where applicable) liability for any
antecedent breach of its obligations under the Disposal Agreement.
Completion
Subject to the satisfaction of the Conditions Precedent and other terms and conditions
of the Disposal Agreement, Completion of the Disposal Agreement shall take place on the
Listing Date. At the request of the Purchaser, LCR has agreed to the Condition Precedent
that Completion is conditional on the underwriting agreement in respect of the offering and
listing of the units of OUE Commercial Trust on the SGX-ST becoming unconditional and
for the Completion to take place on the Listing Date as a commercial decision as the
Purchaser will be utilising the proceeds from the initial public offering of the units of OUE
Commercial Trust to, amongst other things, pay the Consideration in cash.
LETTER FROM THE BOARD
– 8 –
Upon Completion, the Tecwell Group will cease to be subsidiaries of each of LCR and
the Company and the results, assets and liabilities of the Tecwell Group will cease to be
consolidated into the accounts of each of LCR and the Company.
At Completion, the Purchaser will deliver a deed of undertakings to be entered on the
Completion Date duly executed by the Purchaser and LRSL in favour of LCR (‘‘Deed of
Undertakings’’) pursuant to which each of the Purchaser and LRSL undertakes that it shall,
and shall procure its successors and permitted assigns, to use its best endeavours and
exercise all rights within its power to prevent the change of name of Lippo Plaza, and not to
exercise, or take any action to change the name of Lippo Plaza, without the prior written
consent of LCR or its assignee.
It is currently anticipated that none of LCR, the Company or HKC will subscribe for
any units in OUE Commercial Trust upon its listing on the SGX-ST.
INFORMATION ON THE TECWELL GROUP
Tecwell, an indirect wholly-owned subsidiary of LCR, is a limited liability company
incorporated in the British Virgin Islands. It is an investment holding company which
wholly owns LRSL. The Property was developed by LRSL and has been held for rental
purpose since its completion in 1999. The principal activities of the Tecwell Group are
property investment and leasing.
Set out below is the audited consolidated financial information of the Tecwell Group
for the twelve months ended 31st December, 2011 and 31st December, 2012, and the
unaudited consolidated financial information of the Tecwell Group for the fifteen months
ended 31st March, 2013, respectively, prepared under the HKFRS:
For the twelve
months ended
31st December,
2011
For the twelve
months ended
31st December,
2012
For the fifteen
months ended
31st March,
2013
HK$’000 HK$’000 HK$’000
Net profit before taxation 179,275 429,391 474,672
Net profit after taxation 133,674 311,255 340,298
Net profit after taxation
(excluding net fair value gain
on investment property) 70,458 32,625 31,956
INFORMATION ON THE PURCHASER
The Purchaser is a company incorporated in the British Virgin Islands as an investment
holding company. It is a wholly-owned subsidiary of OUE Commercial Trust.
As disclosed in the announcements of OUE dated 25th September, 2013 and
16th October, 2013, OUE Commercial Trust, which units are proposed to be listed on
the SGX-ST, shall invest mainly in commercial properties with the expected initial portfolio
LETTER FROM THE BOARD
– 9 –
to include OUE Bayfront, being an 18-storey office building located at 50 Collyer Quay,
Singapore 049321, together with its ancillary properties comprising a conserved tower
building used for a food and beverage outlet and a link bridge with retail shops as well as
the Property. As such, it is expected that the Property will not be the only asset or property
in the initial portfolio of OUE Commercial Trust.
REASONS FOR THE DISPOSAL
The principal activity of the Company is investment holding. The principal activities of
the subsidiaries, associated companies and joint ventures of the Company are investment
holding, property investment, property development, hotel operation, food business,
property management, project management, mineral exploration, extraction and
processing, fund management, underwriting, corporate finance, securities broking,
securities investment, treasury investment, money lending, banking and other related
financial services.
The principal business activity of LCR is investment holding. The principal activities
of the subsidiaries and associated companies of LCR include investment holding, property
investment, property development, food business, property management, mineral
exploration, extraction and processing, securities investment, treasury investment and
money lending.
The respective Boards of LCR and the Company undertake strategic reviews of their
respective assets from time to time with a view to maximizing returns to their respective
shareholders, which may include a possible sale of certain properties held for investment
purposes. The Disposal will enable the LCR Group to unlock the value of the Property
which is held by the LCR Group for investment purposes and the proceeds can be used by
the LCR Group to (i) pursue other growth opportunities, (ii) fund its future business plans
and capital expenditure, and/or (iii) enable it to reduce its existing borrowings. As at the
Latest Practicable Date, the LCR Group did not have any plan nor has entered into any
agreement on any acquisition and/or investment in new business and/or material assets.
However, the LCR Group will be in a stronger cash position after the Disposal and will be
well prepared and readily able to take on any new investment opportunities with a long
term growth potential should such opportunities arise in the near future. In addition, the
LCR Group can focus its resources on its existing property development projects which
have started and would take years to complete. Moreover, the excess cash could be applied
to reduce the LCR Group’s borrowings in order to save some finance costs.
The Property was developed by the LCR Group and has been held by the LCR Group
since completion of the development in 1999. The Property is a mature asset, which whilst
providing stable rental income, does not have the growth in terms of earnings expected by
the Board of LCR. LCR wishes to realize full value of the Property. The Disposal enables
the LCR Group to recycle capital into future investment opportunities. The Disposal is also
in line with LCR’s policy of realising profit at appropriate time as LCR also disposed of a
number of investment properties during the previous accounting period for an aggregate
consideration of HK$622 million. In light of pronouncements from the government of the
PRC, the Board of LCR foresees relatively stable and moderate growth in the PRC
LETTER FROM THE BOARD
– 10 –
economy in the short to medium term, as the country enters into a more mature growth
phase. In view of that, the Directors (including the independent non-executive Directors)
agree with the directors of LCR and are of the view that the Disposal represents a good
opportunity to realize its investment in the Tecwell Group and to recycle capital into future
investment opportunities.
The Company, being interested in approximately 71.24% of the issued share capital of
LCR as at the Latest Practicable Date, will also benefit from the Disposal, through
receiving a special dividend to be approved by LCR. Such funds received from LCR as
dividend will also be used to (i) fund its future business plans and capital expenditure,
and/or (ii) reduce its existing borrowings.
While it is noted from the unaudited pro forma financial information that the loss of
the Group for the fifteen months ended 31st March, 2013 would be increased assuming the
Disposal had taken place on 1st January, 2012, the Directors are of the view that the terms
of the Disposal Agreement are fair and reasonable and in the interests of the Shareholders
as a whole due to the following reasons:
(a) the pro forma financial information was prepared for illustrative purposes only.
As such, given its nature, it may not give a true picture of the Group’s financial
position or results. For example, such pro forma financial results have not taken
into account the income derived from the proceeds of the Disposal; and
(b) the Directors also considered a number of factors, including but not limited to,
financial impact, business prospects, market factors, etc., as a whole when
undertaking the strategic review of the Group’s assets/business from time to time
in order to make any business decision.
In view of the above, the basis of determination of the Consideration (including NAV
of the Tecwell Group and the valuation of the Property) and the expected gain from the
Disposal as stated below, the Directors (including the independent non-executive Directors,
but excluding Mr. Stephen Riady who has abstained from voting on the relevant Board
resolution due to his deemed interest in the Disposal Agreement) are of the view that the
terms of the Disposal Agreement (including the Consideration) are fair and reasonable and
the Disposal is in the interests of the Company and the Shareholders as a whole.
None of the Directors has a material interest in the Disposal Agreement and the
Disposal save for Mr. Stephen Riady (being a director of each of the Company and LCR)
who has a deemed interest in Lippo Capital. As at the Latest Practicable Date, the
Company is owned as to approximately 64.75% by Lippo Capital which in turn is wholly
owned by Lanius. Lanius is a trustee of a discretionary trust, of which the beneficiaries
include, inter alia, Mr. Stephen Riady and other members of his family. Accordingly,
Mr. Stephen Riady is deemed to have a material interest in the Disposal Agreement due to
his deemed interests in LCR and the Company through Lippo Capital, and had abstained
from voting on the relevant Board resolutions in respect of the resolutions approving the
Disposal Agreement and the Disposal.
LETTER FROM THE BOARD
– 11 –
As at the Latest Practicable Date, neither the LCR Group nor the Group have any
plan nor have entered into any agreement, arrangement, understanding, intention or
negotiation on (i) any disposal, termination and/or scaling-down of the existing business
(including the Group’s property investments) and major assets; and/or (ii) any acquisition
and/or investment in new business and/or material assets. The Company will comply with
the relevant requirements under the Listing Rules in the event of any of such transactions
are entered into.
USE OF PROCEEDS
With reference to the announcement of the Company dated 4th November, 2013,
having analysed the cash requirements of the LCR Group and distributable reserve position
of LCR after the Disposal Agreement was entered into and the Announcement was
published, the Board of LCR proposed to change the use of proceeds as disclosed in the
Announcement and approved the payment of the Conditional Special Dividend on
4th November, 2013 to distribute the excess cash as a return to the shareholders of LCR.
The net proceeds from the Disposal, after deducting expenses and related taxes attributable
to the Disposal, are estimated to be approximately HK$755.3 million (subject to adjustment
and audit), which are currently expected to be applied by LCR as to (i) approximately
HK$433.8 million for general corporate purposes of the LCR Group, including investments
(such as new or additional existing investments which may include short term and long term
investments, capital or trading in nature, property-related or financial investments) and
capital expenditure (such as expenditure which is capital in nature including but not limited
to development costs, renovation costs and capital injection); and (ii) subject to, among
others, the Completion, approximately HK$321.5 million for payment of the Conditional
Special Dividend to the shareholders of LCR to distribute the excess cash as a return to
them.
FINANCIAL EFFECTS OF THE DISPOSAL
According to the unaudited accounts of the Tecwell Group, the NAV of the Tecwell
Group was approximately HK$849.9 million as at 30th June, 2013.
The Disposal is expected to give rise to a net gain attributable to the Group of
approximately HK$81.2 million (subject to adjustment and audit).
The gain on Disposal attributable to the Group is calculated based on the difference
between the Consideration and the NAV of the Tecwell Group attributable to the Group as
of 30th June, 2013, net of relevant tax and expenses and release of exchange equalisation
reserve.
Shareholders should note that the exact amount of the gain on the Disposal to the
Group would be calculated by reference to the NAV of the Tecwell Group as at Completion
and therefore may be different from the amount mentioned above.
LETTER FROM THE BOARD
– 12 –
Based on the unaudited pro forma financial information of the Remaining Group as
set out in the Appendix III to this circular, the financial effects of the Disposal on the
Group are summarised as follows:
(i) the Group’s total assets would decrease from approximately HK$22,768 million
to HK$20,551 million, and the Group’s total liabilities would decrease from
approximately HK$7,815 million to approximately HK$5,957 million assuming
the Disposal had been completed on 31st March, 2013; and
(ii) the Group’s loss attributable to equity holders of the Company for the fifteen
months ended 31st March, 2013 would change from approximately HK$10 million
to approximately HK$190 million, which is calculated based on the assumption
that the Disposal had been completed on 1st January, 2012.
It should be noted that the aforementioned estimations are for illustrative purpose
only and do not purport to represent how the financial position and performance of the
Remaining Group will be upon Completion.
Shareholders and potential investors should note that the Disposal may or may not
proceed, as it is subject to a number of conditions, which may or may not be fulfilled.
Shareholders and potential investors are reminded to exercise caution when dealing in the
Shares.
IMPLICATION OF THE LISTING RULES
As one or more of the applicable percentage ratios in respect of the Disposal as
calculated under Rule 14.07 of the Listing Rules exceeds 75%, the Disposal constitutes a
very substantial disposal for the Company under the Listing Rules which is subject to the
reporting, announcement and shareholders’ approval requirements.
The Purchaser is a wholly-owned subsidiary of OUE Commercial Trust. Subject to,
inter alia, the authorisation of OUE Commercial Trust and the registration of the
prospectus in relation to the establishment and listing of OUE Commercial Trust by the
Monetary Authority of Singapore, and such terms and conditions which may be imposed by
the SGX-ST for such listing, units in OUE Commercial Trust will be listed on the SGX-ST.
As at the Latest Practicable Date, OUE is the sponsor of OUE Commercial Trust and
holds the only unit in OUE Commercial Trust. It is currently anticipated that OUE will be
interested in up to 50% of the issued units of OUE Commercial Trust upon the listing of
OUE Commercial Trust. The Joint Venture, being a principal joint venture of HKC, is
interested in approximately 68.02% of the issued share capital of OUE (excluding treasury
shares) as at the Latest Practicable Date. Accordingly, OUE is a joint venture of HKC. As
at the Latest Practicable Date, HKC is a subsidiary owned as to approximately 56.12% by
the Company. The Company is a controlling shareholder of LCR and is interested in
approximately 71.24% of the issued share capital of LCR. Accordingly, the Purchaser is
regarded as a connected person of LCR under the Listing Rules.
LETTER FROM THE BOARD
– 13 –
In view of the above, the Disposal is not a connected transaction for the Company, but
a very substantial disposal for the Company under Chapter 14 of the Listing Rules, which is
subject to the approval of the Shareholders at the EGM by way of poll. To the best of the
knowledge, information and belief of the Directors, having made all reasonable enquiries,
no Shareholders are required to abstain from voting to approve the resolution in respect of
the Disposal Agreement and the Disposal at the EGM.
The Joint Venture was set up to hold real estate investments and/or hospitality related
investments in the East Asia Region, including but not limited to income producing real
estate projects including commercial and residential projects, direct investments in high
potential properties and green field development projects as well as listed and/or unlisted
equity, bonds and/or equity equivalent securities of companies predominantly engaged in
real estate, hotel operations and/or hotel management. The Board of the Joint Venture
comprises two directors, who are nominated by each of HKC and Admiralty Station
Management Limited. The Joint Venture and its subsidiaries (including OUE, the Purchaser
and the OUE Commercial Trust) have not been and will not be consolidated as subsidiaries
in the financial statements of the Company or HKC after taking into account the effect of
adopting HKFRS 10 because neither the Company nor HKC has power to control over the
Joint Venture, OUE, the Purchaser and the manager of OUE Commercial Trust. As (i) none
of the Purchaser, the OUE Commercial Trust or OUE is a subsidiary of HKC; and
(ii) neither HKC nor its subsidiary is a party to the Disposal Agreement, the Disposal will
not constitute a notifiable and connected transaction to HKC under Chapters 14 and 14A
of the Listing Rules.
EGM
The notice convening the EGM to be held at Harcourt Room, Lower Lobby, Conrad
Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Tuesday, 3rd December, 2013 at
11 : 00 a.m. (or so soon thereafter as the extraordinary general meeting of LCR convened for
10 : 45 a.m. on the same date shall have been concluded or adjourned) at which an ordinary
resolution will be proposed to approve the Disposal Agreement and the Disposal as set out
on pages 85 and 86 of this circular.
A form of proxy for use at the EGM is enclosed. Whether or not you are able or intend
to attend the EGM, you are requested to complete and return the accompanying form of
proxy in accordance with the instructions printed thereon to the registered office of the
Company at 24th Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong as soon as
possible but in any event not less than 48 hours before the time appointed for the holding of
the EGM or any adjourned meeting thereof. Completion and return of the form of proxy
shall not preclude you from attending and voting in person at the EGM or any adjourned
meeting (as the case may be) should you so wish.
LETTER FROM THE BOARD
– 14 –
VOTING BY POLL AT GENERAL MEETINGS
Pursuant to the requirements under the Listing Rules, any votes of shareholders at a
general meeting must be taken by poll. Therefore, the chairman of the EGM will exercise his
power under the articles of association of the Company to demand a poll for the relevant
resolution put forward at the EGM. The Company will appoint scrutineers to handle
vote-taking procedures at the EGM. The results of the poll will be published on the
Stock Exchange’s website at www.hkexnews.hk and the Company’s website at
www.lippoltd.com.hk as soon as possible after the conclusion of the EGM.
RECOMMENDATION
The Directors (including the independent non-executive Directors but excluding
Mr. Stephen Riady who has abstained from voting on the relevant Board resolution due to
his deemed interest in the Disposal Agreement) believe that the terms of the Disposal
Agreement are on normal commercial terms, in the ordinary and usual course of business
and are fair and reasonable and are in the interests of the Company and the Shareholders as
a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the
ordinary resolution approving the Disposal Agreement and the Disposal at the EGM.
ADDITIONAL INFORMATION
Your attention is also drawn to the additional information set out in the appendices to
this circular.
Yours faithfully,
By Order of the Board
LIPPO LIMITED
John Luen Wai Lee
Managing Director and Chief Executive Officer
LETTER FROM THE BOARD
– 15 –
1. FINANCIAL INFORMATION OF THE GROUP
Details of the published financial information of the Group for each of the three
years/period ended 31st December, 2010, 31st December, 2011 and 31st March, 2013 are
disclosed in the annual reports of the Company for the year/period ended 31st December,
2010, 31st December, 2011 and 31st March, 2013 respectively. Details of these financial
statements have been published on the websites of the Stock Exchange at www.hkexnews.hk
and the Company at www.lippoltd.com.hk:
. annual report of the Company for the year ended 31st December, 2010 (pages 36
to 144);
. annual report of the Company for the year ended 31st December, 2011 (pages 38
to 141); and
. annual report of the Company for the fifteen months ended 31st March, 2013
(pages 40 to 150).
2. INDEBTEDNESS STATEMENT
As at 30th September, 2013, being the latest practicable date for the purpose of
this indebtedness statement prior to the printing of this circular, the Group had
outstanding indebtedness of approximately HK$3,032 million, comprising secured
bank loans of approximately HK$2,483 million, unsecured bank loans of
approximately HK$143 million, secured obligations under finance leases for certain
plant and equipment of approximately HK$1 million, secured bankers’ guarantees of
approximately HK$37 million, unsecured bankers’ guarantees of approximately
HK$7 million, deposits from customers, banks and other financial institutions of
approximately HK$331 million arisen from the normal course of business of The
Macau Chinese Bank Limited (‘‘MCB’’), a banking subsidiary of the Company, and
contingent liabilities of MCB of approximately HK$30 million, comprising guarantees
and other endorsements of approximately HK$17 million and liabilities under letters
of credit on behalf of customers of approximately HK$13 million.
The bank loans were secured by shares in certain listed subsidiaries of the Group,
first legal mortgages over certain investment properties, leasehold land and buildings
and properties under development, and certain bank deposits of the Group. The
obligation under finance leases are secured by the rights to the leased plant and
equipment. The bankers’ guarantees are secured by certain bank deposits of the
Group.
Save as aforesaid and apart from intra-group liabilities, the Group did not, as at
30th September, 2013, have any outstanding debt securities, whether issued and
outstanding, authorised or otherwise created but unissued, term loans, whether
guaranteed, unguaranteed, secured (whether the security is provided by the issuer or by
third parties) or unsecured, other borrowings or indebtedness in the nature of
borrowing including bank overdrafts and liabilities under acceptances (other than
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 16 –
normal trade bills) or acceptance credits or hire purchase commitments, whether
guaranteed, unguaranteed, secured or unsecured borrowings or debt, mortgages,
charges, guarantees or other material contingent liabilities.
The Directors confirms that, save as disclosed above, there are no material
changes in the indebtedness and contingent liabilities of the Group since
30th September, 2013.
It should be noted that following the adoption of HKFRS 10 ‘‘Consolidated
Financial Statements’’ from 1st April, 2013 onwards, Auric and some other associates
are treated as subsidiaries of the Group since 1st April, 2013, and the indebtedness
statement is prepared on the basis to include any indebtedness of those new
subsidiaries.
3. WORKING CAPITAL
The Directors are of the opinion that, after taking into account (i) the internal
resources available to the Remaining Group; (ii) the presently available banking facilities;
and (iii) the estimated net proceeds from the Disposal, and in the absence of unforeseeable
circumstances, the Remaining Group will have sufficient working capital for its present
requirement for at least the next twelve months from the date of this circular.
4. MATERIAL ADVERSE CHANGE
As at the Latest Practicable Date, the Directors were not aware of any material adverse
change in the financial or trading position of the Group since 31st March, 2013, being the
date to which the latest published audited financial statements of the Group were made up.
5. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP
The global economic environment has stabilised since last year but it is still
overshadowed by a considerable number of unknown factors. The Group is seeking to
streamline and strengthen its existing business to meet the challenges ahead as stated in the
annual report for the fifteen months ended 31st March, 2013. The Disposal will enable the
Group to realise the value of its investment at an opportune time and partly share the
rewards of this investment with its shareholders. The remaining proceeds will partly be used
to finance the investment and capital expenditure required by the Group’s existing principal
businesses, including property investment, property development, securities and treasury
investments, corporate finance and securities broking and banking business. Following the
Disposal, the properties at Lippo Centre in Hong Kong will form a major part of the
Group’s current investment property portfolio and continue to provide the stable and
recurring revenue to the Group. The Group has started its property development projects in
Huai An and Taizhou City, both located in Jiangsu Province, mainland China. The Huai
An project will be developed into an integrated residential, commercial and retail complex
with a total gross floor area of approximately 245,391 square metres whereas the Taizhou
City project will be developed into townhouses and residential towers with a total gross
floor area of approximately 217,146 square metres. In addition, in relation to the ‘‘securities
and treasury investment’’ segment, with the increase in working capital after the Disposal,
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 17 –
the Group will continue to cautiously manage its investment portfolio in view of the market
conditions and its business needs with a view to maximizing returns to the Shareholders.
With respect to the banking business, following the capital injection late last year, the
Group has been seeking new business opportunities and remains positive to enhance its
competitiveness in the Macau banking sector. Amid the volatile market conditions, the
Group adopts a cautious and prudent approach in conducting its corporate finance and
securities broking business.
6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP
(a) Business review for the fifteen months ended 31st March, 2013
Operating results
The Company’s financial year end date was changed from 31st December to
31st March. The financial period covered a fifteen-month period from
1st January, 2012 to 31st March, 2013. For the fifteen months ended
31st March, 2013, the revenue of the Remaining Group was approximately
HK$348 million. The significant increase in revenue as compared to the revenue
of the Remaining Group of approximately HK$201 million in 2011 was mainly
due to the disposal of a held-for-sale property in Singapore at approximately
HK$78 million in 2012/13.
The Group’s performance was affected by the weak property sector in certain
key markets. During the year ended 31st December, 2011, the Remaining Group’s
share of results of associates was approximately HK$1,126 million which was
mainly attributable to the fair value gain of a property held by an associate which
was completed in that year and the share of profit recognised from the sale of
properties by another associate. However, during the fifteen months ended
31st March, 2013, neither the Remaining Group nor its associates had any fair
value gain arisen from completion of their property projects, and less profit was
recognised from the sale of properties and high finance costs were incurred by the
associates. Against this backdrop, the Remaining Group recorded a consolidated
loss attributable to shareholders of approximately HK$252 million for the fifteen
months ended 31st March, 2013, as compared to a consolidated profit of
approximately HK$605 million for the year ended 31st December, 2011.
Business review
For the fifteen months ended 31st March, 2013, the Remaining Group was
principally engaged in (i) property investment including letting and resale of
properties; (ii) property development including development and sale of
properties; (iii) treasury investment including investments in cash and bond
markets; (iv) securities investment including dealings in securities and disposals of
investments; (v) the corporate finance and securities broking which provide
securities and futures brokerage, investment banking, underwriting and other
related advisory services; (vi) banking business which engages in the provision of
commercial and retail banking services; and (vii) other businesses comprise
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 18 –
principally mineral exploration, extraction and processing, food business, the
development of computer hardware and software, money lending and the
provision of property, project and fund management and investment advisory
services. The performance analysis of these business segments is shown as follows:
(i) Property investment
Property investment business continued to provide stable and recurring
rental income to the Remaining Group. Total revenue from the property
investment business for the fifteen months ended 31st March, 2013 amounted
to approximately HK$108 million, an increase of approximately 21% as
compared to approximately HK$89 million in 2011. Lippo Centre in Hong
Kong, being the landmark of the Remaining Group in Hong Kong,
continued to contribute significant results to the Remaining Group. Given
the quality and strategic location of the investment properties, the Remaining
Group recorded revaluation gains on its investment properties of a total of
approximately HK$125 million for the period as compared to approximately
HK$271 million in 2011.
For the fifteen months ended 31st March, 2013, the Remaining Group
completed the disposal of a number of residential units in Hong Kong at an
aggregate consideration of approximately HK$622 million and recognised a
gain of approximately HK$68 million. The disposals represented an
opportunity for the Remaining Group to realise a good profit at
appropriate time. As a result of such disposals as well as the above
mentioned revaluation gains, the Remaining Group’s investment properties
were reduced from approximately HK$2.3 billion as at 31st December, 2011
to approximately HK$1.9 billion as that as at 31st March, 2013.
During the fifteen months ended 31st March, 2013, as part of an internal
group restructuring, Lippo ASM Asia Property Limited (‘‘LAAPL’’), a joint
venture, was set up by Lippo ASM Asia Property LP to hold the controlling
stake in OUE, a listed company in Singapore principally engaged in property
investment and development and hotel operation. The Remaining Group’s
economic interest in OUE remains unchanged after the above group
restructuring. The hotels managed by OUE, including Mandarin Orchard
Singapore and the Crowne Plaza Changi Airport, are strategically located in
various well known tourist destinations of Singapore, Malaysia and
mainland China. The investment property portfolio in Singapore, which
includes OUE Bayfront, a Grade A office building near Marina Bay, OUE
Downtown (formerly known as 6 Shenton Way Towers One and Two or
DBS Building Towers One and Two) and Mandarin Gallery at Orchard
Road, provided a strong recurring source of revenue to OUE. Plans are
underway to convert the podium of 6 Shenton Way Towers One and Two
into a retail space with a wide range of options including retail, food and
beverage and a supermarket. Subsequent to the period end, OUE disposed of
its interest in Mandarin Orchard Singapore and Mandarin Gallery to a real
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 19 –
estate investment trust known as OUE Hospitality Real Estate Investment
Trust at a consideration of approximately S$1,705 million (the ‘‘Properties
Disposal’’). OUE maintained the ability to operate Mandarin Orchard and
manage Mandarin Gallery. The consideration for the Properties Disposal
was paid in combination of cash and stapled securities in
OUE Hospitality Trust (the ‘‘OUE H-REIT’’). The Properties Disposal was
approved by the shareholders of OUE in June 2013 and the Properties
Disposal was completed on 25th July, 2013, when the listing and
commencement of trading of the stapled securities in the OUE H-REIT
took place on the SGX-ST.
OUE also holds interests in One Raffles Place (comprising Tower One
and the newly-completed Tower Two) which is located at the central financial
and business district of Singapore. The retail mall at One Raffles Place is
under refurbishment which is expected to be completed in early 2014. Pre-sale
of a residential property development project, named as Twin Peaks, at
33 Leonie Hill Road in Singapore is still in progress. The Remaining Group
registered a share of loss of approximately HK$272 million from the
investment during the fifteen months ended 31st March, 2013 (as compared
to a share of profit of approximately HK$855 million in 2011). The change
was mainly due to the absence of the significant fair value gain recognised
upon completion of any investment property and the higher finance costs
incurred during the period. As a result of the share buy-back by OUE during
the period, the fund’s interest in OUE increased from approximately 65.55%
as at 31st December, 2011 to approximately 68.02% as at 31st March, 2013
and recorded a net increase of share of equity interest of approximately
HK$193 million. Together with the share of other reserves and taking into
account the above share of loss, the Remaining Group’s interest in the
investment increased to approximately HK$8.2 billion (as compared to
HK$7.8 billion as at 31st December, 2011).
(ii) Property development
The Remaining Group has participated in a number of well-located
property development projects in mainland China, Macau, Singapore and
other areas of the Asia Pacific region.
Total revenue from the property development business for the fifteen
months ended 31st March, 2013 amounted to approximately HK$78 million
due to the sale of a held-for-sale property in Singapore and a gain of
approximately HK$16 million was recognised.
In mainland China, construction of an integrated residential,
commercial and retail complex at the Beijing Economic-Technological
Development Area (the ‘‘BDA Project’’) was progressing well. Pre-sale has
been launched since July 2011. A substantial part of the residential units,
office blocks and the retail mall have been sold out. Approximately 82% of
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 20 –
the total saleable area had been pre-sold up to 31st March, 2013 at a total
consideration of approximately RMB3.1 billion. This project was expected to
be completed later in 2013 and construction works had been substantially
finished as at 31st March, 2013. The Remaining Group also participated in
other development projects in Huai An City (the ‘‘Huai An Project’’) and
Taizhou City (the ‘‘Taizhou Project’’), both in the Jiangsu Province. Huai An
Project will be developed into an integrated residential, commercial and retail
complex whereas Taizhou Project is a residential project comprising
townhouses and residential apartments. Both projects were under planning
and design stage. Constructions were expected to be commenced later in
2013.
In Macau, main contract works of ‘‘M Residences’’, a property
development project, have commenced and are expected to be completed in
2014. Pre-sale has been launched since November 2011 and has received
satisfactory response. About 92% of the saleable area of the residential units
have been pre-sold as at 31st March, 2013 at a total consideration of
approximately HK$1.1 billion.
The revenue and the profit arising from the above property development
projects will be reflected in the Remaining Group’s results in the respective
year of completion. The segment loss for the period was mainly due to
marketing and selling expenses incurred for the pre-sale activities and certain
pre-operating costs charged to the income statement during the period. As a
result of the project cost incurred during the period, the Remaining Group’s
property under development increased to approximately HK$2.7 billion as at
31st March, 2013 (as compared to HK$1.5 billion as at 31st December, 2011).
The Remaining Group has interests in ‘‘Marina Collection’’ in Sentosa
Cove, Singapore, a joint venture development project completed in April
2011. For the fifteen months ended 31st March, 2013, a further share of
profit of approximately HK$125 million (as compared to approximately
HK$264 million in year 2011) was recorded from this project, mainly arising
from the sale of properties during the period. All the units of Centennia
Suites, another joint venture property development project at Kim Seng
Road, Singapore, had been sold out during the pre-sale in 2010. Profit arising
therefrom is expected to be recognised upon completion of the development
in the second half of 2013.
The Remaining Group is interested in a development project at
326 Woonbook-dong, Jung-gu, Incheon, Korea (the ‘‘MIDAN City
Project’’). The MIDAN City Project is a comprehensive property project to
be developed into a self-contained community with an approved total gross
floor area of approximately three million square metres. In order to
strengthen the working capital, capital injection was made by one of the
existing shareholders in April 2012. As a result, the Remaining Group’s
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 21 –
interest in the MIDAN City Project was reduced from 47.9% to 38.5% and
recorded a gain on deemed disposal of approximately HK$24 million for the
period. The marketing of the project is in progress.
(iii) Treasury investment and securities investment
The investment market continued to be challenging and full of
uncertainties. The Remaining Group cautiously managed its investment
portfolio and looked for opportunities to realise its profit. For the fifteen
months ended 31st March, 2013 :
(a) revenue for treasury investment of approximately HK$19 million
was recorded, representing an increase of approximately 149% as
compared to approximately HK$8 million in 2011; and
(b) revenue for securities investment of approximately HK$32 million,
or an increase of approximately 76% as compared to
approximately HK$18 million in 2011, was recorded from the
disposal of the Remaining Group’s financial assets held for trading
and dividend income and interest income received from the
investment portfolio. At the same time, the Remaining Group
recognised a total net gain of approximately HK$89 million (as
compared to approximately HK$5 million in 2011) from the
realisation of available-for-sale financial assets through the sale
of a subsidiary which owned the financial assets and direct disposal
in the market.
In the highly volatile investment markets, the performance of the
securities investments was diverse and an unrealised fair value loss was
recorded. The treasury and securities investments business attained a net
profit of approximately HK$66 million for the fifteen months ended
31st March, 2013, (as compared to a net loss of approximately
HK$2 million in 2011) after including the provision of approximately
HK$23 million made for some investments.
(iv) Corporate finance and securities broking
During the fifteen months ended 31st March, 2013, the sentiments in the
investment markets were affected by uncertainties resulting from unresolved
eurozone sovereign debt crisis and threat of China economic slowdown.
Investors remained selective and vigilant in the highly volatile markets. The
Remaining Group’s corporate finance and securities broking business was
adversely affected. It registered a turnover of approximately HK$42 million
for the fifteen months ended 31st March, 2013 (as compared to
HK$44 million in 2011) and a loss of approximately HK$15 million was
derived from this segment (as compared to approximately HK$21 million in
2011).
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 22 –
(v) Banking business
MCB, a licensed bank in Macau, is a wholly-owned subsidiary of HKC.
The operating environment was still challenging because of strong
competition, high operating costs and subdued global economic activities.
Nevertheless, MCB remained positive to the development and growth in the
region, continued to focus on customers need, and seeked opportunities to
launch new products and services to enlarge its customer base. In this regard,
the Remaining Group injected approximately HK$78 million capital into
MCB to strengthen its financial position during the fifteen months ended
31st March, 2013.
(vi) Other businesses
Other businesses mainly comprised mineral exploration, extraction and
processing, food business, the development of computer hardware and
software, money lending and the provision of property, project and fund
management and investment advisory services. The growth and recovery of
the Remaining Group’s various investments was hindered by the external
uncertainties of the developed economies. Moreover, some of the investments
concentrate on new products which are at the early development stage.
Total revenue from other businesses for the fifteen months ended
31st March, 2013 was approximately HK$50 million, representing an
increase of approximately 65% from approximately HK$30 million in 2011.
However, market acceptance and competitions from other competitors
were uncertain and provision of approximately HK$37 million was made for
the fifteen months ended 31st March, 2013 (as compared to approximately
HK$0.4 million in 2011). As a result, the other businesses segment recorded a
loss of approximately HK$47 million (as compared to approximately
HK$22 million in 2011).
Liquidity, financial resources and charge on assets
The Remaining Group financed its liquidity requirements through a
combination of cash flow generated from operations and bank borrowings. As
at 31st March, 2013, the Remaining Group had cash and bank balances of
approximately HK$2.1 billion (as compared to approximately HK$1.1 billion in
2011). As at 31st March, 2013, the bank loans of the Remaining Group decreased
to approximately HK$1.8 billion (as compared to approximately HK$2.2 billion
in 2011). The bank loans were denominated in Hong Kong dollars and Renminbi
and were secured by certain properties, shares in certain subsidiaries of the
Remaining Group and certain bank deposits. As at 31st March, 2013, the bank
loans carried interest at floating rates and approximately 33% (as compared to
11% as at 31st December, 2011) of the bank loans were repayable within one year.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 23 –
As at 31st March, 2013, gearing ratio (measured as total borrowings, net of
non-controlling interests, to shareholders’ funds of the Remaining Group) was
16.8% (as compared to 20.1% as at 31st December, 2011).
Capital Structure and foreign exchange risk
During the fifteen months ended 31st March, 2013, the Company
repurchased 7,282,000 Shares at a total consideration of approximately
HK$22.6 million.
Besides, HKC repurchased 8,816,000 shares and LCR repurchased 6,640,000
shares at a total consideration of approximately HK$10.8 million and
HK$1.2 million respectively. In December 2012, HKC and LCR issued
3,881,000 shares and 2,300,000 shares respectively upon the exercise of share
options by the option holders and received a total cash consideration of
approximately HK$5 million. As a consequence, the Remaining Group’s
interest in HKC slightly increased from approximately 56.0% as at
31st December, 2011 to approximately 56.1% as at 31st March, 2013 and the
Remaining Group’s interest in LCR slightly increased from approximately
71.21% as at 31st December, 2011 to approximately 71.24% as at 31st March,
2013.
Save for the aforesaid, there was no change in the Remaining Group’s capital
structure.
The Remaining Group monitored the relative foreign exchange position of its
assets and liabilities to minimise foreign currency risk. During the fifteen months
ended 31st March, 2013, the Remaining Group had entered into forward contract
to manage exposures to fluctuations of foreign exchange rates. When appropriate,
additional hedging instruments including forward contracts, swap and currency
loans would be used to manage the foreign exchange exposure.
Contingent liabilities and capital commitment
As at 31st March, 2013, the Remaining Group had contingent liabilities
relating to its banking subsidiary of approximately HK$21 million comprising
guarantees and other endorsements of approximately HK$15 million and
liabilities under letters of credit on behalf of customers of approximately
HK$6 million. Aside from those arising from the normal course of the
Remaining Group’s banking operation as aforementioned, the Remaining
Group provided guarantees in respect of banking facilities granted to Tecwell
Group amounted to approximately HK$1,168 million, which were utilized to an
extent of approximately HK$1,127 million as at 31st March, 2013.
As at 31st March, 2013, the Remaining Group’s total commitment amounted
to approximately HK$897 million, a decrease of approximately 4% from
approximately HK$939 million as at 31st December, 2011, which was mainly
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 24 –
related to the property development projects held by the Remaining Group. The
investments or capital assets will be financed by the Remaining Group’s internal
resources and/or external bank financing, as appropriate.
Significant investments, material acquisitions and disposals
Apart from the abovementioned significant transactions under the ‘‘Business
review’’ section, the Remaining Group had the following significant investments,
material acquisitions and disposals.
During the fifteen months ended 31st March, 2013, the Remaining Group
further increased its interest in Skye Mineral Partners, LLC (‘‘Skye’’) for a total
consideration of US$11.2 million. As a result, the Remaining Group had an
effective interest of 8,649 Class A units in Skye, representing approximately
17.3% of the total issued and outstanding Class A units in Skye and
approximately 16.5% of the total issued and outstanding units in Skye.
Through CS Mining, LLC (‘‘CS Mining’’), its majority owned subsidiary, Skye
owns and controls a number of copper ore deposits located in the Milford Mineral
Belt in Beaver County, State of Utah in the U.S., and is engaged in the business of
mining and processing primarily copper, with additional recoveries of silver, gold
and iron ore. CS Mining obtained all its required operating permits for mining
and flotation processing and had started commercial operation. In order to
maximise the recovery of its copper resource, CS Mining plans to set up a leaching
facility.
In March 2012, the Remaining Group entered into a subscription agreement
with Haranga Resources Limited (‘‘Haranga’’) for the subscription of 15,000,000
new ordinary shares in Haranga at an aggregate subscription price of A$6 million.
Together with additional shares acquired by the Remaining Group from the
market, the Remaining Group is interested in a total of 32,470,000 shares in,
representing approximately 13.43% of, the existing issued share capital of
Haranga. Haranga had reported that its drilling programmes have identified a
significant increase in JORC Code (Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves) compliant resource in its Selenge iron ore
project in Mongolia. Haranga expected that further drilling can expand the
resource base in the above project, and is currently in the process of applying for a
mining licence. Haranga is listed on the Australian Securities Exchange and is
primarily engaged in the acquisition, exploration and development of iron ore
projects in Mongolia, and owns a controlling interest in four separate iron ore
projects in Mongolia.
In August 2012, Lippo Investments Management Limited (‘‘LIM’’), a
wholly-owned subsidiary of the Company, successfully launched the Lippo
Select HK & Mainland Property Index. Such index adopts fundamental indexing
with a free-float adjusted market capitalisation-weighted methodology and
comprises property related securities listed on the Main Board of the Stock
Exchange, including property stocks and real estate investment trusts from Hong
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 25 –
Kong and the mainland China region. In September 2012, Lippo Select HK &
Mainland Property ETF (the ‘‘ETF’’) (stock code: 2824), an exchange traded fund
managed by LIM, was successfully launched and listed on the Stock Exchange. In
September 2012, the Remaining Group acquired units in the ETF for a total
consideration of approximately HK$78 million.
In December 2012, the Remaining Group completed the disposal of a
property located at 259 Ocean Drive, Sentosa Cove in Sentosa Island, Singapore
for a consideration of S$22 million.
In January 2013, the Remaining Group together with other joint venture
partners (the ‘‘Consortium’’), including Caesars Entertainment Corporation
(‘‘Caesars’’), a company listed on the NASDAQ Stock Market, entered into
various agreements which established the terms on which the parties agreed to
seek preliminary governmental approval (the ‘‘Preliminary Review Application’’)
that would allow the parties to design, develop, construct and own an integrated
resort located in Incheon, Korea which will include, inter alia, hotels and service
apartments (the ‘‘IR Project’’). The joint venture entity is intended to be owned by
the Remaining Group as to 20% and by Caesars as to 40%. In the event the series
of transactions related to the IR Project are concluded, it is intended that Caesars
or its affiliate(s) would construct and operate an integrated hotel-casino. The
Remaining Group will not participate or engage in any gaming business in the
IR Project. In June 2013, the Remaining Group was notified that the Preliminary
Review Application submitted by the Consortium was declined by the Ministry of
Culture, Sports and Tourism of the Republic of Korea (‘‘MCST’’). The
Consortium has been in discussions with the relevant governmental bodies in
Korea with a view to resolving the issues which lead to the Preliminary Review
Application being declined and has been considering its position. If the issues
which lead to the Preliminary Review Application being declined can be resolved,
the Consortium will consider submitting a new application to MCST.
In February 2013, the Remaining Group entered into a conditional
subscription agreement in relation to the subscription of 184,653,669 new shares
in GSH Corporation Limited (‘‘GSH’’) for an aggregate subscription price of
approximately S$17.5 million under a private placement. GSH is listed on the
Main Board of the SGX-ST, and is primarily engaged in the business of
distribution of IT, photographic and timepiece products and is looking to
diversify into the real estate business.
In June 2013, Auric Pacific Group Limited (‘‘Auric’’, together with its
subsidiaries, the ‘‘APG Group’’), a listed company in Singapore in which the
Remaining Group was interested in approximately 49.3% of its issued share
capital, announced that its wholly-owned subsidiary would make a voluntary
unconditional cash offer to acquire all the issued and paid up ordinary shares in
the capital of Food Junction Holdings Limited (‘‘Food Junction’’), a listed
company in Singapore, other than treasury shares and those already owned,
controlled or agreed to be acquired by Auric and its subsidiaries, at an offer price
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 26 –
of S$0.255 in cash for each share (the ‘‘Offer’’). Immediately before the Offer, the
APG Group was interested in approximately 61.4% of the issued share capital of
Food Junction (excluding treasury shares). Auric was of the view that the Offer
represented an opportunity for Auric to acquire an increased stake in Food
Junction as part of its strategic investments. Auric believed that there were
synergistic benefits to be obtained by increasing its stake in Food Junction, whose
current portfolio of food courts and restaurants would complement Auric’s
existing portfolio, and the increase in the sharing of resources relating to
marketing and operations between both Auric and Food Junction would
contribute to the growth of both companies. The Offer was closed on 14th
August, 2013 and APG Group held 93.13% of all the shares in Food Junction
immediately after the Offer. Following which, Food Junction had applied to the
SGX-ST for its delisting from the SGX-ST and SGX-ST had on 18th September,
2013 stated, inter alia, that it had no objection to the proposed delisting of Food
Junction.
The Remaining Group also owns interests in Asia Now Resources Corp.
(‘‘Asia Now’’), a listed company in Canada and is primarily engaged in the
business of exploration of mineral deposits in Yunnan Province, mainland China.
During the fifteen months ended 31st March, 2013, Asia Now reviewed the results
of its exploration activities on each of the exploration site. Due to a lack of
exploration prospects, Asia Now decided to discontinue further exploration
activities on some of the sites in Beiya, Yunnan Province and a write-down of
C$3.4 million was made. For the site at Habo, Yunnan Province, an impairment
of C$3.5 million was made. Asia Now is currently focusing on the exploration of
the site at Ma Touwan in Beiya.
Auric, Food Junction and Asia Now were regarded as associates of the
Remaining Group before 1st April, 2013. Following the adoption of HKFRS 10
‘‘Consolidated Financial Statements’’ from 1st April, 2013 onwards, Auric, Food
Junction and Asia Now are treated as subsidiaries of the Remaining Group and
retrospective adjustments are required.
The Remaining Group made an initial investment in Export and Industry
Bank, Inc. (‘‘EIB’’), a commercial bank incorporated in the Philippines, in 1996
but over the years the investment in EIB was fully written down. During the
fifteen months ended 31st March, 2013, the Bangko Sentral ng Pilipinas issued a
resolution placing EIB under receivership and Philippine Deposit Insurance
Corporation took over EIB to implement this. As such, all the investments in EIB
are derecognised and a loss on derecognition of associate of HK$61 million was
recorded, which represented the related cumulative foreign exchange translation
loss transferred from the equity to the income statement.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 27 –
Employee and remuneration policies
The Remaining Group had 425 employees as at 31st March, 2013, as
compared to 403 employees as at 31st December, 2011. Staff costs (including
directors’ emoluments) charged to the income statement during the period
amounted to approximately HK$215 million, as compared to approximately
HK$155 million in 2011. The Remaining Group ensured that its employees were
offered competitive remuneration packages. Certain employees of the Remaining
Group were granted options in prior years under share option scheme of the
Company. All outstanding options which remained unexercised by the expiry date
in December 2012 lapsed accordingly.
Future plans for material investments and acquisition of capital assets
There was no specific plan for material investments and acquisition of capital
assets as at 31st March, 2013.
(b) Business review for the year ended 31st December, 2011
Operating Results
For the year ended 31st December, 2011, the revenue of the Remaining
Group was approximately HK$201 million, which was decreased by 31% as
compared with revenue in 2010 of approximately HK$290 million due to the
absence of revenue generated by a Chinese restaurant in Hong Kong which was
disposed of in 2010 and the drop in revenue generated from the project
management business as most of the property development projects managed
were either completed or nearing the completion stage in 2011.
Benefiting from steady economic growth in the Asia region in which the
Remaining Group had operations, the Remaining Group recorded a profit
attributable to shareholders of HK$605 million (as compared to
HK$1,512 million in 2010 when profit from discontinued operation was
excluded). The profit was mainly attributable to the fair value gain of
investment properties of the Remaining Group’s subsidiaries and associates and
the share of profit from the sale of certain residential units upon completion of
property development projects in Singapore during 2011.
Business review
For the year ended 31st December, 2011, the Remaining Group was
principally engaged in (i) property investment including letting and resale of
properties; (ii) property development including development and sale of
properties; (iii) treasury investment including investments in cash and bond
markets; (iv) securities investment including dealings in securities and disposals of
investments; (v) corporate finance and securities broking which provide securities
and futures brokerage, investment banking, underwriting and other related
advisory services; (vi) the banking business which engages in the provision of
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 28 –
commercial and retail banking services; and (vii) other businesses including food
business, development of computer hardware and software, money lending and
the provision of property, project and fund management and investment advisory
services. The performance analysis of these business segments is shown as follows:
(i) Property investment
Property investment business continued to provide stable and recurring
revenue to the Remaining Group. Total revenue from the property
investment business for the year ended 31st December, 2011 amounted to
approximately HK$89 million (as compared to approximately HK$97 million
in 2010).
Given the quality and strategic location of the investment properties, the
Remaining Group recorded revaluation gains on its investment properties of
a total of approximately HK$271 million during the year ended
31st December, 2011 as compared to approximately HK$238 million in 2010.
The Remaining Group has invested in a property fund, Lippo ASM Asia
Property LP (together with its subsidiaries, the ‘‘LAAP Group’’), which has
indirect interests in OUE, a listed company in Singapore principally engaged
in property investment and development and hospitality business. The hotels
managed by OUE, including Mandarin Orchard Singapore and the Crowne
Plaza Changi Airport Hotel acquired in 2011, are strategically located in
various well known tourist destinations of Singapore, Malaysia and
mainland China. OUE Bayfront, a prime office building near Marina Bay,
obtained the temporary occupation permit in January 2011 and started to
generate rental income. Together with DBS Building Towers One and Two
acquired in September 2010 and Mandarin Gallery, a premier luxury retail
mall at Orchard Road, Singapore, the investment property portfolio
provided a higher and recurring source of revenue to OUE. OUE also
holds interests in One Raffles Place near Marina Bay, the central financial
and business district of Singapore. One Raffles Place Tower Two, a 38-storey
Grade A office building adjoining One Raffles Place Tower One, is expected
to commence leasing in 2012. Pre-sale of a residential property development
project, namely Twin Peaks, at 33 Leonie Hill Road in Singapore has started.
The Remaining Group registered a share of profit of approximately
HK$855 million from the LAAP Group during the year ended
31st December, 2011 (as compared to approximately HK$2,649 million in
2010). The profit was mainly attributable to the fair value gain on OUE
Bayfront and higher income from the hospitality division and property
investment division. LAAP’s controlling stake in OUE decreased from
approximately 67.1% as at 31st December, 2010 to approximately 65.6% as
at 31st December, 2011. During the year, a net increase of the share of equity
interest of HK$78 million was recorded directly in the reserves of the LAAP
Group, mainly due to the share buy-back by OUE.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 29 –
The Remaining Group continued to look for opportunities to realise the
increase in value of its property assets. During the year ended 31st December,
2011, the Remaining Group completed the disposal of several office units in
Beijing and a residential unit in Hong Kong at an aggregate consideration of
approximately HK$157 million. The disposals represented a good
opportunity for the Remaining Group to realise the profits.
(ii) Property development
The Remaining Group has participated in a number of well-located
property development projects in mainland China, Macau, Singapore and
Thailand.
In Singapore, Marina Collection and The Holland Collection, joint
venture development projects in Sentosa Cove and Holland Road
respectively, were completed in 2011. Profits arising from the sold units
have been recognised and the Remaining Group recorded share of profit of
approximately HK$282 million from these projects during the year. Pre-sale
of Centennia Suites, another property development project at Kim Seng
Road, was launched and all units were sold out in 2010. Centennia Suites is
scheduled to be completed in 2013, and profit arising therefrom will be
recognised upon completion of the development.
In mainland China, construction of an integrated residential,
commercial and retail complex at the Beijing Economic-Technological
Development Area is progressing well and is expected to be completed in
2013. With the pre-sale permit obtained in July 2011, pre-sale has been
launched. In June 2011, the Remaining Group successfully won the bid for
the land use right of a piece of land with a site area of approximately 80,615
square metres in Taizhou City, Jiangsu Province for a consideration of
RMB145 million, which is a residential development project comprising
townhouses and residential towers. The Remaining Group also participated
in another development project in Huai An, Jiangsu Province with a site area
of approximately 41,087 square metres, which will be developed into an
integrated residential, commercial and retail complex and is currently in
planning and design stage. The Remaining Group remained cautious in light
of the changing market conditions and would timely adjust its development
strategies accordingly.
Foundation work of ‘‘M Residences’’, a property development project in
Macau, also commenced in 2011. Pre-sale has been launched since November
2011 and has received satisfactory response. M Residences is expected to be
completed in 2014.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 30 –
The Remaining Group was interested in approximately 47.9% of the
MIDAN City Project. The MIDAN City Project is a comprehensive property
project to be developed into a self-contained community with an approved
total gross floor area of approximately three million square metres.
Marketing of the project is in progress.
(iii) Treasury investment and securities investment
For the year ended 31st December, 2011, treasury and securities
investments business recorded a total revenue of approximately
HK$26 million (as compared to approximately HK$33 million in 2010),
with a net loss of approximately HK$2 million (as compared to a net profit of
approximately HK$26 million in 2010). The drop was mainly attributable to
the fair value loss on security investments. The global investment market is
challenging and full of uncertainties. Anticipating future volatility, the
Remaining Group cautiously managed its investment portfolio with a
continuing focus on improving the overall asset quality.
(iv) Corporate finance and securities broking
In 2011, market sentiments were adversely affected by uncertainties
resulting from the post-earthquake recession in Japan, Eurozone financial
crisis and inflation pressures. Investors have become cautious in the highly
volatile markets. The Remaining Group’s corporate finance and securities
broking business was also affected, recording a turnover of approximately
HK$44 million in 2011 (as compared to approximately HK$49 million in
2010) and a loss of approximately HK$21 million (as compared to
approximately HK$2 million in 2010).
(v) Banking business
MCB, a licensed bank in Macau, is a wholly-owned subsidiary of HKC.
Although the Macau economy has rebounded since 2010, the operating
environment has been tough because of increasing operating costs and
inflation pressure. MCB managed to maintain the quality of its client and
loan portfolio, and management continued to lend conservatively and seek
growth in areas where appropriate. The banking business recorded a
turnover of approximately HK$11 million (as compared to approximately
HK$14 million in 2010), and contributed profit to the Remaining Group.
(vi) Other businesses
Total revenue from other businesses for the year ended 31st December,
2011 was approximately HK$30 million, representing a decrease of
approximately 69% from approximately HK$97 million in 2010. The
decrease was mainly attributable to the disposal of a Chinese restaurant in
Hong Kong to an associate in November 2010 and the lower revenue
generated from the project management business as mentioned above.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 31 –
In January 2011, the Remaining Group acquired the interest of
Pantogon Holdings Pte Ltd from Jeremiah Holdings Limited, a 60%
subsidiary of the LCR. Following the completion of the transaction, the
Remaining Group increased its effective interest in Auric, a listed company in
Singapore, from approximately 19.9% to approximately 28.1%. Auric is
mainly engaged in food manufacturing, wholesale and distribution, food
retail and food court operation as well as property and securities investment.
The Remaining Group recorded a share of profit of approximately
HK$26 million during the year ended 31st December 2011, as compared to
approximately HK$18 million in 2010.
Liquidity, financial resources and charge of assets
The Remaining Group financed its liquidity requirements through a
combination of cash flow generated from operations and bank borrowings. As
at 31st December, 2011, the Remaining Group had cash and bank balances of
approximately HK$1.1 billion (as compared to approximately HK$0.9 billion in
2010). As at 31st December, 2011, bank loans of the Remaining Group increased
to approximately HK$2.2 billion, as compared to approximately HK$1.7 billion
in 2010. The bank loans were secured by certain properties, shares in certain
subsidiaries and certain bank deposits of the Remaining Group and denominated
in Hong Kong dollars and Renminbi (as compared to Hong Kong dollars,
Renminbi and United States dollars in 2010). All the bank loans carried interest at
floating rates. Approximately 11% (as compared to 32% in 2010) of the bank
loans were repayable within one year. As at 31st December, 2011, the gearing
ratio (measured as total borrowings, net of non-controlling interests, to
shareholders’ funds of the Remaining Group) was 20.1% (as compared to
17.2% as at 31st December, 2010).
Capital Structure and foreign exchange risk
In April 2011, the Remaining Group exercised the warrants issued by HKC
(the ‘‘HKC Warrants’’) to subscribe for a total of 106,764,864 shares of HKC with
a total consideration of HK$133 million. This subscription enabled the Remaining
Group to maintain its percentage interest in HKC. Since some of the warrant
holders did not exercise the warrants, the Remaining Group’s interest in HKC
increased from approximately 55.8% as at 31st December, 2010 to approximately
56.0% as at 31st December, 2011. On 4th July, 2011, the subscription rights under
the HKC Warrants and the Company’s warrants expired and their listing status
were also withdrawn on the same date.
Save for the aforesaid, there was no change in the Remaining Group’s capital
structure.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 32 –
During the year ended 31st December, 2011, the Remaining Group
monitored the relative foreign exchange position of its assets and liabilities to
minimise foreign currency risk. When appropriate, hedging instruments including
forward contracts, swap and currency loans would be used to manage foreign
exchange exposure.
Contingent liabilities and capital commitment
As at 31st December, 2011, the Remaining Group had contingent liabilities
relating to its banking subsidiary of approximately HK$25 million, comprising
guarantees and other endorsements of approximately HK$15 million and
liabilities under letters of credit on behalf of customers of approximately
HK$10 million. Aside from those arising from the normal course of the
Remaining Group’s banking operation, the Remaining Group had no material
contingent liabilities outstanding.
As at 31st December, 2011, the Remaining Group’s total capital commitment
increased by 37% to approximately HK$939 million from approximately
HK$683 million in 2010, mainly attributable to the property development
projects held by the Remaining Group. The investments or capital assets will be
financed by the Remaining Group’s internal resources and/or external bank
financing, as appropriate.
Significant investments, material acquisitions and disposals
Apart from the abovementioned significant transactions under the ‘‘Business
review’’ section, the Remaining Group had the following significant investments,
material acquisitions and disposals for the year ended 31st December, 2011.
The Remaining Group also owns approximately 49.9% interest in Asia Now,
a company whose shares are listed on the TSX Venture Exchange of Canada and
is primarily engaged in the business of exploration of mineral deposits in
mainland China. Asia Now was focus on the exploration of the site at Beiya in
Yunnan Province and an independent technical report prepared in accordance
with the National Instrument 43-101 and the Canadian Institute of Mining,
Metallurgy and Petroleum Standard Definitions for Mineral Projects on the initial
mineral resource estimate for the deposit was released in January 2012.
In November 2011, the Remaining Group entered into an agreement for the
disposal of the entire issued share capital of Winnery Limited (‘‘Winnery’’) for a
consideration of Rp240 billion. An initial payment of Rp24 billion had been
received by the Remaining Group and the balance of the consideration was
received in the final completion date in late 2012. Winnery held 480 million shares
in PT Lippo Karawaci Tbk, a company incorporated in Indonesia and whose
shares are listed on the Indonesia Stock Exchange. The above disposal represented
a good opportunity for the Remaining Group to realise a gain from its
investments and enable the Company to have additional capital and to, in the
future, consider suitable investment opportunities if and when presented to it.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 33 –
In December 2011, the Remaining Group had acquired 14,470,000 ordinary
shares in, representing approximately 7.35% of the then issued share capital of,
Haranga for an aggregate consideration of approximately A$4 million. Haranga is
listed on the Australian Securities Exchange and is primarily engaged in the
acquisition, exploration and development of iron ore projects in Mongolia and
owns a controlling interest in four separate iron ore projects in Mongolia. In
addition, the Remaining Group acquired in November 2011 an attributable
interest of 8% of the total issued and outstanding Class A units in Skye for a
consideration of US$4.88 million. Skye, through its majority owned subsidiary,
CS Mining, owns and controls a few copper ore deposits located in the Milford
Mineral Belt in Beaver County, State of Utah in the United States of America,
and is expected to engage in the business of mining and processing copper and
possibly other minerals following receipt of the appropriate permits. The above
acquisitions had provided another opportunity for the Remaining Group to invest
in the promising mineral resource industry.
Employee and remuneration policies
The Remaining Group had 403 employees as at 31st December, 2011, as
compared to 341 employees as at 31st December, 2010. The increase in the number
of employees was mainly due to the expansion of the property development team
in mainland China. Staff costs (including directors’ emoluments) charged to the
income statement during the year ended 31st December, 2011 amounted to
approximately HK$155 million, as compared to approximately HK$217 million in
2010. The Remaining Group ensured that its employees were offered competitive
remuneration packages. Certain employees of the Remaining Group were granted
options under the share option scheme of the Company.
Future plans for material investments and acquisition of capital assets
There was no specific plan for material investments and acquisition of capital
assets as at 31st December, 2011.
(c) Business review for the year ended 31st December, 2010
Operating Results
For the year ended 31st December, 2010, the revenue of the Remaining
Group was approximately HK$290 million and the Remaining Group recorded a
profit attributable to its shareholders of approximately HK$1,690 million, which
was mainly contributed by the property valuation gain and the disposal of the
retail business, as well as the fair value gains on investment properties and
write-back of impairment loss made for a property project under the Remaining
Group’s associates.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 34 –
Business review
For the year ended 31st December, 2010, the Remaining Group was
principally engaged in (i) property investment including letting and resale of
properties; (ii) property development including development and sale of
properties; (iii) treasury investment including investments in cash and bond
markets; (iv) securities investment including dealings in securities and disposals of
investments; (v) corporate finance and securities broking which provide securities
and futures brokerage, investment banking, underwriting and other related
advisory services; (vi) the banking business which engages in the provision of
commercial and retail banking services; (vii) other businesses including food
business, development of computer hardware and software, money lending and
the provision of property, project and fund management and investment advisory
services; and (viii) retail business engaged in the operation of department stores.
The performance analysis of these business segments is shown as follows:
(i) Property investment
Property investment business generated revenue of approximately
HK$97 million for the year ended 31st December, 2010. Lippo Centre in
Hong Kong, being the landmark of the Remaining Group in Hong Kong,
continued to achieve satisfactory occupancy rates and registered an increase
of rental income in 2010. Given the quality and strategic location of the
investment properties, the Remaining Group recorded a total revaluation
gain on investment properties of HK$238 million. As a result, the profit
generated from the property investment sector increased to approximately
HK$351 million in 2010.
The Remaining Group had invested in a property fund, Lippo ASM
Asia Property LP (‘‘LAAP’’), which had indirect interests in OUE, a listed
company in Singapore principally engaged in property investment and
development and hotel operations. The hotels managed by OUE, including
Mandarin Orchard Singapore, are strategically located in various well known
tourist destinations of Singapore, Malaysia and mainland China. Mandarin
Gallery, a premier luxury retail mall at Orchard Road, Singapore commenced
operation in the fourth quarter of 2009. Together with the DBS Building
Towers One and Two acquired in September 2010, the investment property
portfolio provided a recurrent source of revenue to OUE during the year
ended 31st December, 2010. OUE also holds interests in prime office
buildings, such as One Raffles Place and OUE Bayfront near Marina Bay, in
the central financial and business district of Singapore. OUE has participated
in a residential property development project, named as Twin Peaks at
25 Leonie Hill Road in Singapore. In 2010, the Remaining Group registered a
share of profit of approximately HK$2,649 million from the investment. The
profit was mainly attributable to the fair value gains on investment
properties and write-back of impairment loss made for the property under
development. The remarkable results were also contributed by the improved
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 35 –
performance of the hospitality business which benefited from the substantial
increase in tourist arrivals in Singapore and the new rental income from
Mandarin Gallery and DBS Building Towers One and Two.
In March 2010, LAAP, through its subsidiary, acquired the direct and
indirect interest in OUE held by a joint venture partner, which increased its
controlling stake in OUE to approximately 88.52% and resulted in a gain
recorded in the reserves. Subsequently, two placement of shares of OUE to
third parties had been completed in June and October 2010, which decreased
its controlling stake in OUE to approximately 67.07% and reduced the
amount of the reserves. These transactions had no impact on the Remaining
Group’s profit for the year.
(ii) Property development
The Remaining Group participated in a number of well-located property
development projects in mainland China, Macau, Singapore and Thailand.
TOP of the Marina Collection, a joint venture development in Sentosa Cove,
in which HKC, a listed subsidiary of the Company has a 50% interest, was
obtained in March 2011. Pre-sale has been launched and income thereon
would be recognised accordingly. Other projects in Singapore include
Centennia Suites, and The Holland Collection, development at Kim Seng
Road and Holland Road, respectively. Pre-sale of both projects was launched
and all units have been sold out. Centennia Suites and The Holland
Collection are scheduled to be completed in 2013 and end of 2011
respectively. Revenue thereon will be recognised upon completion.
In mainland China, the construction works of an integrated residential,
commercial and retail complex at the Beijing Economic-Technological
Development Area, have commenced in 2010 and were expected to be
completed by end of 2012. In August 2010, the Remaining Group had
successfully won the bid for a piece of land in Huai An City in mainland
China for the development of an integrated residential, commercial and retail
complex.
The Group was interested in approximately 47.9% of the MIDAN City
Project. This was a comprehensive property project to be developed into a
self-contained community with an approved total gross floor area of
approximately three million square metres. The marketing of the project is
in progress.
(iii) Treasury investment and securities investment
Due to the uncertainty around the global economy, the financial market
remains volatile. The Remaining Group cautiously looked for opportunities
to realise its profit in the investment portfolio. For the year ended
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 36 –
31st December, 2010, treasury and securities investments business recorded a
total revenue of approximately HK$33 million, with a profit of
approximately HK$26 million.
(iv) Corporate finance and securities broking
Despite global economy gradually recovering, participation from retail
investors remained cautious in this highly volatile market. The Remaining
Group’s corporate finance and securities broking business was affected. It
registered a decrease in turnover in 2010 to approximately HK$49 million
and a loss of approximately HK$2 million.
(v) Banking business
MCB is a wholly-owned subsidiary of HKC. Although the Macau
economy has rebounded during the year, the operating environment is still
tough. MCB managed to maintain the quality of its client and loan portfolio.
Management continued to lend conservatively and seek growth in areas
where appropriate in a selective manner. The banking business recorded a
turnover of approximately HK$14 million for the year, and delivered a profit
to the Group.
(vi) Other businesses
Total revenue from other businesses for the year ended 31st December,
2010 was approximately HK$97 million, mainly contributed from a Chinese
restaurant in Hong Kong which was disposed in November 2010 and the
revenue generated from property project management in Singapore.
(vii)Retail business
In August 2010, the Remaining Group entered into an agreement to sell
the retail business in mainland China under the trade name of ‘‘Robbinz’’,
comprising the existing two stores in Tianjin and Chengdu as well as a new
store in Yangzhou, to a subsidiary of PT Multipolar Tbk (‘‘Multipolar’’) for
an aggregate cash consideration of HK$345 million and an option for three
years to buy back 20% interest therein (the ‘‘Sale’’), resulting in a gain on
disposal of HK$341 million. The retail business had been loss making,
contributing turnover of approximately HK$126 million to the Remaining
Group with net operating loss of approximately HK$92 million for 2010. The
Sale could facilitate Robbinz to leverage on Multipolar’s significant interests
and expertise in the retail sector to achieve necessary economies of scale and
improve its performance where the Remaining Group held an option to buy
back 20% interest therein. The Sale was completed on 15th October, 2010.
Following the Sale, the Remaining Group ceased to engage in the retail
business. The turnover and the results of the retail business up to the date of
completion are presented separately as discontinued operation in the
financial statements.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 37 –
Liquidity, financial resources and charge of assets
The Remaining Group financed its liquidity requirements through a
combination of cash flow generated from operations and bank borrowings. As
at 31st December, 2010, the Remaining Group had cash and bank balances of
approximately HK$0.9 billion. As at 31st December, 2010, bank loans of the
Remaining Group amounted to approximately HK$1.7 billion. The bank loans
were secured by certain properties, shares in certain subsidiaries and certain fixed
deposits of the Remaining Group and were denominated in Hong Kong dollars,
United States dollars and Renminbi. All the bank loans carried interest at floating
rates and 32% of the bank loans were repayable within one year. As at
31st December, 2010, gearing ratio (measured as total borrowings, net of
non-controlling interests, to shareholders’ funds of the Remaining Group) was
approximately 17.2%.
Capital Structure and foreign exchange risk
During the year ended 31st December, 2010, there was no change in the
Remaining Group’s capital structure.
During the year ended 31st December, 2010, the Remaining Group
monitored the relative foreign exchange position of its assets and liabilities to
minimise foreign currency risk. When appropriate, hedging instruments including
forward contracts, swap and currency loans would be used to manage foreign
exchange exposure.
Contingent liabilities and capital commitment
As at 31st December, 2010, the Remaining Group had contingent liabilities
relating to its banking subsidiary of approximately HK$18 million, comprising
guarantees and other endorsements of approximately HK$11 million and
liabilities under letters of credit on behalf of customers of approximately
HK$7 million. Aside from those arising from the normal course of the
Remaining Group’s banking operation, the Remaining Group had no material
contingent liabilities outstanding.
As at 31st December, 2010, the Remaining Group’s total capital commitment
was approximately HK$683 million as a result of the property development
projects held by the Remaining Group. The investments or capital assets will be
financed by the Remaining Group’s internal resources and/or external bank
financing, as appropriate.
Significant investments, material acquisitions and disposals
Apart from the abovementioned significant transactions under the ‘‘Business
review’’ section, the Remaining Group had the following significant investments,
material acquisitions and disposals for the year ended 31st December, 2010.
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 38 –
In September 2010, the Remaining Group entered into a conditionalagreement with a wholly-owned subsidiary of Food Junction for the disposal ofits entire interest in All Around Limited for a cash consideration of approximatelyHK$31 million. The material assets of All Around Limited were 90% interest inthe share capital of LCR Catering Services Limited which was engaged in theoperation of a Chinese restaurant in Hong Kong. The above disposal wascompleted in November 2010.
The Remaining Group entered into a conditional subscription agreement inSeptember 2010 with Asia Now, a company listed on the TSX Venture Exchangeof Canada for the subscription by the Remaining Group of 42,400,000 newcommon shares in Asia Now (the ‘‘Asia Now Shares’’) for an aggregateconsideration of approximately C$12.7 million (the ‘‘Subscription’’). TheSubscription was completed in November 2010, after which the RemainingGroup was interested in an aggregate of 55,429,908 Asia Now Shares,representing approximately 49.9%, on a non-diluted basis (and approximately47.5%, on a fully diluted basis) of the issued and outstanding Asia Now Shares.Asia Now is a company primarily engaged in the business of exploration ofmineral deposits in the mainland China. The Subscription represented a strategicinvestment of the Remaining Group in the promising mineral resource industry.
Employee and remuneration policies
The Remaining Group had 341 employees as at 31st December, 2010. Totalstaff costs (including directors’ emoluments) charged to the income statementduring the year ended 31st December, 2010 amounted to approximatelyHK$217 million. The Remaining Group ensured that its employees were offeredcompetitive remuneration packages. Certain employees of the Remaining Groupwere granted options under share option scheme of the Company.
Future plans for material investments and acquisition of capital assets
There was no specific plan for material investments and acquisition of capitalassets as at 31st December, 2010.
7. RECONCILIATION OF VALUATION OF THE PROPERTY
RHL Appraisal Limited, an independent property valuer, has valued the Property as at30th September, 2013. Details of the valuation report are set out in Appendix IV to thiscircular. As required under Rule 5.07 of the Listing Rules, the reconciliation betweenvaluation of the Property as at 30th September, 2013 and the book value of the Property asat 30th June, 2013 is as follows:
HK$’000
Book value as at 30th June, 2013(as extracted from Appendix II to this circular) 2,548,482
Additions 15,573Changes with valuation (15,573)Exchange realignment 11,835
Valuation as at 30th September, 2013(as extracted from Appendix IV to this circular) 2,560,317
APPENDIX I FINANCIAL INFORMATION OF THE GROUP
– 39 –
Set out below are the unaudited consolidated statement of financial position of the
Tecwell Group as at 31st December, 2010, 31st December, 2011, 31st March, 2013 and
30th June, 2013 and the unaudited consolidated income statements, consolidated statements
of comprehensive income, consolidated statements of changes in equity and consolidated
statements of cash flows for each of the years ended 31st December, 2010 and
31st December, 2011, the fifteen months ended 31st March, 2013 and the three months
ended 30th June, 2013 (collectively, the ‘‘Unaudited Consolidated Financial Information of
the Tecwell Group’’), which have been prepared in accordance with Rule 14.68(2)(a)(i)(A)
of the Listing Rules.
The auditors of the Company, Ernst & Young, have reviewed the Unaudited
Consolidated Financial Information of the Tecwell Group 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 and concluded that nothing has come to their attention that
causes them to believe that the Unaudited Consolidated Financial Information of the
Tecwell Group is not prepared, in all material respects, in accordance with the basis of
preparation set out in note 2 to the Unaudited Consolidated Financial Information of the
Tecwell Group.
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 40 –
UNAUDITED CONSOLIDATED INCOME STATEMENTS
For each of the years ended 31st December, 2010 and 31st December, 2011, the fifteen months
ended 31st March, 2013 and three months ended 30th June, 2013
For the year
ended 31st
December,
2010
For the year
ended 31st
December,
2011
For the fifteen
months ended
31st March,
2013
For the three
months ended
30th June,
2013
HK$’000 HK$’000 HK$’000 HK$’000
Revenue 107,818 137,264 180,050 37,952
Cost of sales (3,897) (3,110) (4,830) (1,640)
Gross profit 103,921 134,154 175,220 36,312
Administrative expenses (3,786) (3,853) (4,956) (1,017)
Other operating expenses (21,970) (25,284) (36,371) (4,447)
Fair value gain/(loss) on
investment properties 423,358 97,671 429,553 (355,538)
Net fair value gain/(loss) on
financial instruments
at fair value through
profit or loss — — (33,020) 2,520
Finance costs (21,944) (23,413) (55,754) (19,062)
Profit/(loss) before tax 479,579 179,275 474,672 (341,232)
Income tax (120,966) (45,601) (134,374) 83,374
Profit/(loss) for the year/period 358,613 133,674 340,298 (257,858)
Attributable to:
Equity holders of the
Company 340,590 131,182 340,298 (257,858)
Non-controlling interests 18,023 2,492 — —
358,613 133,674 340,298 (257,858)
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 41 –
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For each of the years ended 31st December, 2010 and 31st December, 2011, the fifteen months
ended 31st March, 2013 and three months ended 30th June, 2013
For the year
ended 31st
December,
2010
For the year
ended 31st
December,
2011
For the fifteen
months ended
31st March,
2013
For the three
months ended
30th June,
2013
HK$’000 HK$’000 HK$’000 HK$’000
Profit/(loss) for the year/period 358,613 133,674 340,298 (257,858)
Other comprehensive income
Exchange differences on
translation of foreign
operations 38,107 74,089 8,623 24,061
Other comprehensive
income for the
year/period, net of tax 38,107 74,089 8,623 24,061
Total comprehensive
income/(loss) for the
year/period 396,720 207,763 348,921 (233,797)
Attributable to:
Equity holders of the
Company 378,970 204,627 348,921 (233,797)
Non-controlling interests 17,750 3,136 — —
396,720 207,763 348,921 (233,797)
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 42 –
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31st December, 2010 and 2011, 31st March, 2013 and 30th June, 2013
31st December,
2010
31st December,
2011
31st March,
2013
30th June,
2013
HK$’000 HK$’000 HK$’000 HK$’000
NON-CURRENT ASSETS
Fixed assets 635 626 690 689
Prepayments — — 5,001 4,750
Investment properties 2,196,430 2,421,361 2,864,142 2,548,482
Other financial asset — — — 2,432
Total non-current assets 2,197,065 2,421,987 2,869,833 2,556,353
CURRENT ASSETS
Debtors, prepayments and
deposits 2,898 2,767 5,626 6,348
Amount due from the immediate
holding company — — 226,981 219,530
Restricted cash — — 32,989 33,639
Cash and bank balances 58,680 25,010 45,346 82,075
Total current assets 61,578 27,777 310,942 341,592
CURRENT LIABILITIES
Amounts due to fellow
subsidiaries 29 73,395 46,438 47,080
Amount due to a shareholder 21,747 21,982 — —
Other payables, accruals and
deposits received 89,924 94,850 94,618 94,686
Bank loans 47,008 49,340 8,668 8,788
Tax payable 19,135 22,076 15,872 16,395
Total current liabilities 177,843 261,643 165,596 166,949
NET CURRENT ASSETS/
(LIABILITIES) (116,265) (233,866) 145,346 174,643
TOTAL ASSETS LESS
CURRENT LIABILITIES 2,080,800 2,188,121 3,015,179 2,730,996
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 43 –
31st December,
2010
31st December,
2011
31st March,
2013
30th June,
2013
HK$’000 HK$’000 HK$’000 HK$’000
NON-CURRENT LIABILITIES
Amounts due to shareholders 467,130 466,637 — —
Bank loans 333,737 300,956 1,088,772 1,115,415
Other financial liabilities — — 32,440 32,023
Deferred tax liabilities 405,375 466,243 590,761 514,149
Total non-current liabilities 1,206,242 1,233,836 1,711,973 1,661,587
NET ASSETS 874,558 954,285 1,303,206 1,069,409
CAPITAL AND RESERVES
Share capital 1 1 1 1
Reserves 805,302 954,284 1,303,205 1,069,408
805,303 954,285 1,303,206 1,069,409
Non-controlling interests 69,255 — — —
TOTAL EQUITY 874,558 954,285 1,303,206 1,069,409
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 44 –
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For each of the years ended 31st December, 2010 and 31st December, 2011, the fifteen months
ended 31st March, 2013 and the three months ended 30th June, 2013
Attributable to equity holders of the Company
Issued
capital
Exchanges
equalisation
reserve
Retained
profits Total
Non-
controlling
interests
Total
equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1st January, 2010 1 98,561 327,771 426,333 51,505 477,838
Profit for the year — — 340,590 340,590 18,023 358,613
Other comprehensive income for the year:
Exchange differences on translation of
foreign operations — 38,380 — 38,380 (273) 38,107
Total comprehensive income for the year — 38,380 340,590 378,970 17,750 396,720
At 31st December, 2010 and
at 1st January, 2011 1 136,941 668,361 805,303 69,255 874,558
Profit for the year — — 131,182 131,182 2,492 133,674
Other comprehensive income for the year:
Exchange differences on translation of
foreign operations — 73,445 — 73,445 644 74,089
Total comprehensive income for the year — 73,445 131,182 204,627 3,136 207,763
Changes in non-controlling interest without
change in control — — (55,645) (55,645) (69,757) (125,402)
Dividend paid to non-controlling
shareholder of the Company — — — — (2,634) (2,634)
At 31st December, 2011 and
at 1st January, 2012 1 210,386 743,898 954,285 — 954,285
Profit for the period — — 340,298 340,298 — 340,298
Other comprehensive income for the period:
Exchange differences on translation of
foreign operations — 8,623 — 8,623 — 8,623
Total comprehensive income for the period — 8,623 340,298 348,921 — 348,921
At 31st March, 2013 and at 1st April, 2013 1 219,009 1,084,196 1,303,206 — 1,303,206
Loss for the period — — (257,858) (257,858) — (257,858)
Other comprehensive income for the period:
Exchange differences on translation of
foreign operations — 24,061 — 24,061 — 24,061
Total comprehensive income/(loss)
for the period — 24,061 (257,858) (233,797) — (233,797)
At 30th June, 2013 1 243,070 826,338 1,069,409 — 1,069,409
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 45 –
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For each of the years ended 31st December, 2010 and 31st December, 2011, the fifteen months
ended 31st March, 2013 and the three months ended 30th June, 2013
For the
year ended
31st December,
2010
For the
year ended
31st December,
2011
For the fifteen
months ended
31st March,
2013
For the three
months ended
30th June,
2013
HK$’000 HK$’000 HK$’000 HK$’000
Cash flows from operating
activities
Profit/(loss) before tax 479,579 179,275 474,672 (341,232)
Adjustments for:
Loss on disposal of fixed
assets — — 61 —
Net fair value (gain)/loss on
investment properties (423,358) (97,671) (429,553) 355,538
Net fair value (gain)/loss on
financial instruments at
fair value through profit
or loss — — 33,020 (2,520)
Finance costs 21,944 23,413 55,754 19,062
Interest income (832) (502) (906) (83)
Depreciation 321 39 49 11
77,654 104,554 133,097 30,776
Decrease/(increase) in
debtors, prepayments and
deposits (1,812) 131 (7,860) (728)
Increase/(decrease) in other
payables, accruals and
deposits received 14,235 11,670 (2,308) (2,422)
Cash generated from
operations 90,077 116,355 122,929 27,626
Interest received 832 502 906 83
Overseas tax paid (7,413) (10,470) (19,453) (2,840)
Net cash flows from operating
activities 83,496 106,387 104,382 24,869
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 46 –
For the
year ended
31st December,
2010
For the
year ended
31st December,
2011
For the fifteen
months ended
31st March,
2013
For the three
months ended
30th June,
2013
HK$’000 HK$’000 HK$’000 HK$’000
Cash flows from investing
activities
Additions to investment
properties (40,086) (16,475) — —
Payments to acquire
fixed assets (22) — (172) —
Net cash flows used in
investing activities (40,108) (16,475) (172) —
Cash flows from financing
activities
Drawdown of bank loans — — 1,128,842 21,034
Repayments of bank loans (45,908) (48,211) (353,820) (2,197)
Finance costs paid (21,997) (23,355) (83,446) (15,964)
Movements of balances
between the
Tecwell Group and the
Remaining Group 1,423 73,109 (742,558) 8,805
Payment relating to change in
non-controlling interests — (125,402) — —
Dividends paid to
non-controlling shareholder
of the subsidiary — (2,634) — —
Increase in restricted cash — — (32,989) (445)
Net cash flows from/(used in)
financing activities (66,482) (126,493) (83,971) 11,233
Net increase/(decrease) in cash
and cash equivalents (23,094) (36,581) 20,239 36,102
Cash and cash equivalents at
beginning of year/period 79,030 58,680 25,010 45,346
Exchange realignments 2,744 2,911 97 627
Cash and cash equivalents
at end of year/period 58,680 25,010 45,346 82,075
ANALYSIS OF BALANCES
OF
CASH AND CASH
EQUIVALENTS
Cash and bank balances 58,680 25,010 45,346 82,075
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 47 –
NOTES TO THE FINANCIAL INFORMATION OF THE TECWELL GROUP
For each of the years ended 31st December, 2010 and 31st December, 2011, the fifteen months
ended 31st March, 2013 and the three months ended 30th June, 2013
1. GENERAL INFORMATION
On 16th October, 2013, LCR and the Purchaser entered into the Disposal Agreement,
pursuant to which, LCR conditionally agreed to procure the sale of, and the Purchaser
conditionally agreed to purchase the Sale Shares, representing the entire issued share capital
of Tecwell, for the Consideration of approximately HK$843.5 million (subject to
adjustment, if any), which shall be satisfied in cash on the Completion Date. Upon
Completion, the Tecwell Group will cease to be the subsidiaries of the Company.
2. BASIS OF PREPARATION
The Unaudited Consolidated Financial Information of the Tecwell Group has been
prepared in accordance with Rule 14.68(2)(a)(i) of the Listing Rules, and solely for the
purposes of inclusion in the circular in connection with the proposed transaction.
The Unaudited Financial Information of the Tecwell Group has been prepared on the
historical cost basis, except for investment properties and certain financial instruments
which have been measured at fair value. The Unaudited Financial Information of the
Tecwell Group has been prepared using the same accounting policies as those adopted by
the Group in the preparation of the consolidated financial statements of the Group for the
fifteen months ended 31st March, 2013, which conform with HKFRSs (which include all
Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (‘‘HKASs’’)
and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants
(‘‘HKICPA’’).
The Unaudited Financial Information of the Tecwell Group does not contain sufficient
information to constitute a complete set of financial statements as defined in Hong Kong
Accounting Standard 1 (Revised) ‘‘Presentation of Financial Statements’’ issued by the
HKICPA or a set of condensed financial statements as defined in Hong Kong Accounting
Standard 34 ‘‘Interim Financial Reporting’’.
APPENDIX II FINANCIAL INFORMATION OF THE TECWELL GROUP
– 48 –
1. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING
GROUP
(a) Basis of preparation of the unaudited pro forma financial information of the
Remaining Group
The unaudited pro forma financial information of the Remaining Group (the
‘‘Unaudited Pro Forma Financial Information’’) which has been prepared on the basis
of the notes set out below is presented to illustrate the effect of the Disposal on (a) the
financial position of the Remaining Group as if it had taken place on 31st March,
2013; and (b) the financial performance and cash flows of the Remaining Group for the
fifteen months ended 31st March, 2013 as if it had taken place on 1st January, 2012.
This Unaudited Pro Forma Financial Information has been prepared by the
Directors of the Company in accordance with paragraph 4.29 of the Listing Rules for
illustrative purposes only, based on their judgments, estimations and assumptions, and
because of its hypothetical nature, it may not give a true picture of the financial
position of the Remaining Group as at 31st March, 2013 or at any future date or of the
financial performance and cash flows of the Remaining Group for the fifteen months
ended 31st March, 2013 or for any future period.
The Unaudited Pro Forma Financial Information should be read in conjunction
with the audited consolidated financial statements of the Group for the fifteen months
ended 31st March, 2013 as set out in the annual report of the Company for the fifteen
months ended 31st March, 2013 and other financial information included elsewhere in
this circular.
The Unaudited Pro Forma Financial Information is prepared based on the
audited consolidated statement of financial position of the Group as at 31st March,
2013, and the audited consolidated income statement, the audited consolidated
statement of comprehensive income and the audited consolidated statement of cash
flows of the Group for the fifteen months ended 31st March, 2013 extracted from the
audited consolidated financial statements of the Group for the fifteen months ended
31st March, 2013 as set out in the annual report of the Company for the fifteen months
ended 31st March, 2013, after making pro forma adjustments relating to the Disposal
as described in the notes set out below that are (i) directly attributable to the Disposal
and not relating to any future events or decisions; (ii) factually supportable; and
(iii) considered to be integral to the Disposal.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 49 –
(b) Unaudited pro forma consolidated statement of financial position
Consolidated
statement of
financial
position of
the Group as at
31st March, 2013 Pro forma adjustments
Unaudited
pro forma
of the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(a)) (Note iii) (Note iv(a)) (Note vi(a))
NON-CURRENT ASSETS
Goodwill 71,485 71,485
Fixed assets 150,647 (689) 149,958
Investment properties 4,721,327 (2,548,482) (315,660) 1,857,185
Interests in associates 9,877,290 (24,584) 9,852,706
Interests in jointed controlled
entities 99,553 99,553
Available-for-sale financial
assets 344,198 344,198
Loans and advances 65,321 65,321
Other financial asset 17,639 (2,432) 15,207
15,347,460 12,455,613
CURRENT ASSETS
Properties held for sale 23,033 23,033
Properties under development 2,724,676 2,724,676
Loans and advances 267,160 267,160
Debtors, prepayments and
deposits 457,837 35,982 493,819
Financial assets at fair value
through profit or loss 359,546 359,546
Other financial asset 7,275 7,275
Client trust bank balances 356,002 356,002
Restricted cash 1,087,363 (33,639) 650 1,054,374
Treasury bills 9,700 9,700
Cash and bank balances 2,127,509 (82,075) (650) 755,262 2,800,046
7,420,101 8,095,631
CURRENT LIABILITIES
Bank loans 617,583 (8,788) 608,795
Creditors, accruals and
deposits received 3,778,437 (94,686) 3,683,751
Amount due to the Tecwell
Group — 219,530 (219,530)
Current, fixed, savings and
other deposits of customers 266,786 266,786
Other financial liabilities 35,713 35,713
Tax payable 48,657 (16,395) 32,262
4,747,176 4,627,307
NET CURRENT ASSETS 2,672,925 3,468,324
TOTAL ASSETS LESS
CURRENT LIABILITIES 18,020,385 15,923,937
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 50 –
Consolidated
statement of
financial
position of
the Group as at
31st March, 2013 Pro forma adjustments
Unaudited
pro forma
of the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(a)) (Note iii) (Note iv(a)) (Note vi(a))
NON CURRENT
LIABILITIES
Bank loans 2,328,354 (1,115,415) 1,212,939
Other financial liabilities 32,440 (32,023) 417
Deferred tax liabilities 707,059 (514,149) (76,612) 116,298
3,067,853 1,329,654
NET ASSETS 14,952,532 14,594,283
CAPITAL AND RESERVES
Share capital 49,316 49,316
Reserves 8,799,246 (173,163) (170,298) 81,174 8,536,959
8,848,562 8,586,275
Non-controlling interests 6,103,970 (69,907) (68,750) 42,695 6,008,008
TOTAL EQUITY 14,952,532 14,594,283
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 51 –
(c) Unaudited pro forma consolidated income statement
Consolidated
income statement
of the Group
for the fifteen
months ended
31st March,
2013 Pro forma adjustments
Unaudited
pro forma
of the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000(Note i) (Note ii(b)) (Note iv(b)) (Note v)
Revenue 528,221 (180,050) 348,171Cost of sales (108,471) 4,830 (103,641)
Gross profit 419,750 244,530
Administrative expenses (276,093) 4,956 (271,137)Other operating expenses (254,438) 36,310 (218,128)Fair value gain on investment
properties 554,728 (429,553) 125,175Gain on disposal of
investment properties 68,282 68,282
Gain on disposal of fixedassets 8,539 61 8,600
Gain on disposal of
subsidiaries 69,491 9,481 78,972Gain on disposal of available-
for-sale financial assets 19,531 19,531Gain on deemed disposal of
an associate 24,065 24,065Loss on derecognition of
associates (61,528) (61,528)
Net fair value loss onfinancial instruments at fairvalue through profit or loss (59,667) 33,020 (26,647)
Provision for impairmentlosses:Associates (36,771) (36,771)Available for sales financial
assets (23,251) (23,251)Properties under development (156) (156)
Finance costs (108,438) 55,754 (52,684)
Share of results of associates (204,546) 100,422 (104,124)Share of result of jointly
controlled entities (299) (299)
Profit/(Loss) before tax 139,199 (225,570)Income tax (158,889) 134,374 (24,515)
Loss for the period (19,690) (250,085)
Attributable to:
Equity holders of theCompany (10,002) (242,428) 6,213 56,357 (189,860)
Non-controlling interests (9,688) (97,870) 3,268 44,065 (60,225)
(19,690) (250,085)
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 52 –
(d) Unaudited pro forma consolidated statement of comprehensive income
Consolidated
statement of
comprehensive
income of
the Group for the
fifteen months
ended 31st March,
2013 Pro forma adjustments
Unaudited
pro forma
of the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(b)) (Note iv(b)) (Note v)
Loss for the period (19,690) (340,298) 9,481 100,422 (250,085)
Other comprehensive income/(loss)
Available-for-sale financial assets:
Changes in fair value 87,256 87,256
Reclassification adjustments for disposal (14,893) (14,893)
Reclassification adjustment relating to
disposal of a subsidiary (78,020) (78,020)
Income tax effect (1,635) (1,635)
(7,292) (7,292)
Surplus on revaluation of leasehold
land and buildings 8,885 8,885
Income tax effect (1,066) (1,066)
7,819 7,819
Share of other comprehensive loss of
associates
Share of changes in fair value of
available-for-sale financial assets 105,638 105,638
Share of effective portion of changes in fair
value of cash flow hedges of an associates 4,336 4,336
Share of exchange differences on translation
of foreign operations 295,085 2,545 297,630
405,059 407,604
Exchange differences on translation of
foreign operations 61,409 (8,623) 52,786
Reclassification adjustment relating to
deemed disposal of a foreign associate 10,504 10,504
Reclassification adjustment relating to
derecognition of a foreign associate 61,365 61,365
Reclassification adjustment relating to
disposal of foreign operations — (210,386) (210,386)
Other comprehensive income for the period,
net of tax 538,864 322,400
Total comprehensive income
for the period 519,174 72,315
Attributable to:
Equity holders of the Company 303,691 (248,571) (143,666) 57,785 (30,761)
Non-controlling interests 215,483 (100,350) (57,239) 45,182 103,076
519,174 72,315
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 53 –
(e) Unaudited pro forma consolidated statement of cash flows
Consolidated
statement of
cash flow
of the Group for
the fifteen months
ended 31st March,
2013 Pro forma adjustments
Unaudited
pro forma of
the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(c)) (Note iv(b), (c)) (Note v) (Note vi(b))
Cash flows from operating
activities
Profit/(Loss) before tax 139,199 (474,672) 9,481 100,422 (225,570)
Adjustments for:
Share of results of associates 204,546 (100,422) 104,124
Share of results of jointly
controlled entities 299 299
Loss/(Gain) on disposal of:
Fixed assets (8,539) (61) (8,600)
Investment properties (68,282) (68,282)
Held-to-maturity financial
assets (570) (570)
Subsidiaries (69,491) (9,481) (78,972)
A jointly controlled entity (310) (310)
Available-for-sale
financial assets (19,531) (19,531)
Gain on deemed disposal of
an associate (24,065) (24,065)
Loss on derecognition of an
associate 61,528 61,528
Provisions for impairment losses:
Associates 36,771 36,771
A jointly controlled entity 2,219 2,219
Available-for-sale
financial assets 23,251 23,251
Properties held for sale (465) (465)
Properties under development 156 156
Net fair value loss on
financial instruments at
fair value through profit
or loss 59,667 (33,020) 26,647
Write-back of allowance for
bad and doubtful debts (5,328) (5,328)
Fair value gains on
investment properties (554,728) 429,553 (125,175)
Finance costs 108,438 (55,754) 52,684
Interest income (41,555) 906 (40,649)
Dividend income (6,701) (6,701)
Depreciation 16,467 (49) 16,418
(147,024) (280,121)
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 54 –
Consolidated
statement of
cash flow
of the Group for
the fifteen months
ended 31st March,
2013 Pro forma adjustments
Unaudited
pro forma of
the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(c)) (Note iv(b), (c)) (Note v) (Note vi(b))
Decrease in properties held for
sale 61,915 61,915
Increase in properties under
development (948,994) (948,994)
Increase in deposits paid for
properties under development (121,650) (121,650)
Increase in financial instruments
at fair value through profit
or loss (128,832) (128,832)
Decrease in loans and advances (85,567) (85,567)
Increase in debtors, prepayments
and deposits (266,555) 7,860 (258,695)
Decrease in client trust bank
balances 194,345 194,345
Increase in restricted cash (580,034) (580,034)
Increase in creditors, accruals
and deposits received 2,079,807 2,308 2,082,115
Increase in current, fixed,
savings and other deposits of
customers 146,561 146,561
Cash generated from operations 203,972 81,043
Interest received 41,525 (906) 40,619
Dividends received from:
An associate 11,522 11,522
A jointly controlled entity 3,165 3,165
Listed investments 3,017 3,017
Unlisted investments 3,459 3,459
Tax paid:
Hong Kong (2,327) (2,327)
Overseas (25,315) 19,453 (5,862)
Net cash flows from operating
activities 239,018 134,636
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 55 –
Consolidated
statement of
cash flow
of the Group for
the fifteen months
ended 31st March,
2013 Pro forma adjustments
Unaudited
pro forma of
the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(c)) (Note iv(b), (c)) (Note v) (Note vi(b))
Cash flows from investing
activities
Proceeds from disposal of:
Fixed assets 136,876 136,876
Investment properties 617,816 617,816
Held-to-maturity financial
assets 17,686 17,686
Available-for-sale financial
assets 45,062 45,062
Payments to acquire:
Fixed assets (22,054) 172 (21,882)
Held-to-maturity financial
assets (18,418) (18,418)
Available-for-sale financial
assets (127,771) (127,771)
Increase in interests in associates (49,816) (49,816)
Advance to associates (94,518) (94,518)
Investment in a jointly
controlled entity (79,066) (79,066)
Decrease in interests in a jointly
controlled entity 2,400 2,400
Repayment from jointly
controlled entities 184,104 184,104
Disposal of subsidiaries, net of
cash and cash equivalents
disposed of 173,976 755,262 929,238
Increase in time deposits with
original maturity of more
than three months (200,988) (200,988)
Net cash flows from investing
activities 585,289 1,340,723
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 56 –
Consolidated
statement of
cash flow
of the Group for
the fifteen months
ended 31st March,
2013 Pro forma adjustments
Unaudited
pro forma of
the
Remaining
Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Note i) (Note ii(c)) (Note iv(b), (c)) (Note v) (Note vi(b))
Cash flows from financing
activities
Interest paid (128,702) 83,446 (45,256)
Drawdown of bank loans (Note) 1,479,422 (1,128,842) 350,580
Repayments of bank and other
borrowings (Note) (1,101,061) 353,820 (747,241)
Movement of balances between
the Tecwell Group and the
Remaining Group — 742,558 (226,981) 515,577
Repurchases of shares (22,563) (22,563)
Repurchases of shares by
subsidiaries (11,998) (11,998)
Exercise of share options by
option holders of subsidiaries 5,039 5,039
Repayment to non-controlling
shareholders of subsidiaries (20,146) (20,146)
Dividends paid to shareholders
of the Company (49,770) (49,770)
Dividends and distributions paid
to non-controlling
shareholders of subsidiaries (87,209) (87,209)
Increase in pledged bank
deposits (39,498) 32,989 (6,509)
Net cash flows from/(used in)
financing activities 23,514 (119,496)
Net increase in cash and cash
equivalents 847,821 1,355,863
Cash and cash equivalents at
beginning of period 1,085,542 (25,010) 1,060,532
Exchange realignments 2,858 (97) 2,761
Cash and cash equivalents at end
of period 1,936,221 2,419,156
Analysis of balances of cash and
cash equivalents:
Cash and bank balances 2,127,509 (45,346) 755,262 (226,981) 2,610,444
Treasury bills 9,700 9,700
Time deposits with original
maturity of more than
three months (200,988) (200,988)
1,936,221 2,419,156
Note: The amounts exclude bank loans drawn down by the Group for lending to its margin clients
in respect of the initial public offerings. All such bank loans were fully repaid during the
period.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 57 –
(f) Notes to the Unaudited Pro Forma Financial Information
(i) The figures are extracted from the audited consolidated financial statements
of the Group for the fifteen months ended 31st March, 2013 as set out in
annual report of the Company for the fifteen months ended 31st March,
2013.
(ii) The adjustments represent:
(a) the exclusion of the assets, liabilities and exchange equalisation reserve
of the Tecwell Group as at 30th June, 2013, as extracted from the
unaudited consolidated statement of financial position of the Tecwell
Group as at 30th June, 2013 as set out in Appendix II of this circular, as
if the Disposal had taken place on 31st March, 2013.
(b) the exclusion of the results and other comprehensive income of the
Tecwell Group for the fifteen months ended 31st March, 2013, as
extracted from the unaudited consolidated income statement and the
unaudited consolidated statement of comprehensive income of the
Tecwell Group for the fifteen months ended 31st March, 2013 as set out
in Appendix II of this circular, as if the Disposal had taken place on
1st January, 2012.
(c) the exclusion of cash flows of the Tecwell Group for the fifteen months
ended 31st March, 2013, as extracted from the unaudited consolidated
statement of cash flows of the Tecwell Group for the fifteen months
ended 31st March, 2013 as set out in Appendix II of this circular, as if
the Disposal had taken place on 1st January, 2012.
(iii) To better reflect the position of the Company, the gain on the Disposal for
the purpose of unaudited pro forma consolidated statement of financial
position as explained in note (iv)(a) below is arrived at by reference to the net
asset value of the Tecwell Group as at 30th June, 2013. Hence, the
adjustments were made to reflect the movement of the key items,
comprising the fair value change in investment properties held by the
Tecwell Group of approximately HK$315,660,000 for the period from 1st
April, 2013 to 30th June, 2013, as well as the related deferred tax and changes
in restricted cash balance over the period.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 58 –
(iv) The adjustments reflect the recognition of the net cash consideration and the
gain on the Disposal. The gain on the Disposal is subject to change upon
Completion of the Disposal depending on the then net assets value of the
Tecwell Group.
(a) For the purpose of the unaudited pro forma consolidated statement of
financial position, the gain on Disposal is arrived at as if the Disposal
had taken place on 31st March, 2013 and is calculated as follows:
HK$’000
Cash consideration 843,537
Estimated professional fees, other expenses and taxes
in relation to the Disposal (Note 1) (88,275)
Net assets of the Tecwell Group disposed of
as at 30th June, 2013 (Note 2) (849,879)
Release of cumulative exchange differences on
translation of foreign operations as at 30th June,
2013 (Note 3) 243,070
Elimination of unrealised gain (Note 4) (24,584)
Gain on the Disposal 123,869
Attributable to:
Equity holders of the Company 81,174
Non-controlling interests 42,695
123,869
Note 1 : These professional fees, expenses and taxes are estimates only and are expected to beincurred as a result of the Disposal.
Note 2 : The amount represents net asset value of the Tecwell Group excluding the amount due
from Reiley Inc., the immediate holding company of Tecwell of HK$219,530,000 as at30th June, 2013, as extracted from the unaudited consolidated statement of financialposition of the Tecwell Group as at 30th June, 2013 as set out in Appendix II of this
circular. The amount due from the immediate holding company will be settled oreliminated before the Completion Date.
Note 3 : The amount represents the carrying amount of exchange equalisation reserve as at
30th June, 2013, as extracted from the unaudited consolidated statement of changes ofequity of the Tecwell Group as at 30th June, 2013 as set out in Appendix II of thiscircular.
Note 4 : The amount represents the elimination of the unrealised gain on the Disposal attributableto the equity holders of Lippo assuming OUE will be interested in 50% of the issued unitsof OUE Commercial Trust at the date of the Completion. The Purchaser is a wholly-
owned subsidiary of OUE Commercial Trust and it is currently anticipated that OUE willbe interested in up to 50% of the issued units of OUE Commercial Trust upon the listingof OUE Commercial Trust. As OUE is an associate of HKC and the Company as at
31st March, 2013 per HKFRS applicable to the fifteen months ended 31st March, 2013,the Purchaser will also be regarded as an associate of the Company. Elimination of theunrealised gain on Disposal of Lippo’s attributable interests in OUE Commercial Trust is
required.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 59 –
(b) For the purposes of unaudited pro forma consolidated income
statement, unaudited pro forma consolidated statement of
comprehensive income and unaudited pro forma consolidated
statement of cash flows, the gain on Disposal is arrived at as if the
Disposal had taken place on 1st January, 2012 and is calculated as
follows:
HK$’000
Cash consideration 843,537
Estimated professional fees, other expenses and taxes
in relation to the Disposal (Note 1) (88,275)
Net assets of the Tecwell Group disposed of
as at 1st January, 2012 (Note 2) (954,285)
Release of cumulative exchange differences on
translation of foreign operations as at 1st January,
2012 (Note 3) 210,386
Elimination of unrealised gain (Note 4) (1,882)
Gain on the Disposal 9,481
Attributable to:
Equity holders of the Company 6,213
Non-controlling interests 3,268
9,481
Note 1 : These professional fees, expenses and taxes are estimates only and are expected to be
incurred as a result of the Disposal.
Note 2 : The amount represents net asset value of the Tecwell Group as at 1st January, 2012, as
extracted from the unaudited consolidated statement of financial position of the Tecwell
Group as at 31st December, 2011 as set out in Appendix II of this circular.
Note 3 : The amount represents the carrying amount of exchange equalisation reserve as at
1st January, 2012, as extracted from the unaudited consolidated statement of changes of
equity of the Tecwell Group as at 31st December, 2011 as set out in Appendix II of this
circular.
Note 4 : The amount represents the elimination of the unrealised gain on the Disposal attributable
to equity holders of Lippo assuming OUE will be interested in 50% of the issued units of
OUE Commercial Trust at the date of the Completion. The Purchaser is a wholly-owned
subsidiary of OUE Commercial Trust and it is currently anticipated that OUE will be
interested in up to 50% of the issued units of OUE Commercial Trust upon the listing of
OUE Commercial Trust. As OUE is an associate of HKC and the Company as at 1st
January, 2012 as per HKFRS applicable to the fifteen months ended 31st March, 2013,
the Purchaser will also be regarded as an associate of the Company. Elimination of the
unrealised gain on Disposal of Lippo’s attributable interests in OUE Commercial Trust is
required.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 60 –
(c) For the purpose of the unaudited pro forma consolidated statement of
cash flows, the net proceeds from the Disposal is arrived at as if the
Disposal had taken place on 1st January, 2012 and is calculated as
follows:
HK$’000
Cash consideration 843,537
Less: Estimated professional fees, other expenses and
taxes in relation to the Disposal (Note 1) (88,275)
Net proceeds from the Disposal 755,262
Note 1 : These professional fees, expenses and taxes are estimates only and are expected
to be incurred as a result of the Disposal.
(v) The adjustments represent the share of results and other comprehensive
income of the Tecwell Group for the fifteen months ended 31st March, 2013,
as if the Disposal had taken place on 1st January, 2012.
(vi) The adjustment represents:
(a) the reinstatement of the amount due from the Remaining Group to the
Tecwell Group. The amount will be settled or eliminated before the
Completion Date.
(b) the exclusion of cash inflow to the Remaining Group in relation to the
amount due to the Tecwell Group during the fifteen months ended
31st March, 2013 assuming that no funding would have occurred had
the Completion Date taken place on 1st January, 2012.
(vii) All the above pro forma adjustments are not expected to have a continuing
effect on the Remaining Group.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 61 –
2. REPORT OF THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report, prepared for the sole purpose of incorporation in
this circular, received from Messrs. Ernst & Young, Certified Public Accountants, Hong
Kong.
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON
THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION INCLUDED
IN AN INVESTMENT CIRCULAR
To the Directors of Lippo Limited
We have completed our assurance engagement to report on the compilation of pro
forma financial information of Lippo Limited (the ‘‘Company’’) and its subsidiaries
(hereinafter collectively referred to as the ‘‘Group’’) by the directors of the Company (the
‘‘Directors’’) for illustrative purposes only. The pro forma financial information consists of
the pro forma consolidated statement of financial position as at 31st March, 2013, and the
pro forma consolidated income statement, the pro forma statement of comprehensive
income and the pro forma statement of cash flows for the fifteen months ended 31st March,
2013, and related notes (the ‘‘Pro Forma Financial Information’’) as set out on pages 49 to
61 of a circular dated 18th November, 2013 (the ‘‘Circular’’) issued by the Company. The
applicable criteria on the basis of which the Directors have compiled the Pro Forma
Financial Information are described in page 49 of the Circular.
The Pro Forma Financial Information has been compiled by the Directors to illustrate
the impact of the very substantial disposal (the ‘‘Disposal’’) of the Tecwell Group (as
defined in the Circular) on the Group’s financial position as at 31st March, 2013 as if the
transaction had taken place at 31st March, 2013, and of the Group’s financial performance
and cash flows for the fifteen months ended 31st March, 2013 as if the transaction had
taken place at 1st January, 2012. As part of this process, information about the Group’s
financial position, financial performance and cash flows has been extracted by the Directors
from the Group’s consolidated financial statements for the fifteen months ended
31st March, 2013, on which an audit report has been published.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 62 –
DIRECTORS’ RESPONSIBILITY FOR THE PRO FORMA FINANCIAL
INFORMATION
The Directors are responsible for compiling the Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with reference to
Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants
(the ‘‘HKICPA’’).
REPORTING ACCOUNTANT’S RESPONSIBILITIES
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Pro Forma Financial Information and to report our opinion to you.
We do not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the Pro Forma Financial Information beyond that
owed to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus’’ issued by the HKICPA. This standard
requires that the reporting accountant comply with ethical requirements and plan and
perform procedures to obtain reasonable assurance about whether the Directors have
compiled the Pro Forma Financial Information, in accordance with paragraph 4.29 of the
Listing Rules and with reference to AG7 ‘‘Preparation of Pro Forma Financial Information
for Inclusion in Investment Circulars’’ issued by HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit
or review of the financial information used in compiling the Pro Forma Financial
Information.
The purpose of Pro Forma Financial Information included in the Circular is solely to
illustrate the impact of the effect of the Disposal on the unadjusted financial information of
the Remaining Group (as defined in the Circular) as if the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide
any assurance that the actual outcome of the transaction would have been as presented.
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 63 –
A reasonable assurance engagement to report on whether the Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the Pro Forma Financial Information provide a reasonable basis for
presenting the significant effects directly attributable to the transaction, and to obtain
sufficient appropriate evidence about whether:
. The related pro forma adjustments give appropriate effect to those criteria; and
. The Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountant’s judgment, having regard
to the reporting accountant’s understanding of the nature of the Group, the transaction in
respect of which the Pro Forma Financial Information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
OPINION
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis
stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Young
Certified Public Accountants
22/F CITIC Tower
1 Tim Mei Avenue
Central, Hong Kong
18th November 2013
APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATIONOF THE REMAINING GROUP
– 64 –
The following is the text of a letter and valuation certificate, prepared for the purpose
of incorporation in this circular received from RHL Appraisal Limited, an independent
valuer, in connection with its valuation as at 30th September, 2013 of the Property held by
LRSL.
永利行評值顧問有限公司RHL Appraisal Limited
Corporate Valuation & Advisory
T +852 2730 6212F +852 2736 9284
Room 1010, 10/F, Star House,Tsimshatsui, Hong Kong
18th November, 2013
The Board of Directors
Lippo Limited
24th Floor, Tower One,
Lippo Centre,
No. 89 Queensway,
Hong Kong
Dear Sirs/Madam,
INSTRUCTIONS
We refer to your instruction for us to value the property held by 力寶置業(上海)有限
公司 (Lippo Realty (Shanghai) Limited) (‘‘LRSL’’), a subsidiary of Lippo Limited (the
‘‘Company’’) (the Company and its subsidiaries are referred to as the ‘‘Group’’) located in
the People’s Republic of China (the ‘‘PRC’’). We confirm that we have carried out property
inspection, made relevant enquiries and obtained such further information as we consider
necessary for the purpose of providing you with our opinion of the market value of the
property interest as at 30th September, 2013 (the ‘‘Valuation Date’’).
This letter which forms part of our valuation report explains the basis and
methodologies of valuation, clarifying assumptions, valuation considerations, title
investigations and limiting conditions of this valuation.
APPENDIX IV PROPERTY VALUATION REPORT
– 65 –
BASIS OF VALUATION
The valuation is our opinion of the market value (‘‘Market Value’’) which we would
define as intended to mean the estimated amount for which an asset or liability should
exchange on the valuation date between a willing buyer and a willing seller in an
arm’s-length transaction after proper marketing wherein the parties had each acted
knowledgeably prudently and without compulsion.
Market Value is understood as the value of an asset or liability estimated without
regard to costs of sale or purchase and without offset for any associated taxes or potential
taxes.
The market value is the best price reasonably obtainable in the market by the seller and
the most advantageous price reasonably obtainable in the market by the buyer. This
estimate specifically excludes an estimated price inflated or deflated by special terms or
circumstances such as atypical financing, sale and leaseback arrangements, joint ventures,
management agreements, special considerations or concessions granted by anyone
associated with the sale, or any element of special value.
VALUATION METHODOLOGY
We have valued the property interest by using the Direct Comparison Approach based
on the principle of substitution, where comparison based on prices realized on actual sales
and/or asking prices of comparable properties is made. Comparable properties of similar
sizes, scales, natures, characters and locations are analyzed and carefully weighed against
all the respective advantages and disadvantages of each property in order to arrive at fair
comparisons of market value.
VALUATION CONSIDERATIONS
In valuing the property interest, we have complied with all the requirements contained
in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by
The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards 2012
Edition.
VALUATION ASSUMPTION
In our valuation, unless otherwise stated, we have assumed that:
a. transferable land use rights in respect of the Property for specific terms at nominal
annual land use fees have been granted and that any premium payable has already
been fully paid;
b. the owner of the Property have enforceable title to the Property and has free and
uninterrupted right to use, occupy or assign the Property for the whole of the
respective unexpired terms as granted;
APPENDIX IV PROPERTY VALUATION REPORT
– 66 –
c. no deleterious or hazardous materials or techniques have been used in the
construction of the Property;
d. the Property is connected to main services and sewers which are available on
normal terms; and
e. the owner sells the Property on the open market without the benefit of a deferred
terms contract, leaseback, joint venture, management agreement or any similar
arrangement which would serve to affect the property value.
TITLE INVESTIGATION
We have been shown copies of various documents relating to the property interest.
However, we have not examined the original documents to verify the existing titles to the
property interest or any amendment which does not appear on the copies handed to us. We
have relied considerably on the information given by the Group’s PRC legal advisers,
AllBright Law Offices, concerning the validity of the titles to the property interest.
LIMITING CONDITIONS
We have inspected the Property. During the course of our inspection, we did not note
any serious defects. However, no structural survey has been made and we are therefore
unable to report whether the Property is free from rot infestation or any other defects. No
tests were carried out on any of the services.
We have not carried out detailed on-site measurement to verify the correctness of the
areas in respect of the property but have assumed that the areas shown on the documents
handed to us are correct. All dimensions, measurements and areas are approximate.
We have relied to a considerable extent on information provided by the Group and
accepted advices given to us on such matters, in particular, but not limited to tenure,
planning approvals, statutory notices, easements, particulars of occupancy, size and floor
areas and all other relevant matters in the identification of the Property.
We have had no reason to doubt the truth and accuracy of the information provided to
us by the Group. We have also been advised by the Group that no material fact has been
omitted from the information supplied. We consider that we have been provided with
sufficient information to reach an informed view, and we have no reason to suspect that any
material information has been withheld.
No allowance has been made in our report for any charges, mortgages or amounts
owing on the property interest valued nor for any expenses or taxation which may be
incurred in effecting a sale. Unless otherwise stated, it is assumed that the property interest
is free from encumbrances, restrictions and outgoings of an onerous nature, which could
affect its values.
APPENDIX IV PROPERTY VALUATION REPORT
– 67 –
REMARKS
We have valued the property in Renminbi (RMB) and in Hong Kong Dollars (HKD)
at the exchange rate of RMB1.00 to HK$1.26124.
We have conducted on-site inspection to the property in October 2013 by our
Ms. Michelle X. L. Zhang (MRICS, Msc, BA).
Our valuation certificate is herewith attached.
Yours faithfully,
For and on behalf of
RHL Appraisal Limited
Peggy Y. Y. Lai
MHKIS, MRICS, RPS(GP), BSC
Senior Associate Director
Ms. Peggy Y.Y. Lai is a Registered Professional Surveyor (GP) with over 18 years’
experience in valuation of properties in HKSAR, Macau SAR, United Kingdom, Canada,
mainland China and the Asia Pacific Region. Ms. Lai is a Professional Member of The
Royal Institution of Chartered Surveyors, a Member of The Hong Kong Institute of
Surveyors as well as a Member of China Institute of Real Estate Appraisers and Agents in
the PRC.
APPENDIX IV PROPERTY VALUATION REPORT
– 68 –
VALUATION CERTIFICATE
Property Description and tenure
Particulars of
occupancy
Market Value in
existing state as at
30 September 2013
RMB
Lippo Plaza
(excluding Unit 2
on basement level
1, levels 12, 13, 15
& 16 and Car-
parking Space
Nos. 15, 16, 17
and 26 on
basement level 2
which have been
sold), No. 222
Huai Hai Zhong
Road,
Huangpu District,
Shanghai,
the PRC (the
‘‘Property’’)
Lippo Plaza (the ‘‘Development’’) is a 36-
storey commercial development with 3
basement levels completed in about 1999.
As advised, portion of
the Property with a
floor area of
approximately 31,000
square meters (333,684
square feet) are subject
to various tenancy
agreements at a total
monthly rental of
approximately
RMB9,900,000 with
various terms of which
the latest one expiring
on 27th April, 2018
whilst the remaining
portions are vacant or
occupied by the owner
with a total floor area
of approximately
7,000.00 square meters
and 1,100.00 square
meters respectively.
2,030,000,000
(RENMINBI TWO
BILLION AND
THIRTY
MILLION)
HKD2,560,317,200
(HONG KONG
DOLLARS TWO
BILLION FIVE
HUNDRED AND
SIXTY MILLION
THREE
HUNDRED
SEVENTEEN
THOUSAND AND
TWO HUNDRED)
The Development consists of a 4-storey
retail podium from levels 1 to 3 and
basement level 1, a 30-storey office tower
from levels 5 to 39 (levels 14, 24 and 34
omitted, levels 20 and 35 are designated for
refuge floors whilst level 4, penthouse 1 and
penthouse 2 are designated for E&M
Floors) and 2 basement levels for car-
parking uses with a total of 172 car-parking
spaces.
The Property comprises approximately 29
retail units on basement level 1, levels 1-3
and approximately 269 office units on levels
5-19, levels 21-33 and levels 36-39 with a
total gross floor area of approximately
42,775.80 square meters (460,439 square
feet).
The Property also comprises 168 car-
parking spaces on basement levels 2 to 3 of
the Development with a total gross floor
area of approximately 8,552.88 square
meters (92,063 square feet).
The land use rights of the Property were
granted for a term expiring on 1st July, 2044
for composite uses.
Notes:
1. Pursuant to a Shanghai Certificate of Real Estate Ownership - Hu Fang Di Lu Zi (2011) Di No. 001727
(滬房地盧字(2011)第001727號) dated 23rd August, 2011, the building ownership of the Property with a
total gross floor area of approximately 58,521.54 square meters, is vested in LRSL. The land use rights of
the Property were granted to LRSL for a term expiring on 1st July, 2044 for composite uses.
2. As advised, as at the Valuation Date, the Property is subject to a mortgage in favour of Standard
Chartered Bank (China) Limited, Shanghai Branch to secure the due and punctual payment of the secured
obligations under the loan in the original aggregate principal amount of up to RMB 320,000,000 since
19th September, 2012 and until the full repayment of such loan. However, in the course of our valuation,
we have not taken into account of such mortgage.
APPENDIX IV PROPERTY VALUATION REPORT
– 69 –
3. The Property is situated at No. 222 Huai Hai Zhong Road. This locality is a composite area predominated
by high rise commercial development and residential development. Public means of transportation
available for the subject property and its vicinity includes buses, metro and taxies.
4. We have been provided with a legal opinion by the Group’s PRC legal adviser, AllBright Law Offices,
regarding the legal title of the Property, which contains, inter alia, the following:
i. Land Use Right Grant Contract shall take effect upon its execution and is legally binding and
enforceable;
ii. the Property is legally held by LRSL;
iii. the Property is subject to a mortgage in favour of Standard Chartered Bank (China) Limited,
Shanghai Branch and is free from any other mortgage or third parties’ encumbrance;
iv. the Property can be freely transferred, leased and mortgaged;
v. all land premium of the Property has been fully settled by LRSL; and
vi. LRSL has obtained all the necessary permits/approvals for the construction works of the property
from relevant urban planning authorities.
APPENDIX IV PROPERTY VALUATION REPORT
– 70 –
1. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Listing Rules for the
purpose of giving information with regard to the Company. The Directors, having made all
reasonable enquiries, confirm that to the best of their knowledge and belief, the information
contained in this circular is accurate and complete in all material respects and not
misleading or deceptive, and there are no other matters the omission of which would make
any statement herein or this circular misleading.
2. DISCLOSURE OF INTERESTS
As at the Latest Practicable Date, the interests or short positions of the Directors and
chief executive 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 SFO)
which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8
of Part XV of the SFO (including interests and short positions which they were taken or
deemed to have under such provisions of the SFO), or which were required, pursuant to
Section 352 of the SFO, to be entered in the register referred to therein, or which were
required, pursuant to the Model Code, to be notified to the Company and the Stock
Exchange, were as follows:
Directors’ and chief executive’s interests and short positions in shares and underlying
shares of the Company and associated corporations
Name of Director
Personal interests(held as beneficial
owner)
Family interests(interest of
spouse) Other interests Total interests
Approximatepercentage of
total interests inthe issued share
capital
Number of ordinary shares of HK$0.10 each in the Company
Stephen Riady — — 319,322,219Note(i)
319,322,219 64.75
Jark Pui Lee — 60 — 60 0.00John Luen Wai Lee 1,031,250 — — 1,031,250 0.21
Number of ordinary shares of HK$0.10 each in LCR
Stephen Riady — — 6,544,696,389Notes (i) and (ii)
6,544,696,389 71.24
Number of ordinary shares of HK$1.00 each in HKC
Stephen Riady — — 1,121,517,842Notes (i) and (iii)
1,121,517,842 56.12
Jark Pui Lee 469 469 — 938 0.00John Luen Wai Lee 2,000,270 270 — 2,000,540 0.10King Fai Tsui 600,000 75,000 — 675,000 0.03
Note:
(i) As at the Latest Practicable Date, Lippo Capital, an associated corporation (within the meaning of
Part XV of the SFO) of the Company, and through its wholly-owned subsidiary, J & S Company
Limited, was directly and indirectly interested in an aggregate of 319,322,219 Shares in, representing
approximately 64.75% of the issued share capital of the Company. Lanius, an associated
corporation (within the meaning of Part XV of the SFO) of the Company, is the holder of
705,690,001 ordinary shares of HK$1.00 each in, representing the entire issued share capital of,
APPENDIX V GENERAL INFORMATION
– 71 –
Lippo Capital. Lanius is the trustee of a discretionary trust which was founded by Dr. Mochtar
Riady, who does not have any interest in the share capital of Lanius. The beneficiaries of the trust
included, inter alia, Mr. Stephen Riady and other members of the family. Mr. Stephen Riady was
taken to be interested in Lippo Capital under the provisions of the SFO.
(ii) As at the Latest Practicable Date, the Company was indirectly interested in 6,544,696,389 ordinary
shares of HK$0.10 each in, representing approximately 71.24% of the issued share capital of, LCR.
(iii) As at the Latest Practicable Date, the Company was indirectly interested in 1,121,517,842 ordinary
shares of HK$1.00 each in, representing approximately 56.12% of the issued share capital of, HKC.
As at the Latest Practicable Date, Mr. Stephen Riady, as a beneficiary of the
aforesaid discretionary trust, through his deemed interest in Lippo Capital as
mentioned in Note (i) above, was also taken to be interested in the share capital of
the following associated corporations (within the meaning of Part XV of the SFO) of
the Company:
Name of associated corporation Class of shares
Number of
shares
interested
Approximate
percentage
of interest
in the issued
share capital
Abital Trading Pte. Limited Ordinary shares 2 100Blue Regent Limited Ordinary shares 100 100Boudry Limited Ordinary shares 10 100
Non-votingdeferred shares
1,000 100
Broadwell Overseas Holdings Limited Ordinary shares 1 100Grand Peak Investment Limited Ordinary shares 2 100Great Honor Investments Limited Ordinary shares 1 100Greenorth Holdings Limited Ordinary shares 1 100Honix Holdings Limited Ordinary shares 1 100J & S Company Limited Ordinary shares 1 100Kingaroy Limited Ordinary shares 1 100Lippo Assets (International) Limited Ordinary shares
Non-votingdeferred shares
115,999,999
100100
Lippo Finance Limited Ordinary shares 6,176,470 82.35Lippo Investments Limited Ordinary shares 2 100Lippo Realty Limited Ordinary shares 2 100Multi-World Builders & Development
CorporationOrdinary shares 4,080 51
The HCB General Investment (Singapore)Pte Ltd.
Ordinary shares 100,000 100
Times Grand Limited Ordinary shares 1 100Valencia Development Limited Ordinary shares
Non-votingdeferred shares
800,000200,000
100100
Winroot Holdings Limited Ordinary shares 1 100
As at the Latest Practicable Date, Mr. Stephen Riady, as beneficial owner and
through his nominee, was interested in 5 ordinary shares of HK$1.00 each in,
representing approximately 16.67% of the issued share capital of, Lanius, which is the
holder of the entire issued share capital of Lippo Capital. Lanius is the trustee of a
APPENDIX V GENERAL INFORMATION
– 72 –
discretionary trust which was founded by Dr. Mochtar Riady (father of Mr. Stephen
Riady), who does not have any interest in the share capital of Lanius. The beneficiaries
of the trust included, inter alia, Mr. Stephen Riady and other members of the family.
As at the Latest Practicable Date, Mr. Stephen Riady was interested in 27,493,311
ordinary shares in Auric Pacific Group Limited (‘‘Auric’’), a subsidiary of the
Company, held by Goldstream Capital Limited, which in turn is a wholly-owned
subsidiary of Bravado International Ltd. (‘‘Bravado’’). Mr. Stephen Riady is the
beneficial owner of the entire issued capital of Bravado. For the reasons mentioned
above, through his deemed interest in Lippo Capital, Mr. Stephen Riady was also
taken to be interested in 61,927,335 ordinary shares in Auric. Accordingly,
Mr. Stephen Riady was interested and taken to be interested in an aggregate of
89,420,646 ordinary shares in, representing approximately 71.16% of the issued share
capital of, Auric.
As at the Latest Practicable Date, none of the Directors or chief executive of the
Company had any interests in the underlying shares in respect of physically settled,
cash settled or other equity derivatives of the Company or any of its associated
corporations (within the meaning of Part XV of the SFO).
All the interests stated above represent long positions. Save as disclosed herein, as
at the Latest Practicable Date, to the knowledge of the Company:
(1) none of the Directors and chief executive of the Company had or was deemed
to have any interests or short positions in the shares, underlying shares and
debentures of the Company or any of its associated corporations (within the
meaning of Part XV of the SFO) (a) which were required to be notified to the
Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV
of the SFO (including interests or short positions which the Directors and the
chief executive of the Company were taken or deemed to have under such
provisions of the SFO); or (b) which were required to be entered in the
register kept by the Company under Section 352 of the SFO; or (c) which
were required to be notified to the Company and the Stock Exchange
pursuant to the Model Code; and
(2) none of the Directors and chief executive of the Company nor their spouses
or minor children (natural or adopted) were granted or had exercised any
rights to subscribe for any equity or debt securities of the Company or any of
its associated corporations (within the meaning of Part XV of the SFO).
Mr. Stephen Riady is also a director of each of Lanius and Lippo Capital. Save as
disclosed herein, none of the Directors holds any directorship or employment in a
company which has an interest or short position in the Shares and underlying Shares
which would fall to be disclosed to the Company under the provisions of Divisions 2
and 3 of Part XV of the SFO.
APPENDIX V GENERAL INFORMATION
– 73 –
3. INTERESTS AND SHORT POSITIONS OF SUBSTANTIAL SHAREHOLDERS
AND OTHER PERSONS
So far as is known to the Directors or chief executive of the Company, as at the Latest
Practicable Date, the persons (other than the Directors or chief executive of the Company)
who had interests or short positions in the Shares and underlying Shares which would fall to
be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the
SFO as recorded in the register required to be kept by the Company pursuant to Section 336
of the SFO or who were, directly or indirectly, interested in 10% or more of the nominal
value of any class of share capital carrying rights to vote in all circumstances at general
meetings of any other members of the Group were as follows:
(a) The Company
Name Number of SharesApproximate
percentage
Lippo Capital 319,322,219 64.75Lanius 319,322,219 64.75Dr. Mochtar Riady 319,322,219 64.75Madam Lidya Suryawaty 319,322,219 64.75
Note (a):
1. Lippo Capital, through its wholly-owned subsidiary, J & S Company Limited, was indirectlyinterested in 14,699,997 Shares. Together with 304,622,222 Shares owned by Lippo Capitaldirectly as beneficial owner, Lippo Capital was interested in an aggregate of 319,322,219
Shares in, representing approximately 64.75% of the issued share capital of, the Company.
2. Lanius is the holder of the entire issued share capital of Lippo Capital and is the trustee of adiscretionary trust which was founded by Dr. Mochtar Riady, who does not have any interestin the share capital of Lanius. Dr. Mochtar Riady and his wife Madam Lidya Suryawaty were
taken to be interested in the shares of the Company under the provisions of the SFO.
3. Lippo Capital’s interests in the Shares were recorded as the interests of Lanius, Dr. MochtarRiady and Madam Lidya Suryawaty. The above 319,322,219 Shares related to the same blockof Shares that Mr. Stephen Riady was interested, details of which are disclosed in the
paragraph ‘‘Disclosure of Interests — Directors’ and chief executive’s interests and shortpositions in shares and underlying shares of the Company and associated corporations’’ in thisappendix.
(b) Chung Po Investment Holding Co., Ltd.
NameNumber of ordinary shares
of HK$1.00 each Percentage
Lippo Realty (China) Limited(‘‘LRCL’’)
1,200,000 60
China Travel BuildingContractors Hong KongLimited
800,000 40
Note (b): LRCL is a wholly-owned subsidiary of the Company. See also (a) above in respect of the
substantial shareholders of the Company.
APPENDIX V GENERAL INFORMATION
– 74 –
(c) LCR
NameNumber of ordinary shares
of HK$0.10 eachApproximate
percentage
Skyscraper Realty Limited(‘‘Skyscraper’’)
6,544,696,389 71.24
Note (c): Skyscraper is indirectly wholly-owned by the Company through its wholly-owned
subsidiary, First Tower Corporation. See also (a) above in respect of the substantial
shareholders of the Company.
(d) Jeremiah Holdings Limited (‘‘Jeremiah’’)
NameNumber of ordinary shares
of S$1.00 each Percentage
Dragon Board Holdings Limited(‘‘Dragon Board’’)
779,187 60
Mrs. Endang Utari Mokodompit 519,458 40
Note (d): Dragon Board is a wholly-owned subsidiary of LCR. See also (c) above in respect of the
substantial shareholders of LCR.
(e) Nine Heritage Pte Ltd (‘‘Nine Heritage’’)
NameNumber of ordinary shares
of S$1.00 each Percentage
Jeremiah 800,000 80SouthQuay Capital Asia Limited 200,000 20
Note(e): See also (d) above in respect of the substantial shareholders of Jeremiah.
(f) Proton Power Asia Limited
NameNumber of ordinary shares
of HK$1.00 eachApproximate
percentage
Apex Tier Limited (‘‘Apex Tier’’) 60 66.66Proton Power, Inc. 30 33.33
Note (f): Apex Tier is a wholly-owned subsidiary of LCR. See also (c) above in respect of the
substantial shareholders of LCR.
(g) Lippo Select HK & Mainland Property ETF
Name Number of unitsApproximate
percentage
World Grand Holding Limited(‘‘World Grand’’)
1,841,500 81
Note (g): World Grand is a wholly-owned subsidiary of LCR. See also (c) above in respect of the
substantial shareholders of LCR.
APPENDIX V GENERAL INFORMATION
– 75 –
(h) HKC
Name
Number of ordinary shares
of HK$1.00 each
Approximate
percentage
Hennessy Holdings Limited
(‘‘Hennessy’’)
1,121,517,842 56.12
Note (h): Hennessy is indirectly wholly owned by the Company through its wholly-owned
subsidiary, Prime Success Limited. See also (a) above in respect of the substantial
shareholders of the Company.
(i) TechnoSolve Limited
Name
Number of ordinary shares
of HK$1.00 each
Approximate
percentage
HKCL Investments Limited
(‘‘HKCL Investments’’)
18,053,500 68.65
Note (i): HKCL Investments is a wholly-owned subsidiary of HKC. See also (h) above in respect
of the substantial shareholders of HKC.
(j) Kingtek Limited
NameNumber of ordinary shares
of US$1.00 each Percentage
Masuda Limited (‘‘Masuda’’) 60 60Mezquita Incorporated 40 40
Note (j): Masuda is a wholly-owned subsidiary of HKC. See also (h) above in respect of the
substantial shareholders of HKC.
(k) 北京力寶世紀置業有限公司 (Beijing Lippo Century Realty Co., Ltd.)
Name
Amount of paid up
registered capital
Approximate
percentage of
profit sharing
Uchida Limited (‘‘Uchida’’) US$28,800,000 64Wealtop Limited (‘‘Wealtop’’) US$7,200,000 16北京經濟技術投資開發總公司(Beijing Economic & TechnologicalInvestment Development Corp.)
N/A 20
Note (k): Uchida and Wealtop are both wholly-owned subsidiaries of HKC. See also (h) above in
respect of the substantial shareholders of HKC.
APPENDIX V GENERAL INFORMATION
– 76 –
(l) Auric
NameNumber of ordinary shares
of S$0.50 eachApproximate
percentage
Jeremiah 4,999,283 3.98Nine Heritage 20,004,000 15.92Pantogon Holdings Pte Ltd(‘‘Pantogon’’)
36,165,052 28.78
Goldstream Capital Limited 27,493,311 21.88
Note (l): Nine Heritage is a subsidiary of Jeremiah and Pantogon is a wholly-owned subsidiary of
LCR. See also (d) above in respect of the substantial shareholders of Jeremiah and
(c) above in respect of the substantial shareholders of LCR.
(m) Delifrance Singapore Wholesale Pte. Ltd.
NameNumber of ordinary shares
of S$1.00 each Percentage
Delifrance Asia Ltd.(‘‘Delifrance Asia’’)
392,000 49
Delifrance S.A. 408,000 51
Note (m): Delifrance Asia is a wholly-owned subsidiary of Auric. See also (l) above in respect of
the substantial shareholders of Auric.
(n) Mequestic Investments Limited
Name
Number of ordinary shares
of US$1.00 each Percentage
Charm Fit Pte Ltd (‘‘Charm Fit’’) 6 60
Aaron Group Limited 4 40
Note (n): Charm Fit is a wholly-owned subsidiary of Auric. See also (l) above in respect of the
substantial shareholders of Auric.
(o) Foshan Ausoon Dairy Co., Ltd
Name
Amount of paid up
registered capital Percentage
Auric Pacific Dairy (Foshan) Limited
(‘‘Auric Foshan’’)
US$4,464,000 75
廣東新盈科技創業投資有限公司
(Foshan XinYing Science Technology
Venture Capital Co., Ltd)
US$1,488,000 25
Note (o): Auric Foshan is a wholly-owned subsidiary of Auric. See also (l) above in respect of the
substantial shareholders of Auric.
APPENDIX V GENERAL INFORMATION
– 77 –
(p) DLF (Thailand) Ltd
Name
Number of ordinary shares
of THB100.00 each
Approximate
percentage
K. Somchai Krunthong 25,500 preference shares 51
Delifrance Asia 24,495 48.9
Edmontor Investments Pte Ltd
(‘‘Edmontor’’)
5 0.1
Note (p): Delifrance Asia and Edmontor are wholly-owned subsidiaries of Auric. See also (l)
above in respect of the substantial shareholders of Auric.
(q) LCR Catering Services Limited
Name
Number of ordinary shares
of HK$1.00 each Percentage
All Around Limited
(‘‘All Around’’)
8,100,000 90
Note (q): All Around is a subsidiary of Auric. See also (l) above in respect of the substantial
shareholders of Auric.
(r) Asia Now Resources Corp. (‘‘Asia Now’’)
Name Number of ordinary shares
Approximate
percentage
China Gold Pte. Limited
(‘‘China Gold’’)
55,429,908 49.93
Note (r): China Gold is a wholly-owned subsidiary of LCR. See also (c) above in respect of the
substantial shareholders of LCR.
All the interests stated above represent long positions. Save as disclosed herein, as at
the Latest Practicable Date, none of the substantial shareholders (as defined under the
Listing Rules) or other persons (other than the Directors or chief executive of the
Company) had any interests or short positions in the Shares and underlying Shares as
recorded in the register required to be kept by the Company under Section 336 of the SFO.
Save as disclosed herein, as at the Latest Practicable Date, so far as was known to the
Directors or chief executive of the Company, there was no person, other than a Director or
chief executive of the Company, who had an interest or short position in the Shares and
underlying Shares which would fall to be disclosed to the Company under the provisions of
Divisions 2 and 3 of Part XV of the SFO, or who were, directly or indirectly, interested in
10% or more of the nominal value of any class of share capital carrying rights to vote in all
circumstances at general meetings of any other member of the Group.
APPENDIX V GENERAL INFORMATION
– 78 –
4. DIRECTORS’ SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors had entered or was proposing
to enter into any service contract with the Company or any other member of the Group
(excluding contracts expiring or determinable by the employer within one year without
payment of compensation (other than statutory compensation)).
5. COMPETING INTERESTS OF DIRECTORS AND ASSOCIATES
The Lippo Group (a general reference to the companies in which Mr. Stephen Riady
and his family members have a direct or indirect interest) is not a legal entity and does not
operate as one. Each of the companies in the Lippo Group operates within its own legal,
corporate and financial framework. As at the Latest Practicable Date, the Lippo Group
might have had or developed interests in business in Hong Kong and other parts in Asia
similar to those of the Group and there was a chance that such businesses might have
competed with the businesses of the Group.
The Directors are fully aware of, and have been discharging, their fiduciary duty to the
Company. The Company and the Directors would comply with the relevant requirements of
the Company’s articles of association and the Listing Rules whenever a Director has any
conflict of interest in the transaction(s) with the Company.
Save as disclosed above, as at the Latest Practicable Date, none of the Directors and
their respective associates were considered to have interest in any business which competes
or is likely to compete, either directly or indirectly, with the businesses of the Group or have
or may have any other conflicts of interest with the Group pursuant to the Listing Rules.
6. DIRECTORS’ INTERESTS IN ASSETS/CONTRACTS AND OTHER INTERESTS
Save for Mr. Stephen Riady who is deemed to be interested in the Disposal Agreement
and the transactions stated below, none of the Directors was materially interested in any
contract or arrangement which was entered into by any member of the Group and
subsisting at the Latest Practicable Date which was significant in relation to the business of
the Group:
(a) (i) the restaurant management agreement dated 10th October, 2013 entered into
between OUE Restaurants Pte. Ltd. (‘‘OUE Restaurants’’), a wholly-owned
subsidiary of OUE, and Zutis Pte. Ltd., an indirect subsidiary of Auric, in respect
of the management of the business and operations of a high-end restaurant of
OUE Restaurants in Singapore serving French, Japanese and Chinese cuisine (the
‘‘Restaurant’’); (ii) the restaurant operator agreement dated 10th October, 2013
entered into between OUE Restaurants and LP-Tetsu Pte. Ltd. (‘‘LP-Tetsu’’), an
indirect subsidiary of Auric, in respect of the operation of the French cuisine
segment in the Restaurant; and (iii) the restaurant operator agreement dated
10th October, 2013 entered into between OUE Restaurants and LP-Tetsu in
respect of the operation of the Japanese cuisine segment in the Restaurant, each
for a term of three years from 1st April, 2013 to 31st March 2016; and
APPENDIX V GENERAL INFORMATION
– 79 –
(b) the supply agreement dated 31st October, 2013 entered into between Auric Pacific
Marketing Pte. Ltd. (‘‘APM’’), a wholly-owned subsidiary of Auric, and OUE in
respect of the supply of food and beverage products by APM to OUE for a term of
three years from 31st October, 2013 to 30th October, 2016.
As at the Latest Practicable Date, the following were particulars of assets acquired or
disposed of by or leased to members of the Group since 31st March, 2013, being the date to
which the latest published audited consolidated financial statements of the Company were
made up, in which Mr. Stephen Riady had a direct or indirect interest:
(a) (i) On 1st April, 2013, a tenancy agreement was entered into between West
Tower Holding Limited (‘‘WTHL’’), a wholly-owned subsidiary of LCR, and
LCR Catering Services Limited (‘‘LCR Catering’’), a non-wholly owned
subsidiary of Auric which in turn is a subsidiary of LCR, pursuant to which
LCR Catering agreed to lease from WTHL Unit 4, Ground Floor, Lippo
Centre, 89 Queensway, Hong Kong (‘‘Lippo Centre’’) for a term of three
years from 1st April, 2013 to 31st March, 2016, both days inclusive, at a
monthly rental of HK$364,550, exclusive of rates, service charge and all
other outgoings, for use as a restaurant. The service charge of HK$65,040 per
month (subject to adjustment) shall be payable by LCR Catering to WTHL
and such service charge shall not exceed HK$78,000 per month; and
(ii) On 1st April, 2013, a licence agreement was entered into between WTHL, as
licensor, and LCR Catering, as licensee, in respect of four night car parking
spaces in the first basement of Lippo Centre. A licence fee of HK$5,300 per
month (subject to adjustment) shall be payable by LCR Catering to WTHL.
The term of the licence agreement shall be three years from 1st April, 2013 to
31st March, 2016, both days inclusive;
(b) On 10th October, 2013, a lease agreement was entered into between Auric, a
subsidiary of LCR, and Clifford Development Pte. Ltd. (‘‘CDPL’’), a
wholly-owned subsidiary of OUE, which is a joint venture of HKC, which in
turn is a subsidiary of the Company, pursuant to which Auric agreed to lease from
CDPL Unit #06-03, 50 Collyer Quay, Singapore for a term of three years from
15th July, 2013 to 14th July, 2016, both days inclusive, at a monthly rental of
(i) S$40,613.90 from 15th July, 2013 to 31 December, 2013 (both dates inclusive);
and (ii) S$46,057.00 from 1st January, 2014 to 14th July, 2016 (both dates
inclusive), exclusive of service charge, for use as an office. The service charge of
S$5,443.10 per month shall be payable by Auric to CDPL on a monthly basis; and
(c) the Disposal Agreement.
Save as disclosed herein, as at the Latest Practicable Date, none of the Directors had
any direct or indirect interest in any assets which had been acquired or disposed of by or
leased to any member of the Group or were proposed to be acquired or disposed of by or
leased to any member of the Group since 31st March, 2013, being the date to which the
latest published audited consolidated financial statements of the Company were made up.
APPENDIX V GENERAL INFORMATION
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7. LITIGATION
So far as the Directors are aware, no member of the Group was engaged in any
litigation or arbitration of material importance and no litigation or arbitration of material
importance was pending or threatened against any member of the Group as at the Latest
Practicable Date.
8. MATERIAL CONTRACTS
The following contracts (not being contracts entered into in the ordinary course of
business) have been entered into by the members of the Group within the two years
immediately preceding the Latest Practicable Date and which are, or may be, material to the
Group:
(a) the agreement dated 25th November, 2011 entered into between Tamsett Holdings
Limited (a wholly-owned subsidiary of LCR) as vendor, and Vantro Investment
Ltd as purchaser, relating to the disposal of one share of US$1.00 in, representing
the entire issued share capital of, Winnery Limited (‘‘Winnery’’) for the
consideration of Rp240,000,000,000. Winnery held 480 million shares in
PT Lippo Karawaci Tbk, a company incorporated in Indonesia and whose
shares are listed on the Indonesia Stock Exchange;
(b) the membership unit purchase agreement dated 27th February, 2012 (the
‘‘February 2012 Purchase Agreement’’) entered into among Skye Mineral
Investors, LLC (‘‘Skye Mineral’’) and Clarity Copper, LLC (‘‘Clarity Copper’’)
as sellers, and PacNet Capital (U.S.) Limited (‘‘Pacnet’’) (an indirect
wholly-owned subsidiary of LCR) as buyer, relating to the sale and purchase of
a total of 3,600 Class A units (‘‘Class A Units’’) in Skye Mineral Partners, LLC
(the ‘‘Project Company’’) for a total consideration of US$8,000,000.
On 3rd August, 2012, another membership unit purchase agreement was entered
into between PacNet, the Project Company and Skye Mineral for the subscription
of 1,674 Class A Units and 1,026 Class A Units by each of PacNet and Skye
Mineral, respectively, for a consideration of US$3,720,000 and US$2,280,000
respectively and on the same date, an amendment to the February 2012 Purchase
Agreement was entered into between PacNet, Skye Mineral and Clarity Copper
pursuant to which, PacNet agreed to reduce its purchase from Clarity Copper and
Clarity Copper agreed to reduce its sale to PacNet Capital from 1,700 Class A
Units to 782 Class A Units, with consideration payable by PacNet Capital at the
Second Closing (as defined in the February 2012 Purchase Agreement) reducing
from US$3,777,777.78 to US$1,737,777.78.
The Project Company, through its majority owned subsidiary, CS Mining LLC,
owns and controls a number of copper ore deposits located in the Milford Mineral
Belt in Beaver County, State of Utah in the United States of America;
APPENDIX V GENERAL INFORMATION
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(c) the subscription agreement dated 13th March 2012 entered into between Golden
Rain Holdings Limited (‘‘Golden Rain’’) (a wholly-owned subsidiary of LCR) and
Haranga Resources Limited (‘‘Haranga’’), a public company listed on the
Australian Securities Exchange, relating to the subscription by Golden Rain of
15,000,000 new ordinary shares in the capital of Haranga for the total
subscription price of A$6,000,000 under a private placement;
(d) the provisional agreements dated 30th April, 2012 entered into between Writring
Investments Limited (a wholly-owned subsidiary of LCR) as seller, and (i) Great
International Development Company Limited, as buyer, for the sale and purchase
of Unit B on the 19th Floor and car parking space no. L35 on the Lower Ground
Floor and car parking space no. G53 on the Ground Floor, Celestial Garden, No.
5 Repulse Bay Road, Hong Kong at the consideration of HK$62,000,000; and
(ii) Oasis Management Limited, as buyer, for the sale and purchase of Unit B on
the 20th Floor, Celestial Garden, No. 5 Repulse Bay Road, Hong Kong at the
consideration of HK$60,000,000, respectively;
(e) the option letter dated 7th September, 2012 entered into between Lippo (S) Pte. Ltd.
(‘‘Lippo (S)’’) (an indirect wholly-owned subsidiary of HKC) as the vendor, and
Mr. Thio Gim Hock (‘‘Mr. Thio’’), pursuant to which Lippo (S) had offered
Mr. Thio an option to purchase at the sale price of S$22,000,000 the whole of Lots
1342L and 1343C both of Mukim 34 containing an area of approximately
684.9 square metres and approximately 715.2 square metres respectively and
comprising the property known as 259 Ocean Drive, located at Sentosa Cove,
Singapore in consideration of an option money in the amount of S$220,000 (being
part of the sale price). The above option was accepted and exercised by Mr. Thio
on 14th September, 2012;
(f) the loan agreement dated 30th November, 2012 entered into between Skyblue
International Limited (an indirect wholly-owned subsidiary of HKC) as lender
and Seeger Worldwide Limited, as the borrower, for a loan facility of up to
HK$125,000,000 (the ‘‘Loan’’) at an interest rate of 6% per annum. Subsequently,
the borrower did not drawdown the Loan and the Loan was cancelled
accordingly;
(g) the subscription agreement dated 20th February, 2013 entered into between
GSH Corporation Limited (‘‘GSH’’), a company listed on the SGX-ST and
Golden Super Holdings Limited (‘‘Golden Super’’) (a wholly-owned subsidiary of
LCR) for the subscription by Golden Super of 184,653,669 new ordinary shares in
the capital of GSH at an aggregate subscription price of S$17,542,098.56 and
GSH is primarily engaged in the business of distribution of IT, photographic and
timepiece products with distribution networks spanning many emerging markets
in Asia, the Middle East and Central Asia;
(h) the share purchase agreement dated 1st March, 2013 entered into between Charm
Fit Pte. Ltd. (‘‘Charm Fit’’) (a wholly-owned subsidiary of Auric) and Asian Hotel
& Resort Group Limited (‘‘Asian Hotel’’) for the sale of all of Charm Fit’s
APPENDIX V GENERAL INFORMATION
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redeemable preference shares of S$0.10 each in the share capital of Auric Pacific
Real Estate Fund (the ‘‘Fund’’), representing 60% of the issued and outstanding
redeemable preference shares of the Fund. The sole ordinary share of the Fund
held by AP Fund Management Pte. Ltd (a wholly-owned subsidiary of Auric) was
also sold to Asian Hotel. The total consideration for the sale of the above shares
in the Fund amounted to HK$130,752,647.08; and
(i) the Disposal Agreement.
9. QUALIFICATIONS AND CONSENTS OF EXPERTS
The qualification of the experts, who have given opinion or advice contained in this
circular are set out as follows:
Name Qualification
Messrs. Ernst & Young Certified Public Accountants
RHL Property valuer
As at the Latest Practicable Date, none of the above experts had any shareholding in
any member of the Group or any right (whether legally enforceable or not) to subscribe for
or to nominate persons to subscribe for securities in any member of the Group, nor did it
has any interest, direct or indirect, in any assets which had, since 31st March, 2013, being
the date to which the latest published audited consolidated financial statements of the
Company were made up, been acquired or disposed of by or leased to any member of the
Group, or were proposed to be acquired or disposed of by or leased to any member of the
Group.
As at the date of this circular, each of the above experts has given and has not
withdrawn its written consent to the issue of this circular with the inclusion of its report(s),
letter(s) and reference(s) to its name(s) and opinion(s) in the form and context in which they
appear in this circular.
10. MISCELLANEOUS
(a) The Secretary of the Company is Mr. Davy Kwok Fai Lee, an associate member
of the Chartered Institute of Bankers, and a fellow member of each of the Institute
of Chartered Secretaries and Administrators and the Hong Kong Institute of
Chartered Secretaries.
(b) The registered office of the Company is situated at 24th Floor, Tower One, Lippo
Centre, 89 Queensway, Hong Kong.
(c) The transfer office of the Company is situated at the office of its registrars, Tricor
Progressive Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East,
Wanchai, Hong Kong.
APPENDIX V GENERAL INFORMATION
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11. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during normal
business hours on any weekday (Saturday, Sunday and public holidays excluded) at the
registered office of the Company which is situate at 24th Floor, Tower One, Lippo Centre,
89 Queensway, Hong Kong from the date of this circular and up to the date of the EGM:
(a) the memorandum and articles of association of the Company;
(b) copies of the material contracts referred to under the paragraph headed ‘‘Material
contracts’’ in this appendix;
(c) the report on the unaudited pro forma financial information of the Remaining
Group, the text of which is set out in Appendix III to this circular;
(d) the property valuation report prepared by RHL, the text of which is set out in
Appendix IV to this circular;
(e) the written consents from the experts referred to in paragraph headed
‘‘Qualification and consents of experts’’ in this appendix;
(f) the published audited consolidated financial statements of the Company for the
financial year ended 31st December, 2011 and the fifteen months ended
31st March, 2013;
(g) the Disposal Agreement; and
(h) this circular.
12. LANGUAGE
In the event of inconsistency, the English texts of this circular and form of proxy shall
prevail over the Chinese texts.
Note: Certain English translations of Chinese names or words used in this appendix are included for
information purpose only and should not be relied upon as the official translation of such Chinese
names or words.
APPENDIX V GENERAL INFORMATION
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LIPPO LIMITED
力 寶 有 限 公 司(Incorporated in Hong Kong with limited liability)
(Stock Code: 226)
NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Lippo Limited(the ‘‘Company’’) will be held at Harcourt Room, Lower Lobby, Conrad Hong Kong,Pacific Place, 88 Queensway, Hong Kong on Tuesday, 3rd December, 2013 at11 : 00 a.m. (or so soon thereafter as the extraordinary general meeting of Lippo ChinaResources Limited convened for 10 : 45 a.m. on the same date shall have been concluded oradjourned) for the purpose of considering and, if thought fit, passing, with or withoutmodifications, the following resolution as an ordinary resolution of the Company:
ORDINARY RESOLUTION
‘‘THAT,
(a) the disposal by Lippo China Resources Limited (‘‘LCR’’), a subsidiary of theCompany, of the entire issued share capital of Tecwell Limited (the ‘‘Disposal’’) ata consideration of approximately HK$843.5 million (subject to adjustment, if any)to OUE Eastern Limited (the ‘‘Purchaser’’) pursuant to the sale and purchaseagreement dated 16th October, 2013 between LCR and the Purchaser (the‘‘Disposal Agreement’’, a copy of which has been produced to the meeting andmarked ‘‘A’’ and signed by the chairman of the meeting for identificationpurposes) and all transactions contemplated under the Disposal Agreement(including, without limitation, the execution of the Deed of Undertakings, asreferred to in the Disposal Agreement, which is annexed in the DisposalAgreement) be and are hereby approved; and
(b) the directors of the Company be and are hereby authorised to do all such actsand/or things and/or execute all such documents incidental to, ancillary to or inconnection with matters contemplated in or relating to the Disposal Agreement asthey may in their absolute discretion consider necessary, desirable or expedient togive effect to the Disposal and the Disposal Agreement and the implementation ofall transactions contemplated thereby and thereunder and to agree to suchvariation, amendment or waiver as are, in the opinion of the directors of theCompany, in the interest of the Company.’’
By Order of the BoardLIPPO LIMITED
Davy Lee
Secretary
Hong Kong, 18th November, 2013
NOTICE OF EXTRAORDINARY GENERAL MEETING
– 85 –
Registered Office:
24th Floor
Tower One
Lippo Centre
89 Queensway
Hong Kong
Note:
1. Any member entitled to attend and vote at the meeting is entitled to appoint more than one proxy to
attend and vote instead of him. A proxy need not be a member of the Company.
2. To be valid, a form of proxy together with the power of attorney or other authority (if any) under which it
is signed (or a notarially certified true copy thereof) must be deposited at the Company’s registered office
at 24th Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong not less than 48 hours before the
time appointed for the holding of the meeting or any adjourned meeting thereof. Completion and return of
the form of proxy will not preclude members from attending and voting in person at the meeting or any
adjourned meeting thereof should they so desire.
3. The register of members of the Company will be closed on Tuesday, 3rd December, 2013 during which
no transfer of share will be registered. In order to be entitled to attend and vote at the meeting, all
transfers of shares accompanied by the relevant share certificates and transfer forms must be lodged with
the Company’s registrars, Tricor Progressive Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East,
Wanchai, Hong Kong not later than 4 : 30 p.m. on Monday, 2nd December, 2013.
4. At the meeting, the chairman of the meeting will exercise his power under article 86(i) of the articles of
association of the Company to put the above resolution to the vote by way of a poll as required under the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
5. Should there be any discrepancies between the English and the Chinese versions, the English version shall
prevail.
NOTICE OF EXTRAORDINARY GENERAL MEETING
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