10. DIVIDENDS
The calculation of earnings per share was based on the consolidated profit attributable to shareholders of approximately $310,678,000 (1997 - $119,554,000) and the weighted average number of approximately 895,833,333 shares (1997 - 750,000,000 deemed shares) in issue during the year.
The calculation of diluted earnings per share was based on the consolidated profit attributable to shareholders of approximately $310,678,000 and the diluted weighted average number of approximately 896,750,000 shares in issue during the year. It has been calculated after taking into account of outstanding share options as of 31st December, 1998. The effect of the dilutive potential ordinary shares resulting from the outstanding share options on the weighted average number of shares in issue during the year was 916,667 shares, which were deemed to be issued at no consideration if all outstanding share options have been exercised, on the date when the options were granted. The diluted earnings per share for the year ended 31st December, 1997 was not shown as there was no outstanding share options.
a. Movements in fixed assets were:
b. All the land and buildings are located in Hong Kong and are held under medium-term leases.
Movements of investment properties were:
All investment properties are located in the PRC and were held under land use rights for 40 to 50 years expiring in 2036 through 2047. They were stated at valuation on an open market basis at 31st December, 1998 as determined by C. Y. Leung & Company Limited, independent qualified valuers, with related surpluses credited to investment properties revaluation reserve.
Approximately $243 million (1997 - Nil) of the investment properties were pledged as securities for bank loans granted to the Group and two related companies, Guangdong Zhujiang Investment Company and Guangzhou Tianhe Science and Technology Enterprises Development Company Limited (Notes 3 and 24). The pledges of investment properties as securities for bank loans granted to the two related companies were released after 31st December, 1998.
Details of the investment properties as of 31st December, 1998 were as follows:
Movements of properties under development for long-term investment were:
All properties under development for long-term investment are located in the PRC and were held under land use rights for 40 to 50 years expiring in 2037 through 2047.
Approximately $52 million (1997 - $49 million) of the properties under development for long-term investment were pledged as securities for bank loans granted to the Group and two related companies, Guangdong Zhujiang Investment Company and Guangzhou Tianhe Science and Technology Enterprises Development Company Limited (Notes 3 and 24). The pledges of properties under development for long-term investment as securities for bank loans granted to the two related companies were released after 31st December, 1998.
In the balance sheet of the Company, investment in subsidiaries comprised:
The advances to subsidiaries were unsecured, non-interest bearing and will not be repayable within one year.
In the opinion of the directors, the underlying value of investment in subsidiaries was not less than the carrying value in the consolidated balance sheet as of 31st December, 1998.
Details of the subsidiaries as of 31st December, 1998 were:
Investment in associated company comprised:
The advances to associated company were unsecured, interest free and had no fixed repayment date.
The underlying aggregate value of the investment in associated company was, in the opinion of the directors, not less than the carrying value in the consolidated balance sheet as of 31st December, 1998.
Details of the associated company as of 31st December, 1998 were:
The amount represents the Group's investment in a contractual joint venture, Guangzhou Zhujiang Qiaodao Real Estate Limited ("GZQREL"). GZQREL is established to invest and develop properties located in Haizhu district, Guangzhou, PRC. According to the joint venture agreement, the Group has an equity interest of 25% in the share capital and is entitled to 17.5% of the profit or loss of this venture. As of 31st December, 1998, the capital verification procedures were still in progress, and the venture has not commenced operations.
a. Cash and bank balances
Approximately $43 million (1997-Nil) of the Group's bank deposits were pledged as security for the Group's banking facilities (Note 24).
b. Properties under development for sale
The cost of properties under development is analysed as follows:
All properties under development for sale are located in the PRC and were held under land use rights for 70 years up to 2067.
c. Completed properties for sale
Movements of completed properties for sale were:
All completed properties for sale are located in the PRC and were held under land use rights for 70 years up to 2067.
a. Short-term loans
Refer to Note 24 for details of the Group's banking facilities.
b. Amounts due to related companies
The amounts due to related companies were unsecured, non-interest being and had no fixed repayment dates.
c. Amount due to a joint venture partner
Amount due to a joint venture partner was unsecured, non-interest bearing and had no fixed repayment dates.
d. Amounts due to directors
Amounts due to directors were unsecured, non-interest bearing and had no fixed repayment dates.
1998 1997
$'000 $'000
Final proposed dividends of $0.12 (1997 - Nil)
per ordinary share 120,000 -
======= ===
11. EARNINGS PER SHARE
12. FIXED ASSETS
1998 1997
__________________________________________________ _____
Furniture
fixtures and
Land and Leasehold office Motor
buildings improvement equipment vehicles Total Total
$'000 $'000 $'000 $'000 $'000 $'000
Cost
Beginning of year 6,574 599 1,725 2,206 11,104 9,858
Additions - 72 1,483 3,383 4,938 1,246
___________________________________________________________________________
End of year 6,574 671 3,208 5,589 16,042 11,104
___________________________________________________________________________
Accumulated depreciation
Beginning of year 363 309 492 953 2,117 1,227
Provision for the year 130 120 430 1,008 1,688 890
___________________________________________________________________________
End of year 493 429 922 1,961 3,805 2,117
___________________________________________________________________________
Net book value
End of year 6,081 242 2,286 3,628 12,237 8,987
===== === ===== ===== ====== =====
Beginning of year 6,211 290 1,233 1,253 8,987 8,631
===== === ===== ===== ====== =====
13. INVESTMENT PROPERTIES
1998 1997
$'000 $'000
Beginning of year - -
Transfer from properties under development
for long-term investment 109,134 -
Surplus on revaluation 254,866 -
_______________________________________________________________________
End of year 364,000 -
======= ===
Location Group's interest Existing/intended use
________ ________________ ________________________
Phase 5A, Huajing New City 90% Shopping mall and retail
No. 105 Zhongshan Avenue podium rental
Tianhe District
Guangzhou
Guangdong Province
PRC
Phase 2, Jinan Garden 90% Shopping mall and retail
South of Zhongshan Avenue podium rental
Tianhe District
Guangzhou
Guangdong Province
PRC
14. PROPERTIES UNDER DEVELOPMENT FOR LONG-TERM INVESTMENT
1998 1997
$'000 $'000
Beginning of year 100,259 -
Additions 429,798 100,259
Transfer to investment properties (109,134) -
______________________________________________________________________
End of year 420,923 100,259
======= =======
15. INVESTMENT IN SUBSIDIARIES
1998 1997
$'000 $'000
Unlisted shares, at cost 74,900 -
Advances to subsidiaries 348,858 -
_______________________________________________________________________
423,758 -
======= ===
Percentage
of equity
Place and interest Issued and
date of attributable fully paid Principal
Name incorporation to the Group capital activities
Hopson Development BVI 100% US$2,000 Investment
International 4th June, holding
Limited 1997
Hopeson Holdings Hong Kong 100% $2 ordinary Investment
Limited 9th March, $10,000 holding
1995 non-voting
deferred
shares*
Guangdong PRC 90% Rmb58,402,218 Properties
Huajingxincheng 4th June, development
Real Estate Limited 1996
Guangdong Jinan PRC 90% Rmb65,084,340 Properties
Real Estate 29th March, development
Limited 1996
Guangzhou Hopson PRC 100% Rmb100,655,819 Properties
Yihui Real 6th August, development
Estate Limited 1997
Ever New Hong Kong 100% $2 ordinary Investment
Properties 29th October, $3 non-voting holding and
Limited 1992 deferred properties
shares* investment
Guangdong Huanan Real PRC 70% Rmb41,682,421 Properties
Estate Limited 3rd August, development
1993
Archibald BVI 100% US$2 Investment
Properties 11th June, holding
Limited 1997
Guangdong Hopson PRC 90% Rmb16,988,133 Properties
Minghui Real 18th September, development
Estate Limited 1997
Nambour BVI 100% US$2 Investment
Properties 29th April, holding
Limited 1997
Guangzhou Hopson PRC 70% Rmb78,328,681 Properties
Keji Garden 22nd September, development
Real Estate 1997
Limited
Sound Zone BVI 100% US$2 Investment
Properties 29th April, holding
Limited 1997
Guangdong Hopson PRC 90% Rmb16,997,572 Properties
Yuehua Real 1st August, development
Estate Limited 1997
Tumen Properties BVI 100% US$2 Investment
Limited 21st April, holding
1997
Timbercrest BVI 100% US$2 Investment
Properti 29th April, holding
Limited 1997
Pomeroy BVI 100% US$2 Investment
Properties 29th April, holding
Limited 1997
Guangzhou Hopson PRC 100% Rmb17,323,994 Properties
Qinghui Real 8th August, development
Estate Limited 1997
Solawide Properties BVI 100% US$2 Investment
Limited 29th April, holding
1997
Guangzhou Hopson PRC 100% Rmb17,311,073 Properties
Dongyu Real 21st August, development
Estate Limited 1997
Hopson Development Hong Kong 100% $10,000 General
(Properties) 4th July, administration
Limited 1997 and consultancy
Outward Expanse BVI 100% US$2 Investment
Investments 3rd November, holding
Limited 1997
Galloping BVI 100% US$2 Dormant
Properties 3rd November,
Limited 1997
Funland BVI 100% US$2 Dormant
Properties 3rd November,
Limited 1997
Sun Yick BVI 100% US$2 Dormant
Properties 15th October,
Limited 1997
16. INVESTMENT IN ASSOCIATED COMPANY
Consolidated
1998 1997
$'000 $'000
Unlisted shares, at cost 1 1
Share of post-acquisition reserves - -
Share of net assets other than goodwill 1 1
Advances to associated company 5,867 3,777
______________________________________________________________________
5,868 3,778
===== =====
Percentage
of equity
Place and interest Issued and
date of attributable fully paid Principal
Name incorporation to the Group capital activities
Tonking Hong Kong 30% $10 Investment
International 20th April, holding
Limited 1995
17. OTHER INVESTMENT
18. CURRENT ASSETS
Consolidated Company
1998 1997 1998 1997
$'000 $'000 $'000 $'000
Cash and bank balances (a) 444,169 82,362 308,835 -
Properties under development
for sale (b) 712,017 669,744 - -
Completed properties
for sale (c) 15,890 - - -
Accounts receivable 448,603 171,673 - -
Prepayments and other assets 22,942 21,032 358 100
Amount due from a
joint venture partner 53,738 47,036 - -
______________________________________________________________________
1,697,359 991,847 309,193 100
========= ======= ======= ===
1998 1997
$'000 $'000
At cost 1,307,428 1,102,807
Add: Attributable profits on
pre-sold properties 449,785 433,204
_____________________________________________________________________
1,757,213 1,536,011
Less: Sale instalments/deposits received (1,045,1) (866,267)
_____________________________________________________________________
712,017 669,744
========= =========
1998 1997
$'000 $'000
Land cost 486,322 685,307
Construction cost 821,106 409,154
Interest capitalised - 8,346
_______________________________________________________________________
1,307,428 1,102,807
========= =========
1998 1997
$'000 $'000
Beginning of year - -
Transfer from properties
under development for sale 158,703 -
Less: Sale of completed
properties during the year (142,813) -
___________________________________________________________________
End of year 15,890 -
======= ===
19. CURRENT LIABILITIES
Consolidated Company
1998 1997 1998 1997
$'000 $'000 $'000 $'000
Short-term loans (a) 128,972 32,056 - -
Accounts payable 219,269 114,614 - -
Bills payable 36,449 - - -
Land premium - -
payable (Note 20) 204,662 167,931 - -
Other payable and accruals 147,213 114,490 229 -
Amounts due to
related companies (b) 6,808 48,029 - -
Amounts due to -
group companies - - - 44
Amount due to a
joint venture partner (c) 13,903 74,814 - -
Amounts due to directors (d) 6,631 48,667 - -
Dividends payable 120,000 - - -
Taxation 17,677 10,343 - -
____________________________________________________________________________
901,584 610,944 229 44
======= ======= === ==
Consolidated Company
1998 1997 1998 1997
$'000 $'000 $'000 $'000
Short-term bank loans
-secured 128,972 18,692 - -
- -
Other loans
-unsecured - 13,364 - -
_____________________________________________________________________
128,972 32,056 - -
======= ====== === ===
Source: Hopson Development Holdings Limited
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