Annual Report 2021 Report 2021 年報 年 報 Contents
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ANNUAL ANNUAL REPORT 2021 ANNUAL REPORT REPORT 2021 年報 年 報 CONTENTS 2 Corporate Information 3 Financial Review 7 Chairman’s Statement 10 Management Discussion and Analysis 15 Corporate Governance Report 25 Environmental, Social and Governance Report 41 Directors’ Report 56 Independent Auditor’s Report 63 Consolidated Statement of Profit or Loss 64 Consolidated Statement of Profit or Loss and Other Comprehensive Income 65 Consolidated Statement of Financial Position 67 Consolidated Statement of Changes in Equity 68 Consolidated Statement of Cash Flows 71 Notes to the Consolidated Financial Statements 168 Financial Summary 169 Schedule of Major Properties held by the Group Corporate Information 02 BOARD OF DIRECTORS REGISTERED OFFICE Executive Directors: Clarendon House Chung Cho Yee, Mico (Chairman) 2 Church Street CSI Properties Limited Kan Sze Man Hamilton HM 11 Chow Hou Man Bermuda Fong Man Bun, Jimmy Ho Lok Fai Leung King Yin, Kevin HONG KONG HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS Independent Non-Executive Directors: Lam Lee G. 31/F Cheng Yuk Wo Bank of America Tower Shek Lai Him, Abraham, GBS, JP 12 Harcourt Road Lo Wing Yan, William, JP Central, Hong Kong AUDIT COMMITTEE SHANGHAI OFFICE Cheng Yuk Wo (Chairman) Room 804, The Platinum Lam Lee G. 233 Taicang Road Shek Lai Him, Abraham, GBS, JP Huangpu District Lo Wing Yan, William, JP Shanghai, 200020, China REMUNERATION COMMITTEE AUDITORS Cheng Yuk Wo (Chairman) Chung Cho Yee, Mico Deloitte Touche Tohmatsu Lam Lee G. Registered Public Interest Entity Auditors 35/F., One Pacific Place NOMINATION COMMITTEE 88 Queensway Chung Cho Yee, Mico (Chairman) Hong Kong Lam Lee G. Cheng Yuk Wo PRINCIPAL REGISTRARS EXECUTIVE COMMITTEE MUFG Fund Services (Bermuda) Limited 4th Floor North, Cedar House Chung Cho Yee, Mico (Chairman) 41 Cedar Avenue Kan Sze Man Hamilton HM 12 Chow Hou Man Bermuda Fong Man Bun, Jimmy Ho Lok Fai Leung King Yin, Kevin HONG KONG BRANCH SHARE REGISTRARS COMPANY SECRETARY Computershare Hong Kong Investor Services Limited Chan Suet Kwan Shops 1712-1716 17th Floor, Hopewell Centre PRINCIPAL BANKERS 183 Queen’s Road East Bank of China (Hong Kong) Limited Wanchai, Hong Kong Bank of Communications Co., Ltd., Hong Kong Branch Chong Hing Bank Limited STOCK CODE DBS Bank (Hong Kong) Limited Fubon Bank (Hong Kong) Limited 497 Hang Seng Bank Limited Industrial and Commercial Bank of China (Asia) Limited COMPANY WEBSITE Oversea-Chinese Banking Corporation Limited The Bank of East Asia, Limited www.csigroup.hk The Hongkong and Shanghai Banking Corporation Limited United Overseas Bank Limited Financial Review REVIEW OF THE RESULTS As at 31 March 2021, the Group’s total external 03 borrowings, comprise of bank borrowings and guaranteed CSI Properties Limited (the “Company”) and its notes, amounted to approximately HK$11,939.0 million subsidiaries (collectively referred as the “Group”) reported (31 March 2020: HK$11,252.2 million) and the Group’s a total revenue of approximately HK$368.7 million for the ratio of total debt to total assets was 41.7% (31 March Annual Report 2021 year ended 31 March 2021, which was mainly generated 2020: 41.5%) (measured by total external borrowings as a from sale of properties, representing decrease of 90.1% percentage to the total assets of the Group). from approximately HK$3,710.0 million recorded last year. All bank borrowings were mainly denominated in Hong The Group reported a consolidated profit attributable Kong dollars, Renminbi, US dollars, Australian dollars and to the owners of the Company of HK$330.8 million for Great British Pound which were on a floating rate basis at the year ended 31 March 2021, represented a decrease of short-term Hong Kong Interbank Offered Rate (“HIBOR”) 71.4% compared with HK$1,155.6 million reported in plus 1% to 2.05% per annum or bore interest at the quoted 2020. Loan Prime Rate by the National Interbank Funding Center or the Shanghai Interbank Offered Rate plus a fixed The decrease in profit was mainly attributable to the margin. The maturity profile (including bank borrowings of reduction in the recorded sales of the Group’s properties approximately HK$795.1 million that contain a repayment under the continuing adverse market conditions caused by on demand clause in the loan agreements are grouped the COVID-19 pandemic. under repayable within one year) usually spreads over a period of around 2-5 years with approximately HK$1,714.9 LIQUIDITY AND FINANCIAL million repayable within one year, HK$8,364.5 million RESOURCES repayable between one to five years, and HK$nil over five The Group maintained a healthy liquid position which years. included bank balances and cash (including cash held by securities brokers) of approximately HK$1,500.8 million (31 The majority of the Group’s assets and liabilities were March 2020: HK$2,675.2 million). The Group generally denominated in Hong Kong dollars, Renminbi and US financed its operations through its internal resources and dollars. As such, the fluctuation of foreign currencies did banking facilities provided by its principal bankers. not have a significant impact on the performance, result and operation of the Group. However, the Group will closely monitor the foreign exchange risk exposure. Financial Review 04 FINANCIAL HIGHLIGHTS (In HK$ million, except otherwise indicated) CSI Properties Limited Year ended 31 March 2021 2020 Revenue Per consolidated statement of profit or loss 369 3,710 Share of revenue of associates and joint ventures 1,666 1,782 2,035 5,492 Profit attributable to owners of the Company 331 1,156 Equity attributable to owners of the Company 13,298 12,884 Earnings per share – basic (HK cents) 3.43 11.77 Dividend per share proposed after the end of the reporting year – Final dividend (HK cents) 0.42 0.50 0.42 0.50 ASSETS VALUE The Group’s properties held for sale are stated at the lower of cost and net realisable value on individual property basis in accordance with the current accounting standards. The principal assets of the Group’s joint ventures are properties held for sale and stated at the lower of cost and net realisable value in accordance with the current accounting standards. In order to fully reflect the underlying economic value of the properties held for sale of the Group and its joint ventures, the Group considers it appropriate also to present to shareholders, as set out below, supplementary information on the Group’s statement of net assets on the basis that the Group were to state its properties held for sale at their open market valuations as at 31 March 2021. 2021 (Unaudited) HK$’000 Net assets attributable to owners of the Company (audited) 13,297,903 Add: Attributable revaluation surplus relating to the Group’s properties held for sale (1) 5,818,060 (1) 1,250,460 Attributable revaluation surplus relating to properties held for sale by joint ventures Net assets attributable to owners of the Company as if the properties held for sale and interests in joint ventures were stated at open market value (2) 20,366,423 Net assets per ordinary share as if the properties held for sale and interests in joint ventures were stated at open market value (3) HK$2.15 (1) Based on open market valuations as at 31 March 2021 carried out by independent firms of qualified professional valuers not connected to the Group (the value of which has been slightly adjusted due to the RMB to HK$ exchange rate) or actual transaction prices or estimated based on average transaction price. (2) Deferred tax liabilities have not been provided for the attributable revaluation surplus of the properties held for sale. (3) Net assets per ordinary share calculated based on 9,488.7 million shares in issue as at 31 March 2021. Financial Review EMPLOYEE 05 As at 31 March 2021, the total number of employees of the Group was 105, excluding the employees of the Novotel Hong Kong Nathan Road Kowloon (“Novotel Hotel”) (2020: 104, excluding the employees of Novotel Hotel). The Group’s employees are remunerated in line with the prevailing market terms and individual performance, with the remuneration Annual Report 2021 package and policies reviewed on a regular basis. In addition to salaries, discretionary bonuses may be rewarded to employees after assessment of the performance of the Group and the individual employee. FINANCIAL GUARANTEE CONTRACTS 2021 2020 HK$’000 HK$’000 Guarantees given by the Group for banking facilities granted to: Joint ventures 8,010,859 8,736,144 An associate 282,854 282,854 8,293,713 9,018,998 and utilised by: Joint ventures 6,716,533 7,273,690 An associate 192,280 183,066 6,908,813 7,456,756 The directors of the Company assessed the risk of default of the joint ventures and an associate at the end of the reporting period and considered the risk to be insignificant and it is unlikely that any guaranteed amount will be claimed by the counterparties. Included in other payables and accruals as at 31 March 2021, there was deferred income in respect of financial guarantee contracts given to joint ventures amounted to HK$11,205,000 (2020: HK$18,728,000). Financial Review 06 PLEDGE OF ASSETS At the end of the reporting period, the following assets were pledged to secure banking facilities granted to the Group: CSI Properties Limited 2021 2020 HK$’000 HK$’000 Property, plant and equipment 208,249 224,819 Properties held for sale 11,928,292 10,966,083 Financial assets at fair value through profit or loss (“FVTPL”) 306,188 289,328 12,442,729 11,480,230 For certain properties, the Group has assigned to the bank all its right, title and benefit as lessor of relevant properties and amount receivable from lessees for certain banking facilities granted to the Group.