Hkr International Limited 香港興業國際集團有限

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

HKR INTERNATIONAL LIMITED

^*香港興業國際集團有限公司^*

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00480)

INTERIM RESULTS ANNOUNCEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

The board of directors (the “Board” or the “Directors”) of HKR International Limited (the “Company”) is pleased to announce the results of the Company and its subsidiaries (the “Group”) for the six months ended 30 September 2010 (the “Period”).

INTERIM RESULTS

The Group’s unaudited consolidated profit attributable to shareholders of the Company for the Period was HK$711.0 million, compared with HK$657.9 million for the corresponding period last year. Earnings per share were HK52.66 cents, compared with HK48.72 cents for the corresponding period last year.

INTERIM DIVIDEND

The Board has declared the payment of an interim dividend of HK7 cents per share for the Period to its shareholders whose names will appear on the registers of members of the Company on 13 December 2010. The interim dividend will be paid on 22 December 2010. An interim dividend of HK6 cents per share was paid by the Company to its shareholders for the corresponding period last year.

CLOSURE OF REGISTERS OF MEMBERS

The main and branch registers of members of the Company will be closed from Friday, 10 December 2010 to Monday, 13 December 2010, both days inclusive, during the period no transfer of shares will be registered. In order to qualify for the declared interim dividend, all transfers of shares accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Thursday, 9 December 2010.

– 1 –

CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended
30 September

NOTES

2010

HK$’M

2009

HK$’M

(unaudited)

(unaudited)
Turnover

3

868.0

945.8
Cost of sales

(589.2)

(666.6)
Gross profit Other operating income

278.8 149.3

279.2
99.4
Administrative expenses Change in fair value of investment properties
Realised gains on disposals Unrealised gains
Finance costs Share of results of associates Share of results of jointly controlled entities

(188.7)

(172.4)

1.0
549.7 (20.3)
93.1

419.0 301.8 (41.8)
49.6

4

48.9

(7.5)
Profit before taxation Taxation

5 6

911.8
(120.8)

927.3
(242.0)

Profit for the period

791.0

685.3
Attributable to:
Owners of the Company Non-controlling interests

711.0
80.0

657.9
27.4

791.0

685.3
Earnings per share
Basic (HK cents)

8

52.66 52.35

48.72

46.98

Diluted (HK cents)

– 2 –

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended
30 September
2010

HK$’M

2009

HK$’M

(unaudited)

(unaudited)
Profit for the period

791.0

685.3
Other comprehensive income:
Exchange differences arising from translation of foreign operations
Exchange difference arising from net investment in jointly controlled entities

134.4
91.9

126.2
4.1
Available-for-sale financial assets:
Fair value changes during the period Reclassified to profit or loss upon disposal Deferred tax arising on fair value change

(13.9)
(9.2) (0.3)

48.0
(22.3)
(0.7)

Other comprehensive income for the period (net of tax) Total comprehensive income for the period

202.9 993.9

155.3 840.6
Total comprehensive income attributable to:
Owners of the Company

910.2
83.7

808.9

31.7

Non-controlling interests

993.9

840.6
– 3 –

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 September
2010

31 March
2010

NOTES

HK$’M

HK$’M

(audited and restated)

(unaudited)

Non-current assets Investment properties

6,665.2 2,434.5
35.2
401.2
5,736.6
58.1 65.8
134.7
4.1

5,298.6 2,410.8
34.4
Property, plant and equipment Prepaid lease payments

Interests in associates

356.9

4,918.5
52.4
Interests in jointly controlled entities Held-to-maturity investments Available-for-sale financial assets Other assets
79.2 53.2

Deferred tax assets

3.2

15,535.4

13,207.2
Current assets Inventories

149.6
22.2 88.2

134.7
30.6 92.2
Properties held for sale Trade receivables

9

Deposits, prepayments and other financial assets Properties held for/under development for sale Amounts due from associates Amount due from a jointly controlled entity Taxation recoverable

224.2
2,238.6
192.8
27.5

287.3
1,735.1
211.5
18.2

3.3

1.7
Held-to-maturity investments Available-for-sale financial assets Financial assets at fair value through profit or loss Pledged bank deposits

89.0

135.5
9.2
128.6
59.3

–
0.2
59.4

Bank balances and cash

2,105.1

2,055.4

5,200.1

4,899.3
Current liabilities Trade payables, provision and accrued charges Deposits received and other financial liabilities Amounts due to associates

10

885.0 723.6
20.2 41.7
383.1
1.3

933.4 694.5
10.0

Taxation payable

43.6

Bank loans due within one year Other liabilities due within one year Convertible bonds – liability component
159.3
4.7
830.5

–
2,054.9 3,145.2

2,676.0

2,223.3

Net current assets

Total assets less current liabilities

18,680.6

15,430.5
– 4 –

30 September
2010

31 March
2010

HK$’M

HK$’M

(audited and restated)

(unaudited)

Non-current liabilities
Bank loans due after one year Other liabilities due after one year Deferred tax liabilities

3,622.8
997.8 478.4

1,411.3
886.4 383.1

5,099.0

2,680.8

13,581.6

12,749.7
Capital and reserves
Share capital Reserves

337.5
12,045.5

337.5
11,297.3

Equity attributable to owners of the Company Non-controlling interests

12,383.0
1,198.6

11,634.8
1,114.9

13,581.6

12,749.7
– 5 –

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.

BASIS OF PREPARATION

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

2.

PRINCIPAL ACCOUNTING POLICIES

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

Except as described below, the accounting policies used in the interim financial information are consistent with those followed in the preparation of the consolidated financial statements of the Group for the year ended 31 March 2010, included in the annual report of the Group for the year ended 31 March 2010.

In the current interim period, the Group has applied, for the first time, a number of new and revised standards, amendments and interpretations (“new and revised HKFRSs”) issued by the HKICPA which are effective for the financial year beginning on 1 April 2010.

The adoption of these new and revised HKFRSs has resulted in the following changes and impact on the results and financial position for the current and prior accounting periods. The adoption of the other new and revised HKFRSs had no material effect on how the results and financial position for the current and prior accounting periods have been prepared and presented.

Amendment to HKAS 17 “Leases”

As part of Improvements to Hong Kong Financial Reporting Standards (“HKFRSs”) issued in 2009, HKAS 17 “Leases” has been amended in relation to the classification of leasehold land. Before the amendment to HKAS 17, the Group was required to classify leasehold land as operating leases and to present leasehold land as prepaid lease payments in the condensed consolidated statement of financial position. The amendment to HKAS 17 has removed such a requirement. The amendment requires that the classification of leasehold land should be based on the general principles set out in HKAS 17, that is, whether or not substantially all the risks and rewards incidental to ownership of a leased asset have been transferred to the lessee.

In accordance with the transitional provisions set out in the amendment to HKAS 17, the Group reassessed the classification of unexpired leasehold land as at 1 April 2010 based on information that existed at the inception of the leases. Leasehold land that qualifies for finance lease classification has been reclassified from prepaid lease payments to property, plant, and equipment retrospectively. This resulted in a reclassification of prepaid lease payments with a previous carrying amount of HK$109.1 million at 1 April 2009 to property, plant and equipment that are measured at cost model.

– 6 –

The effect of changes in accounting policy of HKAS 17 on the financial positions of the Group as at 31 March 2010 and 1 April 2009 is as follows:

As at
31 March 2010
(originally stated)

HK$’M

As at
31 March 2010

(restated)

Adjustment

HK$’M

2,345.7
99.5
65.1
(65.1)
2,410.8
34.4

Total effects on net assets

2,445.2

–

2,445.2

As at
1 April 2009
(originally stated)

HK$’M

As at
1 April 2009

(restated)

Adjustment

HK$’M

2,488.5
143.1
109.1
(109.1)
2,597.6
34.0

Total effects on net assets

2,631.6

–

2,631.6

HKFRS 3 (Revised) “Business combinations” and HKAS 27 (Revised) “Consolidated and separate financial statements”

The Group applies HKFRS 3 (Revised) “Business combinations” prospectively to business combinations for which the acquisition date is on or after 1 April 2010. The requirements in HKAS 27 (Revised) “Consolidated and separate financial statements” in relation to accounting for changes in ownership interests in a subsidiary after control is obtained and for loss of control of a subsidiary are also applied prospectively by the Group on or after 1 April 2010.

As there was no transaction during the current interim period in which HKFRS 3 (Revised) and HKAS 27 (Revised) are applicable, the application of HKFRS 3 (Revised), HKAS 27 (Revised) and the consequential amendments to other HKFRSs had no effect on the condensed consolidated financial statements of the Group for the current or prior accounting periods.

Results of the Group in future periods may be affected by future transactions for which HKFRS 3 (Revised), HKAS 27 (Revised) and the consequential amendments to the other HKFRSs are applicable.

The Group has not early applied those new, revised and amended standards or interpretations that have been issued but are not yet effective.

HKFRS 9 “Financial instruments”

HKFRS 9 “Financial instruments” introduces new requirements for the classification and measurement of financial assets and will be effective from 1 January 2013, with earlier application permitted. The standard requires all recognised financial assets that are within the scope of HKAS 39 “Financial instruments: Recognition and measurement” to be measured at either amortised cost or fair value. Specifically, debt investments that (i) are held within a business model whose objective is to collect the contractual cash flows and (ii) have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost. All other debt investments and equity investments are measured at fair value. The application of HKFRS 9 might affect the classification and measurement of the Group’s financial assets.

The directors of the Company anticipate that the application of the other new, revised and amended standards or interpretations will have no material impact on the results and the financial position of the Group.

– 7 –

3.

SEGMENT INFORMATION

The Group is currently organised into seven operating divisions: property development, property investment, services provided (club operation, provision of professional property management and transportation services to the residents of Discovery Bay), hotel operation, healthcare (provision of medical and dental care services, comprising cancer centres, dental clinics, diabetic and cardiovascular centres and multi-specialty outpatient centres), manufacturing (manufacturing and sales of bathroom products) and securities investment. The following is an analysis of the Group’s revenue and results by operating segments for the period under review:

Property development

HK$’M

Property investment

HK$’M

Services provided

HK$’M

Hotel operation

HK$’M

Securities investment

HK$’M

Healthcare Manufacturing

Total

HK$’M

Six months ended
30 September 2010

TURNOVER Segment revenue – sales to external customers derived by the Group and associates Excluding turnover of associates Excluding sale proceeds of investment properties located in the People’s Republic of China (“PRC”)

421.8 (385.1)
225.4 (42.1)
190.6
–
144.0
–
217.9
–
110.2
–
9.2
–
1,319.1
(427.2)

––
(14.7)
–
––
––
––
––

–

(14.7)

(9.2)

Excluding sale proceeds of securities investment

(9.2)

Consolidated turnover, as reported

36.7

168.6

190.6

144.0

217.9

110.2

–

868.0

RESULTS Segment results – total result of the Group, associates and jointly controlled entities (note 1) Excluding segment results of associates and jointly controlled entities not shared by the Group

178.0

218.0

2.8
30.8
–
(8.8)
–
(10.3)
–
(7.4)
–
12.2
–
412.5

(113.5)

(110.7)

Segment results attributable to the Group

64.5

220.8

30.8

(8.8)

(10.3)

(7.4)

12.2

301.8

Unallocated corporate expenses Finance costs and corporate level exchange difference

(35.4) (17.5)

Net unrealised gains on fair value change of investment properties

(note 2)

456.7

Net unrealised gain on fair value change of investment properties attributable to the Group’s interest in a jointly controlled entity and associates

85.4

Profit for the period Non-controlling shareholders’ share of profit for the period

791.0 (80.0)

Profit for the period attributable to the owners of the Company

711.0

– 8 –

Property development

HK$’M

Property investment

HK$’M

Services provided

HK$’M

Hotel operation

HK$’M

Securities investment

HK$’M

Healthcare Manufacturing

Total

HK$’M

Six months ended
30 September 2009

TURNOVER Segment revenue – sales to external customers derived by the Group and associates Excluding turnover of associates Excluding sale proceeds of investment properties located in the PRC
872.6 (714.6)
1,324.1
(42.2)
185.9
–
121.2
–
261.1 (59.0)
117.1
–
38.5
–
2,920.5
(815.8)

––
(1,120.4)
–
––
––
––
––

–

(1,120.4)

(38.5)
Excluding sale proceeds of

securities investment

(38.5)

Consolidated turnover, as reported

158.0

161.5

185.9

121.2

202.1

117.1

–

945.8

RESULTS Segment results – total result of the Group, associates and jointly controlled entities (note 3) Excluding segment result of associates and jointly controlled entities not shared by the Group
133.3 (65.5)
373.5
7.5
11.4
–
(11.7)
–
(12.1)
–
12.7
–
53.9
–
561.0 (58.0)
Segment results attributable to

the Group

67.8

381.0

11.4

(11.7)

(12.1)

12.7

53.9

503.0

Unallocated corporate expenses Finance costs and corporate level exchange difference
(16.9) (39.5)
Net unrealised gains on fair value change of investment properties