Annual Report 2020 3

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Annual Report 2020 3 International Community, Tianjin Contents Board of Directors and Committees 2 Directors and Organisation 76 Corporate Information 3 Sustainable Development 86 Shareholders’ Information and Financial Calendar 4 Accolades & Awards 2020 96 Corporate Structure 5 Investor Relations 98 Financial Highlights 6 Corporate Governance Report 100 Group Financial Summary 8 Report of Directors 119 2020 Business Milestones 9 Financial Information Chairman’s Statement 14 Independent Auditor’s Report 147 Management Discussion and Analysis Consolidated Income Statement 153 Overall Performance 21 Consolidated Statement of Comprehensive Income 154 Property Development 22 Consolidated Statement of Financial Position 155 Commercial Properties 48 Consolidated Statement of Changes in Equity 157 Other Property-Related Operations 58 Consolidated Statement of Cash Flows 159 Land Reserves 62 Notes to the Financial Statements 161 Group Finance 71 Five Year Financial Summary 253 Others 75 2 China Overseas Land & Investment Ltd. Board of Directors and Committees EXECUTIVE DIRECTORS AUDIT AND RISK MANAGEMENT COMMITTEE Yan Jianguo Chairman Luo Liang Vice Chairman Li Man Bun, Brian David* Zhang Zhichao Chief Executive Officer Fan Hsu Lai Tai, Rita Guo Guanghui Vice President Chan Ka Keung, Ceajer NON-EXECUTIVE DIRECTORS REMUNERATION COMMITTEE Zhuang Yong Vice Chairman Chan Ka Keung, Ceajer* Chang Ying Fan Hsu Lai Tai, Rita Li Man Bun, Brian David INDEPENDENT NON-EXECUTIVE DIRECTORS NOMINATION COMMITTEE Fan Hsu Lai Tai, Rita Fan Hsu Lai Tai, Rita* Li Man Bun, Brian David Li Man Bun, Brian David Chan Ka Keung, Ceajer Chan Ka Keung, Ceajer AUTHORISED REPRESENTATIVES CORPORATE GOVERNANCE COMMITTEE Yan Jianguo Luo Liang Chan Ka Keung, Ceajer* Fan Hsu Lai Tai, Rita Li Man Bun, Brian David Luo Liang * Committee Chairman Annual Report 2020 3 Corporate Information REGISTERED OFFICE LEGAL ADVISOR 10/F., Three Pacific Place Mayer Brown 1 Queen’s Road East, Hong Kong Telephone : (852) 2988 0666 INDEPENDENT AUDITOR Facsimile : (852) 2865 7517 Website : www.coli.com.hk Ernst & Young Certified Public Accountants and COMPANY SECRETARY Registered Public Interest Entity Auditor Edmond Chong PRINCIPAL BANKERS (In Alphabetical Order) REGISTRAR AND TRANSFER OFFICE Agricultural Bank of China Bank of China Tricor Standard Limited Bank of Communications Co., Ltd. Hong Kong Branch Level 54, Hopewell Centre Bank of Shanghai Co., Ltd 183 Queen’s Road East, Hong Kong China Construction Bank Corporation Telephone : (852) 2980 1333 China Merchants Bank Facsimile : (852) 2810 8185 DBS Bank Ltd., Hong Kong Branch E-mail : [email protected] Industrial and Commercial Bank of China Nanyang Commercial Bank, Limited INVESTOR RELATIONS Postal Savings Bank of China Shanghai Pudong Development Bank Co., Ltd. Corporate Communications Department Sumitomo Mitsui Banking Corporation Telephone : (852) 2988 0666 The Hongkong and Shanghai Banking Corporation Limited Facsimile : (852) 2865 7517 E-mail : [email protected] PUBLIC RELATIONS Corporate Communications Department Telephone : (852) 2988 0666 Facsimile : (852) 2865 7517 E-mail : [email protected] 4 China Overseas Land & Investment Ltd. Shareholders’ Information and Financial Calendar LISTING The Company’s shares are listed on The Stock Exchange of Hong Kong Limited (“SEHK”) and certain notes issued by the Company’s subsidiaries are listed on SEHK and/or other stock exchange. STOCK CODE Shares SEHK : 00688 Bloomberg : 688:HK Reuters : 0688.HK FINANCIAL CALENDAR Interim results announcement : 24 August 2020 Closure of Register of Members : 22 September 2020 for interim dividend Interim dividend paid : 5 October 2020 Final results announcement : 29 March 2021 Closure of Register of Members : 17 June 2021 to for annual general meeting 22 June 2021 (both days inclusive) Annual General Meeting : 22 June 2021 Closure of Register of Members : 28 June 2021 for final dividend Final dividend payable : 12 July 2021 Annual Report 2020 5 Corporate Structure PROPERTY DEVELOPMENT* t .BJOMBOE$IJOB t )POH,POH t .BDBV COMMERCIAL PROPERTIES t .BJOMBOE$IJOB t )POH,POH t .BDBV t -POEPO OTHER PROPERTY RELATED OPERATIONS t .BJOMBOE$IJOB t )POH,POH * Property development in 81 major cities in Mainland China, including Beijing, Shanghai, Guangzhou, Shenzhen, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Ezhou, Foshan, Fuzhou, Guiyang, Haikou, Hangzhou, Harbin, Jiangmen, Jinan, Kunming, Nanchang, Nanjing, Ningbo, Qingdao, Sanya, Shenyang, Shijiazhuang, Suzhou, Taiyuan, Tianjin, Urumqi, Wanning, Weihai, Wenzhou, Wuhan, Wuxi, Xiamen, Xi’an, Yantai, Zhangzhou, Zhaoqing, Zhengzhou, Zhenjiang^, Zhongshan, Zhuhai, Baotou#, Changzhou#, Ganzhou#, Guilin#, Hefei#, Hohhot#, Huangshan#, Huizhou#, Jilin#, Jinhua#, Jining#, Jiujiang#, Langfang#, Lanzhou#, Linyi#, Liuzhou#, Nanning#, Nantong#, Qingyuan#, Quanzhou#, Shantou#, Shaoxing#, Taizhou#, Tangshan#, Tianshui#, Weifang#, Weinan#, Xining#, Xuzhou#, Yancheng#, Yangzhou#, Yinchuan#, Zhanjiang#, Zhuzhou#, Zibo#, Zunyi# as well as in Hong Kong and Macau ^ The city where both China Overseas Land & Investment Limited (the “Company”) and its subsidiaries (the “Group”) and China Overseas Grand Oceans Group Limited (“COGO”) have operations. # The cities where COGO has operations 6 China Overseas Land & Investment Ltd. Financial Highlights For the year ended 31 December 2020 2019 Change Financial Highlights (RMB billion) Revenue 185.79 163.65 13.5% Profit attributable to the shareholders of the Company 43.90 41.62 5.5% Profit attributable to the shareholders of the Company excluding fair value gain1 38.03 34.30 10.9% Contracted property sales2 360.72 320.59 12.5% Financial Ratios Net gearing (%) 32.6 33.7 –1.1 3 Interest coverage ratio (times) 7.8 7.4 +0.4 4 Dividend payout (%)5 30.2 28.4 +1.8 3 Return on equity (%)6 14.8 15.8 –1.0 3 Weighted average borrowing cost (%) 3.8 4.2 –0.4 3 Financial Information per Share (RMB) Earnings 4.01 3.80 5.5% Dividends (HK$) 1.18 1.02 15.7% — Interim dividend (HK$) 0.45 0.45 – — Final dividend (HK$) 0.73 0.57 28.1% Net assets 28.68 25.61 12.0% Land Reserves (million sq m) Development land bank7 61.79 65.22 –5.3% Notes: 1 Representing profit attributable to the shareholders of the Company after deducting net gains after tax arising from changes in fair value of investment properties 2 Representing the Group together with its associates and joint ventures (collectively the “Group Series of Companies”) 3 Change in percentage points 4 Change in number of times 5 Calculated based on the profit attributable to the shareholders of the Company after deducting net gains after tax arising from changes in fair value of investment properties 6 Calculated based on the profit attributable to the shareholders of the Company divided by the average of the equity attributable to shareholders of the Company 7 Representing year end figures of the Group Series of Companies (excluding COGO) Annual Report 2020 7 Financial Highlights (continued) EARNINGS PER SHARE DIVIDENDS PER SHARE RMB HK$ 4.01 1.18 3.80 3.44 1.02 3.20 3.08 0.90 0.77 0.80 FY 16 17 18 19 20 FY 16 17 18 19 20 NET ASSETS PER SHARE RMB 28.68 25.61 22.61 20.13 18.12 FY 16 17 18 19 20 NET GEARING LAND RESERVES* % million sq m 33.7 33.7 32.6 70.10 65.22 63.75 61.79 27.9 56.77 7.5 FY 16 17 18 19 20 FY 16 17 18 19 20 * Representing the Group Series of Companies (excluding COGO) 8 China Overseas Land & Investment Ltd. Group Financial Summary KEY FINANCIAL INFORMATION AND RATIOS Financial Year 2016 2017 2018 2019 2020 RMB RMB RMB RMB RMB Earnings per share 3.08 3.20 3.44 3.80 4.01 Dividend per share (HK$) 0.77 0.80 0.90 1.02 1.18 — Interim Dividend (HK$) 0.35 0.35 0.40 0.45 0.45 — Final Dividend (HK$) 0.42 0.45 0.50 0.57 0.73 Net assets per share 18.12 20.13 22.61 25.61 28.68 Net gearing (%) 7.5 27.9 33.7 33.7 32.6 Net debt The equity attributable to the shareholders of the Company Interest coverage ratio (times) 6.3 8.2 7.8 7.4 7.8 Operating profit — Total interest income Interest expense* KEY PROFIT AND LOSS ITEMS For the year ended 31 December 2016 2017 2018 2019 2020 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Revenue 138,637,906 142,798,668 144,027,289 163,650,953 185,789,528 Operating profit 48,929,983 54,071,963 59,414,910 62,344,200 65,231,389 Profit attributable to the shareholders of the Company 31,282,439 35,059,478 37,716,257 41,618,313 43,903,954 KEY STATEMENT OF FINANCIAL POSITION ITEMS As at 31 December 2016 2017 2018 2019 2020 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Fixed assets# 63,384,862 84,058,238 100,720,347 118,040,070 145,889,892 Long-term investments 14,476,555 17,245,299 23,320,828 36,306,418 33,313,889 Other non-current assets 8,202,326 17,896,314 14,320,460 8,917,738 8,200,412 Net current assets 245,850,787 245,055,790 277,841,093 302,383,346 332,290,978 Non-current liabilities (128,825,470) (137,214,595) (159,590,874) (176,502,947) (191,345,851) Net assets 203,089,060 227,041,046 256,611,854 289,144,625 328,349,320 * Before capitalisation and excluding interest on amounts due to fellow subsidiaries and a related company, associates, joint ventures and non-controlling shareholders # Representing investment properties and property, plant and equipment Annual Report 2020 9 2020 Business Milestones 24 January The Group actively responded to the call of the nation and worked in unity against the COVID-19 pandemic. It actively and efficiently implemented pandemic prevention and control measures in its properties and communities, and accelerated the resumption of work and production in an orderly manner.
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