Contents Company Profile 2–3 Corporate Information 4 Chairman’s Statements 5–7 Property Development Projects 8–19 Property Investment Project 20 Management Discussion and Analysis 21–30 Corporate Governance Report 31–37 Biographical Details of Directors and 38–39 Senior Management Report of the Directors 40–51 Independent Auditors’ Report 52–53 Consolidated Statement of Profit or Loss 54 Consolidated Statement of Comprehensive Income 55 Consolidated Statement of Financial Position 56–57 Consolidated Statement of Changes in Equity 58–59 Consolidated Statement of Cash Flows 60–62 Notes to Financial Statements 63–137 Particulars of Investment Properties 138 Five Year Financial Summary 139 Financial Highlights 140 2 Peking University Resources (Holdings) Company Limited Company Profi le BUSINESS AREAS Peking University Resources (Holdings) Company Limited (“PKU Resources” or the “Company”, together with its subsidiaries, collectively the “Group”) was formerly known as EC-Founder (Holdings) Company Limited. In order to seek higher proceeds for shareholders, the Company began to launch multi-business development strategy based on information products distribution business starting in 2013. In January 2013, the Company completed the acquisition of subsidiaries engaged in the business of property development and property investment from the subsidiary of Peking University Founder Group Company Limited (“Peking Founder”, together with its subsidiaries, collectively the “Peking Founder Group”), and gradually entered the fields of real estate development and commercial real estate operations, making itself an overseas listing platform of real estate business subordinate to Peking University and Peking Founder and also the only university-run real estate development enterprise in Hong Kong capital market. In order to further expand its business scope, the Company completed the acquisition of 12 high-quality real estate development projects from Peking University Resources Group Holdings Co., Ltd and its subsidiaries (“PKU Resources Group”) on 2 January 2015. As at the date of this annual report, the Company’s operation area has covered 14 cities of China and has 24 real estate development projects at different development stages. In the future, the Company will be mainly engaged in the real estate investment business. BACKGROUND OF SUBSTANTIAL SHAREHOLDERS Peking University, founded in 1898, initially named Imperial University of Peking, is the first national comprehensive university of China, and also the highest educational authority of China at that time. After the 1911 revolution, she was renamed the present name in 1912. In recent years, Peking University has entered a new historical stage of development and has achieved remarkable achievements in discipline construction, talent training, teaching staff construction, teaching and scientific research and other areas, laying a solid foundation to build itself into one of the world-class universities. Today, Peking University has become a cradle for training high-quality creative talents for China, a frontier of scientific researches, an important base for knowledge innovation and an important bridge and window for international exchanges. Annual Report 2015 3 Company Profile (continued) Peking Founder was invested and founded in 1986 by Peking University, with Peking University holding 70% shares and the management holding 30% shares. As the leader and a founder of Peking Founder, Academician Wang Xuan invented the Chinese-character Laser Phototypesetting Technology, which laid the initial solid foundation for the future development of Peking Founder. Today, Peking Founder Group has successfully transformed into a diversified investment holding group, with its business encompassing IT, healthcare & pharmaceuticals, property, finance, bulk-commodity trading, etc.. As a market-oriented enterprise that has successfully integrated production, teaching and research, Peking Founder Group is one of the best models in interpreting the concept of “innovation” advocated by the Chinese government, that is, “to establish a market-oriented system for technological innovation, in which enterprises play the leading role and which combines the efforts of enterprises, universities and research institutes.” Relying on Peking University, Peking Founder Group has possessed and created core technologies crucial for the development of China’s IT and healthcare & pharmaceutical industries. As one of the first 6 technical innovation pilot enterprises of China, Peking Founder Group has been repeatedly awarded honorary titles like “National Technological Innovation Model Enterprise”, etc.. Peking Founder Group has established good cooperative relations with many domestic well-known enterprises and governments. Thanks to its open and standardized capital platform, the Group has attracted international investment from Intel, Omron, Credit Suisse, Bank of East Asia, and Taiwan’s Fubon Financial Holding. With five industry groups and more than 35,000 employees distributed in major Chinese cities, Peking Founder Group has performed outstandingly in expanding the overseas markets. In addition, Peking Founder Group has owned 6 public companies listed in the stock exchanges of Shanghai, Shenzhen and Hong Kong. As an enterprise invested and founded by Peking University, Peking Founder Group has, since its inception, been adhering to the university’s spirit — “be a man of honesty and integrity and do things in a down-to-earth manner”, and conscientiously performing its social corporate responsibilities. While lending support to the improvement of China’s soft power, the Group has developed a sense of “responsibility for innovation” in the areas of serving the country through industry, educational regurgitation-feeding, and repaying the society. At the same time, the Group has for long focused on the four major areas, namely, national culture, national health, national education, and science and technology. 4 Peking University Resources (Holdings) Company Limited Corporate Information BOARD OF DIRECTORS PRINCIPAL BANKERS Executive directors The Export-Import Bank of China Mr Cheung Shuen Lung (Chairman) Bank of Beijing Mr Fang Hao (President) Bank of Communications Mr Zhou Bo Qin Huaxia Bank Mr Wei Jun Min Pingan Bank Mr Xie Ke Hai DBS Bank (Hong Kong) Limited Mr Zheng Fu Shuang Industrial and Commercial Bank of China (Asia) Limited Independent non-executive directors REGISTERED OFFICE Mr Li Fat Chung Canon’s Court Ms Wong Lam Kit Yee 22 Victoria Street Ms Cao Qian Hamilton HM12 Bermuda COMMITTEES HEAD OFFICE AND PRINCIPAL PLACE Audit Committee OF BUSINESS IN HONG KONG Mr Cheung Shuen Lung (Chairman) Ms Wong Lam Kit Yee Unit 1408, 14th Floor Ms Cao Qian Cable TV Tower 9 Hoi Shing Road Remuneration Committee Tsuen Wan New Territories Mr Li Fat Chung (Chairman) Hong Kong Mr Cheung Shuen Lung Ms Wong Lam Kit Yee SHARE REGISTRARS AND TRANSFER OFFICE Nomination Committee Principal registrar Mr Cheung Shuen Lung (Chairman) MUFG Fund Services (Bermuda) Limited The Belvedere Building Ms Wong Lam Kit Yee 69 Pitts Bay Road Ms Cao Qian Pembroke HM08 Bermuda COMPANY SECRETARY Ms Tang Yuk Bo, Yvonne Hong Kong branch share registrars and transfer office Tricor Tengis Limited AUTHORISED REPRESENTATIVES Level 22, Hopewell Centre Mr Cheung Shuen Lung 183 Queen’s Road East Mr Fang Hao Hong Kong AUDITORS LISTING INFORMATION Ernst & Young Main board of The Stock Exchange of Hong Kong Limited Certified Public Accountants Stock code: 00618 Board Lot: 2,000 shares LEGAL ADVISERS COMPANY WEBSITE Jun He Law Offices www.pku-resources.com Annual Report 2015 5 Chairman’s Statements Practicing the development model of “quality plus resources” and “industry plus capital” 6 Peking University Resources (Holdings) Company Limited Chairman’s Statements (continued) Dear shareholders, Over the past year 2015, the growth of China’s economy has shown a downward trend, with a year-over-year GDP growth of 6.9% recorded, hitting a history low for twenty five years. With the overall sluggish economy, the stocks in real estate market remain high which has adversely hurt the enterprises’ desire to invest. In that context, the performance of various indicators representative of the real estate industry is barely satisfactory. In terms of the real estate projects that completed their development and investment, the growth dropped down for a consecutive nineteen months, reaching a lowest level on record, with rather poor performance of indicators such as acquired land area, newly constructed project area. However, such bad situation was improved by progressive recovery in sale volume as well as selling price of the real estate, since the government has successively launched policies to relax restrictions based on its firm determination to uphold the keynote of policy to destock and promote consumption. A growth in trading volume of real estates in the first-tier, second-tier and third-tier cities is recorded to a varying extent, with trading prices grow at a steady pace in the first-tier cities, but are clearly differentiated in the second-tier and third-tier cities. In the face of the weak macro economy and complicated industrial situation, the Board has been able to consolidate its principal activity of real estate constantly with acute market sensibility, leading to a continuous growth in key operation indicators. The Group’s comprehensive transformation to a property developer was achieved through its acquisition of 12 projects under the parent, which was