Year 2014

The Group’s results for the year ended 31 December 2014 was derived from the businesses of property development and investment, whereas the results for the corresponding period of last year was derived from the sold businesses of production, distribution and sale of beer.

In 2014, the Group recorded consolidated revenue of HK$3.42 million derived from the rental income from investment properties (2013: nil). During the year under review, net profit from the continuing operations amounted to HK$81.77 million (2013: HK$27.09 million), representing an increase of 201.8% from the corresponding period last year. Due to the completion of the disposal of the entire equity interests in 9 previous subsidiaries, the Group recorded a net profit from discontinued operation of HK$3,400 million in 2013, whereas no such profit was recorded during the year. Under the combined effect of the above two factors, profit for the year attributable to owners of the Company amounted to HK$81.77 million (2013: HK$3,427 million), down by 97.6% from the corresponding period last year.

Operating Income, Expenses and Finance Costs


Due to the increase in average bank balances, the Group recorded bank interest income of HK$137 million during the year under review (2013: HK$29.35 million), representing an increase of 366.8% as compared to the corresponding period last year. During the year under review, a gain of approximately HK$73.38 million was recorded from the disposal of the staff quarters (2013: nil).

The Group’s administrative expenses in 2014 were HK$94.78 million (2013: HK$29.50 million), representing an increase of 221.3%, which was mainly attributable to the exclusion of administrative expenses of PRC subsidiaries from the administrative expenses of the continuing operations in last year and the inclusion of the administrative expenses generated from Shenzhen Plant 1 retained by the Group during the year. Moreover, the Group has entered into an agreement with an independent third party in relation to the disposal of the legacy beer production equipment of the Shenzhen Plant 1 during the year under review. The Group has made a provision for impairment of HK$5.8 million for the aforementioned machinery and equipment as the anticipated proceeds of disposal are expected to be lower than the carrying amount of the beer production equipment.

In respect of the completion of the transactions related to the disposal of the equity interests in 9 previous subsidiaries engaged in the production and sale of beer by the Group in 2013, the consideration of the disposal transaction is subject to adjustment as stipulated in the relevant agreements. During the year under review, the aggregate settlement amount of the consideration of the transactions is mildly downward adjusted by HK$32.58 million that results in the reduction of consideration receivable. Such reduction has been charged to the statement of profit or loss for the year. Also, the Group has made an additional provision of HK$24.55 million in accordance with the relevant compensation mechanism as stated in the master agreement of the transactions. The sum of the above two items amounted to HK$57.13 million, accounting for approximately 0.8% of the aggregated considerations of RMB5.38 billion (equivalent to approximately HK$6.73 billion) from the disposal transactions in last year.

The Group has recorded no finance cost as it did not have any bank loan for the year (2013: HK$595 thousand).

Taxation

During the year, one of a wholly-owned subsidiaries of the Group operating in the PRC has made a provision of land appreciation tax of HK$9.13 million due to the disposal of staff quarters (2013: nil).

Capital Expenditure


The Group’s capital expenditure, on a cash basis, for the year was approximately HK$1.05 million (2013: HK$136 million), representing a decrease of 99.2% over that of 2013. In addition, capital expenditure related to the Buxin Project was approximately HK$5.39 million (2013: HK$6.00 million).

Financial Resources and Liquidity


As at 31 December 2014, the Group’s net asset value was HK$4.34 billion (2013: HK$4.26 billiOFon), representing an increase of 1.9% over that of 2013. Based on the number of ordinary shares in issue as at 31 December 2014, the net asset value per share of the Group was HK$2.53 (2013: HK$2.49), an increase of 1.6% from that of 2013.

As at 31 December 2014, the Group had cash and bank balances of HK$3,832 million (2013: HK$3,104 million), representing an increase of 23.5% over that of 31 December 2013, which, restricted bank balances amounted to HK$191 thousand (2013: HK$695 million). Of the Group’s cash and bank balances as at 31 December 2014, 97.9% was in RMB and 2.1% in USD. Net cash flows used in operating activities for the year were HK$240 million (2013: HK$4.00 million).

As most of the transactions from the Group’s daily operations were denominated in Renminbi, there will be low transaction exposure. During the year under review, the Group did not perform currency hedge of the transactions actively. The consolidated financial statements of the Group are presented in Hong Kong dollars, and changes in the exchange rate of HK$ against RMB generated exchange differences upon currency translation in the book, but the said exchange differences arising from the currency translation will pose no effect on the daily operations of the Group. In 2014, the Group recorded net foreign exchange losses of HK$2.91 million (2013: net foreign exchange gains HK$26.20 million).

As at the end of 2014, the Group did not have any outstanding bank loan. Given the Group’s existing amount cash and bank balances, the Group will have sufficient financial resources to finance its existing continuing operations in the coming year.

None of the assets of the Group was pledged to any creditors and there was no material contingent liability recorded as at the end of 2014.

Human Resources


The Group had 182 (2013: 546, representing the aggregate number of employees from the head office in Hong Kong and Shenzhen Plant 1) employees as at the end of 2014. The total employee remuneration and provident fund contributions (excluding directors’ remuneration) of the continuing operations in 2014 was HK$63.38 million (2013: HK$82.40 million, representing the aggregate relevant expenditures from the head office in Hong Kong and Shenzhen Plant 1). The Group carried out a staff redundancy plan continuously during 2014 and, as a result, the total number of employees of the Group gradually dropped to 182 at the end of 2014. Various basic benefits were provided to the Group’s staff with an incentive policy which was designed to remunerate staff by combined references to the Group’s operating results as well as the performance of the individual staff member.