Chuang Consortium International : Financial Reporting Document

Contents

2 Chairman's Statement

58 Corporate Information

62 Biographical Details of Honorary Chairman,   Directors and Senior Management

69 Corporate Governance Report

92 Environmental, Social and Governance Report

116 Report of the Directors

130 Independent Auditor's Report

1. Consolidated Income Statement
2. Consolidated Statement of Comprehensive Income
3. Consolidated Balance Sheet

1. Consolidated Cash Flow Statement
2. Consolidated Statement of Changes in Equity
3. Notes to the Consolidated Financial Statements

239 Particulars of Principal Properties

1. Summary of Financial Information
2. Notice of Annual General Meeting

Chairman's Statement

Chairman's

Statement

2 Chuang's Consortium International Limited

Chairman's Statement

Business and Financial Highlights

Amidst the battered global and local economies, caused mainly by the raging Covid-19 pandemic and volatile Sino-US relationship, the Group has made strides, highlighted below, to enhance the value of our assets and to strengthen our financial performance and cash position. The Group has also successfully achieved a turnaround of profit attributable to shareholders.

Business

1. For ONE SOHO, the joint venture project at Mongkok, development is proceeding as scheduled to build a residential/commercial building comprising 322 residential units, clubhouse facilities, commercial podium and carparking spaces. Site formation and foundation works have been completed, and superstructure works are in progress. Pre-sale consent of the 322 residential units has been obtained in April 2021 and pre-sale has commenced. Up-to-date, a total of 148 units have been pre-sold at aggregate amount of about HK$1.0 billion, and aggregate deposits amounting to about HK$62.4 million have been received.
2. For Po Shan Road joint venture project, site formation and foundation works have just been completed. In addition to the two sets of approved building plans previously disclosed, the Group is studying the possibility of developing the property into one vertical house with 8-storey height. The 8-storey house will include a luxury living and dining area with 6m floor-to-floor height, an entertainment floor and 6 residential suite floors with at least 3.5m floor-to-floor height. The proposed GFA for the house is about 44,388 sq. ft., with an additional of about 4,446 sq. ft. for garden and about 2,191 sq. ft. for roof and flat roof area. In the meantime, both joint venture partners are also exploring other options (including disposal) to accelerate return on this investment. Marketing to promote this project has been commenced.
3. For the redevelopment project at Gage Street, following the auction for Nos. 16-18 Gage Street in mid-July 2020, the compulsory acquisition of the remaining 3 units was subsequently completed in August 2020. The Group has therefore unified the ownership of Nos. 16-20 Gage Street and successfully consolidated this project with a total site area of about 3,600 sq. ft.. It is currently planned that a residential/commercial building with GFA of about 35,000 sq. ft. will be developed. Hoarding and demolition works have been commenced which will be completed in the third quarter of 2021. Foundation work will be followed promptly. With the prime location at Central, the Group is optimistic about the prospect of this project.

Annual Report 2021

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Chairman's Statement (continued)

1. For the development project, Greenview Garden, in Vietnam, in order to capitalize on the rising property market in Vietnam and to unlock its stored value for generation of revenue and cashflow, the Group had negotiation and, subsequent to the year end, entered into a conditional sale and purchase agreement and disposed of Greenview Garden to an independent third party for a consideration of about US$25.6 million (equivalent to approximately HK$198.8 million). The transaction is completed with consideration duly received by the Group in May 2021 except for an amount of about US$1.3 million (equivalent to approximately HK$10.1 million) which is held in an escrow account with a bank pending the assessment of tax obligations by the Vietnam Tax Authority. The surplus, if any, will be released to the Group after the tax clearance or 2 years after completion of the disposal (whichever is earlier). A net profit of approximately HK$85 million (subject to the adjustment of the outcome of the tax clearance) will be recorded for this transaction. This disposal can help to unlock the stored value in this project and has further strengthened the financial position of the Group.
2. For Ap Lei Chau project acquired in 2019, the Group has obtained vacant possession of the whole property during the year. The property has a site area of about 4,320 sq. ft. and has a developable GFA of about 40,000 sq. ft.. General building plans of the project have been approved to develop a 27-storey residential/commercial building with clubhouse facilities and retail units at the podium levels. Hoarding and demolition works have been completed, and foundation work is in progress.
3. For The Esplanade in Tuen Mun, upon the issuance of certificate of compliance, all residential units have been sold up to the date of this report, and 365 units (out of the 371 units) have been handed- over to end-buyers during the year ended 31 March 2021. This has improved the Group's financial performance and position. The Group will continue to market the remaining unsold carparking spaces, as well as to lease out the commercial units in the commercial podium in order to generate more income to the Group.
4. In September 2020, the Group has successfully completed the disposal of the investment property in the United Kingdom for approximately GBP93.8 million (equivalent to approximately HK$971.5 million). The disposal has strengthened the Group's overall financial position.
5. For Panyu project in the People's Republic of China, subsequent to the year end, the Group has completed the disposal of the subsidiaries that held this property project with an aggregate consideration of about RMB1,571.3 million (equivalent to approximately HK$1,872.2 million), and a net gain of approximately HK$1.0 billion (before deducting non-controlling interests of about HK$0.4 billion) will be recorded. The disposal represented a valuable opportunity for the Group to accelerate the return on this investment at a considerable profit and generate substantial cash inflow to the Group.

4 Chuang's Consortium International Limited