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AEON STORES (HONG KONG) CO., LIMITED
永旺(香港)百貨有限公司
(Incorporated in Hong Kong with limited liability)
(Stock Code: 984)
2019 INTERIM RESULTS
The Board of Directors (the "Board") of AEON Stores (Hong Kong) Co., Limited (the "Company") is pleased to announce the unaudited results of the Company and its subsidiaries (the "Group" or "AEON") for the six months ended 30 June 2019 together with comparative figures for the previous period as follows:
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2019 | |||
Six months ended | |||
NOTES | 30.6.2019 | 30.6.2018 | |
HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | ||
Revenue | 3 | 4,829,780 | 4,929,803 |
Other income | 4 | 270,906 | 300,368 |
Investment income | 13,704 | 11,843 | |
Interest income from rental deposits | 5,352 | - | |
Purchase of goods and changes in inventories | (3,405,365) | (3,416,708) | |
Staff costs | (569,349) | (627,930) | |
Depreciation of investment properties | (43,673) | - | |
Depreciation of property, plant and equipment | (105,594) | (114,391) | |
Depreciation of right-of-use-assets | (378,593) | - | |
Rental expenses | (61,358) | (572,965) | |
Pre-operating expenses | (1,661) | (6,697) | |
Other gains and losses | 5 | (3,527) | 935 |
Other expenses | 6 | (535,820) | (542,784) |
Interest on lease liabilities | (155,685) | - | |
__________ | __________ | ||
Loss before tax | (140,883) | (38,526) | |
Income tax expense | 7 | (7,053) | (4,887) |
__________ | __________ | ||
Loss for the period | (147,936) | (43,413) | |
__________ | __________ | ||
(Loss) profit for the period attributable to: | |||
Owners of the Company | (149,096) | (50,484) | |
Non-controlling interests | 1,160 | 7,071 | |
__________ | __________ | ||
(147,936) | (43,413) | ||
__________ | __________ | ||
Loss per share | 9 | (57.34) HK cents | (19.42) HK cents |
______________ | _ ____________ |
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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2019
Six months ended
30.6.2019 30.6.2018
HK$'000HK$'000
(unaudited) (unaudited)
Loss for the period
Other comprehensive income
Item that will not be reclassified to profit or loss:
Fair value gain on investments in equity instruments
at fair value through other comprehensive income ("FVTOCI")
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of financial statements of foreign operations
Other comprehensive income for the period, net of income tax
Total comprehensive expense for the period
Total comprehensive (expense) income for the period attributable to:
Owners of the Company Non-controlling interests
(147,936) | (43,413) |
__________ | __________ |
102 | 547 |
3,233 | 9,978 |
__________ | __________ |
3,335 | 10,525 |
__________ | __________ |
(144,601) | (32,888) |
__________ | __________ |
(147,123) | (44,834) |
2,522 | 11,946 |
__________ | __________ |
(144,601) | (32,888) |
__________ | __________ |
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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2019
NOTES | 30.6.2019 | 31.12.2018 | |
HK$'000 | HK$'000 | ||
Non-current Assets | (unaudited) | (audited) | |
Property, plant and equipment | 753,950 | 796,071 | |
Right-of-use assets | 3,756,838 | - | |
Investment properties | 510,088 | - | |
Goodwill | 94,838 | 94,838 | |
Equity instruments at FVTOCI | 26,647 | 26,545 | |
Pledged bank deposits | 28,333 | 25,001 | |
Deferred tax assets | 48,890 | 48,736 | |
Rental and related deposits paid | 191,506 | 263,826 | |
________ | ________ | ||
5,411,090 | 1,255,017 | ||
________ | ________ | ||
Current Assets | |||
Inventories | 784,300 | 856,763 | |
Trade receivables | 10 | 49,971 | 55,368 |
Other receivables, prepayments and deposits | 122,317 | 140,213 | |
Amounts due from fellow subsidiaries | 40,995 | 53,805 | |
Tax recoverable | - | 2,284 | |
Time deposits | 109,353 | 358,095 | |
Pledged bank deposits | 10,786 | 14,852 | |
Bank balances and cash | 1,853,797 | 1,651,349 | |
________ | ________ | ||
2,971,519 | 3,132,729 | ||
________ | ________ | ||
Current Liabilities | |||
Trade payables | 11 | 1,330,911 | 1,250,497 |
Other payables, accrued charges and other liabilities | 709,291 | 846,229 | |
Lease liabilities | 742,241 | - | |
Contract liabilities | 393,925 | 393,557 | |
Dividend payable | 32,919 | 426 | |
Amount due to ultimate holding company | 42,853 | 30,980 | |
Amounts due to fellow subsidiaries | 17,846 | 77,234 | |
Tax liabilities | 4,110 | - | |
________ | ________ | ||
3,274,096 | 2,598,923 | ||
________ | ________ | ||
Net Current (Liabilities) Assets | (302,577) | 533,806 | |
________ | ________ | ||
Total Assets Less Current Liabilities | 5,108,513 | 1,788,823 | |
_________ | _________ | ||
Capital and Reserves | |||
Share capital | 115,158 | 115,158 | |
Reserves | 759,219 | 1,325,889 | |
________ | ________ | ||
Equity attributable to owners of the Company | 874,377 | 1,441,047 | |
Non-controlling interests | 139,658 | 137,136 | |
________ | ________ | ||
Total Equity | 1,014,035 | 1,578,183 | |
________ | ________ | ||
Non-current Liabilities | |||
Rental deposits received and other liabilities | 121,957 | 209,251 | |
Lease liabilities | 3,970,900 | - | |
Deferred tax liabilities | 1,621 | 1,389 | |
________ | ________ | ||
4,094,478 | 210,640 | ||
________ | ________ | ||
5,108,513 | 1,788,823 | ||
________ | ________ |
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2019
1. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" ("HKAS 34") issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA") as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").
The financial information relating to the year ended 31 December 2018 that is included in the condensed consolidated financial statements as comparative information does not constitute the Company's statutory annual consolidated financial statements for that year but is derived from those financial statements. Further information relating to these statutory financial statements is as follows:
The Company has delivered the consolidated financial statements for the year ended 31 December 2018 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance.
The Company's auditor has reported on those consolidated financial statements. The auditor's report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or (3) of the Hong Kong Companies Ordinance.
In preparing the condensed consolidated financial statements, the directors of the Company have given careful consideration to the future liquidity of the Group in light of the fact that the Group's current liabilities exceeded its current assets by HK$302,577,000 at 30 June 2019. In the opinion of the directors of the Company, the Group has a number of sources of finance available to fund its operations. Taking into account of the available banking facilities, the directors of the Company are confident that the Group will be able to meet its financial obligations when they fall due in the foreseeable future. Accordingly, the condensed consolidated financial statements have been prepared on a going concern basis.
2. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values, as appropriate.
Other than changes in accounting policies resulting from application of new and amendments to Hong Kong Financial Reporting Standards ("HKFRSs"), the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2019 are the same as those presented in the Group's annual financial statements for the year ended 3l December 2018.
Application of new and amendments to HKFRSs and an interpretation
In the current interim period, the Group has applied, for the first time, the following new and amendments to HKFRSs and an interpretation issued by the HKICPA which are mandatory effective for the annual period beginning on or after 1 January 2019 for the preparation of the Group's condensed consolidated financial statements.
HKFRS 16 HK(IFRIC) - Int 23 Amendments to HKFRS 9 Amendments to HKAS19 Amendments to HKAS 28 Amendments to HKFRSs
Leases
Uncertainty over Income Tax Treatments Prepayment Features with Negative Compensation Plan Amendment, Curtailment or Settlement Long-term Interests in Associates and Joint Ventures Annual Improvements to HKFRSs 2015 - 2017 Cycle
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2. PRINCIPAL ACCOUNTING POLICIES - continued
Application of new and amendments to HKFRSs and an interpretation - continued
Except as described below, the application of the new and amendments to HKFRSs and an interpretation in the current period has had no material impact on the Group's financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.
2.1 Impacts and changes in accounting policies of application on HKFRS I6 Leases
The Group has applied HKFRS 16 for the first time in the current interim period. HKFRS 16 superseded HKAS 17 Leases ("HKAS 17") and the related interpretations.
2.1.1 Key changes in accounting policies resulting from application of HKFRS 16
The Group applied the following accounting policies in accordance with the transition provisions of HKFRS 16.
Definition of a lease
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
For contracts entered into or modified on or after the date of initial application, the Group assesses whether a contract is or contains a lease based on the definition under HKFRS 16 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.
-
As a lessee
Allocation of consideration to components of a contract
For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.
Non-lease components are separated from lease component on the basis of their relative stand-alone prices.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to leases of machinery and equipment that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the recognition exemption for lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Right-of-use assets
Except for short-term leases and leases of low value assets, the Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
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