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Tan Chong International Limited
陳唱國際有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 693)
FINAL RESULTS
The Board of Directors (the "Board") of Tan Chong International Limited (the "Company") wishes to announce the following results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2018.
Consolidated statement of profit or loss for the year ended 31 December 2018
Note | 2018 | 2017 | ||
HK$'000 | HK$'000 | |||
Revenue | 3, 4 | 15,731,423 | 15,855,612 | |
Cost of sales | (12,642,693) | (12,673,325) | ||
Gross profit | 3,088,730 | 3,182,287 | ||
Other net income | 435,999 | 280,005 | ||
Distribution costs | (1,340,416) | (1,389,285) | ||
Administrative expenses | (1,157,603) | (1,058,422) | ||
Other operating expenses | (54,960) | (62,410) | ||
Profit from operations | 971,750 | 952,175 | ||
Financing costs | (92,426) | (87,538) | ||
Share of profits less losses of associates | 71,941 | 74,238 | ||
Profit before taxation | 5 | 951,265 | 938,875 | |
Income tax expense | 6 | (320,647) | (308,116) | |
Profit for the year | 630,618 | 630,759 | ||
Attributable to: | ||||
Equity shareholders of the Company | 600,899 | 501,924 | ||
Non-controlling interests | 29,719 | 128,835 | ||
Profit for the year | 630,618 | 630,759 | ||
Earnings per share | ||||
8 | ||||
Basic and diluted | $0.30 | $0.25 | ||
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Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2018
2018 | 2017 | |||
HK$'000 | HK$'000 | |||
Profit for the year | 630,618 | 630,759 | ||
Other comprehensive income for the | ||||
year (after tax and reclassification adjustments) | ||||
Items that will not be reclassified to profit or loss | ||||
Remeasurement of net defined benefit | ||||
liability | 9,040 | 10,351 | ||
Investments designated as at fair value | ||||
through other comprehensive income: | ||||
- changes in fair value recognised | ||||
during the year | (931,439) | (736,031) | ||
(922,399) | (725,680) | |||
Items that may be reclassified to profit | ||||
or loss: | ||||
Exchange differences on translation of | ||||
financial statements of: | ||||
- subsidiaries outside Hong Kong | (94,568) | 572,424 | ||
- associates outside Hong Kong | (37,444) | 54,831 | ||
(132,012) | 627,255 | |||
Other comprehensive income for | ||||
the year | (1,054,411) | (98,425) | ||
Total comprehensive income for the | ||||
year | (423,793) | 532,334 | ||
Attributable to: | ||||
Equity shareholders of the Company | (455,289) | 343,042 | ||
Non-controlling interests | 31,496 | 189,292 | ||
Total comprehensive income for the | ||||
year | (423,793) | 532,334 | ||
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Consolidated statement of financial position at 31 December 2018
Note | 2018 | 2017 | ||
HK$'000 | HK$'000 | |||
Non-current assets | ||||
Investment properties | 3,443,029 | 3,387,150 | ||
Other property, plant and equipment | 4,325,588 | 4,078,353 | ||
Interest in leasehold land | 61,554 | 73,005 | ||
Intangible assets | 110,633 | 102,805 | ||
Goodwill | 43,486 | 58,043 | ||
Interest in associates | 862,729 | 856,331 | ||
Other financial assets | 57,179 | 134,507 | ||
Hire purchase debtors and instalments receivable | 246,190 | 288,661 | ||
Non-current prepayments | 134,832 | 161,231 | ||
Deferred tax assets | 61,606 | 44,378 | ||
9,346,826 | 9,184,464 | |||
Current assets | ||||
Investments designated as at fair value through other | ||||
comprehensive income | 1,896,746 | 2,800,128 | ||
Inventories | 2,166,126 | 2,523,345 | ||
Properties held for sale | 16,644 | 24,568 | ||
Trade debtors | 9 | 1,096,292 | 1,085,648 | |
Hire purchase debtors and instalments receivable | 116,497 | 143,293 | ||
Other debtors, deposits and prepayments | 507,666 | 483,098 | ||
Amounts due from related companies | 150 | 155 | ||
Cash and bank balances | 3,090,532 | 3,436,956 | ||
8,890,653 | 10,497,191 | |||
Current liabilities | ||||
Unsecured bank overdrafts | 97,600 | 88,807 | ||
Bank loans | 2,010,779 | 3,045,316 | ||
Trade creditors | 10 | 844,576 | 936,895 | |
Other creditors and accruals | 1,319,188 | 1,318,453 | ||
Amounts due to related companies | 32,292 | 7,291 | ||
Obligations under finance leases | 48,281 | 40,100 | ||
Current taxation | 160,100 | 172,599 | ||
Provisions | 79,896 | 72,905 | ||
4,592,712 | 5,682,366 | |||
Net current assets | 4,297,941 | 4,814,825 | ||
Total assets less current liabilities | 13,644,767 | 13,999,289 | ||
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Consolidated statement of financial position | ||||
at 31 December 2018 (continued) | ||||
2018 | 2017 | |||
HK$'000 | HK$'000 | |||
Non-current liabilities | ||||
Bank loans | 1,152,102 | 876,254 | ||
Obligations under finance leases | 110,190 | 155,546 | ||
Net defined benefit retirement obligations | 123,324 | 131,308 | ||
Deferred tax liabilities | 75,303 | 80,707 | ||
Provisions | 35,413 | 31,946 | ||
1,496,332 | 1,275,761 | |||
NET ASSETS | 12,148,435 | 12,723,528 | ||
Capital and reserves | ||||
Share capital | 1,006,655 | 1,006,655 | ||
Reserves | 9,999,086 | 10,674,527 | ||
Total equity attributable to equity | ||||
shareholders of the Company | 11,005,741 | 11,681,182 | ||
Non-controlling interests | 1,142,694 | 1,042,346 | ||
TOTAL EQUITY | 12,148,435 | 12,723,528 | ||
Notes:
1.Basis of preparation
The financial information relating to the year ended 31 December 2018 included in this preliminary announcement of annual results is extracted from the Company's consolidated financial statements for the year ended 31 December 2018.
The consolidated financial statements of the Company for the year ended 31 December 2018 comprise the Company and all its subsidiaries and the Group's interest in associates and comply with International Financial Reporting Standards ("IFRSs"), the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provision of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.
2.Changes in accounting policies
The International Accounting Standards Board has issued a number of new IFRSs and amendments to IFRSs that are first effective for the current accounting period of the Group. Of these, the following developments are relevant to the Group's financial statements:
(i)IFRS 9 (2014), Financial instruments
(ii)IFRS 15, Revenue from contracts with customers
(iii)IFRIC 22, Foreign currency transactions and advance consideration
The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period, except for the amendments to IFRS 9, Prepayment features with negative compensation which have been adopted at the same time as IFRS 9 (2014).
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2.Changes in accounting policies (continued)
(i)IFRS 9 (2014), Financial instruments, including the amendments to IFRS 9, Prepayment features with negative compensation
The Group has early adopted IFRS 9 (2009) on 1 January 2015. IFRS 9 (2009) is the first part of a project to replace IAS 39, Financial Instruments: Recognition and Measurement; and it replaces the classification and measurement requirements in IAS 39 for debt and equity securities.
Before the early adoption of IFRS 9 (2009), debt and equity securities of the Group were classified as available-for-sale securities and investments designated as at fair value through profit or loss respectively. Since the early adoption of IFRS 9 (2009) on 1 January 2015, debt and equity securities were classified into investments designated as at fair value through profit or loss and investments designated as at fair value through other comprehensive income respectively.
IFRS 9 (2014) completely replaces IAS 39 as the second part of the project. It sets out the requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non- financial items.
The Group has applied IFRS 9 (2014) retrospectively to items that existed at 1 January 2018 in accordance with the transition requirements. There was no significant effect upon initial application of IFRS 9 (2014) on 1 January 2018.
Further details of the nature and effect of the changes to previous accounting policies and the transition approach are set out below:
aCredit losses
IFRS 9 (2014) replaces the "incurred loss" model in IAS 39 with the "expected credit loss" ("ECL") model. The ECL model requires an ongoing measurement of credit risk associated with a financial asset and therefore recognises ECLs earlier than under the "incurred loss" accounting model in IAS 39.
The Group applies the new ECL model to financial assets measured at amortised cost (including cash and cash equivalents, trade debtors, hire purchases debtors and instalments receivable and other debtors);
The closing loss allowance determined in accordance with IAS 39 as at 31 December 2017 is not significantly different from the opening loss allowance determined in accordance with IFRS 9 (2014) as at 1 January 2018.
b.Transition
Changes in accounting policies resulting from the adoption of IFRS 9 (2014) have been applied retrospectively, except that if, at the date of initial application, the assessment of whether there has been a significant increase in credit risk since initial recognition would have involved undue cost or effort, a lifetime ECL has been recognised for that financial instrument.
(ii)IFRS 15, Revenue from contracts with customers
IFRS 15 establishes a comprehensive framework for recognising revenue and some costs from contracts with customers. IFRS 15 replaces IAS 18, Revenue, which covered revenue arising from sale of goods and rendering of services, and IAS 11, Construction contracts, which specified the accounting for construction contracts.
IFRS 15 also introduces additional qualitative and quantitative disclosure requirements which aim to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
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