Annual Report (in PDF) - Hongkong Land

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Financial Review Dividend The Board is recommending a final dividend of US¢9.00 per share (2006: US¢7.00 per share) giving a total dividend payable for the year of US¢13.00 per share (2006: US¢10.00 per share), representing an increase of 30%. The dividends are payable in cash. Cash Flow Year-end debt summary 2007 2006 us$m us$m us$ convertible bonds 349 341 us$ bonds 1,119 1,105 us$ bank loans 3 3 hk$ bank loans 739 995 S$ bonds 483 449 S$ bank loans 842 586 Gross debt 3,535 3,479 Cash 1,104 1,167 Net debt 2,431 2,312 With strong rental income from the Group’s investment properties and excellent response to the sales launches of the Group’s development projects in Singapore, recurring cash flow (cash flow from operating activities less major renovations expenditure) of US$382 million in 2007 was US$332 million higher than that in 2006. This cash flow together with the proceeds from the disposals of 1063 King’s Road (US$169 million) and MCL Land’s Oriental Bank Building in Kuala Lumpur (US$11 million) were applied to the payment of dividends (US$255 million) and capital expenditure on developments and joint ventures (US$340 million, including US$85 million for acquisitions). As a result, the Group’s net debt at the end of 2007 was US$2,431 million, up US$119 million from US$2,312 million at the end of 2006. Net gearing calculated on adjusted equity, which excludes deferred tax provisions on revaluation surpluses of investment properties, was 17.2%, a reduction of 21.0% from the end of 2006 due to the higher adjusted shareholders’ funds resulting from the increased valuation of investment properties. Investment Properties’ Valuation In preparing the Group’s financial statements under International Financial Reporting Standards (‘IFRS’), the fair value model for investment properties has been adopted. In accordance with this model, the Group’s leasehold investment properties have been included at their open market value as determined by independent valuers. In the territories where the Group has significant leasehold investment properties, no capital gains tax would be payable on the sale of these properties. In relation to leasehold investment properties, however, IFRS require deferred tax on any revaluation amount to be calculated using income tax rates. This is in contrast to the treatment for the revaluation element of freehold properties where IFRS require capital gains tax rates to be used. 12 Hongkong Land
As Management considers that the Group’s long-term leasehold properties have very similar characteristics to freehold property, the adjusted shareholders’ funds and adjusted net asset value per share information is presented on the basis that would be applicable if the leasehold properties were freehold. The adjustments made add back the deferred tax provided in the financial statements that would not be payable if the properties were sold. Debt profile as at 31st December 2007 (%) The revaluation surplus for 2007 of US$3,026 million, which includes the Group’s shares in joint ventures, resulted from higher market rents. The deferred tax charge required by IFRS in relation to this revaluation surplus is US$541 million. The revaluation surplus and the associated deferred tax charge have been taken to the profit and loss account in accordance with IFRS as set out above. At the end of the year, the Group’s commercial investment properties portfolio (including the Group’s share of investment properties in joint ventures) was valued Interest rate 48 52 Fixed Rate Floating Rate Currency 10 US$ 37 S$ 53 HK$ Maturity 33 > 5 years 59 2-5 years 4 1-2 years 4
Page 1 and 2: Hongkong Land Holdings Limited Annu
Page 3 and 4: Highlights • Continued strength i
Page 5 and 6: The newly refurbished retail areas
Page 7 and 8: The Singapore office market also wi
Page 9 and 10: Central portfolio at 31st December
Page 11 and 12: Residential Property The profit con
Page 13: Financial Review Financial Market R
Page 17 and 18: Directors’ Profiles Simon Keswick
Page 19 and 20: Consolidated Balance Sheet at 31st
Page 21 and 22: Consolidated Cash Flow Statement fo
Page 23 and 24: Amendments to IFRS 2, Share-based P
Page 25 and 26: g. Depreciation Depreciation is cal
Page 27 and 28: Certain derivative transactions, wh
Page 29 and 30: Price risk The Group is exposed to
Page 31 and 32: The Group determines the appropriat
Page 33 and 34: Underlying profit attributable to s
Page 35 and 36: 7 Operating profit 2007 2006 US$m U
Page 37 and 38: 11 Earnings per share Basic earning
Page 39 and 40: 14 Joint ventures 2007 2006 US$m US
Page 41 and 42: 17 Pension plans The Group has defi
Page 43 and 44: 18 Properties for sale 2007 2006 US
Page 45 and 46: 21 Non-current assets classified as
Page 47 and 48: 23 Borrowings continued Fixed rate
Page 49 and 50: 25 Revenue and other reserves conti
Page 51 and 52: 31 Derivative financial instruments
Page 53 and 54: 34 Related party transactions In th
Page 55 and 56: 36 Principal subsidiaries and joint
Page 57 and 58: 36 Principal subsidiaries and joint
Page 59 and 60: Five Year Summary 2003 2004 2005 20
Page 61 and 62: Directors’ Appointment, Retiremen
Page 63 and 64: Prior to completion and announcemen
Page 65 and 66:
Shareholder Information Financial C
Page 67 and 68:
Report of the Valuers To Hongkong L
Page 69 and 70:
Residential Development Property fo
Page 71 and 72:
11 9 8 1 2 10 6 5 3 7 12 4 13
Page 73:
Hongkong Land Holdings Limited Jard
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