Franshion Properties (China) Limited Annual Report 2013210

Notes to Financial Statements31 December 2013

14. PROPERTY, PLANT AND EQUIPMENTGroup

Hotel properties

Leasehold improvements Buildings

Furniture, fixtures

and office equipment

Motor vehicles

Construction in progress Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

31 December 2013

At 31 December 2012 and at 1 January 2013: Cost 6,279,018 67,794 411,493 1,586,216 69,267 295,242 8,709,030 Accumulated depreciation and impairment (835,297) (65,227) (48,417) (762,345) (36,889) (5,247) (1,753,422)

Net carrying amount 5,443,721 2,567 363,076 823,871 32,378 289,995 6,955,608

At 1 January 2013, net of accumulated depreciation and impairment 5,443,721 2,567 363,076 823,871 32,378 289,995 6,955,608Additions 3,403 2,615 – 28,763 9,925 1,160,165 1,204,871Disposals (1,119) – (414) (1,268) (703) – (3,504)Depreciation provided during the year (126,394) (13,160) (11,289) (108,508) (9,491) – (268,842)Impairment – – – (2,108) – – (2,108)Acquisition of a subsidiary (note 39) 473,253 17,579 20,775 45,629 2,895 1,659,477 2,219,608Gains on property revaluation in relation to the transfers to investment properties – – 15,764 – – – 15,764Transfer from investment properties (note 18) – – 71,285 – – – 71,285Transfer to investment properties (note 18) – – (37,096) – – – (37,096)Transfer from properties under development (note 15) – – – – – 498,570 498,570Transfer to properties under development (note 15) – – – – – (50,753) (50,753)Transfers (52,862) – 1,312 3,146 – 48,404 –Exchange realignment 181,465 428 11,808 25,838 1,093 84,698 305,330

At 31 December 2013, net of accumulated depreciation and impairment 5,921,467 10,029 435,221 815,363 36,097 3,690,556 10,908,733

At 31 December 2013: Cost 6,903,968 27,985 494,134 1,704,880 79,426 3,697,660 12,908,053 Accumulated depreciation and impairment (982,501) (17,956) (58,913) (889,517) (43,329) (7,104) (1,999,320)

Net carrying amount 5,921,467 10,029 435,221 815,363 36,097 3,690,556 10,908,733

Franshion Properties (China) Limited Annual Report 2013 211

Notes to Financial Statements31 December 2013

14. PROPERTY, PLANT AND EQUIPMENT (Continued)Group

Hotel properties

Leasehold improvements Buildings

Furniture, fixtures

and office equipment

Motor vehicles

Construction in progress Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

31 December 2012

At 1 January 2012: Cost 6,572,179 67,422 406,129 1,662,470 57,227 53,190 8,818,617 Accumulated depreciation and impairment (1,013,803) (63,962) (43,604) (769,838) (30,672) (5,248) (1,927,127)

Net carrying amount 5,558,376 3,460 362,525 892,632 26,555 47,942 6,891,490

At 1 January 2012, net of accumulated depreciation and impairment 5,558,376 3,460 362,525 892,632 26,555 47,942 6,891,490Additions 7,829 461 (1,199) 20,357 13,226 256,945 297,619Disposals (17,046) – (315) (941) (121) – (18,423)Depreciation provided during the year (112,706) (1,294) (7,423) (94,088) (7,295) – (222,806)Gains on properties revaluation in relation to the transfers to investment properties – – 9,466 – – – 9,466Transfer to investment properties (note 18) – – (23,704) – – – (23,704)Transfer from investment properties (note 18) – – 20,039 – – – 20,039Transfer from properties held for sale – – 2,837 – – – 2,837Transfers 8,528 (57) 907 6,272 – (15,650) –Exchange realignment (1,260) (3) (57) (361) 13 758 (910)

At 31 December 2012, net of accumulated depreciation and impairment 5,443,721 2,567 363,076 823,871 32,378 289,995 6,955,608

At 31 December 2012: Cost 6,279,018 67,794 411,493 1,586,216 69,267 295,242 8,709,030 Accumulated depreciation and impairment (835,297) (65,227) (48,417) (762,345) (36,889) (5,247) (1,753,422)

Net carrying amount 5,443,721 2,567 363,076 823,871 32,378 289,995 6,955,608

Franshion Properties (China) Limited Annual Report 2013212

Notes to Financial Statements31 December 2013

14. PROPERTY, PLANT AND EQUIPMENT (Continued)Company

Furniture, fixtures

and office equipment

Motor vehicles Total

HK$’000 HK$’000 HK$’000

31 December 2013

At 1 January 2013: Cost 605 2,357 2,962 Accumulated depreciation (567) (2,306) (2,873)

Net carrying amount 38 51 89

At 1 January 2013, net of accumulated depreciation 38 51 89Additions 19 – 19Depreciation provided during the year (17) (50) (67)

At 31 December 2013, net of accumulated depreciation 40 1 41

At 31 December 2013: Cost 624 2,357 2,981 Accumulated depreciation (584) (2,356) (2,940)

Net carrying amount 40 1 41

Furniture, fixtures

and office equipment

Motor vehicles Total

HK$’000 HK$’000 HK$’000

31 December 2012

At 1 January 2012: Cost 590 2,357 2,947 Accumulated depreciation (539) (1,902) (2,441)

Net carrying amount 51 455 506

At 1 January 2012, net of accumulated depreciation 51 455 506Additions 15 – 15Depreciation provided during the year (28) (404) (432)

At 31 December 2012, net of accumulated depreciation 38 51 89

At 31 December 2012: Cost 605 2,357 2,962 Accumulated depreciation (567) (2,306) (2,873)

Net carrying amount 38 51 89

Franshion Properties (China) Limited Annual Report 2013 213

Notes to Financial Statements31 December 2013

14. PROPERTY, PLANT AND EQUIPMENT (Continued)All of the Group’s hotel properties and buildings are situated in Mainland China and are held under the following lease terms:

2013 2012HK$’000 HK$’000

Long term leases 782,026 773,348Medium term leases 5,574,662 5,033,449

6,356,688 5,806,797

At 31 December 2013, certain of the Group’s hotel properties and buildings included in property, plant and equipment with a net carrying amount of approximately HK$4,647,187,000 (2012: HK$3,279,204,000) and HK$356,442,000 (2012: HK$304,587,000), respectively, were pledged to secure bank loans granted to the Group (note 32).

15. PROPERTIES UNDER DEVELOPMENT

Group2013 2012

Notes HK$’000 HK$’000

Carrying amount at 1 January 23,431,260 18,874,377Acquisition of subsidiaries – 629,869Additions 27,927,943 12,793,599Transfer from property, plant and equipment 14 50,753 –Transfer to property, plant and equipment 14 (498,570) –Transfer to properties held for sale (7,816,332) (8,879,805)Transfer to prepaid land lease payments 19 (106,487) –Exchange realignment 1,043,344 13,220

Carrying amount at 31 December 44,031,911 23,431,260Current portion (10,713,573) (10,383,932)

Non-current portion 33,318,338 13,047,328

All of the Group’s properties under development are situated in Mainland China and are held under the following lease terms:

2013 2012HK$’000 HK$’000

Long term leases 22,448,112 10,388,079Medium term leases 21,583,799 13,043,181

44,031,911 23,431,260

At 31 December 2013, certain of the Group’s properties included in properties under development with a net carrying amount of approximately HK$12,065,182,000 (2012: HK$4,928,638,000) were pledged to secure bank loans granted to the Group (note 32). At 31 December 2012, certain of the Group’s properties included in properties under development with a net carrying amount of approximately HK$995,650,000 were pledged to secure bank loans granted to an unrelated third party.