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IncorporatedinBermudawithlimitedliability(StockCode:41)GreatEagleHoldingsLimited33rdFloor,GreatEagleCentre23HarbourRoadWanchai,HongKongTel:(852)28273668Fax:(852)28275799香港灣仔港灣道23號鷹君中心33樓電話:(852)28273668傳真:(852)28275799www.
GreatEagle.
com.
hkIncorporatedinBermudawithlimitedliability(StockCode:41)GreatEagleHoldingsLimitedCONTENTS2345910111213151618343840CORPORATEINFORMATIONHIGHLIGHTSMANAGEMENTDISCUSSIONANDANALYSISOVERVIEWBUSINESSREVIEWFINANCIALREVIEWOUTLOOKREPORTONREVIEWOFINTERIMFINANCIALINFORMATIONINTERIMFINANCIALINFORMATIONCONDENSEDCONSOLIDATEDINCOMESTATEMENTCONDENSEDCONSOLIDATEDBALANCESHEETCONDENSEDCONSOLIDATEDSTATEMENTOFCHANGESINEQUITYCONDENSEDCONSOLIDATEDCASHFLOWSTATEMENTNOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSDISCLOSUREOFINTERESTSOTHERINFORMATIONDIVIDENDNOTICECORPORATEINFORMATIONGREATEAGLEHOLDINGSLIMITED2DIRECTORSLOKaShui(ChairmanandManagingDirector)LOKaiShui(DeputyManagingDirector)LOTOLeeKwanCHENGHoiChuen,Vincent*WONGYueChim,Richard*LEEPuiLing,Angelina*LOHongSui,AntonyLAWWaiDuenLOHongSui,VincentLOYingSui,ArchieKANTakKwong*IndependentNon-executiveDirectorsAUDITCOMMITTEECHENGHoiChuen,Vincent(Chairman)WONGYueChim,RichardLEEPuiLing,AngelinaREMUNERATIONCOMMITTEELEEPuiLing,Angelina(Chairman)CHENGHoiChuen,VincentWONGYueChim,RichardNOMINATIONCOMMITTEEWONGYueChim,Richard(Chairman)CHENGHoiChuen,VincentLEEPuiLing,AngelinaCOMPANYSECRETARYWONGMeiLing,MarinaPRINCIPALBANKERSTheHongkongandShanghaiBankingCorporationLimitedBankofChina(HongKong)LimitedHangSengBankLimitedCitibank,N.
A.
LEGALADVISORSMayerBrownJSMCliffordChanceAUDITORDeloitteToucheTohmatsuPRINCIPALREGISTRARSButterfieldFundServices(Bermuda)LimitedRosebankCentre11BermudianaRoadPembrokeHM08,BermudaHONGKONGBRANCHREGISTRARSComputershareHongKongInvestorServicesLimitedShops1712-171617thFloor,HopewellCentre183Queen'sRoadEastWanchai,HongKongTel:(852)28628628Fax:(852)25296087REGISTEREDOFFICECanon'sCourt22VictoriaStreetHamiltonHM12BermudaPRINCIPALOFFICE33rdFloor,GreatEagleCentre23HarbourRoadWanchai,HongKongTel:(852)28273668Fax:(852)28275799WEBSITEwww.
GreatEagle.
com.
hkSTOCKCODE41HIGHLIGHTSINTERIMREPORT20083FINANCIALHIGHLIGHTSProfitfromcorebusinessaftertaxincreasedby21.
09%year-on-yeartoHK$512.
1million.
Interimdividendpershareincreasedby33.
33%toHK20cents,andaspecialinterimdividendofHK$2.
7pershare.
Netdebt-freeposition.
KEYDEVELOPMENTSInjectedLanghamPlaceOfficeTowerandMallintotheChampionREITatanagreedvalueofHK$12,500millioninJune2008andraisednetcashproceedsofHK$3,100million.
Asof30June2008,theGroupowned48.
7%oftheunitsoftheREIT.
Completedtheacquisitionofa380-room5-starhotelinPasadena,CaliforniainJanuary2008.
Securedtwomorehotelmanagementcontracts,bringingthetotaltoeight.
MANAGEMENTDISCUSSIONANDANALYSISGREATEAGLEHOLDINGSLIMITED4OVERVIEWOverall,theGroupdeliveredarobustcoreincomegrowthof21.
09%year-on-yearinthefirsthalfof2008.
ThegrowthwasmainlysupportedbycontinuinglyfavourableconditionsintheHongKongcommercialpropertymarket.
Underlyingcoreincomeforthefirstsixmonthsof2008amountedtoHK$512.
1million,andcoreincomewouldhavebeenmuchhigher,ifweexcludeanone-offchargeofHK$106.
9millionrelatingtofixedassetswrittenoffatLanghamLondon.
TherenovationwillhelptopositionLanghamLondonasoneofthebesthotelsinLondon.
Also,inconjunctionwiththecashproceedsraisedfromthesuccessfulinjectionoftheLanghamOfficeTowerandMallintotheChampionREIT,therewillbeanadditionalspecialinterimdividendofHK$2.
7persharetobedistributedtoshareholders,ontopofthealreadyincreasedinterimdividendofHK20centspershare.
DuetoashortageofnewsupplyofGrade-Aofficespace,especiallyintheCentralBusinessDistrict,andsustaineddemandfromthefundmanagementandlegalprofessions,vacanciesinprimeofficepropertieshitanall-timelowoflessthan2%.
RentratesinCentralgrewanother20%inthefirstsixmonthsof2008.
TherewasalsocontinuedgrowthinretailsalesinHongKonginthefirsthalf.
TheLanghamPlaceMallwasbeginningtoseeincreasingpositiveimpactofitstenantqualityupgradeprogramme.
FootfallattheMallcontinuedtoincreaseatahighlysatisfactorypace,therebyleadingtogeneralimprovementinthesalesperformanceofitstenants,whichinturnshouldleadtohigherrentalincomeinthefuture.
Inthefirsthalfof2008,theperformanceoftheGroup'shotelswasadverselyaffectedbytheslowdownintheworldeconomies.
WhilethehotelsinHongKongmanagedtoholdsteady,softeneddemandinothermarketsledtoadeclineintheoverallperformanceoftheoverseashotels.
AfterincorporatingtheimpactoftherenovationworksatLanghamLondon,aswellastherebrandingcostsassociatedwiththenewlyacquiredPasadenahotel,netoperatingprofitofthehotelportfoliodeclinedby18%inthefirsthalfof2008.
TheinjectionoftheLanghamPlaceOfficeTowerandMallintotheChampionREITwassuccessfullycompletedon3June2008atanagreedvalueofHK$12,500million.
ThatwasinlinewiththeGroup'sstatedaimtobuildtheChampionREITintoapremierrealestateinvestmenttrustinAsia.
TheGroupreceivednetcashproceedsofapproximatelyHK$3,100millionfromthetransaction,therebyfurtherstrengtheningitsbalancesheetasaresult.
Thetransactionnotonlyreducedourfinancechargesgoingforward,butthelowerdebtlevelalsogivesusmoreflexibilityinincreasingourdividendpayoutortocapitalizeonnewinvestmentopportunities,especiallywhenassetpricesareweakeningincertainpartsoftheregion.
TheDirectorshavedeclaredaspecialinterimdividendofHK$2.
7pershare.
ImmediatelyafterthespecialinterimdividendandtheinterimdividendofHK20centspershare,whichamountstoatotalsumofapproximatelyHK$1,768million,theGroupwillretainacashholdingofapproximatelyHK$4,027million.
Withregardtocapitalizingonnewinvestmentopportunities,theGroupisenvisagingmoreinvestmentopportunitiesinMainlandChina,wherewehavebeenmaintainingaconservativeandprudentapproach.
TheCentralGovernment'sintensivemacroeconomiccontrolmeasureshaveeffectivelycooleddownthepropertysector,andlandpriceshavestartedtosoften.
Underhighlyrestrictivedomesticliquidityconditions,thereshouldbebroaderandbetterinvestmentopportunities,offeringanevenmorefavourableriskreturnprofilefortheGroup.
WehoweverdorecognizethatitwilltakeagreatdealofpatienceandtimetobringininvestmentsthatarecompatiblewiththeGroup'squalityandreturngoals.
MANAGEMENTDISCUSSIONANDANALYSISINTERIMREPORT20085BUSINESSREVIEWPROPERTYINVESTMENTHongKongReflectingtherisingrentsandoccupancyratesintheHongKongofficemarket,grossrentalincomeofourHongKongpropertiesrose11.
4%fromHK$259.
8millioninthefirstsixmonthsof2007toHK$289.
5millionin2008(whichincludedjustover5months'ofincomefromtheLanghamPlaceproperties).
Netrentalincomegrewby16.
1%year-on-yearfromHK$207.
3milliontoHK$240.
6millionbecauseofimprovedexpenseratiosassociatedwithhigheroccupancy.
GreatEagleCentreGrossrentalincomeincreasedby19.
1%year-on-yearfromHK$38.
7milliontoHK$46.
1million,drivenprimarilyonpositiverentalreversion,asachievedrentalratescontinuedtosurpassthoseoftheexpiringleasesduringthefirsthalfof2008.
Netrentalincomeroseby27.
2%year-on-yearfromHK$35.
4milliontoHK$45million.
Asatmid-year2008,occupancyrateattheGreatEagleCentrestoodat91.
2%,whichwaslowerthanthatof99.
3%atyear-end2007,representingthetemporarydowntimeinbetweentenancies.
TheavailableshopsinGreatEagleCentreremainedfullyletduringtheperiodunderreview.
LanghamPlaceMallWhiletheLanghamPlaceOfficeTowerandMallhadbeeninjectedintotheChampionREITinearlyJune2008,thesepropertiescontributedalittlemorethanfivemonthsofoperatingincometotheGroupinthefirsthalf.
Thecompletionofthetrade-mixrealignmentandupgradeinitiativesinlate2007havehelpedfuelhigherfootfallandtenantssalesinthefirsthalfof2008.
Accordingtothe2008interimreportoftheChampionREIT,occupancyattheMallstoodat98%asof30June2008;footfallattheMallincreasedby29%year-on-year,whilethetenants'averagemonthlygrosssalespersquarefootroseby18%.
WhiletheMallhadonlyfivemonthsofincomecontributionintheperiodunderreview,itsgrossrentalincomeofHK$153.
8millionwasstill2.
3%higherthanthatofHK$150.
4millionforthesixmonthsin2007.
Netofoperatingexpenses,whichweremainlyrelatedtoleasingupcosts,netrentalincomefromtheMallwasHK$121.
7millionforthefive-monthperiodin2008,ascomparedtoHK$126.
9millionforthesixmonthsin2007.
RENTALINCOMEFROMHONGKONGPROPERTIESGrossRentalIncomeSixMonthsEnded30June20082007HK$'mHK$'mGreatEagleCentre46.
138.
7LanghamPlace*Commercial153.
8150.
4Office64.
349.
4EatonHouses21.
518.
0Others3.
83.
3289.
5259.
8*TherentalincomeofLanghamPlacewasnolongerattributedtotheGroupafterthecompletionofthedisposaloftheGroup'sinterestsinLanghamPlacetotheChampionREITon3June2008.
MANAGEMENTDISCUSSIONANDANALYSISGREATEAGLEHOLDINGSLIMITED6LanghamPlaceOfficeTowerHigherrenewalrentalandoccupancyratedrovegrossrentalincomefortheOfficeTower.
Occupancyratestoodat99.
4%asattheendofJune2008,and3.
3percentagepointshigherthanthatof96.
1%asatJune2007.
ThelowvacancyrateanddemandforqualityofficespaceintheMongkokareahasledtohigherachievedrents.
GrossrentalincomecametoHK$64.
3millionoverthefive-monthcontributingperiod,whichwas30.
2%higherthantheHK$49.
4millionachievedinthefirstsixmonthsof2007.
Netrentalincomeforthefirsthalfof2008roseby75.
8%year-on-yeartoHK$57.
4million.
EatonHouseFurnishedApartmentsSupportedbyhigherdemandforserviceapartmentsfromthelocalcorporatemarket,rentalperoccupiedsquarefootforthefirsthalfof2008rose15.
2%year-on-yeartoHK$39.
3persquarefoot,andaverageoccupancyrateforthefirsthalfroseby2.
3percentagepointsto82%.
GrossrentalincomecameinatHK$21.
5millioninthefirsthalfof2008,representinganincreaseof19.
4%overthesameperiodlastyear.
Netrentalincomeroseby34.
1%year-on-yeartoHK$13.
2million.
UnitedStatesAttheUnitedStatescommercialportfolio,grossrentalfellby26.
2%fromHK$82.
4millioninthefirsthalfof2007toHK$60.
8million,mainlyduetothelossofincomeafterthedisposalofthe150SpearStreetpropertyin2007.
Excludingtheimpactof150SpearStreet,grossrentalincomewouldhavebeenstablewhencomparedwiththesameperiodlastyear.
Whileourpropertiesat353Sacramentoand2700YgnaciobothachievedhigheroccupancyratesasattheendofJune2008ascomparedwiththecorrespondingdatelastyear,thefront-loadedcharge-offofre-tenantingcostsmorethanoffsettheadditionalrevenuesinthe2008first-halfresults.
Asaresult,netrentalincomefromtheU.
S.
commercialpropertyportfoliodroppedby19.
6%year-on-yeartoHK$23.
1million.
Asmajorityofthere-tenantingcosthavebeenbookedinfirsthalfresults,netrentalincomeshouldimproveinthesecondhalfoftheyear.
HOTELSForthesixmonthsended30June2008,theHotelsDivisionpostedtotalrevenueofHK$1,548.
9million,a14.
2%increaseoverthatofHK$1,356.
6millionforthesameperiodin2007,mainlyduetotheaddedrevenuefromtheLanghamHuntington,Pasadena,whichwasacquiredon8January2008.
Excludingtherevenueofthenewhotel,grossrevenueoftheHotelsDivisionwouldhavebeenflat.
OverallsatisfactoryperformancewasachievedbythehotelsinHongKongalthoughthesecondquartersawaslowdowninbusinessgrowth.
Inroomsrevenue,therewascontinuedfocusoncapturingthehigh-yieldretailmarket,albeitattheexpenseofoccupancyrates.
FoodandbeveragebusinessattheLanghamandLanghamPlacehotelshaveperformedwell,supportedbycateringbusiness,particularlyfromweddings.
Themajorityoftheoverseaspropertieshaveseenagradualslowdowninbusinessandleisuretraveldemand,astheimpactoftheslowingU.
S.
economywasbeingfelt.
RebrandingexpensesrelatedtotheLanghamHuntingtonpropertyalsocutintotheoverallresults.
TheHotelDivisioncontinuedtoexpanditshotelmanagementbusinessbysecuringafurthertwomanagementcontractsinIndiaandNewZealandduringthefirsthalfoftheyear,whicharebothunderdevelopment.
Itwillcontinuetoseekoutopportunitiestoenrichitsmanagementportfolioandtolaunchitsbrandsinkeyglobalmarkets.
MANAGEMENTDISCUSSIONANDANALYSISINTERIMREPORT20087HongKongOperationsLanghamHotel,HongKongStrategicfocusonretailmarkethasliftedaverageratesinthefirsthalfof2008by24%toHK$1,784ascomparedtolastyear.
ThecompletionoftheroomrenovationphaseinearlySeptemberwillprovideamoreluxuriousproductforourguestsandbetterpositionthehotelatthehigherendofthe5-starmarket.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof79%(2007:84%)andaverageroomrateofHK$1,784(2007:HK$1,444).
LanghamPlaceHotel,HongKongTheperformancewassteadyforthefirsthalfoftheyearwithtotalrevenueachievingdouble-digitgrowthandrevenueperavailableroomincreasing11%year-on-year,primarilydrivenbyhigheraverageroomrates.
Therestaurantbusinessalsoperformedwellalongwithstablepickupinbanquetoperations.
Thehotelwillcontinuetofocusonbuildingitsretailmarketwithemphasisoncapitalizingitspositionasawell-establishedvenueforweddingfunctions.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof85%(2007:87%)andaverageroomrateofHK$1,406(2007:HK$1,240).
EatonHotel,HongKongTheoperatingresultsinthefirsthalfof2008weresatisfactoryasthehotelcontinuedtofocusonbuildingitsretailmarketwithroomratesrising10%overlastyearwhileholdingoccupancysteady.
Food&beveragebusinesssawaslightsetbackduetoslowerweddingbanquetbusinessalthoughthatwascompensatedbyahighervolumeofcorporateeventsandconferences.
ThecommencementoftheroomrenovationduringthesecondquarterwithtargetcompletioninearlySeptember2008,willfurtherimprovetheguestexperienceandpositionthehotelasthebestinitsclass.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof88%(2007:87%)andaverageroomrateofHK$906(2007:HK$820).
InternationalOperationsLanghamHotel,LondonOperatingresultswereimpactedbytheongoingmajorrenovationprogrammeforguestrooms,publicareasandfunctionspaces,whichstartedinJanuary2008.
Thehotelremainedopenthroughouttherenovationperiodwith162roomsavailableforsale.
Uponcompletionoftherenovationinearly2009,thisflagshiphotelwillbere-positionedwiththeverybestintheLondonmarketandshouldbeabletogrowitsroomrates.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof69%(2007:68%on425availablerooms)andaverageroomrateof241(2007:187).
MANAGEMENTDISCUSSIONANDANALYSISGREATEAGLEHOLDINGSLIMITED8LanghamHotel,BostonLowerbusinessresultsreflectedtheimpactofthegeneraleconomicslowdownandhigherfuelprices,asfewerfinancialinstitutionsandcitywideconventionsledtoreducedcorporatetravellers.
WiththerecentopeningoftheChuanSpafacilityinthesecondquarterof2008andthecompletionofrefurbishmentofthenewbarandrestaurantbytheendofthisyear,thehotelwillbewell-positionedtocompeteeffectivelyinaslowermarket.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof61%(2007:68%)andaverageroomrateofUS$249(2007:US$238).
LanghamHotel,MelbourneThishotelachievedpositivegrowthinthefirsthalfof2008duetoacombinationofincreasedbusinesstravellersandagrowthinbanquetrevenuesascomparedwithlastyear.
Thegrowthinbanquetbusinesswaslargelysupportedbytheupgradedfunctionroomfacilitieslaunchedinearly2008.
Thehotelisupgradingthearrivalexperiencewitharenovationtothefrontentrancetobecompletedbytheendof2008.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof81%(2007:83%)andaverageroomrateofA$257(2007:A$232).
LanghamHotel,AucklandThehotelpostedsofterresults,especiallyintermsofoccupancy,primarilyduetotheslowdowninleisureandcorporatemarkets.
Food&beveragewasimpactedbyreducedvolumesinitsbanquetoperations.
ThelaunchofChuanSpaandupgradedhealthclubfacilitiesbytheendofthisyearwillhelptoliftthehotel'sprofileandmarketshare.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof69%(2007:78%)andaverageroomrateofNZ$175(2007:NZ$162).
LanghamHuntington,Hotel&SpaPasadenaThehotelwasrebrandedtoLanghamonJanuary8,2008.
Aseriesofmarketingandadvertisingcampaignshavebeenlaunchedtobuildbrandpresenceinthemarketplace.
Asthenewmanagementstrivestobuildbrandawarenessandthecustomerbase,theperformanceofthishotelwillcontinuetolagintheshorttermfuture.
Fortheperiodto30June2008,thehotelachievedanaverageoccupancyof61%andaverageroomrateofUS$247.
DeltaChelseaHotel,TorontoTherewasamoderategrowthinrevenueinthefirsthalfof2008asthehotelbenefitedfromincreasedmeetingsandconferencesinthecityofToronto.
Forthesixmonthsto30June2008,thehotelachievedanaverageoccupancyof69%(2007:67%)andaverageroomrateofC$141(2007:C$138).
MANAGEMENTDISCUSSIONANDANALYSISINTERIMREPORT20089INVESTMENTINTHECHAMPIONREITBenefitingfromthecontinuedbuoyantconditionsofthecommercialpropertymarketinHongKongandthepositiverentalreversionatCitibankPlaza,theChampionREITwasabletoincreaseitsnetpropertyincomeby98%toHK$516.
5millioninthefirsthalfof2008.
TheunwindingofcertainfinancialengineeringarrangementsalsoprovidedtheChampionREITwithproceedsofHK$370.
9million.
IthasconsequentlydeclaredanincreasedDistributionPerUnitofHK$0.
1788forthefirsthalfof2008,a31%increaseovertheprioryearperiod.
DuetotheGroup'saccountingpolicyofrecognizingdistributionincomefromtheChampionREITatthedateofpaymentofthedistribution,theincomestatementoftheGroupforasix-monthperiodwouldreflectthedistributiondeclaredbytheChampionREITfortheimmediatelyprecedingsix-monthperiod.
ThereforethehigherdistributiondeclaredbytheChampionREITforthefirsthalfof2008hasnotyetbeenreflectedintheGroup's2008firsthalfresults,giventhespecificdistributionwasdeclaredafter30June2008.
TheinterimdistributionbytheChampionREITforthefirsthalfof2008willinsteadbebookedintheGroup'ssecondhalfresults.
Forthesamereason,theGroup's2008interimresultshaveincorporatedthefinaldistributionfromtheChampionREITforthesecondhalfof2007,whichcametoHK$124.
9million.
InassociationwiththeChampionREIT'sacquisitionoftheLanghamPlaceproperties,certainservicefeeswerealsoearnedbytheGroup.
Allinall,theChampionREITincreaseditscontributiontotheGroup'sresultsinthefirsthalfof2008toHK$335.
5million,ascomparedtoHK$138.
8millionintheprioryearperiod.
TheChampionREIT,withitstwopremiumqualityassets,shouldcontinuetoseestronggrowthinitsdistributableincomeinthecomingyear.
WethereforeexpecttheChampionREITtocontinuetobeasignificantcontributorofincometotheGroup.
FINANCIALREVIEWDebtGrossdebtsdenominatedinHKdollarsamountedtoHK$1,426millionasof30June2008.
Ourforeigncurrencygrossdebtsasof30June2008amountedtotheequivalentofHK$4,044million,ofwhichtheequivalentofHK$671million,or16.
6%ofourforeigncurrencydebts,wasonfixed-ratebasis.
NetofcashandbankdepositstotallingtheequivalentofHK$5,795million,ourconsolidatednetcashoutstandingasof30June2008wasHK$325million,aturnaroundpositionfromthenetdebtpositionofHK$5,610millionasof31December2007.
EquityAttributabletoShareholders,basedonprofessionalvaluationoftheGroup'sinvestmentpropertiesasof30June2008andthedepreciatedcostsoftheGroup'shotelproperties,amountedtoHK$23,840millionasof30June2008.
Thenetassetsvalueat30June2008representsadropofHK$1,241millioncomparedtothevalueofHK$25,081millionasof31December2007,whichisprimarilyduetothedisposaloftheLanghamPlaceOfficeTowerandMallatadiscounttotheappraisedvaluationasof31December2007aswellasamark-to-marketchangeinfairvalueoftheGroup'slong-terminvestmentintheChampionREIT.
FinanceCostThenetfinancecostofHK$137millionincurredinthefirsthalfof2008,representsadecreaseofHK$71millionfromtheHK$208millionfortheprioryearperiod,asaresultofthedecreaseinborrowingsafterreceiptoftheproceedsfromthedisposaloftheLanghamPlaceOfficeTowerandMall.
Interestcoverforthefirsthalfof2008was6.
37times,ascomparedwith3.
71timesforthesameperiodlastyear.
MANAGEMENTDISCUSSIONANDANALYSISGREATEAGLEHOLDINGSLIMITED10LiquidityandDebtMaturityProfileAsof30June2008,ourcash,bankdepositsandcommittedbutundrawnloanfacilitiesamountedtoatotalofHK$8,411million.
Themajorityofourloanfacilitiesismediumterminnatureandissecuredbypropertieswithsufficientvaluetoloancoverage.
Thefollowingisaprofileofthematurityofouroutstandingdebtsasof30June2008:Within1year14.
9%1-2years31.
7%3-5years53.
4%PledgeofAssetsAt30June2008,propertiesoftheGroupwithatotalcarryingvalueofapproximatelyHK$14,261million(31December2007:HK$27,210million),weremortgagedorpledgedtosecurecreditfacilitiesgrantedtoitssubsidiaries.
ThedropinvalueofpledgedassetsisprimarilyduetothedisposaloftheLanghamPlaceOfficeTowerandMall,whichtherelateddebtandcreditfacilitiesweresubsequentlypaiddownandterminated.
CommitmentsandContingentLiabilitiesAsat30June2008,theGrouphasauthorisedcapitalexpendituresnotprovidedforinthesefinancialstatementsamountingtoapproximatelyHK$523million(31December2007:HK$167million)ofwhichapproximatelyHK$522million(31December2007:HK$166million)wascontractedfor.
Otherthansetoutabove,theGroupdidnothaveanysignificantcommitmentsandcontingentliabilitiesasat30June2008.
OUTLOOKTheHongKongeconomyhasheldupfairlywellsofardespiteasofteningglobaleconomicenvironmentandextendedturmoilintheU.
S.
creditmarkets.
Nevertheless,thedegreeofcontagiousnessoftheU.
S.
financialmarketsanditsimpactonGreaterChinaremaintobeseen.
InHongKong'sofficemarket,thesecondhalfof2008willseemajornewsuppliesofofficespaceintheperipheraldistrictsofKowloon.
However,theirpotentialimpactwouldbemainlylimitedtotheirrespectivedistricts,whereasourcommercialproperties,aswellasthoseownedbytheChampionREIT,areallsituatedatprimelocations.
Eventhoughthegrowthinrentratesmighteaseoffinthecomingmonths,positiverentalreversionwithinthetwopropertyportfoliosshouldcontinuetolifttheGroup'srentalincomeandtheincomecontributionfromtheChampionREITinthesecondhalfoftheyear.
Wearealsoexpectingfurthersoftnessinourhotelbusinessinthesecondhalfasbusinesstravelslowsdown.
TheoutlookforourhotelsinHongKongisrelativelystableasregionalbusinessactivitieshaveremainedfairlyactive.
Howeverweexpecttheoperatingenvironmentwilllikelybecomemorechallenging,especiallyforouroverseashotels.
Inthemeantime,goodprogresshasbeenmadeinbuildingthegroup'sbrand,astwoadditionalhotelmanagementcontractshavebeensecuredandmoreprojectsareundervariousstagesofnegotiation.
Despitethegoodprogress,ittakestimeforthesehotelstobedevelopedandshouldcontributetotheGroupinthelongterm.
Earningsoutlookremainspositiveinthesecondhalf,asgrowthincontributionfromtheChampionREITshouldhaveabiggerimpactonourcoreincome,offsettingthesofterprofitcontributionsfromtheGroup'shotelportfolio.
Withourstrongbalancesheet,wearewellshelteredfromconcernsoverexternalrisks.
Infactwearelookingtoleverageonourstrongliquiditypositiontocapturenewinvestmentopportunitiesinthesetimesofuncertainties.
LOKaShuiChairmanandManagingDirectorHongKong,16September2008REPORTONREVIEWOFINTERIMFINANCIALINFORMATIONINTERIMREPORT200811TOTHEBOARDOFDIRECTORSOFGREATEAGLEHOLDINGSLIMITED(incorporatedinBermudawithlimitedliability)INTRODUCTIONWehavereviewedtheinterimfinancialinformationsetoutonpages12to33whichcomprisesthecondensedconsolidatedbalancesheetofGreatEagleHoldingsLimitedasof30June2008andtherelatedcondensedconsolidatedincomestatement,statementofchangesinequityandcashflowstatementforthesix-monthperiodthenended,andcertainexplanatorynotes.
TheMainBoardListingRulesgoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimitedrequirethepreparationofareportoninterimfinancialinformationtobeincompliancewiththerelevantprovisionsthereofandHongKongAccountingStandard("HKAS")34"InterimFinancialReporting"issuedbytheHongKongInstituteofCertifiedPublicAccountants.
ThedirectorsareresponsibleforthepreparationandpresentationofthisinterimfinancialinformationinaccordancewithHKAS34.
Ourresponsibilityistoexpressaconclusionontheinterimfinancialinformationbasedonourreview,andtoreportourconclusionsolelytoyou,asabody,inaccordancewithouragreedtermsofengagement,andfornootherpurpose.
Wedonotassumeresponsibilitytowardsoracceptliabilitytoanyotherpersonforthecontentsofthisreport.
SCOPEOFREVIEWWeconductedourreviewinaccordancewithHongKongStandardonReviewEngagements2410"ReviewofInterimFinancialInformationPerformedbytheIndependentAuditoroftheEntity"issuedbytheHongKongInstituteofCertifiedPublicAccountants.
Areviewofinterimfinancialinformationconsistsofmakingenquiries,primarilyofpersonsresponsibleforfinancialandaccountingmatters,andapplyinganalyticalandotherreviewprocedures.
AreviewissubstantiallylessinscopethananauditconductedinaccordancewithHongKongStandardsonAuditingandconsequentlydoesnotenableustoobtainassurancethatwewouldbecomeawareofallsignificantmattersthatmightbeidentifiedinanaudit.
Accordingly,wedonotexpressanauditopinion.
CONCLUSIONBasedonourreview,nothinghascometoourattentionthatcausesustobelievethattheinterimfinancialinformationisnotprepared,inallmaterialrespects,inaccordancewithHKAS34.
DeloitteToucheTohmatsuCertifiedPublicAccountantsHongKong,16September2008CONDENSEDCONSOLIDATEDINCOMESTATEMENTForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED12SixMonthsEnded30June20082007NotesHK$'000HK$'000(unaudited)(unaudited)Revenue(3)2,437,4061,996,548Costofgoodsandservices(1,488,078)(1,199,817)Operatingprofitbeforedepreciationandamortisation949,328796,731Depreciationandamortisation(177,797)(147,741)Operatingprofit771,531648,990Fairvaluechangesoninvestmentproperties222,598360,734Fairvaluechangesonderivativefinancialinstruments(98,967)(2,223)Fairvaluechangesonfinancialassetscarriedatfairvaluethroughprofitorloss(12,342)12,168Otherincome65,953101,877Administrativeexpenses(90,886)(74,715)Otherexpenses(108,471)(6,010)Lossondisposalofpropertyinvestmentsubsidiaries(17)(450,814)–Financecosts(4)(196,005)(282,145)Shareofresultsofassociates7,1877,667Profitbeforetax109,784766,343Incometaxes(5)20,124(152,532)Profitfortheperiod(6)129,908613,811Attributableto:Equityholdersoftheparent129,908613,810Minorityinterests–1129,908613,811Dividends(7)211,643150,268Earningspershare(8)Basic$0.
21$1.
02Diluted$0.
21$1.
02CONDENSEDCONSOLIDATEDBALANCESHEETAsat30June2008INTERIMREPORT200813AsatAsat30June31December20082007NotesHK$'000HK$'000(unaudited)(audited)Non-currentassetsProperty,plantandequipment(9)9,079,5478,119,231Prepaidleasepayments1,728,7971,751,184Investmentproperties(9)4,087,38917,609,630Interestsinassociates43,08338,926Availableforsaleinvestments(10)7,787,1016,263,705Investmentinconvertiblebonds(11)2,239,954–Loanreceivables12,07712,077Pledgedbankdeposits–323,226Restrictedcash–567,59924,977,94834,685,578CurrentassetsInventories134,756111,480Debtors,depositsandprepayments(12)561,440507,552Financialassetscarriedatfairvaluethroughprofitorloss73,78335,856Derivativefinancialinstruments(13)2,249–Prepaidleasepayments44,77144,771Bankbalancesandcash5,795,4142,884,7096,612,4133,584,368CurrentliabilitiesCreditors,depositsandaccruals(14)1,067,5141,261,706Derivativefinancialinstruments(13)–9,714Provisionfortaxation144,296137,184Borrowingsduewithinoneyear(15)812,8533,020,131Unsecuredbankoverdrafts1,0931,2312,025,7564,429,966CONDENSEDCONSOLIDATEDBALANCESHEETAsat30June2008GREATEAGLEHOLDINGSLIMITED14AsatAsat30June31December20082007NotesHK$'000HK$'000(unaudited)(audited)Netcurrentassets(liabilities)4,586,657(845,598)Totalassetslesscurrentliabilities29,564,60533,839,980Non-currentliabilitiesBorrowingsdueafteroneyear(15)4,646,3716,375,379Deferredtaxation1,078,3232,383,2235,724,6948,758,602NETASSETS23,839,91125,081,378EquitySharecapital(16)304,825302,315Sharepremiumandreserves23,535,08624,779,063TOTALEQUITY23,839,91125,081,378CONDENSEDCONSOLIDATEDSTATEMENTOFCHANGESINEQUITYForthesixmonthsended30June2008INTERIMREPORT200815AttributabletoequityholdersoftheparentInvestmentCapitalExchangeShareShareSharerevaluationredemptionContributedtranslationoptionsRetainedMinoritycapitalpremiumreservereservesurplusreservereserveprofitsTotalinterestsTotalHK$'000HK$'000HK$'000HK$'000HK$'000HK$'000HK$'000HK$'000HK$'000HK$'000HK$'000At1January2007300,4273,368,142(1,764,814)1,650402,540163,6508,71817,568,33420,048,64728820,048,935Surplusonrevaluationofinvestments––965,430965,430–965,430Exchangedifferencesarisingontranslationofforeignoperations126,977––126,977–126,977Netincomeandexpensesrecogniseddirectlyinequity––965,430––126,977––1,092,407–1,092,407Transfertoprofitorlossonsaleofavailableforsaleinvestments––(15,472)15,472)–(15,472)Profitfortheperiod613,810613,8101613,811Totalrecognisedincomeandexpensesfortheperiod––949,958––126,977–613,8101,690,74511,690,746Dividendpaid150,268)(150,268)–(150,268)Sharesissuedatpremium1,82199,0891,868)–99,042–99,042Shareissueexpenses–(21)21)–(21)Recognitionofequity-settledsharebasedpayments6,829–6,829–6,829At30June2007302,2483,467,210(814,856)1,650402,540290,62713,67918,031,87621,694,97428921,695,263At1January2008302,3153,470,311(677,823)1,650402,540339,09917,64021,225,64625,081,378–25,081,378Deficitonrevaluationofinvestments––(1,292,700)1,292,700)–(1,292,700)Exchangedifferencesarisingontranslationofforeignoperations7,148––7,148–7,148Netincomeandexpensesrecogniseddirectlyinequity––(1,292,700)––7,148––(1,285,552)–(1,285,552)Profitfortheperiod129,908129,908–129,908Totalrecognisedincomeandexpensesfortheperiod––(1,292,700)––7,148–129,908(1,155,644)–(1,155,644)Dividendpaid211,643)(211,643)–(211,643)Sharesissuedatpremium2,510118,044517)–120,037–120,037Shareissueexpenses–(22)22)–(22)Recognitionofequity-settledsharebasedpayments5,805–5,805–5,805At30June2008304,8253,588,333(1,970,523)1,650402,540346,24722,92821,143,91123,839,911–23,839,911CONDENSEDCONSOLIDATEDCASHFLOWSTATEMENTForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED16SixMonthsEnded30June20082007NotesHK$'000HK$'000(unaudited)(unaudited)Cashgeneratedfromoperations544,974515,893HongKongProfitsTaxpaid(24,707)(11,570)HongKongProfitsTaxrefunded–15,061Taxpaidinotherjurisdictions(40,467)(29,260)Taxrefundedinotherjurisdictions–171Netcashfromoperatingactivities479,800490,295InvestingactivitiesInterestreceived48,92173,433Dividendsreceivedfromlistedinvestments125,359495Dividendreceivedfromanassociate3,0304,673Additionsofinvestmentproperties(36,622)(13,799)Additionsofproperty,plantandequipment(1,485,754)(91,343)Additionofavailableforsaleinvestments(3,700)(19,535)Investmentinconvertiblebonds(11)(2,340,000)–Netproceedsondisposalofavailableforsaleinvestments–43,603Proceedsondisposalofpropertyinvestmentsubsidiaries(17)5,486,537–Proceedsondisposalofproperty,plantandequipment68–Decreaseinloanreceivables–323Decrease(increase)inpledgedbankdeposits25,802(7,573)Decreaseinrestrictedcash567,599–Netcashfrom(usedin)investingactivities2,391,240(9,723)CONDENSEDCONSOLIDATEDCASHFLOWSTATEMENTForthesixmonthsended30June2008INTERIMREPORT200817SixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)FinancingactivitiesInterestpaid(198,373)(281,218)Issueofshares1,4205,157Shareissueexpenses(22)(21)Newbankloansraised792,822–Repaymentsofbankandrevolvingloans(459,945)(198,826)Dividendspaidtoshareholders(93,026)(56,383)Netcashfrom(usedin)financingactivities42,876(531,291)Increase(decrease)incashandcashequivalents2,913,916(50,719)Effectofforeignexchangeratechanges(3,073)43,311Cashandcashequivalentsat1January2,883,4782,919,827Cashandcashequivalentsat30June5,794,3212,912,419AnalysisofcashandcashequivalentsBankbalancesandcash5,795,4142,918,554Bankoverdrafts(1,093)(6,135)5,794,3212,912,419NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED18(1)BASISOFPREPARATIONThecondensedconsolidatedfinancialstatementshavebeenpreparedinaccordancewiththeapplicabledisclosurerequirementsofAppendix16totheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the"ListingRules")andwithHongKongAccountingStandard34,"InterimFinancialReporting"issuedbytheHongKongInstituteofCertifiedPublicAccountants("HKICPA").
(2)PRINCIPALACCOUNTINGPOLICIESThecondensedconsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasis,exceptforinvestmentpropertiesandcertainfinancialinstruments,whicharemeasuredatfairvalues.
TheaccountingpoliciesusedinthecondensedconsolidatedfinancialstatementsareconsistentwiththosefollowedinthepreparationoftheGroup'sannualfinancialstatementsfortheyearended31December2007.
Inthecurrentinterimperiod,theGrouphasapplied,forthefirsttime,anumberofnewinterpretationsissuedbytheHKICPA,whichareeffectivefortheGroup'sfinancialyearbeginningon1January2008.
TheadoptionofthesenewinterpretationshadnomaterialeffectonhowtheresultsandfinancialpositionoftheGroupforthecurrentand/orprioraccountingperiods.
Accordingly,nopriorperiodadjustmenthasbeenrequired.
TheGrouphasnotearlyappliedthefollowingnew/revisedstandards,amendmentsorinterpretationsthathavebeenissuedbutarenotyeteffective.
HKAS1(Revised)PresentationofFinancialStatements1HKAS23(Revised)BorrowingCosts1HKAS27(Revised)ConsolidatedandSeparateFinancialStatements2HKAS32&HKAS1(Amendments)PuttableFinancialInstrumentsandObligationsArisingonLiquidation1HKFRS2(Amendment)VestingConditionsandCancellations1HKFRS3(Revised)BusinessCombinations2HKFRS8OperatingSegment1HK(IFRIC)–Int13CustomerLoyaltyProgrammes3HK(IFRIC)–Int15AgreementsfortheConstructionofRealEstate1HK(IFRIC)–Int16HedgesofaNetInvestmentinaForeignOperation41Effectiveforannualperiodsbeginningonorafter1January20092Effectiveforannualperiodsbeginningonorafter1July20093Effectiveforannualperiodsbeginningonorafter1July20084Effectiveforannualperiodsbeginningonorafter1October2008NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200819TheDirectorsoftheCompanyanticipatethattheapplicationofthesenew/revisedstandards,amendmentsorinterpretationswillhavenomaterialimpactontheresultsandfinancialpositionoftheGroupexceptfortheadoptionofHKFRS3(Revised)andHKAS27(Revised).
TheadoptionofHKFRS3(Revised)mayaffecttheaccountingforbusinesscombinationforwhichtheacquisitiondateisonorafterthebeginningofthefirstannualreportingperiodbeginningonorafter1July2009.
HKAS27(Revised)willaffecttheaccountingtreatmentonchangesinaparent'sownershipinterestinasubsidiarythatdonotresultinalossofcontrol,whichwillbeaccountedforasequitytransactions.
(3)BUSINESSSEGMENTSFormanagementpurposes,theGroupiscurrentlyorganisedintothefollowingoperations:Propertyinvestment–rentalincomefromleasingofpropertiesandfurnishedapartmentsandpropertiesheldforinvestmentpotential.
Hoteloperation–hotelaccommodation,foodandbanquetoperations.
Otheroperations–salesofbuildingmaterials,restaurantoperation,provisionofpropertymanagement,investmentinsecurities,maintenanceandagencyservices,managementserviceasamanagerofrealestateinvestmenttrust,provisionofinsuranceagencyservicesandfitnesscentreoperation.
TheseoperationsarethebasisonwhichtheGroupreportsitsprimarysegmentinformation.
NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED20Segmentinformationaboutthesebusinessesispresentedbelow:SixMonthsEnded30June2008PropertyHotelOtherinvestmentoperationoperationsEliminationsConsolidatedHK$'000HK$'000HK$'000HK$'000HK$'000(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)REVENUEExternalsales392,4601,548,921496,025–2,437,406Inter-segmentsales32,263–11,504(43,767)–Total424,7231,548,921507,529(43,767)2,437,406Inter-segmentsalesarechargedatmutuallyagreedprices.
RESULTSSegmentresults255,18154,383362,617672,181Unallocatedcorporateincome27,851Unallocatedcorporateexpenses(61,905)Lossondisposalofpropertyinvestmentsubsidiaries(450,814)––(450,814)Fairvaluechangesoninvestmentproperties222,598––222,598Fairvaluechangesonderivativefinancialinstruments(98,967)Fairvaluechangesonfinancialassetscarriedatfairvaluethroughprofitorloss(12,342)Financecosts(196,005)Shareofresultsofassociates––7,1877,187Profitbeforetax109,784Incometaxes20,124Profitfortheperiod129,908NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200821SixMonthsEnded30June2007PropertyHotelOtherinvestmentoperationoperationsEliminationsConsolidatedHK$'000HK$'000HK$'000HK$'000HK$'000(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)REVENUEExternalsales384,5361,356,646255,366–1,996,548Inter-segmentsales12,028–10,535(22,563)–Total396,5641,356,646265,901(22,563)1,996,548Inter-segmentsalesarechargedatmutuallyagreedprices.
RESULTSSegmentresults222,300257,760174,629654,689Unallocatedcorporateincome57,868Unallocatedcorporateexpenses(42,415)Fairvaluechangesoninvestmentproperties360,734––360,734Fairvaluechangesonderivativefinancialinstruments(2,223)Fairvaluechangesonfinancialassetscarriedatfairvaluethroughprofitorloss12,168Financecosts(282,145)Shareofresultsofassociates––7,6677,667Profitbeforetax766,343Incometaxes(152,532)Profitfortheperiod613,811(4)FINANCECOSTSSixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)Interestonbankborrowingsnotwhollyrepayablewithinfiveyears–32,315Interestonbankborrowingswhollyrepayablewithinfiveyears156,729183,950Interestonotherloanswhollyrepayablewithinfiveyears29,63758,904Otherborrowingcosts9,6396,976196,005282,145NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED22(5)INCOMETAXESSixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)Currenttax:Currentperiod:HongKongProfitsTax54,85238,519Otherjurisdictions17,38812,32672,24050,845Under(Over)provisioninpriorperiods:HongKongProfitsTax(3)–Otherjurisdictions15(167)12(167)72,25250,678Deferredtax:Currentperiod7,797101,854Attributabletochangeintaxrate(100,173)–(92,376)101,854(20,124)152,532HongKongProfitsTaxiscalculatedat16.
5%(sixmonthsended30June2007:17.
5%)oftheestimatedassessableprofitfortheperiod.
Taxationarisinginotherjurisdictionsiscalculatedattheratesprevailingintherespectivejurisdictions.
On26June2008,theHongKongLegislativeCouncilpassedtherevenuebill2008whichincludedthereductionincorporatetaxrateby1%from17.
5%to16.
5%effectivefromtheyearofassessment2008-2009.
Theeffectofsuchdecreasehasbeenreflectedinmeasuringthecurrentanddeferredtaxforthesixmonthsended30June2008.
NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200823(6)PROFITFORTHEPERIODSixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)Profitfortheperiodhasbeenarrivedataftercharging:Depreciationonotherproperty,plantandequipment61,76745,151Depreciationonhotelbuildings93,64380,204Fitting-outworksofhotelbuildings(2007:investmentproperties)writtenoff(includedinotherexpenses)106,8815,940Lossondisposalofproperty,plantandequipment1,59070Amortisationofprepaidleasepayments22,38722,386Staffcosts,includingdirectors'emoluments653,399526,465andaftercrediting:Interestincome58,53673,498Dividendincomefromavailableforsaleinvestments:–ChampionRealEstateInvestmentTrust("ChampionREIT")124,93183,315–Others428495Gainondisposaloflistedavailableforsaleinvestments–17,387Netexchangegain4,8928,563(7)DIVIDENDSSixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)Dividendsrecognisedasdistributionduringtheperiod:2007Finaldividendpaid–HK35centspershare211,643–2006Finaldividendpaid–HK25centspershare–150,268211,643150,268Interimdividenddeclared–HK20centspershare(2007:HK15centspershare)121,93390,687Specialinterimdividenddeclared–HK$2.
70pershare1,646,093–1,768,02690,687NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED24Duringtheperiod,adividendofHK35cents(finaldividendof2006:HK25cents)pershare,whichincludedscripdividendalternativesofferedtoshareholders,waspaidtoshareholdersasthefinaldividendfor2007.
Thescripdividendalternativeswereacceptedbytheshareholdersasfollows:SixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)Dividends:Cash93,02656,383Sharealternative118,61793,885211,643150,268(8)EARNINGSPERSHAREThecalculationofbasicanddilutedearningspershareisbasedonthefollowingdata:SixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)EarningsEarningsforthepurposesofbasicanddilutedearningspershare(profitfortheperiodattributabletoequityholdersoftheparent)129,908613,810SixMonthsEnded30June20082007NumberofsharesWeightedaveragenumberofsharesforthepurposeofbasicearningspershare604,786,338600,988,034Effectofdilutivepotentialshares:Shareoptions242,015470,441Weightedaveragenumberofsharesforthepurposeofdilutedearningspershare605,028,353601,458,475NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200825(9)MOVEMENTSINPROPERTY,PLANTANDEQUIPMENTANDINVESTMENTPROPERTIESTheinvestmentpropertieswithacarryingvalueofHK$69,400,000(sixmonthsended30June2007:HK$67,000,000)wastransferredtoproperty,plantandequipment.
On8January2008,theGroupacquiredahotelpropertysituatedintheUnitedStatesofAmericaamountingtoHK$1,287,363,000.
Theadditionsanddisposalsofotherproperty,plantandequipmentduringtheperiodwereHK$194,673,000(sixmonthsended30June2007:HK$84,270,000)andHK$108,539,000(sixmonthsended30June2007:HK$151,000)respectively.
Duringtheperiod,theGrouphadadditionstoimprovementworkoninvestmentpropertiesatacostofHK$11,545,000(sixmonthsended30June2007:HK$16,963,000).
On3June2008,theGroupcompletedthedisposalofLanghamPlace.
Accordingly,thecarryingamountsoftheinvestmentpropertyandowneroccupiedlandandbuildingswerereducedbyHK$13,687,000,000andHK$353,480,000,respectively.
Detailsofthedisposalaresetoutinnote17.
ThefairvalueoftheGroup'sinvestmentpropertiesasat30June2008wascarriedoutbyindependentprofessionalpropertyvaluersnotconnectedwiththeGroup:InvestmentpropertiesinHongKong–KnightFrankPettyLimitedInvestmentpropertiesintheUnitedStatesofAmerica–Cushman&WakefieldofCalifornia,Inc.
Thevaluations,whichconformtoInternationalValuationStandards,werearrivedatusingthebasisofcapitalisationofnetrentalincome.
(10)AVAILABLEFORSALEINVESTMENTSAvailableforsaleinvestmentscomprise:30June31December20082007HK$'000HK$'000(unaudited)(audited)ListedsecuritiesinHongKong:–ChampionREIT7,695,4986,167,196–Others71,82276,728UnlistedsecuritiesinHongKong19,78119,7817,787,1016,263,705Marketvalueoflistedsecurities7,767,3206,243,924NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED26On3June2008,theGroupreceived781,221,000unitsofChampionREITwithafairvalueofHK$2,812,396,000aspartoftheconsiderationofdisposalofLanghamPlace.
Detailsofthedisposalaresetoutinnote17.
Inaddition,theGroupfurtheracquired1,000,000unitsofChampionREITwithafairvalueofHK$3,700,000inJune2008.
Asat30June2008,theGroupholds48.
7%(31December2007:48.
5%)interestinChampionREIT.
Atthebalancesheetdate,allthelistedsecuritiesarestatedatfairvalue.
Theaboveunlistedinvestmentsrepresentinvestmentinunlistedequitysecuritiesissuedbyaprivateentityandclubdebentures.
Theyaremeasuredatcostlessimpairmentateachbalancesheetdate.
(11)INVESTMENTINCONVERTIBLEBONDSOn3June2008,theGroupsubscribedforHK$2,340million1%guaranteedconvertiblebondsdue2013(the"Bond")ofChampionREIT.
Theeffectiveinterestrateofthestraightdebtcomponentis6.
27%perannum.
TheBondislistedonTheStockExchangeofHongKongLimited.
DetailsofthetransactionaresetoutintheannouncementsoftheCompanydated28May2008and3June2008.
TheinvestmentinconvertiblebondsofChampionREIThasbeensplitbetweenastraightdebtreceivablecomponentandembeddedderivatives(note13).
TheGroupengagedanindependentvaluertoassessthefairvalueoftheembeddedderivativestakingintoaccountsofthequotedmarketpriceatsubscriptiondateandbalancesheetdate.
Themovementoftheconvertiblebondsfortheperiodisasfollows:StraightEmbeddeddebtderivativesHK$'000HK$'000(unaudited)(unaudited)Convertiblebondssubscribedon3June20082,229,084110,916Interestincomerecognisedduringtheperiod10,870–Changeinfairvalue–(110,864)At30June20082,239,95452NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200827(12)DEBTORS,DEPOSITSANDPREPAYMENTS30June31December20082007HK$'000HK$'000(unaudited)(audited)Tradedebtors321,661286,628Deferredrentreceivables14,99170,235Otherreceivables51,11058,793Depositsandprepayments173,67891,896561,440507,552TheGroupmaintainsadefinedcreditpolicy.
Forsalesofgoods,theGroupallowsanaveragecreditperiodof30-60daystoitstradecustomers.
Rentalsreceivablefromtenantsandserviceincomereceivablefromcustomersarepayableonpresentationofinvoices.
Thefollowingisanagedanalysisoftradedebtorsnetofallowancefordoubtfuldebts:30June31December20082007HK$'000HK$'000(unaudited)(audited)0-3months276,106234,1673-6months18,2055,223Over6months27,35047,238321,661286,628NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED28(13)DERIVATIVEFINANCIALINSTRUMENTS30June200831December2007AssetsLiabilitiesAssetsLiabilitiesHK'000HK'000HK'000HK'000(unaudited)(unaudited)(audited)(audited)Interestrateswapsandforwardcurrencycontracts(note)2,197––9,714Embeddedderivativesinconvertiblebonds(note11)52–––2,249––9,714Note:TheGrouphasusedsterlingpoundinterestrateswapstomanageitsexposuretointerestratemovementsonitsbankborrowings.
Interestrateswapcontractsofnotionalamounttosterlingpound40,000,000(2007:sterlingpound40,000,000)inaggregatewereenteredforperiodsupto2009,toswapfloating-rateborrowingstofixed-rateborrowingsofinterestratesrangingfrom4.
91%to5.
48%(2007:4.
91%to5.
48%)perannum.
Inaddition,theGroupenteredintoforeigncurrencyderivativecontractstomanageitsexposuretoforeignexchangeratemovement.
Changesinfairvalueofthederivativefinancialinstrumentswerechargedtothecondensedconsolidatedincomestatement.
(14)CREDITORS,DEPOSITSANDACCRUALS30June31December20082007HK$'000HK$'000(unaudited)(audited)Tradecreditors149,625205,399Rentaldeposits148,598260,209Constructionfeepayableandretentionmoneypayable393,949422,987Accruals,interestpayableandotherpayables375,342373,1111,067,5141,261,706Theagedanalysisoftradecreditorsisasfollows:30June31December20082007HK$'000HK$'000(unaudited)(audited)0-3months143,221200,5543-6months1,3652,650Over6months5,0392,195149,625205,399NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200829(15)BORROWINGS30June31December20082007HK$'000HK$'000(unaudited)(audited)Billspayable16,47111,148Bankloansandrevolvingloans(secured)4,316,2468,249,514Othernon-currentloans(secured)1,137,4351,147,5455,470,1529,408,207Loanfront-endfee(10,928)(12,697)5,459,2249,395,510Thematurityoftheaboveloansisasfollows:Ondemandorwithinoneyear812,8533,020,131Morethanoneyearbutnotexceedingtwoyears1,731,8681,907,840Morethantwoyearsbutnotexceedingfiveyears2,914,5034,467,5395,459,2249,395,510Less:Amountsduewithinoneyearshownundercurrentliabilities(812,853)(3,020,131)4,646,3716,375,379Therangesofeffectiveinterestrates(whicharealsoequaltocontractedinterestrates)ontheGroup'sborrowingsareasfollows:Effectiveinterestrate:30June31December20082007(unaudited)(audited)Fixed-rateborrowings4.
52%to12.
50%4.
52%to12.
50%Variable-rateborrowings2.
79%to8.
23%4.
62%to10.
22%NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED30(16)SHARECAPITAL(a)Authorised:30June200831December2007(unaudited)(audited)NumberofNominalNumberofNominalsharesValuesharesValue'000HK$'000'000HK$'000SharesofHK$0.
5eachBalancebroughtforwardandcarriedforward800,000400,000800,000400,000(b)Issuedandfullypaid:30June200831December2007(unaudited)(audited)NumberofNominalNumberofNominalsharesValuesharesValue'000HK$'000'000HK$'000SharesofHK$0.
5eachBalancebroughtforward604,631302,315600,854300,427IssueduponexerciseofshareoptionsundertheShareOptionScheme7839423211Issuedasscripdividends4,9402,4713,3541,677Balancecarriedforward609,649304,825604,631302,315Duringtheperiod,4,940,289(2007:3,353,013)sharesofHK$0.
50eachintheCompanywereissuedatHK$24.
01(2007:HK$28)pershareasscripdividends.
NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200831(17)DISPOSALOFPROPERTYINVESTMENTSUBSIDIARIESOn14February2008,theGroupenteredintosaleandpurchaseagreements(the"Agreements")withChampionREITinconnectionwiththedisposaloftheGroup'spropertyinterestinLanghamPlaceanditsrelatedassetsandliabilities(the"Disposal").
DetailsoftheDisposalaresetoutinthecircularoftheCompanydated16February2008.
TheDisposalwascompletedon3June2008andwasaccountedforasthedisposalofpropertyinvestmentsubsidiaries.
Thenetassetsofthepropertyinvestmentsubsidiariesatthedateofdisposalwereasfollows:HK$'000(unaudited)Netassetsdisposedof:Investmentproperties13,687,000Owneroccupiedlandandbuildings353,480Pledgedbankdeposits297,424Debtors,depositsandprepayments110,175Bankbalancesandcash93Creditors,depositsandaccruals(197,136)Bankloans(4,291,134)Deferredtaxation(1,211,258)8,748,644Totalconsiderationsatisfiedby:Cash5,486,630AmountpayabletoChampionREIT(1,196)FairvalueofunitsissuedbyChampionREIT(Note)2,812,3968,297,830Lossondisposalofpropertyinvestmentsubsidiaries(450,814)Netcashinflowarisingondisposal:Cashconsiderationreceived5,486,630Bankbalancesandcashdisposedof(93)5,486,537Note:TheGroupreceived781,221,000unitsofChampionREITwithafairvalueofHK$2,812,396,000aspartoftheconsiderationoftheDisposalon3June2008.
NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008GREATEAGLEHOLDINGSLIMITED32(18)SHARE-BASEDPAYMENTSTheCompanyhasashareoptionschemeforeligibleemployeesoftheGroup.
Detailsoftheshareoptionsoutstandingduringthecurrentperiodareasfollows:–NumberofshareoptionsOutstandingat1January20084,080,000Exercisedduringtheperiod(78,000)Cancelledduringtheperiod(35,000)Outstandingat30June20083,967,000Noshareoptionwasgrantedduringtheperiod.
(19)COMMITMENTSANDCONTINGENTLIABILITIESAt30June2008,theGrouphasauthorisedcapitalexpenditureforacquisitionofinvestmentpropertiesandproperty,plantandequipmentwhichisnotprovidedforinthesecondensedconsolidatedfinancialstatementsamountingtoHK$522,972,000(31December2007:HK$157,375,000)ofwhichHK$522,427,000(31December2007:HK$156,574,000)wascontractedfor.
Otherthansetoutabove,theGroupdidnothaveanysignificantcommitmentsandcontingentliabilitiesatthebalancesheetdate.
NOTESTOTHECONDENSEDCONSOLIDATEDFINANCIALSTATEMENTSForthesixmonthsended30June2008INTERIMREPORT200833(20)RELATEDPARTYTRANSACTIONSTheGrouphadthefollowingsignificantrelatedpartytransactionsduringtheperiodandbalancesatthebalancesheetdatewithassociatesandrelatedcompanies.
RelatedcompaniesarecompaniesinwhichsomeshareholdersanddirectorsoftheCompanyhavebeneficialinterests.
ThetransactionswerecarriedoutinthenormalcourseoftheGroup'sbusinessontermsmutuallyagreedbetweentheparties.
SixMonthsEnded30June20082007HK$'000HK$'000(unaudited)(unaudited)TransactionswithrelatedcompaniesTradingincome1226,242Rentalincome1,790707Managementfeereceived360360Rentalcharges300300Costandexpensesincurredforsuper-structuralworks–20,496Paymentforrenovationworks–84130June31December20082007HK$'000HK$'000(unaudited)(audited)BalancesasatAmountsduefromassociates12,07712,077Amountsduefromrelatedcompanies(includedindebtors,depositsandprepayments)3,8443,872Amountsduetorelatedcompanies(includedincreditors,depositsandaccruals)287,363287,090DISCLOSUREOFINTERESTSGREATEAGLEHOLDINGSLIMITED34DIRECTORS'INTERESTSANDSHORTPOSITIONSINSHARESANDUNDERLYINGSHARESAsat30June2008,theinterestsandshortpositionoftheDirectorsoftheCompanyinthesharesandunderlyingsharesoftheCompanyoranyofitsassociatedcorporations(withinthemeaningofPartXVoftheSecuritiesandFuturesOrdinance(the"SFO"))whichwerenotifiedtotheCompanyandTheStockExchangeofHongKongLimited("StockExchange")pursuanttoDivisions7and8ofPartXVoftheSFO(includinginterestsorshortpositionswhichtheyweretakenordeemedtohaveundersuchprovisionsoftheSFO),orwhichwererecordedintheregisterrequiredtobekeptbytheCompanyunderSection352oftheSFO,orwhichwererequired,pursuanttotheModelCodeforSecuritiesTransactionsbyDirectorsofListedIssuers("ModelCode")setoutinAppendix10oftheRulesGoverningtheListingofSecuritiesontheStockExchange("ListingRules"),tobenotifiedtotheCompanyandtheStockExchange,wereasfollows:1.
LongpositionsinsharesandunderlyingsharesoftheCompanyNumberofordinarysharesNumberofPercentageoutstandingNameofPersonalFamilyCorporateOtherofshareDirectorinterestsinterestsinterestsinterestsTotalshareholdingoptionsLoKaShui7,823,110–29,503,407(1)241,701,691(2)279,028,20845.
77900,000LoKaiShui––513,113(3)200,382,200(4)200,895,31332.
95400,000LoToLeeKwan958,624–4,405,584(5)–5,364,2080.
88–ChengHoiChuen,Vincent–10,000––10,000––LoHongSui,Antony2,984–––2,984–250,000LawWaiDuen292,744––200,382,200(4)200,674,94432.
92100,000LoHongSui,Vincent293–––293––LoYingSui,Archie3,855,0463,70033,269,396(6)200,382,200(4)237,510,34238.
96–KanTakKwong860,431–––860,4310.
14420,000Notes:(1)These29,503,407sharesareheldbyacompanywholly-ownedbyDr.
LoKaShui.
(2)These241,701,691sharescomprise:(i)200,382,200shareswhichareownedbyadiscretionarytrustofwhichDr.
LoKaShui,Mr.
LoKaiShui,MadamLawWaiDuenandDr.
LoYingSui,Archiearebeneficiaries;and(ii)41,319,491shareswhichareownedbyanotherdiscretionarytrustofwhichDr.
LoKaShuiistheFounder.
DISCLOSUREOFINTERESTSINTERIMREPORT200835(3)These513,113sharesareheldbycompanieswholly-ownedbyMr.
LoKaiShui.
(4)ThesesharesarethesameparcelofsharesreferredtoinNote(2)(i)above.
(5)These4,405,584sharesareheldbycompanieswholly-ownedbyMrs.
LoToLeeKwan.
(6)These33,269,396sharesareheldbyacompanywholly-ownedbyDr.
LoYingSui,Archie.
2.
LongpositionsinsharesofanassociatedcorporationoftheCompanyDr.
LoKaShuibeneficiallyowned150,000sharesinthecapitalofRecruitHoldingsLimitedrepresenting0.
048%oftheissuedsharecapitalofthecompany.
Saveasdisclosedabove,asat30June2008,noneoftheDirectorsoftheCompanywere,underDivisions7,8and9ofPartXVoftheSFO,takentobeinterestedordeemedtohaveanyotherinterestsorshortpositionsinsharesorunderlyingsharesoftheCompanyanditsassociatedcorporations,thatwererequiredtobeenteredintotheregisterkeptbytheCompanyundersection352oftheSFOorwererequiredtobenotifiedtotheCompanyandtheStockExchangepursuanttotheModelCode.
SHAREOPTIONPursuanttoanordinaryresolutionpassedon10June1999,theCompanyhadadoptedtheGreatEagleHoldingsLimitedShareOptionScheme(the"ShareOptionScheme"),whichwasamendedbyanordinaryresolutionpassedon20December2001,inordertomotivateofficers,employees,associates,agentsandcontractorsoftheCompanyoranysubsidiaryandtoallowthemtoparticipateinthegrowthoftheCompany.
1.
MovementsoftheShareOptionsgrantedtotheCompany'semployees(includingDirectors)Duringthesixmonthsended30June2008,movementsoftheShareOptionsgrantedtotheCompany'semployees(includingDirectors)asrequiredtobedisclosedaccordingtoRule17.
07oftheStockExchangeListingRuleswereasfollows:NumberofShareOptionsGrantedExercisedCancelledLapsedOutstandingduringduringduringduringOutstandingSubscriptionDateofasatthethethetheasatExercisepricepergrant01/01/2008periodperiodperiodperiod30/06/2008periodshare(HK$)10/02/200315,000––(15,000)––11/02/2005–4.
62510/02/200816/03/20045,000––––5,00017/03/2006–13.
55016/03/200917/03/20051,013,000–(78,000)(1)––935,00018/03/2007–18.
21017/03/201004/01/20073,047,000––(20,000)–3,027,00005/01/2009–22.
35004/01/20124,080,000–(78,000)(35,000)–3,967,000DISCLOSUREOFINTERESTSGREATEAGLEHOLDINGSLIMITED362.
MovementsoftheShareOptionsgrantedtoDirectorsDuringthesixmonthsended30June2008,movementsoftheShareOptionsgrantedtoDirectors(somearealsosubstantialshareholders)undertheShareOptionSchemeasrequiredtobedisclosedaccordingtoRule17.
07oftheStockExchangeListingRuleswereasfollows:NumberofShareOptionsGrantedExercisedCancelledLapsedOutstandingduringduringduringduringOutstandingNameofDateofasatthethethetheasatDirectorgrant01/01/2008periodperiodperiodperiod30/06/2008LoKaShui17/03/2005300,000––––300,00004/01/2007600,000––––600,000900,000––––900,000LoKaiShui17/03/2005200,000––––200,00004/01/2007200,000––––200,000400,000––––400,000LoHongSui,Antony17/03/200550,000––––50,00004/01/2007200,000––––200,000250,000––––250,000LawWaiDuen17/03/200550,000–(50,000)(2)–––04/01/2007100,000––––100,000150,000––––100,000KanTakKwong17/03/2005120,000––––120,00004/01/2007300,000–––300,000420,000––––420,000Total:2,120,000–(50,000)––2,070,000Notes:(1)Theweightedaverageclosingpriceofthe78,000sharesimmediatelybeforethedatesonwhichtheoptionswereexercisedwasHK$24.
26.
(2)Theweightedaverageclosingpriceofthe50,000sharesimmediatelybeforethedateonwhichtheoptionswereexercisedwasHK$24.
(3)ConsiderationpaidforeachgrantofoptionwasHK$1.
00.
(4)Thevestingperiodfortheoptiongrantis24monthsfromdateofgrant.
(5)Duringthesixmonthsended30June2008,noshareoptionswasgrantedtotheCompany'semployees(includingDirectors).
DISCLOSUREOFINTERESTSINTERIMREPORT200837SUBSTANTIALSHAREHOLDERS'INTERESTSINSHARESAsat30June2008,thelongpositionsofthefollowingpersons(otherthanaDirectororthechiefexecutiveoftheCompany)whohadinterestorshortpositionsinthesharesorunderlyingsharesoftheCompanywhichfalltobedisclosedtotheCompanyundertheprovisionsofDivisions2and3ofPartXVoftheSFO,orwhichwererecordedintheregisterrequiredtobekeptbytheCompanyunderSection336ofPartXVoftheSFOashavinganinterestin5%ormoreoftheissuedsharecapitaloftheCompany:PercentageofNameofShareholdersNumberofsharesissuedsharecapitalHSBCInternationalTrusteeLimited244,990,957(1)40.
18AdscanHoldingsLimited(2)33,269,3965.
50Cohen&Steers,Inc.
30,274,8865.
01Notes:(1)These244,990,957sharescomprise:(i)200,382,200shareswhichareheldbyHSBCInternationalTrusteeLimited("HITL")asatrusteeofadiscretionarytrust,ofwhichDr.
LoKaShui,Mr.
LoKaiShui,MadamLawWaiDuenandDr.
LoYingSui,Archiearethebeneficiaries;(ii)41,319,491shareswhichareheldbyHITLasatrusteeofanotherdiscretionarytrust,ofwhichDr.
LoKaShuiistheFounder;and(iii)3,289,266shareswhichareheldbyHITLinthecapacityoftrustee(otherthanabaretrustee).
(2)Acompanywholly-ownedbyDr.
LoYingSui,Archie.
(3)PowermaxAgentsLimited,awholly-ownedsubsidiariesofHITL,holds143,082,768sharesintheCompany.
Thesaid143,082,768sharesareamongthesharesreferredtoinNote(1)(i).
(4)SurewitFinanceLimited,awholly-ownedsubsidiaryofKSLManagementLimited,holds41,319,491sharesintheCompany.
Thesetwocompaniesarewholly-ownedsubsidiariesofHITLandthesaid41,319,491sharesarethesameparcelofsharesreferredtoinNote(1)(ii)above.
Saveasdisclosedabove,noperson(otherthanDirectorsoftheCompany)isinterested(ordeemedtobeinterested)orholdsanyshortpositioninthesharesorunderlyingsharesoftheCompanywhichwererecordedintheregisterrequiredtobedisclosedtotheCompanyundertheprovisionsofDivisions2and3oftheSFO,orwhichwererequiredtobekeptbytheCompanyunderSection336oftheSFO.
OTHERINFORMATIONGREATEAGLEHOLDINGSLIMITED38REVIEWOFINTERIMRESULTSThe2008interimreporthasbeenreviewedbytheAuditCommitteeoftheCompanyandthefinancialstatementsforthesixmonthsended30June2008werepreparedinaccordancewithHongKongAccountingStandard34"InterimFinancialReporting"issuedbytheHongKongInstituteofCertifiedPublicAccountants(the"HKICPA"),andhavebeenreviewedbytheIndependentAuditorsDeloitteToucheTohmatsuinaccordancewithHongKongStandardonReviewEngagements2410"ReviewofInterimFinancialInformationPerformedbytheIndependentAuditoroftheEntity"issuedbytheHKICPA.
COMPLIANCEWITHTHECODEONCORPORATEGOVERNANCEPRACTICESSaveasdisclosedinthefollowingparagraphs,duringthesixmonthsended30June2008,theCompanyhascompliedwithallthecodeprovisionsand,whereappropriate,adoptedsomeoftherecommendedbestpracticesassetoutintheCodeonCorporateGovernancePractices(the"CGCode")containedinAppendix14totheMainBoardListingRulesthroughouttheperiodunderreview.
CGCodeProvisionA.
2.
1requiresthattherolesofchairmanandchiefexecutiveofficershouldbeseparateandshouldnotbeperformedbythesameindividual.
Dr.
LoKaShuiistheChairmanoftheBoardandisholdingtheofficeofManagingDirectoroftheCompany.
WhilethisisadeviationfromCodeProvisionA.
2.
1,dualroleleadershiphasbeeninpracticebytheCompanyfordecadesandhasstoodforthetestoftime.
TheBoardconsideredthisarrangementisappropriatetotheCompanyasitcanpreservetheconsistentleadershipcultureoftheCompanyandallowefficientdischargeoftheexecutivefunctionsofthechiefexecutiveofficer.
TheBoardbelievesthatthebalanceofpowerandauthorityisadequatelyensuredbytheoperationsoftheBoardwhichcomprisesexperiencedandhighcalibreindividualsincludingthreeIndependentNon-executiveDirectors.
CGCodeprovisionA.
4.
1requiresthatnon-executivedirectorsshouldbeappointedforaspecificterm,subjecttore-election.
WhiletheBye-lawsoftheCompanyrequiresthatone-thirdofthedirectors(otherthantheexecutivechairmanandmanagingdirector)shouldretirebyrotation,thenon-executivedirectorshavenofixedtermofoffice.
TheBoardconsidersthattheprovisionsintheBye-lawsanditscorporategovernancemeasuresarenolessexactingthanthoseprescribedbyCGCodeprovisionA.
4.
1andthereforedoesnotintendtotakeanystepsinthisregard.
CGCodeprovisionA.
4.
2requiresthateverydirectorshouldbesubjecttoretirementbyrotationatleastonceeverythreeyears.
UndertheexistingBye-lawsoftheCompany,theexecutivechairmanandmanagingdirectoroftheCompanyarenotsubjecttoretirementbyrotation.
ThesameprovisioniscontainedinTheGreatEagleHoldingsLimitedCompanyAct,1990ofBermuda.
Assuch,directorswhoholdtheofficesofeithertheexecutivechairmanorthemanagingdirectoroftheCompanyarebystatutenotrequiredtoretirebyrotation.
Afterdueconsideration,inparticular,thelegalcostsandproceduresinvolved,theBoardconsidersthatitisnotdesirabletoproposeanyamendmenttoTheGreatEagleHoldingsLimitedCompanyAct,1990forthesolepurposeofsubjecttheexecutivechairmanandmanagingdirectoroftheCompanytoretirebyrotation.
OTHERINFORMATIONINTERIMREPORT200839COMPLIANCEWITHTHEMODELCODETheCompanyhasadoptedtheModelCodeforSecuritiesTransactionsbyDirectorsoftheListedIssuers(the"ModelCode")assetoutinAppendix10totheStockExchangeListingRules.
Havingmadespecificenquiry,allDirectorsoftheCompanyhaveconfirmedthattheyfullycompliedwiththeModelCodethroughouttheperiodunderreview.
PURCHASE,SALEORREDEMPTIONOFSHARESDuringthesixmonthsended30June2008,neithertheCompanynoranyofitssubsidiarieshadpurchased,soldorredeemedanyoftheCompany'sshares.
PUBLICFLOATAsfarastheCompanyisaware,asat30June2008,theCompanyhasmaintainedasufficientpublicfloatwithmorethan25%oftheissuedsharesoftheCompanybeingheldbythepublic.
EMPLOYEESThenumberofemployeesrosefrom4,044asat31December2007to4,622asat30June2008.
TheincreasewasmainlyattributabletothecompletionoftheacquisitionofahotelinPasadena,Californiatherebybringinginapproximately600employeestotheGroup.
SalarylevelsofemployeesarecompetitiveanddiscretionarybonusesaregrantedbasedonperformanceoftheGroupaswellasperformanceofindividualemployees.
Otheremployeebenefitsincludeeducationalallowance,insurance,medicalschemeandprovidentfundschemes.
Senioremployees(includingexecutivedirectors)areentitledtoparticipateintheGreatEagleHoldingsLimitedShareOptionScheme.
Inordertoenhanceemployeerelationsandcommunications,regularmeetingsofgeneralstaffwithseniormanagementhavebeenarrangedfortheperiod,withparticularemphasisonperformancemanagement.
DIVIDENDNOTICEGREATEAGLEHOLDINGSLIMITED40INTERIMDIVIDENDTheBoardoftheDirectorsofGreatEagleHoldingsLimited(the"Company")hasresolvedtodeclareaninterimdividendofHK20centspershare(2007:HK15centspershare)andaspecialinterimdividendofHK$2.
7pershare(2007:Nil)forthesixmonthsended30June2008payableon22October2008tothoseShareholderswhosenamesappearontheRegisterofMembersoftheCompanyon13October2008.
CLOSUREOFREGISTEROFMEMBERSTheRegisterofMembersoftheCompanywillbeclosedfromWednesday,8October2008toMonday,13October2008,bothdaysinclusive,duringwhichperiodnotransferofshareswillberegistered.
Inordertoreceivetheinterimdividendandthespecialinterimdividend,allproperlycompletedtransferformsaccompaniedbytherelevantsharecertificatesmustbelodgedwiththeHongKongBranchRegistrarsoftheCompany,ComputershareHongKongInvestorServicesLimitedofShops1712-1716,17thFloor,HopewellCentre,183Queen'sRoadEast,Wanchai,HongKong,forregistrationnotlaterthan4:30p.
m.
onMonday,6October2008.
IncorporatedinBermudawithlimitedliability(StockCode:41)GreatEagleHoldingsLimited33rdFloor,GreatEagleCentre23HarbourRoadWanchai,HongKongTel:(852)28273668Fax:(852)28275799香港灣仔港灣道23號鷹君中心33樓電話:(852)28273668傳真:(852)28275799www.
GreatEagle.
com.
hkIncorporatedinBermudawithlimitedliability(StockCode:41)GreatEagleHoldingsLimited