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Annex A

THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES Report for the year ended 31 December 2013

The Board of Management of the Chinese Permanent Cemeteries (the Board) is a statutory body established under the Chinese Permanent Cemeteries Ordinance (Cap. 1112).

2. The Board comprises both ex-officio members and appointed members. The Secretary for Home Affairs is the ex-officio Chairman of the Board. A membership list of the Board during the period under report is at Appendix I of Annex A.

3. The Board has appointed five Select Committees namely, Executive Committee, Finance Committee, Internal Affairs Committee, External Affairs Committee, Works and Development Committee. These Select Committees focus on the day to day business of the Board. The membership of these Select Committees is listed at Appendix II of Annex A.

4. The Board manages four Chinese Permanent Cemeteries, namely Aberdeen Cemetery, Tsuen Wan Cemetery, Cape Collinson Cemetery and Junk Bay Cemetery. The four cemeteries together provided around 80,000 burial lots and urn plots and some 240,000 niches of various types.

5. The Board perceives that in the coming years, the supply of new niches is limited. Hence, the Board has a pressing need to identify new sites to develop new cemeteries and columbaria to meet the demand of the public. If the Board is unable to acquire suitable sites in the coming years, the Board perceives that there will be limited supply of new niches in the future after exhaustion of all available stock. The Board will endeavor to explore suitable sites within its existing cemeteries and other potential sites for building columbaria and associated facilities to meet public demand. It is anticipated that substantial financial commitment would be required for development of new sites.

6. During the period under report, the Board has donated a total amount of $25 million to charitable organizations for supporting 117 projects under various donation exercises.

7. The audited Statement of Accounts of the Board for the year ended 31 December 2013 is at Appendix III of Annex A.

Tsang Tak-sing Chairman

The Board of Management of the Chinese Permanent Cemeteries

November 2014

Appendix I of Annex A

Membership List of the Board of Management of the Chinese Permanent Cemeteries (BMCPC)

(for the year ended 31 December 2013) Chairman

Secretary for Home Affairs (Ex-officio)

Members

Director of Lands (Ex-officio)

Director of Food and Environmental Hygiene (Ex-officio)

Dr CHAN Tung, GBS, JP (up to 31.1.2013)

Mr CHING Kwok-ho, Samuel (up to 31.1.2013)

Mr HO Tak-sum, MH (up to 31.1.2013)

Dr TAM Kam-kau, JP (up to 31.1.2013)

Mr TSANG Ching-lun, Edwin (up to 31.1.2013)

Ms CHAN Ka-mun, Carmen, JP

Dr WONG King-keung, Peter, BBS, JP

Mr NG Leung-sing, SBS, JP

Mr CHAN Pun-chung, BBS (up to 31.1.2013)

Mr CHAU Kam-man (up to 31.1.2013)

Ms NG Ka-yin, Agnes (up to 31.1.2013)

Mr NG Kwok-tung, Tony

Mr CHEUNG Wing-hong, Shannon

Mr LI Hon-hung, MH, JP

Mr CHAN Kwok-kai, BBS

Ms LEUNG Wing-yu, Nisa

Ir Dr CHAN Siu-kun, Alex (from 1.2.2013)

Ms HO Siu-fong, Betty (from 1.2.2013)

Ms HO Yee-lin, Elaine (from 1.2.2013)

Dr LEE Sam-yuen, John, BBS (from 1.2.2013)

Members

Dr POON Chong-ching, Margaret (from 1.2.2013)

Dr SO Chun-hin, Albert (from 1.2.2013)

Mr TSANG Heung-kwan, MH (from 1.2.2013)

Miss YU Yuk-ying, Vivian (from 1.4.2013)

Co-opt Members

Dr SO Chun-hin, Albert (up to 31.1.2013)

Mr KWONG Kwok-keung, Kenneth (up to 24.6.2013)

Ir Dr CHAN Siu-kun, Alex (up to 31.1.2013)

Ms HO Siu-fong, Betty (up to 31.1.2013)

Mr WONG Kam-choi

Appendix II of Annex A

Membership list of the Select Committees of the Board of Management of the Chinese Permanent Cemeteries

(for the year ended 31 December 2013)

Executive Committee

Chairperson : Mr TSANG Tak-sing, GBS, JP Members : Dr CHAN Tung, GBS, JP (up to 31.1.2013)

Mr CHING Kwok-ho, Samuel (up to 31.1.2013) Mr HO Tak-sum, MH (up to 31.1.2013) Dr WONG King-keung, Peter, BBS, JP Mr CHAN Pun-chung, BBS (up to 31.1.2013) Ms CHAN Ka-mun, Carmen, JP (from 1.2.2013) Mr CHEUNG Wing-hong, Shannon (from 1.2.2013) Mr CHAN Kwok-kai, BBS (from 1.2.2013)

Internal Affairs Committee

Chairperson : Mr CHING Kwok-ho, Samuel (up to 31.1.2013) Mr CHAN Kwok-kai, BBS (from 1.2.2013) Vice-chairperson : Mr CHEUNG Wing-hong, Shannon (from 1.2.2013) Members : Dr CHAN Tung, GBS, JP (up to 31.1.2013)

Mr CHAN Pun-chung, BBS (up to 31.1.2013) Mr TSANG Ching-lun, Edwin (up to 31.1.2013) Mr CHEUNG Wing-hong, Shannon (up to 31.1.2013) Mr CHAN Kwok-kai, BBS (up to 31.1.2013) Ir Dr CHAN Siu-kun, Alex (from 1.4.2013) Ms HO Yee-lin, Elaine (from 1.4.2013)

Finance Committee

Chairperson : Mr HO Tak-sum, MH (up to 31.1.2013) Mr CHEUNG Wing-hong, Shannon (from 1.2.2013) Vice-chairperson : Mr NG Leung-sing, SBS, JP Members : Dr TAM Kam-kau, JP (up to 31.1.2013)

Dr WONG King-keung, Peter, BBS, JP Mr NG Kwok-tung, Tony Mr CHEUNG Wing-hong, Shannon (up to 31.1.2013) Ms LEUNG Wing-yu, Nisa Dr POON Chong-ching, Margaret (from 1.4.2013) Dr SO Chun-hin, Albert (from 1.4.2013)

Works Committee (up to 31.3.2013*)

Chairperson : Dr WONG King-keung, Peter, BBS, JP Vice-chairperson : Mr CHAU Kam-man (up to 31.1.2013)

Members : Mr TSANG Ching-lun, Edwin (up to 31.1.2013) Ms NG Ka-yin, Agnes (up to 31.1.2013) Mr LI Hon-hung, MH, JP Mr CHAN Kwok-kai, BBS

Co-opt member : Ir Dr CHAN Siu-kun, Alex (up to 31.1.2013)

Development Committee (up to 31.3.2013*)

Chairperson : Mr CHAN Pun-chung, BBS (up to 31.1.2013) Vice-chairperson : Mr LI Hon-hung, MH, JP Members : Dr CHAN Tung, GBS, JP (up to 31.1.2013)

Mr TSANG Ching-lun, Edwin (up to 31.1.2013) Ms CHAN Ka-mun, Carmen, JP Dr WONG King-keung, Peter, BBS, JP

Mr CHAU Kam-man (up to 31.1.2013) Ms NG Ka-yin, Agnes (up to 31.1.2013) Co-opt members : Dr SO Chun-hin, Albert (up to 31.1.2013) Ms HO Siu-fong, Betty (up to 31.1.2013)

* With effect from 1.4.2013, Works Committee and Development Committee have merged to form one committee as Works and Development Committee.

Works and Development Committee (from 1.4.2013)

Chairperson : Dr WONG King-keung, Peter, BBS, JP (from 1.4.2013) Vice-chairperson : Mr LI Hon-hung, MH, JP (from 1.4.2013)

Members : Ms CHAN Ka-mun, Carmen, JP (from 1.4.2013) Mr CHAN Kwok-kai, BBS (from 1.4.2013) Ir Dr CHAN Siu-kun, Alex (from 1.4.2013) Ms HO Siu-fong, Betty (from 1.4.2013) Dr SO Chun-hin, Albert (from 1.4.2013) Mr TSANG Heung-kwan, MH (from 1.4.2013)

External Affairs Committee

Chairperson : Dr CHAN Tung, GBS, JP (up to 31.1.2013) Ms CHAN Ka-mun, Carmen, JP (from 1.2.2013) Vice-chairperson : Ms CHAN Ka-mun, Carmen, JP (up to 31.1.2013) Mr NG Kwok-tung, Tony (from 1.2.2013) Members : Mr HO Tak-sum, MH (up to 31.1.2013) Dr TAM Kam-kau, JP (up to 31.1.2013)

Mr NG Leung-sing, SBS, JP Mr NG Kwok-tung, Tony (up to 31.1.2013) Mr LI Hon-hung, MH, JP Ms HO Yee-lin, Elaine (from 1.4.2013 to 15.11.2013) Dr LEE Sam-yuen, John, BBS (from 1.4.2013) Dr POON Chong-ching, Margaret (from 1.4.2013) Dr SO Chun-hin, Albert (from 1.4.2013) Mr TSANG Heung-kwan, MH (from 1.4.2013) Ms LEUNG Wing-yu, Nisa (from 20.6.2013) Miss YU Yuk-ying, Vivian (from 20.6.2013) Co-opt members : Mr KWONG Kwok-keung, Kenneth (up to 24.6.2013) Mr WONG Kam-choi

Appendix III of Annex A THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2013

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (Registered under the Chinese Permanent Cemeteries Ordinance) We have audited the financial statements of The Board of Management of The Chinese Permanent Cemeteries (the “Board”) set out on pages 3 to 35, which comprise the balance sheet as at 31st December 2013, and the statement of comprehensive income, statement of changes in funds and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Responsibility of the members of the Board for the financial statements The members of the Board are responsible for the preparation of financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, and for such internal control as the members of the Board determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit and to report our opinion solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the members of the Board, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (CONTINUED) (Registered under the Chinese Permanent Cemeteries Ordinance) Opinion In our opinion, the financial statements give a true and fair view of the state of the Board’s affairs as at 31st December 2013, and of its surplus and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 4th December 2014

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) BALANCE SHEET As at 31st December Note 2013 2012 ASSETS Non-current assets Intangible assets 5 5,676,862 - Property, plant and equipment 6 409,860,136 413,135,504 Investment properties 7 582,881,875 565,791,250 Available-for-sale financial assets 9 3,884,468,423 3,815,333,646 Held-to-maturity financial assets 10 38,732,696 42,680,102 Deposits, non-current 11 - 6,791,742 ─────────── ─────────── 4,921,619,992 4,843,732,244 ------------------ ------------------ Current assets Development and formation costs of columbarium, grave and niche spaces 2.11 167,510,157 61,733,720

Inventories 340,683 28,513,445 Receivables, deposits and prepayments 11 7,881,884 15,956,144 Held-to-maturity financial assets 10 11,518,465 61,263,402 Financial assets at fair value through profit or loss 12 772,781,210 871,435,812 Cash and cash equivalents 13 889,438,744 761,592,305 ─────────── ─────────── 1,849,471,143 1,800,494,828 ------------------ ------------------ Total assets 6,771,091,135 6,644,227,072 ═══════════ ═══════════ FUNDS Accumulated funds 3,763,211,229 3,602,466,655 Reserves 14 2,855,007,307 2,905,354,241 ─────────── ─────────── Total funds 6,618,218,536 6,507,820,896 ------------------ ------------------ LIABILITIES Non-current liabilities Provision for donations 15 2,367,158 2,975,088 ------------------ ------------------ Current liabilities Other payables and accrued charges 16 118,252,312 112,015,453 Provision for donations 15 32,253,129 21,415,635 ─────────── ─────────── 150,505,441 133,431,088 ------------------ ------------------ Total liabilities 152,872,599 136,406,176 ------------------ ------------------ Total funds and liabilities 6,771,091,135 6,644,227,072 ═══════════ ═══════════ The notes on pages 8 to 35 are an integral part of these financial statements. The financial statements on pages 3 to 35 were approved by the members of the Board on 4th December 2014 and were signed on its behalf. …..……………………... …..……………………... TREASURER EXECUTIVE DIRECTOR CHEUNG WING-HONG, SHANNON LO MEI WAH, BRENDA

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) STATEMENT OF COMPREHENSIVE INCOME Year ended 31st December Note 2013 2012 Operating activities Revenue Sales of grave, niche and urn spaces 52,571,800 73,974,000 Sales of reverted subscriber lots 9,940,500 8,120,000 Income from reallocation of family niche spaces, ossuary and ordinary niche spaces 1,548,600 1,222,200

Income from reallocation of Type B renewable lots 13,104,000 13,384,000 Income from reallocation of Type C non-renewable lots 15,060,000 15,040,000 Conversion of Type B grave spaces to ordinary lots 560,000 1,400,000 Cleaning, removal and backfilling service fees for

exhumation

2,688,950 2,520,100 Digging and paving fees for grave spaces 1,831,200 1,933,600 Exhumation lots renewal fees 27,760,000 18,660,000 Other service fees 1,773,440 1,787,408 ────────── ────────── Total revenue 126,838,490 138,041,308 ---------------- ---------------- Less: Direct costs Cost of grave, niche and urn spaces sold 28,172,762 40,713,751 Direct costs arising from cleaning, removal and backfilling service for exhumation 1,188,400 831,920

Direct costs of digging and paving of grave spaces 2,692,988 1,735,698 ────────── ────────── 32,054,150 43,281,369 ---------------- ---------------- 94,784,340 94,759,939 Other operating income and other gains 17 11,325,528 2,595,751 ────────── ────────── 106,109,868 97,355,690 ---------------- ---------------- Less: General and administrative expenses Advertising and newspapers 357,954 396,695 Air-conditioning and management fees 856,729 846,084 Auditor’s remuneration 376,500 322,079 Cleaning 7,771,610 8,116,863 Crown rent and permit fees 608,098 697,255 Amortisation of intangible assets 5 1,419,216 - Depreciation 6 13,861,384 11,733,882 Employee benefit expense 18 43,527,011 41,807,128 Electricity, telephone and water 2,424,415 2,060,992 Geotechnical consultancy service fees 62,485,183 38,845,114 Insurance 1,284,920 1,084,753 Lift maintenance fees 208,867 105,065 Motor vehicle running expenses 280,050 299,622 Postage 80,245 124,177 Printing and stationery 197,173 336,561 Repairs and improvement works 17,655,175 54,445,330 Security guard fees 8,423,880 9,194,892 Sundry 5,341,825 3,829,634 Travelling 872,253 484,090 ────────── ────────── 168,032,488 174,730,216 ---------------- ---------------- Deficit for the year from operating activities (carried forward to page 5) (61,922,620) (77,374,526) ---------------- ----------------

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) Year ended 31st December Note 2013 2012 Deficit for the year from operating activities (brought forward from page 4) (61,922,620) (77,374,526) ---------------- ---------------- Investing activities Income Investment income 19 223,845,667 243,099,881 Rental income from investment properties 12,025,776 11,193,696 Fair value gains on investment properties 7 17,090,625 106,594,375 ────────── ────────── 252,962,068 360,887,952 ---------------- ---------------- Less: Direct expenses Impairment losses on available-for-sale financial assets 14 - 5,400,000 Investment expenses 19 5,108,200 4,421,934 Direct operating expenses arising from investment properties that generate rental income 85,329 78,081

────────── ────────── 5,193,529 9,900,015 ---------------- ---------------- Surplus for the year from investing activities 247,768,539 350,987,937 ---------------- ---------------- Total surplus for the year before donations 185,845,919 273,613,411 Donations 15 (25,101,345) (17,551,493) ────────── ────────── Surplus for the year 160,744,574 256,061,918 Other comprehensive (loss)/income for the year Item that may be reclassified to profit or loss Available-for-sale financial assets 14 (50,346,934) 721,613,692 ────────── ────────── Total comprehensive income for the year 110,397,640 977,675,610 ══════════ ══════════ The notes on pages 8 to 35 are an integral part of these financial statements.

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) STATEMENT OF CHANGES IN FUNDS

Accumulated

funds Reserves Total (note 14) Balance at 1st January 2012 3,346,404,737 2,183,740,549 5,530,145,286 ------------------ ------------------ ------------------ Comprehensive income Surplus for the year 256,061,918 - 256,061,918 ------------------ ------------------ ------------------ Other comprehensive income/(loss) Available-for-sales financial assets - net fair value gains - 724,310,006 724,310,006 - gains transferred to the statement of

comprehensive income upon disposals - (8,096,314) (8,096,314) - impairment losses recognised in

comprehensive income - 5,400,000 5,400,000 ─────────── ─────────── ─────────── Total other comprehensive income - 721,613,692 721,613,692 ------------------ ------------------ ------------------ Total comprehensive income 256,061,918 721,613,692 977,675,610 ------------------ ------------------ ------------------ Balances at 31st December 2012 and 1st January 2013 3,602,466,655 2,905,354,241 6,507,820,896

------------------ ------------------ ------------------ Comprehensive income Surplus for the year 160,744,574 - 160,744,574 ------------------ ------------------ ------------------ Other comprehensive income/(loss) Available-for-sales financial assets - net fair value losses - (49,665,797) (49,665,797) - gains transferred to the statement of

comprehensive income upon disposals - (681,137) (681,137) ─────────── ─────────── ─────────── Total other comprehensive loss - (50,346,934) (50,346,934) ------------------ ------------------ ------------------ Total comprehensive income/(loss) 160,744,574 (50,346,934) 110,397,640 ------------------ ------------------ ------------------ Balance at 31st December 2013 3,763,211,229 2,855,007,307 6,618,218,536 ═══════════ ═══════════ ═══════════ The notes on pages 8 to 35 are an integral part of these financial statements.

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) STATEMENT OF CASH FLOWS Year ended 31st December Note 2013 2012 Cash flows from operating activities Net cash used in operating activities 21 (118,146,237) (88,080,426) ---------------- ---------------- Cash flows from investing activities Purchases of intangible assets (304,336) (6,791,742) Purchases of property, plant and equipment 6 (10,586,016) (2,538,500) Purchases of available-for-sale financial assets 9 (142,823,277) (55,115,490) Purchases of held-to-maturity financial assets 10 (8,000,105) (40,858,439) Proceeds from disposals of available-for-sale financial assets 9 24,022,703 17,087,614

Proceeds from redemptions of held-to-maturity financial assets 10 61,251,686 358,580,250

Net decrease/(increase) in financial assets at fair value through profit or loss 148,135,153 (129,417,684)

Net decrease in financial liabilities at fair value through profit or loss - (320,233)

Dividends received 150,775,281 158,513,948 Interest received 23,521,587 28,543,829 ────────── ────────── Net cash generated from investing activities 245,992,676 327,683,553 ---------------- ---------------- Net increase in cash and cash equivalents 127,846,439 239,603,127 Cash and cash equivalents at beginning of the year 761,592,305 521,989,178 ────────── ────────── Cash and cash equivalents at end of the year 13 889,438,744 761,592,305 ══════════ ══════════ The notes on pages 8 to 35 are an integral part of these financial statements.

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated)

NOTES TO THE FINANCIAL STATEMENTS 1 General information

The Board of Management of the Chinese Permanent Cemeteries (the “Board”) is established and operated under the Chinese Permanent Cemeteries Ordinance. The Board is engaged in the sale of niche, family niche, grave and urn spaces and the provision of related services.

The Board may allocate an exhumable lot, either- Type A

For an initial term of 10 years, which may be extended for one further and final term of 6 years for an additional premium which the Board, in its discretion, may determine at the time of expiry of the initial period (designated to Type C from August 1995 onwards).

Type B For an initial term of 10 years, which may be extended for an indefinite number of terms up to 10

years each, for an additional premium which the Board, in its discretion, may determine at the time of expiry of each term.

Type C For a finite term of 10 years which will not be extended at its expiry.

These financial statements are presented in Hong Kong dollars unless otherwise stated. These financial statements have been approved for issue by the members of the Board on 4th December 2014.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation The financial statements of the Board have been prepared in accordance with Hong Kong

Financial Reporting Standards (“HKFRS”). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss and investment properties, which are carried at fair value.

The preparation of financial statements in conformity with HKFRS requires the use of certain

critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Board’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

(a) New standards, amendments and interpretations to existing HKFRS (collectively, the

“Amendments”) effective for the accounting year commencing on 1st January 2013

Amendment to Hong Kong Accounting Standard (“HKAS”) 1, “Financial statement presentation” regarding other comprehensive income. The main change resulting from this amendment is a requirement for entities to group items presented in “other comprehensive income” on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). There is no significant impact on these financial statements other than certain additional disclosures.

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NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued) 2.1 Basis of preparation (Continued) (a) New standards, amendments and interpretations to existing HKFRS (collectively, the

“Amendments”) effective for the accounting year commencing on 1st January 2013 (Continued)

Amendment to HKFRS 7, “Financial instruments: Disclosures”, on asset and liability offsetting. The amendment requires new disclosure requirements which focus on quantitative information about recognised financial instruments that are offset in the balance sheet, as well as those recognised financial instruments that are subject to master netting or similar arrangements irrespective of whether they are offset. This new amendment does not have any impact on these financial statements as the Board has not offset financial instruments, nor has it entered into master netting or similar arrangements which are subject to disclosures of HKFRS 7.

HKFRS 13, “Fair value measurement”, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across HKFRS. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within HKFRS. There is no significant impact on these financial statements other than certain additional disclosures.

(b) Amendments that are not yet effective and have not been early adopted by the Board

Certain Amendments have been published that are mandatory for the Board’s accounting periods commencing on or after 1st January 2014. The following Amendments are relevant and applicable to the Board; however, they have not been early adopted in these financial statements:

HKAS 32 (Amendment) Financial instruments: Presentation - offsetting financial assets and financial liabilities1

HKFRS 9 Financial instruments3 HKFRS 15 Revenue from contracts with customers2

Note: (1) Effective for financial periods beginning on or after 1st January 2014 (2) Effective for financial periods beginning on or after 1st January 2017 (3) Effective for financial periods beginning on or after 1st January 2018 The Board will apply these Amendments in the period of initial application. The Board is currently assessing the impact of the adoption of the Amendments and is not yet in a position to state whether they would have a significant impact on the Board’s results of operations and financial position.

2.2 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Board operates (“the functional currency”). The financial statements are presented in Hong Kong dollars, which is the Board’s functional and presentation currency.

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NOTES TO THE FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued) 2.2 Foreign currency translation (Continued)

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income. Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in comprehensive income, and other changes in carrying amount are recognised in other comprehensive income. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in the statement of comprehensive income as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as available for sale, are included in other comprehensive income.

2.3 Investment properties

Investment properties, comprising leasehold land and buildings, are held for long-term rental yields and are not occupied by the Board. Land held under operating leases is accounted for as investment properties when the rest of the definition of an investment property is met. In such cases, the operating leases concerned are accounted for as if they were finance leases. Investment properties are initially measured at cost, including related transaction costs. After initial recognition at cost, investment properties are carried at fair value, representing open market value determined at each reporting date by external valuers. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If the information is not available, the Board uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. Changes in fair values are recognised in comprehensive income in the statement of comprehensive income.

2.4 Intangible assets – computer software

Acquired computer software is capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Computer software is carried at cost less accumulated amortisation and impairment. Amortisation is calculated using the straight-line method to allocate the cost of computer software over its estimated useful life of 5 years.

2.5 Property, plant and equipment

Land and buildings comprise mainly office premises. Leasehold land classified as finance lease and all other property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Board and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged in the statement of comprehensive income during the financial year in which they are incurred.

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2 Summary of significant accounting policies (Continued) 2.5 Property, plant and equipment (Continued)

Construction in progress are assets on which construction has not been completed, and are carried at cost, which includes development and construction expenditure incurred and other direct cost attributable to the construction, less accumulated impairment losses. On completion, the assets are transferred to the relevant category of property, plant and equipment at cost less accumulated impairment losses. No depreciation is provided for construction in progress until the construction is completed and available for its intended use. Leasehold land classified as finance lease commences amortisation from the time when the land interest becomes available for its intended use. Amortisation on leasehold land classified as finance lease and depreciation on other property, plant and equipment is calculated using the straight-line method to allocate their costs to their residual values over their estimated useful lives, as follows:

Leasehold land classified as finance lease Remaining lease term Buildings 44 to 50 years Access roads 10 years Reservoir 10 years Furniture, fixtures and equipment 5 years Motor vehicles 4 years Footpath 50 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.

2.6 Impairment of non-financial assets Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.7 Financial assets (a) Classification

The Board classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity and available for sale. The classification depends on the purposes for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

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2 Summary of significant accounting policies (Continued)

2.7 Financial assets (Continued) (a) Classification (Continued)

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for the amounts that are settled or expected to be settled more than 12 months after the end of the reporting period. These are classified as non-current assets. The Board’s loans and receivables comprise “receivables” and “cash and cash equivalents” in the balance sheet (notes 2.13 and 2.14).

Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Board’s management has the positive intention and ability to hold to maturity. If the Board were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available for sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets.

Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the end of the reporting period.

(b) Recognition and measurement

Regular way purchases and sales of financial assets are recognised on the trade-date - the date on which the Board commits to purchase or sell the asset. Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Board has transferred substantially all the risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity financial assets are subsequently carried at amortised cost using the effective interest method.

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2 Summary of significant accounting policies (Continued) 2.7 Financial assets (Continued) (b) Recognition and measurement (Continued)

Gains or losses arising from changes in the fair value of the “financial assets at fair value through profit or loss” category are presented in the statement of comprehensive income, in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the statement of comprehensive income when the Board’s right to receive payments is established. Changes in the fair value of securities classified as available for sale are recognised in other comprehensive income. Dividends on available-for-sale equity instruments are recognised in the statement of comprehensive income when the Board’s right to receive payments is established. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in reserves are included in the statement of comprehensive income as part of investment income.

2.8 Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

2.9 Impairment of financial assets

(a) Assets carried at amortised cost

The Board assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of comprehensive income. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Board may measure impairment on the basis of an instrument’s fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the statement of comprehensive income.

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2 Summary of significant accounting policies (Continued) 2.9 Impairment of financial assets (Continued) (b) Assets classified as available for sale

The Board assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, the Board uses the criteria refer to (a) above. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in comprehensive income - is removed from reserves and recognised in comprehensive income. Impairment losses recognised in comprehensive income on equity instruments are not reversed through comprehensive income. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in comprehensive income, the impairment loss is reversed through the statement of comprehensive income.

2.10 Derivative financial instruments

The Board does not have any derivative financial instruments that are qualified for hedge accounting.

Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Changes in the fair value of any derivative financial instruments are recognised immediately in comprehensive income, except where the derivative financial instruments are qualified for hedge accounting.

2.11 Development and formation costs of columbarium, grave and niche spaces

The development and formation costs of columbarium, grave and niche spaces are stated at cost less any impairment losses, and are transferred to inventories when completed and ready for sale. Cost comprises architectural consultancy fees, construction costs and other direct costs attributable to the development and formation of columbarium, grave and niche spaces.

2.12 Inventories

Inventories comprise grave, niche and urn spaces and are stated at the lower of cost and net realisable value. Cost, which comprises development, formation and construction costs of the grave, niche and urn spaces, is calculated using the weighted average method. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.13 Receivables

If collection of receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

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2 Summary of significant accounting policies (Continued) 2.14 Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts, if any.

2.15 Payables

Payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.16 Employee benefits (a) Long service payments

Certain of the Board’s employees have completed a required number of years of service to the Board and are eligible for long service payments under the Hong Kong Employment Ordinance in the event of the termination of their employment. The Board is liable to make such payments in the event that such a termination of employment meets the circumstances specified in the Hong Kong Employment Ordinance.

A provision is recognised in respect of the probable future long service payments expected to be made. The provision is based on the best estimate of the probable future payments which have been earned by the employees from their service to the Board to the balance sheet date.

(b) Pension obligations

The Board has established a mandatory provident fund scheme (“MPF scheme”) in Hong Kong. The assets of the MPF scheme are held in separate trustee-administered funds. Both the Board and the employees are required to contribute a certain percentage of the employees’ relevant income. The Board has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

2.17 Reserves Reserves, other than available-for-sale financial assets reserve and buildings revaluation reserve, are funds set aside by the Board which are earmarked for specific purposes.

2.18 Provisions

Provisions are recognised when the Board has a present legal or constructive obligation where, as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

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2 Summary of significant accounting policies (Continued) 2.19 Operating leases - as the lessor

When the Board leases out properties under operating leases, the properties are included in the balance sheet as investment properties (note 2.3). Revenue arising from properties for leasing purposes under operating leases is recognised on a straight-line basis over the lease period (note 2.20(f)).

2.20 Revenue and income recognition

Revenue and income are recognised as follows:

(a) Sales of grave, niche, urn spaces and reverted subscriber lots

Sales of grave, niche, urn spaces and reverted subscriber lots (collectively, the “Lots”) are recognised when the Board has transferred the right of use of the Lots to the customers in accordance with the terms of the relevant contract.

(b) Reallocation and conversion income

Income from reallocation and conversion of the Lots is recognised when the Board has transferred the right of use of the Lots to the customers in accordance with the terms of the relevant contract.

(c) Cleaning, removal and backfilling service fees for exhumation, digging and paving fees for grave spaces, exhumation lots renewal fees and other service fees (collectively, “Service Fees”)

Service Fees are recognised when the relevant services are rendered.

(d) Dividend income

Dividend income is recognised when the right to receive payment is established. (e) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method. (f) Rental income

Operating lease rental income is recognised over the term of the lease on a straight-line basis. (g) Other operating income

Other operating income is recognised when the relevant services are rendered or on an accruals basis.

3 Financial risk and capital risk management 3.1 Financial risk factors

The Board’s activities expose it to a variety of financial risk factors: foreign exchange risk, price risk, credit risk, liquidity risk and cash flow and fair value interest rate risk. The Board’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Board’s financial performance.

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3 Financial risk and capital risk management (Continued) 3.1 Financial risk factors (Continued)

(a) Foreign exchange risk

Foreign exchange risk arises where future commercial transactions, recognised assets and liabilities are denominated in a currency that is not the Board’s functional currency. The Board is exposed to foreign exchange risks with respect to its investments and bank balances, arising primarily from United States dollars and Renminbi.

In the opinion of the Board, as Hong Kong dollars are reasonably stable with the United States dollars under the Linked Exchange Rate System, the foreign exchange risk in relation to United States dollars is low. Accordingly, no sensitivity analysis is performed. At 31st December 2013, if Hong Kong dollar had weakened/strengthened by 5% against Renminbi with all other variables held constant, surplus for the year would have been increased/decreased by HK$3,854,000 (2012: HK$5,421,000), as a result of foreign exchange gains/losses on translation of Renminbi-denominated held-to-maturity financial assets, receivables and deposits, financial assets at fair value through profit or loss and cash and cash equivalents. In addition, forward foreign exchange contracts have been entered to further mitigate foreign exchange risk arising from various currency exposures, other than United States dollars and Renminbi, in respect of the Board’s equity and debt securities included in financial assets at fair value through profit or loss. These forward exchange contracts are not qualified for hedge accounting and are classified as financial assets at fair value through profit or loss.

(b) Price risk

The Board’s investments are exposed to price risk because the securities held by the Board are classified on the balance sheet either as available-for-sale financial assets or financial assets at fair value through profit or loss. The Board’s investments are under the close monitoring of its Finance Committee, which meets on a regular basis to ensure that appropriate investment strategies are implemented in a timely and prudent manner.

Most of the Board’s investments are publicly traded and listed in major recognised stock exchanges. As majority of the investments classified as available-for-sale are listed on the Stock Exchange of Hong Kong, if the Hang Seng Index had been 5% (2012: 5%) higher/lower with all other variables held constant and all the Board’s equity securities moved according to the historical correlation with the Index, the available-for-sale financial assets of the Board as at 31st December 2013 would have been increased/decreased by approximately 7% (2012: approximately 5%). Accordingly, the available-for-sale financial assets reserve would also increase/decrease as a result of gains/losses on equity securities classified as available for sale. For securities classified as financial assets at fair value through profit or loss, if their fair values had increased/decreased by 5% (2012: 5%), surplus for the year would have been approximately HK$39 million (2012: HK$44 million) higher/lower. The financial assets at fair value through profit or loss are managed by professional fund managers who report regularly to the Finance Committee of the Board.

(c) Credit risk

The Board’s credit risk mainly arises from its liquid funds, held-to-maturity financial assets and financial assets at fair value through profit or loss. The Finance Committee of the Board is closely monitoring the credit ratings of respective counterparties. At this stage, the members of the Board are of the opinion that the credit risk is limited because the counterparties are reputable and creditworthy banks, corporations and governments. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

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3 Financial risk and capital risk management (Continued) 3.1 Financial risk factors (Continued)

(d) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash. The Board ensures that it maintains sufficient cash and liquid investments, which are available to meet its continuous operational needs The table below analyses the Board’s non-derivative financial liabilities based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

2013 2012 Less than one year Other payables and accrued charges (note 16) 117,992,312 111,824,339 ══════════ ══════════ (e) Cash flow and fair value interest rate risk

The Board’s interest rate risk mainly arises from bank balances carrying interest at market interest rates. As the interest income generated from bank balances is relatively insignificant to the Board’s surplus for the year, the members of the Board consider that its income and operating cash flows are substantially independent of changes in market interest rates. Accordingly, no sensitivity analysis is performed.

3.2 Capital risk management

The Board’s objectives when managing capital are to safeguard the Board’s ability to continue as a going concern and to have sufficient fundings for its future operations. The Board’s overall strategy remains unchanged from prior years. The capital structure of the Board represents accumulated funds and reserves.

3.3 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). • Inputs other than quoted prices included within level 1 that are observable for the asset or

liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

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3 Financial risk and capital risk management (Continued) 3.3 Fair value estimation (Continued)

The following table presents the Board’s financial assets that are measured at fair value at 31st December 2013.

Level 1 Level 2 Total Financial assets Financial assets at fair value

through profit or loss - Trading equity securities and

equity funds 236,268,034 9,434,755 245,702,789 - Trading debt securities 394,759,216 131,661,653 526,420,869 - Trading derivatives - 657,552 657,552 ─────────── ────────── ─────────── 631,027,250 141,753,960 772,781,210 ------------------ ---------------- ------------------ Available-for-sale financial assets - Equity securities 3,765,490,401 - 3,765,490,401 - Investment funds - 118,978,022 118,978,022 ─────────── ────────── ─────────── 3,765,490,401 118,978,022 3,884,468,423 ------------------ ----------------- ------------------ 4,396,517,651 260,731,982 4,657,249,633 ═══════════ ══════════ ═══════════

The following table presents the Board’s financial assets that are measured at fair value at 31st December 2012.

Level 1 Level 2 Total Financial assets Financial assets at fair value

through profit or loss - Trading equity securities and

equity funds 194,289,353 146,318,368 340,607,721 - Trading debt securities 289,651,176 240,205,474 529,856,650 - Trading derivatives - 971,441 971,441 ─────────── ────────── ─────────── 483,940,529 387,495,283 871,435,812 ------------------ ----------------- ------------------ Available-for-sale financial assets - Equity securities 3,770,251,663 - 3,770,251,663 - Investment funds - 45,081,983 45,081,983 ─────────── ────────── ─────────── 3,770,251,663 45,081,983 3,815,333,646 ------------------ ----------------- ------------------ 4,254,192,192 432,577,266 4,686,769,458 ═══════════ ══════════ ═══════════

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3 Financial risk and capital risk management (Continued) 3.3 Fair value estimation (Continued)

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Board is the current bid price. These instruments are included in level 1.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value.

4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Board makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

4.1 Impairment of available-for-sale financial assets

The Board determines when an available-for-sale financial asset is impaired by reference to the guidance of HKAS 39 “Financial instruments: recognition and measurement”. This determination requires significant judgement. In making this judgement, the Board evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and business outlook for the investee, including factors such as industry and sector performance and changes in operational and financing cash flow.

4.2 Held-to-maturity financial assets

The Board follows the guidance of HKAS 39 on classifying non-derivative financial assets with fixed or determinable payments and fixed maturity as held-to-maturity. This classification requires significant judgement. In making this judgement, the Board evaluates its intention and ability to hold such investments to maturity. If the Board fails to keep these investments to maturity other than for specific circumstances as explained in HKAS 39, it will be required to reclassify the whole class as available-for-sale. The investments would then be measured at fair value instead of amortised cost. If the Board was to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available for sale.

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NOTES TO THE FINANCIAL STATEMENTS 4 Critical accounting estimates and judgements (Continued) 4.3 Fair value of investment properties

Investment properties are carried in the balance sheet at 31st December 2013 at their fair values of HK$582,881,875 (2012: HK$565,791,250). The fair values were based on valuation on the properties conducted by an independent valuer using property valuation techniques which involve certain assumptions of market conditions. Favourable or unfavourable changes to these assumptions would result in changes in the fair value of the Board’s investment properties and corresponding adjustments to the amount of gains or losses reported in comprehensive income. Further details of the judgement and assumptions have been disclosed in note 7.

5 Intangible assets – computer software At 1st January and 31st December 2012 Cost - Accumulated amortisation - ─────────── Net book amount - ═══════════ Year ended 31st December 2013 Opening net book amount - Additions 7,096,078 Amortisation (1,419,216) ─────────── Closing net book amount 5,676,862 ═══════════ At 31st December 2013 Cost 7,096,078 Accumulated amortisation (1,419,216) ─────────── Net book amount 5,676,862 ═══════════

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NOTES TO THE FINANCIAL STATEMENTS 6 Property, plant and equipment

Land and buildings

Access roads Reservoir

Furniture, fixtures and

equipment Motor

vehicles

Footpath Construction

in progress Total (note a) (note b) At 1st January 2012 Cost 128,776,784 49,667,513 5,568,551 24,758,089 1,002,067 - 315,461,031 525,234,035 Accumulated depreciation (28,509,615) (49,667,513) (5,568,551) (18,155,403) (1,002,067) - - (102,903,149) ────────── ───────── ──────── ───────── ──────── ──────── ───────── ────────── Net book amount 100,267,169 - - 6,602,686 - - 315,461,031 422,330,886 ══════════ ═════════ ════════ ═════════ ════════ ════════ ═════════ ══════════ Year ended 31st December 2012 Opening net book value 100,267,169 - - 6,602,686 - - 315,461,031 422,330,886 Additions - - - 1,955,500 - - 583,000 2,538,500 Disposals - cost - - - (863,467) - - - (863,467) - accumulated depreciation - - - 863,467 - - - 863,467 Transfers - - - - - 303,324,866 (303,324,866) - Depreciation (2,822,013) - - (2,845,372) - (6,066,497) - (11,733,882) ────────── ───────── ──────── ───────── ──────── ───────── ────────── ────────── Closing net book amount 97,445,156 - - 5,712,814 - 297,258,369 12,719,165 413,135,504 ══════════ ═════════ ════════ ═════════ ════════ ═════════ ══════════ ══════════ At 31st December 2012 Cost 128,776,784 49,667,513 5,568,551 25,850,122 1,002,067 303,324,866 12,719,165 526,909,068 Accumulated depreciation (31,331,628) (49,667,513) (5,568,551) (20,137,308) (1,002,067) (6,066,497) - (113,773,564) ────────── ───────── ──────── ───────── ──────── ───────── ────────── ────────── Net book amount 97,445,156 - - 5,712,814 - 297,258,369 12,719,165 413,135,504 ══════════ ═════════ ════════ ═════════ ════════ ═════════ ══════════ ══════════

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NOTES TO THE FINANCIAL STATEMENTS 6 Property, plant and equipment (Continued)

Land and buildings

Access roads Reservoir

Furniture, fixtures and

equipment Motor

vehicles

Footpath Construction

in progress Total

(note a)

(note b) Year ended 31st December

2013

Opening net book value 97,445,156 - - 5,712,814 - 297,258,369 12,719,165 413,135,504 Additions - - - 73,266 477,230 - 10,035,520 10,586,016 Disposals - cost - - - (11,595,513) (273,049) - - (11,868,562) - accumulated depreciation - - - 11,595,513 273,049 - - 11,868,562 Transfers - 2,120,594 - 10,577,787 - - (12,698,381) - Depreciation (2,822,013) (212,061) - (4,641,506) (119,307) (6,066,497) - (13,861,384) ───────── ───────── ───────── ───────── ───────── ───────── ───────── ───────── Closing net book amount 94,623,143 1,908,533 - 11,722,361 357,923 291,191,872 10,056,304 409,860,136 ═════════ ═════════ ═════════ ═════════ ═════════ ═════════ ═════════ ═════════ At 31st December 2013 Cost 128,776,784 51,788,107 5,568,551 24,905,662 1,206,248 303,324,866 10,056,304 525,626,522 Accumulated depreciation (34,153,641) (49,879,574) (5,568,551) (13,183,301) (848,325) (12,132,994) - (115,766,386) ───────── ───────── ───────── ───────── ───────── ───────── ───────── ───────── Net book amount 94,623,143 1,908,533 - 11,722,361 357,923 291,191,872 10,056,304 409,860,136 ═════════ ═════════ ═════════ ═════════ ═════════ ═════════ ═════════ ═════════

Note: (a) The Board’s land and buildings are located in Hong Kong under medium-term leases.

(b) As at 31st December 2013, the construction in progress mainly represents costs incurred for the construction of open staircases in Chai Wan Chinese

Permanent Cemetery (the “Staircases under Constructions”) (2012: for Beautification Projects in Junk Bay Chinese Permanent Cemetery).

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NOTES TO THE FINANCIAL STATEMENTS 7 Investment properties 2013 2012

At fair value At 1st January 565,791,250 459,196,875 Net fair value gains 17,090,625 106,594,375 ────────── ────────── At 31st December 582,881,875 565,791,250 ══════════ ══════════

The investment properties are situated in Hong Kong and held under medium-term leases.

Amounts recognised in the statement of comprehensive income for investment properties are as follows:

2013 2012 Rental income 12,025,776 11,193,696 Direct operating expenses arising from properties that

generate rental income (85,329) (78,081) ════════ ════════

As at 31st December 2013, the Board has no unprovided contractual obligations for future repairs and maintenance (2012: nil). An independent valuation of the Board’s investment properties was performed by an independent valuer, Centaline Surveyors Limited, to determine the fair value of the investment properties as at 31st December 2013 and 2012. The revaluation gains or losses are recorded in comprehensive income. The following table analyses the investment properties carried at fair value, by valuation method. Fair value hierarchy

Fair value measurements at 31st December 2013 using

Description

Quoted prices in active

markets for identical assets

(Level 1)

Significant other

observable inputs

(Level 2)

Significant unobservable

inputs (Level 3)

Recurring fair value measurements Investment properties - commercial

properties in Hong Kong - - 582,881,875 ════════ ═════════ ═════════

The Board’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. However, there were no transfers between Levels 1, 2 and 3 during the year.

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NOTES TO THE FINANCIAL STATEMENTS 7 Investment properties (Continued)

Fair value measurements using significant unobservable inputs (Level 3)

Commercial properties in

Hong Kong At 1st January 2013 565,791,250 Net gains from fair value adjustment 17,090,625 ────────── At 31st December 2013 582,881,875 ══════════ Total gains for the year included in comprehensive income for assets held at the

end of the year 17,090,625 ══════════ Change in unrealised gains for the year included in comprehensive income for

assets held at the end of the year 17,090,625 ══════════

Valuation processes of the Board The Board’s commercial properties in Hong Kong were valued at 31st December 2013 by independent professionally qualified valuer who holds a recognised relevant professional qualification and has recent experience in the location of the properties valued. For all investment properties, their current use equate to the highest and best use. The Board reviews the valuation performed by the independent valuer for financial reporting purposes. Discussions of valuation processes and results are held between the Board and the valuer once a year, in line with the Board’s annual reporting date. As at 31st December 2013, the fair value of the commercial properties in Hong Kong has been determined by Centaline Surveyors Limited. At each financial year end the Board: - verifies all major inputs to the independent valuation report; - assesses property valuation movement when compared to the prior year valuation report; and - holds discussions with the independent valuer.

Valuation techniques The valuation was determined using the sale comparison approach. Sales prices of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot. There were no changes to the valuation techniques during the year.

Information about fair value measurements using significant unobservable inputs (Level 3)

Description

Fair value at 31st

December 2013 Valuation

technique Unobservable

inputs

Range of unobservable

inputs

Relationship of unobservable inputs to fair

value Commercial

properties 582,881,875 Market

approach Adjustment

on market prices

2.1% to 12%

The higher the downward

adjustment, the lower the fair value

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8 Financial instruments by category

The Board’s financial instruments include the following:

Available-for- sale financial

assets

Held-to- maturity financial

assets

Financial assets at fair

value through profit or loss

Loans and receivables

Financial assets At 31st December 2013 Available-for-sale

financial assets (note 9) 3,884,468,423 - - - 3,884,468,423

Held-to-maturity financial assets (note 10) - 50,251,161 - - 50,251,161

Financial assets at fair value through profit or loss (note 12) - - 772,781,210 - 772,781,210

Receivables and deposits (note 11) - - - 6,817,561 6,817,561

Cash and cash equivalents (note 13) - - - 889,438,744 889,438,744

─────────── ────────── ────────── ────────── ─────────── 3,884,468,423 50,251,161 772,781,210 896,256,305 5,603,757,099 ═══════════ ══════════ ══════════ ══════════ ═══════════

At 31st December 2012 Available-for-sale

financial assets (note 9) 3,815,333,646 - - - 3,815,333,646

Held-to-maturity financial assets (note 10) - 103,943,504 - - 103,943,504

Financial assets at fair value through profit or loss (note 12) - - 871,435,812 - 871,435,812

Receivables and deposits (note 11) - - - 15,060,598 15,060,598

Cash and cash equivalents (note 13) - - - 761,592,305 761,592,305

─────────── ────────── ────────── ────────── ─────────── 3,815,333,646 103,943,504 871,435,812 776,652,903 5,567,365,865 ═══════════ ══════════ ══════════ ══════════ ═══════════ 2013 2012 Financial liabilities - other financial

liabilities at amortised cost

Other payables and accrued charges (note 16) 117,992,312 111,824,339 ══════════ ══════════

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NOTES TO THE FINANCIAL STATEMENTS 9 Available-for-sale financial assets 2013 2012 At 1st January 3,815,333,646 3,052,995,764 Additions 142,823,277 55,115,490 Disposals (24,022,703) (17,087,614) Net fair value (losses)/gains transferred to reserves

(note 14) (49,665,797) 724,310,006 ─────────── ─────────── At 31st December 3,884,468,423 3,815,333,646 ═══════════ ═══════════

Available-for-sale financial assets include the following:

2013 2012 Listed securities: - Equity securities - Hong Kong 3,670,749,849 3,659,291,981 - Equity securities - Overseas 94,740,552 110,959,682 ─────────── ─────────── Market value of listed securities 3,765,490,401 3,770,251,663 Unlisted securities: - Investment funds 118,978,022 45,081,983

─────────── ─────────── Total 3,884,468,423 3,815,333,646 ═══════════ ═══════════

The fair values of all equity securities and investment funds are based on either their current bid prices in an active market or their quoted prices provided by issuers. The carrying values of the Board’s available-for-sale financial assets are denominated in the following currencies:

2013 2012 Hong Kong dollars 3,652,768,817 3,640,413,005 United States dollars 213,718,574 156,041,665 Renminbi 17,981,032 18,878,976 ─────────── ─────────── 3,884,468,423 3,815,333,646 ═══════════ ═══════════

10 Held-to-maturity financial assets 2013 2012 Bonds, at amortised cost: - Listed in Hong Kong 18,312,976 10,454,775 - Listed outside Hong Kong 8,072,340 8,162,947 - Unlisted 23,865,845 85,325,782 ────────── ────────── 50,251,161 103,943,504 ══════════ ══════════ Market value of listed held-to-maturity financial assets 26,944,113 19,082,058 ══════════ ══════════

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NOTES TO THE FINANCIAL STATEMENTS 10 Held-to-maturity financial assets (Continued)

The effective interest rates of listed bonds vary from 1.4% to 6.25% (2012: 2.18% to 3.68%) and the maturity dates vary from 30th June 2014 to 18th April 2018 (2012: from 30th June 2014 to 28th April 2016).

The effective interest rates of unlisted bonds vary from 1.6% to 6.05% (2012: 1.28% to 3.41%) and

the maturity dates vary from 3th November 2014 to 5th April 2022 (2012: from 15th January 2013 to 30th June 2016).

The movements in held-to-maturity financial assets are summarised as follows:

2013 2012 At 1st January 103,943,504 423,142,236 Additions 8,000,105 40,858,439 Redemptions (61,251,686) (358,580,250) Amortisation of premium on acquisition (note 19) (440,762) (1,476,921) ────────── ────────── At 31st December 50,251,161 103,943,504 Less: non-current portion (38,732,696) (42,680,102) ────────── ────────── Current portion 11,518,465 61,263,402 ══════════ ══════════

The carrying values of the Board’s held-to-maturity financial assets are denominated in the following currencies:

2013 2012 United States dollars 35,045,477 35,434,660 Hong Kong dollars 10,037,107 62,092,855 Renminbi 5,168,577 6,415,989 ────────── ────────── 50,251,161 103,943,504 ══════════ ══════════ The Board has not reclassified any financial asset measured at amortised cost rather than fair

value during the year (2012: nil). There were no gains or losses realised on the redemptions of held-to-maturity financial assets in

2013 and 2012, as all the financial assets were redeemed at their respective maturity dates. 11 Receivables, deposits and prepayments 2013 2012 Receivables: - Dividend - 73,158 - Interest 1,249,673 1,405,316 - Others 4,046,457 11,643,183 ────────── ────────── 5,296,130 13,121,657 Utility deposits 1,521,431 1,938,941 ────────── ────────── Financial assets 6,817,561 15,060,598 Deposits for purchases of intangible assets - 6,791,742

Prepayments for operating expenses 1,064,323 895,546 ────────── ────────── 7,881,884 22,747,886 Less: non-current deposits for purchases of intangible

assets - (6,791,742) ────────── ────────── Current portion included in current assets 7,881,884 15,956,144 ══════════ ══════════

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NOTES TO THE FINANCIAL STATEMENTS 11 Receivables, deposits and prepayments (Continued)

The carrying values of receivables and deposits approximate their fair values as at 31st December 2013 and 2012, and are denominated in the following currencies:

2013 2012 Hong Kong dollars 3,585,118 13,496,873 Renminbi 37,664 9,066,720 United States dollars 2,535,681 39,642 Others 1,723,421 144,651 ────────── ────────── 7,881,884 22,747,886 ══════════ ══════════

The receivables and deposits are neither past due nor impaired. The Board does not hold any collateral as security.

12 Financial assets at fair value through profit or loss Note 2013 2012 Financial assets at fair value through profit or

loss - Equity and debt securities (a) 772,123,658 870,464,371 - Derivative financial instruments (b) 657,552 971,441 ────────── ────────── 772,781,210 871,435,812 ══════════ ══════════

The financial assets at fair value through profit or loss are managed by professional fund managers who report regularly to the Finance Committee of the Board.

Changes in fair value of financial assets at fair value through profit or loss are recorded in “investment income” in the statement of comprehensive income (note 19).

(a) Equity and debt securities 2013 2012 Listed securities, at market value: - Equity securities - Hong Kong 109,560,103 111,915,070 - Equity securities - Overseas 126,707,931 82,374,283 - Debt securities - Hong Kong 60,914,306 48,729,082 - Debt securities - Overseas 333,844,910 240,922,094 ────────── ────────── 631,027,250 483,940,529 Unlisted securities, at quoted price: - Equity funds 9,434,755 146,318,368 - Debt securities 131,661,653 240,205,474 ────────── ────────── 772,123,658 870,464,371 ══════════ ══════════

The fair values of all equity and debt securities are based on either their current bid prices in an active market or their quoted prices provided by issuers.

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NOTES TO THE FINANCIAL STATEMENTS 12 Financial assets at fair value through profit or loss (Continued) (a) Equity and debt securities (Continued)

The carrying values of the Board’s equity and debt securities carried at fair value through profit or loss are denominated in the following currencies:

2013 2012 Hong Kong dollars 198,392,905 343,240,463 United States dollars 357,992,373 336,041,187 Renminbi 61,699,845 56,153,195 Others 154,038,535 135,029,526 ────────── ────────── 772,123,658 870,464,371

══════════ ══════════ (b) Derivative financial instruments Assets 2013 2012 Net settled forward foreign exchange contracts -

held-for-trading 657,552 971,441 ══════════ ══════════

The notional principal amounts of the outstanding forward foreign exchange contracts at 31st December 2013 were HK$79,380,123 (2012: HK$81,268,139).

13 Cash and cash equivalents 2013 2012 Cash at banks and in hand 194,423,446 96,250,906 Short-term deposits 695,015,298 665,341,399 ────────── ────────── 889,438,744 761,592,305

══════════ ══════════ Maximum exposure to credit risk 889,404,744 761,558,305 ══════════ ══════════

The effective interest rate on short-term deposits is 0.78% (2012: 0.88%); these deposits have an average maturity of 8 days (2012: 8 days). The carrying values of the Board’s cash and cash equivalents are denominated in the following currencies:

2013 2012 Hong Kong dollars 731,937,642 667,575,798 United States dollars 137,580,454 45,633,091 Renminbi 10,179,229 36,776,194 Others 9,741,419 11,607,222 ────────── ────────── 889,438,744 761,592,305 ══════════ ══════════

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14 Reserves

Cemetery beautification

reserve

Cemetery emergency

reserve Maintenance

reserve

Available- for-sale

financial assets reserve

Buildings revaluation

reserve Total (note a) (note b) (note c) (note d) Balance at 1st January 2012 14,508,454 18,044,350 875,000,000 1,256,217,416 19,970,329 2,183,740,549 Movement during the year - net fair value gains (note 9) - - - 724,310,006 - 724,310,006

- gains transferred to the statement of

comprehensive income upon disposals (note 19) - - - (8,096,314) - (8,096,314)

- impairment losses recognised in comprehensive

income - - - 5,400,000 - 5,400,000 - - - 721,613,692 - 721,613,692 ───────── ───────── ────────── ─────────── ───────── ───────────

Balances at 31st December 2012 and at 1st January 2013 14,508,454 18,044,350 875,000,000 1,977,831,108 19,970,329 2,905,354,241

Movement during the year - net fair value losses (note 9) - - - (49,665,797) - (49,665,797)

- gains transferred to the statement of

comprehensive income upon disposals (note 19) - - - (681,137) - (681,137) - - - (50,346,934) - (50,346,934) ───────── ───────── ────────── ─────────── ───────── ─────────── Balance at 31st December 2013 14,508,454 18,044,350 875,000,000 1,927,484,174 19,970,329 2,855,007,307 ═════════ ═════════ ══════════ ═══════════ ═════════ ═══════════

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14 Reserves (Continued)

Note:

(a) Cemetery beautification reserve is set aside from accumulated funds for beautification of and environmental improvements to cemeteries.

(b) Cemetery emergency reserve represents the funds available for use for emergency purpose. (c) Maintenance reserve represents the amount set aside from accumulated funds for the purpose

of upkeep and renovation of the facilities at the cemeteries up to 2050. (d) Building revaluation reserve represents the difference between the carrying amount and fair

value of an owner-occupied property which was transferred from property, plant and equipment to investment property in 2008.

Usage of the reserves as mentioned in notes (a) to (c) above will be reviewed by the Board every

five years.

15 Provision for donations 2013 2012 At 1st January 24,390,723 21,009,340 -------------- -------------- Charged to the statement of comprehensive income - Additional provision 29,942,227 19,888,955 - Unused amount reversed (4,840,882) (2,337,462) ───────── ───────── 25,101,345 17,551,493 -------------- -------------- Used during the year (14,871,781) (14,170,110) -------------- -------------- At 31st December 34,620,287 24,390,723 ═════════ ═════════ Analysis of provision: 2013 2012 Non-current 2,367,158 2,975,088 Current 32,253,129 21,415,635 ───────── ───────── 34,620,287 24,390,723 ═════════ ═════════

Provision for donations represents the amount of donations approved by the members of the Board to financially support projects as carried out by certain charitable organisations.

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16 Other payables and accrued charges

2013 2012 Other payables 38,260,622 21,878,562 Accrued charges 75,481,910 86,421,014 Contractors’ deposits received 2,527,071 2,257,854 Rental deposits received 1,722,709 1,266,909 ────────── ────────── Financial liabilities 117,992,312 111,824,339 Receipts in advance 260,000 191,114 ────────── ────────── 118,252,312 112,015,453 ══════════ ══════════

The carrying values of other payables and accrued charges approximate their fair values as at 31st December 2013 and 2012 and are denominated in Hong Kong dollars.

17 Other operating income and other gains 2013 2012 Other operating income Contractors’ registration fees 320,000 340,000 Recovery of repair costs of subsided grave spaces 12,540 15,775 Sundry income 924,695 1,308,583 ───────── ───────── 1,257,235 1,664,358 -------------- -------------- Other gains (note) Reversal of overaccruals for unbilled expenses of completed

projects in respect of: - geotechnical consultancy services 3,668,537 - - repairs and improvement works 6,399,756 931,393 ───────── ───────── 10,068,293 931,393 -------------- -------------- 11,325,528 2,595,751 ═════════ ═════════

Note: At each balance sheet date, the Board made accruals for unbilled expenses of completed projects in respect of geotechnical consultancy services and repairs and improvement works based on their respective contract sums, in which contingency amounts were included. During the years ended 31st December 2013 and 2012, the Board reversed overaccruals for unbilled expenses of completed projects, totalling HK$10,068,293 (2012: HK$931,393), because those contingency amounts were not utilised and/or the scope of works were reduced. The Board is of the opinion that there were no material over/under accruals for unbilled expenses of completed projects as at 31st December 2013.

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THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) NOTES TO THE FINANCIAL STATEMENTS 18 Employee benefit expense 2013 2012 Wages and salaries 38,790,131 37,221,005 Provision for long service payments 76,855 194,550 Provision for gratuity payments 2,953,712 2,727,904 Contributions to the MPF scheme 1,585,721 1,460,238 Others 120,592 203,431 ────────── ────────── 43,527,011 41,807,128 ══════════ ══════════

None of the members of the Board (regarded as the Board’s key management) received or will receive any fees or other emoluments in respect of their services to the Board during the year (2012: nil).

19 Investment income and expenses 2013 2012 Investment income Interest income on bank deposits 3,906,555 5,126,990 Interest income on held-to-maturity financial assets 2,091,517 7,929,049 Interest income on financial assets at fair value through

profit or loss 17,367,872 14,903,605 ────────── ────────── 23,365,944 27,959,644 Dividend income from available-for-sale financial assets 144,624,560 137,145,443 Dividend income from financial assets at fair value through

profit or loss 6,077,563 6,026,608 Gains on disposals of available-for-sale financial assets

(note 14) 681,137 8,096,314 Fair value gains/(losses) on derivative financial

instruments - forward foreign exchange contracts 2,532,375 (1,157,746) Fair value gains on financial assets at fair value through

profit or loss 46,948,176 65,110,796 Amortisation of premium on acquisition of

held-to-maturity financial assets (note 10) (440,762) (1,476,921) Exchange gains - 1,385,710 Other income 56,674 10,033 ────────── ────────── 223,845,667 243,099,881 ---------------- ---------------- Less: Investment expenses Custody and scrip fees (524,802) (1,183,390) Management fees to fund managers (4,107,877) (3,238,544) Exchange losses (475,521) - ────────── ────────── (5,108,200) (4,421,934) ---------------- ---------------- 218,737,467 238,677,947 ══════════ ══════════ 20 Income tax expense

No provision for Hong Kong profits tax has been made in the financial statements as the Board is exempted from the payment of Hong Kong profits tax by virtue of Section 88 of the Hong Kong Inland Revenue Ordinance.

- 34 -

THE BOARD OF MANAGEMENT OF THE CHINESE PERMANENT CEMETERIES (All amounts in Hong Kong dollars unless otherwise stated) NOTES TO THE FINANCIAL STATEMENTS

21 Net cash used in operating activities 2013 2012 Surplus for the year 160,744,574 256,061,918 Adjustments for: - Amortisation of intangible assets 1,419,216 - - Depreciation 13,861,384 11,733,882 - Dividend income (150,702,123) (143,172,051) - Interest income (23,365,944) (27,959,644) - Fair value gains on investment properties (17,090,625) (106,594,375) - Amortisation of premium on acquisition of

held-to-maturity financial assets 440,762 1,476,921 - Gains on disposals of available-for-sale financial assets (681,137) (8,096,314) - Impairment losses on available-for-sale financial assets - 5,400,000 - Fair value (gains)/losses on derivative financial

instruments - forward foreign exchange contracts (2,532,375) 1,157,746 - Fair value gains on financial assets at fair value through

profit or loss (46,948,176) (65,110,796) - Donations 25,101,345 17,551,493 Changes in working capital: - Development and formation cost of columbarium, grave

and niche spaces (105,776,437) 12,271,428 - Inventories 28,172,762 (9,190,222) - Receivables, deposits and prepayments 7,845,459 (3,423,668) - Other payables and accrued charges 6,236,859 (16,016,634) - Provision for donations (14,871,781) (14,170,110) ────────── ────────── Net cash used in operating activities (118,146,237) (88,080,426) ══════════ ══════════ 22 Commitments (a) Capital commitments

Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:

2013 2012 Property, plant and equipment - Staircases under Construction (note 6) 11,157,607 - Intangible assets - computer software - 297,679 ────────── ────────── 11,157,607 297,679 ══════════ ══════════ (b) Operating lease commitments

At 31st December, the Board had the following future minimum lease payments receivable under non-cancellable operating leases in respect of its investment properties:

2013 2012 No later than one year 13,600,835 8,599,224 Later than one year and no later than five years 47,504,654 1,807,823 ────────── ────────── 61,105,489 10,407,047 ══════════ ══════════

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