Rents and operating profit of our Mainland China investment properties portfolio advanced by 14% and 13% to HK$3,526 million and HK$2,683 million, respectively. These pleasing results were contributed by the steady growth of our operations in Shanghai, the full year impact of Shenyang Forum 66 and the opening of a new mall in Wuxi, Center 66, in September 2013.

Shanghai Plaza 66 and Grand Gateway 66 recorded 7% and 6% rental turnover growth, respectively compared to the previous year. The Grand Gateway 66 Mall remained fully let while the Plaza 66 Mall reached 96% occupancy. Retail sales of the two malls remained stable despite a general downturn in mainland luxury goods sales as a result of government’s anti-corruption and anti-opulence measures on the Mainland.

Tenant mix changes were continuing at Shenyang Palace 66 and Jinan Parc 66 after completion of the first lease cycle since their opening. As a result, there was higher vacancy temporarily at both properties. Thus rental turnover of Palace 66 slipped 2% and Parc 66 rose 1% when compared with the previous year. Notwithstanding a lower occupancy rate, retail sales of Para 66 and Palace 66 increased by 8% and 9%, respectively.

Shenyang Forum 66, opened in September 2012, recorded a 4% and 15% increase in rental turnover and retail sales on an average daily basis.

Performance of Wuxi Center 66, which was 3.5 months old at year end date, was encouraging with rising footfall and retail sales. Occupancy rate stood at 95%.

Property sales turnover and operating profit jumped 96% and 79% to $2,500 million and HK$1,511 million, respectively. A total of 272 residential apartments were sold in 2013 (2012: 117 units). The sales comprised of 267 units (2012: 108 units) of The Long Beach, one unit of The HarbourSide and four units of Aqua Marine. Average profit margin of the sales was 60%.

Other income decreased by 98% to HK$36 million from HK$2,153 million because of much fewer disposals of investment properties in 2013. The one-off gain from investment property disposals in 2013 was only HK$8 million compared to that of HK$2,148 million as recorded in 2012.

Net interest income rose 45% or HK$122 million to HK$395 million compared to the previous year. It was partly due to a higher average cash and bank balance and partly attributable to the capitalization of a larger amount of interest expenses relating to projects under development.

The amount of increase in fair value of investment properties in 2013 was HK$2,482 million, which was similar to that of HK$2,522 million recorded in the year before. Property revaluation was undertaken by Savills, an independent professional valuer; the valuation methodology and capitalization rates used remain unchanged.

With a much lower one-off gain arising from the disposal of investment properties, profit attributable to shareholders decreased by 14% to HK$7,212 million compared to the previous year. When excluding the one-off gain and the effect of the investment properties disposed in the previous year, profit attributable to shareholders would increase 15% compared to a year ago.

The value of investment properties rose 10% during the year to HK$107,587 million as a result of transferring Wuxi Center 66 mall from investment properties under development upon its opening in September 2013 and the 2% gain on revaluation of other completed properties.

Investment properties under development comprised several projects in mainland China including the projects in Shenyang, Wuxi, Tianjin, Dalian, Kunming & Wuhan. Its aggregate value increased by 24% to HK$30,478 million principally due to the acquisition of a prime lot of about 82,650 square meters in Wuhan for RMB3.3 billion and payment of construction costs in respect of various projects. A new shopping mall, Riverside 66, in Tianjin is scheduled for opening in the second half of 2014. Other projects are progressing as planned.

Properties for sale represent the cost of completed residential apartments available for sale at the balance sheet date. It comprised of 859 units of The Long Beach, 272 units of The HarbourSide, 17 units of Aqua Marine, 2 units of Carmel-on-the-Hill and the near completion of 18 houses located at 23-39 Blue Pool Road in Happy Valley. The amount of properties for sale decreased comparing to the previous year because of the sale of 272 apartments during 2013.

Cash and bank balances as at December 31, 2013 amounted to HK$34,321 million, over 92% of which was held in RMB bank deposits. The RMB deposits provide a natural hedge against the currency fluctuations of our RMB construction commitments on the Mainland and earn a higher yield than Hong Kong dollar deposits. After deducting total borrowings amounted to HK$34,979 million, the Group had a net debt balance of HK$658 million as at December 31, 2013. The net debt to equity ratio was 0.5%.

Total capital commitments of the Group at year end amounted to HK$49 billion and they were mainly RMB denominated construction costs in respect of projects under development on the Mainland. Those projects would take many years to complete. As outlined above, the Group has ample financing capacity and multiple channels of raising funds to meet those commitments when they fall due.

The Group will continue to adopt a prudent and sound financial management strategy to support its long-term growth. With a strong balance sheet and cash generation capability, the Group is well positioned to seize new investment opportunities when arise.