Logan Group Company Limited

Equities

3380

KYG555551095

Real Estate Development & Operations

Market Closed - Hong Kong S.E. Other stock markets 04:08:20 2024-04-26 am EDT			5-day change	1st Jan Change
0.54 ^HKD	+11.34%		+8.00%	-11.48%

Apr. 17	Logan, KWG Slash Prices of Luxury Apartments By Half	MT
Apr. 10	Ares Management Plans to Buy Stake in Project Loan for Hong Kong Property Project	MT

Logan : PROPOSED ISSUE OF USD DENOMINATED SENIOR NOTES AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2020

March 30, 2021 at 08:12 pm EDT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities referred to herein will not be registered under the Securities Act, and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. The Company does not intend to make any public offering of securities in the United States.

The communication of this announcement and any other document or materials relating to the issue of the Notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000, as amended (the ''FSMA''). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ''Financial Promotion Order'')), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as ''relevant persons''). In the United Kingdom, the Notes offered hereby are only available to, and any investment or investment activity to which this announcement relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this announcement or any of its contents.

- 1 -

Logan Group Company Limited

龍光集團有限公司

PROPOSED ISSUE OF USD DENOMINATED SENIOR NOTES AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2020

THE PROPOSED NOTES ISSUE

The Board announces that the Company proposes to conduct an international offering of guaranteed U.S. Dollar denominated senior fixed rate notes.

In connection with the Proposed Notes Issue, the Company will provide certain professional investors with recent audited financial information of the Group for the year ended 31 December 2020. To ensure equal dissemination of information to the shareholders of the Company, the audited consolidated financial statements of the Company for the year ended 31 December 2020 is attached hereto.

Completion of the Proposed Notes Issue is subject to, among others, market conditions and investors' interest. The Notes are proposed to be guaranteed by the Subsidiary Guarantors. As at the date of this announcement, the principal amount, the interest rate, the payment date and certain other terms and conditions of the Proposed Notes Issue are yet to be finalised. Upon finalising the terms of the Notes, it is expected that Deutsche Bank, UBS, Credit Suisse, Guotai Junan International, Haitong International, China CITIC Bank International, Citigroup, Barclays, Standard Chartered Bank, CMBC Capital, BNP PARIBAS, the Subsidiary Guarantors and the Company will enter into the Purchase Agreement. The Company will make a further announcement in respect of the Proposed Notes Issue upon the signing of the Purchase Agreement.

The Notes and the Subsidiary Guarantees have not been, and will not be, registered under the Securities Act. The Notes and the Subsidiary Guarantees are being offered outside the United States in offshore transactions in accordance with Regulation S under the Securities Act, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. None of the Notes and the Subsidiary Guarantees will be offered to the public in Hong Kong.

- 2 -

No PRIIPs KID - No PRIIPs key information document (KID) has been prepared as the Notes are not available to retail investors in the EEA or UK.

REASONS FOR THE PROPOSED NOTES ISSUE

The Group is principally engaged in property development, property investment and property construction in the PRC, focusing on the residential property market, and its products are primarily targeted at first-time homebuyers and upgraders. The Company believes demand from such customers is less susceptible to fluctuations in property prices and thus provides stability to the Group's business profile.

The Company intends to use the net proceeds of the Proposed Notes Issue for refinancing its existing indebtedness. The Company may adjust its plans in response to changing market conditions and, thus, reallocate the use of the net proceeds.

LISTING

The Company will seek a listing of the Notes on the Stock Exchange. A confirmation of the eligibility for the listing of the Notes has been received from the Stock Exchange for the listing of the Notes by way of debt issues to professional investors only as described in the offering memorandum. Admission of the Notes to the Stock Exchange is not to be taken as an indication of the merits of the Company or the Notes.

GENERAL

As no binding agreement in relation to the Proposed Notes Issue has been entered into as at the date of this announcement, the Proposed Notes Issue may or may not materialise. Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company. A further announcement in respect of the Proposed Notes Issue will be made by the Company should the Purchase Agreement be signed.

DEFINITIONS

In this announcement, the following expressions shall have the meanings set forth below unless the context requires otherwise:

''Barclays''	Barclays Bank PLC
''BNP PARIBAS''	BNP Paribas
''Board''	the board of Directors
''China CITIC Bank	China CITIC Bank International Limited
International''
''Citigroup''	Citigroup Global Markets Limited
''CMBC Capital''	CMBC Securities Company Limited

- 3 -

''Company''	Logan Group Company Limited, a company incorporated in the
	Cayman Islands with limited liability, the shares of which are
	listed on the main board of the Stock Exchange
''Credit Suisse''	Credit Suisse (Hong Kong) Limited
''Deutsche Bank''	Deutsche Bank AG, Singapore Branch
''Directors''	the directors of the Company
''EEA''	European Economic Area
''Group''	the Company and its subsidiaries
''Guotai Junan	Guotai Junan Securities (Hong Kong) Limited
International''
''Haitong	Haitong International Securities Company Limited
International''
''Hong Kong''	the Hong Kong Special Administrative Region of the People's
	Republic of China
''Notes''	the guaranteed U.S. Dollar denominated senior fixed rate notes
	to be issued by the Company
''PRC''	the People's Republic of China, excluding Hong Kong, Macau
	Special Administrative Region and Taiwan for the purpose of
	this announcement
''Proposed Notes	the proposed issue of the Notes by the Company
Issue''
''Purchase	the agreement proposed to be entered into by and among
Agreement''	Deutsche Bank, UBS, Credit Suisse, Guotai Junan International,
	Haitong International, China CITIC Bank International,
	Citigroup, Barclays, Standard Chartered Bank, CMBC Capital,
	BNP PARIBAS, the Company and the Subsidiary Guarantors in
	relation to the Proposed Notes Issue
''Securities Act''	the United States Securities Act of 1933, as amended
''Standard Chartered	Standard Chartered Bank
Bank''
''Stock Exchange''	The Stock Exchange of Hong Kong Limited

- 4 -

''Subsidiary	the guarantees provided by the Subsidiary Guarantors in respect
Guarantees''	of the Notes
''Subsidiary	the subsidiaries of the Company which guarantee the Notes
Guarantors''
''U.S. Dollar(s)'' or	United States dollar(s), the lawful currency of the United States
''USD''
''UBS''	UBS AG Hong Kong Branch
''UK''	the United Kingdom
''United States''	the United States of America
	By Order of the Board
	Logan Group Company Limited
	Kei Hoi Pang
	Chairman

Hong Kong, 31 March 2021

As at the date of this announcement, the executive directors are Mr. Kei Hoi Pang, Mr. Lai Zhuobin, Mr. Xiao Xu and Mr. Zhong Huihong; the non-executive director is Ms. Kei Perenna Hoi Ting; and the independent non-executive directors are Mr. Zhang Huaqiao, Ms. Liu Ka Ying, Rebecca and Mr. Cai Suisheng.

- 5 -

Audited Financial Statements

LOGAN GROUP COMPANY LIMITED

(Incorporated in the Cayman Islands with limited liability)

31 December 2020

LOGAN GROUP COMPANY LIMITED

CONTENTS

	Pages
INDEPENDENT AUDITOR'S REPORT	1	- 6
AUDITED FINANCIAL STATEMENTS
Consolidated statement of profit or loss		7
Consolidated statement of comprehensive income		8
Consolidated statement of financial position	9 - 10
Consolidated statement of changes in equity	11	- 12
Consolidated statement of cash flows	13	- 15
Notes to financial statements	16 - 140

Independent auditor's report

To the shareholders of Logan Group Company Limited (Incorporated in the Cayman Islands with limited liability)

Opinion

We have audited the consolidated financial statements of Logan Group Company Limited (formerly known as "Logan Property Holdings Company Limited") (the "Company") and its subsidiaries (the "Group") set out on pages 7 to 140 which comprise the consolidated statement of financial position as at 31 December 2020, and the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.

Basis for opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAS") issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the HKICPA's Code of Ethics for Professional Accountants (the "Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

Independent auditor's report (continued)

To the shareholders of Logan Group Company Limited (Incorporated in the Cayman Islands with limited liability)

Key audit matters (continued)

Key audit matter				How our audit addressed the key audit matter

Valuation of investment properties and inventory properties acquired through business combinations

As at 31 December 2020, the Group held investment		We evaluated the objectivity, independence and
properties with a carrying amount of RMB29,794 million		competence of the external valuers engaged by
representing 12% of the total assets of the Group.	In		the management of the Group. We also involved
addition, the Group acquired property projects with		our internal valuation specialists to assist us in
inventory properties of RMB32,669 million through		evaluating the valuations models, assumptions
business combinations during the current year.			and parameters adopted in the valuation.	We
The Group has engaged external valuers to determine the		compared	the	valuation determined	by	the
	external valuer to	the	range	provided by	our
fair value of the investment properties at the end of the
	internal valuation specialists. We evaluated the
reporting period and the fair values	of the inventory
	significant inputs to the valuation used. We also
properties at the date of acquisitions.
			assessed the adequacy of the disclosures of the

We identified this as a key audit matter because the carrying		valuation	of	the	investment	properties	and
	inventory	properties acquired	through	business
amounts of the investment properties	and the inventory
	combinations	in	the	consolidated	financial
properties acquired through business	combinations	are
	statements.
significant to the Group and significant estimations are

involved in determining their fair values.	The
determination of valuation models adopted also involved
significant judgements.
Related disclosures are included in notes 3, 4, 16 and
35(b)(i) to the consolidated financial statements.

Independent auditor's report (continued)

To the shareholders of Logan Group Company Limited (Incorporated in the Cayman Islands with limited liability)

Key audit matters (continued)

Key audit matter

How our audit addressed the key audit matter

Recoverability of receivables from joint ventures and associates

As at 31 December 2020, the Group had receivables from

We evaluated management's

assessment on the

joint ventures and associates amounting to RMB18,210

recoverability of or the expected credit losses for

million and

RMB3,289

million,

respectively.

The

balances by performing the following procedures:

aggregate amount of RMB21,499 million represented 9%

of the total assets of the Group as at 31 December 2020

We discussed with management to gain an

and is significant to the consolidated financial statements.

understanding of the purpose and background

The measurement of impairment losses of these

of the underlying investments made by the joint

ventures and associates.

receivables under HKFRS 9 requires judgement, in

We examined the cooperation contracts and

particular, the estimation of the amount and timing of

agreements for the projects acquired and title

future cash flows and collateral values when determining

documents of the underlying assets acquired by

impairment losses and the assessment of a significant

the joint ventures and associates.

increase in credit risk. These estimates are driven by a

We reviewed the valuation reports or

number of factors, such as risk of default, loss given

investment return analyses of the projects

default and collateral recovery, changes in which can

acquired and evaluated the key estimates and

result in different levels of allowances.

assumptions adopted in the valuation reports or

investment return analyses.

The Group's

expected

credit

loss

calculations

examined

supporting

documents

for

significant payments made by the joint ventures

on receivables

from joint

ventures

and

associates are

and

associates

and

obtained

direct

based on assumptions about risk of default and loss given

confirmations from joint

ventures

and

default. The

Group uses

judgement in

making

these

associates on the balance of receivables.

assumptions and selecting the inputs to the impairment

We inspected the title documents of land or

calculations,

based on

credit

risk

the debtors or

development right agreements held by the joint

comparable

companies

the

market,

existing market

ventures and associates.

conditions as well as forward looking estimates at the end

We performed site visit to evaluate the status of

of each reporting period.

construction and existence of projects.

The Group has engaged external valuers to determine the

We evaluated the impairment assessment of the

receivables from joint ventures and associates

expected credit loss for receivables from joint ventures

made by management.

and associates at the end of the reporting period.

We involved our internal specialists to assist us

We identified this as a key audit matter because the

to evaluate the assumptions and other inputs

carrying amount of the receivables from joint ventures and

including probability of default, loss given

associates is significant to the Group and significant

default and forward looking element in

estimation and judgement are required by management to

determining the expected credit loss on

assess the recoverability of these receivables from joint

receivables from joint ventures and associates.

ventures and associates.

We also assessed the adequacy of the

Related disclosures are included in notes 3, 4, 18, 19 and

disclosures of the recoverability of receivables

from joint ventures and associates in the

21 to the consolidated financial statements.

consolidated financial statements.

Independent auditor's report (continued)

To the shareholders of Logan Group Company Limited (Incorporated in the Cayman Islands with limited liability)

Other information included in the Annual Report

The directors of the Company are responsible for the other information. The other information comprises the information included in the Annual Report, other than the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated financial statements

The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors of the Company are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors of the Company either intend to liquidate the Group or to cease operations or have no realistic alternative but to do so.

The directors of the Company are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Our report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Independent auditor's report (continued)

To the shareholders of Logan Group Company Limited (Incorporated in the Cayman Islands with limited liability)

Auditor's responsibilities for the audit of the consolidated financial statements (continued)

As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

Independent auditor's report (continued)

To the shareholders of Logan Group Company Limited (Incorporated in the Cayman Islands with limited liability)

Auditor's responsibilities for the audit of the consolidated financial statements (continued)

From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Chow Chi Chung.

Ernst & Young

Certified Public Accountants

22/F, CITIC Tower

1 Tim Mei Avenue

Central, Hong Kong

26 March 2021

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Year ended 31 December 2020

	Notes			2020		2019
				RMB'000		RMB'000
REVENUE	6		71,079,729		57,480,418
Cost of sales		(49,747,857)	(39,347,437)
Gross profit			21,331,872		18,132,981
Other income and gains	6			2,107,785		2,130,113
Other expenses	7	(		118,363)	(	115,456)
Selling and marketing expenses		(		1,672,170)	(	1,398,172)
Administrative expenses		(		1,867,320)	(	1,409,352)
Net increase in fair value of investment properties	16			1,597,354		1,622,065
Net increase in fair value of derivative
financial instruments				218,400		32,683
Share of losses of associates		(	28,923)	(	63,400)
Share of losses of joint ventures		(	19,425)	(	112,960)
PROFIT FROM OPERATIONS			21,549,210		18,818,502
Finance costs	8	(		2,051,424)	(	1,366,250)
PROFIT BEFORE TAX	9		19,497,786		17,452,252
Income tax expense	12	(		6,123,692)	(	5,888,994)
PROFIT FOR THE YEAR			13,374,094		11,563,258
Attributable to:
Owners of the parent			13,016,635		11,269,044
Non-controlling interests				357,459		294,214
			13,374,094		11,563,258
EARNINGS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS
OF THE PARENT (RMB cents)	14
Basic				234.13		202.24
Diluted				232.36		199.36

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December 2020

	2020	2019
	RMB'000	RMB'000
PROFIT FOR THE YEAR	13,374,094	11,563,258
OTHER COMPREHENSIVE INCOME FOR THE YEAR
(after tax and reclassification adjustments)
Item that may be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of
financial statements of group entities	865,243	23,451
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	14,239,337	11,586,709
Attributable to:
Owners of the parent	13,881,878	11,292,495
Non-controlling interests	357,459	294,214
	14,239,337	11,586,709

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 December 2020

	Notes	2020	2019
		RMB'000	RMB'000
NON-CURRENT ASSETS
Investment properties	16	29,794,064	26,604,198
Other property, plant and equipment	15	159,893	891,954
Deferred tax assets	29	1,455,960	914,263
Investments in associates	18	3,488,649	3,460,487
Investments in joint ventures	19	8,968,781	13,934,196
Trade and other receivables, prepayments and other assets	21	4,282,980	-
Assets under cross-border guarantee arrangements	22	400,000	-
Cash and bank balances	23	1,829,261	980,543
Total non-current assets		50,379,588	46,785,641
CURRENT ASSETS
Inventories	20	106,327,001	86,351,810
Trade and other receivables, prepayments and other assets	21	39,194,772	31,327,794
Tax recoverable		2,025,196	1,254,170
Assets under cross-border guarantee arrangements	22	4,547,191	566,140
Cash and bank balances	23	41,039,900	39,724,570
Total current assets		193,134,060	159,224,484
CURRENT LIABILITIES
Trade and other payables	24	40,463,391	56,166,909
Contract liabilities	25	42,484,960	26,030,052
Liabilities under cross-border guarantee arrangements	22	5,376,575	921,994
Bank and other loans	26	9,665,437	9,443,571
Senior notes	27	7,192,358	3,128,150
Other current liabilities	28	6,439,252	17,024,670
Tax payable		9,149,363	6,381,743
Total current liabilities		120,771,336	119,097,089
NET CURRENT ASSETS		72,362,724	40,127,395
TOTAL ASSETS LESS CURRENT LIABILITIES		122,742,312	86,913,036

continued/…

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

31 December 2020

	Notes	2020	2019
		RMB'000	RMB'000
TOTAL ASSETS LESS CURRENT LIABILITIES		122,742,312	86,913,036
NON-CURRENT LIABILITIES
Liabilities under cross-border guarantee arrangements	22	700,631	-
Bank and other loans	26	23,371,878	13,503,512
Senior notes	27	17,933,558	18,195,653
Corporate bonds	28	15,536,000	8,382,000
Deferred tax liabilities	29	4,528,780	3,837,852
Total non-current liabilities		62,070,847	43,919,017
Net assets		60,671,465	42,994,019
EQUITY
Equity attributable to owners of the parent
Share capital	30	436,727	435,167
Perpetual capital securities	32	2,363,346	2,363,346
Reserves	33	39,603,161	31,395,904
		42,403,234	34,194,417
Non-controlling interests		18,268,231	8,799,602
Total equity		60,671,465	42,994,019

.....................................................................	.....................................................................
Lai Zhuobin	Xiao Xu
Director	Director
	10

LOGAN GROUP COMPANY LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

Year ended 31 December 2020

								Attributable to owners of the parent
					Shares held	Share-based		PRC				Perpetual				Non-
			Share	Share	under share compensation	Exchange	statutory	Other		Retained	capital				controlling		Total
			capital	premium award scheme		reserve	reserve	reserves	reserve		profits	securities		Total	interests		equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000		RMB'000
		(note 30)	(note 33(i))	(note 31)	(note 31)	(note 33(ii))	(note 33(iii))				(note 32)
At 1 January 2020			435,167	-*	-*		104,900*	(303,509)*	1,279,222*	(1,489,207)*		31,804,498*	2,363,346		34,194,417	8,799,602		42,994,019
Profit for the year			-	-	-		-	-	-	-		13,016,635	-		13,016,635	357,459		13,374,094
Other comprehensive income -
Exchange differences on translation of
financial statements of group entities			-	-	-		-	865,243	-	-		-	-		865,243	-		865,243
Total comprehensive income for the year			-	-	-		-	865,243	-	-		13,016,635	-		13,881,878	357,459		14,239,337
Transfer to PRC statutory reserves			-	-	-		-	-	179,619	-	(	179,619)	-		-		-		-
Repurchase and cancellation of own shares	(	342)	(44,451)	-		-	-	-	-		-	-	(	44,793)	-	(	44,793)
2019 final dividend declared			-	-	-		-	-	-	-	(	2,235,312)	-	(	2,235,312)	-	(	2,235,312)
2020 interim dividends declared			-	-	-		-	-	-	-	(	2,140,142)	-	(	2,140,142)	-	(	2,140,142)
Issuance of shares in connection with
the exercise of share options			1,902	67,033	-	(	20,030)	-	-	-		-	-		48,905	-		48,905
Equity-settledshare-based transactions			-	-	-		76,637	-	-	-		-	-		76,637		-		76,637
Effect of forfeited or expired share options			-	-	-	(	52,526)	-	-	-		52,526	-		-		-		-
Shares purchased under share award scheme			-	-	(823,306)		-	-	-	-		-	-	(	823,306)	-	(	823,306)
Acquisition of subsidiaries			-	-	-		-	-	-	-		-	-		-		819,990		819,990
Acquisition of additional
interests in subsidiaries			-	-	-		-	-	-	( 387,479)		-	-	(	387,479)	( 2,672,278)	(	3,059,757)
Capital contribution from
non-controlling shareholders			-	-	-		-	-	-	-		-	-		-		10,963,458	10,963,458
Distribution to holders of
perpetual capital securities			-	-	-		-	-	-	-	(	167,571)	-	(	167,571)	-	(	167,571)
At 31 December 2020			436,727	22,582*	(823,306)*		108,981*	561,734*	1,458,841*	(1,876,686)*		40,151,015*	2,363,346		42,403,234	18,268,231		60,671,465
	________	________	________	________	________	_________	_________	__________	_________	__________	_________	__________

continued/…

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

Year ended 31 December 2020

					Attributable to owners of the parent
				Share-based		PRC				Perpetual				Non-
		Share	Share	compensation	Exchange	statutory	Other		Retained	capital				controlling		Total
		capital	premium	reserve	reserve	reserves	reserve		profits	securities		Total	interests		equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000		RMB'000
		(note 30)	(note 33(i))	(note 31)	(note 33(ii))	(note 33(iii))				(note 32)
At 1 January 2019	434,041	-	88,205	(326,960)	1,117,742	538,543		25,033,889	2,363,346		29,248,806		7,496,980		36,745,786
Profit for the year	-	-	-	-	-	-		11,269,044	-		11,269,044	294,214		11,563,258
Other comprehensive income -
Exchange differences on translation of
financial statements of group entities	-	-	-	23,451	-	-		-	-		23,451	-		23,451
Total comprehensive income for the year	-	-	-	23,451	-	-		11,269,044	-		11,292,495	294,214		11,586,709
Transfer to PRC statutory reserves	-	-	-	-	161,480	-	(	161,480)	-		-		-		-
Repurchase and cancellation of own shares	(1,682)	(90,022)	-	-	-	-	(	81,298)	-	(	173,002)	-	(	173,002)
2018 final and special dividends declared	-	-	-	-	-	-	(	2,313,041)	-	(	2,313,041)	-	(	2,313,041)
2019 interim and special dividends declared	-	-	-	-	-		(	1,786,604)	-	(	1,786,604)	-	(	1,786,604)
Issuance of shares in connection with
the exercise of share options	2,808	90,022	(29,823)	-	-	-		-	-		63,007	-		63,007
Equity-settledshare-based transactions	-	-	57,659	-	-	-		-	-		57,659	-		57,659
Effect of forfeited share options	-	-	(11,141)	-	-	-		11,141	-		-		-		-
Dividends declared to
non-controlling shareholders	-	-	-	-	-	-		-	-		-		( 302,940)	(	302,940)
Deemed disposal of subsidiaries	-	-	-	-	-	( 114,875)		-	-	(	114,875)	-	(	114,875)
Acquisition of additional
interests in subsidiaries	-	-	-	-	-	(1,927,171)		-	-	(	1,927,171)	(3,500,000)	(	5,427,171)
Capital contribution from
non-controlling shareholders	-	-	-	-	-	14,296		-	-		14,296	4,811,348		4,825,644
Distribution to holders of
perpetual capital securities	-	-	-	-	-	-	(	167,153)	-	(	167,153)	-	(	167,153)
At 31 December 2019	435,167	-*	104,900*	(303,509)*	1,279,222* (1,489,207)* 31,804,498*	2,363,346		34,194,417	8,799,602		42,994,019
	________	_________	_______	________	________	_________	__________	_________	__________	_________	__________

These reserve accounts comprise the consolidated reserves of RMB39,603,161,000 (2019: RMB31,395,904,000) in the consolidated statement of financial position.

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended 31 December 2020

	Notes		2020		2019
			RMB'000		RMB'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax			19,497,786		17,452,252
Adjustments for:
Interest income	6	(	1,739,621)	(	1,158,274)
Finance costs	8		2,051,424		1,366,250
Depreciation	9		60,100		60,590
Net loss on disposal of items of other property,
plant and equipment	9		4		234
Premium on early redemption of senior notes	7		-		53,328
Share of losses of joint ventures			19,425		112,960
Share of losses of associates			28,923		63,400
Net increase in fair value of investment properties	16	(	1,597,354)	(	1,622,065)
Net increase in fair value of derivative
financial instruments		(	218,400)	(	32,683)
Gain on bargain purchase	35(b)	(	38,146)	(	351,316)
Gain on remeasurement of pre-existing interests in
joint ventures and an associate	35(b)		-	(	246,349)
Gain on disposal of subsidiaries	36(a)	(	637)		-
Gain on deemed disposal of subsidiaries upon loss
of control, net	36(b)	(	39,848)	(	89,913)
Equity-settledshare-based transactions	9		76,637		57,659
			18,100,293		15,666,073
Increase in inventories and land deposits		(	4,605,716)	(	8,852,189)
Increase in trade and other receivables, prepayments
and other assets		(	887,817)	(	1,262,315)
Increase in trade and other payables			5,248,133		17,266,169
Decrease in contract liabilities		(14,210,192)	(14,147,434)
Cash generated from operations			3,644,701		8,670,304
Tax paid		(	2,413,815)	(	2,798,216)
Net cash flows from operating activities			1,230,886		5,872,088

continued/…

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

Year ended 31 December 2020
	Notes		2020		2019
			RMB'000		RMB'000
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received			1,007,627		861,058
Addition to investment properties	16	(	760,198)	(	1,026,693)
Addition to other property, plant and equipment	15	(	70,175)	(	77,322)
Disposal of subsidiaries	36(a)	(	1,962,828)		-
Deemed disposal of subsidiaries	36(b)	(	2,777,705)	(	1,840,973)
Acquisition of subsidiaries that are not a business	35(a)	(	330,712)	(	3,185,147)
Acquisition of subsidiaries	35(b)		9,193,733		5,937,074
Disposal of a joint venture			346,751		-
Investments in joint ventures		(	1,569,101)	(	1,381,279)
Investments in associates		(	126,074)	(	1,684,488)
Repayment from joint ventures			4,475,143		18,465,669
Repayment from/(advances to) associates			1,863,672	(	1,210,915)
Acquisition of a subsidiary in prior year			-	(	7,542,163)
Payment of land deposits		(	4,282,980)		-
Proceeds from disposal of investment properties			-		10,418
Proceeds from disposal of other property, plant
and equipment			28,704		738
(Increase)/decrease in assets under cross-border
guarantee arrangements		(	4,381,051)		1,787,517
Decrease/(increase) in pledged deposits			20,453	(	179,909)
Increase in non-currentnon-pledged time deposits		(	949,000)	(	711,000)
Net cash flows (used in)/from investing activities		(	273,741)		8,222,585

continued/…

LOGAN GROUP COMPANY LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
Year ended 31 December 2020
		2020		2019
		RMB'000		RMB'000
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid	(	4,328,017)	(	4,099,764)
Proceeds from bank and other loans		25,483,012		12,447,243
Repayment of bank and other loans	(18,092,407)	(15,229,293)
Proceeds from issuance of senior notes		8,056,100		5,652,117
Repayment of senior notes	(	2,991,270)	(	1,786,361)
Proceeds from issuance of corporate bonds		7,379,000		5,010,000
Repayment of corporate bonds	(	8,833,000)	(	4,280,449)
Proceeds from/(repayment of) cross-border guarantee
arrangements		5,332,376	(	2,119,574)
Premium paid on early redemption of senior notes		-	(	53,328)
Proceeds from issuance of shares in connection with the
exercise of share options		48,905		63,007
Repurchase of own shares	(	44,793)	(	173,002)
Shares purchased under share award scheme	(	823,306)		-
Repayment to non-controlling shareholders/
former non-controlling shareholders	(	8,854,936)	(	4,754,577)
Repayment to joint ventures	(	981,168)	(	4,090,395)
Advances from associates		366,543		339,481
Capital contribution from non-controlling shareholders		10,963,458		4,825,644
Payments for acquisition of non-controlling interests	(	3,059,757)	(	1,000,000)
Payments for acquisition of non-controlling interests in
prior year	(	3,600,000)		-
Dividends paid to non-controlling shareholders		-	(	302,940)
(Repayment of)/proceeds from loans from a
non-controlling shareholder	(	107,500)		13,000
Distribution paid to holders of perpetual capital securities	(	167,571)	(	167,153)
Dividends paid to ordinary equity shareholders of
the Company	(	4,060,139)	(	979,211)
Net cash flows from/(used in) financing activities		1,685,530	(10,685,555)

continued/…

LOGAN GROUP COMPANY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

Year ended 31 December 2020
	Note	2020	2019
		RMB'000	RMB'000
NET INCREASE IN CASH AND CASH EQUIVALENTS		2,642,675	3,409,118
Cash and cash equivalents at beginning of year		39,227,247	35,130,194
Effect of foreign exchange rate changes		( 1,407,174)	687,935
CASH AND CASH EQUIVALENTS AT END OF YEAR		40,462,748	39,227,247
ANALYSIS OF BALANCES OF CASH AND
CASH EQUIVALENTS
Cash and bank balances		29,032,513	37,347,055
Non-pledged time deposits		11,430,235	1,880,192
Cash and cash equivalents as stated in the
consolidated statement of cash flows and included in
the consolidated statement of financial position	23	40,462,748	39,227,247

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

1. CORPORATE AND GROUP INFORMATION

Logan Group Company Limited (formerly known as "Logan Property Holdings Company Limited") (the "Company") is incorporated in the Cayman Islands as an exempted company with limited liability. The registered office address of the Company is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111,Cayman Islands.

The Company and its subsidiaries (collectively referred to as the "Group") were principally engaged in property development, property investment, construction and decoration and urban redevelopment business in the People's Republic of China (the "PRC" or "Mainland China") during the year.

In the opinion of the directors, Junxi Investments Limited is the immediate holding company of the Company and the ultimate controlling party of the Company is Ms. Kei Perenna Hoi Ting, who is a non-executive director of the Company.

Information about subsidiaries

The following list contains particulars of the Company's principal subsidiaries. All of them are established in the PRC unless otherwise stated.

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Logan Construction Co., Ltd. (note)	RMB80,000,000	91%	-	91%	Property
(龍光工程建設有限公司)						construction
Shenzhen Logan Holdings Co., Ltd. #	RMB443,000,000	100%	-	100%	Investment
(note)						holding
(深圳市龍光控股有限公司)
Zhongshan Logan Property Co., Ltd.	RMB30,000,000	100%	-	100%	Property
(note)						development
(中山市龍光房地產有限公司)
Nanning Logan Property Development	RMB100,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(南寧市龍光房地產開發有限公司)						and
						investment
Guangzhou Logan Property Co., Ltd.	RMB40,000,000	100%	-	100%	Property
(note)						development
(廣州市龍光房地產有限公司)						and
						investment
Guangzhou Logan Realty Co., Ltd.	RMB30,000,000	100%	-	100%	Property
(note)						development
(廣州市龍光置業有限公司)
Huizhou Daya Bay Logan Property	RMB10,000,000	100%	-	100%	Property
Co., Ltd. (note)						development

(惠州大亞灣龍光房地產有限公司)

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Shantou Logan Property Co., Ltd.	RMB10,000,000	100%	-	100%	Property
(note)						development
(汕頭市龍光房地產有限公司)
Zhuhai Logan Property Development	RMB30,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(珠海市龍光房地產開發有限公司)						and
						investment
Foshan Shunde Logan Realty Co., Ltd.	RMB35,295,000	100%	-	100%	Property
(note)						development
(佛山市順德區龍光置業房產
有限公司)
Huizhou Logan Property Co., Ltd.	RMB30,000,000	100%	-	100%	Property
(note)						development
(惠州市龍光房地產有限公司)
Dongguan Logan Property Co., Ltd.	RMB50,000,000	100%	-	100%	Property
(note)						development
(東莞市龍光房地產有限公司)
Shantou Jinfengyuan Realty Co., Ltd.	RMB66,000,000	100%	-	100%	Property
(note)						development
(汕頭市金鋒園置業有限公司)
Nanning Logan Jinjun Property	RMB50,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光金駿房地產開發有限						and
公司)						investment

Chengdu Logan Property Co., Ltd.	RMB10,000,000	100%	-	100%	Property
(note)						development
(成都市龍光房地產有限公司)
Shantou Logan Realty Co., Ltd. (note)	RMB33,000,000	100%	-	100%	Property
(汕頭市龍光置業有限公司)						development
						and
						investment
Shantou Jiarun Property Co., Ltd.	RMB50,000,000	100%	-	100%	Property
(note)						development

(汕頭市佳潤房地產有限公司)

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Foshan Shancheng Logan Property	RMB10,500,000	100%	-	100%	Property
Co., Ltd. (note)						development
(佛山市禪城區龍光房地產有限公
司)
Nanning Logan Bojun Property	RMB700,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光鉑駿房地產開發有限
公司)
Chengdu Logan Jinjun Realty Co., Ltd.	RMB10,000,000	100%	-	100%	Property
(note)						development
(成都市龍光金駿置業有限公司)
Chengdu Logan Donghua Property	RMB558,059,600	100%	-	100%	Property
Development Co., Ltd. (note)						development
(成都市龍光東華房地產開發有限
公司)
Shantou Weida Property Co., Ltd.#	RMB54,200,441	100%	-	100%	Property
(note)						development
(汕頭市偉達房地產有限公司)
Shenzhen Logan Dongzhen Realty	RMB30,000,000	100%	-	100%	Investment
Co., Ltd. (note)						holding
(深圳市龍光東圳置業有限公司)
Huizhou Daya Bay Dongzhen Property	RMB100,000,000	100%	-	100%	Property
Co., Ltd. ("Huizhou Dongzhen")						development
(note)						and
(惠州大亞灣東圳房地產有限公司)						investment
Shenzhen Logan Property Co., Ltd.	RMB80,000,000	100%	-	100%	Property
(note)						development
(深圳市龍光房地產有限公司)						and
						investment
Shenzhen Yongjing Decorating	RMB200,000,000	91%	-	100%	Provision of
Construction Co., Ltd. (note)						decoration
(深圳市潤景裝飾工程有限公司)						services to
						joint ventures
						and associates
Shenzhen Logan Media Planning Co.,	RMB2,200,000	100%	-	100%	Provision of
Ltd. (note)						advertising
(深圳市龍光傳媒策劃有限公司)						services to
						joint ventures
						and associates

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Nanning Logan Junchi Property	RMB35,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光駿馳房地產開發有限
公司)
Foshan Nanhai Logan Realty Co., Ltd.	RMB58,820,000	100%	-	100%	Property
(note)						development
(佛山市南海區龍光置業房產有限
公司)
Shenzhen Logan Investment	RMB10,000,000	100%	-	100%	Investment
Consultancy Co., Ltd. (note)						holding
(深圳市龍光投資顧問有限公司)
Shantou Logan Jinjun Property Co.,	RMB50,000,000	100%	-	100%	Property
Ltd. (note)						development
(汕頭市龍光金駿房地產有限公司)
Foshan Runjing Property Co., Ltd.	RMB50,000,000	100%	-	100%	Property
(note)						development
(佛山市順德區龍光潤景房地產有
限公司)
Shenzhen Jinjun Property Co., Ltd.	RMB198,000,000	100%	-	100%	Property
(note)						development
(深圳市金駿房地產有限公司)
Guilin Logan Bojun Property	RMB50,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(桂林市龍光鉑駿房地產開發有限
公司)
Shenzhen Logan Junchi Property	RMB5,000,000	51%	-	51%	Property
Development Co., Ltd. (note)						development
(深圳市龍光駿馳房地產開發有限
公司)
Foshan Logan Sunshine Seaward	RMB50,000,000	66%	-	66%	Property
Property Co., Ltd. (note)						development

(佛山市龍光陽光海岸房地產有限公司)

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Guangxi King Kerry Realty Co., Ltd.	US$18,000,000	95%	-	95%	Property
(note)						development
(廣西金凱利置業有限公司)
Zhuhai Junjing Property Development	RMB10,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(珠海市駿景房地產開發有限公司)
Shantou Logan Runjing Property Co.,	RMB50,000,000	100%	-	100%	Property
Ltd. (note)						development
(汕頭市龍光潤璟房地產有限公司)
Nanning Logan Mingjun Property	RMB50,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光銘駿房地產開發有限
公司)
Shenzhen Logan Junjing Property	RMB100,000,000	100%	-	100%	Property
Development Co., Ltd. ("Shenzhen						development
Logan Junjing") (note)
(深圳市龍光駿景房地產開發有限
公司)
Shenzhen Junteng Realty Co., Ltd.	RMB10,500,000	100%	-	100%	Property
(note)						development
(深圳市駿騰置業有限公司)
Zhuhai Junchi Property Development	RMB10,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(珠海市駿馳房地產開發有限公司)
Shenzhen Logan Junfei Realty Co.,	RMB10,000,000	100%	-	100%	Property
Ltd. (note)						development
(深圳市龍光駿飛置業有限公司)
Shenzhen Logan Junyu Property	RMB10,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(深圳市龍光駿譽房地產開發有限
公司)
Huizhou Logan Junjing Property Co.,	RMB10,000,000	100%	-	100%	Property
Ltd. (note)						development
(惠州市龍光駿景房地產有限公司)						and
						investment

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Huizhou Logan Jinjun Property Co.,	RMB10,000,000	100%	-	100%	Property
Ltd. (note)						development
(惠州市龍光金駿房地產有限公司)
Shenzhen Logan Bojun Property Co.,	RMB10,000,000	100%	-	100%	Property
Ltd. (note)						development
(深圳市龍光鉑駿房地產有限公司)
Shanghai Logan Property Co., Ltd.	RMB10,000,000	100%	-	100%	Property
(note)						development
(上海市龍光房地產有限公司)
Nanning Logan Jiarun Property	RMB50,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光佳潤房地產開發有限
公司)
Foshan Logan Junjing Property Co.,	RMB21,000,000	50%	-	50%	Property
Ltd.@ (note)						development
(佛山市龍光駿景房地產有限公司)
Huizhou Boshen Property Co., Ltd.	RMB10,000,000	51%	-	51%	Property
(note)						development
(惠州市鉑紳房地產有限公司)
Liuzhou Logan Mingjun Property	RMB102,040,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(柳州市龍光銘駿房地產開發有限
公司)
Chengdu Zhonghui Investment Co.,	RMB1,000,000	100%	-	100%	Property
Ltd. (note)						development
(成都中暉投資有限公司)
Zhongshan Haixin Property Co., Ltd.	RMB224,624,902	100%	-	100%	Property
(note)						development
(中山市海心置業有限公司)
Shenzhen Kaifung Industrial Co.,	RMB15,000,000	100%	-	100%	Property
Ltd. ("Shenzhen Kaifung") (note)						development
(深圳市凱豐實業有限公司)
Runjing Printing (Shenzhen) Company	RMB133,224,082	100%	-	100%	Urban
Ltd. ("Runjing Printing") (note)						redevelopment

(潤璟印刷(深圳)有限公司)

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Nanning Logan Century Property	RMB100,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧龍光世紀房地產有限公司)
Zhaoqing Gaoxing Logan Property	RMB20,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(肇慶市高新區龍光房地產有限公司)
Chaozhou Jingrong Property Co.,	RMB161,100,000	100%	-	100%	Property
Ltd. (note)						development
(潮州市景榮房地產開發有限公司)
Huizhou Dejie Transportation Co.,	RMB146,659,409	100%	-	100%	Urban
Ltd. ("Huizhou Dejie") (note)						redevelopment
(惠州德捷運輸設備有限公司)
Huizhou Huihe Investment Co.,	RMB50,000,000	100%	-	100%	Property
Ltd. (note)						development
(惠州市惠和投資有限公司)
Huizhou Taihe Yixin Property Co., Ltd.	RMB265,118,600	100%	-	100%	Property
(note)						development
(惠州泰和怡馨房地產有限公司)
Foshan Logan Junshen Property Co.,	RMB20,000,000	50%	-	50%	Property
Ltd.@ ("Foshan Junshen") (note)						development
(佛山市龍光駿紳房地產有限公司)
Heyuan Meiping Property Development	RMB876,772,031	75%	-	75%	Property
Co., Ltd. ("Heyuan Meiping") (note)						development
(河源美平房地產發展有限公司)
Shenzhen Kangqiao Jiacheng Realty	RMB1,000,000,000	94%	-	94%	Property
Investment Co., Ltd. (note)						development
(深圳市康僑佳城置業投資有限公司)
Nanning Hengliang Property	RMB10,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市恒亮房地產開發有限公司)
Nanning Yaotai Property Development	RMB20,000,000	100%	-	100%	Property
Co., Ltd. (note)						development

(南寧市耀泰房地產開發有限公司)

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of	Group's	Held
	issued and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Huizhou Lujing Property Development	RMB20,750,000	100%	-	100%	Property
Co., Ltd. (note)						development
(惠州市綠景房地產開發有限公司)
Zhuhai Hengqin Haojing Realty Co., Ltd.	RMB57,438,606	73%	-	73%	Property
("Zhuhai Hengqin Haojing") (note)						development
(珠海市橫琴好景置業有限公司)
Nanning Yaorong Property Development	RMB10,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(南寧市耀榮房地產開發有限公司)
Huizhou Aoda Property Development Co.,	RMB2,048,400	100%	-	100%	Property
Ltd. (note)						development
(惠州市澳達地產發展有限公司)
Dongguan Logan Junyu Property	RMB20,000,000	100%	-	100%	Property
Development Co., Ltd.						development
(東莞市龍光駿譽房地產開發有限公
司)
Guangzhou Logan Junshen Property Co.,	RMB500,000,000	100%	-	100%	Property
Ltd. (note)						development
(廣州市龍光駿紳房地產有限公司)
Shenzhen Logan Junrong Property Co.,	RMB10,000,000	100%	-	100%	Property
Ltd. (note)						development
(深圳市龍光駿榮房地產有限公司)
Foshan Sanshui Logan Jinjun Property	RMB100,000,000	50%	-	50%	Property
Co., Ltd.@ (note)						development
(佛山市三水區龍光金駿房地產有限
公司)
Nanning Logan Jiujun Property	RMB20,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光玖駿房地產開發有限公
司)
Nanning Logan Jiuyao Property	RMB20,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development

(南寧市龍光玖曜房地產開發有限公司)

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued) Information about subsidiaries(continued)

		Proportion of ownership interest
	Particulars of issued	Group's	Held
	and	effective	by the	Held by	Principal
Name of subsidiaries	paid-up capital	interest	Company	subsidiary	activities
Foshan Nanhai Logan Juncheng Property	RMB21,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(佛山市南海區龍光駿誠房地產有限
公司)
Shenzhen Minghuida Investment Co.,	RMB33,333,300	30%	-	30%	Property
Ltd.("Shenzhen Minghuida")@ (note)						development
(深圳市銘輝達投資有限公司)
Nanning Yaoyong Property Development	RMB10,000,000	100%	-	100%	Property
Co., Ltd. (note)						development
(南寧市耀邕房地產開發有限公司)
Zhuhai Shunxing Realty Co.,	RMB65,000,000	100%	-	100%	Property
Ltd.("Zhuhai Shunxing") (note)						development
(珠海市順興置業有限公司)
Nanning Logan Juncheng Property	RMB20,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(南寧市龍光駿誠房地產開發有限公
司)
Foshan Shunde Kaimo Property	RMB10,000,000	100%	-	100%	Property
Development Co., Ltd. (note)						development
(佛山市順德區凱模房地產開發有限
公司)
Zhongshan Tongan Realty Co., Ltd.	RMB318,143,726	50%	-	50%	Property
("Zhongshan Tongan")@ (note)						development
(中山市同安置業有限公司)
Guangxi Tangqin Tongguang Investment	RMB320,000,000	33%	-	33%	Property
Co., Ltd. @ (note)						development
(廣西唐沁同光投資有限公司)
Sino Triumph Global Limited ("Sino	USD100	30%	-	30%	Investment
Triumph")@						holding
Silver Maple Developments Limited	USD100	30%	-	30%	Investment
("Silver Maple")@						holding

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

1. CORPORATE AND GROUP INFORMATION (continued)

Information about subsidiaries(continued)

#Registered as wholly-foreign-owned enterprises under PRC law

These entities are accounted for as subsidiaries of the Group because the Group owns more than half of the voting rights even though the equity interests in these entities attributable to the Group are 50% or less.

Note: The English translation of the names is for reference only. The official names of these entities are in Chinese.

The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

2.1 BASIS OF PREPARATION

These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties and derivative financial instruments which have been measured at fair value.

These financial statements are presented in Renminbi ("RMB") and all values are rounded to the nearest thousand ("RMB'000") except when otherwise indicated.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year ended 31 December 2020. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).

When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

the contractual arrangement with the other vote holders of the investee;
rights arising from other contractual arrangements; and
the Group's voting rights and potential voting rights.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Group's share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the Conceptual Framework for Financial Reporting 2018 and the following revised HKFRSs for the first time for the current year's financial statements:

Amendments to HKFRS 3	Definition of a Business
Amendments to HKAS 1	Definition of Material
and HKAS 8
Amendments to HKFRS 9,	Interest Rate Benchmark Reform
HKAS 39 and HKFRS 7

The nature and the impact of the Conceptual Framework for Financial Reporting 2018 and the revised HKFRSs are described below:

Conceptual Framework for Financial Reporting 2018 (the "Conceptual Framework") sets out a comprehensive set of concepts for financial reporting and standard setting, and provides guidance for preparers of financial statements in developing consistent accounting policies and assistance to all parties to understand and interpret the standards. The Conceptual Framework includes new chapters on measurement and reporting financial performance, new guidance on the derecognition of assets and liabilities, and updated definitions and recognition criteria for assets and liabilities. It also clarifies the roles of stewardship, prudence and measurement uncertainty in financial reporting. The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The Conceptual Framework did not have any significant impact on the financial position and performance of the Group.
Amendments to HKFRS 3 clarify and provide additional guidance on the definition of a business. The amendments clarify that for an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. A business can exist without including all of the inputs and processes needed to create outputs. The amendments remove the assessment of whether market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. The Group has applied the amendments prospectively to transactions or other events that occurred on or after 1 January 2020. The amendments did not have any impact on the financial position and performance of the Group.
Amendments to HKAS 1 and HKAS 8 provide a new definition of material. The new definition states that information is material of omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information, or both. The amendments did not have any significant impact on the financial position and performance of the Group.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (continued)
1. Amendments to HKFRS 9, HKAS 39 and HKFRS 7 address issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative risk-free rate ("RFR"). The amendments provide temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the introduction of the alternative RFR. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. The amendments did not have any impact on the financial position and performance of the Group as the Group does not have any interest rate hedging relationships.
ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS
The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these financial statements.
Amendments to HKFRS 3 Reference to the Conceptual Framework3

Amendments to HKFRS 9,	Interest Rate Benchmark Reform - Phase 22
HKAS 39, HKFRS 7,
HKFRS 4 and
HKFRS 16
Amendments to HKFRS 10	Sale or Contribution of Assets between an Investor and its
and HKAS 28 (2011)	Associate or Joint Venture5
Amendment to HKFRS 16	Covid-19-Related Rent Concessions1
HKFRS 17	Insurance Contracts 4
Amendments to HKFRS 17	Insurance Contracts 4, 7
Amendments to HKAS 1	Classification of Liabilities as Current or Non-current4,6
Amendments to HKAS 16	Property, Plant and Equipment: Proceeds before Intended Use3
Amendments to HKAS 37	Onerous Contracts - Cost of Fulfilling a Contract3
Annual Improvements to	Amendments to HKFRS 1, HKFRS 9, Illustrative Examples
HKFRSs 2018-2020	accompanying HKFRS 16, and HKAS 413

Effective for annual periods beginning on or after 1 June 2020
Effective for annual periods beginning on or after 1 January 2021
Effective for annual periods beginning on or after 1 January 2022
Effective for annual periods beginning on or after 1 January 2023
No mandatory effective date yet determined but available for adoption
As a consequence of the amendments to HKAS 1, Hong Kong Interpretation 5 Presentation of Financial Statements - Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause was revised in October 2020 to align the corresponding wording with no change in conclusion
As a consequence of the amendments to HKFRS 17 issued in October 2020, HKFRS 4 was amended to extend the temporary exemption that permits insurers to apply HKAS 39 rather than HKFRS 9 for annual periods beginning before 1 January 2023

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS (continued)

Further information about those HKFRSs that are expected to be applicable to the Group is described below:

Amendments to HKFRS 3 are intended to replace a reference to the previous Framework for the Preparation and Presentation of Financial Statements with a reference to the Conceptual Framework for Financial Reporting issued in June 2018 without significantly changing its requirements. The amendments also add to HKFRS 3 an exception to its recognition principle for an entity to refer to the Conceptual Framework to determine what constitutes an asset or a liability. The exception specifies that, for liabilities and contingent liabilities that would be within the scope of HKAS 37 or HK(IFRIC)-Int 21 if they were incurred separately rather than assumed in a business combination, an entity applying HKFRS 3 should refer to HKAS 37 or HK(IFRIC)-Int 21 respectively instead of the Conceptual Framework. Furthermore, the amendments clarify that contingent assets do not qualify for recognition at the acquisition date. The Group expects to adopt the amendments prospectively from 1 January 2022. Since the amendments apply prospectively to business combinations for which the acquisition date is on or after the date of first application, the Group will not be affected by these amendments on the date of transition.

Amendments to HKFRS 9, HKAS 39, HKFRS 7, HKFRS 4 and HKFRS 16 address issues not dealt with in the previous amendments which affect financial reporting when an existing interest rate benchmark is replaced with an alternative RFR. The Phase 2 amendments provide a practical expedient to allow the effective interest rate to be updated without adjusting the carrying amount when accounting for changes in the basis for determining the contractual cash flows of financial assets and liabilities, if the change is a direct consequence of the interest rate benchmark reform and the new basis for determining the contractual cash flows is economically equivalent to the previous basis immediately preceding the change. In addition, the amendments permit changes required by the interest rate benchmark reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued. Any gains or losses that could arise on transition are dealt with through the normal requirements of HKFRS 9 to measure and recognise hedge ineffectiveness. The amendments also provide a temporary relief to entities from having to meet the separately identifiable requirement when an RFR is designated as a risk component. The relief allows an entity, upon designation of the hedge, to assume that the separately identifiable requirement is met, provided the entity reasonably expects the RFR risk component to become separately identifiable within the next 24 months. Furthermore, the amendments require an entity to disclose additional information to enable users of financial statements to understand the effect of interest rate benchmark reform on an entity's financial instruments and risk management strategy. The amendments are effective for annual periods beginning on or after 1 January 2021 and shall be applied retrospectively, but entities are not required to restate the comparative information.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS (continued)

The Group had certain interest-bearing bank loans denominated in Hong Kong dollars and foreign currencies based on the Hong Kong Interbank Offered Rate and the London Interbank Offered Rate as at 31 December 2020. If the interest rates of these borrowings are replaced by RFRs in a future period, the Group will apply this practical expedient upon the modification of these borrowings when the "economically equivalent" criterion is met and expects that no significant modification gain or loss will arise as a result of applying the amendments to these changes.

Amendments to HKFRS 10 and HKAS 28 (2011) address an inconsistency between the requirements in HKFRS 10 and in HKAS 28 (2011) in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require a full recognition of a gain or loss when the sale or contribution of assets between an investor and its associate or joint venture constitutes a business. For a transaction involving assets that do not constitute a business, a gain or loss resulting from the transaction is recognised in the investor's profit or loss only to the extent of the unrelated investor's interest in that associate or joint venture. The amendments are to be applied prospectively. The previous mandatory effective date of amendments to HKFRS 10 and HKAS 28 (2011) was removed by the HKICPA in January 2016 and a new mandatory effective date will be determined after the completion of a broader review of accounting for associates and joint ventures. However, the amendments are available for adoption now.

Amendment to HKFRS 16 provides a practical expedient for lessees to elect not to apply lease modification accounting for rent concessions arising as a direct consequence of the covid-19 pandemic. The practical expedient applies only to rent concessions occurring as a direct consequence of the pandemic and only if (i) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; (ii) any reduction in lease payments affects only payments originally due on or before 30 June 2021; and (iii) there is no substantive change to other terms and conditions of the lease. The amendment is effective for annual periods beginning on or after 1 June 2020 with earlier application permitted and shall be applied retrospectively. The amendments are not expected to have any significant impact on the Group's financial statements.

Amendments to HKAS 1 clarify the requirements for classifying liabilities as current or non-current.

The amendments specify that if an entity's right to defer settlement of a liability is subject to the entity complying with specified conditions, the entity has a right to defer settlement of the liability at the end of the reporting period if it complies with those conditions at that date. Classification of a liability is unaffected by the likelihood that the entity will exercise its right to defer settlement of the liability. The amendments also clarify the situations that are considered a settlement of a liability. The amendments are effective for annual periods beginning on or after 1 January 2023 and shall be applied retrospectively. Earlier application is permitted. The amendments are not expected to have any significant impact on the Group's financial statements.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS (continued)

Amendments to HKAS 16 prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling any such items, and the cost of those items, in profit or loss. The amendments are effective for annual periods beginning on or after 1 January 2022 and shall be applied retrospectively only to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. Earlier application is permitted. The amendments are not expected to have any significant impact on the Group's financial statements.

Amendments to HKAS 37 clarify that for the purpose of assessing whether a contract is onerous under HKAS 37, the cost of fulfilling the contract comprises the costs that relate directly to the contract. Costs that relate directly to a contract include both the incremental costs of fulfilling that contract (e.g., direct labour and materials) and an allocation of other costs that relate directly to fulfilling that contract (e.g., an allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract as well as contract management and supervision costs). General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. The amendments are effective for annual periods beginning on or after 1 January 2022 and shall be applied to contracts for which an entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments. Earlier application is permitted. Any cumulative effect of initially applying the amendments shall be recognised as an adjustment to the opening equity at the date of initial application without restating the comparative information. The amendments are not expected to have any significant impact on the Group's financial statements.

Annual Improvements to HKFRSs 2018-2020 sets out amendments to HKFRS 1, HKFRS 9, Illustrative Examples accompanying HKFRS 16, and HKAS 41. Details of the amendments that are expected to be applicable to the Group are as follows:

HKFRS 9 Financial Instruments: clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual periods beginning on or after 1 January 2022. Earlier application is permitted. The amendment is not expected to have a significant impact on the Group's financial statements.
HKFRS 16 Leases: removes the illustration of payments from the lessor relating to leasehold improvements in Illustrative Example 13 accompanying HKFRS 16. This removes potential confusion regarding the treatment of lease incentives when applying HKFRS 16.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investments in associates and joint ventures

An associate is an entity, in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

The Group's investments in associates and joint ventures are stated in the consolidated statement of financial position at the Group's share of net assets under the equity method of accounting, less any impairment losses.

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

The Group's share of the post-acquisition results and other comprehensive income of associates and joint ventures is included in the consolidated statement of profit or loss and other comprehensive income. In addition, when there has been a change recognised directly in the equity of the associate or joint venture, the Group recognises its share of any changes, when applicable in the consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of the Group's investments in the associates or joint ventures, except where unrealised losses provide evidence of an impairment of the assets transferred. Goodwill arising from the acquisition of associates or joint ventures is included as part of the Group's investments in associates or joint ventures.

If an investment in an associate becomes an investment in a joint venture or vice versa, the retained interest is not remeasured. Instead, the investment continues to be accounted for under the equity method. In all other cases, upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of net assets in the event of liquidation at fair value or at the proportionate share of the acquiree's identifiable net assets. All other components of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as incurred.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Business combinations and goodwill(continued)

The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts of the acquiree.

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability is measured at fair value with changes in fair value recognised in profit or loss. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the fair value of the net assets acquired, the difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on the disposal. Goodwill disposed of in these circumstances is measured based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurement

The Group measures its investment properties and derivative financial instruments at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - based on quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 - based on valuation techniques for which the lowest level input that is significant to the fair

value measurement is observable, either directly or indirectly

Level 3 - based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of non-financial assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than properties under development for sale, completed properties for sale, deferred tax assets, financial assets and investment properties), the asset's recoverable amount is estimated. An asset's recoverable amount is the higher of the asset's or cash-generating unit's value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset.

An assessment is made at the end of each reporting period as to whether there is an indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period in which it arises.

Related parties

A party is considered to be related to the Group if:

the party is a person or a close member of that person's family and that person;
1. has control or joint control over the Group;
2. has significant influence over the Group; or
3. is a member of the key management personnel of the Group or of a parent of the Group;

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Related parties(continued)

the party is an entity where any of the following conditions applies:
1. the entity and the Group are members of the same group;
2. one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);
3. the entity and the Group are joint ventures of the same third party;
4. one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
5. the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;
6. the entity is controlled or jointly controlled by a person identified in (a);
7. a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and
8. the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.

Other property, plant and equipment and depreciation

Other property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any impairment losses. The cost of an item of other property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Expenditure incurred after items of other property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to statement of profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of other property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

Depreciation is calculated on the straight-line basis to write off the cost of each item of other property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

Buildings	Over the lease terms
Leasehold improvements	Over the shorter of the lease terms and 20%
Furniture, fixtures and other plant
and equipment	3 to 10 years

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Other property, plant and equipment and depreciation(continued)

Where parts of an item of other property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

An item of other property, plant and equipment including any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in the statement of profit or loss in the year the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.

Properties held for development for sale

The cost of leasehold land, which is held for development for sale, represents the cost of acquisition. Net realisable value is determined by reference to management estimates based on prevailing market conditions.

Properties under development for sale

Properties under development for sale are stated at the lower of cost and net realisable value and comprise land costs, construction costs, borrowing costs, professional fees and other costs directly attributable to such properties incurred during the development period.

Properties under development for sale are classified as current assets unless the construction period of the relevant property development project is expected to complete beyond the normal operating cycle. On completion, the properties are transferred to completed properties for sale.

Completed properties for sale

Completed properties for sale are stated at the lower of cost and net realisable value. Cost is determined by an apportionment of total land and construction costs attributable to the unsold properties. Net realisable value is determined by reference to the sales proceeds of properties sold in the ordinary course of business, less applicable variable selling expenses, or by management estimates based on prevailing market conditions.

Investment properties

Investment properties include both completed investment properties and investment properties under construction.

Completed investment properties are interests in land and buildings (including the leasehold property held as a right-of-use asset which would otherwise meet the definition of an investment property) held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the end of the reporting period.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investment properties(continued)

Investment properties under construction or development for future use as investment properties are classified as investment properties under construction. Such properties under construction are measured initially at cost, including transaction costs, and stated at fair value, subsequent to initial recognition, at the end of the reporting period when the fair value can be determined reliably.

Gains or losses arising from changes in the fair values of completed investment properties and investment properties under construction are included in profit or loss in the year in which they arise.

Any gains or losses on the retirement or disposal of a completed investment property or an investment property under construction are recognised in the statement of profit or loss in the year of the retirement or disposal.

If a property occupied by the Group as an owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under "Other property, plant and equipment and depreciation" for owned property and/or accounts for such property in accordance with the policy stated under "Right-of-use assets" for property held as a right-of-use asset up to the date of change in use, and any difference at that date between the carrying amount and the fair value of the property is accounted for as a revaluation in accordance with the policy stated under "Other property, plant and equipment and depreciation" above.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short- term leases. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-useassets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:

Leasehold land

Over the lease terms

If ownership of the leased asset is transferred to the Group by the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Leases(continued)

Group as a lessee (continued)

Right-of-useassets (continued)
When the right-of-use assets relate to interests in leasehold land held as inventories, they are subsequently measured at the lower of cost and net realisable value in accordance with the Group's policy for "inventories". When a right-of-use asset meets the definition of investment property, it is included in investment properties. The corresponding right-of-use asset is initially measured at cost, and subsequently measured at fair value, in accordance with the Group's policy for "investment properties".
Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying asset.

Group as a lessor

When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its as either an operating lease or a finance lease.

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. When a contract contains lease and non-lease components, the Group allocates the consideration in the contract to each component on a relative stand-alone selling price basis. Rental income is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee, are accounted for as finance leases.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments and other financial assetsInitial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial assets at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under HKFRS 15 in accordance with the policies set out for "Revenue recognition" below.

In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are solely payments of principal and interest ("SPPI") on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Group's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchase or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through"arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

the rights to receive cash flows from the asset have expired; or

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group's consolidated statement of financial position) when:

•

Investments and other financial assets(continued) Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in profit or loss.

This category includes derivative instruments and equity investments which the Group had not irrevocably elected to classify at fair value through other comprehensive income. Dividends on equity investments classified as financial assets at fair value through profit or loss are also recognised as other income in profit or loss when the right of payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

A derivative embedded in a hybrid contract, with a financial liability or non-financialhost, is separated from the host and accounted for as a separate derivative if the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised in the statement of profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset at fair value through profit or loss.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Derecognition of financial assets(continued)

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group's continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment of financial assets

The Group recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

General approach

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of financial assets(continued) General approach (continued)

Financial assets at amortised cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for trade receivables and contract assets which apply the simplified approach as detailed below.

Stage 1 - Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs

Stage 2 - Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs

Stage 3 - Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs

Simplified approach

For trade receivables and contract assets that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

For trade receivables that contain a significant financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in calculating ECLs with policies as described above.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group's financial liabilities include trade and other payables, bank and other loans, senior notes, corporate bonds and liabilities under cross-border guarantee arrangements.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial liabilities(continued) Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at amortised cost (loans and borrowings)

After initial recognition, bank and other loans and corporate bonds are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in profit or loss.

Senior notes

Senior notes issued by the Company that contain both liability and early redemption option (which is not closely related to the host contract) are classified separately into respective items on initial recognition. At the date of issue, both the liability and early redemption option components are recognised at fair value.

In subsequent periods, the liability component of the senior notes is carried at amortised cost using the effective interest method. The early redemption option is measured at fair value with changes in fair value recognised in profit or loss.

Transaction costs that relate to the issue of the senior notes are allocated to the liability and early redemption components in proportion to their relative fair values. Transaction costs relating to the early redemption option are charged to profit or loss immediately. Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortised over the period of the senior notes using the effective interest method.

Financial guarantee contracts

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the Group measures the financial guarantee contracts at the higher of: (i) the ECL allowance determined in accordance with the policy as set out in "Impairment of financial assets"; and (ii) the amount initially recognised less, when appropriate, the cumulative amount of income recognised.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Cash and cash equivalents

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Group's cash management.

For the purpose of the consolidated statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to use.

Perpetual capital securities

Perpetual capital securities with no contractual obligation to repay its principal or to pay any distribution are classified as part of equity.

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in the statement of profit or loss.

Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income tax(continued)

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:

when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition

Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

When the contract contains a financing component which provides the customer with a significant benefit of financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the Group and the customer at contract inception. When the contract contains a financing component which provides the Group with a significant financial benefit for more than one year, revenue recognised under the contract includes the interest expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in HKFRS 15.

Sale of properties
Revenue from the sale of properties is recognised at the point in time when the purchasers obtained the physical possession or the legal title of the inventories and the Group has present right to payment and the collection of the consideration is probable.
Construction and decoration services
Revenue from the provision of construction and decoration services is recognised over time, using an input method to measure progress towards complete satisfaction of the service, because the Group's performance creates or enhances an asset that the customer controls as the asset is created or enhanced. The input method recognises revenue based on the proportion of the actual costs incurred relative to the estimated total costs for satisfaction of the construction and decoration services.
Provision of management services
Revenue from the provision of management service is recognised over the scheduled period on a straight-line basis because the customer simultaneously receives and consumes the benefits provided by the Group.
Urban redevelopment business
Revenue from urban redevelopment business is recognised at a point in time, when the customer obtains control of the assets and the Group has present right to payment and the collection of the consideration is probable.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition(continued) Revenue from another source

Rental income is recognised on a time proportion basis over the lease terms. Variable lease payments that do not depend on an index or a rate are recognised as income in the accounting period in which they are incurred.

Other income

Interest income is recognised on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument to the net carrying amount of the financial asset.

Dividend income is recognised when the shareholders' right to receive payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. Contract assets are subject to impairment assessment, details of which are included in the accounting policies for impairment of financial assets.

Contract liabilities

A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).

Contract costs

Costs to fulfil a contract

Other than the costs which are capitalised as properties under development for sale and other property, plant and equipment, costs incurred to fulfil a contract with a customer are capitalised as an asset if all of the following criteria are met:

The costs relate directly to a contract or to an anticipated contract that the entity can specifically identify.
The costs generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations in the future.
The costs are expected to be recovered.

Costs of obtaining contracts

Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer it would not have incurred if the contract had not been obtained e.g., commission to sales agents. Incremental costs of obtaining a contract are capitalised when incurred if the costs relate to revenue which will be recognised in a future reporting period and the costs are expected to be recovered. Other costs of obtaining a contract are expensed when incurred.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Contract costs(continued)

The capitalised contract costs are amortised and charged to profit or loss on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. Other contract costs are expensed as incurred.

Share-basedpaymentsShare option scheme

The Company operates a share option scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations. Employees (including directors) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments ("Equity-Settled Transactions").

The cost of Equity-Settled Transactions with employees for grants is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an external valuer using a binomial model, further details of which are given in note 31 to the financial statements.

The cost of Equity-Settled Transactions is recognised in employee benefit expense, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

For awards that do not ultimately vest because non-market performance and/or service conditions have not been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Share-basedpayments(continued) Share option scheme (continued)

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Share award scheme

Where shares are acquired by the Share Award Scheme from the market or by electing for scrip in lieu of cash dividends, the total consideration of shares acquired from the market (including any directly attributable incremental costs) or under the scrip dividend scheme is presented as shares held for the Share Award Scheme and deducted from total equity.

Upon vesting, the related costs of the vested awarded shares purchased from the market and shares acquired under the scrip dividend scheme (dividend shares) are credited to shares held for the Share Award Scheme, with a corresponding decrease in the employee share-based compensation reserve for awarded shares and a decrease in retained earnings for dividend shares.

Other employee benefitsPension schemes

The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the "MPF Scheme") under the Mandatory Provident Fund Schemes Ordinance for those employees who are eligible to participate in the MPF Scheme. Contributions are made based on a percentage of the employees' basic salaries and are charged to statement of profit or loss as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently administered fund. The Group's employer contributions vest fully with the employees when contributed into the MPF Scheme. Where employees leave the scheme prior to the full vesting of the employer's contributions, the amount of forfeited contributions cannot be used to reduce the contributions payable by the Group.

The employees of the Group's subsidiaries which operate in Mainland China are required to participate in a central pension scheme (the "Pension Scheme") operated by the local municipal government. The subsidiaries are required to contribute certain percentages of their payroll costs to the Pension Scheme. The only obligation of the Group with respect to the Pension Scheme is to pay the ongoing contributions under the Pension Scheme. The contributions are charged to statement of profit or loss as they become payable in accordance with the rules of the Pension Scheme.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Dividends

Final dividends are recognised as a liability when they have been approved by the shareholders in a general meeting. Proposed final dividends are disclosed in the notes to the financial statements.

Interim dividends are simultaneously proposed and declared, because the Company's memorandum and articles of association grant the directors the authority to declare interim dividends. Consequently, interim dividends are recognised immediately as a liability when they are proposed and declared.

Foreign currencies

These financial statements are presented in RMB, which is the Group's presentation currency. The functional currency of the Company is Hong Kong dollars ("HK$") while RMB is used as the presentation currency because the Group's operation is mainly carried out in Mainland China. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss.

Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss with the exception of monetary items that are designated as part of the hedge of the Group's net investment of a foreign operation. These are recognised in other comprehensive income until the net investment is disposed of, at which time the cumulative amount is reclassified to statement of profit or loss. Tax charges and credits attributable to exchange differences on these monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss, respectively).

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign currencies(continued)

In determining the exchange rate on initial recognition of the related asset, expense or income on the derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date of initial transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of the advance consideration.

The functional currencies of certain subsidiaries, joint ventures and associates operating outside the PRC are currencies other than RMB. As at the end of the reporting period, the assets and liabilities of these entities are translated into RMB at the exchange rates prevailing at the end of the reporting period and their statements of profit or loss and other comprehensive income are translated into RMB at the weighted average exchange rates for the year. The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the statement of profit or loss.

For the purpose of the consolidated statement of cash flows, the cash flows of non-PRC entities are translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of non-PRC entities which arise throughout the year are translated into RMB at the weighted average exchange rates for the year.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Judgements

In the process of applying the Group's accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

Determining the timing of satisfaction of contracts related to sale of properties

The Group determined that the sales contract with customers requires the Group to complete the development of property before transferring the legal title of the relevant property to customers. The Group also determined that the Group does not have an enforceable right to payment from customers for performance completed to date before the transfer of legal title of the relevant property to customers. Consequently, the Group concluded that the timing of transfer of properties is at the point of time that the purchasers obtained the physical possession or the legal title of the completed property.

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately or leased out separately under a finance lease, the Group accounts for these portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Classification between investment properties and properties held for sale

The Group develops properties held for sale and properties held to earn rentals and/or for capital appreciation. Judgement is made by management on determining whether a property is designated as an investment property or a property held for sale. The Group considers its intention for holding the properties at the early development stage of the related properties. During the course of construction, the related properties under construction are accounted for as properties under development for sale included in current assets if the properties are intended for sale after their completion, whereas, the properties are accounted for as investment properties under construction included in investment properties if the properties are intended to be held to earn rentals and/or for capital appreciation. Upon completion of the properties, the properties held for sale are transferred to completed properties for sale and are stated at cost, while the properties held to earn rentals and/or for capital appreciation are transferred to completed investment properties. Investment properties, both under construction and completed, are subject to revaluation at the end of each reporting period.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)

Judgements(continued)

Property lease classification - Group as lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all the fair value of the commercial property, that it retains substantially all the significant risks and rewards incidental to ownership of these properties which are leased out and accounts for the contracts as operating leases.

Allocation of construction cost on properties under development for sale

When developing properties, the Group typically divides the development projects into phases. Costs directly related to the development of a phase are recorded as the cost of such phase. Costs that are common to each phase are allocated to each phase based on the saleable floor area of each phase as a percentage of the total saleable floor area of the entire project. The cost of the unit sold is determined by the floor area in square metres sold during the year multiplied by the average cost per square metre of that particular phase of the project.

Whether the presumption that investment properties stated at fair value are recovered through sale is rebutted in determining deferred tax

The Group has investment properties located in the PRC which are measured at fair value. Investment property is property held to earn rentals or for capital appreciation or both. In considering whether the presumption in HKAS 12 Income Taxes that an investment property measured at fair value will be recovered through sale is rebutted in determining deferred tax, the Group has developed certain criteria in making that judgement, such as whether an investment property is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time or through sale. In determining the Group's deferred tax on investment properties, the directors have determined that the presumption set out in HKAS 12 Income Taxes that investment properties measured using the fair value model are recovered through sale is rebutted. Continuous assessments on the presumption will be made by management at each reporting date.

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

Valuation of properties under development for sale and completed properties for sale

Properties under development for sale and completed properties for sale are stated at the lower of cost and net realisable value. The cost of each unit in each phase of development is determined using the weighted average method. The estimated net realisable value is the estimated selling price less selling expenses and the estimated cost of completion (if any), which are estimated based on the best available information.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)

Estimation uncertainty(continued)

Valuation of properties under development for sale and completed properties for sale (continued)

If there is an increase in costs to completion or a decrease in net sales value, the net realisable value will decrease and this may result in a provision for properties under development for sale and completed properties for sale. Such provision requires the use of judgement and estimates. Where the expectation is different from the original estimate, the carrying value and provision for properties in the periods in which such estimate is changed will be adjusted accordingly.

Investments in joint ventures and associates

The Group has cooperated with certain third parties to engage in certain property development projects through investments in and advances to joint ventures and associates. Significant estimation and judgement are required to assess the recoverability of the receivables from joint ventures and associates because the profitability of the future development of properties by the joint ventures and associates over a number of years can be difficult to predict and can be influenced by broader political and economic factors.

Estimation of fair value of investment properties and inventory properties acquired through business combinations

Investment properties, including completed investment properties and investment properties under construction, were revalued at each reporting date during the year based on the appraised market value provided by independent professional valuers. Inventory properties acquired through business combinations were evaluated at fair value at the date of acquisition. Such valuations were based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. In making the estimation, the Group considers information from current prices in an active market for similar properties and uses assumptions that are mainly based on market conditions existing at each reporting date. The valuations of investment properties under construction and inventory properties acquired through business combinations were based on the residual approach, and have taken into account the expended construction costs and the costs that will be expended to complete the development to reflect the quality of the completed development on the basis that the properties will be developed and completed in accordance with the Group's latest development plan.

PRC corporate income tax ("CIT")

The Group is subject to CIT in the PRC. As a result of the fact that certain matters relating to income taxes have not been confirmed by the local tax bureau, objective estimates and judgement based on currently enacted tax laws, regulations and other related policies are required in determining the provision for income taxes. Where the final tax outcome of these matters is different from the amounts originally recorded, the differences will impact on the income tax and tax provisions in the period in which the differences realise.

PRC land appreciation tax ("LAT")

The Group is subject to LAT in the PRC. The provision for LAT is based on management's best estimates according to the understanding of the requirements set forth in the relevant PRC tax laws and regulations. The actual LAT liabilities are subject to the determination by the tax authorities upon the completion of the property development projects. The Group has not finalised its LAT calculation and payments with the tax authorities for certain of its property development projects. The final outcome could be different from the amounts that were initially recorded.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)
Estimation uncertainty(continued) Deferred tax assets
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
Provision for expected credit losses on receivables from joint ventures and associates
The measurement of impairment losses under HKFRS 9 requires judgement, in particular, the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, such as risk of default, loss given default and collateral recovery, changes in which can result in different levels of allowances.
The Group's expected credit loss calculations on receivables from joint ventures and associates are based on assumptions about risk of default and loss given default. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculations, based on credit risks of the debtors or comparable companies in the market, existing market conditions as well as forward looking estimates at the end of each reporting period. It has been the Group's policy to regularly review its models in the context of actual loss experience and adjust when necessary.
At 31 December 2020, the carrying amount of the Group's receivables from joint ventures and associates was RMB21,499 million (2019: RMB26,183 million), and the ECLs are insignificant. Further details of the Group's receivables from joint ventures and associates, and the key assumptions and inputs used for impairment calculations are given in notes 18, 19 and 21 to the financial statements.
OPERATING SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their products and services and has four reportable operating segments as follows:
1. the property development segment develops and sells residential properties and retail shops, and sells land held for development;
2. the property leasing segment leases office units, retail shops and hotels to generate rental income and to gain from the appreciation in the properties' values in the long term;
3. the construction and decoration contracts and others segment engage in the construction of office premises and residential buildings and provides decoration services for external customers and for group companies, and provides interior decoration services to property buyers; and
4. the urban redevelopment business segment engages in the sale of land held for urban redevelopment.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

5. OPERATING SEGMENT INFORMATION (continued)

The Group's revenue from external customers from each operating segment is set out in note 6 to the financial statements.

Management monitors the results of the Group's operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on reportable segment profit or loss, which is a measure of adjusted profit or loss before tax. The adjusted profit or loss before tax is measured consistently with the Group's profit or loss before tax except that depreciation, other income and gains, other expenses, finance costs, share of profits or losses of joint ventures and associates, fair value gains or losses on investment properties and derivative financial instruments and head office and corporate income and expenses are excluded from such measurement. Segment assets and liabilities are not reported to the Group's chief operating decision maker regularly.

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

Information regarding the reportable segments is presented below.

			Construction
				and
				decoration	Urban
	Property	Property		contracts	redevelopment
	development	leasing		and others	business	Total
	RMB'000	RMB'000		RMB'000	RMB'000	RMB'000
Year ended 31 December 2020
Gross revenue from external
customers (note 6)	55,108,708	116,119		10,117,866	6,019,115	71,361,808
Less: Sales related taxes	( 250,321)	( 7,034)	(	24,724)	-	( 282,079)
Net revenue from
external customers	54,858,387	109,085		10,093,142	6,019,115	71,079,729
Inter-segment revenue	-	65,272		14,677,889	-	14,743,161
Reportable segment revenue	54,858,387	174,357		24,771,031	6,019,115	85,822,890
	__________	________	__________	_________	__________
Reportable segment profit	11,812,363	126,034		5,116,915	4,793,051	21,848,363
	__________	________	__________	_________	__________

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

5. OPERATING SEGMENT INFORMATION (continued)

			Construction
				and
				decoration	Urban
	Property	Property		contracts	redevelopment
	development	leasing		and others	business	Total
	RMB'000	RMB'000		RMB'000	RMB'000	RMB'000
Year ended 31 December 2019
Gross revenue from external
customers (note 6)	41,180,693	129,616		11,568,862	4,900,000	57,779,171
Less: Sales related taxes	( 259,853)	( 2,099)	(	36,801)	-	( 298,753)
Net revenue from
external customers	40,920,840	127,517		11,532,061	4,900,000	57,480,418
Inter-segment revenue	-	63,161		13,167,740	-	13,230,901
Reportable segment revenue	40,920,840	190,678		24,699,801	4,900,000	70,711,319
	__________	________		__________	_________	__________
Reportable segment profit	10,203,386	152,824		5,225,809	2,911,861	18,493,880
	__________	________		__________	_________	__________

Information about a major customer

During the years ended 31 December 2020 and 2019, no revenue from transactions with a single external customer amounted to 10% or more of the Group's total revenue.

Reconciliation of reportable segment revenue and profit or loss
	2020	2019
	RMB'000	RMB'000
Revenue
Reportable segment revenue	85,822,890	70,711,319
Elimination of inter-segment revenue	(14,743,161)	(13,230,901)
Consolidated revenue	71,079,729	57,480,418

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

5. OPERATING SEGMENT INFORMATION (continued)

Reconciliation of reportable segment revenue and profit or loss (continued)

		2020		2019
		RMB'000		RMB'000
Profit
Reportable segment profit		21,848,363		18,493,880
Elimination of inter-segment profits	(	3,687,578)	(	2,711,710)
Reportable segment profit derived
from the Group's external customers		18,160,785		15,782,170
Other income and gains		2,107,785		2,130,113
Other expenses	(	118,363)	(	115,456)
Depreciation	(	60,100)	(	60,590)
Finance costs	(	2,051,424)	(	1,366,250)
Share of losses of associates	(	28,923)	(	63,400)
Share of losses of joint ventures	(	19,425)	(	112,960)
Net increase in fair value of investment properties		1,597,354		1,622,065
Net increase in fair value of derivative
financial instruments		218,400		32,683
Unallocated head office and corporate expenses	(	308,303)	(	396,123)
Consolidated profit before tax		19,497,786		17,452,252

Geographical information

Geographical information is not presented since over 90% of the Group's revenue from external customers is generated in Mainland China and over 90% of the segment assets of the Group are located in Mainland China. Accordingly, in the opinion of the directors, the presentation of geographical information would provide no additional useful information to the users of these financial statements.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

6.	REVENUE, OTHER INCOME AND GAINS
	An analysis of the Group's revenue is as follows:
		2020	2019
		RMB'000	RMB'000
	Revenue from contracts with customers
	Sale of properties*	55,108,708	41,180,693
	Construction and decoration and others income	10,117,866	11,568,862
	Urban redevelopment business income	6,019,115	4,900,000
	Revenue from another source
	Gross rental income from investment
	property operating leases:
	Other lease payments, including fixed payments	116,119	129,616
		71,361,808	57,779,171
	Less: Sales related taxes	( 282,079)	( 298,753)
		71,079,729	57,480,418

The invoiced amount billed to buyers of properties was RMB60,529,087,000 (2019: RMB45,015,384,000), including value-added tax of RMB5,420,379,000 (2019: RMB3,834,691,000).

Revenue from contracts with customers

Disaggregated revenue information
For the year ended 31 December 2020

		Construction
		and	Urban
		decoration	redevelopment
	Sale of	income	business
	properties	and others	income	Total
	RMB'000	RMB'000	RMB'000	RMB'000
Timing of revenue recognition:
Goods transferred at a point in time	54,858,387	-	6,019,115	60,877,502
Services transferred over time	-	10,093,142	-	10,093,142
Total revenue from contracts
with customers	54,858,387	10,093,142	6,019,115	70,970,644

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

6. REVENUE, OTHER INCOME AND GAINS (continued) Revenue from contracts with customers(continued)

Disaggregated revenue information (continued)
Set out below is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information:
For the year ended 31 December 2020

		Construction
		and
		decoration	Urban
	Property	contracts	redevelopment
	development	and others	business	Total
	RMB'000	RMB'000	RMB'000	RMB'000
Revenue from contracts
with customers
External customers	54,858,387	10,093,142	6,019,115	70,970,644
Intersegment sales	-	14,677,889	-	14,677,889
	54,858,387	24,771,031	6,019,115	85,648,533
Intersegment adjustments
and eliminations	-	(14,677,889)	-	(14,677,889)
Total revenue from contracts
with customers	54,858,387	10,093,142	6,019,115	70,970,644

For the year ended 31 December 2019

		Construction
		and	Urban
		decoration	redevelopment
	Sale of	income	business
	properties	and others	income	Total
	RMB'000	RMB'000	RMB'000	RMB'000
Timing of revenue recognition:
Goods transferred at a point in time	40,920,840	-	4,900,000	45,820,840
Services transferred over time	-	11,532,061	-	11,532,061
Total revenue from contracts
with customers	40,920,840	11,532,061	4,900,000	57,352,901

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

6. REVENUE, OTHER INCOME AND GAINS (continued) Revenue from contracts with customers(continued)

Disaggregated revenue information (continued)
Set out below is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information: (continued)
For the year ended 31 December 2019

		Construction
		and
		decoration	Urban
	Property	contracts	redevelopment
	development	and others	business	Total
	RMB'000	RMB'000	RMB'000	RMB'000
Revenue from contracts
with customers
External customers	40,920,840	11,532,061	4,900,000	57,352,901
Intersegment sales	-	13,167,740	-	13,167,740
	40,920,840	24,699,801	4,900,000	70,520,641
Intersegment adjustments
and eliminations	-	(13,167,740)	-	(13,167,740)
Total revenue from contracts
with customers	40,920,840	11,532,061	4,900,000	57,352,901

The following table shows the amounts of revenue recognised in the current reporting period that were included in the contract liabilities at the beginning of the reporting period:

	2020	2019
	RMB'000	RMB'000
Revenue recognised that was included in contract
liabilities at the beginning of the reporting period:
Sale of properties	20,944,669	7,983,495
Construction and decoration and others income	1,002,756	1,399,787

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

6. REVENUE, OTHER INCOME AND GAINS (continued) Revenue from contracts with customers(continued)

Performance obligations
Information about the Group's performance obligations is summarised below:
Sale of properties
The performance obligation is satisfied when the physical possession or the legal title of the inventories is obtained by the purchaser.
Construction and decoration and others income
The performance obligation is satisfied over time as services are rendered. A certain percentage of payment is retained by customers until the end of the retention period as the Group's entitlement to the final payment is conditional on the satisfaction of the service quality by the customers over a certain period as stipulated in the contracts.

Urban redevelopment business income

The performance obligation is satisfied when the customer obtains control of the assets.

Other income and gains

An analysis of the Group's other income and gains is as follows:

	Notes	2020	2019
		RMB'000	RMB'000
Bank interest income		430,051	411,354
Interest income on amounts due from
associates and joint ventures		1,309,570	746,920
Forfeiture income on deposits received		42,733	55,645
Government subsidies		9,528	13,797
Gain on disposal of subsidiaries	36(a)	637	-
Gain on deemed disposal of subsidiaries
upon loss of control, net	36(b)	39,848	89,913
Gain on remeasurement of pre-existing
interests in joint ventures and an associate
to the date of obtaining control and acquisition	35(b)	-	246,349
Gain on bargain purchase	35(b)	38,146	351,316
Foreign exchange differences, net		-	15,939
Others		237,272	198,880
		2,107,785	2,130,113

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

7.	OTHER EXPENSES
		2020	2019
		RMB'000	RMB'000
	Charitable donations	22,783	12,979
	Premium on early redemption of senior notes	-	53,328
	Foreign exchange differences, net	28,686	-
	Net loss on disposal of items of other property,
	plant and equipment	4	234
	Others	66,890	48,915
		118,363	115,456
8.	FINANCE COSTS
	An analysis of finance costs is as follows:
		2020	2019
		RMB'000	RMB'000
	Interest on bank and other loans and other finance costs	2,355,189	2,122,688
	Interest on senior notes	1,887,659	1,433,320
	Interest on corporate bonds	1,234,666	958,700
	Total interest expense on financial liabilities not
	at fair value through profit or loss	5,477,514	4,514,708
	Less: Interest capitalised	(3,426,090)	(3,148,458)
		2,051,424	1,366,250

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

9. PROFIT BEFORE TAX

The Group's profit before tax is arrived at after charging/(crediting):

	Notes		2020		2019
			RMB'000		RMB'000
Cost of properties sold			41,045,790		30,447,999
Cost of services provided			8,702,067		8,899,438
Depreciation	15		107,013		73,186
Less: Amount capitalised		(	46,913)	(	12,596)
			60,100		60,590
Lease payments not included in the
measurement of lease liabilities			29,947		24,015
Auditor's remuneration			7,800		7,000
Employee benefit expenses (including
directors' remuneration (note 10)):
Director's fee			3,663		3,803
Salaries and other staff costs			1,312,089		1,212,259
Equity-settled share option expense			76,637		57,659
Pension scheme contributions			48,584		87,933
Less: Amount capitalised		(	594,621)	(	390,748)
			846,352		970,906
Foreign exchange differences, net*/^			28,686	(	15,939)
Interest income:
- Cash at banks		(	430,051)	(	411,354)
- Amounts due from associates and
joint ventures		(	1,309,570)	(	746,920)
Gain on disposal of subsidiaries	36(a)	(	637)		-
Gain on deemed disposal of subsidiaries
upon loss of control, net^	36(b)	(	39,848)	(	89,913)
Net loss on disposal of items of other
property, plant and equipment*	7		4		234
Gain on remeasurement of pre-existing
interests in joint ventures and an associate
to the date of obtaining control and acquisition^	35(b)		-	(	246,349)
Gain on bargain purchase^	35(b)	(	38,146)	(	351,316)

The amounts are included in "Other income and gains" in the consolidated statement of profit or loss.

* The amounts are included in "Other expenses" in the consolidated statement of profit or loss.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

10. DIRECTORS' REMUNERATION

Directors' remuneration for the year, disclosed pursuant to the Listing Rules, section 383(1)(a), (b),
and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information about Benefits of Directors) Regulation, is as follows:

	2020	2019
	RMB'000	RMB'000
Fees	3,663	3,803
Other emoluments:
Salaries, allowances and benefits in kind	22,853	24,097
Discretionary performance related bonuses	20,228	44,007
Equity-settled share option expense	3,502	6,867
Retirement scheme contributions	397	423
	46,980	75,394
	50,643	79,197

During the year and in prior years, certain directors were granted share options, in respect of their services to the Group, under the share option scheme of the Company, further details of which are set out in note 31 to the financial statements. The fair value of such options, which has been recognised in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amounts included in the financial statements for the current and prior years are included in the above directors' remuneration disclosures.

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

10. DIRECTORS' REMUNERATION (continued)

The remuneration of each of the directors is set out below:

		Salaries,	Discretionary
		allowances	performance	Equity-settled	Retirement
		and benefits	related	share option	scheme
	Fees	in kind	bonuses	expense	contributions	Total
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
2020
Executive Directors:
Kei Hoipang ("Mr. Kei",
also act as the
Chairman of the Group)	-	9,000	10,935	1,850	155	21,940
Xiao Xu	-	3,601	339	601	53	4,594
Lai Zhuobin
(Chief Executive)	-	4,501	4,985	635	53	10,174
Wu Jian@	-	5,751	701	-	41	6,493
Non-executive Director:
Kei Perenna Hoi Ting
("Ms. Kei")	2,400	-	3,268	416	95	6,179
Independent non-executive
Directors:
Zhang Huaqiao	421	-	-	-	-	421
Liu Ka Ying, Rebecca	421	-	-	-	-	421
Cai Suisheng	421	-	-	-	-	421
	3,663	22,853	20,228	3,502	397	50,643
	______	_______	_______	______	_____	_______
2019
Executive Directors:
Mr. Kei	-	9,252	12,993	2,725	90	25,060
Ji Jiande#	-	5,134	15,813	1,428	82	22,457
Xiao Xu	-	3,575	2,425	954	85	7,039
Lai Zhuobin
(Chief Executive)	-	3,819	6,409	954	85	11,267
Wu Jian@	-	2,317	2,469	-	22	4,808
Non-executive Director:
Ms. Kei	2,486	-	3,898	806	59	7,249
Independent non-executive
Directors:
Zhang Huaqiao	439	-	-	-	-	439
Liu Ka Ying, Rebecca	439	-	-	-	-	439
Cai Suisheng	439	-	-	-	-	439
	3,803	24,097	44,007	6,867	423	79,197
	______	_______	_______	______	_____	_______

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

10. DIRECTORS' REMUNERATION (continued)

Mr. Ji Jiande resigned as an executive director of the Company with effect from 10 September 2019.

Mr. Wu Jian was appointed as an executive director of the Company with effect from 12 September 2019 and resigned as an executive director of the Company with effect from 1 January 2021.

There was no arrangement under which a director waived or agreed to waive any remuneration during the year (2019: Nil).

11. FIVE HIGHEST PAID EMPLOYEES

The five highest paid employees during the year included two directors (2019: three directors), details of whose remuneration are set out in note 10 above. Details of the remuneration for the year of the remaining three (2019: two) highest paid employees who are neither a director nor chief executive of the Company are as follows:

	2020	2019
	RMB'000	RMB'000
Salaries, allowances and benefits in kind	11,403	6,114
Discretionary bonuses	11,294	13,174
Share-based payments	-	954
Retirement scheme contributions	137	101
	22,834	20,343

The emoluments of the three (2019: two) individuals who are neither a director nor chief executive of the Company with the highest emoluments are within the following bands:

	Number of employees
	2020	2019
HK$7,000,001 to HK$7,500,000	1	-
HK$8,000,001 to HK$8,500,000	1	-
HK$10,000,001 to HK$10,500,000	1	-
HK$11,000,001 to HK$11,500,000	-	1
HK$11,500,001 to HK$12,000,000	-	1
	3	2

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

FIVE HIGHEST PAID EMPLOYEES (continued)
No individual waived or agreed to waive any emoluments during the year.
During the year and in prior years, share options were granted to non-director and non-chief executive highest paid employees in respect of their services to the Group, further details of which are included in the disclosures in note 31 to the financial statements. The fair value of such options, which has been recognised in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amounts included in the financial statements for the current and prior years are included in the above non-director and non-chief executive highest paid employees' remuneration disclosures.
INCOME TAX
No provision for Hong Kong profits tax has been made as the Group did not generate any assessable profits arising in Hong Kong during the year (2019: Nil). Taxes on profits assessable in Mainland China have been calculated at the rates of tax prevailing in the cities in which the Group's subsidiaries operate.

		2020	2019
		RMB'000	RMB'000
Current charge for the year:
PRC CIT		4,778,145	4,495,200
PRC LAT		1,539,964	1,152,058
Dividend withholding tax		360,000	280,042
(Overprovision)/underprovision in prior years, net:
PRC CIT	(	18,231)	52,422
		6,659,878	5,979,722
Deferred (note 29)	(	536,186)	( 90,728)
Total tax charge for the year		6,123,692	5,888,994

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

12. INCOME TAX (continued)

A reconciliation of the tax expense applicable to profit before tax at the statutory/applicable rates for the jurisdictions in which the Company and the majority of its subsidiaries are domiciled to the tax expense at the effective tax rate is as follows:

			2020		2019
			RMB'000		RMB'000
	Profit before tax	19,497,786	17,452,252
	At the statutory/applicable rates of different jurisdictions		5,172,329		4,372,598
	Adjustments in respect of current tax of previous periods	(	18,231)		52,422
	Income not subject to tax	(	150,143)	(	188,829)
	Expenses not deductible for tax		953,202		547,804
	Effect of withholding tax at prevailing tax rate
	on the distributable profits of the Group's
	PRC subsidiaries		360,000		280,042
	Tax losses utilised from previous periods	(	85,393)	(	53,621)
	Tax losses not recognised		52,657		14,534
	LAT		1,539,964		1,152,058
	Tax effect of LAT deductible for PRC CIT	(	384,991)	(	288,014)
	Lower tax rates for specific provinces or enacted by
	local authority	(1,315,702)		-
	Tax charge at the Group's effective rate		6,123,692		5,888,994
13.	DIVIDENDS
			2020		2019
			RMB'000		RMB'000
	Interim dividends - HK43 cents (2019: HK38 cents)
	per ordinary share		2,140,142		1,786,604
	Proposed final dividends - HK58 cents
	(2019: HK45 cents) per ordinary share		2,693,469		2,220,403
			4,833,611		4,007,007
	The proposed final dividend for the year is subject to the approval of the Company's shareholders at
	the forthcoming annual general meeting.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

14. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

The calculation of the basic earnings per share amount is based on the profit for the year attributable to owners of the parent, adjusted for the distribution related to perpetual capital securities, and the weighted average number of ordinary shares of 5,515,607,000 (2019: 5,489,585,000) in issue less the weighted average number of shares held under the share award scheme (2019: Nil) during the year.

The calculation of the diluted earnings per share amount is based on the profit for the year attributable to owners of the parent, adjusted for the distribution related to perpetual capital securities. The weighted average number of ordinary shares used in the calculation is the weighted average number of ordinary shares in issue less the weighted average number of shares held under the share award scheme (2019: Nil) during the year, as used in the basic earnings per share calculation, and the weighted average number of ordinary shares assumed to have been issued at no consideration on the deemed exercise of all the dilutive potential ordinary shares into ordinary shares.

The calculations of the basic and diluted earnings per share are based on:

	2020	2019
	RMB'000	RMB'000
Earnings
Profit attributable to owners of the parent	13,016,635	11,269,044
Distribution related to perpetual capital securities	( 167,571)	( 167,153)
Profit used in the basic and diluted
earnings per share calculations	12,849,064	11,101,891
	Number of shares
	2020	2019
	'000	'000
Shares
Weighted average number of ordinary shares in issue less the
weighted average number of shares held under the share award
scheme during the year, used in the basic earnings per share
calculation	5,488,099	5,489,585
Effect of dilution - weighted average number of ordinary shares:
Share options	41,663	79,048
Weighted average number of ordinary shares in issue during
the year used in the diluted earnings per share calculation	5,529,762	5,568,633

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

15. OTHER PROPERTY, PLANT AND EQUIPMENT

					Furniture,
						fixtures
					and other
	Land and	Leasehold	plant and
	buildings	improvements	equipment		Total
	RMB'000	RMB'000	RMB'000		RMB'000
31 December 2020
At 1 January 2020
Cost		723,346		267,763		309,307		1,300,416
Accumulated depreciation	(	18,544)	(207,992)	(181,926) ( 408,462)
Net carrying value		704,802		59,771		127,381		891,954
	_______	________	________		________
At 1 January 2020, net of
accumulated depreciation		704,802		59,771		127,381		891,954
Additions		8,393		27,503		34,279		70,175
Acquisition of subsidiaries (note 35)		-		7,167		9,901		17,068
Depreciation	(	23,265)	(	62,068)	(	21,680)	(	107,013)
Disposals		-		-	(	28,708)	(	28,708)
Transfer to investment properties	(681,857)		-		-	(	681,857)
Disposal and deemed disposal
of subsidiaries (note 36)		-	(	1,419)	(	493)	(	1,912)
Exchange realignment		-		-		186		186
At 31 December 2020, net of
accumulated depreciation		8,073		30,954		120,866		159,893
	_______	________	________		________
At 31 December 2020:
Cost		49,882		301,014		324,472		675,369
Accumulated depreciation	(	41,809)	(270,060)	(203,606) ( 515,475)
Net carrying value		8,073		30,954		120,866		159,893
	_______	________	________		________

LOGAN GROUP COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS 31 December 2020

15. OTHER PROPERTY, PLANT AND EQUIPMENT (continued)

				Furniture,
					fixtures
				and other
	Land and	Leasehold	plant and
	buildings	improvements	equipment		Total
	RMB'000	RMB'000	RMB'000	RMB'000
31 December 2019
At 1 January 2019:
Cost		41,683	219,185		257,591		518,459
Accumulated depreciation	(	16,489)	( 158,350)	( 167,606) ( 342,445)
Net carrying value		25,194	60,835		89,985		176,014
	_______	________	________	________
At 1 January 2019, net of
accumulated depreciation		25,194	60,835		89,985		176,014
Additions		-	48,005		29,317		77,322
Acquisition of subsidiaries (note 35)		681,860	298		30,599		712,757
Depreciation	(	2,159)	( 49,824)	(	21,203)	(	73,186)
Disposals	(	93)	-	(	879)	(	972)
Deemed disposal of subsidiaries (note 36)		-	-	(	666)	(	666)
Exchange realignment		-	457		228		685
At 31 December 2019, net of
accumulated depreciation		704,802	59,771		127,381		891,954
At 31 December 2019:
Cost		723,346	267,763		309,307	1,300,416
Accumulated depreciation	(	18,544)	( 207,992)	( 181,926) ( 408,462)
Net carrying value		704,802	59,771		127,381		891,954

At 31 December 2020, right-of-use assets in respect of leasehold land with an aggregate carrying amount of approximately RMB7,003,000 (2019: RMB108,619,000) were included in land and buildings and the depreciation charged to profit or loss in the current year was RMB1,167,000 (2019: RMB1,207,000).

At 31 December 2020, certain of the Group's other property, plant and equipment were pledged to secure certain bank and other loans granted to the Group (note 39).

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

16.	INVESTMENT PROPERTIES
				Under
			Completed	construction		Total
			RMB'000	RMB'000		RMB'000
	Carrying amount at 1 January 2019		12,969,073	5,368,938		18,338,011
	Additions		31,138	995,555		1,026,693
	Acquisition of subsidiaries (note 35(b)(i))		1,326,506	4,257,550		5,584,056
	Disposals	(	10,418)	-	(	10,418)
	Transfer from completed properties for sale		26,507	-		26,507
	Transfer upon completion of construction		5,101,251	(5,101,251)		-
	Net gain from a fair value adjustment		883,136	738,929		1,622,065
	Exchange realignment		17,284	-		17,284
	Carrying amount at 31 December 2019
	and 1 January 2020		20,344,477	6,259,721		26,604,198
	Additions		93,847	666,351		760,198
	Acquisition of subsidiaries (note 35(b)(i))		199,968	-		199,968
	Transfer upon completion of construction		912,320	( 912,320)		-
	Transfer from other property,
	plant and equipment		681,857	-		681,857
	Net gain from a fair value adjustment		1,066,106	531,248		1,597,354
	Exchange realignment	(	49,511)	-	(	49,511)
	Carrying amount at 31 December 2020		23,249,064	6,545,000		29,794,064

The Group's completed investment properties and investment properties under development were revalued on 31 December 2020 based on valuations performed by APAC Asset Valuation and Consulting Limited, Greater China (Shanghai) Appraisal Limited and Vocation (Beijing) International Assets Appraisal Co., Ltd., independent professionally qualified valuers, at RMB29,794,064,000 (2019: RMB26,604,198,000).

At 31 December 2020, certain of the Group's investment properties were pledged to secure certain bank and other loans granted to the Group (note 39).

The Group's completed investment properties are leased to third parties under operating leases, further summary details of which are included in (note 17).

Fair value hierarchy

For the years ended 31 December 2020 and 2019, the fair value measurements of all investment properties of the Group were categorised within Level 3 of the fair value hierarchy and details of their movements are disclosed above.

In the opinion of the directors, for all investment properties that are measured at fair value, the properties have been used in their highest and best use.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

16. INVESTMENT PROPERTIES (continued)

Fair value hierarchy(continued)

The following table illustrates the fair value measurement of the Group's investment properties:

Fair value measurement

using significant

unobservable inputs (Level 3)

20202019

RMB'000RMB'000

Recurring fair value measurement for:
Leasehold land - Hong Kong	1,631,117	1,551,037
Commercial - Mainland China	21,617,947	18,793,440
Investment properties under construction	6,545,000	6,259,721
	29,794,064	26,604,198

During the year, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 (2019: Nil).

Below is a summary of the valuation techniques used and the key inputs to the valuation of investment properties:

		Significant
	Valuation techniques	unobservable inputs			Range
				2020	2019
Completed investment
properties
- Residential - Hong Kong	Direct comparison	Market unit sale rate	265,275-437,475	233,299-385,588
	approach	(RMB/sq.m.)
- Commercial - Mainland	Direct comparison	Market unit sale rate	12,538-147,724	17,600-150,380
China	approach	(RMB/sq.m.)
- Commercial - Mainland	Income approach	Risk-adjusted discount rate		3.3%-7.7%	3.3%-6%
China		Expected market rental growth	0%-5.5%	0%-10%
		Expected occupancy rate		73%-100%	95%-100%
		Expected yearly unit rental		205-1,934	147-2,008
		income (RMB/sq.m.)
		Capitalisation rate		3.0%-6.0%	3.5%-6.5%
Investment properties	Residual approach	Gross development value		13,000-18,200	13,200-64,391
under construction		(RMB/sq.m.)
		Budgeted construction costs to	2,947	1,124-11,451
		be incurred (RMB/sq.m.)
		Development profit		5%	8%
		Risk-adjusted discount rate		4.35%	4.35%-8%

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

INVESTMENT PROPERTIES (continued)
Fair value hierarchy(continued)
The valuations of completed investment properties were based on either the direct comparison method by reference to comparable market transactions, which is positively correlated to the market unit sale rate; or the income approach by capitalisation of net rental income derived from the existing tenancies with allowance for the reversionary rental income potential of the properties, which is positively correlated to the market rental growth rate, and negatively correlated to risk-adjusted discount rate and capitalisation rate.
The valuations of investment properties under construction were based on the residual approach, and have taken into account the expected construction costs and the costs that will be expended to complete the development to reflect the quality of the completed development on the basis that the properties will be developed and completed in accordance with the Group latest development plan. The valuations of investment properties under construction are positively correlated to the development profit and negatively correlated to the risk-adjusted discount rate.
LEASES
The Group as a lessor
The Group leases its investment properties (note 16) under operating lease arrangements. The terms of the leases generally also require the tenants to pay security deposits and provide for periodic rent adjustments according to the then prevailing market conditions. Rental income recognised by the Group during the year was RMB109,085,000 (2019: RMB127,517,000), details of which are included in note 6 to the financial statements.
At 31 December 2020, the undiscounted lease payments receivable by the Group in future periods under non-cancellable operating leases with its tenants are as follows:

	2020	2019
	RMB'000	RMB'000
Within one year	83,215	120,127
After one year but within two years	78,775	88,540
After two years but within three years	70,814	69,438
After three years but within four years	73,117	48,079
After four year but within five years	39,236	28,204
After five years	104,153	95,678
	449,310	450,066

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

18. INVESTMENTS IN ASSOCIATES

	2020	2019
	RMB'000	RMB'000
Share of net assets	2,037,249	2,009,087
Due from an associate (note)	1,451,400	1,451,400
	3,488,649	3,460,487

Note: As at 31 December 2020, the amount due from an associate is unsecured, bearing interest at a fixed interest rate of 7.98% (2019: 7.98%) per annum and repayable in 2022 (2019: 2022).

Particulars of the principal associates, which are unlisted corporate entities, are as follows:

				Proportion of ownership interest
	Form of	Place of	Particulars	Group's
	business	incorporation	of issued and	effective	Held by the	Held by a	Principal
Name of associate	structure	and business	paid-up capital	interest	Company	subsidiary	activity
Delight Prime Limited	Incorporated	BVI	Paid-up capital	20%	-	20%	Property
("Delight Prime")			US$50,000					development
(悅盛有限公司)
Zhuhai Ruiliang Property	Incorporated	The PRC	Registered capital	50%	-	50%	Property
Company Limited			RMB1,318,000,000					development
("Zhuhai Ruiliang")
(珠海市瑞梁房地产
有限公司)
Nanning Jinlin Real Estate	Incorporated	The PRC	Registered capital	50%	-	50%	Property
("Nanning Jinlin")			RMB1,140,000,000					development

(南宁锦麟置业有限公司)

Note: The English translation of the name is for reference only. The official names of these entities are in Chinese.

The directors consider that the Group can only exercise significant influence over Delight Prime, Zhuhai Ruiliang and Nanning Jinlin based on their board composition, and accordingly they are classified as associates of the Group. Zhuhai Ruiliang and Nanning Jinlin are accounted for as associates of the Group because the Group owns less than half of the voting rights even though the equity interests in these entities attributable to the Group are 50%. The associates are accounted for using the equity method in the consolidated financial statements.

Amount due from an associate represented an interest-bearing loan granted to an associate. Where applicable, an impairment analysis is performed at each reporting date by considering the probability of default of comparable companies with published credit ratings. As at 31 December 2020, the probability of default applied was 27.08% (2019: 26.89%) and the loss given default was approximately to 0% (2019: 0%) and the expected credit loss was considered to be minimal.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

18. INVESTMENTS IN ASSOCIATES (continued)

Summarised financial information of a material associate, adjusted for any differences in accounting policies, and reconciled to the carrying amounts in the consolidated financial statements, is disclosed below:

	2020		2019
	RMB'000	RMB'000
Gross amounts of Delight Prime
Cash and bank balances	672,510		14,363
Current assets (excluding cash and bank balances)	7,666,172	4,619,235
Non-current assets	16,449		15,712
Current liabilities	(6,938,516)	(3,157,630)
Equity	1,416,615	1,491,680
Revenue	-		-
Loss for the year	-	(	16,475)
Other comprehensive income	-		-
Total comprehensive loss	-	(	16,475)
Reconciled to the Group's interest in Delight Prime
Gross amounts of net assets of Delight Prime	1,416,615	1,491,680
Group's effective interest	20%		20%
Group's share of net assets of Delight Prime	283,323		298,336
Elimination of other downstream transaction	( 17,987)	(	15,013)
Amount due from Delight Prime	1,451,400	1,451,400
Carrying amount in the consolidated financial statements	1,716,736	1,734,723

All associates have been accounted for using the equity method in these financial statements and their financial year end dates are coterminous with that of the Group.

The following table illustrates the financial information of the Group's other associates that are not individually material:

	2020	2019
	RMB'000	RMB'000
Share of the associates' loss and total
comprehensive loss for the year	( 28,923)	( 60,105)
Aggregate carrying amount of the Group's
investments in the associates	1,771,913	1,725,764

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

19. INVESTMENTS IN JOINT VENTURES

	2020	2019
	RMB'000	RMB'000
Share of net assets	8,753,730	7,956,548
Due from joint ventures (note)	215,051	5,977,648
	8,968,781	13,934,196

Note: As at 31 December 2020, all amounts due from joint ventures are unsecured, bear interest at fixed interest rates ranging from 4.69% to 7.98% (2019: ranging from 3.4% to 7.3%) per annum and mature from two to five years (2019: from two to five years).

To address the increasing land premium in public bidding, the Group started in 2016 to secure land by teaming up with resourceful joint venture partners. These joint ventures are mainly engaged in urban development projects in Shenzhen, Nanning, Shantou and Zhongshan.

Details of the Group's interests in the principal joint ventures, which are accounted for using the equity method in the consolidated financial statements, are as follows:

				Proportion of ownership interest
	Form of	Place of	Particulars of	Group's
	business	incorporation	issued and	effective	Held by the	Held by a	Principal
Name of joint venture	structure	and business	paid-up capital	interest	Company	subsidiary	activity
Shenzhen Yingrui Industrial Co.,	Incorporated	The	Registered capital	50%	-	50%	Investment
Ltd. ("Shenzhen Yingrui") (note)		PRC	RMB10,000,000				holding
(深圳市盈睿实业有限公司)
LN Development (STIRLING)	Incorporated	Singapore	Registered capital	51%	-	51%	Property
PTE. LTD* ("LN Development")			SG$4,000,000				investment
Shenzhen Yurongshun Industrial	Incorporated	The	Registered capital	50%	-	50%	Investment
Co., Ltd. (note)		PRC	RMB10,000,000				holding
(深圳市裕荣顺实业有限公司)
Unicorn Bay Limited	Incorporated	BVI	Paid-up capital	50%	50%	-	Investment
("Unicorn Bay")			US$50,000				holding

(麒灣有限公司)

This entity is accounted for as a joint venture of the Group because the decisions about the relevant activities of this entity require the unanimous consent of both shareholders of this entity.

Note: The English translation of the names is for reference only. The official names of these entities are in Chinese.

The Group shares control in the above entities with other shareholders, accordingly they are classified as joint ventures of the Group. All the joint ventures in which the Group held interest are unlisted corporate entities whose quoted market prices are not available.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

19. INVESTMENTS IN JOINT VENTURES (continued)

Amounts due from joint ventures represented interest-bearing loans granted to joint ventures. Where applicable, an impairment analysis is performed at each reporting date by considering the probability of default of comparable companies with published credit ratings. As at 31 December 2020, the probability of default applied was 0.61% (2019: 0.65%) and the loss given default was approximately 0% (2019: ranging from 0% to 12.12%) and the expected credit loss was considered to be minimal.

Summarised financial information of the material joint ventures, adjusted for any differences in accounting policies, and reconciled to the carrying amounts in the consolidated financial statements, is disclosed below:

		2020	2019
		RMB'000	RMB'000
Gross amounts of LN Development
Cash and bank balances		557,539	718,052
Current assets (excluding cash and bank balances)		4,089,758	5,121,411
Non-current assets		182	496
Trade and other payables	(	106,677)	( 216,318)
Non-current liabilities	( 2,182,661)	( 3,441,806)
Equity		2,358,141	2,181,835
Revenue		3,432,994	1,637,939
Profit for the year		271,706	127,430
Other comprehensive income	(	95,400)	21,370
Total comprehensive income		176,306	148,800
Reconciled to the Group's interest in LN Development
Gross amounts of equity of LN Development		2,358,141	2,181,835
Group's effective interest		51%	51%
Group's share of equity of LN Development		1,202,652	1,112,736
Carrying amount in the consolidated financial statements		1,202,652	1,112,736

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

19.	INVESTMENTS IN JOINT VENTURES (continued)
			2020		2019
			RMB'000		RMB'000
	Gross amounts of Unicorn Bay
	Cash and bank balances		52,861		30,509
	Current assets (excluding cash and bank balances)		18,280,611		17,384,525
	Non-current assets		165,413		199,421
	Trade and other payables	(	2,047,030)	(	1,574,921)
	Non-current liabilities	(	6,403,675)	(	6,411,153)
	Equity		10,048,180		9,628,381
	Revenue		-		-
	Loss for the year	(	58,830)	(	33,351)
	Other comprehensive loss	(	3,185)		653
	Total comprehensive loss	(	62,015)	(	32,698)
	Reconciled to the Group's interest in Unicorn Bay
	Gross amounts of equity of Unicorn Bay		10,048,180		9,628,381
	Group's effective interest		50%		50%
	Group's share of equity of Unicorn Bay		5,024,090		4,814,191
	Amount due from the joint venture		-		773,868
	Carrying amount in the consolidated financial statements		5,024,090		5,588,059

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

19.	INVESTMENTS IN JOINT VENTURES (continued)
			2020		2019
		RMB'000		RMB'000
	Gross amounts of Shenzhen Yingrui
	Cash and bank balances		67		96
	Current assets (excluding cash and bank balances)		1,161,760		1,873,730
	Non-current assets		27,877		34,575
	Trade and other payables	( 1,561,043)	( 2,236,655)
	Equity	(	371,339)	(	328,254)
	Revenue		-		-
	Loss for the year	(	43,085)	(	171,052)
	Other comprehensive loss		-		-
	Total comprehensive loss	(	43,085)	(	171,052)
	Reconciled to the Group's interest in Shenzhen Yingrui
	Gross amounts of equity of Shenzhen Yingrui	(	371,323)	(	328,254)
	Group's effective interest		50%		50%
	Group's share of equity of Shenzhen Yingrui		-		-
	Amount due from the joint venture		-		1,700,000
	Carrying amount in the consolidated financial statements		-		1,700,000

The following table illustrates the aggregate financial information of the Group's joint ventures that are not individually material:

		2020		2019
		RMB'000		RMB'000
Share of joint ventures' loss for the year, net	(	128,580)	(	75,747)
Share of the joint ventures' other comprehensive loss		-		-
Share of the joint ventures' total comprehensive loss	(	128,580)	(	75,747)
Aggregate carrying amount of the Group's
investments in the joint ventures		2,742,039		5,533,401

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

20.	INVENTORIES
		2020	2019
		RMB'000	RMB'000
	Construction:
	Raw materials	506,068	181,654
	Property development:
	Properties held for development for sale	4,076,036	2,426,924
	Properties under development for sale	84,764,336	69,368,750
	Completed properties for sale	16,980,561	14,374,482
		105,820,933	86,170,156
		106,327,001	86,351,810
	Properties expected to be recovered
	within normal operating cycle:
	Within one year	68,928,503	45,140,361
	After one year	36,892,430	41,029,795
		105,820,933	86,170,156

All the completed properties for sale are stated at the lower of cost and net realisable value.

At 31 December 2020, certain of the Group's properties held for development for sale, properties under development for sale and completed properties for sale were pledged to secure certain bank and other loans granted to the Group (note 39).

Lump sum payments were made upfront to acquire the leased land from the PRC government with lease periods of 40 to 70 years, and no ongoing payments will be made under the terms of these land leases.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

21. TRADE AND OTHER RECEIVABLES, PREPAYMENTS AND OTHER ASSETS

		2020	2019
	Notes	RMB'000	RMB'000
Trade receivables	(i)	1,038,943	542,621
Prepayments and other receivables		11,328,903	7,297,423
Land deposits	(ii)	6,612,431	1,688,850
Amounts due from related companies	(iii)	657,904	292,621
Amounts due from non-controlling shareholders	(iii)	3,222,589	2,023,304
Amounts due from associates	(iv)	1,837,920	3,111,895
Amounts due from joint ventures	(v)	17,994,624	15,642,361
Costs of obtaining contracts	(vi)	484,408	628,391
Derivative financial instruments:
Senior notes redemption call options (note 27(xx))		300,030	100,328
	(vii)	43,477,752	31,327,794
Portion classified as current assets		(39,194,772)	(31,327,794)
Non-current portion		4,282,980	-

Notes:

The Group's trade receivables arise from the sale of properties, leasing of investment properties and provision of construction and decoration services.
Consideration in respect of properties is payable by the purchasers in accordance with the terms of the related sale and purchase agreements. The Group normally requires its customers to make payment of monthly/quarterly charges in advance in relation to the leasing of investment properties.
Since the Group's trade receivables are related to a number of diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. All trade receivables are non-interest- bearing.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

21. TRADE AND OTHER RECEIVABLES, PREPAYMENTS AND OTHER ASSETS (continued) Notes:

(continued)
An ageing analysis of the trade receivables as at the end of the reporting period, based on the revenue recognition date or invoice date and net of loss allowance, is as follows:

	2020	2019
	RMB'000	RMB'000
Current to 30 days	737,062	73,726
31 days to 90 days	289,126	447,875
91 to 180 days	5,134	20,280
181 to 365 days	7,621	740
	1,038,943	542,621

The amounts represented deposits for the acquisition of land.
The amounts due from related companies and non-controlling shareholders are unsecured, interest-free and repayable on demand.
Except for amounts of RMB226 million (2019: RMB413 million), which are trade receivables derived from the provision of construction and decoration services by the Group to the associates, with credit period of generally six months, other amounts due from associates are unsecured, interest-free and repayable on demand.
An ageing analysis of the trade receivables from associates as at the end of the reporting period, based on the invoice date and net of loss allowance, is as follows:

	2020	2019
	RMB'000	RMB'000
0 to 30 days	160,205	17,515
31 to 90 days	62,871	33,699
91 to 180 days	2,140	303,319
181 to 365 days	564	-
Over 365 days	-	58,211
	225,780	412,744

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

21. TRADE AND OTHER RECEIVABLES, PREPAYMENTS AND OTHER ASSETS (continued) Notes: (continued)

(continued)
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customers with similar loss patterns. The calculation reflects the probability- weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Based on the evaluation on the provision rate and gross carrying amount, the directors of the Company are of the opinion that the financial impact of ECLs in respect of these balances is considered immaterial. As at 31 December 2020 and 2019, the loss allowance for trade receivables was assessed to be minimal.
Except for the amounts of RMB4,009 million (2019: RMB4,109 million), which are trade receivables derived from the provision of construction and decoration services by the Group to the joint ventures, with credit period of generally six months, and amounts of RMB760 million as at 31 December 2019 which were unsecured, bearing interest at rates ranging from 5.70% to 7.30% per annum and repayable in 2020, other amounts due from joint ventures are unsecured, interest-free and repayable on demand.
An ageing analysis of the trade receivables from joint ventures as at the end of the reporting period, based on the invoice date and net of loss allowance, is as follows:

	2020	2019
	RMB'000	RMB'000
0 to 30 days	3,536,662	1,621,851
31 to 90 days	264,743	467,477
91 to 180 days	27,534	768,444
181 to 365 days	179,759	1,081,699
Over 365 days	-	169,187
	4,008,698	4,108,658

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customers with similar loss patterns. The calculation reflects the probability- weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Based on the evaluation on the provision rate and gross carrying amount, the directors of the Company are of the opinion that the financial impact of ECLs in respect of these balances is considered immaterial. As at 31 December 2020 and 2019, the loss allowance for trade receivables was assessed to be minimal.

The amount represents prepaid agency fees in connection with the sale of properties.

The financial assets included in the above balances relate to receivables for which there was no recent history of default. As at 31 December 2020 and 2019, the loss allowance was assessed to be minimal.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

22. ASSETS AND LIABILITIES UNDER CROSS-BORDER GUARANTEE ARRANGEMENTS

During 2020 and 2019, the Group entered into some cross-border guarantee arrangements with certain financial institutions, whereby certain onshore funding (i.e. in the PRC) and offshore funding (i.e. in Hong Kong) have been used as a pledge against advances to offshore (i.e. in Hong Kong) and onshore (i.e. in the PRC) for the Group's general working capital.

Pursuant to these arrangements which are made in compliance with the relevant rules and regulations promulgated by the State Administration of Foreign Exchange, funds are advanced to the Group's subsidiaries in Hong Kong by depositing a certain amount of funds in the relevant financial institutions by the Group's subsidiaries in the PRC or vice versa. The net cost of such arrangements is less than 1% per annum of the total funds advanced.

	2020		2019
	RMB'000		RMB'000
Assets under cross-border guarantee arrangements	4,947,191		566,140
Portion classified as current assets	(4,547,191)	(	566,140)
Non-current portion	400,000		-
Liabilities under cross-border guarantee arrangements	6,077,206		921,994
Portion classified as current liabilities	(5,376,575)	(	921,994)
Non-current portion	700,631		-

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

23.	CASH AND BANK BALANCES
		2020	2019
		RMB'000	RMB'000
	Cash and bank balances	42,869,161	40,705,113
	Portion classified as current assets	(41,039,900)	(39,724,570)
	Non-current portion	1,829,261	980,543

Notes:

Included in the cash and bank balances as at 31 December 2020 are guarantee deposits of RMB5,384,690,000 (2019: RMB4,409,526,000) which are placed in designated bank accounts and can only be applied in the designated property development projects in accordance with the applicable prevailing government regulations.
Included in the cash and bank balances as at 31 December 2020 are deposits of RMB292,626,000 (2019: RMB429,920,000) pledged to banks to secure the mortgage loans granted to the property purchasers.
Included in the cash and bank balances as at 31 December 2020 are bank deposits of RMB453,787,000 (2019: RMB336,946,000) pledged to secure certain bank and other loans granted to the Group (note 39).

Included in the cash and bank balances as at 31 December 2020 are non-currentnon-pledged time deposits of RMB1,660,000,000 (2019: RMB711,000,000)

At the end of the reporting period, the cash and bank balances and time deposits of the Group denominated in RMB amounted to RMB35,463,475,000 (2019: RMB33,391,551,000). RMB is not freely convertible into other currencies, however, under Mainland China's Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Non-pledged time deposits are made for varying periods of between seven days and six months depending on immediate cash requirements of the Group, and earn interest at the respective short term time deposit rates. Non- current portion of non-pledged time deposits are made for varying periods of between two and five years. All the bank balances and time deposits are deposited with creditworthy banks with no recent history of default.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

24.	TRADE AND OTHER PAYABLES
			2020	2019
		Notes	RMB'000	RMB'000
	Trade payables	(i)	21,683,379	24,127,252
	Other payables and accrued charges	(ii)	10,846,693	25,546,174
	Customer deposits received		796,333	24,998
	Rental and other deposits received		476,611	404,699
	Proceeds from asset-backed securities	(iii)	4,045,908	3,746,901
	Amounts due to non-controlling shareholders	(iv)	1,781,758	120,144
	Amounts due to related companies	(v)	310,635	582,596
	Amounts due to joint ventures	(vi)	9,152	1,271,164
	Amounts due to associates	(vii)	512,922	342,981
			40,463,391	56,166,909

Notes:

An ageing analysis of the trade payables as at the end of the reporting period, based on the invoice date, is as follows:

	2020	2019
	RMB'000	RMB'000
Current to 30 days	5,658,896	9,532,282
31 to 90 days	5,891,352	5,381,636
91 to 180 days	2,984,200	2,723,328
181 to 365 days	3,862,533	3,084,331
Over 365 days	3,286,398	3,405,675
	21,683,379	24,127,252

The trade payables are non-interest-bearing.

Other payables are non-interest-bearing and are expected to be settled within one year. Included in the balance as at 31 December 2020 is a dividend payable of RMB5,683,202,000 (2019: RMB5,367,887,000) to the immediate holding company.
The balance represented proceeds, deduction of certain percentage of upfront fee, received from specific purpose entities ("SPEs") set up by financial institutions in the PRC for the issuance of asset-backed securities, to which the Group has transferred the right of receipt of the remaining sales proceeds of certain properties to be delivered by the Group. Under the assignment arrangement between the Group and the SPEs, as and when the Group receives the sales proceeds from customers, the Group would remit to the holder of the asset-backed securities any cash flows it collects on behalf of the SPEs.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

TRADE AND OTHER PAYABLES (continued) Notes: (continued)
1. The amounts due to non-controlling shareholders are unsecured, interest-free and repayable on demand, except for amounts of RMB107,500,000 as at 31 December 2019 which bore interest at fixed interest rates ranging from 5.7% to 7.0% per annum.
2. The amounts due to related companies are unsecured, interest-free and repayable on demand.
3. The amounts due to joint ventures are unsecured, interest-free and repayable on demand.
4. The amounts due to associates are unsecured, interest-free and repayable on demand.
CONTRACT LIABILITIES
Contract liabilities mainly represent sales proceeds received from buyers in connection with the Group's pre-sales of properties. Balance as at 1 January 2019 was RMB16,785 million. Contract liabilities are expected to be settled within the Group's normal operating cycle. The increase in contract liabilities during the year was mainly due to the growth of the Group's contracted sales and an amount of RMB30,681 million (2019: RMB23,393 million) recognised in relation to the acquisition of subsidiaries, partially offset by the delivery of properties in the current year.
BANK AND OTHER LOANS

		2020					2019
	Effective					Effective
	interest					interest
	rate (%)	Maturity	RMB'000		rate (%)	Maturity	RMB'000
Current
Bank loans - secured	4.76-8.78	2021	7,452,110	4.76-8.50	2020	8,436,604
Bank loans - unsecured	3.75-6.65	2021	3,468,579	4.75-6.60	2020	2,908,737
Other loans - secured	6.18	2021	180,000	6.65-12.00	2020	2,133,200
Other loans - unsecured	9.50-9.90	2021	632,000	10.60-10.90	2020	9,700
			11,732,689				13,488,241
Non-current
Bank loans - secured	4.76-8.80	2022-2038	16,637,534	3.06-7.98	2021-2024	8,861,268
Bank loans - unsecured	5.00-6.90	2022-2025	4,134,344	5.23-6.65	2021-2023	2,810,611
Other loans - secured	9.40	2023	2,600,000	6.65-12.00	2021	1,831,633
			23,371,878				13,503,512
			35,104,567				26,991,753

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

26.	BANK AND OTHER LOANS (continued)
			2020	2019
			RMB'000	RMB'000
	Analysed into:
	Bank loans repayable:
	Within one year or on demand	10,920,689	11,345,341
	In the second year		5,280,242	5,125,043
	In the third to fifth years, inclusive	15,294,636	6,546,836
	Beyond five years		197,000	-
		31,692,567	23,017,220
	Other loans repayable:
	Within one year		812,000	2,142,900
	In the second year		2,600,000	1,831,633
			3,412,000	3,974,533
		35,104,567	26,991,753
	Portion classified as current liabilities
	- based on maturity terms of the loans	(	9,665,437)	( 9,443,571)
	- based on the accumulated pre-sales/sales amount
	of the property development projects and
	presented as other current liabilities (note 28)	(	2,067,252)	( 4,044,670)
	Non-current liabilities	23,371,878	13,503,512
	Notes:

Certain of the Group's bank and other loans are secured by the Group's equity interests in certain subsidiaries, bank deposits, land and buildings, investment properties, properties held for development for sale, properties under development for sale and completed properties for sale, details of which are disclosed in note 39 to the financial statements.
Except for certain bank and other loans of RMB5,557,038,000 (2019: RMB4,117,347,000)
and RMB3,357,410,000 (2019: RMB3,807,075,000) as at 31 December 2020 which were denominated in HK$ and Singapore dollars ("SG$"), respectively, all of the Group's bank and other loans were denominated in RMB.

LOGAN GROUP COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

31 December 2020

27.	SENIOR NOTES
		Effective
		interest rate	2020	2019
		(% per annum)	RMB'000	RMB'000
	US$200m Senior Notes (notes (i), (xx))	5.80	1,325,331	1,389,500
	US$450m Senior Notes (notes (ii), (xx))	5.42	2,958,417	3,129,141
	US$250m Senior Notes (notes (iii), (xx))	6.75	1,668,170	1,766,909
	SG$200m Senior Notes (notes (iv), (xx))	6.60	1,056,805	1,017,416
	US$300m Senior Notes (notes (v), (xx))	7.32	1,985,679	2,101,581
	US$100m Senior Notes (notes (vi), (xx))	7.62	661,267	697,852
	US$300m Senior Notes due 2021
	(notes (vii), (xx))	8.05	2,002,128	2,118,895
	US$80m Senior Notes (notes (viii), (xx))	9.74	-	553,331
	US$370m Senior Notes (notes (ix), (xx))	9.20	-	2,574,819
	US$50m Senior Notes (notes (x), (xx))	9.45	315,080	324,114
	US$300m Senior Notes due 2022
	(notes (xi), (xx))	7.78	2,004,634	2,123,224
	US$400m Senior Notes due 2023
	(notes (xii), (xx))	6.76	2,675,275	2,838,873
	US$100m Senior Notes due 2024
	(notes (xiii), (xx))	7.60	650,636	688,148
	US$300m Senior Notes due 2025
	(notes (xiv), (xx))	5.96	1,995,736	-
	US$180m Senior Notes due 2024
	(notes (xv), (xx))	5.42	1,271,017	-
	US$100m Senior Notes due 2024
	(notes (xvi), (xx))	4.53	654,689	-
	US$300m Senior Notes due 2025
	(notes (xvii), (xx))	5.49	1,956,350	-
	US$300m Senior Notes due 2026
	(notes (xviii), (xx))	5.03	1,944,702	-
			25,125,916	21,323,803
	Portion classified as current liabilities (note (xix))	( 7,192,358)	( 3,128,150)
	Non-current portion (note (xix))		17,933,558	18,195,653
	Analysed into:
	Repayable:
	Within one year		7,192,358	3,128,150
	In the second year		3,826,737	7,702,653
	In the third to fifth years, inclusive		12,162,119	10,493,000
	Beyond five years		1,944,702	-
			25,125,916	21,323,803

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

Original document
Permalink

Disclaimer

Logan Group Co. Ltd. published this content on 31 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2021 00:11:09 UTC.

Latest news about Logan Group Company Limited

Logan, KWG Slash Prices of Luxury Apartments By Half	Apr. 17	MT
Ares Management Plans to Buy Stake in Project Loan for Hong Kong Property Project	Apr. 10	MT
Logan Group Reports Wider Loss For 2023	Apr. 02	MT
Logan Group Company Limited Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 28	CI
Chinese developer Logan Group's liquidation proceedings dismissed	Feb. 16	RE
Logan Group Shares Surge 14% After Liquidation Cases Fall	Feb. 16	MT
Logan Group Adds New Co-Financial Advisor to Advise on Offshore Debt Restructuring	Jan. 18	MT
Chinese developer Logan's liquidation lawsuit adjourned on potential new petitioner	Jan. 15	RE
Hong Kong court adjourns liquidation proceedings against Chinese developer Logan	Jan. 14	RE
Winding-Up Petition Hearing Against Logan Group Adjourned to January	Dec. 04	MT
Chinese developer Logan Group seeks to postpone Dec 4 liquidation hearing - state media	Dec. 01	RE
Logan Group Company Limited Provides Update on the Progress on Its Offshore Holistic Liability Management Solutions	Nov. 02	CI
Hong Kong stocks rise ahead of US payrolls data, China market reopen	23-10-06	RE
Logan Group Company Limited Announces Change of Directors	23-10-03	CI
Logan Group Company Limited Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-30	CI
Winding-Up Petition Against Logan Group Adjourned to September	23-07-19	MT
China property shares rise on financial support policy	23-07-10	RE
Chinese Property Shares Rise Despite Cooler Home Prices	23-06-15	DJ
Winding Up Petition Hearing Against Logan Group and Units Adjourned to July 17	23-05-23	MT
Logan Group Company Limited Auditor Raises 'Going Concern' Doubt	23-04-27	CI
Logan Group Company Limited Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-30	CI
Logan Group Company Limited Appoints Liu Yongping as an Independent Non-Executive Director	23-03-30	CI
China developer Country Garden sees 2022 loss amid property market slump	23-03-12	RE
Logan Group Forecasts Up To 9 Billion Yuan in 2022 Net Loss	23-03-12	MT
China developer Logan looks to swap $3.4 billion bonds for 7-year notes - sources	23-03-10	RE

Chart Logan Group Company Limited

Duration

Period

More charts

Company Profile

Logan Group Co Ltd, formerly Logan Property Holdings Co Ltd, is an investment holding company principally engaged in property development in China. The Company operates its businesses through four segments. The Property Development segment develops and sells residential properties and retail shops. The Property Leasing segment is involved in leasing office units and retail shops. The Construction and Decoration Contracts segment provides construction of office buildings and residential buildings and decoration services for external clients and group companies. The segment also provides interior decoration services for property buyers. The Primary Land Development segment sells land held for development. The Company operates its businesses in Guangdong-Hong Kong-Macao Greater Bay Area (GBA), Yangtze River Delta region as well as city clusters in the southwestern and central parts of China.

Sector

Real Estate Development & Operations

Calendar

2024-08-27 - Q2 2024 Earnings Release (Projected)

More about the company

Income Statement Evolution

More financial data

Ratings for Logan Group Company Limited

Trading Rating

Investor Rating

ESG Refinitiv

B+

More Ratings

Analysts' Consensus

Sell

Buy

Mean consensus

HOLD

Number of Analysts

Last Close Price

0.4999 CNY

Average target price

0.554 CNY

Spread / Average Target

+10.83%

Consensus

EPS Revisions

Estimates Revisions

Annual profits - Rate of surprise

Company calendar

Sector Other Real Estate Development & Operations

	1st Jan change	Capi.
LOGAN GROUP COMPANY LIMITED	-11.48%	381M
MITSUI FUDOSAN CO., LTD.	+36.16%	27.94B
SUN HUNG KAI PROPERTIES LIMITED	-13.74%	26.97B
DLF LIMITED	+25.00%	26.95B
CHINA RESOURCES LAND LIMITED	-0.71%	25.32B
MITSUBISHI ESTATE CO., LTD.	+44.49%	22.58B
EMAAR PROPERTIES	+2.78%	19.59B
CHINA OVERSEAS LAND & INVESTMENT LTD.	+1.45%	19.52B
SUMITOMO REALTY & DEVELOPMENT CO., LTD.	+28.54%	16.23B
CK ASSET HOLDINGS LIMITED	-14.80%	14.98B

Other Real Estate Development & Operations