Financial Statements and Related Announcement::Second Quarter and/ or Half Yearly Results

Hiap Hoe Limited (Registration No.: 199400676Z) UNAUDITED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND FIRST HALF YEAR ENDED 30 JUNE 2017 PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF- YEAR AND FULL YEAR RESULTS 1(a) An income statement and statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year.

The Group

3 months ended 6 months ended

30-Jun-17 30-Jun-16 30-Jun-17 30-Jun-16

$'000 $'000 % $'000 $'000 %

Revenue 23,214 23,957 (3.1) 48,532 43,697 11.1

Other items of income Dividend income	632	514	23.0	1,194	852	40.1
Financial income	762	386	97.4	1,580	595	165.5
Other income 1,176 1,268 (7.3) 3,678 15,471 (76.2)
2,570	2,168	18.5	6,452	16,918	(61.9)
Changes in development properties	(986)	(1,944)	(49.3)	(6,078)	(1,944)	212.7
Employee benefits expense	(8,127)	(6,211)	30.8	(14,801)	(12,120)	22.1
Depreciation expense	(5,644)	(5,156)	9.5	(10,803)	(10,411)	3.8
Other expenses	(8,605)	(8,974)	(4.1)	(16,506)	(17,294)	(4.6)
Finance cost	(1,768)	(3,016)	(41.4)	(3,339)	(6,581)	(49.3)

Fair value changes in financial

instruments 3,136 97 3,133.0 6,490 (346) (1,975.7)

Foreign exchange (loss)/gain (1,806) (2,412) (25.1) 547 (2,851) (119.2)

Profit/(loss) before tax	1,984 (1,491)	(233.1)	10,494 9,068	15.7
Income tax expense	(536) (1,621)	(66.9)	(1,947) (5,529)	(64.8)
Profit/(loss) for the period	1,448 (3,112)	(146.5)	8,547 3,539	141.5
Attributable to : Owners of the Company	1,441 (3,097)	(146.5)	8,523 3,536	141.0
Non-controlling interests	7 (15)	(146.7)	24 3	700.0
Total	1,448 (3,112)	(146.5)	8,547 3,539	141.5

Statement of Comprehensive Income for the Group for the Second Quarter and First Half Year Ended 30 June 2017

The Group

3 months ended 6 months ended

30-Jun-17 30-Jun-16 30-Jun-17 30-Jun-16

$'000 $'000 $'000 $'000

Profit/(loss) for the period 1,448 (3,112) 8,547 3,539 Other comprehensive income items that may be reclassified subsequently to profit or loss

Foreign currency translation (1,278) (4,486) 2,069 (3,695) Fair value loss on net investment hedge - - - (45) Other comprehensive (loss)/income for the period, (1,278) (4,486) 2,069 (3,740)

net of tax of nil

Total comprehensive income/(loss) for the period 170 (7,598) 10,616 (201)

Attributable to :
Owners of the Company	163 (7,583)	10,592 (204)
Non-controlling interests	7 (15)	24 3
Total comprehensive income/(loss) for the period	170 (7,598)	10,616 (201)

Additional Information

Profit from operation is determined after charging / (crediting):

The Group

3 months ended 6 months ended

30-Jun-17 $'000	30-Jun-16 $'000	%	30-Jun-17 $'000	30-Jun-16 $'000	%
4,722	4,176	13.1	8,951	8,349	7.2
922	980	(5.9)	1,852	2,062	(10.2)
(17)	(3)	466.7	(73)	(6)	1,116.7

Depreciation of property, plant and equipment

Depreciation of investment properties Gain on disposal of property, plant and equipment

held for sale Property, plant and equipment written off	- - - 12		NM NM	- (13,203) ⁽¹⁾ - 12		NM NM
Fair value changes in held-for-trading investments	(3,118) 335		(1,030.7)	(6,466) 1,489		(534.3)
Fair value changes in derivative instruments	(18) (432)		(95.8)	(24) (1,143)		(97.9)
Impairment of trade receivables	79	547	(85.6)	98	547	(82.1)
Impairment of trade receivables written back	-	-	NM	(448)	-	NM
Bad debts written off - trade	-	11	NM	33	11	200.0
(Gain)/loss on disposal of investments	(101)	6	(1,783.3)	(87)	66	(231.8)

Gain on disposal of investment property

Write back of other provision - - NM (999) ⁽²⁾ - NM

NM - Not meaningful

Notes:

⁽¹⁾ This relates to the gain on disposal of 206 Bourke Street in Melbourne.

(2) This relates to the write back of provision for tenancy and contract matters arising from the disposal of our

Australia properties.

1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

The Group The Company

30-Jun-17 31-Dec-16 30-Jun-17 31-Dec-16

$'000 $'000 $'000 $'000

Non-Current Assets Property, plant and equipment	805,805 727,107 293 336
Investment properties	170,786 171,494 - -
Investment in subsidiaries	- - 168,417 168,417
Investment in joint venture	- - 11,130 9,279
Other assets	646 28,605 - -
Other receivables	43 52 - -
Due from subsidiary, non-trade	- - 105,820 103,870
Deferred tax assets	2,707 2,963 - -
979,987 930,221 285,660 281,902
Current Assets
Cash and short-term deposits	14,646 28,939 112 5,511
Other investments⁽¹⁾	107,775 91,017 - -
Trade and other receivables	8,223 8,533 - -
Other assets	28,303 683 - -
Derivatives assets	105 - - -
Prepaid operating expenses	677 651 5 7
Due from subsidiaries, trade	- - 102 4
Due from subsidiaries, non-trade	- - 292,827 245,902
Due from related companies, trade	1 6 - -
Development properties	164,359 150,927 - -
Completed properties for sale	52,681 52,681 - -
Inventories	2,072 2,044 - -
378,842 335,481 293,046 251,424

Current Liabilities Trade and other payables	16,091	21,019	26	65
Other liabilities	34,386	10,048	263	528
Dividend payable	32	-	-	-
Derivatives - liabilities	284	203	-	-
Due to subsidiaries, trade	- - 4			4
Due to subsidiaries, non-trade	- - 108,098			60,504
Due to related companies, trade	44 54 -			8
Interest-bearing loans and borrowings	492,302 341,327 27			27

Tax payable 3,391 2,072 198 81

546,530 374,723 108,616 61,217

Non-Current Liabilities Other liabilities	4,046 29,573	- -
Interest-bearing loans and borrowings	154 58,173	11 24
Deferred tax liabilities	83,407 84,419	- -
87,607 172,165	11 24
Net Assets	724,692 718,814	470,079 472,085
Equity attributable to owners of the Company
Share capital	84,445 84,445	84,445 84,445
Treasury shares	(1,101) (1,101)	(1,101) (1,101)
Reserves	637,772 631,886	386,735 388,741
721,116 715,230	470,079 472,085
Non-controlling interests	3,576 3,584	- -
Total Equity	724,692 718,814	470,079 472,085

Net Current (Liabilities)/Assets⁽²⁾ (167,688) (39,242) 184,430 190,207

Notes:

⁽¹⁾ This included short-term commercial papers and trading investments.

⁽²⁾ The Group is in a net current liabilities position mainly due to maturity of the long-term borrowings within the

next 12 months. The Group has sufficient banking facilities available to refinance the portion of borrowings

which are maturing within the next 12 months.

1(b)(ii) Aggregate amount of Group's borrowings and debts securities. Amount repayable in one year or less, or on demand

($'000)

As at 30 Jun 17
Secured	Unsecured
492,302	-

As at 31 Dec 16
Secured	Unsecured
341,327	-

Amount repayable after one year

($'000)

As at 30 Jun 17
Secured	Unsecured
154	-

As at 31 Dec 16
Secured	Unsecured
58,173	-

Details of any collateral

The above borrowings are from financial institutions and are secured by the following:

1. Legal mortgages on the Group's property, plant and equipment, investment properties, development properties and properties for sale (collectively, the "Properties");

2. Legal assignment of all rights and benefits under the sales and purchase agreements and/or tenancy agreements;

3. The building contracts of certain Properties;

4. Assignment of all insurance policies for certain Properties;

5. Deed of subordination to subordinate all loans and advances from the Company to the facilities;

6. Corporate guarantees given by the Company; and

7. A charge over certain trading investments, cash and short-term deposits.