TNAG-1812-FCO40-2573-Preservation-of-Ohel-Leah-Synagogue-in-Hong-Kong-1988 — Page 119

The following is a table which gives a breakdown of the Group's Profit/Loss for the 1987 Financial Year ended December 31, 1987:

Operating Profit

Percentage

1987

1986

Change

($HK,000)

Banking and finance

(70.7)

7,377.9

(100.9)

Property investment

1,107.2

(1,398.5)

Trading

10,105.9

4,464.9

126.3

Insurance

(4,858.7)

930.9

(421.9)

Financial agent,

165.1

(886.7)

investment service

Investment holding

and others

(16,960.4)

(35,987.2)

(52.9)

(10,511.6)

(25,598.5)

(58.9)

The Turnover of the Banking and Finance Division fell from $HK66.64 million in 1986 to $HK7.92 million in 1987.

Part of this decline in Turnover was due to Panin Holdings's 60 percent holding in Xiamen International Bank being reduced to 49 percent during 1986.

The contribution of the Banking and Finance Division to Profit has changed from a positive to a negative contribution, with the Banking and Finance Division recording a loss of $HK70,700 in 1987 compared with a profit of $HK7.38 mil-

lion in 1986.

The loss attributable to the Banking and Finance Division was due to lower Operating Profit Margins in 1987 than in 1986, and the $HK9-million Contingent Liability attribut-

able to this Division.

The reasons for the low Operating Profit Margins in 1987 were heavy competition and low interest rates.

Panin Holdings's insurance operations, as with the Group's banking and finance operations, has fallen from profitability, recording a Loss of $HK4.86 million in 1987 compared with a Profit of $HK930,988 in 1986.

The Group's worst-performing division continues to be 'investment holding and others', where a loss of $HK16.96

million was incurred on a Turnover of $HK12,000 in 1987! This compares with a loss of $HK35.99 million in 1986 on a Turnover of approximately $HK4,000!

As with the 1986 Annual Report, the 1987 Annual Report is far from informative on exactly how the Group's losses came about.

However, the Group's Property Division and Trading Division improved over 1986. The Group's Property Divi- sion turned round from a loss of $HK1.39 million in 1986 to a profit of $HK1.11 million in 1987.

Turnover for the Trading Division increased 50.99 per- cent, from $HK72.65 million in 1986 to $HK109.69 in 1987, and profitability increased from $HK4.46 million in 1986 to $HK10.11 million in 1987.

When the Group was asked by TARGET as to why Panin Holdings had performed so badly, the answer was simply,

'No comment'.

The large number of dormant associate and subsidiary

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