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Notes to the Consolidated Financial Statements

31st March 2017

29 GAIN ON DISPOSAL OF PROPERTIES AND DEFERRED GAIN

In January 2016, Alco Electronics Limited (“AEL”), a wholly-owned subsidiary of the Company, entered
into a sale and purchase agreement with an independent third party, Lead Harvest Group Limited (“Lead
Harvest”), for the disposal of a self-occupied property (Note 14) and certain investment properties
(Note 15) in Quarry Bay with carrying values of HK$23,791,000 and HK$236,310,000, respectively, at
a total net consideration of HK$533,769,000. The transaction was completed on 29th February 2016
(“Completion Date”).

Upon completion of the disposal, AEL and Lead Harvest entered into a tenancy agreement,
whereby AEL leased the aforesaid self-occupied property from Lead Harvest for its own use for 3
years commencing on the Completion Date. The fair value of the self-occupied property near the
Completion Date was determined by the Valuer. The excess of consideration over fair value has been
deferred and amortised over the lease period, resulting in the recognition of deferred gain amounting
to HK$33,446,000 (2016: HK$50,896,000) in the consolidated balance sheet and amortisation of
the deferred gain amounting to HK$17,450,000 (2016: HK$1,454,000) in the consolidated income
statement for the current year.

30 BANKING FACILITIES

As at 31st March 2017, banking facilities of approximately HK$1,177 million (2016: HK$1,314 million)
were granted by banks to the Group, of which approximately HK$175 million (2016: HK$233 million)
have been utilised by the Group. All banking facilities were supported by corporate guarantees given by
the Company and no facility is secured by charges over the use of certain assets of the Group (2016:
same).

31 COMMITMENTS

(a) Capital commitments

2017 2016
HK$’000 HK$’000

Moulds, plant and machinery and renovation
contracted but not provided for 5,189 11,878

ALCO HOLDINGS LIMITED ANNUAL REPORT 2017 101