NOTES TO THE FINANCIAL STATEMENTS

(Continued)
(Expressed in Hong Kong dollars unless otherwise indicated)

12. Interest in an associate (Continued)

(b) Summary financial information of an associate

Summarised financial information of the associate, adjusted for any differences

in accounting policies and reconciled to the carrying amount in the consolidated
financial statements, is disclosed below:

DCH Auto Group

(USA) Limited
2016 2015
$000 $000

Gross amounts of the associates

Current assets 634,160 768,656
Non-current assets 133,270 122,008
Current liabilities (219,794) (283,820)
Equity (547,636) (606,844)

Revenue 511,522 473,004

(Loss)/profit from continuing operations (53,642) 68,690

Other comprehensive income (5,566) (5,428)

Total comprehensive income (59,208) 63,262

Dividend declared 2,199,154

Reconciled to the Groups interest in an associate

Gross amounts of net assets of the associate 547,636 606,844
Groups effective interest 50% 50%
Groups share of net assets of the associate 273,818 303,422

Carrying amount in the consolidated financial

statements 273,818 303,422

99 WING ON COMPANY INTERNATIONAL LIMITED ANNUAL REPORT 2016

 NOTES TO THE FINANCIAL STATEMENTS
(Continued)
(Expressed in Hong Kong dollars unless otherwise indicated)

12. Interest in an associate (Continued)

(c) On 2 October 2014, the associate of the Group sold its entire issued and
outstanding shares of a subsidiary (the disposal group) to a third party. The
disposal group was engaged in automobile dealerships and related business in
USA.

The gain on disposal shared by the Group for the year ended 31 December
2014 was $373,847,000. A portion of the consideration amounting to
US$33,454,000 was paid into an escrow account during 2014 and consisted of
cash of US$10,954,000 and listed shares of the buyer (the shares) amounting
to US$22,500,000. The cash and shares were held in escrow until 1 July 2016,
whereafter they were expected to be transferred to the associate, less any
successful claims made under warranties provided in the sale and purchase
agreement.

US$12,100,000 of this escrow balance has been returned to the associate on

20 July 2016 and after the disposal of all the shares, the escrow balance at 31
December 2016 was US$25,088,000 (2015: US$40,133,000).

Up to 31 December 2016, claims amounting to US$355,000 ($2,800,000)

have been agreed with the buyer and accounted for in the associates financial
statements. During the period, the buyer has also made potential claims which
are currently under negotiation and the outcome is uncertain. The directors of
the associate have agreed to leave US$8,950,000 ($69,300,000) in the escrow
account pending agreement of these claims.

The Group is not in a position to assess the full potential liability of the claims
made with certainty but based on discussions with legal counsel, believe that
the Groups share of the provision held for these claims of $34,700,000 which
is included in the above summary of financial information and accounted for in
determining the Groups share of net assets is appropriate in light of the current
circumstances.

ANNUAL REPORT 2016 WING ON COMPANY INTERNATIONAL LIMITED 100