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RNS

Audited financial results

Released 11:32 08-Mar-2017

RNS Number : 8751Y
Vietnam Infrastructure Limited
08 March 2017
 

Vietnam Infrastructure Limited

Audited financial results for the six months ended 31 December 2016

Vietnam Infrastructure Limited ("VNI" or "the Company") today announces its interim results for the six months ended 31 December 2016 ('the period').

Financial highlights:

·     Net Asset Value ("NAV"):

·     Private Equity Shares: USD79.6 million

·     NAV per share:

·     Private Equity Shares: USD0.23

Operational highlights:

·     During the interim period, the Company announced two significant asset sales: 1) In August 2016, the Company reached agreement to sell the BTS portion of the Southeast Asia Telecommunications Holdings Pte. Ltd. (SEATH) portfolio to OCK Vietnam Towers Ltd for USD50 million. This transaction closed in December 2016, and the Company fully received the proceeds in January 2017; 2) In early November 2016, the Company received an out-of-court cash settlement of USD2.37 million related to the sale of the Long An SEA asset.

·     These sales leave the Company with one remaining asset to be divested, the IBS portion of the SEATH portfolio. The Board is evaluating options to dispose of this asset as soon as practicable, and expects to complete the realisation of the Private Equity Portfolio by 30 June 2017.

·     On 31 January 2017, the Company announced the distribution of USD65.0 million which will be paid to PES shareholders on 14 March 2017 based on the record date 24 February 2017. This represented USD0.1856 for each PES currently in issue.

The financial statements will be posted to shareholders and are available on the Company's website at www.vinacapital.com/vni.         

Notes to Editors:

About VinaCapital

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of USD1.8 billion in assets under management. VinaCapital's expertise spans a full range of asset classes including capital markets, private equity, real estate, venture capital, and fixed income.

The firm has three closed-ended funds that trade on the London Stock Exchange: VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, as well as VinaLand Limited and Vietnam Infrastructure Limited, which trade on the AIM. VinaCapital also manages the Forum One - VCG Partners Vietnam Fund, one of Vietnam's largest open-ended UCITS-compliant funds.

Additionally, VinaCapital co-manages the DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson, and holds a stake in VinaWealth, a locally incorporated fund management company. For more information, please visit www.vinacapital.com.

 Enquiries:

Jonathan Luu

VinaCapital Investment Management Limited

Investor Relations

+84 8 3821 9930

Jonathan.luu@vinacapital.com

 

Joel Weiden

VinaCapital Investment Management Limited

Communications

+84 8 3821 9930

joel.weiden@vinacapital.com

 

Philip Secrett

Grant Thornton UK LLP, Nominated Adviser

+44 (0)20 7383 5100

philip.j.secrett@uk.gt.com

 

David Benda / Hugh Jonathan

Numis Securities Limited, Broker

+44 (0)20 7260 1000

funds@numis.com

 



Dear Shareholders,

 

The first six months of the current financial year have been notable for the considerable progress the Management and the Board of the Company have made with respect to the Company's ongoing restructuring.

 

Asset Sales

 

During the interim period, the Company announced two significant asset sales:

 

·     Southeast Asia Telecommunications Holdings Pte. Ltd. (SEATH): In August 2016, the Company reached agreement to sell the BTS portion of the portfolio to OCK Vietnam Towers Ltd for USD50 million. This transaction closed in December 2016, and the Company fully received the proceeds in January 2017. An additional working capital adjustment of approximately USD1.6 million is expected to be received in May 2017.

·     Long An SEA: In early November 2016, the Company received an out-of-court cash settlement of USD2.4 million and the asset was transferred to the buyer.

Also in late November 2016, the Company received the second and final payment related to the sale of Vina-CPK, which was previously announced in June 2016.

 

These sales leave the Company with one remaining asset to be divested, the IBS portion of the SEATH portfolio. The Board is actively evaluating options to dispose of this asset as soon as practicable.

 

Shareholder Distribution

 

On 31 January 2017, the Company announced an aggregate distribution to Private Equity Shareholders of USD65.0 million, representing USD0.1856 for each Private Equity Share in issue, in either cash or, if eligible, in VVF shares. As announced on 1 March 2017, 81% or USD52.7 million of the distribution will be paid in cash, and the remaining 19% or USD12.3 million will be applied by the Company for VVF shares.

 

Fund Wind-Up

 

With these developments, the Company is well on its way to wind up operations. Pursuant to AIM rules, since the Company has disposed of substantially all of its assets, it now has until January 2018 to wind up the fund in an orderly manner. The Board will endeavour to realise the remaining asset well before that deadline.

 

On or before 30 June 2017, the Company intends to hold an Extraordinary General Meeting at which a proposal to wind-up the fund will be considered. Subject to the sale of the remaining asset, the Company anticipates making an additional distribution before or in conjunction with the commencement of the voluntary liquidation process.

 

Please continue to directly contact me or any of the Directors if you have an issue or concern you wish to discuss. We appreciate your continued support.

 

Rupert Carington

Chairman

Vietnam Infrastructure Limited

8 March 2017


CONDENSED CONSOLIDATED BALANCE SHEET

 



As at

31 December 2016

As at

30 June 2016

 



(Unaudited)

(Audited)

 


Note

USD'000

USD'000

 





 

ASSETS                        




 





 

Non-current assets




 





 

Investment properties

13

-

-

 

Property, plant and equipment

14

-

-

 

 

Total non-current assets

 


─────

-

─────

       ──────

-

──────





 

Current assets




 





 

Prepayment for acquisition of Long An Industrial Service project

 

6

-

 

2,371

 

Trade and other receivables

8

24

4,455

 

Financial assets at fair value through profit or loss

9

-

38,245

 

Cash and cash equivalents

10

20,644

20,408

 



──────

──────

 



20,668

65,479

 

Assets classified as held for sale

11

70,909

70,252

 

 

Total current assets

 


──────

91,577

──────

──────

135,731   ──────

 

Total assets

 


91,577

══════

135,731  

══════

 

 



 



As at



31 December 2016

30 June 2016



(Unaudited)

(Audited)


Note/page

USD'000

USD'000





EQUITY AND LIABILITIES








EQUITY








Equity attributable to shareholders of the Company






Share capital

Note 15

-

-

Foreign currency translation reserve


(7,146)

(6,566)

Accumulated gains


7,146

6,566



             ─────

-

                     ─────

             ─────

-

                     ─────

Non-controlling interests


-

-



─────

──────

Total equity


-

-



═════

══════

LIABILITIES








Current liabilities




Short-term borrowings

Note 16

-

9,042

Trade and other payables

Note 18

2,554

1,868

Payable to related parties

Note 19

209

531



─────

2,763

─────

11,441

Liabilities directly associated with assets classified as held for sale

Note 11(d)

2,822

2,727



─────

─────

Total current liabilities (excluding net assets attributable to holders of the Company and holders of non-controlling interests)


 

 

5,585

 

14,168

Net assets attributable to holders of the Company

Page 9

79,637

 

115,480

Net assets attributable to holders of non-controlling interests in subsidiaries

Page 9

6,355

 

6,083 



─────

─────

Total liabilities


91,577

135,731



─────

─────

Total equity and liabilities


91,577

═════

135,731

═════

 

Net asset value per Listed Portfolio Shares attributable to holders of the Company

  (USD per share)

Note 25(b)

-

 

 

0.357

Net asset value per Private Equity Shares

  attributable to holders of the Company

  (USD per share)

Note 25(b)

 

 

0.227

 

 

0.220




════

════

 


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


 

 

 



 

Attributable to shareholders of the Company

 



 

 

Share

capital

 

Additional paid-in capital

 

 

Treasury shares

Foreign currency translation reserve

 

 

Equity reserve

 

 

Other reserves

 

 

Accumulated gains

 

 

 

Total

 

Non-controlling interests

 

 

Total
equity


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000









 

 


 

Balance at 1 July 2015

3,502

328,437

-

(6,359)

3,764

306

(127,135)

202,515

10,763

213,278

 

Transfers to net assets attributable to holders of Private Equity Shares

(3,502)

(226,013)

-

-

(3,764)

(306)

133,844

(99,741)

-

(99,741)

 

Transfers to net assets attributable to holders of Listed Portfolio Shares

-

(102,424)

-

-

-

-

(350)

(102,774)

-

(102,774)

 

Transfers to net assets attributable to holders of non-controlling interests in subsidiaries

-

-

-

-

-

-

-

-

(10,763)

(10,763)

 

Decrease in net assets attributable to holders of the Company

-

-

-

(2,117)

-

-

2,117

-

-

-

 


────

────

────

────

────

────

────

────

────

────

 

Total transactions with shareholders of the Company, recognised directly in equity

(3,502)

(328,437)

-

(2,117)

(3,764)

(306)

135,611

(202,515)

(10,763)

(213,278)

 

 

Balance at 31 December 2015 (unaudited)

────

 

-

 ════

─────

 

-

═════

─────

 

-

═════

─────

 

(8,476)

═════

────

 

-

════

────

 

-

════

─────

 

8,476

═════

──────

 

-

══════

────

 

-

════

──────

 

-

══════

 









 

 


 

Balance at 1 July 2016

-

-

-

(6,566)

-

-

6,566

-

-

-

 

Other comprehensive income arising from exchange differences on translation of foreign operations

-

-

-

(580)

-

-

580

-

-

-

 


────

─────

─────

────

────

────

─────

──────

────

──────

 

Total transactions with shareholders of the Company, recognised directly in equity

-

-

-

(580)

-

-

580

-

-

-

 

 

Balance at 31 December 2016 (unaudited)

────

 

-

 ════

─────

 

-

═════

─────

 

-

═════

─────

 

(7,146)

═════

────

 

-

════

────

 

-

════

─────

 

7,146

═════

──────

 

-

══════

────

 

-

════

 

──────

 

-

══════

 

 

 


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARES

 


Note

Listed Portfolio Shares

Private

Equity

Shares

Sub total

Non-controlling interests

 

 

Total



USD'000

USD'000

USD'000

USD'000

USD'000








Balance at 1 July 2015


-

-

-

-

-








Transferred from equity


102,774

99,741

202,515

10,763

213,278

Repurchase of Listed Portfolio Shares

 

 

(48,095)

-

(48,095)

-

(48,095)

Net decrease from share transactions

 

 

 

─────

 

54,679

─────

 

99,741

─────

 

154,420

─────

 

10,763

─────

 

165,183

Increase/(decrease) in net assets attributable to holders of the Company and holders of non-controlling interests


(97)

(5,019)

(5,116)

(3,342)

(8,458)



─────

─────

─────

─────

─────

Net assets attributable to holders of the Company and holders of non-controlling interests as at 31 December 2015 (unaudited)


54,582

94,722

149,304

7,421

156,725



═════

═════

═════

═════

═════








Balance at 1 July 2016


38,311

77,169

115,480

6,083

121,563








Repurchase of Listed Portfolio Shares

 

15

(40,842)

-

(40,842)

-

(40,842)

Net decrease from share transactions

 

 

 

─────

 

(40,842)

─────

 

-

─────

 

(40,842)

─────

 

-

─────

 

(40,842)

(Decrease)/increase in net assets attributable to holders of the Company and holders of non-controlling interests

15

2,531

2,468

4,999

272

5,271



─────

─────

─────

─────

─────

Net assets attributable to holders of the Company and holders of non-controlling interests as at 31 December 2016 (unaudited)

15

-

79,637

79,637

6,355

85,992



═════

═════

═════

═════

═════

 

 


 

CONDENSED CONSOLIDATED INCOME STATEMENT

 



Six-month period ended 31 December

 


Note

2016

2015

 



(Unaudited)

(Unaudited)

 

 

 


USD'000

USD'000

Restated (*)

 

Continuing operation




 





 

Revenue

20

-

-

 

Cost of sales

20

-

-

 



─────

─────

 

Gross profit


-

-

 



─────

─────

 

Dividend income


-

7

 

Interest income

21

36

-

 

Administrative expenses

22

(1,453)

(1,450)

 

Fair value (loss)/gain of financial assets at fair value through profit or loss

23

2,576

1,700

 

Other income


12

3

 

Other expenses


(30)

-

 



─────

─────

 

Operating (loss)/profit


1,141

260

 



─────

─────

 

Finance income


-

43

 

Finance costs


(146)

(184)

 



─────

─────

 

Finance costs - net


(146)

(141)

 



─────

─────

 

(Loss)/profit before tax


995

119

 





 

Income tax expense

24

-

-

 

Deferred income tax

17, 24

-

-

 



─────

─────

 

(Loss)/profit from continuing operation


995

119

 





 

Profit/(loss) from discontinued operations (*)

11(a)

5,108

(6,323)

 



─────

─────

 

Profit/(loss) for the period


6,103

(6,204)

 





 

(Increase)/Decrease in net assets attributable to




Shareholders of the Company


(5,139)

5,116

Non-controlling interests


(272)

3,342



─────

─────

Gain for the period


 692

2,254



═════

═════

Earnings/(loss) per Listed Portfolio Shares

  (USD per share)

25(a)

0.024

                        (0.000)

Earnings/(loss) per Private Equity Shares

  (USD per share)

25(a)

         0.009

            (0.008)


═════

═════

 

(*)    See Note 11 for details of the restatement resulting from operations being reclassified as discontinued.

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED Statement of COMPREHENSIVE INCOME

 



Six-month

period ended 31 December


Note

 2016

2015



(Unaudited)

(Unaudited)



USD'000

USD'000




Restated (*)





Gain for the period


692

2,254





Other comprehensive loss




Items that may be reclassified subsequently to profit or loss:



Exchange differences on translation of foreign operations from discontinued operations:




Other comprehensive loss arising from exchange differences on translation of foreign operations (*)

 

11(a)

(580)

(2,117)



────

(580)

────

────

(2,117)

────

Items that will not be reclassified subsequently to profit or loss:



Others (**)


(112)

(137)

 

Other comprehensive loss for the period, net of tax


(692)

(2,254)



────

────

Total comprehensive income for the period


-

-



════

════





 

(*)    See Note 11 for details of the restatement resulting from operations being reclassified as discontinued.

 

(**) These represent reserves provided on after tax profits of the Group's subsidiaries which are required by local regulations.

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED Statement oF CASH FLOWS

 



Six-month

period ended 31 December


Note

2016

2015



(Unaudited)

(Unaudited)



USD'000

USD'000





Operating activities




(Loss)/profit from continuing operation before tax


995

119

Profit/(loss) from discontinued operation before tax


5,424

(6,007)



─────

─────

Profit/(loss) before tax


6,419

(5,888)

Adjustments for:




Depreciation and amortisation

14

1,159

2,615

Fair value gain of financial assets at fair value through profit or loss


(2,576)

 

(1,795)

Fair value (gain)/loss of investment properties

13

(2,385)

320

Revaluation (gain)/loss on property, plant and equipment

 

14

(790)

5,558

Unrealised foreign exchange losses


356

(308)

Interest expense


265

262

Interest income


(36)

(218)

Dividend income


-

(7)



─────

─────

Profit before changes in working capital


2,412

539

Change in prepayments


-

165

Change in trade receivables and other assets


-

2,522

Change in assets classified as held for sale


(657)

(3,501)

Change in inventories


-

935

Change in trade payables and other liabilities


2,149

(1,774)

Change in liabilities classified as held for sale


94

-

Taxes paid


(315)

(288)



─────

─────

Net cash inflow/(outflow) from operating activities


3,554

(1,402)



─────

─────

Investing activities




Interest received


36

218

Dividends received


-

1,802

Purchases of short-term investment


(111)

-

Proceeds from disposal of short-term investments


517

1,416

Cash transferred to VVF


-

(35,036)

Purchases of investment properties


-

(2,136)

Purchases of property, plant and equipment


(772)

(361)

Proceeds from disposal of a subsidiary

8

4,431

-

Proceeds from disposal of a prepayment for acquisition of investment property

 

6

2,371

-

Proceeds from disposals of financial assets at fair value through profit or loss

 

 

-

2,864



─────

─────

Net cash outflow from investing activities


6,472  

(31,233)



─────

─────

 

 

 

 

 

 



 



Six-month

period ended 31 December


Note

2016

2015



(Unaudited)

(Unaudited)



USD'000

USD'000





Financing activities 




Interest paid


(265)

(262)

Proceeds from borrowings


-

249

Repayments of borrowings


(9,042)

(2,232)



─────

─────

Net cash outflow from financing activities


(9,307)

(2,245)



─────

─────

Net increase/(decrease) in cash and cash equivalents for the period


719

 

(34,880)

Cash and cash equivalents at beginning of the

 period

 

 

24,788

46,106

Exchange differences on cash and cash equivalents


303

(52)



─────

─────

Cash and cash equivalents at end of the period


25,810

11,174



═════

═════

Made up of:




Cash and equivalents per the consolidated balance sheet

 

10

20,644

11,174

Included in the assets of the disposal groups

11

5,166

-



═════

═════





Major non-cash transactions










Six-month

period ended 31 December


Note

2016

2015



(Unaudited)

(Unaudited)



USD'000

USD'000





Contribution of listed investments into VVF


-

67,388

Repurchase of LPSs in exchanging for VVF units


40,842

48,095



═════

═════

 

 


1          GENERAL INFORMATION

 

Vietnam Infrastructure Limited ("the Company") is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.

 

The original principal activity of the Group was to invest in a diversified portfolio of entities owning infrastructure projects and assets primarily in Vietnam. The Group could invest and hold equity and debt instruments in unquoted companies that themselves held, developed or operated infrastructure assets. The Group could also invest in entities whose shares or other instruments were listed on a stock exchange, or traded on over-the-counter ("OTC") markets and in other funds that invested in infrastructure projects or assets.

 

On 22 July 2015, following shareholder approval of a proposal to restructure the Company, the listed and private equity components of VNI's portfolio were separated into two distinct pools, the Listed Portfolio and the Private Equity Portfolio. Each pool of assets was represented by a separate share class, Listed Portfolio Shares ("LPS") and Private Equity Shares ("PES"), which were listed on the London Stock Exchange's Alternative Investment Market ("AIM") under the tickers VNIL and VNI, respectively.  Both classes of shares meet the definition for financial liabilities under International Accounting Standard 32 ("IAS 32") (refer Note 2.2 of the consolidated financial statements for the year ended 30 June 2016).

 

The Listed Portfolio assets and any surplus cash in the Company were contributed to Forum One-VCG Partners Vietnam Fund ("VVF"), a newly established sub-fund of Forum One, a Luxembourg open-ended investment company or SICAV ("Forum One") for consideration of 10,242,351 Class A VVF shares at the subscription price of USD10 per Class A VVF share. VVF's investment strategy is to invest in equities listed on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange; and other issuers that carry out a substantial part of their economic activity in Vietnam and are listed, traded or dealt on other stock exchanges. The VVF shares were distributed to LPS shareholders between August 2015 and August 2016 in return for redeeming their LPS shares. Following the final distribution of VVF shares and receipt of all outstanding LPSs from shareholders the AIM listing for VNIL was withdrawn and all outstanding LPS were cancelled. 

 

The Company has ceased making new private equity investments and is seeking to fully realise the Private Equity Portfolio by 30 June 2017. Once this objective is met it will seek to be wound up within six months. The proceeds from the sale of the private equity assets and any surplus net cash-flows will, subject to each shareholders' election, be distributed to the PES shareholders in cash, else to them in the form of VVF units distributed in specie.

 

The condensed consolidated interim financial information for the six-month period ended 31 December 2016 was approved for issue by the Board of Directors on 08 March 2017.

 

2          BASIS OF PREPARATION

 

This condensed consolidated interim financial information for the six-month period ended 31 December 2016 has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). It does not include all of the information required in the annual consolidated financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRS"). Accordingly, this condensed consolidated interim financial information is to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2016.

 

Going concern

 

The Company is progressively realising its Private Equity Portfolio which it expects to complete by 30 June 2017. Following the realisation of the portfolio and return of proceeds to PES shareholders the Company will be wound up in accordance with the Amended and Restated Memorandum of Association dated 15 December 2014. As a consequence, this condensed consolidated interim financial information has been prepared using the liquidation basis, as the going concern basis is no longer considered appropriate. The Company continues to apply the same IFRS accounting policies as has been used in prior years as management do not believe there is a difference in the accounting measurement basis that would be applied using a going concern basis of accounting versus what would apply under a liquidation basis of accounting.

 

3          ACCOUNTING POLICIES

 

The accounting policies adopted are consistent with those of the previous financial year ended 30 June 2016, except additional accounting policies as described below.

 

The AIM Rules for Companies require comparative figures for the balance sheet for the corresponding period end in the preceding financial year which differs to IAS 34 which requires comparative figures for the balance sheet for the immediately preceding financial year end. The Group continues to elect to report in accordance with IAS 34 and as such has agreed with the London Stock Exchange a derogation from the above requirement of the AIM Rules for Companies in order to comply with IAS 34.

 

New standards and interpretation effective from 1 July 2016 adopted by the Group

 

There are no standards, interpretations and amendments to existing standards that are effective for the financial period beginning 1 July 2016 that have had a material impact on the Group.

 

4          SEGMENT INFORMATION

 

In identifying its operating segments, management generally follows the Group's sectors of investments which are based on internal management reporting information for the Investment Manager's management, monitoring of investments, and decision making. The operating segments by investment portfolio include energy, property and infrastructure development, telecommunications, transportation and logistics, general infrastructure, other capital markets and cash.

 

Each of the operating segments are managed and monitored individually by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses, as reported to the Board, segment profit or loss using a measure which is consistent with that in profit or loss. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.

 



 

 

Segment information can be analysed as follows:

 

Assets

 

 

 

Property and infrastructure development

 

Telecomm-unications

Other capital markets

 

Cash

 

 

Total


USD'000

USD'000

USD'000

USD'000

USD'000

As at 31 December 2016






 

Trade and other receivables

24

-

-

-

24

 

Cash and cash equivalents

-

-

-

20,644

20,644

 

Assets classified as held for sale

-

70,909

-

-

70,909

 


─────

─────

─────

──────

───────

 

Total assets

24

70,909

-

20,644

91,577

 


═════

═════

═════

═════

══════

 

Total assets include:

Additions to non-current assets

-

1,266

-

-

1,266

 


═════

═════

═════

═════

═════

 

As at 30 June 2016






 

Prepayment for acquisition of Long An Industrial Service project

2,371

-

-

-

2,371

 

Trade and other receivables

4,455

-

-

-

4,455

 

Financial assets at fair value through profit or loss

-

-

38,245

-

38,245

 

Cash and cash equivalents

-

-

-

20,408

20,408

 

Assets classified as held for sale

-

70,252

-

-

70,252

 


──────

──────

──────

─────

───────

 

Total assets

6,826

70,252

38,245

20,408

135,731

 


══════

══════

══════

══════

═══════

 

Total assets include:

Additions to non-current assets

-

3,509

-

-

3,509

 


═════

═════

═════

═════

═════

 

 

Revenue and segment profit and loss

 


Other capital markets

 

Cash

 

Total


USD'000

USD'000

USD'000

Six-month period ended 31 December 2016


 


 

Interest income

36

-

36

 

Fair value loss of financial assets at fair value through profit or loss

2,576

-

2,576

 


────

────

─────

 

Total

2,612

-

2,612

 


════

════

═════

 

Unallocated expenses



(1,617)

─────

 

Loss before tax



995

 




═════

 





 

Six-month period ended 31 December 2015




 

Dividend income

7

-

7

 

Fair value gain of financial assets at fair value through profit or loss

1,700

-

1,700

 


────

────

─────

 

Total

1,707

-

1,707

 


════

════

═════

 

Unallocated expenses



(1,588)

─────

 

Gain before tax



119

 




═════

 

 

 

 

 

 

 

 

 




 

5          SUBSIDIARIES

 

The operating subsidiaries of the Group are incorporated in Vietnam, which are held through special purpose vehicles outside of Vietnam, details are as follows:

 


Equity interest held

by the Group (%) as at


Name of entity

31 December 2016

30 June 2016

Principal activity





Southeast Asia Telecommunication Holdings ("SEATH") Base Transceiver Station ("BTS") tower network (*)




 VNC-55 Infrastructure Investment Joint Stock Company

100.0

100.0

Telecommunications

 Mobile Information Service Joint Stock Company

100.0

100.0

Telecommunications

 Zone II Mobile Information Service Joint Stock Company

99.9

99.9

Telecommunications

 Global Infrastructure Investment Joint Stock Company

100.0

100.0

Telecommunications

 Truong Loc Telecom Trading and Service Joint Stock Company

98.0

98.0

Telecommunications

 Tan Phat Telecom Joint Stock Company

99.9

99.9

Telecommunications

 T&A Company Limited

100.0

100.0

Telecommunications





Vietnam Infrastructure Holding Ltd. ("VIHL") In-Building Cellular Enhancement Systems ("IBS") (**)




Vietnam Data and Aerial System Company Limited ("VinaDAS")

100.0

100.0

Telecommunications

Southern Star Telecommunication Equipment Joint Stock Company ("SST")

70.0

70.0

 

Telecommunications

Vien Tin Joint Stock Company ("Vien Tin")

75.0

75.0

Telecommunications





 

(*)    Agreement to sell equity interest in SEATH

 

On 4 August 2016 the Company signed a share sale and purchase agreement to transfer 100% of its holding of SEATH to OCK Vietnam Towers Pte. Ltd. The transaction resulted in a net cash proceeds of USD51.6 million to the Company. Sale proceeds of USD50.0 million were received on 17 January 2017 and the remaining balance of approximately USD1.6 million is expected to be received in May 2017.

 

(**)   In December 2016, as a pre-condition of the share sale and purchase agreement with OCK Vietnam Towers Pte. Ltd., VinaDAS, SST and Vien Tin were transferred from SEATH to VIHL. All of the restructuring transactions were recorded at book value and no gains or losses were recognised as a result of this restructuring.

 

 

 

 

 

 

 



 

6          PREPAYMENT FOR ACQUISITION OF LONG AN INDUSTRIAL SERVICE PROJECT

 


31 December 2016

30 June 2016


USD'000

USD'000




Opening balance

2,371

2,188

Gain on remeasurement of prepayment for acquisition of Long An Industrial Service project

-

183

Receipt of final settlement (*)

(2,371)

-


─────

────

Closing balance

-

2,371


═════

════

 

(*) On 2 November 2016 VND53.3 billion, equivalent to USD2.4 million, was received as a final settlement of this outstanding balance.

 

7          FINANCIAL INSTRUMENTS BY CATEGORY

 


 

 

Loans and receivables

Financial

assets at fair value through profit or loss

 

 

 

Total


USD'000

USD'000

USD'000

Financial assets




As at 31 December 2016




Trade and other receivables (Note 8)

24

-

24

Cash and cash equivalents (Note 10)

20,644

-

20,644

Assets classified as held for sale (Note 11(d)), include:




- Trade and other receivables

4,038

-

4,038

- Short-term investments (Note 12)

-

-

-

- Cash and cash equivalents

5,166

-

5,166

 

Total

─────

29,872

═════

─────

-

═════

──────

29,872

══════

Financial assets denominated in:




- USD

25,519

-

25,519

- VND

4,353

-

4,353


─────

29,872

═════

─────

-

═════

──────

29,872

══════

As at 30 June 2016




Trade and other receivables (Note 8)

4,455

-

4,455

Financial assets at fair value through profit or loss (Note 9)

-

38,245

38,245

Cash and cash equivalents (Note 10)

20,408

-

20,408

Assets classified as held for sale (Note 11(d)), include:




- Trade and other receivables

5,347

-

5,347

- Short-term investments

781

-

781

- Cash and cash equivalents

4,380

-

4,380

 

Total

─────

35,371   ═════

─────

38,245

═════

─────

73,616  ═════

Financial assets denominated in:




- USD

2,405

-

2,405

- VND

32,966 

38,245

71,211 


─────

35,371  ═════

─────

38,245

═════

─────

73,616   ═════

 

 



Liabilities at amortised cost



USD'000




Financial liabilities






As at 31 December 2016



Trade and other payables (Notes 18, 19)


2,554

Borrowings (Note 16)


-

Liabilities directly associated with assets classified as held for sale (Note 11(d)), include:



- Borrowings


37

- Trade and other payables


1,847

 

Total financial liabilities


─────

4,438

═════




Financial liabilities denominated in:



- USD


2,554

- VND


1,884



─────

4,438

═════




As at 30 June 2016



Trade and other payables (Notes 18, 19)


2,399

Borrowings (Note 16)


9,042

Liabilities directly associated with assets classified as held for sale (Note 11(d)), include:



- Borrowings


71

- Trade and other payables


1,670

 

Total financial liabilities


─────

13,182

═════




Financial liabilities denominated in:



- USD


11,440

- VND


1,742



─────

13,182

═════

 



 

8          TRADE AND OTHER RECEIVABLES

 


31 December 2016

30 June 2016


USD'000

USD'000




Trade receivables

24

4,455


─────

─────


24

4,455

Less: allowance for impairment of receivables

-

-

Total

 

─────

 24

═════

─────

4,455

═════

 

Trade and other receivables are short-term in nature and their carrying values, after allowances for impairment, approximate their fair values at the reporting date.  As at 31 December 2016 and 30 June 2016, there was no trade and other receivables past due and impaired or not past due but doubtful.

 

As at 30 June 2016 there was a significant concentration of credit risk (representing 96.8% of trade receivables at that date) relating to the buyer of Vina-CPK Limited. On 22 November 2016, VND98.7 billion, equivalent to USD4.4 million, was received as settlement of this purchase.

 

9          FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

 


31 December 2016

30 June 2016

 


USD'000

USD'000

 




 

Designated at fair value through profit or loss:



 




 

Current:



 

Unlisted shares, fair value based on net asset value

-

38,245


──────

──────

 


-

──────

38,245

──────

 


-

38,245

 


══════

══════

 

 

The financial assets at fair value through profit or loss as at 30 June 2016 comprised of Class A VVF shares which were subsequently transferred to the LPS shareholders' accounts on 25 August 2016 following the compulsory repurchase of the remaining 107,281,741 LPS by the Company in exchange for 3,288,435,511 Class A VVF shares on 17 August 2016 (Note 15)

 

Risk exposure and fair value measurements

 

Information about the Group's exposure to price risk is provided in Note 30. Refer to Note 29(a) for information about the methods and assumptions used in determining fair value.

 



 

10         CASH AND CASH EQUIVALENTS

 


31 December 2016

30 June 2016


USD'000

USD'000




Cash and cash equivalents

20,644

20,408


═════

═════

 

  Cash and cash equivalents denominated in:

 

USD

310

2,381

VND

20,334

18,027

─────

─────

20,644

20,408

═════

═════

 

11         DISCONTINUED OPERATION AND ASSETS AND LIABILITIES OF DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE

 

Classification of SEATH BTS tower network and VIHL IBS network as assets held for sale

 

As discussed in note 5 the Company has signed a share sale and purchase agreement to transfer 100% of its holding of SEATH to OCK Vietnam Towers Pte. Ltd. The Company is also in the process of disposing of its investment in VIHL.  As a result, the associated assets and liabilities of the BTS tower network and IBS systems have been reported as discontinued operations and presented as held for sale in this condensed consolidated interim financial information. The financial information relating to these discontinued operations is set out below.



 

(a)        Financial performance and cash flow information

 

The financial performance and cash flow information presented below includes the six-month period ended 31 December 2016 of the BTS network and IBS network. The comparative figures presented for these disposal groups and Vina-CPK Limited are for the period ended 31 December 2015.

 


31 December  2016

31 December 2015


USD'000

USD'000




Revenue

 9,618

 9,981

Cost of sales

 (5,678)

 (7,299)

Net gain/(loss) from fair value adjustment on investment properties (Note 13) (*)

 

2,385

 

 (320)

Revaluation gain/(loss) on fixed assets (Note 14) (**)

 790

 (5,558)

Administrative expenses

 (1,120)

 (1,368)

Other income

 282

 334

Other expenses

 (853)

 (1,777)


─────

─────

Profit/(loss) before income tax

5,424

(6,007)

Income tax expense

(315)

  (353)

Deferred income tax (charge)/income

(1)

  37  


─────

─────

Profit/(loss) after income tax of discontinued operation

5,108

(6,323)


─────

─────

Profit/(loss) from discontinued operation

5,108

(6,323)


═════

═════




Exchange differences on translation of discontinued operations

(580)

         (2,117)

In which:



- Exchange differences on translation of foreign operations

(580)

(2,117)

Others (***)

(112)

(137)


─────

─────

Other comprehensive loss from discontinued operations

(692)

(2,254)


═════

═════




Net cash inflow from operating activities

2,377

321

Net cash inflow/(outflow) from investing activities (includes an inflow of USD 4,4 million from sales of Vina-CPK Limited)

2,892

(668)

Net cash outflow from financing activities

(38)

(755)


─────

─────

Net increase/(decrease) in cash generated by the disposal groups

5,231

(1,102)


═════

═════

 

(*)    Investment properties includes SEATH's BTS tower network and Vina-CPK Limited's land and buildings.

(**)   Fixed assets includes VIHL's IBS network.

(***)  These represent reserves provided on after tax profits of the Group's subsidiaries which are required by local regulations

(b)        The following assets and liabilities were reclassified as held for sale in relation to the discontinued operations:

 


As at 31 December 2016


USD'000



Assets classified as held for sale


Investment properties

 45,555

Property, plant and equipment

12,534

Long-term deferred expenses

 1,409

Other long term receivables

 396

Deferred tax assets

 8

Inventories

 681

Trade and other receivables

 4,038

Prepayments to suppliers

 1,122

Cash and cash equivalents

 5,166


─────

Total assets of disposal group held for sale

70,909


─────

Liabilities directly associated with assets classified as held for sale


Long-term and short-term borrowings and debts

 37

Corporate income tax payable

 300

Advance from customers

 60

Trade and other payables

 1,847

Short-term unearned revenue

 439

Other reserves

 139


─────

Total liabilities of disposal group held for sale

2,822


─────

Net assets of disposal groups classified as held for sale

68,087


═════

 

(c)        Restating prior periods

 

Under IFRS 5 - Non-current assets held for sale and discontinued operations, the Company must disclose prior period information for discontinued operations in the condensed consolidated interim financial information so that the disclosure cover all operations that have been discontinued at the end of the reporting period of the latest period presented. The discontinued operations presented in the condensed consolidated statement of comprehensive income and the condensed consolidated statement of cash flows in the comparative period therefore include all operations that have been discontinued by the current period end. This means that the condensed consolidated statements of comprehensive income and cash flows for the comparative period show as discontinued operations both reported as discontinued in the previous period together with those classified as discontinued in the current period. As a consequence the restated prior period statements of comprehensive income and cash flows will not be entirely comparable to the current period's figures.

 

In contrast, the balance sheet information for the prior period is neither restated nor remeasured.

 



 

(d)        Movement of assets and liabilities of disposal groups classified as held for sale:

 


 

 

Note

As at

1 July 2016

Change in carrying amount

Fair value gain

As at

31 December 2016



USD'000

USD'000

USD'000

USD'000







Assets of disposal groups classified as held for sale






Investment properties

13

 42,798

 372

2,385

 45,555

Property, plant and equipment

14

 12,705

(961)

790

 12,534

Long-term deferred expenses


 1,313

 96

-

 1,409

Other long term receivables


 406

 (10)

-

 396

Deferred tax assets


 9

 (1)

-

 8

Inventories


 948

 (267)

-

 681

Trade and other receivables


 5,347

 (1,309)

-

 4,038

Prepayment for suppliers


 1,565

 (443)

-

 1,122

Short-term investments


 781

 (781)

-

 -  

Cash and cash equivalents


 4,380

 786

-

 5,166



─────

────

─────

─────



70,252

(2,518)

3,175

70,909



─────

────

─────

─────







Liabilities directly associated with assets classified as held for sale






Long-term and short-term borrowings and debts


 

 71

 

(34)

-

 

 37

Corporate income tax payable


209  

 91

-

 300

Advance from customers


 62

 (2)

-

 60

Trade and other payables


 1,670

177

-

1,847

Short-term unearned revenue


 463

(24)

-

 439

Other reserves


 252

 (113)

-

 139



─────

────

─────

─────



2,727

95

-

2,822



─────

────

─────

─────

Net assets and liabilities of disposal groups classified as held for sale


67,525

(2,613)

3,175

68,087



═════

════

═════

═════

 

As at 31 December 2016 and 30 June 2016 the assets and liabilities of the BTS network and IBS network were classified as held for sale.

 

12         SHORT-TERM INVESTMENTS

 

As at 31 December 2016 the Company did not hold any short-term investments. Short-term investments of USD0.8 million, which were classified to assets held for sale as at 30 June 2016 (Note 11(d)) comprises of VND term deposits at local banks with maturities of three months to one year, which earned interest at rates ranging from 6.0% to 6.8% per annum.

 



 

13         INVESTMENT PROPERTIES

 

As at 31 December 2016, all investment properties are classified and presented as assets held for sale (Note 11).

 

Movement of investment properties is as follows:

 


Six-months period ended

31 December 2016


2016

2015


USD'000

USD'000

Opening balance of:



Investment properties

-

73,435

Investment properties classified as assets held for sale

42,798

-


─────

─────


42,798

73,435

Additional investments made during the period

494

2,136

Transfer to property, plant and equipment (Note 14)

-

(684)

Transfer to disposal group assets classified as held for       sale (Note 11)

-

(25,437)

Net gain/(loss) from fair value adjustment (Note 11(a))

2,385

(320)

Currency translation difference in other comprehensive income

(122)

(732)


─────

─────

Closing balance of:



Investment properties

-

48,398

Investment properties classified as assets held for sale

45,555

-


  ═════

═════

 

As at 30 June 2016, the BTS tower network was pledged with banks as security for long-term borrowings granted to a subsidiary (Note 16).

 

Measuring the fair value of investment property

 

Investment properties, principally land and the BTS tower network, which were held for long-term rental yields in 2015, are now held as available for sale and carried at fair value. Changes in fair values are presented in the Condensed Consolidated Income Statement as profit/(loss) from discontinued operations.

 

Significant estimate - fair value of investment property

 

Information about the valuation of investment properties is provided in Note 29(b).

 

Amounts recognised in profit or loss for investment properties


31 December 2016

31 December 2015


USD'000

USD'000




Rental income

6,113

5,966

Direct operating expenses from property that generated rental income

(4,524)

(4,502)

Direct operating expenses from property that did not generate rental income

(749)

(1,001)

Fair value gain/loss recognised (*) (Note 11(a))

2,385

(320)


════

════

 

(*) The fair value gain recognised in the Condensed Consolidated Income Statement as profit/(loss) from discontinued operations during the period included the fair value gain on the BTS tower network which was presented as assets classified as held for sale as at reporting date.

 

Contractual obligations and leasing arrangements

 

As at 31 December 2016, there were no significant contractual obligations to purchase, construct or develop investment properties or conduct repairs, maintenance or other enhancements.

 

Information about leasing arrangements of investment properties is provided in Note 28.



14         PROPERTY, PLANT AND EQUIPMENT

 

As at 31 December 2016 and 30 June 2016 all property, plant and equipment is classified and presented as assets held for sale (Note 11).  The movements of property, plant and equipment which are classified as assets held for sale at 31 December 2016 were:

 

 

 

Buildings

Plant and machinery

Motor vehicles

Office equipment

Other assets

Assets under construction

Total


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000









Historical cost








At 1 July 2016

 100

 17,507

 229

 33

 33

 648

 18,550

New purchases

-

 28

 -

 -

 -

 744

772

Transfer from assets under construction

-

271

-

-

-

(271)

-

Written-off

-

 (8)

 -

 -

 -

 (28)

 (36)

Revaluation gain

  (Note 11(a))

 

-

 

790

 

-

 

-

 

-

 

-

 

790

Translation differences

 (4)

 (646)

 (8)

 (1)

 (1)

 (37)

 (697)


────

─────

────

────

────

────

─────

At 31 December 2016

 96

 17,942

 221

 32

 32

 1,056

 19,379


────

─────

────

────

────

────

─────









Accumulated depreciation








At 1 July 2016

 1

 5,690

 118

 11

 25

 -

 5,845

Charged for the year

 1

 1,140

 13

 4

1

-

1,159

Written-off

-

(8)

-

-

-

-

(8)

Translation differences

 -

 (147)

 (3)

 -

 (1)

 -

(151)


────

─────

────

────

────

────

─────

At 31 December 2016

 2

 6,675

 128

 15

 25

 -  

 6,845


────

─────

────

────

────

────

─────









Net book value








At 1 July 2016

 99

 11,817

 111

 22

 8

 648

 12,705


════

═════

════

════

════

════

═════

At 31 December 2016

 94

 11,267

 93

 17

 7

 1,056

 12,534


════

═════

════

════

════

════

═════

 



 

The movements of property, plant and equipment during the year ended 30 June 2016 were:

 

 

 

Buildings

Plant and machinery

Motor vehicles

Office equipment

Other assets

Assets under construction

Total


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000









Historical cost








At 1 July 2015

222

26,368

302

6

37

452

27,387

New purchases

-

130

67

27

2

960

1,186

Transfer from assets under construction

-

764

-

-

-

(764)

-

Transfers from investment properties (Note 13)

684

-

-

-

-

-

684

Revaluation loss

  (Note 11(a))

 

-

 

(9,072)

 

-

 

-

 

-

 

-

 

(9,072)

Written-off

-

(92)

-

-

-

-

(92)

Transfers to assets classified as held for sale (Note 11(d))

(902)

(17,508)

(362)

(33)

(39)

(648)

(19,492)

Translation differences

(4)

(590)

(7)

-

-

-

(601)


────

─────

────

────

────

────

─────

At 30 June 2016

-

-

-

-

-

-

-


────

─────

────

────

────

────

─────









Accumulated depreciation








At 1 July 2015

58

692

137

4

25

-

916

Charged for the year

25

5,101

43

9

6

-

5,184

Written-off

-

(92)

-

-

-

-

(92)

Transfers to assets classified as held for sale (Note 11(d))

(81)

(5,691)

(176)

(11)

(28)

-

(5,987)

Translation differences

(2)

(10)

(4)

(2)

(3)

-

(21)


────

─────

────

────

────

────

─────

At 30 June 2016

-

-

-

-

-

-

-


────

─────

────

────

────

────

─────









Net book value








At 1 July 2015

164

25,676

165

2

12

452

26,471


════

═════

════

════

════

════

═════

At 30 June 2016

-

-

-

-

-

-

-


════

═════

════

════

════

════

═════

 

In which the net book value of property, plant and equipment which are classified and presented as assets held for sale as at 30 June 2016 were:

 

 

 

Buildings

Plant and machinery

Motor vehicles

Office equipment

Other assets

Assets under construction

Total


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000









Net book value








At 30 June 2016

 99

 11,817

 111

 22

 8

 648

 12,705


════

═════

════

════

════

════

═════

 

Plant and machinery primarily comprises of VIHL's IBS network which is measured at fair value less accumulated depreciation.  As at 31 December 2016 the net book value of the network was USD 11.6 million (30 June 2016: USD 11.4 million) which has been classified as assets held for sale together with other property, plant and equipment disclosed in Note 11. All other property, plant and equipment are stated at cost less depreciation.

 

Significant estimates - valuations of plant and machinery of IBS

 

Information about the valuation of plant and machinery of IBS is provided in Note 29(b).

 

 

15         SHARE CAPITAL

 

On 21 July 2015 the Company's ordinary shares were re-designated as PES and a bonus issue of a new class of LPS was undertaken. As a result each VNI shareholder held an equal number of PES and LPS. The PESs give the holders the right to receive cash distributions and the LPSs were subject to mandatory repurchase in August 2016, so both meet the definition of financial liabilities under International Accounting Standard 32 ("IAS 32"). Accordingly, both share classes have been classified as financial liabilities.

 

All of the remaining 107,281,741 LPS were repurchased by the Company on 17 August 2016 in exchange for 3,288,435,511 Class A VVF shares. Following the compulsory repurchase all of the LPSs have been cancelled.

 

The movements LPSs and PESs during the period were as follows:

 


Listed Portfolio Shares


Number of shares

USD'000




As at 1 July 2016

107,281,741

38,311

Repurchased during the period

(107,281,741)

(40,842)

Increase in net assets attributable to holders of Listed Portfolio Shares

 

-

 

2,531

As at 31 December 2016

────────

-

════════

─────

-

═════

 


Private Equity Shares


Number of shares

USD'000




As at 1 July 2016

350,221,094

77,169

Increase in net assets attributable to holders of redeemable shares

 

-

 

2,468

As at 31 December 2016

────────

350,221,094

════════

─────

79,637

═════

 

16         BORROWINGS

 


31 December 2016

30 June 2016


USD'000

USD'000




Short-term borrowings:



 Current portion of long-term bank borrowings

-

9,042


─────

─────


-

9,042


─────

─────

Total

-

═════

9,042

═════

 

Under the liquidation basis of accounting all long-term borrowings which are expected to be realised or settled within the next twelve months from the reporting date are classified as short-term borrowings as at reporting date.

 

As at 30 June 2016 according to the original contract terms, the Group's borrowings, which are denominated in USD, mature on a range of dates up until October 2019 and bear a range of annual interest rates from 3.9% to 4.1%. The borrowings were secured by the BTS tower network as disclosed in Note 13.  As at 31 December 2016 the outstanding loan had been fully repaid to lender.

 

 

 

 

The maturities of the Group's borrowings at the reporting date were:


31 December 2016

30 June 2016


USD'000

USD'000




6 months or less

-

1,750

6 - 12 months

-

1,750

1 - 5 years

-

5,542


─────

-

═════

─────

9,042

═════

 

As at 30 June 2016 the fair value of short-term borrowings amounting to USD9.0 million approximates their carrying amounts as the impact of discounting is not significant. They were classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

 

17         DEFERRED TAX LIABILITIES

 


31 December 2016

30 June 2016


USD'000

 USD'000




Beginning of year

-

1,113

Balance sold as part of disposal of Vina-CPK Limited

-

(1,110)

Effect of translation to presentation currency

-

(3)

 

End of period

─────

-

═════

─────

-

═════

             

            There are no other significant unrecognised deferred tax liabilities.

 

18         TRADE AND OTHER PAYABLES 

 

           

31 December 2016

30 June 2016


USD'000

USD'000




Accrued realisation fees (Note 27(b))

1,489  

1,692

Trade payables

65  

176

Accrued liabilities

1,000

-

Total

 

─────

2,554

═════

────

1,868

════

 

As at 31 December 2016 and 30 June 2016, trade and other payables primarily relate to the operations of the Group. The carrying amounts of trade and other payables approximate their fair values due to their short-term nature.

 

19         PAYABLE TO RELATED PARTIES

           


31 December 2016

30 June 2016


 USD'000

USD'000




Payable to VinaCapital Investment Management Ltd.:



-  realisation fees (Note 27(b))

203

525

Payable to shareholders

6

6


───

───

Total

 

209

═══

531

═══

 

Payables to related parties are short-term in nature, hence their carrying values are considered a reasonable approximation of their values at the balance sheet date.

 

20         REVENUE AND COST OF SALES

 

The Group's revenue represents rental income from the BTS tower network and the IBS network and associated leasing and information rescue services. All revenue is derived from external customers, although 60.6% of total sales during the six-month period amounting to USD5.8 million (2015: 62% of total sales during the period) was sourced from one customer. 

 

The Group's cost of sales mainly relates to the operating costs of the BTS and IBS leasing business and provision of related services.

 

The analysis of cost of sales based on the nature of the more significant expenses is as follows:

 


Six-month period ended

31 December


2016

2015


USD'000

USD'000




Land rentals

1,523

1,116

Tools and equipment expenses

713

1,042

Employee expenses

231

322


════

════

 

21         INTEREST INCOME

 


Six-month period ended

31 December


2016

2015


USD'000

USD'000



Restated

Interest income was derived from:



- Cash and term deposits

36

-

Total

 

────

36

════

────

-

════

 

22         ADMINISTRATIVE EXPENSES

 


Six-month period ended

31 December


2016

2015


USD'000

USD'000



Restated

Management fees (Note 27(a))

-

306

Professional fees

1,255

826

Custodian fees

77

84

Directors' fees (Note 26)

75

134

Realisation fees (Note 27 (b))

-

48

Other expenses

46

52

Total

 

─────

1,453  

═════

─────

1,450 

═════

 

 

 



 

23         FAIR VALUE (LOSS)/GAIN OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

 


Six-month

period ended 31 December


2016

2015


USD'000

USD'000

Unrealised (losses)/gains based on changes in fair

values using



-   sales agreements

-

(323)

 Gains from realisation of financial assets

2,576

2,118

Unrealised losses on foreign exchange translation

-

(95)

 

Total

 

────

2,576

════

─────

1,700

═════

 

 

24         INCOME TAX EXPENSE

 

            Vietnam Infrastructure Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there is no income, state, corporation, capital gains or other taxes payable by the Company.

 

The majority of the Group's subsidiaries are domiciled in the British Virgin Islands and so have tax exempt status.

 

The principal operating subsidiaries of the Group are established in Vietnam and are subject to corporate income tax in Vietnam. The income from these subsidiaries is taxable at the applicable tax rate in Vietnam. On 19 June 2013, the Vietnamese National Assembly approved a new corporate income tax law. Under the new law, the standard corporate income tax has been reduced from 22% to 20% effective 1 January 2016. A provision of USD0.7 million was provided for corporate income tax payable by the Vietnamese subsidiaries for the current period (2015: USD0.4 million).

 

The relationship between the expected income tax expense based on the applicable income tax rate and the tax expense actually recognised in the condensed consolidated income statement can be reconciled as follows:

 


Six-month

period ended 31 December

 


2016

2015

 


USD'000

USD'000

 




 

Current tax



 

Current income tax on loss for the year

315

353

 


─────

─────

 

Total current tax expense

315

353

 


─────

─────

 

Deferred income tax



 

Decrease in deferred tax assets

1

18

 

Increase in deferred tax liabilities

-

(55)

 


─────

─────

 

Deferred income tax benefit (Note 11(a))

1

(37)

 


─────

─────

 

Income tax expense

316

316

 


═════

═════

 

Income tax expense is attributable to:

Charged to the condensed consolidated income statement from continuing operation

-

-

Charged to the condensed consolidated income statement from discontinued operation

316

316


═════

═════

 

 

Numerical reconciliation of income tax expense to prima facie tax payable:

 


Six-month

period ended 31 December

 


2016

2015

 


USD'000

USD'000

 




 

(Loss)/profit from continuing operations before income tax expense

 

995

 

119

 

Profit/(loss) from discontinuing operation before income tax expense

 

5,424

 

  (6,007)

 


─────

─────

 

Group profit/(loss) before tax

6,419

(5,888)

 

Group profit/(loss) multiplied by applicable tax rate 0% (2015: 0%)

-

-

 

Tax effect of amounts which are not deductible (taxable) in calculating taxable income:



 

Difference in overseas tax rates

316

316

 


─────

─────

 

Total income tax expense

316

316

 


─────

─────

 




 

Income tax expense is attributable to:

Charged to the condensed consolidated income statement from continuing operation

-

-

Charged to the condensed consolidated income statement from discontinued operation

316

316


═════

═════

 

 

 

25         LOSS PER SHARE AND NET ASSET VALUE PER SHARE

 

(a)        Earnings/(losses) per share

 

Earnings/(loss) per share is calculated by dividing the profit/(loss) from operations attributable to the shareholders of the Company by the weighted average number of shares in issue during the period excluding shares purchased by the Group and held as treasury shares (Note 15).

           

            Six-month period ended 31 December 2016

 


Listed Portfolio Shares (*)

Private Portfolio Shares




(Loss)/profit for the period attributable to shareholders of the Company (USD'000)

2,531

3,300

Weighted average number of shares in issue ('000)

107,282

350,221

(Loss)/earning per share (USD/share)

0.024

0.009


═══════

═══════

 

(*) The losses per share for the Listed Portfolio Shares is determined for the period from 1July 2016 to 17 August 2016 when it was existing, whereby all the remaining 107,281,741 repurchased and cancelled by the Company.

 

 

 

 

 

 

            Six-month period ended 31 December 2015


Listed Portfolio Shares

Private Portfolio Shares




Loss for the period attributable to shareholders of the Company (USD'000)

(97)

(2,765)

Weighted average number of shares in issue ('000)

262,666  

350,221

Loss per share (USD/share)

(0.000)  

(0.008)


═══════

═══════

 

(b)        Net asset value per share

 

Net asset value ("NAV") per share is calculated by dividing the net asset value attributable to shareholders of the Company by the number of outstanding shares in issue at the reporting date. Net asset value is determined as total assets less total liabilities.

 

As at 31 December 2016:

 


Listed Portfolio Shares

Private Portfolio Shares




Net asset value attributable to shareholders of the Company (USD'000)

 

-

 

79,637

Number of outstanding shares in issue ('000)

-

350,221

Net asset value per share (USD/share)

-

 0.227  


═══════

═══════

 

As at 30 June 2016:

 


Listed Portfolio Shares

Private Portfolio Shares




Net asset value attributable to shareholders of the Company (USD'000)

 

38,311

 

77,169

Number of outstanding shares in issue ('000)

107,282

350,221

Net asset value per share (USD/share)

0.357

0.220  


═══════

═══════

 

26         DIRECTORS' FEES AND MANAGEMENT'S REMUNERATION

 

The aggregated directors' fees during the period amounted to USD75,000 (2015: USD134,000) (Note 22), of which there was no outstanding amounts payable at the reporting date (2015: nil). The directors are considered key management personnel of the Company for reporting purposes. The details of the remuneration for each director is summarised below:

 


Six-month ended


31 December 2016

31 December 2015


USD'000

USD'000




Rupert Carington

22.5

37.5

Robert Binyon

17.5

27.5

Luong Van Ly

17.5

27.5

Paul Garnett

17.5

17.5

Ekkehard Goetting

-

24.0

Total

 

────

75.0

════

────

134.0

════

 

 

 

27        RELATED PARTIES

 

(a)        Management fees

 

The Group is managed by VinaCapital Investment Management Limited (the "Investment Manager"), incorporated and registered as a licensed fund manager in the Cayman Islands. On 20 November 2014, the Company signed a new investment management agreement with the Investment Manager, which became effective on 27 July 2015 (the "new Investment Management Agreement"). Under this agreement no management fee is charged by the Investment Manager to the Company on either the LPS or the PES.

 

Management fees payable during the six-month period ended 31 December 2015 were USD0.3 million.  There were no outstanding accrued fees due to the Investment Manager at the reporting date (30 June 2016: nil) (Note 19).

 

(b)        Realisation fees and incentive fees

 

Under the new Investment Management Agreement, the Investment Manager will receive a realisation fee and an incentive fee based on sales proceeds relating to the Private Equity Portfolio:

 

1)   Upon realisation of the Company's private equity assets, the Company will pay a fee of 3% of the net sale proceeds of each asset realised once the net sale proceeds are received by the Company. Total realisation fee payable for the period ended 31 December 2016 amounted to USD0.2 million (31 December 2015: USD0.1 million) (Note 22), although USD1.5 million (30 June 2016: USD1.7 million) (Note 18) has been accrued as a future payable to the Investment Manager at the reporting date.

 

2)   The Company will also pay an incentive fee of 10% of the amount by which the total return from the sale of private equity assets exceeds a hurdle amount of USD80.9 million. The total return equals the aggregate of all net sale proceeds and other distribution received by the Company from private equity investments. This incentive fee will be paid when the proceeds collected from private equity asset sales have exceeded the hurdle amount.

 

28         OPERATING LEASE COMMITMENTS

 

The Group leases various offices, land for BTS tower network and the IBS under non-cancellable operating leases expiring within two to eight years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are negotiated.

 

At the reporting date the Group has the following commitments under non-cancellable operating lease agreements:

 


31 December 2016

30 June 2016


USD'000

USD'000




Within one year

6,403

6,755

Within two to five years

7,751

9,897

Over five years

1,236

435

Total

 

─────

15,390

═════

──────

17,087

══════

 

Approximately USD14.1m of these commitments relate to SEATH subsidiaries which were sold subsequent to the reporting date (Note 5).

 

 

29         RECOGNISED FAIR VALUE MEASUREMENTS

 

a)         Financial assets and financial liabilities

 

i)          Fair value hierarchy:

 

The following table presents financial assets measured at fair value by valuation method. The different levels have been defined as below:

 

-   Level 1: quoted prices (unadjusted) in active markets for identical assets;

 

-   Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

-   Level 3: inputs for the assets that are not based on observable market data (unobservable inputs).

 

The level within which the financial assets are classified is determined based on the lowest level of significant input to the fair value measurement.

 

As at 31 December 2016, there was no financial assets measured at fair value by valuation method held by the Company.

 

The financial assets measured at fair value in the condensed consolidated balance sheet as of 30 June 2016 were grouped into the fair value hierarchy as follows:

 

Recurring fair value measurements

Level 1

Level 2

Level 3

Total


USD'000

USD'000

USD'000

USD'000






Ordinary shares - unlisted

-

38,245

-

38,245


─────

-

═════

─────

38,245

═════

─────

-

═════

─────

38,245

  ═════

           

During the period, there were no transfers between the fair value hierarchy levels (30 June 2016: nil). There were also no other reclassifications of financial assets in the current period and prior period.

 

ii)          Valuation techniques used to determine fair values

 

Specific valuation techniques used to value financial instruments include:

 

-   the use of quoted market prices for level 1 listed shares;

-   the use of dealer quotes or published daily net asset value for level 2 unlisted shares;

-   the fair value of borrowing is determined using discounted cash flow analysis.

 

iii)         Valuation process

 

The Company's internal investment officers perform the valuation of listed and unlisted securities for financial reporting purposes. The valuation results are reported directly to the Audit and Valuation Committee and approved by the Board for adoption.

 

b)         Non-financial assets and financial liabilities

 

i)          Fair value hierarchy

                                                                                                                       

This note explains the judgements and estimates made in determining the fair values of the non-financial assets that are recognised and measured at fair value in the condensed consolidated interim financial information. To provide an indication about the reliability of the inputs used in determining fair value the Group has classified its non-financial assets and liabilities into the three levels prescribed under the accounting standards. An explanation of each level is provided in Note 29(a).

 

Recurring fair value measurements

 Level 1

Level 2

 Level 3

Total


USD'000

USD'000

USD'000

USD'000






As at 31 December 2016

 





Assets classified as held for sale





Investment properties - SEATH BTS tower network

-

-

45,555

 

45,555

Plant and machinery - VIHL IBS

-

-

10,525   

10,525   


─────

─────

─────

─────

Total non-financial assets

-

-

56,080

56,080


═════

═════

═════

═════






As at 30 June 2016

 





Assets classified as held for sale





Investment properties - SEATH BTS tower network

-

-

42,798

42,798

Plant and machinery - SEATH IBS

-

-

11,362  

11,362     


─────

─────

─────

─────

Total non-financial assets

-

-

54,160

54,160


═════

═════

═════

═════






i)          Fair value hierarchy (continued)

                                                                                                                       

The Group's policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

 

There were no transfers between levels in prior period.

 

ii)          Valuation technique used to determine level 3 fair values

 

Specific valuation techniques used to determine the level 3 fair value include:

 

-     sale comparison approach for level 3 investment properties as at 31 December 2016;

-     discounted cash flow ("DCF") method for level 3 plant and machinery.

 

iii)         Significant unobservable inputs (level 3)

 

The significant unobservable inputs used in the DCF calculation for the respective investment properties and plant and machinery are as follows:

 

VIHL IBS network

 

-        Future IBS growth to generate incremental rental cash inflows - such growth is funded by recurring cash inflows from existing leases while rental for new IBS and tenants is based on the same terms as those of existing leases;

 

-        Discount rates - reflecting current market assessment of the uncertainty in the amount and timing of cash flows; and

 

-        Terminal value - reflecting management's view of long-term growth in the sector.

 

SEATH BTS tower network

 

-        Future tower and tenancy growth to generate incremental rental cash inflows - such growth is funded by recurring cash inflows from existing leases while rental for new towers and tenants is based on the same terms as those of existing leases;

 

-        Discount rates - reflecting current market assessment of the uncertainty in the amount and timing of cash flows; and

 

-        Terminal value - reflecting management's view of long-term growth in the sector.

 

iv)         Valuation process

 

The Group's plant and machinery (IBS) are valued by the independent professional qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and categories of the plant and machinery being valued (IBS) or the Company's internal investment officers (BTS). The estimated fair values provided by the independent professional valuers and the Company's internal investment officers are used by the Audit and Valuation Committee as the primary basis for estimating each property's fair value. Management reviews the valuations performed by the Company's internal investment officers and the independent professional valuers for financial reporting purposes, and the valuations, as adjusted if appropriate, are approved by the Board for adoption after deliberation in the Audit and Valuation Committee. 

 

v)          Valuation inputs and relationship to fair value

 

The following table analyses the range of the significant unobservable inputs and the impact of changes of these to the fair value of investment properties and property, plant and equipment:

 

            Sensitivity as at 31 December 2016:

 


Range of

Sensitivity on management's estimates


Unobservable inputs

Change of input

 (Loss)/gain to fair value due to change





Assets classified as held for sale

 




Plant and machinery -   VIHL IBS




-     IBS growth

5%

-/+1%

(USD0.4m) - USD0.4m

-     Discount rate

16%

+/-1%

(USD1m) - USD1m

-     Terminal growth

0%

+1%

USD2.1m

-     Leasing price per square       metre per month

USD0.22 - USD0.29

-/+10%

(USD1.8m) - USD1.8m

           

            Investment Properties - BTS network

 

After being classified as asset held for sale the fair value of BTS network is based on the pricing terms set out in the sale and purchase agreement.

 

            Sensitivity as at 30 June 2016:

 


Range of Unobservable inputs

Sensitivity on management's estimates

 


Change of input

 (Loss)/gain to fair value due to change





Assets classified as held for sale

 




Plant and machinery - IBS




-     IBS growth

5%

-/+1%

(USD0.4m) - USD0.4m

-     Discount rate

16%

+/-1%

(USD1m) - USD1m

-     Terminal growth

0%

+1%

USD2.1m

-     Leasing price per square       metre per month

USD0.22 - USD0.29

-/+10%

(USD1.8m) - USD1.8m

 

Investment Properties - BTS network

 

Before and after being classified as asset held for sale the fair value of BTS network was based on the price quoted on the sale and purchase agreement plus the additional cash generated from BTS business post year end which was confirmed by the buyer and utilised by the Company in November 2016.

30         FINANCIAL RISK MANAGEMENT

 

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

 

The condensed consolidated interim financial information does not include all significant risks, management information and disclosure required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 30 June 2016.

 

There have been no changes in the risk management department since period end or in any risk management policies.

                                          

31         SEASONALITY

 

The Group's management believes that the impact of seasonality on the condensed consolidated interim financial information of the Fund is not material.

 

32         SUBSEQUENT EVENTS

 

a)         Distributions to the shareholders

 

On 31 January 2017, the Company announced the distribution of USD65.0 million which will be paid to PES shareholders early March 2017 (period ended 31 December 2015: nil) based on the record date 24 February 2017.  This represented USD0.1856 for each PES currently in issue.

 

b)         Disposal of SEATH

 

In August 2016, the Company reached agreement to sell the BTS portion of the portfolio to OCK Vietnam Towers Ltd for USD50 million. This transaction closed in December 2016, and the Company fully received the proceeds in January 2017.  An additional working capital adjustment of approximately USD1.6 million is expected to be received in May 2017.

 

 

The condensed consolidated interim financial information was approved by the Board of Directors on

08 March 2017.


This information is provided by RNS
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