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VinaLand Limited   -  VNL   

Audited financial results

Released 07:00 24-Oct-2017

RNS Number : 3933U
VinaLand Limited
24 October 2017
 

VinaLand Limited

Audited financial results for the twelve months ended 30 June 2017

VinaLand Limited ("the Company" or "VNL"), the AIM-quoted investment vehicle established to target strategic segments within Vietnam's emerging real estate market, today announces its full year results for the twelve months ended 30 June 2017 ("the Year").

Financial highlights:

·      Net asset value per share at 30 June 2017 of USD0.94 (30 June 2016: USD0.86).

·      135.8 million ordinary shares outstanding were repurchased and cancelled during the year ended 30 June 2017.

Operational highlights:

·      During the year, VNL completed five full divestments and one partial divestment, with a gross total sales value of USD129.7 million and net proceeds of approximately USD120.8 million.

·      In May 2017, VNL announced a USD40 million tender offer to purchase ordinary shares, which was paid out on 30 June 2017.

 

·      In aggregate, as at 30 June 2017 the Company has cancelled 242.0 million ordinary shares, representing 48.4 percent of the total shares in issue prior to the commencement of the share buyback programme.

Notes to Editors:

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

The company manages three closed-ended funds that trade on the London Stock Exchange including the VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, and VinaLand Limited, which trades on the AIM. Other funds managed by the company include the Forum One - VCG Partners Vietnam Fund (VVF), a UCITS-compliant, long-term, open-ended fund, and the Vietnam Equity Special Access Fund (VESAF), the company's newest fund, which invests in equities and is unencumbered by foreign restrictions or size. The company also offers two funds for Vietnamese investors in equities and fixed income.

VinaCapital's joint ventures include DFJ VinaCapital L.P. (DFJV), our venture capital fund in partnership with noted US firm Draper Fisher Jurvetson, as well as Lodgis Hospitality Holdings, a new hospitality platform focused on Southeast Asia in partnership with Warburg Pincus.

More information about VinaCapital may be found at www.vinacapital.com. The financial statements will be posted to shareholders and are available on the Company's website at www.vnl-fund.com.

Enquiries:

Jonathan Viet Luu / Joel Weiden

VinaCapital Investment Management Limited

Investor Relations / Communications

+84 28 3821 9930

jonathan.luu@vinacapital.com / 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,

 

During the 2017 fiscal year VinaLand ("VNL" or "the Company") continued its focus on the realization of its portfolio and made a number of asset sales in accordance with the strategy approved by shareholders at the EGM in November 2016. The country's macroeconomic environment continues to be one of the strongest in the region, with solid GDP growth, manageable inflation and robust foreign direct investment, all supporting the real estate sector that continues to be one of the most attractive sectors within Vietnam. The past year has seen both new and existing foreign developers significantly increase their investments in the residential, commercial and infrastructure segments of the market and merger & acquisition activity has increased. This foreign intervention has underpinned the momentum in the market and maintained pressure on the local Vietnamese developers to close the acquisition of new development projects notwithstanding the tightening of bank lending into this sector.    

 

During the financial year, VNL completed five full divestments and one partial divestment, with a gross total sales value of USD129.7 million and net proceeds of approximately USD120.8 million. These divestments enabled the Company to proceed with further distributions to shareholders, via both the ongoing share buyback programme and a USD40 million tender offer to purchase ordinary shares announced on 17 May 2017 and paid out on 30 June 2017.

 

Subsequent to the close of the fiscal year, the Company announced another tender offer to purchase shares at USD0.83 per ordinary share on 7 September 2017 and USD42.95m was paid out on 13 October 2017.

 

The positive dynamics in the real estate market over the past 12 months have continued into the new fiscal year, creating an environment which supports the Company's objective to negotiate the sale of the Company's remaining assets in a controlled and orderly manner. While there can be no guarantees, the confidence in the market should allow the realisation process to proceed in a way that will allow for further distributions to shareholders during the current fiscal year.

 

Financial results summary

 

VNL's financial results for the fiscal year ended 30 June 2017 show VNL's audited NAV per share enhanced from USD0.86 as at 30 June 2016 to USD0.94 as at 30 June 2017. The Company's share price closed FY 2017 at USD0.78 per share, a 34.8 percent increase year on year. VNL's share price to NAV discount has narrowed considerably to 17.2 percent from 32.2 percent at the end of FY 2016.

 

During the financial year, VNL repurchased and cancelled 135.8 million ordinary shares, an increase of almost four times when compared to the 36.3 million shares repurchased and cancelled in the previous fiscal year. VNL did so via ongoing share buybacks and the USD40 million tender offer announced in May 2017. As at 30 June 2017 the Company has cancelled 242.0 million ordinary shares, representing 48.4% of the total shares in issue prior to the commencement of the share buyback programme and has 258.0 million ordinary shares still outstanding.

 

In December 2016, the VinaLand Zero Dividend Preference (ZDP) shares were redeemed, and the ZDP's listing was cancelled by the London Stock Exchange on 19 December 2016. This reduced the debt at the Company (Fund) level to zero, while debt at the portfolio project level remained at 25.1% of NAV as at 30 June 2017. As further projects are divested, the level of debt at project level will continue to diminish.  

 

 

Corporate actions

 

On 25 October 2016, Mr. Nicholas Allen resigned from the Board of Directors and was replaced by Mr. Ian Lydall, who brings nearly 40 years of experience as a UK chartered accountant, primarily with PwC, with extensive experience in Vietnam and Southeast Asia.

 

On 31 December 2016, Mr. Nicholas Brooke resigned from the Board after a decade of service. The Board determined that no replacement would be named in an acknowledgement that the Company's portfolio is reducing and to control administrative costs. The Board of Directors now consists of four members.

On behalf of the Board of Directors I would like to express our gratitude to both Nick Allen and Nick Brooke for their contributions both in knowledge and significant experience over a number of years.   

 

On 18 November 2016, the Company conducted its Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) in Zurich at which time the revised strategy to focus on further realisations with a revised distribution and incentive fee policy among other matters, were supported by shareholders. 

 

The Company's performance during the 2017 fiscal year was sound and we look forward to continuing on this path in the year ahead. On behalf of your Board of Directors, I want to thank you for your continued support.

 

 

 

Michel Casselman

Chairman

VinaLand Limited

23 October 2017

 


CONSOLIDATED BALANCE SHEET

 



30 June 2017

30 June 2016


Note

USD'000

USD'000





ASSETS








Non-current




Investment properties

5

63,988

389,700

Property, plant and equipment


404

500

Intangible assets


-

3

Investments in associates

6

20,097

47,713

Prepayments for acquisitions of investments

7

22,650

27,772

Deferred income tax assets

8

-

3,638

Other non-current assets


65

1,024 



───────

───────

Total non-current assets


107,204

470,350



═══════

═══════





Current




Inventories

9

220

54,442  

Trade and other receivables

10

1,120

17,581 

Tax receivables


314

1,985

Receivables from and advances to related parties

32

1,786

1,044

Short-term investments


56

9,806

Financial assets at fair value through profit or loss


269

384 

Restricted cash


-

3,392

Cash and cash equivalents (excluding bank overdrafts)

11

88,919  

76,903 



───────

───────

Total current assets


92,684

165,537





Assets classified as held for sale

13

329,963

18,628 

 

Total assets


───────

529,851   ═══════

───────

654,515

═══════

 

 

 

 

 

 

 

 

 

 

 

 


 

 



30 June 2017

30 June 2016


Note

USD'000

USD'000





EQUITY AND LIABILITIES








EQUITY




Equity attributable to equity shareholders of the parent




Share capital

14

2,580

3,938

Additional paid-in capital

15

332,803

452,680

Equity reserve


65,166

42,115

Other reserve


(10)

(67)

Translation reserve


(45,443)

(71,877)

Accumulated losses


(113,612)

(89,953)



───────

───────



241,484

336,836

Non-controlling interests


74,867

128,413

 

Total equity


───────

316,351

───────

───────

465,249

───────

LIABILITIES








Non-current




Borrowings and debts

16

-

47,416

Deferred income tax liabilities

17

18,762

16,358



───────

───────

Total non-current liabilities


18,762

63,774





Current




Borrowings and debts

16

-

25,704

Trade and other payables

18

56,387

77,174

Payables to related parties

32

13,836

10,228

Financial liabilities at fair value through profit or loss


-

6,945

Tax payables


-

 176 



───────

───────

Total current liabilities


70,223

120,227





Liabilities classified as held for sale

13

124,515

   5,265

 

Total liabilities


───────

213,500

───────

189,266

 

Total equity and liabilities


───────

529,851

───────

654,515



═══════

═══════

Net assets per share attributable to equity

   shareholders of the parent (USD per share)

 

28

0.94

0.86  



═══════

═══════

 

 

 

 

 

 


 

 


Equity attributable to equity shareholders of the Company




 

 

Share

capital

 

Additional paid-in capital

Equity

reserve

Other

reserve

 

Translation reserve

 

 

Accumulated losses

Total equity attributable to owners of the Company

 

Non-

controlling interests

 

 

Total
equity


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000











Balance at 1 July 2016

3,938

452,680

42,115

(67)

(71,877)

(89,953)

336,836

128,413

465,249

Loss for the year

-

-

-

-

-

(23,659)

(23,659)

11,054

(12,605)

Currency translation

-

-

-

-

(2,781)

-

(2,781)

(653)

(3,434)

Reclassification of currency translation reserves on disposal of subsidiaries

-

-

-

-

29,215

-

 

29,215

-

29,215


─────

─────

─────

─────

──────

──────

─────

──────

──────

Total comprehensive loss

-

-

-

-

26,434

(23,659)

2,775

10,401  

13,176 


─────

─────

─────

─────

──────

──────

─────

──────

──────

Transactions with owners in their capacity as owners:










Repurchase and cancellation of shares (Notes 14, 15)

(1,358)

(119,877)

23,051

-

-

-

 

(98,184)

-

(98,184)

Capital contributions in subsidiaries

-

-

-

-

-

-

-

364

364

Disposals of subsidiaries

-

-

-

57

-

-

57

(52,506)

(52,449)

Distributions to non-controlling interests

-

-

-

-

-

-

-

(11,805)

(11,805)

Balance at 30 June 2017

─────

2,580

═════

───────

332,803

═══════

──────

65,166

══════

────

  (10)

════

──────

(45,443)

 ══════

──────

(113,612)

══════

───────

241,484     

═══════

───────

74,867     

═══════

───────

         316,351 

═══════

 

 

'

 

 

 

 

 


Equity attributable to equity shareholders of the Company




 

 

Share

capital

Additional paid-in capital

 

Equity

reserve

 

 

Other

reserve

 

 

Translation reserve

 

Accumulated losses

Total equity attributable to owners of the Company

 

Non-

controlling interests

 

 

Total
equity


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000











Balance at 1 July 2015

4,301

521,088

30,706

(57)

(83,209)

(81,638)

391,191

182,821

574,012

Loss for the year

-

-

-

-


(8,315)

(8,315)

3,677

(4,638)

Currency translation

-

-

-

-

(4,218)

-

(4,218)

(1,784)

(6,002)

Reclassification of currency translation reserves on disposal of subsidiaries

-

-

-

-

15,550

-

 

15,550

-

15,550

 

Total comprehensive loss

─────

-

─────

-

─────

-

─────

-

──────

11,332

──────

(8,315)

──────

3,017

──────

1,893

──────

4,910


─────

─────

─────

     ─────

──────

──────

─────

──────

──────

Transactions with owners in their capacity as owners:










Repurchase and cancellation of shares (Notes 14, 15)

(363)

(33,348)

11,409

-

-

-

 

(22,302)

-

(22,302)

Distribution to shareholders (Note 15)

-

(35,060)

-

-

-

-

(35,060)

-

(35,060)

Capital contributions in subsidiaries

-

-

-

-

-

-

-

6,874

6,874

Disposals of subsidiaries

-

-

-

-

-

-

-

(27,105)

(27,105)

Distributions to non-controlling interests

-

-

-

-

-

-

-

(35,180)

(35,180)

Acquisitions of non-controlling interests in subsidiaries

-

-

-

                 (10)

-

-

 

(10)

(890)

(900)

Balance at 30 June 2016

─────

3,938

═════

───────

452,680

═══════

──────

42,115

══════

────

(67)

════

──────

(71,877)

 ══════

──────

(89,953)

══════

───────

336,836

═══════

───────

128,413

═══════

───────

465,249 

═══════

 

 

 

 


CONSOLIDATED INCOME STATEMENT

 



Year ended



30 June 2017

30 June 2016


Note

USD'000

USD'000





Revenue

19

6,562

43,157

Cost of sales

20

(7,371)

(36,363)



──────

──────

Gross (loss)/profit


(809)

6,794





Net gain on fair value adjustments of investment

  properties and revaluations of property, plant and

  equipment

 

 

6, 21

30,122 

22,384

Selling and administration expenses

22

(20,062)

(16,378)

Net changes in fair value of financial assets and financial liabilities at fair value through profit or loss

 

 

(115)

(161)

Gain/(loss) on disposals of investments, net

23

(12,938)

6,477

Reversal of impairment/(impairment) of assets

24

204

(18,210)

Finance income


908

1,247

Finance expenses

25

(6,673)

(6,251)

Gain from acquisition of a subsidiary

6

9,721

-

Share of losses of associates

6

(2,445)

(3,563)

Gain due to dilution of ownership in an associate

6

1,670

-

Other income


367

3,552

Other expenses

26

(1,829)

(373)



───────

───────

Loss before income tax from operations


(1,879)

(4,482)

Income tax

27

(10,726)

(156)



───────

───────

Net loss from operations


(12,605)

(4,638)

Attributable to equity shareholders of the parent


(23,659)

(8,315)

Attributable to non-controlling interests


11,054

3,677



───────

───────

Net loss for the year


(12,605)

(4,638)



═══════

═══════

Loss per share

-     basic and diluted (USD per share)

 

28

(0.07)

(0.02)



───────

───────

 

 

 

 

 

 

 

 


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 



Year ended



30 June 2017

30 June 2016


Note

USD'000

USD'000





Net loss for the year


(12,605)

(4,638)





Other comprehensive income








Items that may be reclassified subsequently




 to profit or loss:




   Exchange differences on translating foreign operations


(3,434)

(6,002)

Reclassification of currency translation reserve on disposal of subsidiaries


 

29,215

 

15,550



──────

──────



25,781

9,548



──────

──────

Other comprehensive income for the year

25,781

9,548

Total comprehensive income for the year


13,176

4,910



──────

──────





Attributable to equity shareholders of the parent


2,775

3,017

Attributable to non-controlling interests


10,401

1,893



─────

─────



13,176

4,910



═════

═════

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 



Year ended



30 June 2017

30 June 2016


Note

USD'000

USD'000





Operating activities




Loss before tax


(1,879)

(4,482)

Adjustments for:




Depreciation and amortisation


50

1,118

Net changes in fair value of financial assets and financial liabilities at fair value through profit or loss

 

 

 

(6,831)

 

161

Net gain on fair value adjustments of investment properties and revaluations of property, plant and equipment

 

22

 

(30,122)

 

(22,384)

Net loss on disposal of fixed assets and written-off account balances

 

26

 

1,802

 

90

Loss/(gain) on disposals of investments, net

23

13,653

(6,477)

Gain on disposals of investment properties

23

(715)

-

Impairment of assets

24

(204)

18,210

Share of losses of associates

6

2,445

3,563

Gain from acquisition of assets

6

(9,721)

-

Loss due to dilution of ownership in an associate

6

(1,670)

-

Unrealised foreign exchange losses, net

25

922

809

Interest expense

25

4,065

3,973

Interest income


(561)

(1,025)

 

Net loss before changes in working capital


──────

(28,766)

──────

(6,444)



──────

──────

Change in trade receivables and other current assets


(2,628)

17,765

Change in inventories


446

23,184

Change in trade payables and other current liabilities


32,623

(40,237)

Income tax paid


-

(162)

 

Net cash inflow/(outflow) from operating activities


──────

        1,675

──────

──────

(5,894)

──────

Investing activities




Interest received


578

1,012

Purchases of investment properties, property, plant and equipment, and prepayments for acquisitions of investments


 

(25,345)

 

(21,508)

Proceeds from sales of subsidiaries


112,053

54,522

Proceeds from disposals of investment properties


10,635

8,694

Proceeds from disposals of investment in associates


-

123,668

Proceeds from disposals of assets/liabilities classified as held for sale


3,609

12,715

Collection of a prepayment for acquisition


2,955

-

Investments in associates


(2,014)

(1,829)

Cash acquired on acquisition of a subsidiary


26

-

Net proceeds from long-term investments


-

463

Net proceeds/(deposits) from short-term investments


7,591

(3,075)

 

Net cash inflow from investing activities


──────

         110,088    

──────

──────

174,662

──────

 

 

 

 

 



 

 



Year ended



30 June 2017

30 June 2016


Note

USD'000

USD'000





Financing activities




Additional capital contributions from non-controlling interests


364

6,874

Ordinary shares acquired by the Company                           

14

(98,184)

(22,302)

Distribution to shareholders                                                


-

(34,972)

Acquisition of non-controlling interests in subsidiaries


-

(900)

Loan proceeds from banks


58,763

19,114

Loan repayments to banks


(9,924)

(25,271)

Repayment of zero-dividend preference shares


(25,118)

-

Loan repayments to a related party


-

(2,296)

Interest paid


(9,559)

(10,567)

Distributions to non-controlling interests


(11,805)

(35,180)

 

Net cash outflow from financing activities


───────

      (95,463)  

───────

──────

(105,500)

──────

Net changes in cash and cash equivalents for the year


16,300

63,268

Cash and cash equivalents at the beginning of the year


76,903

21,820

Cash and cash equivalents classified as held for sale


(4,284)

(8,189)

Exchange differences on cash and cash equivalents


-

4

 

Cash and cash equivalents at the end of the year          

 

11

──────

88,919

══════

──────

76,903

══════

 

Major non-cash transactions included capital gains tax of USD4.7 million crystalised during the year (the year ended 30 June 2016: USD9.0 million) resulting from realised gains on divestments. The tax amounts due were withheld from disposal proceeds due to the Group by the buyers and remitted to the tax authorities and, as a result, these amounts are excluded from proceeds from disposal of subsidiaries, and disposals included in the consolidated statement of cash flows.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1          GENERAL INFORMATION

 

VinaLand 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 Company's primary objective is to focus on key growth segments within Vietnam's emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia. The Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNL.

 

At an Extraordinary General Meeting ("EGM") held on 21 November 2012 the shareholders approved a proposal that the Company make no new investments and dispose of a portion of its investments in a controlled and orderly manner so as to maximise returns to shareholders.  At a subsequent EGM held on 18 November 2016 this strategy was expanded to include the disposal of all remaining investments. The key changes impacting these financial statements are summarised as follows:

 

·      The new strategy involves the orderly sell down of investments in conjunction with ongoing development of selected projects to maximise returns to shareholders. All projects will be realised over a period of approximately three years and the proceeds collected, less operating costs, will be returned to shareholders.

 

·      The Third Amended and Restated Investment Management Agreement introduces a new fee structure composed of disposal and alignment fees, prepayment advances and a retention account to ensure that the Investment Manager is incentivised to meet the investing policy (Note 32).

 

The consolidated financial statements for the year ended 30 June 2017 were approved for issue

by the Company's Board of Directors on 23 October 2017.

 

2          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

 

2.1        Basis of preparation

 

The consolidated financial statements of the Group for the year ended 30 June 2017 comprise the Company and its subsidiaries (together, the "Group") and the Group's interests in associates.

 

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

 

The consolidated financial statements have been prepared using the historical cost convention, as modified by the revaluation of investment properties, property, plant and equipment, financial assets and financial liabilities at fair value through profit or loss, the measurement bases of which are described in the accounting policies below.

 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

 

 

 

 

 

2.2        Changes in accounting policy and disclosures

 

(a)        New and amended standards adopted by the Group

 

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

 

(b)        New standards, amendments and interpretations issued but not yet effective and not early adopted

 

At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been early adopted by the Group.

 

The Board anticipates that all such pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective dates of these pronouncements. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's consolidated financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's consolidated financial statements.

 

IFRS 9, "Financial instruments", addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was completed in July 2014 and it is effective for annual periods beginning on or after 1 January 2018. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be

classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group expects the adoption of the new standard will affect classifications of its financial assets only. Its loans and receivables are expected to satisfy the conditions for classification as financial assets at amortised cost. Equity investments currently measured at fair value through profit or loss will continue to be measured on the same basis under IFRS 9. The Group's classifications of financial liabilities will remain the same.

 

IFRS 15, "Revenue from contracts with customers", was issued on 28 May 2015 and it is effective for annual periods beginning on or after 1 January 2018. It establishes a comprehensive framework for determining when to recognise revenue and how much revenue to recognise. The core principle in that framework is that an entity should recognise revenue upon the transfer of promised goods and services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The Group is yet to assess IFRS 15's full impact and intends to adopt the standard no later than the financial year ending 30 June 2019.

 

 

Amendments to IAS 140 "Investment Property" that was issued in December 2016 and effective for annual reporting periods beginning on or after 1 January 2018. The amendment clarified that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition. This change must be supported by evidence. The Board confirmed that a change in intention, in isolation, is not enough to support a transfer. The issue arose from confusion over whether an entity transfer's property under development from inventory to investment property when there is evidence of a change in use that was not explicitly included in the standard. The list of evidence was therefore recharacterised as a non-exhaustive list of examples to help illustrate the principle. The examples were expanded to include assets under construction and development and not only transfers of completed properties.

 

IFRS 16, "Leases", the new leasing standard establishes principles for the recognition, measurement, presentation and disclosure of leases, with the objective of ensuring that lessees and lessors provide relevant information that faithfully represents those transactions. IFRS 16 was issued in January 2016 and effective for annual reporting periods beginning on or after 1 January 2019. For lessees, the new standard brings most leases (with limited exceptions) on-balance sheet, eliminating the distinction between operating and finance leases. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value (as further defined in the standard with examples including tablet and personal computers, small items of office furniture and telephones.). A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Lessor accounting remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor's risk exposure. The Group is yet to assess IFRS 16's full impact and intends to adopt the standard no later than the financial year ending 30 June 2020.

 

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

 

2.3        Consolidation

 

(a)        Subsidiaries

 

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

 

The majority of the Group's subsidiaries have a reporting date of 30 June. For those subsidiaries with a different reporting date, the Group consolidates management information prepared for the year to 30 June.



 

 

 

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.

 

If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

 

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

 

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

 

Gain on bargain purchase is immediately allocated to the consolidated income statement as at the acquisition date.

 

Inter-company transactions, balances, income and expenses on transactions between the Group's companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

(b)        Changes in ownership interests in subsidiaries without change of control

 

Changes in ownership of interests in a subsidiary that do not result in loss of control of the subsidiary are accounted for as equity transactions whereby the difference between the consideration paid and the proportionate change in the parent entity's interest in the carrying value of the subsidiary's net assets is recorded in equity and attributable to the owners. No adjustment is made to the carrying value of the subsidiary's net assets as reported in the consolidated financial statements.

 

(c)        Disposal of subsidiaries

 

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

 

 

 

 

(d)        Associates

 

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. Under the equity method, the carrying amount of the investment is increased or decreased to recognise the Group's share of the profit or loss of the investee after the date of acquisition. The Group's investments in associates include goodwill identified on acquisition.

 

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

 

The Group's share of post-acquisition profit or loss of an associate is recognised in the consolidated income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

 

The Group determines at each reporting date whether there is any objective evidence that the investment in the associates is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount as 'share of profit/(loss) of associates' in the consolidated income statement.

 

Profits and losses resulting from upstream and downstream transactions between the Group and its associates are recognised in the Group's consolidated financial statements only to the extent of unrelated investors' interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

Dilution gains and losses arising in investments in associates are recognised in the consolidated income statement.

 

2.4        Foreign currency translation

 

(a)        Functional and presentation currency

 

The Group's consolidated financial statements are presented in United States Dollars ("USD") ("the presentation currency"). The financial statements of each consolidated entity are initially prepared in the currency of the primary economic environment in which the entity operates ("the functional currency"), which for most of the Group's investments is Vietnam Dong ("VND"). The financial statements prepared using VND are then translated into the presentation currency of USD. USD is used as the presentation currency because it is the primary basis for the measurement of the performance of the Group (specifically changes in the net asset value of the Group) and a large proportion of significant transactions of the Group are denominated in USD.



 

 

 

 (b)       Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated income statement.

 

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction. Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined.

 

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as available for sale, are included in other comprehensive income.

 

(a)        Group companies

 

The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

(i)         assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

 

(ii)         income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

 

(iii)        all resulting exchange differences are recognised in other comprehensive income.

 

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

 

2.5     Investment property

 

Investment properties are properties owned or held under finance leases to earn rentals or capital appreciation, or both, or land held for a currently undetermined use.

 

Property under construction or development for future use as investment property is treated as investment property and is measured at fair value where the fair value of the investment property under construction or development for future use can be reliably determined.



 

 

 

Investment properties are stated at fair value. At the end of each quarter of the financial year, the fair values of a selection of investment properties are assessed by the Board such that the fair values of all investment properties are assessed at least once each financial year. At the date of assessment, two independent valuation companies with appropriately recognised professional qualifications and relevant experience in the location and category being valued undertake a valuation of each property selected. Exceptions to engaging two independent valuers are made in the following circumstances:

 

·      For any project whose value is equal to or is below USD5 million: Only one valuer is engaged to perform a valuation of the property, and subsequently an updated valuation.

 

·      For projects being divested with (i) sales and purchase agreement ("SPA") signed, (ii) a deposit received and (iii) conditions precedent readily achievable. Their fair value is based on the agreed selling price and only one independent valuation is obtained if required by the Valuation Committee.

 

The fair value is estimated by the independent valuation companies assuming there is an agreement between a willing buyer and a willing seller in an arm's length transaction after proper marketing; wherein the parties have each acted knowledgeably, prudently and without compulsion. The valuations by the independent valuation companies are prepared based upon direct comparison with sales of other similar properties in the area and the expected future discounted cash flows of a property using a yield that reflects the risks inherent therein. The estimated fair values provided by the independent valuation companies are used by the Valuation Committee as the primary basis for estimating each property's fair value.  In addition to the reports of the independent valuation companies the valuation committee considers information from other sources, including those sources referred to in Note 3, before recommending each property's estimated fair value to the Board for approval.

 

In addition to the annual revaluation cycle, at the end of each quarter the Investment Manager reviews the entire portfolio to determine if there are any material changes to investment properties or other indicators that might mean that the value of an investment property has materially changed. Subject to the results of this review a more detailed assessment of those properties may be performed.  If there is an indication that an investment property's value has increased then the investment property will be included in the independent valuation program.  If there is an indication that an investment property's value has declined then an assessment will be made in respect to quantifying the fall in value.  This involves either obtaining an independent valuation of the investment property or determining the change in value of each property based on an internal assessment.  Based upon the analysis performed by the Investment Manager or the independent valuation report, the Valuation Committee determines whether any valuation adjustments should be recommended to the Board for approval.

 

Any gain or loss arising from a change in fair value of investment properties is recognised in the consolidated income statement.

 

When an item of property, plant and equipment is transferred to investment property following a change in its use, any differences arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is treated in the same way as a revaluation under IAS 16. Any resulting increase in the carrying amount of the property is recognised in profit or loss to the extent that it reverses a previous impairment loss, with remaining increase recognised in other comprehensive income and increase directly to equity in revaluation surplus. Any resulting decrease in the carrying amount of the property is initially

 

 

 

 

charged in other comprehensive income against any previous recognised revaluation surplus, with any remaining decrease charged to profit or loss

 

If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting purposes. Where an investment property undergoes a change in use, evidenced by commencement of development with a view to sale, the property is transferred to inventories. A property's deemed cost for subsequent accounting as inventories is its fair value at the date of change in use.

 

All costs directly associated with the purchase and construction of an investment property, and all subsequent capital expenditures for the development, which qualify as acquisition costs, are capitalised.

 

Borrowing costs for property under construction or development are capitalised if they are directly attributable to the acquisition, construction or production of that qualifying asset.

Capitalisation of borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred. Capitalisation of borrowing costs continues until the assets are substantially ready for their intended use. If the resulting carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised. The capitalisation rate is arrived at by reference to the actual rate payable on borrowings for development purposes or, with regard to that part of the development cost financed out of general funds, to the average rate.

 

2.6        Leases

 

Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the leases' commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

 

Leases which do not transfer substantially all the risks and rewards of ownership to the

Group are classified as operating leases, unless they are treated as investment properties as described in Note 2.5. Where the Group has the use of an asset held under an operating lease, payments made under the lease are charged to the consolidated income statement on a straight line basis over the term of the lease. Prepayments for operating leases represent properties held under operating leases where a portion, or all, of the lease payments have been paid in advance, and the properties cannot be classified as investment properties.

 

2.7        Property, plant and equipment

 

All property, plant and equipment, except buildings and leasehold land improvements, are stated at cost less accumulated depreciation and impairment losses as set out in Note 2.14. The cost of self-constructed assets includes the cost of materials, direct labour, overheads and the initial estimate of the costs of dismantling and removing the items and restoring the site on which they are located.

 

Buildings and leasehold land improvements are revalued to fair value in accordance with the methods and processes as set out in Note 2.5. Any surplus arising on the revaluation is recognised in a revaluation reserve within equity, except to the extent that the surplus reverses a previous revaluation deficit on the building charged to the consolidated income statement, in which case a credit to that extent is recognised in the consolidated income statement. Any deficit on revaluation is charged in the consolidated income statement except to the extent that it reverses a previous revaluation surplus on a building, in which case it is taken directly to the revaluation reserve. Any revaluation surplus remaining in equity on disposal of the asset is transferred to accumulated losses.

 

 

 

 

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

 

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. The carrying values of any parts replaced as a result of such replacements are expensed at the time of replacement.  All other costs associated with the maintenance of property, plant and equipment are recognised in the consolidated income statement as incurred.

 

Depreciation is charged to the consolidated income statement on a straight-line basis over the estimated useful lives of property, plant and equipment, and major components that are accounted for separately. The estimated useful lives are as follows:

 

Buildings                                                            7 to 45 years

Machinery, plant and equipment                           4 to 20 years

Furniture, fixtures and office equipment                 3 to 5 years

            Motor vehicles                                                     5 to 10 years

 

Material residual value estimates and estimates of useful lives are reviewed at least annually, irrespective of whether assets are revalued.

 

Assets held under finance leases which do not transfer title to the assets to the Group at the end of the leases are depreciated over the shorter of the estimated useful lives shown above and the terms of the leases.

 

2.8     Intangible assets

 

Intangible assets represent software. Intangible assets acquired separately are measured initially at cost. The cost of an intangible asset acquired in a business combination is the asset's fair value at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses. The carrying values of the assets are reviewed annually for impairment.

 

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that they may be impaired. The amortisation period and method are reviewed at least at each financial year end. The estimated useful lives are as follows: 

 

Software                                                            3 to   5 years

 

2.9        Non-current assets (or disposal groups) and liabilities held for sale

 

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable at the reporting date. They are presented separately in the consolidated balance sheet. They are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair values less costs to sell. Assets held for sale are not subject to depreciation or amortisation subsequent to their classification as held for sale.

 

Liabilities are classified as held for sale and presented as such in the consolidated balance sheet if they are directly associated with a disposal group.

 

 

 

 

 

 

 

 

 

 

 

2.10      Financial assets

 

(a)        Classification

 

The Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. 

 

 (i)        Financial assets at fair value through profit or loss

 

Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or designated by management to be carried at fair value through profit or loss at inception. Financial assets at fair value through profit or loss held by the Group include unlisted equity securities. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise they are classified as non-current.

 

 (ii)        Loans and receivables

 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period, which

are classified as non-current assets. The Group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the consolidated balance sheet.

 

(b)        Recognition and measurement

 

Purchases or sales of financial assets are recognised on the trade-date, being the date on which the Group commits to purchase or sell the asset.

 

Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the consolidated income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

 

Net changes in fair value of financial assets at fair value through profit or loss includes net unrealised gains in fair value of financial assets and net gains from realisation of financial assets during the year.

 

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the consolidated income statement within 'net changes in fair value of financial assets at fair value through profit or loss' in the period in which they arise.

 

2.11      Offsetting financial instruments

 

Financial assets and liabilities are offset and the net amount reported in the consolidated balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

 

 

 

 

 

 



 

 

 

2.12        Prepayments for acquisitions of investments

 

These represent prepayments made by the Group to vendors for land compensation and other related costs including professional fees directly attributed to an investment property, where the final transfer of the property is pending the approval of the relevant authorities and/or is subject to either the Group or the vendors completing certain performance conditions. Such prepayments are measured initially at cost until such time as the approval is obtained or conditions are met at which point they are transferred to the appropriate investment accounts. 

 

2.13      Impairment of assets

 

The Group's goodwill, operating lease prepayments, property, plant and equipment, intangible assets, trade and other receivables, prepayments for acquisitions of investments, and interests in associates are subject to impairment testing.

 

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at a cash-generating unit level. Goodwill in particular is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management controls the related cash flows.

 

Goodwill and intangible assets with indefinite lives are tested for impairment annually, while other assets are tested when there is an indicator of impairment.

 

An impairment loss is recognised as an expense immediately for the amount by which an asset's carrying amount exceeds its recoverable amount unless the relevant asset is carried at a revalued amount under the Group's accounting policy, in which case the impairment loss is treated as a revaluation decrease, but only to the extent of the revaluation surplus for that same asset according to that policy. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use.

 

2.14      Inventories

 

The Group's inventories arise where there is a change in use of investment properties evidenced by the commencement of development with a view to sale, and the properties are reclassified as inventories at their deemed cost, which is the fair value at the date of reclassification. They are subsequently carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less costs to complete redevelopment and selling expenses.

 

2.15      Trade receivables

 

Trade receivables are amounts due from customers for merchandise sold or services performed         in the ordinary course of business. If collection is expected in one year or less (or in the norm operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

 

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

 

2.16      Cash and cash equivalents

 

Cash and cash equivalents include cash in banks and on hand as well as short term highly liquid investments such as money market instruments and bank deposits with original maturity terms of not more than three months.

 

2.17      Short-term investments

 

Short-term investments include bank deposits with original maturity terms of between three and twelve months.

 

 

 

2.18      Share capital

 

Ordinary shares are classified as equity. Share capital is determined using the nominal value of shares that have been issued. Additional paid-in capital includes any premiums received on the initial issuance of the share capital. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 

2.19      Ordinary shares acquired by the Company

 

Shares which are repurchased by the Company are cancelled and whilst the amount of the authorised share capital is not affected, the issued share capital is reduced accordingly.

 

If the cost of purchasing ordinary shares is less than the net asset value attributable to the shares acquired, the difference is transferred to the Company's equity reserve. If the cost of purchasing ordinary shares is greater than the net asset value of the shares, i) the amount of any equity reserve, additional paid-in capital account or fully paid share capital of the Company, and ii) any amount representing unrealised profits of the Company for the time being standing to the credit of any revaluation reserve maintained by the Company may be reduced by a sum not exceeding the amount by which the repurchase payment exceeds the net asset value of the shares.

 

2.20      Trade payables

 

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

 

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 

2.21      Borrowings

 

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the profit or loss over the period of the borrowings using the effective interest method.

 

2.22      Borrowing costs

 

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

 

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

 

2.23      Current and deferred income tax

 

The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.  In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

 

Current income tax assets and/or liabilities comprise claims from or obligations to fiscal authorities relating to the current or prior reporting periods that are not yet settled at the reporting date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year. All changes to current tax assets or liabilities are recognised as a component of tax expense in the consolidated income statement.

 

 

Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. In addition, tax losses available to be carried

forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

 

However, deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and associates is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the

extent that it is probable that they will be able to be offset against future taxable income.

 

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the reporting date. Most changes in deferred tax assets or liabilities are recognised as a component of tax expense in the consolidated income statement. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is charged directly to other comprehensive income are charged or credited directly to other comprehensive income.

 

2.24      Provisions, contingent liabilities and contingent assets

 

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

 

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

 

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation and there is uncertainty about the timing or amount of the future expenditure require in settlement. Where there are a num-ber of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Long-term pro-vi-sions are discounted to their present values, where the time value of money is material.

 

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate of the Group's management.

 

The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.

A contingent asset is a possible asset that arises from past events, whose existence will be confirmed by uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses their existence when inflows of economic benefits are probable, but not virtually certain.

 

 

 

 

 

2.25      Revenue recognition

 

Revenue is measured at the fair value of the consideration received or receivable, and

represents amounts receivable for goods supplied, stated net of discounts, returns and value

added taxes. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group's activities, as described below.

 

(a)        Sales of real estate

 

Deposits received from buyers to reserve rights to buy houses are recognised as a liability on the consolidated balance sheet. These amounts are recorded as unearned revenue when the house's foundation is completed and a sales and purchase agreement is signed with the buyer.  Unearned revenue is recorded as revenue when the construction is completed and the house is handed over to the buyer.

 

Revenue on sales of apartments is recognised when the Company has transferred to the buyer the significant risks and rewards of the ownership in a transaction that is in substance a sale and does not have a substantial continuing involvement with the property.

 

(b)        Interest income

 

Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognised using the original effective interest rate.

 

(c)        Dividend income

 

Dividend income is recognised when the right to receive payment is established.

 

2.26      Related parties

 

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

 

Enterprises and individuals that directly, or indirectly through one or more immediately, control, or are controlled by, or under common control with, the Company, including holding Company, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owing directly, or indirectly, an interest in the voting power of the Company that give them significant influence over the Company, key management personnel, including directors and officers of the Company and the close members of the family. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.

 

2.27      Disposal fee and alignment fee

 

The disposal fee and alignment fee liabilities are designated as financial liabilities at fair value through profit or loss, net of any prepayment advances received up to the date of the balance sheet. Management estimates the fees' fair value at each balance sheet date using a discounted cash flow model developed by an independent valuation company and based on the Company's projected completion, collections of proceeds from sales of the remaining properties and distributions to shareholders. The change in liabilities due to the Investment Manager during the year is included as "disposal fee and alignment fee (expense)/recovery" in the consolidated income statement and is further described in Note 32 to these consolidated financial statements. An expense results from an increase in the liabilities to the Investment Manager, and a recovery of previously expensed disposal fee and alignment fee results from a decrease in the disposal fee and alignment fee liability to the Investment Manager at the reporting date.

 

 

 

 

2.28      Loss per share and net asset value per share

 

The Group presents basic loss per share for its ordinary shares. Basic loss per share is calculated by dividing the profit or loss attributable to the ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

 

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding during the year to assume conversion of all dilutive potential ordinary shares.

 

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

 

2.29      Segment reporting

 

An operating segment is a component of the Group:

 

·      that engages in investment activities from which it may earn revenues and incur expenses;

·      whose operating results are based on internal management reporting information that is regularly reviewed by the Investment Manager to make decisions about resources to be allocated to the segment and assess its performance; and

·      for which discrete financial information is available.

 

3          CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

When preparing the consolidated financial statements, the Group undertakes a number of accounting judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and may not equal the estimated results. Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below.



 

 

 

3.1        Fair value of investment properties

 

The investment properties of the Group are stated at fair value in accordance with accounting policies 2.5. The fair values of investment properties are based on valuations by independent professional valuers including CB Richard Ellis, Savills, Jones Lang LaSalle and Cushman & Wakefield. These valuations are based on certain assumptions which are subject to uncertainty and might materially differ from the actual results. The estimated fair values provided by the independent professional valuers are used by the Valuation Committee as the primary basis for estimating each property's fair value for recommendation to the Board. 

 

In making its judgement, the Valuation Committee considers information from a variety of sources including:

 

(i)         current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;

 

(ii)         recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the dates of those transactions;

 

(iii)        recent developments and changes in laws and regulations that might affect zoning and/or the Group's ability to exercise its rights in respect to properties and therefore fully realise the estimated values of such properties;

 

(iv)        discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of external evidence such as current market rents and sales prices for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows; and

 

(v)         recent compensation prices public by local authority at the province where the property is located.

 

Sensitivity analyses are provided in the respective note disclosures on investment properties.

 

3.2        Impairment of prepayment for acquisitions of investments

 

The Group estimates the recoverable amounts of significant prepayments for acquisitions of investments either based on management's internal assessment or by engaging independent valuers in accordance with the valuation methods and processes as set out in Notes 2.5 and 3.1.

 

3.3        Disposal fee and alignment fee

 

The liabilities of the Group are stated at fair value in accordance with accounting policy 2.28. Their fair value is estimated at each balance sheet date by an independent valuation company. The valuation is based on certain assumptions which are subject to uncertainty and might materially differ from the actual results, including:

 

(i)         the timing and amount of disposals;

 

(ii)         development expenditure and operating expenses of the Group;

 

(iii)        the timing and amount of distributions to shareholders using a variety of methods;

 

 

 

 

 

 

4          SEGMENT ANALYSIS

 

In identifying its operating segments, management generally follows the Group's sectors of investment 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 commercial, residential and office buildings, hospitality, mixed-use segments and cash and deposits.

 

The activities undertaken by the commercial segment include the development and operation of investment properties. Apartments and villas properties which are developed for sale, land and office buildings are included in the residential and office buildings segment. The hospitality segment includes the development and operation of hotels and related services. The mixed-use segment includes multi-purpose projects. Strategic decisions are made on the basis of segment operating results.

 

Each of the operating segments is managed and monitored separately by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental profit or loss, the majority of expenses are common to all segments and therefore cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.

 

There is no measure of segment liabilities regularly reported to the Investment Manager; therefore, liabilities are not disclosed in the sector analyses.

 



 

 

 

Segment information can be analysed as follows for the reporting years:

 

(a)        Consolidated income statement

 


Year ended 30 June 2017

 

 

 

Commercial

Residential and office buildings

 

 

Hospitality

 

Mixed use

 

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

Revenue

-

6,562  

-

-

6,562  

Cost of sales

-

 (7,371)

-

-

 (7,371)

 

──────

──────

──────

──────

──────

Gross loss

    -

 (809)

    -

      -

 (809)

Net (loss)/gain on fair value adjustments of investment properties and revaluations of property, plant and equipment

 

 

        (1,301)

 

 

 720

 

 

    -

 

 

 30,703

 

 

 30,122

Net gain/(loss) from disposal of investments,

-

 (22,441)

    -

 9,503

 (12,938)

Gain from acquisition of an asset

-

9,721

-

-

9,721

Gain due to dilution in ownership of associate

-

1,670

-

-

1,670

Impairment of assets

 -

 (404)

    -

 608

204

Finance income

 2

 730

 3

 173

 908

Share of losses of associates

 (50)

 (2,249)

 (146)

 -

 (2,445)

Other income

 8

358

 -

1

 367

 

──────

──────

──────

──────

──────

Total (loss)/profit before unallocatable expenses

 

 (1,341)

 

 (12,704)

 

 (143)

 

40,988

 

26,800

Selling and administration expenses

 

 

 

 

(20,062)

Net changes in fair value of financial assets and financial liabilities at fair value through profit or loss

 

 

 

 

(115)

Finance expenses

 

 

 

 

(6,673)

Other expenses

 

 

 

 

(1,829)

 

 

 

 

 

──────

Loss before tax

 

 

 

 

(1,879)

Income tax

 

 

 

 

(10,726)

 

Net loss for the year

 

 

 

 

──────

(12,605)

══════

 



 

 

 


Year ended 30 June 2016

 

 

 

Commercial

Residential and office buildings

 

 

Hospitality

 

Mixed use

 

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

Revenue

-

43,157

-

-

43,157

Cost of sales

-

(36,363)

-

-

(36,363) a

 

──────

──────

──────

──────

──────

Gross profit

-

6,794

-

-

6,794

Net (loss)/gain on fair value adjustments of investment properties and revaluations of property, plant and equipment

(171)

13,403

-

9,152

22,384

Net gain/(loss) from disposal of investments

-

1,513

5,627

(663)

6,477

Impairment of assets

-

(18,210)

-

-

(18,210)

Finance income

1

911

110

225

1,247

Share of losses of associates

(1,619)

(1,612)

(327)

(5)

(3,563)

Other income

582

1,495

-

1,475

3,552

 

──────

──────

──────

──────

──────

Total (loss)/profit before unallocatable expenses

(1,207)

4,294

5,410

10,184

18,681

Selling and administration expenses

 

 

 

 

(16,378)

Net changes in fair value of financial assets and financial liabilities at fair value through profit or loss

 

 

 

 

(161)

Finance expenses

 

 

 

 

(6,251)

Other expenses

 

 

 

 

(373)

 

 

 

 

 

──────

Loss before tax

 

 

 

 

(4,482)

Income tax

 

 

 

 

(156)

 

Net loss for the year

 

 

 

 

──────

(4,638)

══════

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)        Consolidated balance sheet

 

 

As at 30 June 2017

 

 

 

Commercial

Residential and office buildings

 

 

Hospitality

 

Mixed

use

 

Cash and deposits

 

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

 

Investment properties

 -

 33,700

 -

 30,288

 -

63,988

Property, plant and equipment

   -

      -

 -

 404

 -

404

Intangible assets

-

-

-

-

-

-

Investments in associates

 20,097

 -

 -

 -

 -

20,097

Prepayments for acquisitions of investments

 

-

 

 22,650

 

-

 

-

 

-

 

22,650

Inventories

-

220

  -

-

-

220

Trade, tax and other receivables

-

1,254

-

1,966

-

3,220

Short-term investments

-

-

-

-

56

56

Financial assets at fair value through profit or loss

 

-

 

-

 

-

 

269

 

-

 

269

Cash and cash equivalents

-

-

-

-

88,919

88,919

Assets classified as held for sale

3,017

 193,373

 4,287

129,286

 -

329,963

Other assets

-

35

-

30

-

65

 

Total assets

──────

23,114

══════

───────

251,232

═══════

──────

4,287

══════

──────

162,243 

══════

──────

   88,975

══════

───────

529,851

═══════

Total assets include:

-   Addition to non-current assets (other than financial instruments and deferred tax assets)

2,026

66,584

-

73

-

68,683

             



 

 

 

 

As at 30 June 2016

 

 

 

Commercial

Residential and office buildings

 

 

Hospitality

 

Mixed

use

 

Cash and deposits

 

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

 

Investment properties

4,350

211,200

-

174,150

-

389,700

Property, plant and equipment

-

66

-

434

-

500

Intangible assets

-

-

-

3

-

3

Investments in associates

17,513

25,768

4,432

-

-

47,713

Prepayments for acquisitions of investments

 

-

 

25,425

 

-

 

2,347

 

-

 

27,772

Inventories

-

51,550

-

2,892

-

54,442

Trade, tax and other receivables

98

12,955

5,344

2,213

-

20,610

Short-term investments

-

-

-

-

9,806

9,806

Financial assets at fair value through profit or loss (*)

 

-

 

-

 

-

 

269

 

-

 

269

Restricted cash

-

-

-

-

3,392

3,392

Cash and cash equivalents

-

-

-

-

76,903

76,903

Assets classified as held for sale

-

18,628

-

-

-

18,628

Other assets

197

4,432

-

33

-

4,662

 

Total assets

──────

          22,158

══════

───────

350,024   

═══════

──────

9,776

══════

──────

182,341

══════

──────

90,101 

══════

───────

654,400

═══════

Total assets include:

-   Addition to non-current assets (other than financial instruments and deferred tax assets)

1,950

16,064

-

10,341

-

28,355

             

(*)   The amount presented in the table for 30 June 2016 above did not include the fair value of the call options which gave the Group the rights to early redeem the ZDP shares. The Investment Manager did not manage the ZDP shares and call options under any particular segment.

 

 

 

 

 

 

 



 

 

 

5          INVESTMENT PROPERTIES

 


30 June 2017

30 June 2016


USD'000

USD'000




Opening balance

389,700

479,454

Additions

66,514

25,697

Disposals

(130,255)

(119,738)

Transferred to inventories

-

(9,240)

Exchange of inventories for investment properties

-

2,969

Transferred to assets classified as held for sale (Note 13)

(287,058)

(5,586)

Net gain from fair value adjustments (Note 21)

30,122

24,187

Translation differences

(5,035)

(8,043)

 

Closing balance

───────

63,988  

═══════

───────

389,700

═══════

 

The Group's investment properties were revalued during the year by independent professionally qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and categories of the investment properties valued.

 

There were no bank borrowings secured by investment properties as at 30 June 2017 (30 June 2016: USD102.9 million). During the year, the Group capitalised borrowing costs amounting to USD4.9 million (year ended 30 June 2016: USD4.9 million) into investment properties.

 

At 30 June 2017, land use rights certificates have not been fully issued for certain portions of the Group's investment properties as final issuance is subject to the completion of a number of administrative steps required by local authorities and/or the settlement of any outstanding land taxes. In the Investment Manager's view, the lack of land use rights certificates does not have any material impact on the existence and valuation of the investment properties as land use rights over the land area for each project have been specifically granted under investment licences.

 

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. All of the Group's investment properties are in Level 3 of the fair value hierarchy. There were no transfers between levels during the year (2016: none).


 

 

Information about fair value measurements using unobservable inputs (Level 3) is set out below:

 


Level 3 - Range of unobservable inputs

Sensitivity on management's estimates

Segment

Valuation technique

Valuation (USD'000)

Valuation per square metre (USD)

Sensitivities in sales price per

 square metre (USD'000)

Residential and office buildings

Direct comparisons

33,700

 

30

 

Change in sales price per

square metre





-10%

0%

10%





30,330

33,700

38,070

Mixed use

Direct comparisons

30,288

 

785 - 938

 

Change in sales price per

square metre





-10%

0%

10%





24,908

30,288

35,668

 



 

 

 

For the comparative balance sheet date:

 



Level 3 - Range of unobservable inputs

(probability-weighted average)

 

Sensitivity on management's estimates

Segment

Valuation technique

Valuation (USD'000)

Discount rate

Cap rate

Valuation per square metre (USD)

Sensitivities in sales price per

 square metre (USD'000)

Sensitivities in discount and cap rates (USD'000)

Residential and office buildings (*)

Discounted

cash flows

102,140

19% - 21.5%

N/A

N/A




Change in discount rate



-1%

0%

1%












105,031

102,140

99,202

Residential and office buildings

Direct comparisons

 

109,060

N/A

N/A

30 - 5,845

Change in sales price per

square metre










-10%

0%

10%












98,154

109,060

119,966






Mixed use

Discounted

cash flows









Change in discount rate

103,350

17%

8.5%

N/A





           -1%

0%

1%










Change in cap rate

-1%

127,815

114,762

102,915










0%

115,666

103,350

92,673










1%

106,127

94,882

84,641

Mixed use

Direct comparisons

70,800

N/A

N/A

258 - 1,040

Change in sales price per

square metre










-10%

0%

10%












63,720

70,800

77,880






Commercial

Direct comparisons

4,350

N/A

N/A

1,758

Change in sales price per

square metre










-10%

0%

10%












3,915

4,350

4,785






 

(*)   The valuations of these investment properties assumed that they would be developed and sold within a definite time period; therefore, no capitalisation rates were used in such valuations.


 

 

6          SUBSIDIARIES AND ASSOCIATES

 

(a)        Investments in associates

 


30 June 2017

30 June 2016


 USD'000

USD'000




Opening balance

47,713

165,205

Additions

  2,014

1,829

Gain due to dilution of ownership in an associate

  1,670

-

Disposals (*)

(24,568)

(115,758)

Reclassified as held for sale (**)

  (4,287)

-

Share of losses of associates

  (2,445)

(3,563)

 

Closing balance

───────

20,097

═══════

──────

47,713

══════

 

(*)    During the year, the Group completed its structuring plan regarding Aqua City Joint Stock Company. As a result, the company was split into two companies which are Aqua City Joint Stock Company and Aqua Dona City Company Limited. Aqua City Joint Stock Company became a wholly-owned subsidiary of the Group from 15 March 2017.

 

(**)   During the year, assets and liabilities of Romana Services - Trading - Investment Joint Stock Corporation were reclassified to held for sales following the signing of a sale and purchase agreement (Note 13).

 

 Particulars of material operating associates and their summarised financial information, extracted from their financial statements as at 30 June 2017 and 30 June 2016, are as follows:

 

As at 30 June 2017


 



Incorporation

 

 

Principal activity

 

 

 

Assets

 

 

 

Liabilities

 

 

 

Revenue

 

 

 

Loss

 

Share of losses to the Group

 

Equity interest held




USD'000

USD'000

USD'000

USD'000

USD'000

%










Thang Loi Textile Garment Joint Stock Company (***)

 

 

Vietnam

 

 

Property

 

 

  49,101

 

 

  7,893

 

 

  2,925

 

 

  (80)

 

 

  (50)

 

 

65

           

As at 30 June 2016


 



Incorporation

 

 

Principal activity

 

 

 

Assets

 

 

 

Liabilities

 

 

 

Revenue

 

 

 

Loss

 

Share of losses to the Group

 

Equity interest held




USD'000

USD'000

USD'000

USD'000

USD'000

%










Aqua City Joint Stock Company (*)

 

Vietnam

 

Property

 

59,232

 

  8,942

 

  -

 

(2,866)

 

(1,433)

 

50

Other associates

Vietnam

Property/

Hospitality

65,501

25,872

3,984

 (3,138)

  (1,946)





124,733

34,814

3,984

(6,004)

(3,379)


 

(***) As at the reporting date, the Group has 65% equity interest in Thang Loi Textile Garment Joint Stock Company. Management considers the interest an investment in an associate as the Group does not have control over the investee. The Group and a co-investor have significant influence over this investee.


 

 

(b)        Principal subsidiaries

 

The Group had the following principal subsidiaries which are held through special purpose vehicles established outside of Vietnam as at 30 June 2017 and 30 June 2016:

 



30 June 2017


30 June 2016


 

Name

Country of incorporation and place of business

Percentage interest held by the Group

Percentage interest held by non-controlling interests


Percentage interest held by the Group

Percentage interest held by non-controlling interests

 

Nature of business









VinaCapital Hoi An Resort Limited

Vietnam

-

-


100.0%

-

Hospitality

VinaCapital Danang Resort Limited

Vietnam

-

-


75.0%

25.0%

Property investment

VinaCapital Commercial Center Limited (Vietnam) (*)

Vietnam

38.2%

61.8%


38.2%

61.8%

Property investment

Mega Assets Company Limited (Vietnam)

Vietnam

75.0%

25.0%


75.0%

25.0%

Property investment

SIH Real Estate Limited Company (Vietnam)

Vietnam

75.0%

25.0%


75.0%

25.0%

Property investment

Dien Phuoc Long Real Estate Company Limited

Vietnam

100.0%

-


100.0%

-

Property investment

VinaCapital Phuoc Dien Co. Limited

Vietnam

100.0%

-


100.0%

-

Property investment

Dong Binh Duong Urban Development Co. Limited

Vietnam

-

-


70.0%

30.0%

Property investment

Vina Dai Phuoc Corporation Limited

Vietnam

-

-


54.0%

46.0%

Property investment

Viet Land Development Corporation Limited

Vietnam

90.0%

10.0%


90.0%

10.0%

Property investment

Vinh Thai Urban Development Corporation Limited

Vietnam

53.3%

46.7%


53.3%

46.7%

Property investment

Thang Long Property Company Limited

Vietnam

-

-


65.0%

35.0%

Property investment

Hoang Phat Investment Joint Stock Company

Vietnam

60.0%

40.0%


60.0%

40.0%

Hospitality

AA VinaCapital  Co. Limited

Vietnam

83.2%

16.8%


83.2%

16.8%

Property investment

Vina Alliance Company Limited (*)

Vietnam

46.5%

53.5%


46.5%

53.5%

Property investment

Phu Hoi City Company Limited

Vietnam

52.5%

47.5%


52.5%

47.5%

Property investment

Aqua City Joint Stock Company (**)

Vietnam

100.0%

-


50.0%

50.0%

Property investment

 

(*)           At the reporting date, the Group has 38.2% and 46.5% equity interests in VinaCapital Commercial Center Limited (Vietnam) and Vina Alliance Company Limited, respectively. Management considers these companies as subsidiaries as the Group has de facto control through the majority voting rights in these companies.

 

 


 

 

All subsidiaries are included in the consolidated financial statements. The proportion of the voting rights in the subsidiary undertakings held directly by the Group does not differ from the proportion of ordinary shares held. The Group does not hold any preference shares of the subsidiaries included in the Group.

 

(**) Acquisition of Aqua City Joint Stock Company

 

During the year, the Group completed its restructuring of Aqua City Joint Stock Company, which was split into two separate entities. The group became the sole owner of the new Aqua Joint Stock company, while the other shareholders of the original company acquired the other entity. As a result, Aqua City Joint Stock Company became a wholly-owned subsidiary of the Group on 15 March 2017.

 

For three and a half months ended 30 June 2017, Aqua City Joint Stock Company attributed no revenue but losses of USD33 thousand to the Group's results.

 

The following reconciliation table summarises the derecognition of investment in an associate and the fair value of assets acquired and liabilities assumed at the acquisition date.

 


USD'000

Identifiable assets acquired and liabilities assumed


Cash and cash equivalents

26

Short-term investments

44

Trade and other receivables

605

Other assets

2

Investment properties

33,700

Short-term borrowings

(88)


─────

Total identifiable net assets acquired

34,289


═════



Derecognition of investment in an associate (Note 6(a))

24,568

Gain from acquisition of a subsidiary

9,721


─────


34,289


═════

 

 



 

 

 

During the year, the Group lost control of a number of subsidiaries, details of which are provided on the following pages. The major assets and liabilities in the subsidiaries over which control is lost were as follows:

 



As at the date of loss of control



USD'000

Current assets



         Cash and cash equivalents


9,401

Short-term investments


2,203

        Inventories


23,109

        Trade and other receivables


3,432

          Other current assets


445

Assets classified as held for sale


14,845



──────

Total current assets


53,435

Non-current assets



        Investment properties


123,713

        Property, plant and equipment


52

        Other non-current assets


11



──────

Total non-current assets


123,776

Current liabilities



        Trade and other payables


(14,424)

        Short-term borrowings


(3,623)

Liabilities classified as held for sale


(4,861)



──────

Total current liabilities


(22,908)



──────

Net assets at the date when control is lost


154,303



──────

Net assets attributable to the Company


103,338

Net assets attributable to non-controlling interests


50,965



──────

Total consideration


118,900

Capital gains tax withheld by buyers


(3,610)



──────

  Consideration received due to loss of control of subsidiaries


115,290

  Less: Cash and cash equivalents of disposed subsidiaries


(9,401)



──────

  Cash received due to loss of control of subsidiaries


105,889



──────

 



 

 

 

Details of the loss on disposals of subsidiaries were as follows:

 



Year ended

30 June 2017

 



USD'000




Total consideration


118,900

Carrying amount of net assets sold attributable to the Company


(103,338)



──────

          Gain on disposals before reclassification of currency translation reserve

15,562

Reclassification of currency translation reserve


(29,215)



──────

Loss on disposals of subsidiaries


(13,653)



──────

 

Sale of VinaCapital Danang Resort Limited

 

During the period the Group sold its 75% equity interest in VinaCapital Danang Resort Limited for a total consideration of USD7.0 million. The book value of the net assets at the sale date was USD10.5 million and the reclassification of translation reserve on disposal was USD1.5 million, resulting in a loss of USD5.0 million.

 

Sale of Dong Binh Duong Urban Development Company Limited

 

During the period the Group sold its 70% equity interest in Dong Binh Duong Urban Development Company Limited for a total consideration of USD11.6 million. The book value of the net assets at the sale date was USD14.4 million and the reclassification of translation reserve on disposal was USD6.1 million, resulting in a loss of USD8.9 million.

 

Sale of VinaCapital Hoi An Resort Limited

 

During the period the Group sold its 100% equity interest in VinaCapital Hoi An Resort Limited for a total consideration of USD7.8 million. The book value of the net assets at the sale date was USD6.6 million and the reclassification of translation reserve on disposal was USD1.2 million, resulting in no gain/(loss) on this disposal.

 

Sale of Vina Dai Phuoc Corporation Limited

 

During the year the Group sold its 54% equity interest in Vina Dai Phuoc Corporation Limited for a total consideration of USD48.8 million. The book value of the net assets at the sale date was USD43.8 million and the reclassification of translation reserve on disposal was USD14.3 million, resulting in a loss of USD9.3 million.

 

Sale of Thang Long Property Company Limited

 

During the year the Group sold its 65% equity interest in Thang Long Property Company Limited for a total consideration of USD43.7 million. The book value of the net assets at the sale date was USD28.0 million and the reclassification of translation reserve on disposal was USD6.2 million, resulting in a gain of USD9.5 million.



 

 

 

Summarised financial information of subsidiaries with material non-controlling interests

 

The total value of non-controlling interests as at 30 June 2017 is USD74.9 million (30 June 2016: USD128.4 million), allocated as below:

 


30 June 2017

30 June 2016


USD'000

USD'000




Vina Alliance Company Limited ("Vina Square")

42,394

40,613

Phu Hoi City Company Limited ("Phu Hoi")

14,871

14,563

Vina Dai Phuoc Corporation Limited ("Dai Phuoc Lotus")

-

30,529

Thang Long Property Company Limited ("Time Square")

-

14,361

Others

17,602

28,347


──────

74,867

 ══════

───────

128,413

═══════

 

Set out below is the summarised financial information of each material subsidiary of the Group with non-controlling interests. The information below is before inter-company eliminations.

 

Summarised balance sheets

 


Vina Square

Phu Hoi


As at 30 June

As at 30 June


2017

2016

2017

2016


USD'000

USD'000

USD'000

USD'000

Current





Assets

418

 26

4,238

118

Liabilities

(42,018)

(67,250)

(6,577)

(468)

Total current net (liabilities)/assets

(41,600)

(67,224)

(2,339)

(350)

Non-current





Assets

-

103,368

-

26,794

Liabilities

(12,015)

(4,920)

-

1,624

Total non-current net assets

(12,015)

98,448

-

28,418

Classified as held for sales





Assets

129,286

-

30,221

-

Liabilities

(29,462)

-

(1)

-

Total net assets classified as held for sales

99,824

-

30,220

-






Net assets

46,209

31,224

27,881

28,068

 



 

 

 

Summarised income statements

 


Vina Square

Phu Hoi


Year ended 30 June

Year ended 30 June


2017

2016

2017

2016


USD'000

USD'000

USD'000

USD'000






Revenue

-

-

-

-

Profit before income tax

24,578

4,332

3,707

3,216

Income tax expense

(8,168)

(861)

(3,418)

(742)

Post-tax profit from continuing operations

16,410

3,471

289

2,474

Other comprehensive loss

(1,425)

(1,591)

(476)

(489)

Total comprehensive income/(loss)

14,985

1,880

(187)

1,985

Total comprehensive income
allocated to non-controlling interests

           9,110

1,148

308

942

 

Summarised cash flow statements

 


Vina Square

Phu Hoi


Year ended 30 June

Year ended 30 June


2017

2016

2017

2016


USD'000

USD'000

USD'000

USD'000






Net cash flows from/(used in) operating activities

21,047

(99)

6,114

(39)

Net cash flows used in investing activities

(296)

(53)

(76)

-

Net cash flows (used in)/from financing activities

(21,100)

80

-

60

Cash and cash equivalents classified as held for sale

(52)

-

(1,858)

-

Net (decrease)/increase in cash and cash equivalents

(401)

(72)

4,180

21

 

7          PREPAYMENTS FOR ACQUISITIONS OF INVESTMENTS

 


30 June 2017

30 June 2016


USD'000

USD'000




Prepayments for acquisitions of investments

26,218

43,839

Allowance for impairment

(3,568)

(16,067)


──────

──────


22,650

27,772


══════

══════

 

Prepayments are made by the Group to property vendors where the final transfer of the property is pending the approval of the relevant authorities and/or is subject to either the Group or the vendor completing certain performance conditions set out in agreements.



 

 

 

As at 30 June 2017, the accumulated impairment allowances amounted to USD3.6 million (30 June 2016: USD16.1 million). During the year, there was a reversal of USD1.2 million due to improvement of market conditions. The relevant recoverable amounts are the fair values of the underlying properties less the costs to sell which have been estimated by independent professional qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and categories of the properties upon which these prepayments have been made.

 

The valuations performed by the independent valuation companies, as adopted by the Group, are prepared using the direct comparison method. All of these fair value less the costs to sell valuations are in Level 3 of the fair value hierarchy and there were no transfers between levels during the period (year ended 30 June 2016: none). As at 30 June 2017, the sales prices per square meter used was USD89 (30 June 2016: ranged from USD21 to USD85). If the sales prices of similar properties have increased/decreased, it is expected that the recoverable amounts of these prepayments would have moved up/down accordingly.

 

Management's view is that all of the Group's prepayments for acquisitions of investments are in Level 3 of the fair value hierarchy. Movements in the balance during the year were as follows:

 


30 June 2017

30 June 2016


USD'000

USD'000




Opening balance

27,772

26,572

Additions

76

128

Reversal of impairment (Note 23)

1,176

1,560

Collection of prepayment

(2,955)

-

Reclassified as held for sale (Note 13)

(3,077)

-

Translation differences

(342)

(488)


──────

──────

Closing balance

22,650

27,772


══════

══════

 

8          DEFERRED INCOME TAX ASSETS

 


30 June 2017

30 June 2016


USD'000

USD'000

 

Opening balance

3,638

6,572

Net change during the year

-

(2,779)

Reclassified to non-current assets classified as held for sale

-

(155)

Written off (*)

(3,638)

-

 

Closing balance

─────

-

═════

─────

3,638

═════

Deferred income tax assets to be recovered after more than

  12 months

-

3,638

Deferred income tax assets to be recovered within 12 months

-

-


─────

─────


-

3,638


═════

═════

 

(*)    As at 30 June 2017, Phu Hoi project was reclassified to assets and liabilities classified as held for sales. The deferred tax assets arising from fair value adjustment was written off as the recoverability of this deferred tax assets is determined to be remote.

 

 

 

 

Deferred income tax assets are the amounts of income taxes to be recovered in future periods in respect of temporary differences between the carrying amounts of revalued assets and their tax bases.

 

Deferred income tax assets relating to the accumulated tax losses as at 30 June 2017 of USD17.8 million (30 June 2016: USD25.6 million) of the Group's subsidiaries subject to corporate income tax in Vietnam have not been recognised due to uncertainties as to the timing of their recoverability. Estimated tax losses available for offset against future taxable income are as follows:

 

Years of expiration                                                                                                                

 


30 June 2017

30 June 2016


USD'000

USD'000




2017

-

2,627

2018

1,593

2,534

2019

1,857

3,328

2020

9,655

11,119

2021

3,875

6,017

2022

845

-


──────

──────


17,825

25,625


══════

══════

 

9          INVENTORIES

 

                                 

30 June 2017

30 June 2016


USD'000

USD'000

 

Opening balance

54,442

98,911

Additions

7,201

9,744

Transferred to cost of sales

(6,693)

(30,868)

Write-down (Note 24)

(972)

(18,951)

Sold as part of property disposals (Note 6(b))

(23,109)

(4,774)

Transferred from investment properties (Note 5)

-

9,240

Exchanged for investment property (Note 5)

-

(2,969)

Reclassified as held for sale (Note 13)

(29,584)

(4,585)

Translation differences

(1,065)

(1,306)


───────

───────


220

54,442


═══════

═══════

 

During the year, the Group capitalised borrowing costs amounting to USD0.9 million (2016: USD0.8 million) into the value of inventories.

 

There were no inventories pledged as security for bank borrowings. As of 30 June 2016, inventories which belonged to Vinh Thai Urban Development Corporation Limited with a total carrying value of USD21.2 million were pledged as security for bank borrowings of USD5.2 million.



 

 

 

10         TRADE AND OTHER RECEIVABLES

 


30 June 2017

30 June 2016


USD'000

USD'000




Trade receivables

217

1,409

Receivables from disposals of subsidiaries (*)

252

14,806

Interest receivables

10

27

Prepayments to suppliers

17

726

Short-term prepaid expenses

  5

434

Advances to employees

  8

20

Other receivables

  611

159


──────

  1,120

══════

──────

17,581

══════

 

(*)      Receivables from disposals of subsidiaries represent the final settlements upon completion of the transfer of ownership of subsidiaries to the buyers in accordance with the relevant sale and purchase agreements.

 

All trade and other receivables are short-term in nature and their carrying values, after allowances for impairment, approximate their fair values at the date of the consolidated balance sheet.

 

11         CASH AND CASH EQUIVALENTS

 


30 June 2017

30 June 2016


USD'000

USD'000




Cash on hand

6

44

Cash at banks

80,217

70,510

Cash equivalents

8,696

6,349


──────

──────


88,919

76,903


══════

══════

 

Cash equivalents include short-term highly liquid investments with original maturities of three months or less.

 

At 30 June 2017, cash and cash equivalents held at the Company level amounted to USD71 million (30 June 2016: USD69 million). The remaining balance of cash and cash equivalents is held by subsidiaries in Vietnam. Cash held in Vietnam is subject to restrictions imposed by co-investors and the Vietnamese government and therefore cannot be transferred out of Vietnam unless such restrictions are satisfied.

 

 

 

 

 

 

 

 

12         FINANCIAL INSTRUMENTS BY CATEGORY

 

As at 30 June 2017


 

Loans and receivables

Assets at fair value through profit or loss

 

 

Total


USD'000

USD'000

USD'000





Assets








Current:




Trade receivables

217

-

217

Receivables from disposal of subsidiaries

252

-

252

Interest receivables

10

-

10

Other receivables

607

-

607

Receivables from related parties

1,786

-

1,786

Short-term investments

56

-

56

Financial assets at fair value through profit or loss

-

269

269

Cash and cash equivalents

88,919

-

88,919

 

Total

──────

91,847

────

269 

──────

92,116


══════

════

══════

 


Other financial liabilities at amortised cost

Liabilities at fair value through profit or loss

Total


USD'000

USD'000

USD'000

Liabilities







Non-current:




Bank borrowings and debts

-

-

-





Current:




Bank borrowings and debts

-

-

-

Payables to related parties

832

13,004

13,836

Trade payables

15

-

15

Payables for property acquisitions and land compensation

2,685

-

2,685

Other accrued liabilities

31

-

31

Other payables

1,182

-

1,182

 

Total

──────

4,745

──────

13,004

──────

17,749


══════

══════

══════

 



 

 

 

As at 30 June 2016

 

 

 

Loans and receivables

Assets at fair value through profit or loss

 

 

Total


USD'000

USD'000

USD'000





Assets








Current:




Trade receivables

1,409

-

1,409

Receivables from disposal of subsidiaries

14,806

-

14,806

Interest receivables

27

-

27

Receivables from related parties

1,044

-

1,044

Short-term investments

9,806

-

9,806

Financial assets at fair value through profit or loss

-

384

384

Restricted cash

3,392

-

3,392

Cash and cash equivalents

76,903

-

76,903

 

Total

──────

107,387

────

384 

──────

107,771


══════

════

══════

 


Other financial liabilities at amortised cost

Liabilities at fair value through profit or loss

Total


USD'000

USD'000

USD'000

Liabilities







Non-current:




Bank borrowings and debts

47,416

-

47,416





Current:




Bank borrowings and debts

25,704

-

25,704

Payables to related parties

10,228

-

10,228

Trade payables

1,388

-

1,388

Proceeds payables to a co-investor on disposal of an investment

 

1,603

-

 

1,603

Payables for property acquisitions and land compensation

 

36,636

-

 

36,636

Interest payables

1,557

-

1,557

Other accrued liabilities

413

-

413

Distribution to shareholders

88

-

88

Other payables

2,167

-

2,167

Financial liabilities at fair value through profit or loss

 

-

6,945

 

6,945

 

Total

───────

127,200

─────

6,945

──────

134,145


═══════

═════

══════

 



 

 

 

13         ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

 


30 June 2017





Attributable to

 

 

Assets classified as held for sale

Liabilities classified as held for sale

Net assets classified as held for sale

Non-controlling interests

Equity shareholders of the parent


USD'000

USD'000

USD'000

USD'000

USD'000







Phu Hoi City Company Limited

30,221

(1)

30,220

14,603

15,617

AA VinaCapital  Co. Limited

3,017

(59)

2,958

498

2,460

Viet Land Development Corporation Limited

 

112,150

 

(60,224)

 

51,926

 

3,966

 

47,960

Vinh Thai Urban Development Corporation Limited

 

45,263

 

(34,452)

 

10,811

 

5,054

 

5,757

Vina Alliance Company Limited

129,286

(29,462)

99,824

53,406

46,418

Romana Services - Trading Investment JS Corporation

 

4,287

 

-

 

4,287

 

-

 

4,287

Hoang Phat Investment Joint Stock Company

 

2,662

 

(317)

 

2,345

 

779

 

1,566

Long Truong Site

3,077

-

3,077

-

3,077


──────

329,963 ══════

───────

(124,515) ═══════

──────

205,448 ══════

──────

78,306  ══════

──────

127,142  

══════

 

As at 30 June 2017, the assets and liabilities of followings project companies had been presented as held for sale following the signing of relevant sale and purchase agreements:

-     Phu Hoi City Company Limited

-     AA VinaCapital  Co. Limited

-     Viet Land Development Corporation Limited

-     Vinh Thai Urban Development Corporation Limited

-     Vina Alliance Company Limited

-     Romana Services - Trading Investment JS Corporation

-     Hoang Phat Investment Joint Stock Company

-     Long Truong Site

 

For the comparative year:

 


30 June 2016





Attributable to

 

 

Assets classified as held for sale

Liabilities classified as held for sale

Net assets classified as held for sale

Non-controlling interests

Equity shareholders of the parent


USD'000

USD'000

USD'000

USD'000

USD'000







VinaCapital Danang Resort Limited

14,844

(4,861)

9,983

3,045

6,938

Vinh Thai Parcel 3

3,784

(404)

3,380

1,580

1,800


──────

18,628

══════

─────

(5,265)

═════

──────

13,363

 ══════

─────

4,625

 ═════

──────

8,738

══════

 

 



 

 

 

 

 

Management's view is that all of the Group's assets and liabilities classified as held for sale are in Level 3 of the fair value hierarchy. The major classes of assets and liabilities and their movements during the year are as follows: 

 


1 July 2016

Transferred in

Disposals

30 June 2017


USD'000

USD'000

USD'000

USD'000

Assets classified as held for sale





Investment properties (Note 5)

3,784

287,058

(3,784)

287,058

Property, plant and equipment (net of accumulated depreciation)

 

318

 

11

 

(318)

 

11

Intangible assets (net of accumulated amortisation)

9

-

(9)

-

Prepayment for acquisitions

-

3,077

-

3,077

Deferred income tax assets

155

-

(155)

-

Other current assets

41

3

(41)

3

Other non-current assets

468

14

(468)

14

Inventories (Note 9)

4,585

29,584

(4,585)

29,584

Trade and other receivables

860

1,645

(860)

1,645

Short term investments

219

-

(219)

-

Cash and cash equivalents

8,189

4,284

(8,189)

4,284

Investment in associates (Note 6(a))

-

4,287

-

4,287


──────

──────

───────

──────


18,628

329,963

(18,628)

329,963


──────

──────

───────

──────

Liabilities classified as held for sale





Long-term borrowings and debts (Note 16)

-

78,248

-

78,248

Short-term borrowings and debts (Note 16)

-

18,829

-

18,829

Long-term trade and other payable

2,602

33

(2,602)

33

Accruals and other current liabilities

319

-

(319)

-

Trade and other payables

2,344

27,405 

(2,344)

27,405 


──────

──────

───────

──────


5,265

124,515

(5,265)

124,515


──────

──────

───────

──────

Net assets classified as held for sale

13,363

══════

205,448 ══════

(13,363) 

═══════

205,448 ══════

 

As at 30 June 2017, bank borrowing of USD64.6 million (30 June 2016: nil) are secured by investment properties held for sale with a total fair value of USD253.4 million and inventories held for sale with a total carrying value of USD29.6 million.  

 

For the comparative year:

 


1 July

 2015

Transferred in

Fair value adjustment

 

Disposals

30 June 2016


USD'000

USD'000

USD'000

USD'000

USD'000

Assets classified as held for sale






Available for sales financial assets

851

-

-

(851)

-

Investment properties (Note 5)

12,080

5,587

(1,803)

(12,080)

3,784

Property, plant and equipment (net of accumulated depreciation)

 

-

 

318

 

-

 

-

 

318

Intangible assets (net of accumulated amortisation)

 

-

9

 

-

-

 

9

Deferred income tax assets

-

155

-

-

155

Other current assets

-

41

-

-

41

Other non-current assets

-

468

-

-

468

Inventories (Note 9)

-

4,585 

-

-

4,585

Trade and other receivables

172

860

-

(172)

860

Short term investments

-

219

-

-

219

Cash and cash equivalents

130

8,189

-

(130)

8,189


──────

──────

──────

───────

──────


13,233

20,431

(1,803)

(13,233)

18,628


──────

──────

──────

───────

──────

Liabilities classified as held for sale






Long-term trade and other payable

-

2,602

-

-

2,602

Accruals and other current liabilities

17

319

-

(17)

319

Trade and other payables

501

2,344

-

(501)

2,344


──────

──────

──────

───────

──────


518

5,265

-

(518)

5,265


──────

──────

──────

───────

──────

Net assets classified as held for sale

12,715

 ══════

15,166

══════

(1,803)

══════

(12,715) 

═══════

13,363

══════

 

 

 

 



 

 

 

14         SHARE CAPITAL

 


30 June 2017


30 June 2016


Number of shares

 

 

USD'000


Number of shares

 

USD'000

Authorised:

Ordinary shares of USD0.01 each

500,000,000

─────────

  5,000

─────


  500,000,000

─────────

  5,000

─────







Issued and fully paid:






Opening balance

393,808,479

3,938


430,132,220

4,301

Shares purchased and cancelled

(135,820,859)

(1,358)


(36,323,741)

(363)

 

Closing balance

─────────

257,987,620 

═════════

─────

2,580

═════


─────────

393,808,479 

═════════

─────

3,938 

═════

 

The Company considers investors holding more than a 10% beneficial interest in the ordinary shares of the Company as major shareholders. As at 30 June 2017, there were two investors that held more than 10% of the ordinary shares of the Company (30 June 2016: two).

 

During the year, the Company purchased and cancelled 135,820,859 of its ordinary shares (30 June 2016: 36,323,741 shares) for a total cash consideration of USD98.2 million (30 June 2016: USD22.3 million) at an average cost of USD0.723 per share (30 June 2016: USD0.614 per share). The difference between the cost of the shares repurchased and their net asset value has been recorded in an equity reserve.

 

15         ADDITIONAL PAID-IN CAPITAL

 

Additional paid-in capital represents the excess of consideration received over the par value of shares issued.

 


30 June 2017

30 June 2016


USD'000

USD'000




Opening balance

452,680

521,088

Shares repurchased and cancelled

(119,877)

(33,348)

Distribution to shareholders

-

(35,060)

 

Closing balance

───────

332,803

═══════

───────

452,680

═══════



 

 

 

16         BORROWINGS AND DEBTS

 


30 June 2017

30 June 2016


USD'000

USD'000




Long-term borrowings:



Bank borrowings

81,731

48,276

Loans from non-controlling interests

239

804

Less:



Current portion of long-term borrowings

(3,722)

(1,664)

Reclassified to held for sales (Note 13)

(78,248)

-


──────

-

──────

──────

47,416

──────

Short-term borrowings:



Bank borrowings

-

-

Loans from non-controlling interests

779

-

Loans from third party

14,328

-

Zero dividend preference shares

-

24,040

Current portion of long-term borrowings

3,722

1,664

Reclassified to held for sales (Note 13)

(18,829)

-


──────

-

──────

──────

25,704

──────

Total borrowings and debts

-

══════

73,120

══════

 

During the year the Group capitalised borrowing costs amounting to USD5.8 million

(2016: USD5.7 million) in qualifying assets (Notes 5 and 9).

The maturities of the Group's borrowings at the end of the reporting year are as follows:

 


30 June 2017

30 June 2016


USD'000

USD'000




6 months or less

-

539

6-12 months

-

1,125

1-5 years

-

47,416


──────

-

══════

───────

49,080

═══════

 

The Group's borrowings are denominated in Vietnamese Dong.

 

During the year, the Group's subsidiaries borrowed USD47.9 million (30 June 2016: USD19.1 million) from banks and USD10.9 million from non-controlling interests (30 June 2016: nil) to finance working capital and property development activities.

 

The Group fully paid of its zero dividend preference shares on 19 December 2016.

 

 

 

 

 

 

 

 

 

 

 

17         DEFERRED INCOME TAX LIABILITIES

 


30 June 2017

30 June 2016


USD'000

USD'000




Opening balance

16,358

28,184

Net change during the year from fair value adjustments of investment properties and property, plant and equipment

2,404

(11,826)

 

Closing balance

──────

18,762

══════

──────

16,358

══════

Deferred income tax liabilities to be recovered after more than 12 months

3,976

7,211

Deferred income tax liabilities to be recovered within 12 months

14,786

9,147


──────

──────


18,762

16,358


══════

══════

 

Deferred income tax liabilities relate to income taxes for settlement in future periods in respect of temporary differences between the carrying amounts of revalued assets and their tax bases.

 

18         TRADE AND OTHER PAYABLES

 


30 June 2017

30 June 2016


USD'000

USD'000




Deposits from property buyers

52,174

4,952 

Payables for property acquisitions and land compensation

2,685

36,636

Deposits from customers of residential projects

300

28,370

Proceeds payables to a co-investor on disposal of an investment

 

-

 

1,603

Trade payables

15

1,388

Interest payable

-

1,603

Other accrued liabilities

31

413

Distribution to shareholders


88

Other payables

1,182

2,121


──────

56,387

══════

──────

77,174

══════

 

All trade and other payables are short-term in nature. Their carrying values approximate their fair values as at the date of the consolidated balance sheet.

 

 

19         REVENUE

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Sales of residential projects

6,562

43,157


═════

═════

 

20         COST OF SALES

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Residential projects

7,371

36,363 


══════

══════

 

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

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Raw materials and consumables used

-

583

Construction costs

4,468

24,906

Land costs

1,804   

5,283

Depreciation and amortisation

33

480

Staff costs

60

1,794

Outside service costs

1,005

1,351

Other expenses

1

1,966


──────

──────


7,371

36,363


══════

══════

 



 

 

 

21         NET GAIN ON FAIR VALUE ADJUSTMENTS OF INVESTMENT PROPERTIES AND REVALUATIONS OF PROPERTY, PLANT AND EQUIPMENT

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Investment properties



By real estate sector:



- Commercial

(1,301)

(171)

- Residential, office buildings and undetermined use

720

15,206

- Mixed use

30,703

9,152 


──────

──────


30,122  

24,187




Investment properties classified as held for sale



- Residential, office buildings and undetermined use

-

(1,803)

 

Net gain on fair value adjustments of investment

  properties and revaluations of property, plant and equipment

 

──────

        

30,122

══════

──────

        

22,384

══════

 

22         SELLING AND ADMINISTRATION EXPENSES

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Disposal and alignment fee under the Third Amended and Restated Investment Management Agreement (Note 32)

 

13,004

 

-

Management fees under the Second Amended and Restated Investment Management Agreement (Note 32)

 

1,822

 

5,305

Disposal fees under the Second Amended and Restated Investment Management Agreement (Note 32)

 

-

 

139

Professional fees (*)

2,795

4,767

Depreciation and amortisation (*)

12

638

General and administration expenses (*)

1,858

3,338

Staff costs (*)

450

1,514

Outside service costs (*)

121

677


──────

20,062

══════

──────

16,378

══════

 

(*)    These expenses primarily relate to the operating activities of the Group's subsidiaries. Note 32 contains further information in respect to the ongoing charges incurred by the Company.

 

23         LOSS/(GAIN) ON DISPOSAL OF INVESTMENTS, NET

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Loss on sales of subsidiaries (Note 6(b))

13,653

(6,477)

Gain on sales of investment properties

(715)

-


──────

12,938

══════

──────

(6,477)

══════

 

24         (REVERSAL OF IMPAIRMENT)/IMPAIRMENT OF ASSETS

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Reversal of impairment of prepayments for acquisitions of investments (Note 7)

(1,176)

(1,560)

Write-down on inventories (Note 9)

972

18,951

Impairment of property, plant and equipment

-

819

 

 

──────

(204)

══════

─────

18,210

═════

 

25         FINANCE EXPENSES

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Realised foreign exchange losses

184

1,515

Unrealised foreign exchange losses

922

763

Interest expense

4,065

3,973

Others

1,502

-


─────

6,673

═════

─────

6,251

═════

 

26         OTHER EXPENSES

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Write-off of assets

1,802

-

Other expenses

27

373


─────

1,829

═════

─────

373

═════

 

27         INCOME TAX

 

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

 

The majority of the Group's subsidiaries are domiciled in the British Virgin Islands ("BVI") and so have a tax exempt status. A number of subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in those countries.

 

As is the case with many other developing countries, Vietnam is in the process of implementing comprehensive tax regulations.  As a result, the administration of tax regulations by government agencies may be subject to considerable discretion, and in many areas, the legal framework is uncertain and subject to interpretation.  The Group has provided for all taxes expected to be payable by it under the current tax regulations in Vietnam.  There is, however, an ongoing risk that government agencies might seek to impose additional taxes on the Group based on different interpretations of the regulations or through the restrospective application of new regulations.



 

 

 

On 19 June 2014, the Vietnamese National Assembly approved a new corporate income tax law.  Under the new law, the standard corporate income tax was reduced from 25% to 22% effective 1 January 2015. A further reduction in tax rate to 20% became effective on 1 January 2016. No provision has been made for corporate income tax payable by the Vietnamese subsidiaries for the year because these subsidiaries do not have taxable income in Vietnam (30 June 2016: USD0.2 million).

 

The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense actually recognised in the consolidated income statement can be reconciled as follows:

 


Year ended


30 June 2017

30 June 2016


USD'000

 USD'000




Current tax



Group's loss before tax

(1,879)

(4,482)




Group's loss multiplied by applicable tax rate (0%)

-

-

Effect of higher tax rate in Vietnam

-

(163)

Capital gains tax

(4,684)

(9,040)


─────

─────

Total current tax expense

(4,684)

(9,203)


─────

─────

Deferred income tax



Decrease in deferred tax assets (*)

(3,638)

(2,779)

(Increase)/decrease in deferred tax liabilities (*)

(2,404)

11,826


─────

─────

Deferred income tax

(6,042)

9,047


─────

─────

Tax expense

(10,726)

(156)


═════

═════

 

(*)   Those amounts represent the deferred income tax income/(expense) which arises from the gains and losses on fair value adjustments of investment properties and property, plant and equipment and the reversal of deferred income tax assets and liabilities as a result of changes to assumptions during the year.

 

28         LOSS AND NET ASSET VALUE PER SHARE

 

(a)        Basic

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Loss attributable to owners of the Company from continuing and total operations (USD'000)

(23,659)

(8,315)

Weighted average number of ordinary shares in issue

351,765,215

416,601,627

Basic loss per share from continuing

  and total operations (USD/share)

(0.07)

(0.02)


────────

────────

 

 

 

 

 

 

 

(b)        Diluted

 

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group has no category of potential dilutive ordinary shares. Therefore, diluted loss per share is equal to basic loss per share.

 

(c)        Net asset value per share

 


As at


30 June 2017

30 June 2016




Net asset value (USD'000)

241,484

336,836

Number of outstanding ordinary shares in issue

257,987,620

393,808,479

Net asset value per share (USD/share)

0.94

0.86

                                                               

─────────

─────────

 

29         TOTAL EXPENSE RATIO

 

1     

For the year ended


30 June 2017

30 June 2016




Total expense ratio

1.73%

2.31%


──────

──────

 

The total expense ratio ("TER") has been calculated in accordance with the Association of Investment Companies ("AIC") recommended methodology dated May 2012, which excludes disposal and alignment fees from the calculation. It is the ratio of annualised ongoing charges over the average undiluted net asset value during the year.

 

            The total expense ratio includes management fees, directors' fees and expenses, recurring audit and tax services, custody and fund administration services, fund accounting services, secretarial services, registrars' fees, public relations fees, insurance premiums, regulatory fees and similar charges.

 

30         COMMITMENTS

 

As at the balance sheet date, the Group was committed under lease agreements to pay the following future amounts:


30 June 2017

30 June 2016


USD'000

USD'000




Within one year

46

52

From two to five years

11

306

Over five years

-

2,284


─────

─────


57

2,642


═════

═════

 

As at 30 June 2017, commitment for future construction work of the Group's properties held by subsidiaries at 30 June 2017 is USD6.7 million (30 June 2016: USD12.7 million).

 

The Company's subsidiaries and associates have a broad range of commitments relating to investment projects under agreements it has entered into and investment licences it has received.  

 

 

 

 

 

 

31         DIRECTORS' FEES AND MANAGEMENT'S REMUNERATION

 

The aggregate annual directors' fees amounted to USD284,986 (year ended 30 June 2016: USD300,640) of which there were no outstanding payables at the reporting date (30 June 2016: nil).

 

The details of annual remuneration by director are summarised below:

 


Year ended


30 June 2017

30 June 2016


USD'000

USD'000




Michel Casselman

72.8

70.5

Charles Isaac

57.0

54.0

Tran Trong Kien

57.5

41.9

Ian Lydall (*)

48.6

-

Nicholas Allen (**)

19.1

60.5

Nicholas Brooke (***)

30.0

60.0

Daniel McDonald

-

13.8


─────

285.0  

═════

─────

300.7

═════

 

(*)          Ian Lydall was appointed on 25 October 2016.

(**)        Nicholas Allen resigned on 25 October 2016.

(***)       Nicholas Brooke resigned on 31 December 2016.

 

32         RELATED PARTY TRANSACTIONS AND BALANCES

 

Management fees

 

The Group is managed by VinaCapital Investment Management Limited (the "Investment Manager"), an investment management company incorporated in the Cayman Islands. 

 

Under a management agreement effective 21 November 2012 (the "Amended Management Agreement") the management fee from 21 November 2012 was fixed at USD8.25 million for the subsequent 12 months, USD7.5 million for the next 12 months and USD6.5 million for the next 12 months. Under the Second Amended and Restated Investment Management Agreement effective from 21 November 2015 (the "Second Amended Management Agreement") the management fee from 21 November 2015 is revised to USD390,000 per month.

 

Total management fees for the year amounted to USD1,822,132 (30 June 2016: USD5,305,143), which were fully settled to the Investment Manager at the date of the consolidated balance sheet. Under the Third Amended and Restated Investment Management Agreement effective from 14 December 2016 (the "Third Amended Management Agreement") no further management fees shall be charged by the Investment Manager to the Company.

 

Realisation fees

 

In accordance with the Amended Management Agreement and Seconded Amended Management Agreement, the Investment Manager was entitled to a realisation fee of up to USD28,218,000 based upon the level of distributions made to shareholders from contracted divestments of assets which were signed prior to 21 November 2015 and the proceeds of which were received by 21 November 2016. These realisation fees had been fully settled by 30 June 2017.

 

Disposal fee and alignment fee

 

Under the Third Amended Management Agreement the Investment Manager will receive a disposal fee and an alignment fee. The disposal fee is calculated at the rate of 3.00% of distributable funds realised in the year starting 22 November 2016, 2.75% in the second year and 2.25% in the third year. The alignment fee is calculated on distributions to shareholders over USD265.0 million during the 3-year period starting 22 November 2016.  The Investment Manager will receive 10% of distributions over USD265.0 million and up to USD279.0 million, 15% of distributions over USD279.0 million and up to USD313.0 million, and 20% of distributions over USD313.0 million. A non-refundable monthly advance of USD200,000 in the year starting 22 November 2016, USD150,000 in the second year, and USD100,000 in the third year, will be paid to the Investment Manager. These advances will be offset against disposal fees and alignment fees. During the year advances of USD1.5 million (30 June 2016: nil) were paid to the Investment Manager. The Company accrued USD5.8 million of disposal fees and USD7.2 million of alignment fees during the year based on the current value of the portfolio and expected timing of asset disposals.

 


30 June 2017

30 June 2016


USD'000

USD'000




Disposal fees

5,820

-

Alignment fees

7,184

-


─────

─────

Total fees expensed/accrued during the year (note 22)

13,004

-

Advance payments to be offset against fees payable

(1,466)

-


─────

─────

Net accrual of disposal and alignment fees

11,538

-


══════

═════

 

Details of payables and accruals to related parties at the date of the consolidated balance sheet are as below:

 




30 June 2017

30 June 2016


Relationship

Balances

USD'000

USD'000






VinaCapital Investment

  Management Ltd.

Investment Manager

Realisation fees

-

7,428



Disposal fees

-

139



Development fees and advances for real estate projects

-

391



Accrued disposal fee and alignment fee

13,004

-

VinaCapital Vietnam

  Opportunity Fund Limited ("VOF")

Under common management

Reimbursed on behalf of the Company

17

31


Disposals of real estate projects

131

2,239



Loan payable

683

                     -




──────

─────




13,835

10,228




══════

═════

 

As at 30 June 2017 and 30 June 2016, receivables from related parties mainly relate to amounts due from VOF pertaining to advances for jointly invested real estate projects and advances to related parties. Advances to related parties as at 30 June 2017 were the non-refundable advances described under the section "Disposal fee and alignment fee" above.

 



 

 

 

The interests of the related parties in the shares, underlying shares and debentures of the Company are as follows:

 


As at


30 June 2017

30 June 2016


Number of shares



Vietnam Master Holding 2 Limited (*)

5,309,327

36,216,326

Asia Investment and Finance Limited (**)

20,360,332

2,372,500

VinaCapital Group Limited

608,553

993,333

VinaCapital Investment Management Limited

48,552

79,250

Vietnam Investment Partners Ltd

1,877,573

-


─────────

─────────

 

(*)    Vietnam Master Holding 2 Limited is a wholly-owned subsidiary of VOF.

 

(**)   In accordance with the Second Amended Management Agreement, the Investment Manager was required to use 50% of the realisation fee arising from the contracted divestment proceeds collected to make market purchases of the Company's ordinary shares In accordance with this requirement by 30 June 2017, a subsidiary of the Investment Manager, Asia Investment and Finance Limited, had purchased a total of 20,045,043 ordinary shares of the Company (30 June 2016: 2,372,500). The shares acquired are subject to lockups of between one and two years from the date of acquisition.  2,057,211 ordinary shares were sold during the first tender dated 17 May 2017 and settled on 30 June 2017.

 

33         FINANCIAL RISK MANAGEMENT

 

Financial risk factors

 

The Group invests in a diversified property portfolio in Vietnam with the objective to provide shareholders with a potential capital growth.

 

The Group is exposed to a variety of financial risks: market risk (including price risk, currency risk and interest rate risk); credit risk; and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group's risk management is coordinated by its Investment Manager who manages the distribution of the assets to achieve the investment objectives. The most significant financial risks to which the Group is exposed are described below.

Foreign exchange risk

 

The Group's exposure to risk resulting from changes in foreign currency exchange rates is moderate as although transactions in Vietnam are settled in the VND, the value of the VND has historically been closely linked to that of the USD, the presentation currency. The value of real estate in Vietnam is based on pricing that is a combination of VND, USD and gold. For this reason, a decline in the value of the VND against the USD does not necessarily mean proportionately lower prices will be obtained in USD.

 

The Group has not entered into any other hedging mechanism as the estimated benefits of available instruments outweigh their cost. On an ongoing basis the Investment Manager analyses the current economic environment and expected future conditions and decides the optimal currency mix considering the risk of currency fluctuation, interest rate return differentials and transaction costs. The Investment Manager updates the Board regularly and reports on any significant changes for further actions to be taken.



 

 

 

The Group's financial assets' and liabilities' exposures to risk of fluctuations in exchange rates at the reporting dates are as follows:

                


Short-term exposure


Long-term exposure

30 June 2017

VND

USD


VND

USD


(USD as functional currency)

(VND as functional currency)


(USD as functional currency)

(VND as functional currency)


USD'000

USD'000


USD'000

USD'000







Financial assets

1,068

1,266


-

-

Financial liabilities

(881)

-


-

-


─────

─────


───

───

Net exposure

187

1,266


-

-


═════

═════


═══

═══

  


Short-term exposure


Long-term exposure

30 June 2016

VND

USD


VND

USD


(USD as functional currency)

(VND as functional currency)


(USD as functional currency)

(VND as functional currency)


USD'000

USD'000


USD'000

USD'000







Financial assets

10,848

1,583


-

-

Financial liabilities

-

(9,021)


-

-


─────

─────


───

───

Net exposure

10,848

(7,438)


-

-


═════

═════


═══

═══

 

The functional currency of the Company is the USD. The functional currencies of the Group's subsidiaries in the BVI and Singapore are the USD while those of its Vietnamese subsidiaries are the VND. The Group's exposure to currency risk arises from VND denominated balances at the BVI and Singapore levels and USD denominated balances at the Vietnamese level.

 

At 30 June 2017, if the VND weakened/strengthened by 5% (30 June 2016: 5%), post-tax loss for the year would not have been materially impacted (30 June 2016: USD0.4 million higher/lower). 

 

Price risk sensitivity

 

Price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. As the majority of the Group's financial instruments are carried at fair value with fair value changes recognised in the consolidated income statement, all changes in market conditions will directly affect net investment income.

 

The Group invests in real estate projects and is exposed to market price risk. If the prices of real estate had increased/decreased by 10%, post-tax loss for the year would have been USD5.2 million lower/higher (30 June 2016: USD30.8 million).

 

 

 

 

 

 

Cash flow and fair value interest rate sensitivity

 

The Group's exposure to interest rate risk is not material as the balance of loan and borrowings of the Group was immaterial at year end.

 

Credit risk analysis

 

Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Impairment provisions are provided for losses that have been incurred by the Group at the reporting date.

 

            The Investment Manager maintains a list of approved banks for holding deposits and set aggregate limits for deposits or exposures to individual banks. While this list is formally reviewed at least monthly, it is updated to reflect developments in the market on a timely basis as information becomes available.

 

The Group's exposure to credit risk is limited to the carrying amounts of financial assets recognised at the reporting date, analysis by credit quality is as follows:

 


30 June 2017

30 June 2016


 USD'000

 USD'000




Neither past due nor impaired

91,595

107,202

Past due but not impaired, less than 6 months

-

-

Past due but not impaired, more than 6 months

252

185

Past due and impaired

-

-


──────

───────


91,847

107,387

Less: Allowance for impairment

-

-

 

Total

 

──────

91,847

══════

───────

107,387

═══════



 

 


30 June 2017

30 June 2016


USD'000

USD'000




Neither past due nor impaired:



Long-term investments

-

-

Short-term investments

56

9,806

Restricted cash

-

3,392

Cash and cash equivalents

88,919

76,903

Receivable from a related party

1,786

1,044

Trade receivables

217

1,409

Receivables from disposals of subsidiaries

-

14,621

Interest receivables

10

27

Other receivables

607

-


──────

91,595

══════

──────

107,202

══════

Past due but not impaired:



Receivables from disposals of subsidiaries

  252

185


──────

252

══════

──────

185

══════

Less: Allowance for impairment

-

-

 

Total trade and other receivables, net of provision for impairment

──────

91,847

──────

107,387


══════

══════

 

As at 30 June 2017, the Group did not set aside a provision for receivables from disposal of subsidiaries (30 June 2016: nil) because it expects to receive them in the next 12 months. The credit quality of financial assets that are neither past due nor impaired is assessed by management for each period end. This assessment takes into account the financial health of the buyers, or history of payments and defaults of existing buyers of the Group. Debtors and amounts due from a related party that are neither past due nor impaired are substantially companies with good collection track records with the Group. Bank deposits are mainly transacted with banks of high credit ratings assigned by international credit-rating agencies.

 

Cash and cash equivalents and deposits are held at international and local banks and financial institutions which do not have histories of default.

 

            The Group has no other significant concentrations of credit risk.

 

In accordance with the Group's policy, the Investment Manager continuously monitors the Group's credit position on a monthly basis, identified either individually or by group, and incorporates this information into its credit controls.

 

The Investment Manager reconsiders the valuations of financial assets that are impaired or overdue at each reporting date based on the payment status of the counterparties, recoverability of receivables, and prevailing market conditions.

 



 

 

 

Liquidity risk analysis

 

Liquidity risk is the risk that the Group will experience difficulty in either realising assets or otherwise raising sufficient funds to satisfy commitments associated with investments and financial instruments. There is an inherent liquidity risk associated with the Company's primary business, being property investment. As a consequence, the value of the majority of the Company's investments cannot be realised as quickly as other investments such as cash or listed equities. Furthermore, the development and realisation of the Company's property investments will normally require access to debt financing at a reasonable cost or shareholder loans from the Company's surplus funds and its co-investors.

 

The Company seeks to minimise liquidity risk through:

 

·      Preparing and monitoring cash flow forecasts for each investment project and the Company;

·      Arranging financing to fund real estate developments as required; and

·      Providing ample lead times for the disposal of assets and realisation of cash.

 

At year end, the contractual undiscounted cash flows of the Group's financial liabilities have contractual maturities summarised as follows:

 

                                                                                                                          Current                                   Non-current

 

30 June 2017

Within 6 months

6 to 12 months

From 1 to 5 years

Over  5 years


USD'000

USD'000

USD'000

USD'000






Group





Financial liabilities:





Trade and other payables

3,913

-

-

-

Payables to related parties

3,958

576

9,302

-

Loans from non-controlling interests

-

-

-

-

 

 

──────

7,871 ══════

─────

576   

═════

─────

9,302
═════

──────

-

══════

 

 



 

 

 

                                                                                                                        Current                                  Non-current

 

30 June 2016

Within 6 months

6 to 12 months

From 1 to 5 years

Over  5 years


USD'000

USD'000

USD'000

USD'000






Group





Financial liabilities:





Trade and other payables

7,216

36,636

-

-

Short-term borrowings

2,602

2,572

-

-

Payables to related parties

10,197

31

-

-

Long-term borrowings and debts

-

-

56,758

-

Zero dividend preference shares

25,067

-

-

-

Loans from non-controlling interests

-

727

217

-

 

 

──────

45,082

══════

──────

39,966 

══════

──────

56,975  
══════

──────

-

══════

Derivative financial liabilities:





Gross settled currency swap





- Receipts

  (25,034)

-

-

-

- Payments

      31,979

-

-

-


──────

        6,945

══════

──────

-

══════

──────

-

══════

──────

-

══════

                                                                                                                       

The above contractual maturities reflect the gross cash flows, which may differ from the carrying value of the liabilities at year end.

 

Capital management

 

The Group's capital management objectives are:

 

·      To ensure the Group's ability to continue as a going concern;

·      To provide investors with an attractive level of investment income; and

·      To preserve a potential capital growth level.

 

The Group considers the capital to be managed as equal to the net assets attributable to the equity shareholders of the parent. The Group is not subject to any externally imposed capital requirements. The Group has engaged the Investment Manager to allocate the net assets in such a way so as to generate a reasonable investment returns for its shareholders and to ensure that there is sufficient funding available for the Company to continue as a going concern.

 

Capital as at year end is summarised as follows: 

 


30 June 2017

30 June 2016


USD'000

USD'000




Net assets attributable to the equity shareholders of the parent

241,484

336,836


═══════

═══════

 



 

 

Fair value estimation

 

The table below analyses financial instruments carried at fair value, by valuation method. The difference levels have been defined as follows:

 

·      Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

·      Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

·      Level 3: Inputs for the asset or liability that are not based on observable market data

(that is, unobservable inputs).

 

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

 

The financial assets and financial liabilities measured at fair value in the consolidated balance sheet are grouped into the fair value hierarchy as follows:

 


Level 1

Level 2

Level 3

Total

As at 30 June 2017

USD'000

USD'000

USD'000

USD'000






Financial assets held at fair value through profit or loss





- Ordinary shares - unlisted

-

269

-

269

Financial liabilities





- Disposal fee and alignment fee

-

-

(13,004)

(13,004)


═══

══════

══════

══════







Level 1

Level 2

Level 3

Total

 

As at 30 June 2016

USD'000

USD'000

USD'000

USD'000

 






 

Financial assets held at fair value through profit or loss





- Ordinary shares - unlisted

-

269

-

269

- Derivatives

-

115

-

115

Financial liabilities

- Derivatives

 

-

 

(6,945)

 

-

 

(6,945)


═══

══════

══════

══════

 

There were no significant transfers between levels during the year.

 

34         SUBSEQUENT EVENT AFTER THE BALANCE SHEET DATE

 

On 7 September 2017, the Company announced that it would conduct a distribution of up to USD60 million (the "Tender Value Cap") to shareholders through a tender offer to purchase the Company's ordinary shares of USD0.01 each in the Company (the "Tender Offer"). The Tender Offer was offered to all shareholders at a fixed price of USD0.83 per share. Shareholders could either elect to accept or decline participation in this Tender Offer. The Tender Offer was undersubscribed. As a result, the shareholders who participated in the Tender Offer were paid the full offer price for each of the shares tendered, resulting in 71.59% of the Tender Value Cap or USD42.95 million paid out in cash on 13 October 2017. The accretive impact of the tender on the remaining shares in issue after the tender is approximately USD2.66 cents per share. Loss per share amounts are not adjusted for transactions occurring after the reporting period because they do not affect the amount of capital used to produce profit or loss for the period.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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