Regulatory Story
Go to market news section View chart   Print
RNS
VinaLand Limited   -  VNL   

Interim results for the six months ended 31 Dec

Released 14:30 27-Mar-2018

RNS Number : 1130J
VinaLand Limited
27 March 2018
 

27 March 2018

VinaLand Limited                                       

Interim results for the six months ended 31 December 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 interim results for the six months ended 31 December 2017 ("the Period").

Financial highlights:

·             Net Asset Value ("NAV") of USD119.3 million (30 June 2017: USD 241.5 million) due to the USD43.0 million tender offer, USD60.4 million capital distribution and ongoing buyback resulting in total distributions for the 6 month period of USD123.1 million; and,

·             NAV per share of USD0.66 (30 June 2017: USD0.94).

Operational highlights:

During the Period, VNL completed the divestment of four projects and made considerable progress on other pending disposals. The four projects sold were:

·     My Gia township development project in August 2017, resulting in net proceeds of USD5.9 million.

·     Vina Square project in September 2017, resulting in net proceeds of USD41.2 million. 

·     Project Phu Hoi City in November 2017, resulting in net proceeds of USD15.8 million.

·     Trinity Garden Project in December 2017, resulting in net proceeds of USD23.1 million.

About VinaCapital

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of USD1.8 billion in assets under management. The firm has two closed-ended funds that trade on the London Stock Exchange: the VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, and VinaLand Limited which trades on the AIM. VinaCapital also manages the Forum One - VCG Partners Vietnam Fund, one of Vietnam's largest open-ended UCITS-compliant funds, the Vietnam Equity Special Access Fund, numerous segregated accounts, and two domestic funds. VinaCapital also has joint ventures with Draper Fisher Jurvetson in venture capital, and Warburg Pincus in hospitality and lodging. VinaCapital's expertise spans a full range of asset classes including capital markets, private equity, real estate, venture capital, and fixed income.

For more information about VinaCapital, please visit 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

VinaCapital Investment Management Limited

Investor Relations

+84 28 3821 9930

jonathan.luu@vinacapital.com

 

Joel Weiden

VinaCapital Investment Management Limited

Communications

+84 28 3821 9930

joel.weiden@vinacapital.com

 

Philip Secrett

Grant Thornton UK LLP, Nominated Adviser

+44 (0)20 7383 5100

philip.j.secrett@uk.gt.com

 

David Benda / Hugh Jonathan

Numis Securities Limited, Broker

+44 (0)20 7260 1000

funds@numis.com

 

 

Chairman's Statement

 

Dear Shareholders,

 

I am pleased to report that VinaLand Limited (the "Company", "VNL") continued to make good progress in divesting assets and making distributions to shareholders during the interim period from 1 July 2017 to 31 December 2017.

 

AGM                              

 

The Company held its Annual General Meeting ("AGM") in November, where all four resolutions were approved. The Company will continue to divest all of its remaining assets in an orderly manner to achieve the highest possible sales values and continue to return available proceeds to shareholders.

 

Project divestments

 

During the period the Company completed four disposals as follows:

 

·     My Gia township development project (August 2017): the Company disposed of its remaining stake, receiving net proceeds of USD5.9 million. The valuation was 0.7% above the 30 June 2017 unaudited net asset value ("NAV") and 25.1% below the unaudited NAV at the time of the Company's Extraordinary General Meeting in November 2016 ("2016 EGM").

·     Vina Square project (September 2017): the Company divested its entire stake in this project in HCMC, with net proceeds of USD41.2 million, including the repayment of loans from shareholders. The total valuation was recorded at 0.3% above the 30 June 2017 unaudited NAV and 13.5% above the unaudited NAV at the time of the 2016 EGM.  

·     Project Phu Hoi City (November 2017): the Company disposed of its entire stake in this project at a valuation 2.0% above the 30 September 2017 unaudited NAV and 3.3% above the unaudited NAV at the time of the 2016 EGM. Net proceeds received by the Company were USD15.8 million.

·     Trinity Garden Project (December 2017): the Company divested its entire stake at a valuation of 2.6% above the 30 September 2017 unaudited NAV and 3.5% above the unaudited NAV at the time of the 2016 EGM. This transaction resulted in net proceeds of USD23.1 million to the Company.

 

Shareholder distributions and share repurchases

 

During the interim period, the Company continued to make distributions to shareholders. In October 2017, the Company distributed USD43.0 million via a tender offer resulting in the cancellation of 51.8 million shares.  In addition to the tender offer, the Company also repurchased, via ongoing share buybacks, a further 25.4 million ordinary shares, which have subsequently been cancelled. Then in December 2017, the Company made a capital distribution (capital reduction) of USD60.4 million, or USD0.33 per share, to all shareholders.

Subsequently, during this 6 month period, USD123.1m in total was distributed using these three methods.

 

Since the commencement of the share buyback program, the Company has cancelled 63.8% of the Company's total issued shares.   

 

Fund performance

 

The NAV per share (reviewed by the auditors) was USD0.66 at 31 December 2017, an improvement of 8.3% from the adjusted audited NAV per share on Capital Return of USD0.61 at 30 June 2017. During this period, the Company's share price increased 21.2% to USD0.60, resulting in a share price discount to NAV of 9.9%.

 

* * * * *

Vietnam's real estate market continues to exhibit an upbeat environment leading into 2018 which will provide positive conditions that will support the Company's divestment strategy enabling further distributions to shareholders. On behalf of the Board, I appreciate your continued support.

 

 

Michel Casselman

Chairman

VinaLand Limited

27 March 2018

 



 

CONDENSED INTERIM CONSOLIDATED BALANCE SHEET

 



31 December 2017

30 June

2017


Note

USD'000

USD'000





ASSETS








Non-current




Investment properties

6

37,730

63,988

Property, plant and equipment


399

404

Investments in associates

7

30,988

20,097

Prepayments for acquisitions of investments

8

-

22,650

Other non-current assets


30

65



───────

───────

Total non-current assets


69,147

107,204



═══════

═══════





Current




Inventories


-

220

Trade and other receivables

9

14,324

1,120

Tax receivables


161

314

Receivables from and advances to related parties

23

2,801

1,786

Short-term investments


34

56

Financial assets at fair value through profit or loss


269

269

Cash and cash equivalents

10

38,341

88,919



───────

───────

Total current assets


55,930

92,684





Assets classified as held for sale

11

161,994

329,963

 

Total assets


───────

287,071      ═══════

───────

529,851 ═══════

 

 


 



31 December 2017

30 June

2017


Note

USD'000

USD'000





EQUITY AND LIABILITIES








EQUITY




Equity attributable to equity shareholders of the parent




Share capital

12

1,808

2,580

Additional paid-in capital

13

199,847

332,803

Equity reserve


75,693

65,166

Other reserve


-

(10)

Translation reserve


(24,998)

(45,443)

Accumulated losses


(133,010)

(113,612)



───────

───────



119,340

241,484

Non-controlling interests


9,917

74,867

 

Total equity


───────

129,257

───────

───────

316,351

───────

LIABILITIES








Non-current




Deferred income tax liabilities

14

8,888

18,762



───────

───────

Total non-current liabilities


8,888

18,762





Current




Trade and other payables

15

65,688

56,387

Payables to related parties

23

15,035

13,836



───────

───────

Total current liabilities


80,723

70,223





Liabilities classified as held for sale

11

68,203

124,515

 

Total liabilities


───────

157,814

───────

213,500

 

Total equity and liabilities


───────

287,071

───────

529,851



═══════

═══════

Net assets per share attributable to equity

 shareholders of the parent (USD per share)

 

21(c)

0.66

0.94



═══════

═══════

 

 


CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 



            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 2017

2,580

332,803

65,166


(10)

(45,443)

(113,612)

241,484

74,867

316,351

Loss for the period

-

-

-

-

-

(19,398)

(19,398)

730

(18,668)

Currency translation

-

-

-

-

338

-

338

89

427

Reclassification of currency translation reserve on disposal of subsidiaries

-

-

-

-

20,107

-

20,107

3,183

23,290


─────

─────

─────

─────

─────

──────

──────

───────

──────

Total comprehensive income

 

-

─────

-

─────

-

─────

-    ─────

20,445  

─────

(19,398)

──────

1,047  

──────

4,002

──────

5,049

──────

Transactions with owners in their

 capacity as owners:










Repurchases and cancellation of shares

(772)

(72,523)

10,527

-

-

-

(62,768)

-

(62,768)

Distributions to shareholders

-

(60,433)

-

-

-

-

(60,433)

-

(60,433)

Disposals of subsidiaries

-

-

-

10

-

-

10

(52,578)

(52,568)

Capital contributions to subsidiaries

-

-

-

-

-

-

-

2,759

2,759

Distributions to non-controlling interests

-

-

-

-

-

-

-

(19,133)

(19,133)


─────

───────

──────


──────

──────

──────

──────

──────

──────

Balance at 31 December 2017

1,808

199,847

75,693

-

(24,998)

(133,010)

119,340

9,917

129,257


═════

═══════

══════

══════

══════

══════

══════

══════

══════

 

 

 

 

 

 

 

 



            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

Profit for the period

-

-

-

-

-

338

338

10,486

10,824

Currency translation

-

-

-

-

(4,007)

-

(4,007)

(2,887)

(6,894)

Reclassification of currency translation reserve on disposal of subsidiaries

-

-

-

-

8,778

-

8,778

-

8,778


─────

─────

─────

─────

─────

─────

──────

───────

──────

Total comprehensive income

 

-

─────

-

─────

-

─────

-    ─────

4,771

─────

338

─────

5,109

──────

7,599

──────

12,708

──────

Transactions with owners in their

 capacity as owners:










Repurchases and cancellation of shares

(359)

(30,613)

7,269

-

-

-

(23,703)

-

(23,703)

Disposals of subsidiaries

-

-

-

-

-

-

-

(3,903)

(3,903)

Capital contributions to subsidiaries

-

-

-

-

-

-

-

41

41

Distributions to non-controlling interests

-

-

-

-

-

-

-

(5,808)

(5,808)


─────

───────

──────

──────

──────

──────

──────

──────

──────

Balance at 31 December 2016

3,579

422,067

49,384

(67)

(67,106)

(89,615)

318,242

126,342

444,584


═════

═══════

══════

══════

══════

══════

══════

══════

══════

 


CONDENSED INTERIM CONSOLIDATED INCOME STATEMENT

 



Six months ended



31 December 2017

31 December 2016


Note

USD'000

USD'000





Revenue


30

4,508

Cost of sales


(102)

(5,338)



──────

──────

Gross loss


(72)

(830)





Net gain on fair value adjustments of investment properties

 

16

 

3,547

 

41,667

Net gain on fair value adjustment of investment properties classified as held for sale

 

11

 

2,623

 

-

Selling and administration expenses

17

(2,435)

(5,188)

Net losses on disposals of investments

18

(20,097)

(13,852)

Reversal of impairment of assets


-

682

Finance income


545

365

Finance expenses


(580)

(4,302)

Share of losses of associates, net

7(a)

(295)

(1,921)

Gain due to dilution of ownership in an associate


-

1,613

Other income


195

330

Other expenses


(488)

(1,078)



──────

──────

(Loss)/income from operations before income tax


(17,057)

17,486

Income tax

19

(1,611)

(6,662)



──────

──────

(Loss)/income from operations


(18,668)

10,824





Attributable to equity shareholders of the Company


(19,398)

338

Attributable to non-controlling interests


730

10,486



──────

──────

Net (loss)/income for the period


(18,668)

10,824



══════

══════

(Loss)/earning per share

-  basic and diluted (USD per share)

 

21(a)

 

(0.08)

 

           0.00



──────

──────

 

 

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 



Six months ended



31 December 2017

31 December 2016



USD'000

USD'000





Net (loss)/income for the period


(18,668)  

10,824





Other comprehensive income








Items that may be reclassified subsequently to profit or loss:




Reclassification of currency translation reserve on

 disposal of subsidiaries


 

23,290

 

8,778

Exchange differences on translating foreign operations


427

(6,894)



──────

──────





Other comprehensive income for the period


23,717

1,884



──────

──────

Total comprehensive income for the period


5,049

12,708



════

════





Attributable to equity shareholders of the Company


1,047

5,109

Attributable to non-controlling interests


4,002

7,599



────

5,049

════

────

12,708

════

 

 

 

 



CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

 



Six months ended


 

 

31 December

2017

31 December

2016


Note

USD'000

USD'000





Operating activities




Net operating (loss)/profit before tax


(17,057)

17,486

Adjustments for:




Depreciation and amortisation


8

27

Net change in fair values of financial assets at fair value

 through profit or loss


 

-

 

(6,831)

Net gain on fair value adjustments of investment properties

16

(3,547)

(41,667)

Net gain on fair value adjustments of investment properties

 classified as held for sales

 

11

 

(2,623)

 

-

Net losses on disposals of investments

18

20,097

13,852

Reversal for impairment of assets


-

(682)

Share of losses of associates, net

7(a)

295

1,921

Gain due to dilution in ownership of associate

7

-

(1,613)

Unrealised foreign exchange losses


7

2

Interest expense


570

4,130

Interest income


(374)

(239)

 

Net loss before changes in working capital


──────

(2,624)

──────

(13,614)





Change in trade receivables and other current assets


(5,368)

(852)

Change in inventories


-

1,953

Change in trade payables and other current liabilities


61,540

(4,179)

 

Net cash inflow/(outflow) from operating activities


──────

53,548

──────

──────

(16,692)

──────





Investing activities




Interest received


365

206

Purchases of investment properties and other non-current assets


(8,646)

(12,980)

Additional investments in associates


(11,186)

(1,880)

Proceeds from disposals of assets classified as held for sale


2,987

1,954

Proceeds from sales of subsidiaries


51,543

26,357

Collection of prepayment for acquisition


-

2,955

Net proceeds in short-term deposits


-

7,352

 

Net cash inflow from investing activities


──────

35,063

──────

──────

23,964

──────





 

 

 

 




Six months ended




31 December

2017

31 December

2016



Note

USD'000

USD'000






Financing activities




Additional capital contributions from non-controlling interests


2,759

41

Loan proceeds from banks           


-

36,309

Loan repayments to banks


-

(1,028)

Zero dividend preference share repayment


-

(25,118)

Ordinary shares acquired by the Company

12

(62,768)

(23,703)

Distributions to shareholders

13

(60,433)

-

Interest paid


(571)

(6,514)

Capital refunded to non-controlling interests


(19,133)

(5,808)

Net cash outflow to financing activities


──────

(140,146)

──────

──────

(25,821)

──────

Net changes in cash and cash equivalents for the period


(51,535)

(18,549)

Cash and cash equivalents at the beginning of the period


88,919

76,903

Cash and cash equivalents classified as held for sale


952

-

Exchange differences on cash and cash equivalents


5

62

 

Cash and cash equivalents at the end of the period

 

10

──────

38,341

══════

──────

58,416

══════

 

During the period, major non-cash transactions included capital gains tax of USD10.1 million (six months ended 31 December 2017: USD0.8 million) realised on the disposals of investments. The tax amounts due were withheld from disposal proceeds by the acquirors of investments and remitted to the tax authorities.  As a result, these amounts are excluded from proceeds from disposal of subsidiaries included in the consolidated statement of cash flows.

 

 

 

 

 

NOTES TO THE CONDENSED INTERIM 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 original objective of the Company was 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 the 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 the 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, disposal and alignment fees, will be returned to shareholders.

 

·      The Third Amended and Restated Investment Management Agreement ("the Third Amended 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 23).

 

The condensed interim consolidated financial statements for the six months ended 31 December 2017 were approved for issue by the Company's Board of Directors on 27 March 2018.

 

These condensed interim consolidated financial statements have been reviewed, not audited.

 

2          BASIS OF PREPARATION

 

The Company and its subsidiaries herein are referred to as the Group.

 

These condensed interim consolidated financial statements are for the six months ended 31 December 2017. They have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). They do not include all of the information required in the annual consolidated financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRSs"). Accordingly, these financial statements are to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2017, which have been prepared in accordance with IFRSs.

 

3          ACCOUNTING POLICIES

 

These condensed interim consolidated financial statements (the "interim financial statements") have been prepared in accordance with the accounting policies, methods of computation and presentation adopted in the last annual consolidated financial statements for the year ended 30 June 2017.



 

 

4          CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

When preparing the condensed interim consolidated financial statements, management undertakes a number of 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 effect on recognition and measurement of assets, liabilities, income and expenses were the same as those that applied to the last annual consolidated financial statements for the year ended 30 June 2017.

 

4.1        Fair value of investment properties

           

The investment properties of the Group are stated at fair value in accordance with accounting policy 2.5 of the annual consolidated financial statements for the year ended 30 June 2017. The fair values of investment properties are based on valuations by independent professional valuers. For the purpose of these interim consolidated financial statements, the Group engaged Cushman & Wakefield to perform independent valuations of its investment properties. 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;

 

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

 

(vi)        prices contained in recent term sheets entered into by the Company with prospective buyers.

 

Sensitivity analyses are provided in Note 6.

 

 

 

 

4.2        Disposal fee and alignment fee

 

The liabilities of the Group are stated at fair value in accordance with accounting policy 2.28 of the annual consolidated financial statements for the year ended 30 June 2017. Their fair value is estimated at each annual balance sheet date by an independent valuation company. For interim reporting purposes, management estimated the fair value of the fees by updating the independent valuation company's model with the latest projected disposal proceeds and distributions. 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;

 

5          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 short-term investments.

 

Detail of activities undertaken by each segment and how each segment is managed and monitored, can be found in Note 4 to the annual consolidated financial statements of the Group for the year ended 30 June 2017.

 

There is no measure of segment liabilities regularly reported to the Investment Manager; therefore, liabilities are not disclosed in the sector analysis. Segment information can be analysed as follows for the reporting periods under review:

 



 

(a)        Condensed Interim Consolidated Income Statement

 

 

Six months ended 31 December 2017

 

 

 

Commercial

Residential and office buildings

 

 

Hospitality

 

 

Mixed use

 

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

Revenue

-

15

-

15

30

Cost of sales

-

(94)

-

(8)

(102)

 

──────

──────

─────

─────

──────

Gross (loss)/profit

-

(79)

-

7

(72)

Net loss on disposals of investments

-

(10,826)

-

(9,271)

(20,097)

Finance income

16

229

-

300

545

Net gain/(loss) on fair value adjustments of investment properties

 

-

 

3,923

 

-

(376)

 

3,547

Net (loss)/gain on fair value adjustment of investment properties classified as held for sale

 

 

(27)

 

 

2,650

 

 

-

 

 

-

 

 

2,623

Share of losses of associates, net

(295)

-

-

-

(295)

Other income

-

124

69

2

195

 

──────

──────

─────

─────

──────

Total (loss)/profit before unallocatable expenses

 

(306)

 

(3,979)

 

69

 

(9,338)

 

(13,554)

Selling and administration expenses

 

 

 

 

(2,435)

Finance expenses

 

 

 

 

(580)

Other expenses

 

 

 

 

(488)

 

Loss before tax

 

 

 

 

─────

(17,057)

Income tax

 

 

 

 

  (1,611)

 

Net loss for the period

 

 

 

 

─────

(18,668)

═════

 

Six months ended 31 December 2016

 

 

 

Commercial

Residential and office buildings

 

 

Hospitality

 

 

Mixed use

 

 

Total

 

USD'000

USD'000

USD'000

USD'000

USD'000

 

 

 

 

 

 

Revenue

-

4,508

-

-

4,508

Cost of sales

-

(5,338)

-

-

(5,338)

 

──────

──────

─────

─────

──────

Gross loss

-

(830)

-

-

(830)

Net loss on disposals of investments

-

(13,852)

-

-

(13,852)

Finance income

-

205

3

157

365

Net (loss)/gain on fair value adjustments of investment properties

 

(1,045)

 

8,950

 

-

33,762

 

41,667

Share of gains/(losses) of associates, net

102

(2,068)

45

-

(1,921)

Loss due to dilution in ownership of associate

 

-

 

1,613

 

-

 

-

 

1,613

Reversal of impairment of assets

-

74

-

608

682

Other income

8

286

-

36

330

 

──────

──────

─────

─────

──────

Total (loss)/profit before unallocatable expenses

 

(935)

 

(5,622)

 

48

 

34,563

 

28,054

Selling and administration expenses

 

 

 

 

(5,188)

Finance expenses

 

 

 

 

(4,302)

Other expenses

 

 

 

 

(1,078)

 

Income before tax

 

 

 

 

─────

17,486

Income tax

 

 

 

 

(6,662)

 

Net income for the period

 

 

 

 

 

─────

10,824

═════

 

 


 

(b)        Condensed Interim Consolidated Balance Sheet

 

 

As at 31 December 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

-

37,730

-

-

-

37,730

Property, plant and equipment

 

-

 

-

 

-

 

399

 

-

 

399

Investments in associates

30,988

-

-

-

-

30,988

Trade, tax and other receivables

 

-

 

15,447

 

-

 

1,839

 

-

 

17,286

Short-term investments

-

-

-

-

34

34

Financial assets at fair value through profit or loss

 

-

 

-

 

-

 

269

 

-

 

269

Cash and cash equivalents

-

-

-

-

38,341

38,341

Assets classified as held for sale

 

3,008

 

124,628  

 

4,286

 

30,072

 

-

 

161,994

Other assets

-

1

-

29

-

30

 

Total assets

──────

  33,996

══════

───────

177,806  

═══════

──────

4,286

══════

───────

32,608

═══════

──────

38,375

══════

───────

287,071  

═══════

Total assets include:

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

11,186

49

-

41

-

11,276

 

 

    

 

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

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

 

 

 

 

 

 

 

 

 

 

 

6          INVESTMENT PROPERTIES

 


31 December 2017

30 June

 2017


USD'000

USD'000




Opening balance (1 July 2017/1 July 2016)

63,988

389,700

Additions

42

66,514

Disposals

-

(130,255)

Transfers to non-current assets classified as held for sale (Note 11)

(30,000)

(287,058)

Net gain from fair value adjustments (Note 16)

3,547

30,122

Translation differences

153

(5,035)

 

Closing balance

───────

37,730

═══════

───────

63,988

═══════

 

The Group's investment properties were revalued during the period 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.

 

As at 31 December 2017 and 30 June 2017, there were no bank borrowings secured by investment properties. During the period, there were no borrowing costs capitalised (year ended 30 June 2017: USD4.9 million) in investment properties.

 

At 31 December 2017, land use right 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.

 

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 period (year ended 30 June 2017: none).

 


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

 

As at 31 December 2017

 


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

37,730

 

34

 

Change in sales price per

square metre





-10%

0%

10%





33,957

37,730

41,503

 

For the comparative balance sheet date:

 


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

37,070

Mixed use

Direct comparisons

30,288

 

785 - 938

 

Change in sales price per

square metre





-10%

0%

10%





24,908

30,288

35,668


7          SUBSIDIARIES AND ASSOCIATES

 

(a)        Investments in associates

 


31 December 2017

30 June

2017


 USD'000

USD'000




Opening balance (1 July 2017/1 July 2016)

20,097

47,713

Additions

11,186

 2,014

Gain due to dilution of ownership in an associate

-

 1,670

Disposals

-

(24,568)

Reclassified as held for sale (Note 11)

-

 (4,287)

Share of losses of associates

(295)

 (2,445)

 

Closing balance

───────

30,988

═══════

───────

20,097

═══════

 

Particulars of material operating associates and their summarised financial information, extracted from their financial statements as at 31 December 2017 and 30 June 2017, are as follows:

 

As at 31 December 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

  59,702

  7,219

 221

(464)

(295)

65

 

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

 

 

 7,893

 

 

 (80)

 

 

 (50)

 

 

65

 

As at the reporting date, the Group has a 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 at 31 December 2017 and 30 June 2017:

 



31 December 2017


30 June 2017


 

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 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

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

Aqua City Joint Stock Company

Vietnam

100.0%

-


100.0%

-

Property investment

Viet Land Development Corporation Limited

Vietnam

90.0%

10.0%


90.0%

10.0%

Property investment

VinaCapital Phuoc Dien Co., Ltd.

Vietnam

-

-


100.0%

-

Property investment

Vinh Thai Urban Development Corporation Limited

Vietnam

-

-


53.3%

46.7%

Property investment

Vina Alliance Company Limited

Vietnam

-

-


46.5%

53.5%

Property investment

Phu Hoi City Company Limited

Vietnam

-

-


52.5%

47.5%

Property investment

 

(*)         At the reporting date, the Group has a 38.2% equity interest in VinaCapital Commercial Center Limited (Vietnam). Management considers this company as a subsidiary as the Group has de facto control through the majority voting rights in the company.

 

 


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 further does not have any shareholding in the preference shares of subsidiary undertakings included in the Group.

 

During the period, the Group sold several subsidiaries, details of which are provided on the following pages. The assets and liabilities held by the subsidiaries sold were as follows:

 



As at the date of disposal



USD'000

Current assets



        Cash and cash equivalents


401

        Prepayment to supplier


2,264 

        Inventories


220

        Trade and other receivables


1,842

        Assets classified as held for sale


205,118



──────

Total current assets


209,845

Non-current assets



        Prepayments for acquisitions


22,697



──────

Total non-current assets


22,697

Current liabilities



        Trade payables


(458)

        Short-term borrowings


(2,961)

        Other current liabilities


(7)

        Liabilities classified as held for sale


(64,776)



──────

Total current liabilities


(68,202)



──────

Net assets at the date when subsidiaries were sold


164,340



──────

Net assets attributable to the Company


112,238

Net assets attributable to non-controlling interests


52,102



──────

Total consideration


115,360

Capital gains tax withheld by buyers


(9,999)

Outstanding consideration as at 31 December 2017


(12,786)



──────

Consideration received from sales of subsidiaries

92,575

Less: Cash and cash equivalents of disposed subsidiaries

(3,674)



──────

Cash received due to loss of control of subsidiaries

88,901


══════

 



Details of the losses from sales of subsidiaries are as follows:

 


Period ended

31 December 2017



USD'000




Total consideration


115,360

Carrying amount of net assets sold attributable to the Company


(112,238)



──────

Gain on sales of subsidiaries before reclassification of currency translation reserve

3,122

Reclassification of currency translation reserve


(23,290)



──────

Loss on sales of subsidiaries


(20,168)



──────

 

Sale of Vinh Thai Urban Development Corporation Limited

 

During the period the Group sold its 53.3% equity interest in Vinh Thai Urban Development Corporation Limited for a total consideration of USD5.9 million. The book value of the net assets at the sale date was USD5.8 million and the reclassification of translation reserve on disposal was USD7.2 million, resulting in a loss of USD7.1 million.

 

Sale of Vina Alliance Company Limited

 

During the period the Group sold its 46.5% equity interest in Vina Alliance Company Limited for a total consideration of USD61.8 million. The book value of the net assets at the sale date was USD61.8 million and the reclassification of translation reserve on disposal was USD9.3 million, resulting in a loss of USD9.3 million.

 

Sale of Phu Hoi City Company Limited

 

During the period the Group sold its 52.5% equity interest in Phu Hoi City Company Limited for a total consideration of USD21.2 million. The book value of the net assets at the sale date was USD20.8 million and the reclassification of translation reserve on disposal was USD5.3 million, resulting in a loss of USD4.9 million.

 

Sale of VinaCapital Phuoc Dien Co., Ltd.

 

During the period the Group sold its 100% equity interest in VinaCapital Phuoc Dien Co., Ltd. for a total consideration of USD26.5 million. The book value of the net assets at the sale date was USD23.9 million and the reclassification of translation reserve on disposal was USD1.5 million, resulting in a gain of USD1.1 million.



Summarised financial information of subsidiaries with material non-controlling interests

 

The total non-controlling interests as at 31 December 2017 was USD9.9 million (30 June 2017: USD74.9 million), allocated as below:

 


31 December 2017

  30 June

    2017


USD'000

  USD'000




Aqua City Joint Stock Company ("Aqua City")

4,776

4,340

Mega Assets Company Limited (Vietnam) ("Mega Assets")

2,802

6,175

Vina Alliance Company Limited ("Vina Square") (*)

-

42,394

Phu Hoi City Company Limited ("Phu Hoi") (*)

-

14,871

Others

2,339

7,087


─────

9,917

 ═════

──────

74,867

 ══════

 

(*) The Group disposed of these subsidiaries during the period.

 

Set out below is summarised financial information for each of the subsidiaries with non-controlling interests that are material to the Group.

 

Summarised balance sheets

 


Aqua City

Mega Assets


As at

As at


31.12.2017

30.06.2017

31.12.2017

30.06.2017


USD'000

USD'000

USD'000

USD'000

Current





Assets

3,116

3,109

1,138

465

Liabilities

(52,074)

(52,074)

(13,674)

(12,261)

Total current net liabilities

(48,958)

(48,965)

(12,536)

(11,796)

Non-current





Assets

37,730

33,701

-

30,237

Liabilities

(598)

-

(3,970)

(4,576)

Total non-current net assets/(liabilities)

37,132

33,701

(3,970)

25,661

Classified as held for sale





Assets

-

-

30,072

-

Liabilities

-

-

(10)

-

Total net assets classified as held for sale

-

-

30,062

-






Net (liabilities)/assets

(11,826)

(15,264)

13,556

13,865

 

 



Summarised income statements

 


Aqua City

Mega Assets


Period ended 31 December

Period ended 31 December


2017

2016

2017

2016


USD'000

USD'000

USD'000

USD'000






Revenue

-

-

-

-

Profit/(loss) before income tax

3,921

(455)

(361)

6,240

Income tax expense

(598)

-

6

(1,213)

Post-tax profit/(loss) from continuing operations

3,323

(455)

(355)

5,027

Other comprehensive income/(loss)

115

-

46

(427)

Total comprehensive income/(loss)

3,438

(455)

(309)

4,600

Total comprehensive income/(loss)
allocated to non-controlling interests

436

(55)

77

1,191

 

Summarised statements of cash flow

 


Aqua City

Mega Assets


Period ended 31 December

Period ended 31 December


2017

2016

2017

2016


USD'000

USD'000

USD'000

USD'000






Net cash flows from/(used in) operating activities

119

-

(3,365)

(112)

Net cash flows (used in)/from investing activities

(1)

-

237

5

Net cash flows from financing activities

-

-

2,990

165

Cash and cash equivalents classified as held for sale

-

-

(25)

-

Net increase/(decrease) in cash and cash equivalents

118

-

(163)

58

 

The information above is before inter-company eliminations.



 

 

8          PREPAYMENTS FOR ACQUISITIONS OF INVESTMENTS

           

Movements in the balance during the period/year were as follows:

 


31 December 2017

30 June

2017


USD'000

USD'000




Opening balance (1 July 2017/1 July 2016)

22,650

27,772

Additions

47

76

Reversal of impairment

-

1,176

Disposal

(22,697)

-

Collection of prepayment

-

(2,955)

Reclassified as held for sale

-

(3,077)

Translation differences

-

(342)


──────

───────

Closing balance

-

22,650


══════

══════

 

 

9          TRADE AND OTHER RECEIVABLES

 


31 December 2017

30 June

2017


USD'000

USD'000




Receivables from disposals of subsidiaries (*)

12,786

252

Trade receivables

766

217

Prepayments to suppliers

750

17

Interest receivables

19

10

Advances to employees

-

 8

Short-term prepaid expenses

2

 5

Other receivables

1

 611


──────

14,324  

══════

──────

 1,120

══════

 

(*)   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 current 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 condensed interim consolidated balance sheet.



 

 

10         CASH AND CASH EQUIVALENTS

 


31 December

2017

30 June

2017


USD'000

USD'000




Cash on hand

6

6

Cash at banks

20,737

80,217

Cash equivalents

17,598

8,696


──────

──────


38,341

88,919


══════

══════

 

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

 

At 31 December 2017, cash and cash equivalents held at the Company level amounted to USD34.0 million (30 June 2017: USD70.7 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 it cannot be transferred out of Vietnam unless those restrictions are satisfied.

 

In accordance with the Third Amended Management Agreement, twenty percent (20%) of any disposal fee payable to the Investment Manager is to be deposited into a separate bank account under the Company's name ("the Retention Account"). These funds will be distributed upon the performance of certain milestones by the Manager. The Company has no specific rights to these funds. Included in cash and cash equivalents as at 31 December 2017 (30 June 2017: nil) was USD0.7 million transferred into the Retention Account in January 2018. This amount equals 20% of disposal fees payable to Investment Manager for the period commencing on and including 22 November 2016 to and excluding 22 November 2017 .

 

11         ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

 


31 December 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







AA VinaCapital Co. Limited

3,007

(59)

2,948

496

2,452

Viet Land Development Corporation Limited

 

120,718

 

(67,732)

 

52,986

 

4,072

 

48,914

Romana Services - Trading Investment JS Corporation

 

4,286

 

-

 

4,286

 

-

 

4,286

Hoang Phat Investment Joint Stock Company

 

3,911

 

(402)

 

3,509

 

1,240

 

2,269

Mega Assets Company Limited

30,072

(10)

30,062

7,516

22,546


──────

161,994  

══════

───────

(68,203)

═══════

──────

93,791

══════

──────

13,324  ══════

──────

80,467

══════



 

As at 31 December 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:

 

-     AA VinaCapital Co. Limited

-     Viet Land Development Corporation Limited

-     Romana Services - Trading Investment JS Corporation

-     Hoang Phat Investment Joint Stock Company

-     Mega Assets Company Limited (Vietnam)

 

For the comparative year:

 


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

══════

 

 


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

 


1 July 2017

Change in carrying amount

Fair value changes

Transferred in

Disposals

31 December 2017


USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

Assets classified as held for sale







Investment properties (Note 6)

287,058

8,557

2,623  

30,000

(171,687)

156,551

Property, plant and equipment (net of accumulated depreciation)

 

11

 

(1)

 

-

 

-

 

(10)

 

-

Prepayments for acquisitions

3,077

-

-

-

(3,077)

-

Other current assets

4

10

-

-

(3)

11

Other non-current assets

14

-

-

-

-

14

Inventories

29,584

7

-

-

(29,591)

-

Trade and other receivables

1,645

(65)

-

47

(554)

1,073

Cash and cash equivalents

4,283

(977)

-

25

(3,273)

58

Investment in associate

4,287

-

-

-

-

4,287


──────

─────

─────

──────

───────

──────


329,963

7,531

2,623

30,072

(208,195)

161,994


──────

─────

─────

──────

───────

──────

Liabilities classified as held for sale







Long-term borrowings and debts

78,247

2,887  

-

-

(30,487)

50,647  

Short-term borrowings and debts

18,828

477

-

-

(7,179)

12,126

Long-term trade and other payables

35

-

-

-

-

35

Accruals and other current liabilities

-

(1)

-

-

1

-

Trade and other payables

27,405

5,091

-

10

(27,111)

5,395


──────

─────

─────

──────

───────

──────


124,515

8,454

-

10

(64,776)

68,203


──────

─────

─────

──────

───────

──────

Net assets classified as held for sale

205,448

(923)

2,623

30,062

(143,419)

93,791


══════

═════

═════

══════

═══════

══════

 


For the comparative year:

 


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 6)

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)

-

Prepayments 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

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 associate (Note 7(a))

-

4,287

-

4,287


──────

──────

──────

──────


18,628

329,963

(18,628)

329,963


──────

──────

──────

──────

Liabilities classified as held for sale





Long-term borrowings and debts

-

78,248

-

78,248

Short-term borrowings and debts

-

18,829

-

18,829

Long-term trade and other payables

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 31 December 2017, bank borrowing of USD50.8 million (30 June 2017: USD64.6 million) are secured by investment properties held for sale with a total fair value of USD120.0 million (30 June 2017: 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).

12    SHARE CAPITAL

 


31 December 2017


30 June 2017


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 (1 July 2017/ 1 July 2016)

257,987,620

2,580


393,808,479

3,938

Shares purchased and cancelled

(77,182,732)

(772)


(135,820,859)

(1,358)

 

Closing balance

──────────

180,804,888

══════════

─────

1,808

═════


──────────

257,987,620

══════════

─────

2,580

═════

 

The Company considers investors holding more than a 10% beneficial interest in the ordinary shares of the Company as major shareholders. As at 31 December 2017, there were four investors that held more than 10% of the ordinary shares of the Company (30 June 2017: two).

 

During the period, the Company purchased and cancelled 77,182,732 of its ordinary shares (year ended 30 June 2017: 135,820,859 shares) for a total cash consideration of USD62.8 million (year ended 30 June 2017: USD98.2 million) at an average cost USD0.814 per share (year ended 30 June 2017: USD0.723 per share). The difference between the cost of the shares repurchased and their net asset value has been recorded in an equity reserve.

 

13         ADDITIONAL PAID-IN CAPITAL

 

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

 


31 December 2017

30 June

2017


USD'000

USD'000




Opening balance (1 July 2017/1 July 2016)

332,803

452,680

Shares repurchased and cancelled

(72,523)

(119,877)

Distribution to shareholders

(60,433)

-

 

Closing balance

───────

199,847

═══════

───────

332,803

═══════

 

On 7 December 2017, the Company announced that it would make a distribution of capital from its additional paid-in capital of USD60.4 million or 33 cents per ordinary share. As at 31 December 2017, this amount had been fully distributed.

 

 



 

 

14         DEFERRED TAX LIABILITIES

 


31 December

2017

30 June

2017


USD'000

USD'000




Opening balance (1 July 2017/1 July 2016)

18,762

16,358

Net change during the period/year from fair value adjustments of investment properties

(9,874)

2,404

 

Closing balance

──────

   8,888

══════

──────

18,762

══════

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

-

3,976

Deferred income tax liabilities to be recovered within 12 months

8,888

14,786


──────

──────


8,888

18,762


══════

══════

 

Deferred tax liabilities are the amounts of income tax to be settled in future periods in respect of temporary differences between the carrying amounts of revalued assets and their tax bases and expected capital gain tax on disposals of its subsidiaries. During the period, the Group disposed of some of its subsidiaries resulting to decrease of deferred tax liabilities.

 

15         CURRENT TRADE AND OTHER PAYABLES

 


31 December 2017

30 June 2017


USD'000

USD'000




Deposits from property buyers

62,937

52,174

Deposits from customers of residential projects

42

300

Other accrued liabilities

33

31

Trade payables

17

15

Payables for property acquisitions and land compensation

-

2,685

Other payables

2,659

1,182


───────

65,688

══════

───────

56,387

══════

 

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

 

  

16         NET GAIN ON FAIR VALUE ADJUSTMENTS OF INVESTMENT PROPERTIES

 


Six months ended


31 December 2017

31 December

2016


USD'000

USD'000




By real estate sector:



- Commercial

-

(1,045)

- Residential and office buildings

3,923

8,950

- Mixed use

(376)

33,762

 

Net gain on fair value adjustments of investment properties

──────

 

3,547

══════

──────

 

41,667

══════

 

17         SELLING AND ADMINISTRATION EXPENSES

 


Six months ended


31 December 2017

31 December

2016


USD'000

USD'000




Disposal and alignment fees under the Third Amended and Restated Investment Management Agreement (Note 23)

938

266

Management fees under the Second Amended and Restated Investment Management Agreement

-

1,822

Professional fees (*)

1,002

1,586

Staff costs (**)

251

                   328

General and administration expenses (**)

202

                   767

Others (**)

42

                     419


─────

2,435

═════

─────

5,188

═════

                           

(*) These expenses primarily relate to the operating activities of the Company such as legal and professional fees, audit fees, valuation fees, fund administrative and custodian fees, directors fees.

 

(**) These expenses primarily relate to the operating activities of the Group's subsidiaries.



 

 

18         NET LOSSES/(GAINS) ON DISPOSALS OF INVESTMENTS

 

 


Six months ended


31 December 2017

31 December

2016


USD'000

USD'000




Losses on sales of subsidiaries (Note 7(b))

20,168

13,852

Gains on sales of assets classified as held for sale

(71)

-


──────

20,097

══════

──────

13,852

══════

 

19         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. Deferred tax assets/liabilities of these subsidiaries are estimated based on the tax legislation of each jurisdiction and included in the deferred income tax assets/liabilities on the balance sheet.

 

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 period because these subsidiaries do not have taxable income in Vietnam (period from 1 July 2016 to 31 December 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 condensed interim consolidated income statement can be reconciled as follows:

 


Six months ended


31 December 2017

31 December 2016


USD'000

 USD'000




Current income tax



Group's (loss)/gain before tax 

(17,057)

17,486

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

-

-

Capital gains tax

(11,485)

(799)


─────

─────

Total current tax expense

(11,485)

(799)


─────

─────

Deferred income tax



Decrease in deferred tax assets (*)

-

(426)

Decrease/(increase) in deferred tax liabilitites (*)

9,874

(5,437)


─────

─────

Total deferred income tax income/(expense)

9,874

(5,863)


─────

─────

Tax expense

(1,611)

(6,662)


═════

═════

           

(*) This amount represents the net deferred income tax income/(expense) which arose from the gains/(losses) on fair value adjustments of investment properties and the reversal of deferred tax assets/liabilities as a result of changes to valuation assumptions during the period.

 

20         DEFERRED INCOME TAX

 

Deferred income tax assets relating to the accumulated tax losses as at 31 December 2017 of USD6.5 million (30 June 2017: USD17.8 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                                                                                                                

 


31 December 2017

30 June 2017


USD'000

USD'000




2018

111

1,593

2019

728

1,857

2020

2,249

9,655

2021

2,723

3,875

2022

707

845


────

─────


6,518

17,825


════

═════

 



 

 

21         (LOSS)/EARNINGS AND NET ASSET VALUE PER SHARE

 

(a)        Basic

 


Six months ended


31 December

2017

31 December

2016




Net (loss)/income attributable to owners of the Company



 from continuing and total operations (USD'000)

(19,398)

338

Weighted average number of ordinary shares in issue

248,348,242

386,050,076

Basic (loss)/earnings per share from continuing and total



 operations (USD per share)   

(0.08)

0.00


──────────

──────────

 

(b)        Diluted

 

Diluted earnings 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 earnings per share is equal to basic earnings per share.

 

(c)        Net asset value per share

 


31 December

2017

30 June

2017




Net asset value (USD'000)

119,340

241,484

Number of outstanding ordinary shares in issue

180,804,888

257,987,620

Net asset value per share (USD/share)

0.66

0.94


──────────

──────────

 

22         COMMITMENTS

 

 

As at 31 December 2017, the Group was committed under lease agreements to paying the following future amounts:

 


31 December

2017

30 June

2017


USD'000

USD'000




Within one year

15

46

From two to five years

1

11


─────

─────


16

57


═════

═════

 

As at 31 December 2017, commitment for future construction work of the Group's properties held by subsidiaries is USD9.7 million (as at 30 June 2017: USD6.7 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.



 

 

23         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 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.

 

Under the Third Amended and Restated Investment Management Agreement effective from 14 December 2016 no further management fees shall be charged by the Investment Manager to the Company (six months ended 31 December 2016: USD1.8 million).

 

Disposal fees and alignment fees

 

Under the Third Amended Management Agreement effective from 14 December 2016 the Investment Manager receives 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 period advances of USD1.1 million (30 June 2017: USD1.5 million) were paid to the Investment Manager.

 

Details of disposal fees and alignment fees accrued at the balance date were as follows:

 


31 December 2017

30 June 2017


USD'000

USD'000




Disposal fees accrued

2,371

5,820

Disposal fees payable

1,267

-

Alignment fees accrued

7,903

7,184


─────

─────

Total fees accrued/payables at period/year end

11,541

13,004

Advance payments to be offset against fees payable

(199)

(1,466)


─────

─────

Total disposal and alignment fees payable (*)

11,342

11,538


═════

═════



(*)    Movement in accrual/payable disposal and alignment fees during the period/year were as follows:

 


31 December 2017

30 June 2017


USD'000

USD'000




Opening balance (1 July 2017/1 July 2016)

11,538

-

Charge for the period/year (Note 17)

938

13,004

Amounts paid

(1,134)

(1,466)

Amounts offset by monthly advances

-

-

 

Closing balance

───────

11,342

═══════

───────

11,538

═══════

 

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

 




31 December 2017

30 June

2017


Relationship

Balances

USD'000

USD'000






 

VinaCapital Investment

 Management Ltd.

Investment Manager

Accrued disposal  and alignment fees

10,274

13,004

 



Disposal fee payable

1,267

-

 






 

VinaCapital Vietnam

 Opportunity Fund Limited ("VOF")

Under common management

Reimbursement on behalf of the Company

-

17

 

Disposals of real estate projects

3,494

131

 



Loan payable

-

684

 




──────

──────

 




15,035

13,836

 




══════

══════

 

 

As at 31 December 2017 and 30 June 2017, receivables from related parties mainly comprise of amounts due from VOF pertaining to advances to jointly invested real estate projects and advances to related parties.

 

Advances to related parties as at 31 December 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


31 December

2017

30 June

2017


Number of shares



Asia Investment and Finance Limited (*)

20,360,332

20,360,332

Vietnam Investment Partners Ltd

1,877,573

1,877,573

VinaCapital Group Limited

608,553

608,553

VinaCapital Investment Management Limited

48,552

48,552

Vietnam Master Holding 2 Limited

-

5,309,327


─────────

─────────

 

 (*)   In accordance with the Second Amended Management Agreement, the Investment Manager is required to use 50% of the realisation fee arising from the contracted divestment proceeds collected by 21 May 2016 to make market purchases of the Company's ordinary shares within three months of the receipt of the realisation fee. As of 31 December 2017, a subsidiary of the Investment Manager. During the period, there was no ordinary share of the Company bought by Asia Investment and Finance Limited (30 June 2017: 20,045,043 ordinary shares). The shares acquired are subject to lockups of between one and two years from the date of acquisition.

 

24         FINANCIAL RISK MANAGEMENT

 

(a)        Financial risk factors

 

The Group holds a diversified property portfolio in Vietnam. As a result 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 condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 30 June 2017. There have been no major changes in the risk management department of the Investment Manager and risk management policies since the most recent year end.

 

(b)        Fair value estimation

 

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

 

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

·      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) (Level 2); and

·      Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

 



The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2017:

 


Level 1

Level 2

Level 3

Total

As at 31 December 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

-

-

(11,541)

(11,541)


═══

══════

══════

══════







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)


═══

══════

══════

══════

 

There were no significant transfers between levels during the period (year ended 30 June 2017: none).

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR SEMFDWFASESD
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Interim results for the six months ended 31 Dec - RNS