Aseana Prop. Regulatory News (ASPL)

RNS Number : 7764R

Aseana Properties Limited

27 August 2010

 

27 August 2010

Aseana Properties Limited ("Aseana" or the "Company")

Half Year Results for the Six Months Ended 30 June 2010

Aseana Properties Limited (LSE: ASPL), a leading property developer investing in Malaysia and Vietnam, listed on the Official List of the London Stock Exchange, announces its half year results for the six month period ended 30 June 2010.

 

Financial highlights:

 

·; Revenue of US$2.35 million (2009: US$11.23 million) 

·; Gross loss of US$4.14 million (2009: Gross profit of US$2.81 million), which included a loss of US$4.00 million (2009: Nil) from sale of properties in 1 Mont' Kiara which was entered into in August 2010 and a charge relating to cost of acquisition for the initial portfolio of US$0.73 million (2009: US$1.29 million)

·; Unrealised foreign exchange loss of US$4.35 million (2009: Gain of US$0.25 million), attributed to the strengthening of the US Dollars

·; Management fee of US$2.17 million (2009: US$2.21 million)

·; Operating expenses of US$2.81 million (2009: US$1.17 million) which included marketing expenses of on-going projects of US$1.70 million (2009: Nil) which were expensed as incurred

·; Group NAV of US$192.97 million (2009: US$202.25 million (restated))

·; Realisable net asset value of the Group is U$259.22 million (2009: US$228.44 million (restated)) or US$1.220 per share (2009: US$0.967 per share (restated))

 

Operational highlights:

·; Completed acquisition of 70% stake in upmarket residential development at Jalan Kia Peng, Kuala Lumpur 

·; Sale and Purchase Agreement signed to acquire a four-star hotel (under construction and due for completion in 2012) in Kuala Lumpur Sentral

·; Sale and Purchase Agreement signed with a wholly owned subsidiary of ARA Asia Dragon Fund to dispose of the office tower and retail mall of 1 Mont' Kiara development

·; Partnered PRUPIM Vietnam Property Fund to develop the Tan Thuan Dong residential project together with Nam Long Investment Corporation

 

Commenting on the results, Dato' Mohammed Azlan bin Hashim, Chairman of Aseana, said:

 

"The Group is continuing with its current strategy of realising cash flow from projects and repositioning our portfolio to capture the impending recovery and growth of the property markets in Malaysia and Vietnam."

For further information:

Aseana Properties Limited	Tel: +603 6203 6688
Tan May Lee	Email: maylee.tan@ireka.com.my
Tavistock Communications	Tel: 020 7920 3150
Jeremy Carey / Simon Hudson	Email: jcarey@tavistock.co.uk
Panmure Gordon	Tel: 020 7459 3600
Richard Gray / Andrew Potts / Tom Nicholson

Notes to Editors:

London-listed Aseana Properties Limited, is a property developer in Malaysia and Vietnam.

Aseana typically invests in development projects at pre-construction stage.  Investment is made in projects where it is believed there will be a minimum 30% annualised return on equity ("ROE") on investments in Vietnam and a minimum 20% annualised ROE on investments in Malaysia.

Ireka Development Management Sdn Bhd ("IDM") is the exclusive Development Manager for Aseana. It is a wholly owned subsidiary of Ireka Corporation Berhad ("ICB"), a company listed on the Bursa Malaysia since 1993, which has over 40 years experience in construction and property development. IDM is responsible for the day-to-day management of Aseana's property portfolio and the introduction and facilitation of new investment opportunities.

Fundamentals of Malaysia and Vietnam remain strong for future growth, especially with indications pointing to strong growth in emerging markets this year. In particular, the real estate sectors are likely to flourish due to:

·; An increasing standard of living and urbanisation driven by a burgeoning young and middle-class population

·; Clear government role in encouraging participation of private sectors in real estate development, as well as encouraging and promoting land and property ownership

·; Improving availability of mortgages to encourage property ownership

·; Favoured Foreign Direct Investment ("FDI") destinations driving demand for commercial and industrial properties

CHAIRMAN'S STATEMENT

Introduction

We are pleased to announce the half year results for Aseana Properties Limited ("Aseana") and its group of companies ("the Group") for the six month period ended 30 June 2010. As the Malaysian and Vietnamese property markets showed signs of recovery after reaching a low point in 2009, the Group has made significant progress with its development projects in both markets.

Results

For the six months ended 30 June 2010, the Group recorded revenue of US$2.35 million (2009: US$11.23 million) and a loss for the period of US$13.33 million (2009: loss of US$0.98 million).

The decrease in revenue was a result of lower income from sales of completed properties. The loss for the period was due to loss of US$4.00 million from the sale of properties in 1 Mont' Kiara which was entered into in August 2010, unrealised foreign exchange loss of US$4.35 million attributable to the strengthening of the US Dollars against certain foreign currency holdings in the Group, a charge to cost of acquisition of US$0.73 million, management fee of US$2.17 million and operating expenses of US$2.81 million, which included marketing expense of ongoing projects of US$1.70 million that were expensed as incurred.

Revenue includes proceeds from the sale of completed units in the Tiffani by i-ZEN development, Sandakan Harbour Square Phase 2 and i-ZEN@Kiara I projects. No new developments were completed during the period.

Net asset value for the Group was US$192.97 million (2009: US$ 202.25 million (restated)) or US$0.908 per share (2009: US$0.857 per share (restated)).

Review of Activities & Property Portfolio

After reaching a low point in 2009, we are pleased to report that some sectors of the property market in Malaysia and Vietnam have started to show signs of recovery in the second half of the year.

In Malaysia, developers returned to the market with new project launches in the third quarter of 2009. Early sales data suggested that landed properties and medium-end condominiums in well established areas enjoyed robust demand, whilst demand for upmarket condominiums, which remained soft throughout 2009, started to show signs of improvement in the second quarter of 2010.

In Vietnam, the demand for affordable housing has remained robust throughout 2009, whilst the secondary market for higher end condominiums began to recover in the second quarter of 2009. This renewed confidence has spurred some developers to launch new projects, albeit at more realistic pricing levels compared to the peak in 2007.

During the first half of 2010, the Group continued to make progress on the sales of its ongoing and completed developments, as illustrated in the table below:

 

Projects	% sales as at August 2010	% sales as at 31 Dec 2009
i-ZEN@Kiara I	100%	99%
Tiffani by i-ZEN	95%	90%
1 Mont' Kiara - Office suites - Office tower - Retail mall (inclusive of car parks)	100% 100% 100%	91% 0% 0%
SENI Mont' Kiara	68%	65%
Sandakan Harbour Square - Phase 1 retail lots - Phase 2 retail lots	100% 85%	100% 76%
KL Sentral Office Towers & Hotel - Office tower 1 - Office tower 2 - Hotel	100% 100% 100%	100% 100% 0%

 

Malaysia

The Group completed the acquisition of a 70% stake in a project alongside Ireka Corporate Berhad, to develop an upmarket residential development at Jalan Kia Peng, a prime location in Kuala Lumpur City Centre. The project, announced in December 2009, is expected to be launched in the first half of 2011.

On 7 July 2010, the Group announced the Sale and Purchase Agreement with Excellent Bonanza Sdn. Bhd. (an investment vehicle owned by Aseana (40%) and Malaysian Resources Corporation Berhad (60%) to acquire a four-star business hotel in Kuala Lumpur Sentral for a consideration of 112.5% of the total development cost, currently estimated to be around RM217 million (approx. US$66 million). Aseana is in advanced negotiations with Starwood Hotel and Resorts Worldwide, Inc. to manage the hotel, which consists of 482 rooms with a gross floor area of approx. 350,000 sq ft, under its 'aloft' brand. The project is currently under construction and is expected to be completed by the second half of 2012.

The Company also announced in July 2010 that it had entered into conditional Sale and Purchase Agreements with wholly owned subsidiaries of ARA Asia Dragon Fund, to dispose off its 20-storey office tower block and five-storey retail mall, together with car parks, for RM333 million (approx. US$104 million). These properties are part of the 1 Mont' Kiara development completed in August 2010. In line with the Group's current strategy, the Board decided to sell the two properties and return capital to the Company, rather than retain them as investment assets as originally intended. This move will also remove the need for the Group to refinance loans on its properties due in early 2011.

 

Vietnam

In Vietnam, the Group made good progress on its various projects and investments. Piling works for the International Hi-Tech Healthcare Park project, the 250-bed tertiary care hospital (Phase 1), started in April 2010 and are expected to complete in September 2010. Construction of the substructure and main building works will start shortly after.

In June 2010, Nam Long Investment Corporation ("Nam Long"), a leading private property company in which Aseana owned a 17.24% stake, successfully completed a capital raising through the placement of new shares with a leading institutional investor in Vietnam. The new placement, which diluted Aseana's stake in Nam Long to 16.44%, was at a 28% premium to Aseana's entry price in US Dollars.

The Group is also making good progress on the Tan Thuan Dong residential project in District 7 of Ho Chi Minh City. As announced on 24 August 2010, it has entered into a conditional agreement to sell a 49% stake in its wholly owned subsidiary, ASPL PV Limited, to the PRUPIM Vietnam Property Fund, which is managed by PRUPIM Asia, a part of Prudential PLC. ASPL PV Limited is a special purpose vehicle that owns 80% of the Tan Thuan Dong residential project alongside Nam Long. As project funding was provided on a joint basis, we expect this transaction to be mutually beneficial to both parties. The project is expected to be fully licensed by the authorities by end of 2010, with construction commencing in Q1 2011. Preliminary site preparation work is currently underway.

On 17 August 2010, the State Bank of Vietnam devalued the Vietnamese Dong against the US Dollar by 2% to improve its relative competitiveness and boost exports in the short term. The Vietnamese Dong is likely to experience some short term volatility in the near future. This recent devaluation of Dong highlights the inherent risks of investing in a high growth emerging market economy.

The Group will focus on continuing with its current strategy of realising cash flow from projects and repositioning the portfolio to capture the impending recovery and growth of the property markets in Malaysia and Vietnam.

 

 

DATO' MOHAMMED AZLAN BIN HASHIM

NON-EXECUTIVE CHAIRMAN

27 August 2010

The Malaysian economy registered a strong growth of 8.9% in the second quarter of 2010 (Q1 2010: 10.1%), driven by sustained expansion in domestic demand and continued robust growth in external demand.

The Consumer Price Index increased to 1.7% in June (May: 1.6%), largely as a result of higher prices in the food and non-alcoholic beverages sector (2.7%), and in the transport sector (1.3%).

With signs of economic recovery and modest inflation, the Central Bank of Malaysia made three Overnight Policy Rate increases of 25 basis points each over the period of March to July 2010. This equates to a 75 basis points increase from its 13-month low to 2.75%.

The Ringgit strengthened against major and regional currencies in the first half of 2010. Between 1 January and 29 July 2010, the Ringgit appreciated by 7.1% against the US Dollar, 18.2% against the Euro and 10.1% against Sterling. It also appreciated in the range of 0.5% and 2.9% against regional currencies. The Ringgit's performance is generally in sync with the performance of South-East Asia's currencies that share the region's strong economic growth prospects.

The Consumer Sentiment Index and Business Conditions Index, as measured by the Malaysian Institute of Economic Research, has started to show signs of moderation at 110.4 points for Q2 2010 (Q1 2010: 114.2 points) and 119.6 points for Q2 2010 (Q1 2010: 124.0 points) respectively. As the economy shows signs of recovery, there are concerns of rising inflation amongst consumers and a less bullish outlook for consumers' income and employment expectations.

 

Overview of Property Market in Klang Valley, Malaysia   Offices § Total supply of office space in the Klang Valley increased by 1.826 million sq ft to 88.851 million sq ft in Q2 2010 due to the completion of six new office buildings and adjustments made to some existing buildings. § In Q2 2010, the average occupancy rate of the Klang Valley office market decreased to 81% from 82% recorded in Q1 2010. § Market prices remained stable. Notable transaction: Sunway Tower, a Prime A office located in the Golden Triangle was sold during the quarter for RM677 per sq ft to Sunway REIT.

 

 

Retail § Rental rates of retail centres in the Klang Valley remained stable in Q2 2010. § Overall occupancy rate for Klang Valley retail centres increased from 84.7% in Q1 2010 to 85.0% in Q2 2010. § Many retailers, although still cautious, are starting to look to increase and/or broaden their market share by opening in new retail centres. § Three retail malls, namely Sunway Pyramid (RM1,355 per sq ft), Sungai Wang Plaza (RM1,607 per sq ft) and The Mines (RM737 per sq ft) were sold to REITs during the quarter under review.   Residential § Market prices and rentals were generally stable during the quarter indicating reasonable holding power. § Average occupancy rate for condominiums was at 81% in Q2 2010. § Recent property launches received good response: Tower A of One Kiara launched in April 2010 sold 85% of the 118 condominium units within one month. Phase 1 of The Icon, Mont' Kiara received 70% bookings during its 3-day sales preview.   Hospitality § International visitor arrivals during the first five months of 2010 increased by 5.2% against the same period last year. § Average occupancy rate improved by 3.2% to 67.6% in Q2 2010. § Average daily room rates in the Klang Valley increased between 1.3% and 12.4%. § First Doubletree Hotel by Hilton in South-East Asia located in the Golden Triangle of Kuala Lumpur is opened in mid-August 2010.

Source: Bank Negara Malaysia website, Jones Lang Wootton Q2 report, MIER, various publications

Vietnam's economic growth accelerated to 6.4% in the second quarter (Q1 2010: 5.8%). This strong growth is attributed to the industrial and construction sectors, which expanded by 6.5% and the services sector which grew by 7.1%. The industrial and construction sectors and the service sector account for approximately 78% of the Vietnamese economy. The Consumer Price Index for the past seven months rose by 8.7%, when compared to the same period in 2009.

Total committed foreign direct investment for the first half of 2010 totalled US$8.4 billion, a 19.1% decrease compared to the first half of 2009, while realised foreign direct investment was estimated at US$5.4 billion, a 5.9% increase against the previous corresponding period.

Export turnover supported by domestic growth and foreign direct investment is recorded at US$32.1 billion in the first half of 2010, representing a 15.7% growth compared to the same period last year. Import turnover for the first half of 2010 expanded by 29.4% against the same period last year to US$38.9 billion. Overall, Vietnam's trade deficit is US$6.7 billion, more than triple the first half of 2009.

The Central Bank of Vietnam has kept the prime lending rate unchanged at 8.0% since December 2009 as part of the ongoing effort to help commercial banks lower lending interest rates. The refinancing and overnight rates remained at 8.0% and the discount rate at 6.0%. While the Central Bank continues to allow banks to negotiate commercial lending interest rates, the Government has ordered commercial banks to cap lending rates at 12.0% and deposit rates at 10.0% in order to help enterprises access credit. Prevailing loan rates currently range between 12.0 to 15.5% per year.

 

Overview of Property Market in Vietnam   Offices § Ho Chi Minh City ("HCMC") office market has a total 147 office buildings of all grades with a total leasable area of around 952,000 sq m in Q2 2010. § With the increase in new office space coming onto the market, average rent for Grade A office building in HCMC decreased further by 5.3% quarter-on-quarter to US$37.51 per sq m per month, while Grade B office building dropped further to US$19.28 per sq m per month, a 8.0% decreased quarter-on-quarter. § Occupancy rate for grade A office building increased to 89% in Q2 2010 (Q1 2010: 88%). Retail § In Q2 2010, four new retail centres were completed: Vincom Center Shopping Mall (District 1), Lotte Mart Phu Tho (District 11), Maximark Ba Thang Hai (District 10), and Co-op mart Phu Tho (District 11), adding an additional supply of about 112,700 sq m to the retail market. § In Q2 2010, occupancy rate of the whole retail market increased slightly to 96% (Q1 2010: 95%). § Average ground floor rent in Q2 2010 decreased by 1% compared to the last quarter, at about US$83 per sq m per month.   Residential § The average secondary asking price in Q2 2010 was relatively stable in most districts. § Average primary price in Q2 2010 was approximately US$1,368 per sq m, 40% increase compared with Q1 2010 (US$980 per sq m). In Q2 2010, the average primary price increased in all three grades (A, B and C), particularly in Grade A with an increase of 68% compared to Q1 2010 due to the launch of new projects with high prices. § The residential market is expected to improve towards the end of 2010 particularly in the mid-tier condominium segment due to the rising middle-class and stronger economic growth.   Hospitality § International visitors' arrival during the first half of 2010 increased by 32.6% from the same period last year. § Average room rates decreased slightly to US$88 per room per night, 2% lower than Q1 2010 room rates. § Due to the low season, average occupancy rate in Q2 2010 fell to 65% (Q1 2010: 72%).

Source: General Statistics Office of Vietnam, Savills Q2 Report, CBRE Q2 2010 Market Insights, various publications

PROPERTY PORTFOLIO

 

Project	Type	Cost of Acquisition/ Equity 1 (US$)	Market Value 2 (US$)
Projects as at 30 June 2010
i-ZEN@Kiara I, Kuala Lumpur, Malaysia	Serviced residences	3,998,840	5,911,290
Tiffani by i-ZEN, Kuala Lumpur, Malaysia	Luxury condominiums	15,274,279	18,410,529
1 Mont' Kiara by i-ZEN, Kuala Lumpur, Malaysia	Office suites, office tower and retail mall	21,453,419	23,420,037
Sandakan Harbour Square, Sandakan, Sabah, Malaysia - initial acquisition - non-controlling interest	Retail lots, hotel and retail mall	18,701,588 4,182,644	34,018,428
SENI Mont' Kiara, Kuala Lumpur, Malaysia - initial acquisition - non-controlling interest	Luxury condominiums	66,172,832 3,447,051	99,391,086
Kuala Lumpur Sentral Office Towers & Hotel, Kuala Lumpur, Malaysia	Office towers and a business hotel	2,567,974	8,364,321
Kota Kinabalu seafront resort & residences, Kota Kinabalu, Sabah, Malaysia	Resort homes, boutique resort hotel and resort villas	10,354,782 (a)	16,259,580
KLCC Kia Peng Residential Project, Kuala Lumpur, Malaysia	Luxury residences	8,370,000 (b)	n/a 3
Aloft Kuala Lumpur Sentral Hotel, Kuala Lumpur, Malaysia	Business Hotel	33,900,000 (b)	n/a 3
Queen's Place, Ho Chi Minh City, Vietnam	Residential, offices and retail mall	5,397,600 (b)	n/a 3
Equity Investment in Nam Long Investment Corporation, an established developer in Ho Chi Minh City, Vietnam	Private equity investment	17,223,620	n/a 4
International Hi-Tech Healthcare Park, Ho Chi Minh City, Vietnam	Commercial and residential development with healthcare theme	27,601,000 (b)	n/a 3
Acquisitions pending completion as at 30 June 2010
TM Mont' Kiara Commercial Development , Kuala Lumpur, Malaysia	Commercial and office suites	3,130,609 (c)	4,017,000
Tan Thuan Dong Project, Ho Chi Minh City, Vietnam	Apartments and commercial development	4,896,000 (b)	n/a 5

 

Notes:

1 Relates to actual equity deployed by Aseana Properties except for the following:

(a) Land cost, un-leveraged paid; (b) Estimated equity to be deployed; (c) Expected land cost, un-leveraged to be paid

2 Market value as at 30 June 2010 relates to effective interest of Aseana Properties Limited

3 Projects carried at cost. No market valuation has been carried out as the project has not commenced at this time in accordance with Company policy

4 The equity investmentis recorded at cost. Revaluation of the investment will be carried out in the next period to reflect the completion of a new share placement exercise in July 2010. The indicative market value after accounting for the new share placement is US$22,051,625

5 Following the disposal of 49% stake to PRUPIM Vietnam Property Fund, the indicative market value estimated by the Development Manager is US$6,385,600

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SIX MONTHS ENDED 30 JUNE 2010

		Unaudited	Unaudited	Audited
		Six months	Six months	Year
		ended 30 June	ended 30 June	ended 31 December
		2010	2009	2009
Continuing activities	Notes	US$	US$	US$
Revenue		2,349,763	11,230,834	115,255,667
Cost of sales	5	(6,490,281)	(8,425,333)	(100,745,950)
Gross (loss)/ profit		(4,140,518)	2,805,501	14,509,717
Other income		70,464	65,380	248,267
Administrative expenses		(318,294)	(600,739)	(1,063,855)
Foreign exchange (loss)/ gain	6	(4,353,454)	251,456	1,827,469
Management fees		(2,173,203)	(2,208,112)	(4,196,384)
Other operating expenses		(2,805,025)	(1,173,146)	(7,882,963)
Investment income		468,710	1,011,059	2,114,833
Finance costs		(77,365)	(153,092)	(595,044)
Share of results of associate		-	( 95)	(607,393)
Goodwill impairment		-	(7,015)	(7,015)
Net (loss)/ profit before taxation		(13,328,685)	(8,803)	4,347,632
Taxation	7	(6,242)	(970,651)	(3,634,542)
(Loss)/ profit for the period/ year		(13,334,927)	(979,454)	713,090
Other comprehensive income -Exchange differences on translating foreign operations		832,369	(249,996)	(209,046)
Total comprehensive income for the period/ year, net of tax		(12,502,558)	(1,229,450)	504,044
(Loss)/ profit attributable to: Equity holders of the parent Non-controlling interests	(13,130,347) (204,580)		(1,674,789) 695,335	835,042 (121,952)
Total	(13,334,927)		(979,454)	713,090
Total comprehensive income attributable to: Equity holders of the parent Non-controlling interests	(12,107,374) (395,184)		(1,908,588) 679,138	916,293 (412,249)
Total		(12,502,558)	(1,229,450)	504,044
(Loss)/ earnings per share
Basic (US cents)	8	(6.18)	(0.70)	0.37
Diluted (US cents)	8	(6.18)	(0.70)	0.37

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2010

		Unaudited	Unaudited	Audited
		As at 30 June	Restated As at 30 June	As at 31 December
		2010	2009	2009
	Notes	US$	US$	US$
Non-current assets
Property, plant and equipment		1,057,744	328,464	1,070,332
Investment in associate		-	563,906	-
Available-for-sale investments	9	17,223,620	17,223,620	17,223,620
Intangible assets		17,173,735	10,694,446	17,173,735
Land held for property development		22,869,231	35,116,487	22,112,458
Long term receivables		-	8,517,000	-
Deferred tax assets		10,951,242	4,885,121	7,166,692
Total non-current assets		69,275,572	77,329,044	64,746,837
Current assets
Inventories		22,428,148	-	22,906,112
Property development costs		440,811,945	358,886,101	354,021,996
Trade and other receivables		23,612,719	19,531,920	24,392,594
Amount due from associate		952,998	-	784,632
Current tax assets		-	183,245	-
Cash and cash equivalents		53,512,182	64,841,948	61,957,107
Total current assets		541,317,992	443,443,214	464,062,441
TOTAL ASSETS		610,593,564	520,772,258	528,809,278
Equity
Share capital		10,626,250	11,806,250	10,626,250
Share premium		221,225,773	221,225,773	221,225,773
Capital redemption reserve		1,873,750	693,750	1,873,750
Exchange fluctuation reserves		1,023,106	(314,917)	133
Retained earnings		(41,783,189)	(31,162,673)	(28,652,842)
Shareholders' equity		192,965,690	202,248,183	205,073,064
Non-controlling interests		4,062,501	6,606,630	4,364,837
Total equity		197,028,191	208,854,813	209,437,901
Current liabilities
Trade and other payables		223,659,319	185,780,931	194,305,600
Finance lease liabilities		-	22,474	-
Bank loans and borrowings	10	59,175,102	19,631,377	36,976,233
Medium term notes	12	43,260,000	-	-
Current tax liabilities		1,921,011	-	2,317,899
Total current liabilities		328,015,432	205,434,782	233,599,732
Non-current liabilities
Amount due to non-controlling interests		2,972,781	2,848,273	2,887,360
Finance lease liabilities		-	6,997	-
Bank loans	11	43,952,160	48,266,893	20,147,285
Medium term notes	12	38,625,000	55,360,500	62,737,000
Total non-current liabilities		85,549,941	106,482,663	85,771,645
Total liabilities		413,565,373	311,917,445	319,371,377
TOTAL EQUITY AND LIABILITIES		610,593,564	520,772,258	528,809,278

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2010 - UNAUDITED

	Retained Earnings US$	Share Capital US$	Share Premium US$	Exchange Fluctuation Reserve US$	Capital Redemption Reserve US$	Total Equity Attributable to Equity Holders of the Parent US$	Non- Controlling Interest US$	Total Equity US$
At 1 January 2010	(28,652,842)	10,626,250	221,225,773	133	1,873,750	205,073,064	4,364,837	209,437,901
Acquisition of subsidiaries	-	-	-	-	-	-	92,848	92,848
Loss for the period	(13,130,347)	-	-	-	-	(13,130,347)	(204,580)	(13,334,927)
Exchange differences on translating foreign operations	-	-	-	1,022,973	-	1,022,973	(190,604)	832,369
Total comprehensive income	(13,130,347)	-	-	1,022,973	-	(12,107,374)	(395,184)	(12,502,558)
Shareholders' equity at 30 June 2010	(41,783,189)	10,626,250	221,225,773	1,023,106	1,873,750	192,965,690	4,062,501	197,028,191

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2009 - UNAUDITED - RESTATED

	Retained Earnings US$	Share Capital US$	Share Premium US$	Exchange Fluctuation Reserve US$	Capital Redemption Reserve US$	Total Equity Attributable to Equity Holders of the Parent US$	Non- Controlling Interest US$	Total Equity US$
As at I January 2009	(29,487,884)	12,500,000	227,233,267	(81,118)	-	210,164,265	5,928,679	216,092,944
Cancellation of shares	-	(693,750)	-	-	693,750	-	-	-
Purchase of own shares	-	-	(6,007,494)	-	-	(6,007,494)	-	(6,007,494)
Acquisition of subsidiaries	-	-	-	-	-	-	(1,187)	(1,187)
(Loss)/ profit for the period	(1,674,789)	-	-	-	-	(1,674,789)	695,335	(979,454)
Exchange differences on translating foreign operations	-	-	-	(233,799)	-	(233,799)	(16,197)	(249,996)
Total comprehensive income	(1,674,789)	-	-	(233,799)	-	(1,908,588)	679,138	(1,229,450)
Shareholders' equity at 30 June 2009	(31,162,673)	11,806,250	221,225,773	(314,917)	693,750	202,248,183	6,606,630	208,854,813

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2009 - AUDITED

	Retained Earnings US$	Share Capital US$	Share Premium US$	Exchange Fluctuation Reserve US$	Capital Redemption Reserve US$	Total Equity Attributable to Equity Holders of the Parent US$	Non- Controlling Interest US$	Total Equity US$
At 1 January 2009	(29,487,884)	12,500,000	227,233,267	(81,118)	-	210,164,265	5,928,679	216,092,944
Cancellation of shares	-	(1,873,750)	-	-	1,873,750	-	-	-
Purchase of own shares	-	-	(6,007,494)	-	-	(6,007,494)	-	(6,007,494)
Acquisition from non- controlling interests	-	-	-	-	-	-	(1,150,406)	(1,150,406)
Acquisition of subsidiaries	-	-	-	-	-	-	(1,187)	(1,187)
Profit/ (loss) for the year	835,042	-	-	-	-	835,042	(121,952)	713,090
Exchange differences on translating foreign operation	-	-	-	81,251	-	81,251	(290,297)	(209,046)
Total comprehensive income	835,042	-	-	81,251	-	916,293	(412,249)	504,044
Shareholders' equity at 31 December 2009	(28,652,842)	10,626,250	221,225,773	133	1,873,750	205,073,064	4,364,837	209,437,901

 

 

Consolidated Statement of Cash Flows

SIX MONTHS ENDED 30 JUNE 2010

	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
Cash Flows from Operating Activities
Net (loss)/ profit before taxation	(13,328,685)	(8,803)	4,347,632
Investment income	(468,710)	(1,011,059)	(2,114,833)
Unrealised foreign exchange loss/ (gain)	4,375,856	(222,194)	(1,854,861)
Depreciation of property, plant and equipment	38,526	21,891	44,935
Share of results of associate	-	95	607,393
Goodwill impairment	-	7,015	7,015
Operating (loss)/ profit before working capital changes	(9,383,013)	(1,213,055)	1,037,281
Changes in working capital:
Decrease/ (increase) in inventories	477,964	-	(22,906,112)
Increase in property development costs	(51,021,781)	(40,013,214)	(37,706,550)
Decrease/ (increase) in receivables	779,875	(3,892,680)	(236,354)
Increase in payables	17,137,979	45,480,306	55,901,815
Cash (used in)/ from operations	(42,008,976)	361,357	(3,909,920)
Tax paid	(3,899,554)	(3,045,391)	(5,488,897)
Net cash flows used in operating activities	(45,908,530)	(2,684,034)	(9,398,817)
Cash Flows From Investing Activities
Acquisition of subsidiaries, net of cash	(18,495)	185	(7,629,510)
Acquisition of land held for property development	(268,934)	(17,987,177)	(4,506,846)
Advances to associate	(168,366)	-	(784,632)
Proceeds from disposal of property, plant and equipment	-	-	58,521
Purchase of property, plant and equipment	(35,080)	(8,950)	(823,509)
Purchase of available-for-sale investment	-	(4,200,048)	(4,200,048)
Investment income received	468,710	1,011,059	2,114,833
Withdrawal of short term bank deposits	-	2,227,651	2,227,651
Net cash used in investing activities	(22,165)	(18,957,280)	(13,543,540)
Cash Flows From Financing Activities
Repayment of bank borrowings	(7,199,474)	(16,602,422)	(37,837,683)
Drawdown of borrowings	48,109,961	28,555,551	49,063,278
Repayment of finance lease liabilities	-	(10,599)	(40,070)
Share buy back	-	(6,007,494)	(6,007,494)
Net cash flows from financing activities	40,910,487	5,935,036	5,178,031
	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD/ YEAR	(5,020,208)	(15,706,278)	(17,764,326)
Effect of changes in exchange rates	(3,588,428)	60,546	1,904,471
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/ YEAR	46,996,448	62,856,303	62,856,303
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/ YEAR	38,387,812	47,210,571	46,996,448

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2010

 

1 General Information

 

The principal activities of the Group are acquisition, development and redevelopment of upscale residential, commercial and hospitality projects in the major cities of Malaysia and Vietnam. The Group typically invests in development projects at the pre-construction stage and also selectively invests in projects in construction and newly completed projects with potential capital appreciation.

2 Summary of Significant Accounting Policies

 

2.1 Basis of Preparation

 

The interim condensed consolidated financial statements for the six months ended 30 June 2010 has been prepared in accordance with IAS 34, Interim Financial Reporting.

 

The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2009 which has been prepared in accordance with IFRS.

 

Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

 

The interim results have not been audited nor reviewed and do not constitute statutory financial statements.

 

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

 

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2009 as described in those annual financial statements except for the impact of the standard described below:-

 

·; IFRS 3 (revised 2008) - Business Combinations has been adopted for the acquisition carried out during the period.

 

The interim report and financial statements were approved by the Board of Directors on 27 August 2010.

 

 

2.2 Statement of Compliance

 

The interim condensed consolidated financial statements of Aseana Properties Limited have been prepared in accordance with IAS 34, Interim Financial Reporting.

 

3 SegmentAL Information

 

The Group's reportable operating segments are as follows:-

 

(i) Ireka Land Sdn. Bhd. - develops i-ZEN@Kiara I, Tiffani by i-ZEN and 1 Mont' Kiara;

(ii) ICSD Ventures Sdn. Bhd. - develops Sandakan Harbour Square;

(iii) Amatir Resources Sdn. Bhd. - develops SENI Mont' Kiara; and

(iv) Others - includes holding and intermediate holding companies, Group's new businesses and consolidation adjustments.

 

Information regarding the operations of each reportable segment is included below. The Executive Management which comprises the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of Ireka Development Management Sdn. Bhd. monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. Performance is based on segment gross profit and profit before taxation, which the Executive Management believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets and liabilities are presented inclusive of inter-segment balances and inter-segment pricing is determined on an arm's length basis.

 

The Group's revenue generating development projects are currently only in Malaysia since development activities have not commenced in Vietnam. No single customer exceeds 10% of the Group's revenues.

 

Operating Segments - six months ended 30 June 2010 - Unaudited

	Ireka Land Sdn. Bhd.	ICSD Ventures Sdn. Bhd.	Amatir Resources Sdn. Bhd.	Others	Consolidated
	US$	US$	US$	US$	US$
Revenue	1,047,862	1,181,879	-	120,022	2,349,763
Gross (loss)/ profit	(4,196,502)	(64,038)	-	120,022	(4,140,518)
Share of results of associate	-	-	-	-	-
Net loss before taxation	(5,477,267)	(382,355)	(1,857,067)	(5,611,996)	(13,328,685)
Taxation	-	(6,242)	-	-	(6,242)
Loss for the period	(5,477,267)	(388,597)	(1,857,067)	(5,611,996)	(13,334,927)
Segment assets	173,081,053	63,355,877	239,146,053	135,010,581	610,593,564
Segment liabilities	131,975,302	39,075,004	181,189,989	61,325,078	413,565,373
Investment income	50,166	15,203	23,697	379,644	468,710
Finance costs	-	-	-	77,365	77,365
Depreciation of property, plant and equipment	13,568	2,166	179	22,613	38,526
Capital expenditure *	13,581,264	8,396,736	28,733,510	345,351	51,056,861

* Capital expenditures consist mainly of property development costs.

 

Geographical Information - six months ended 30 June 2010 - Unaudited

	Malaysia	Vietnam	Others	Consolidated
	US$	US$	US$	US$
Revenue	2,349,763	-	-	2,349,763
Non-current assets	31,675,433	37,600,139	-	69,275,572
Total assets	522,557,653	49,846,941	38,188,970	610,593,564

Others include Aseana and its intermediate holding companies in British Virgin Islands and Singapore.

 

Operating Segments - six months ended 30 June 2009 - Unaudited

	Ireka Land Sdn. Bhd.	ICSD Ventures Sdn. Bhd.	Amatir Resources Sdn. Bhd.	Others	Consolidated
	US$	US$	US$	US$	US$
Revenue	665,329	10,565,505	-	-	11,230,834
Gross profit	116,357	2,689,144	-	-	2,805,501
Share of results of associate	-	-	-	(95)	(95)
Net profit/ (loss) before taxation	699,177	3,183,430	(297,118)	(3,594,292)	(8,803)
Taxation	(174,794)	(795,857)	-	-	(970,651)
Profit/ (loss) for the period	524,383	2,387,573	(297,118)	(3,594,292)	(979,454)
Segment assets	208,590,302	53,186,131	141,398,303	117,597,522	520,772,258
Segment liabilities	166,150,524	31,200,081	82,013,679	32,553,161	311,917,445
Investment income	63,525	-	5,836	941,698	1,011,059
Finance costs	-	1,212	86,399	65,481	153,092
Depreciation of property, plant and equipment	12,021	8,328	192	1,350	21,891
Capital expenditure *	25,919,768	4,249,060	9,288,867	564,469	40,022,164

*Capital expenditures consist mainly of property development costs.

 

 

Geographical Information - six months ended 30 June 2009 - Unaudited

	Malaysia	Vietnam	Others	Consolidated
	US$	US$	US$	US$
Revenue	11,230,834	-	-	11,230,834
Non-current assets	33,982,267	26,753,697	16,593,080	77,329,044
Total assets	412,760,009	30,300,638	77,711,611	520,772,258

Others include Aseana and its intermediate holding companies in British Virgin Islands and Singapore.

.

 

 

Operating Segments - year ended 31 December 2009 - Audited

	Ireka Land Sdn. Bhd.	ICSD Ventures Sdn. Bhd.	Amatir Resources Sdn. Bhd.	Others	Consolidated
	US$	US$	US$	US$	US$
Revenue	95,804,029	18,688,249	-	763,389	115,255,667
Gross profit	9,689,821	4,056,507	-	763,389	14,509,717
Share of results of associate	-	-	-	(607,393)	(607,393)
Net profit/ (loss) before taxation	5,349,257	3,182,647	(2,622,592)	(1,561,680)	4,347,632
Taxation	(2,464,811)	(989,738)	-	(179,993)	(3,634,542)
	Ireka Land Sdn. Bhd.	ICSD Ventures Sdn. Bhd.	Amatir Resources Sdn. Bhd.	Others	Consolidated
	US$	US$	US$	US$	US$
Profit/ (loss) for the year	2,884,446	2,192,909	(2,622,592)	(1,741,673)	713,090
Segment assets	159,970,465	51,677,056	204,094,610	113,067,147	528,809,278
Segment liabilities	114,272,526	27,267,850	143,697,263	34,133,738	319,371,377
Investment income	136,360	20,716	15,320	1,942,437	2,114,833
Finance costs	-	1,854	147,918	445,272	595,044
Depreciation of property, plant and equipment	26,737	6,847	377	10,974	44,935
Capital expenditure *	12,356,284	4,625,316	20,427,802	1,120,657	38,530,059

* Capital expenditures consist mainly of property development costs.

 

Geographical Information - year ended 31 December 2009 - Audited

	Malaysia	Vietnam	Others	Consolidated
	US$	US$	US$	US$
Revenue	115,255,667	-	-	115,255,667
Non-current assets	27,027,988	37,718,849	-	64,746,837
Total assets	429,627,723	51,143,904	48,037,651	528,809,278

Others include Aseana and its intermediate holding companies in British Virgin Islands and Singapore.

 

 

4 Seasonality

 

The Group's business operations are not materially affected by seasonal factors for the period under review.

 

 

5 Cost of Sales

 

Following the adoption of IFRIC 15 in the last financial year, the Group now considers IAS 18 to be a more appropriate standard than IAS 11 by which to recognise revenue from sales of properties. The cost of sales is written off on completion of the sale of the properties, instead of over the life of the development assets.

 

	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
Direct costs attributable to property development	6,490,281	8,425,333	100,745,950

 

 

 

 

6 Foreign exchange (loss)/ GAin

	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
Foreign exchange (loss)/ gain comprises:
Unrealised foreign exchange (loss)/ gain	(4,375,856)	222,194	1,854,861
Realised foreign exchange gain/ (loss)	22,402	29,262	(27,392)
	(4,353,454)	251,456	1,827,469

 

 

7 Taxation

	Unaudited	Unaudited	Audited
	Six month	Six month	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
Current period/ year	3,308,303	970,651	5,722,411
Deferred tax	(3,302,061)	-	(2,087,869)
Total tax expense for the period/ year	6,242	970,651	3,634,542

 

The numerical reconciliation between the income tax expenses and the product of accounting results multiplied by the applicable tax rate is computed as follows:

 

	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	Ended 31 December
	2010	2009	2009
	US$	US$	US$
Accounting (loss)/ profit	(13,328,685)	(8,803)	4,347,632
Income tax at a rate of 25%	(3,332,171)	(2,201)	1,086,908
Add :
Tax effect of expenses not deductible in determining taxable profit	2,623,674	1,105,882	3,886,481
Deferred tax assets arising from unused tax losses not recognised	752,160	74,280	929,662
Tax effect of different tax rates in subsidiaries	75,583	37,807	206,661
Less :
Tax effect of income not taxable in determining taxable profit	(113,004)	(245,117)	(1,372,497)
Utilisation of deferred tax assets not recognised previously	-	-	(1,102,673)
Total tax expense for the period/ year	6,242	970,651	3,634,542

Following the changes to the Income Tax (Jersey) Law 1961 (as amended) in the last financial year, the Company will no longer apply to be tax-exempt. It is now treated as a tax resident company for the purpose of Jersey tax laws and is subject to a tax rate of 0%.

 

The Directors intend to conduct the Group's affairs such that the central management and control is not exercised in the United Kingdom and so that neither the Company nor any of its subsidiaries carries on any trade in the United Kingdom. The Company and its subsidiaries will thus not be resident in the United Kingdom for taxation purposes. On this basis, they will not be liable for United Kingdom taxation on their income and gains other than income derived from a United Kingdom source.

 

8 (Loss)/ EARNINGS Per Share

	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
(Loss)/ profit attributable to the equity holders of the parent	(13,130,347)	(1,674,789)	835,042
Weighted average number of shares:
Basic and Diluted	212,525,000	238,401,934	225,357,123
(Loss)/ earnings per share
Basic (US cents)	(6.18)	(0.70)	0.37
Diluted (US cents)	(6.18)	(0.70)	0.37

 

(Loss)/ earnings per share is calculated by dividing the (loss)/ profit for the Group by the weighted average number of ordinary shares in issue during the period.

 

For diluted (loss)/ earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive options over ordinary shares. Potential ordinary shares resulting from the exercise of share options have an anti-dilutive effect.

 

 

9 Available-for-Sale Investments

 

The Directors review the carrying amounts of available-for-sale investments at each statement of financial position date to determine whether there is an indication of impairment in value other than temporary. The Directors' assessment on whether there is an indication is mainly based on the latest available financial statements of these investee companies. The available-for-sale investments include unquoted equity instruments whose fair value could not be reliably measured, and which were therefore recognised at cost. No impairment is required for the available-for-sale investments as the recoverable amount is higher compared to carrying amount.

 

 

 

 

 

10 Bank Loans and Borrowings

	Unaudited	Unaudited	Audited
	As at	As at	As at
	30 June	30 June	31 December
	2010	2009	2009
	US$	US$	US$
Concessional loan	-	2,000,000	-
Bank loans (Note 11)	44,050,732	-	22,015,574
Bank overdraft	15,124,370	17,631,377	14,960,659
	59,175,102	19,631,377	36,976,233

 

 

The effective interest rates of the borrowings for the period ranged from 0.80% to 5.75% per annum.

 

Borrowings were denominated in Malaysian Ringgit and United States Dollars.

 

Bank loans were repayable by monthly or quarterly instalments and the overdraft is repayable on demand.

 

Bank loans were secured by land held under property development cost and corporate guarantee of the Company.

 

The concessional loan of US$2,000,000 was provided by the joint venture partner of a project for working capital purposes and was repaid in 2009.

The carrying amount of borrowings approximates to its fair value at the statement of financial position date.

 

 

11 Bank Loans

	Unaudited	Unaudited	Audited
	As at	As at	As at
	30 June	30 June	31 December
	2010	2009	2009
	US$	US$	US$
Outstanding loans	88,002,892	48,266,893	42,162,859
Less:
Repayment due within twelve months (Note 10)	(44,050,732)	-	(22,015,574)
Repayment due after twelve months	43,952,160	48,266,893	20,147,285

 

The effective interest rates of the bank loans for the period ranged from 4.75% to 6.88% per annum.

 

Bank loans were denominated in Malaysian Ringgit.

 

Bank loans were repayable by monthly or quarterly instalments.

 

Bank loans of the Group were secured by land held under property development costs and corporate guarantee of the Company.

 

 

12 Medium Term Notes

	Unaudited	Unaudited	Audited
	As at	As at	As at
	30 June	30 June	31 December
	2010	2009	2009
	US$	US$	US$
Outstanding medium term notes	81,885,000	55,360,500	62,737,000
Less:
Repayment due within twelve months	(43,260,000)	-	-
Repayment due after twelve months	38,625,000	55,360,500	62,737,000

 

During the financial period, the Group has drawn down a total of US$15,450,000 (Tranches B5 and B6 as shown below) pursuant to the medium term notes programme.

 

The medium term notes were issued by a subsidiary to fund a development project known as 1 Mont' Kiara in Malaysia. The weighted interest rate of the loan was 5.68% at the statement of financial position date.

 

The maturity dates and effective interest rates of the medium term notes and their outstanding amounts are as follows:

	Maturity dates	Interest rate % per annum	US$
Tranche A1	3 June 2011	3.95	13,905,000
Tranche A2	11 March 2011	4.05	3,708,000
Tranche A3	3 June 2011	4.05	1,545,000
Tranche A4	8 April 2011	4.05	3,090,000
Tranche A5	4 March 2011	4.70	4,017,000
Tranche A6	1 December 2011	4.90	3,708,000
Tranche A7	4 March 2011	4.15	1,545,000
Tranche A8	1 June 2012	4.10	927,000
Tranche B2	30 March 2012	4.40	5,253,000
Tranche B3	1 June 2012	4.50	7,107,000
Tranche B4	1 June 2012	4.15	6,180,000
Tranche B5	3 June 2011	3.75	3,090,000
Tranche B6	3 September 2010	2.90	12,360,000
Tranche C	4 June 2012	13.00	15,450,000
			81,885,000

 

The medium term notes were secured by way of:

 

(i) bank guarantee from financial institutions (for Tranches A and B);

(ii) a first fixed and floating charge over the subsidiary's asset by way of a debenture;

(iii) an assignment over all the present and future sales and insurance policies from 1Mont' Kiara;

(iv) an assignment over a debt service reserve account;

(v) a third party first legal charge over a freehold land under a development project in conjunction with the joint venture agreement between the subsidiary and Ireka Land Sdn. Bhd.; and

(vi) a corporate guarantee issued by Ireka Corporation Berhad (for Tranche C).

 

The medium term notes were denominated in Malaysian Ringgit and are repayable at the maturity dates.

 

 

13 Related Party Transactions

 

Transactions between the Group and the Company with Ireka Corporation Berhad ("ICB") and its group of companies are classified as related party transactions based on ICB's 23.02% shareholding in the Company.

 

	Unaudited	Unaudited	Audited
	Six months	Six months	Year
	ended 30 June	ended 30 June	ended 31 December
	2010	2009	2009
	US$	US$	US$
Payment of construction progress claims made by an ICB subsidiary	53,425,839	41,219,037	88,795,291
Payment of sales, marketing and administration fees to an ICB subsidiary	801,768	87,759	141,809
Payment of management fees to an ICB subsidiary	2,173,203	2,208,112	4,196,384
Reimbursement of site staff salary costs to an ICB subsidiary	199,790	257,278	594,416
Remuneration of key management personnel	42,903	42,011	90,615

 

 

14 Acquisition of Business

 

On 20 April 2010, the Company has, via its wholly-owned subsidiary ASPL M9 Limited, subscribed for 700,000 ordinary shares representing 70% of the issued shares capital of World Trade Frontier Sdn. Bhd. for a total consideration of US$218,330. The transaction is accounted for using the purchase method of accounting. World Trade Frontier Sdn. Bhd. is a developer to develop a residential tower at No.7, Jalan Kia Peng, 50450 Kuala Lumpur.

 

The Group has accounted for the business combination of World Trade Frontier Sdn. Bhd. using fair values assigned to World Trade Frontier Sdn. Bhd.'s identifiable assets and liabilities determined provisionally at 20 April 2010.

 

At 20 April 2010, World Trade Frontier Sdn. Bhd. had a shareholders' equity of US$309,492 of which 70% was owned by the Group. Against a consideration of US$218,330, a fair value adjustment of US$1,686 on property development cost was recorded.

 

 

The assets and liabilities at the date of acquisition arising from the acquisition are as follows:

 

	Book Value	Fair Value
	US$	US$
Current assets	28,507,263	28,507,263
Cash and cash equivalents	199,835	199,835
Non-current liabilities	(20,379,546)	(20,379,546)
Current liabilities	(8,018,060)	(8,018,060)
Net assets	309,492	309,492
Non-controlling interest	(92,848)	(92,848)
Net assets acquired	216,644	216,644
Fair value adjustment on property development cost		1,686
Total consideration		218,330

 

Satisfied by:		US$
Cash		218,330
Cash consideration		(218,330)
Cash and cash equivalents acquired		199,835
Net cash outflow arising from acquisition		(18,495)

 

The acquisition of World Trade Frontier Sdn. Bhd. has not increased nor reduced the Group's loss before taxation for the period as no income or expenses were incurred in World Trade Frontier Sdn. Bhd. after World Trade Frontier Sdn. Bhd. became a subsidiary of the Group.

 

If the acquisition of World Trade Frontier Sdn. Bhd. had occurred on 1 January 2010, this would have increased the Group's revenue and loss before taxation for the period by approximately US$NIL and US$26 respectively.

 

 

15 COMPARATIVE FIGURES

 

Following the application of IFRIC 15 and the requirement of IAS 18, the following balances have been restated from those previously presented for the six months ended 30 June 2009 due to a change in accounting policy to recognise marketing costs as incurred in the consolidated statement of comprehensive income instead of capitalising in property development costs.

 

 

 

 

	Unaudited	Unaudited
	Restated	Previously Stated
	As at	As at
	30 June	30 June
	2009	2009
	US$	US$
Deferred tax assets	4,885,121	118,581
Property development costs	358,886,101	372,701,153
Current tax assets	183,245	4,704,110
Exchange fluctuation reserve	(314,917)	(1,049,379)
Retained earnings	(31,162,673)	(17,610,220)
Non-controlling interests	6,606,630	7,358,016

 

 

16 Dividends

 

The Company has not paid or declared any dividends during the financial period ended 30 June 2010.

 

 

17 Events after the Statement of Financial Position Date

There were no material adjusting events after the statement of financial position date ended 30 June 2010 that have not been reflected in the interim consolidated financial statements.

 

The following are non-adjusting events which have taken place after the statement of financial position date:

 

(i) On 7 July 2010, the Group announced that it has through a wholly-owned subsidiary, entered into a Sale and Purchase Agreement ("SPA") to acquire a four-star business hotel in Kuala Lumpur from Excellent Bonanza Sdn. Bhd. ("EBSB") at a consideration of 112.5% of the total development cost. The consideration is expected to be approximately RM217 million (approx. US$66 million). A deposit of RM9 million (approx. US$2.6 million) has been paid and the balance is payable upon issue of a certificate of completion for the hotel by the relevant authorities. The SPA was entered into as a result of the Group exercising its call option to purchase the hotel, pursuant to a Call and Put Option Agreement.

 

The hotel contains 482 rooms with a gross floor area of approximately 350,000 sq ft. It is currently under construction and is expected to be completed in the second half of 2012. The Group is currently in advance negotiation with Starwood Hotel and Resorts Worldwide, Inc. to manage the hotel under its 'aloft' brand.

 

EBSB is the developer of two office towers and a four-star business hotel at Lot G, Kuala Lumpur Sentral with a combined gross floor area of approximately 1.2 million sq ft. The two office towers were earlier sold to an Asian real estate fund. EBSB is 60% owned by Malaysian Resources Corporation Berhad and 40% by Aseana Properties Limited.

 

(ii) On 21 July 2010, the Group announced that it has through a wholly-owned subsidiary, entered into conditional Sale and Purchase Agreements ("SPAs") with wholly-owned subsidiaries of ARA Asia Dragon Fund, to dispose off a 20-storey office tower block and a five-storey retail mall together with car parks (hereafter referred to as, "the Properties"), at a total consideration of RM333 million (approx. US$104 million).

 

The Properties are two of three components in 1 Mont' Kiara, an integrated mixed development located in the heart of Mont' Kiara, a sought-after residential and commercial address in Kuala Lumpur. 1 Mont' Kiara is jointly developed by Aseana Properties Limited and MCDF Investment Pte Ltd ("MCDF"). MCDF is a private equity fund managed by CapitaLand Financial Limited. The completion of the SPAs is conditional upon approval from the relevant authorities and the issuance of a Certificate of Occupation for the development, which is expected to be by end of 2010.

 

(iii) On 24 August 2010, the Group announced that it has entered into a conditional agreement to sell a 49% stake in its wholly owned subsidiary, ASPL PV Limited ("ASPL PV") to the PRUPIM Vietnam Property Fund, which is managed by Prudential Property Investment Management (Singapore) Pte. Ltd. ("PRUPIM Singapore"), a subsidiary of Prudential plc, United Kingdom.

 

ASPL PV owns 80% of a Vietnamese company undertaking a residential development in the Tan Thuan Dong area, District 7 of Ho Chi Minh City, Vietnam (the "Development"). The remaining 20% is owned by Nam Long Investment Corporation, a leading private property developer based in Ho Chi Minh City.

 

Completion of the sale is conditional upon the Development receiving the necessary consents including a transfer of Land Use Rights Certificate for the development land and authorities' issuance of an Investment Certificate, both of which are anticipated to be issued before the end of this year.

 

 

18 Interim Statement

 

Copies of this interim statement are available on the Company's website www.aseanaproperties.com or from the Company's registered office at 12 Castle Street, St. Helier, Jersey, JE2 3RT, Channel Islands.

 

 

RESPONSIBILITY STATEMENT

 

We confirm that to the best of our knowledge:

 

a) The condensed consolidated financial statements have been prepared in accordance with IAS 34 (Interim Financial Reporting);

b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) The interim management report includes a fair review of the information required by

DTR 4.2.8R (disclosure of related party transactions and changes therein).

 

 

By order of the Board

 

Dato' Mohammed Azlan Bin Hashim Christopher Henry Lovell

Director Director

 

 

27 August 2010

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