Last checked at 28 Aug 2015 07:00
28 August 2015
Aseana Properties Limited("Aseana" or the "Company")
Half-Year Results for the Six Months Ended 30 June 2015
Aseana Properties Limited (LSE: ASPL), a property developer investing in Malaysia and Vietnam, listed on the Main Market of the London Stock Exchange, announces its half-year results for the six-month period ended 30 June 2015.
Operational highlights:
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• | On 22 June 2015, Aseana Properties Limited ("Aseana" or the "Company") announced that at the Extraordinary General Meeting ("June EGM") and the Annual General Meeting ("AGM"), shareholders have supported the Board's recommendations to approve the continuation of Aseana for the next three years to June 2018, to adopt a new divestment/ investment policy to realise its assets in an orderly manner and to make capital distributions of not less than US$20.0 million in 2015 based on current cash balances and expected receivables from realised assets. On 27 August 2015, Aseana held a further Extraordinary General Meeting ("August EGM"), at which shareholders approved amendments to the memorandum and articles of association of the Company and its share capital structure to facilitate a return of capital to shareholders. |
• | Sale of properties at SENI Mont' Kiara stood at approximately 96.0% to date. A further 2.5% is reserved with deposit paid. |
• | The RuMa Hotel and Residences ("The RuMa") achieved approximately 49.0% sales based on sales and purchase agreement signed. |
• | The Aloft Kuala Lumpur Sentral Hotel ("Aloft") is the Gold Winner of FIABCI World Prix d'Excellence Awards 2015 in the hotel category. Aloft achieved occupancy of 75.6% for the six-month period ended 30 June 2015. |
• | Four Points by Sheraton Sandakan Hotel ("FPSS") recorded an occupancy rate of 36.1% for the six-month period ended 30 June 2015. |
• | Successfully realised VND76.5 billion (US$3.5 million) of its investment in Nam Long Investment Corporation ("Nam Long"), through placement of 3.8 million Nam Long shares. Following the block disposal and subsequent entry of a new investor into Nam Long in July 2015, Aseana's effective stake in Nam Long has been reduced from 11.6% to 8.3%. |
Financial highlights:
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• | Unaudited revenue of US$16.9 million for the six-month period ended 30 June 2015 (30 June 2014 (unaudited): US$31.5 million) |
• | Unaudited loss before tax for the six-month period ended 30 June 2015 of US$5.1 million (30 June 2014 (unaudited): loss of US$4.8 million) |
• | Unaudited loss after tax for the six-month period ended 30 June 2015 of US$6.6 million (30 June 2014 (unaudited): loss of US$7.7 million) |
• | Unaudited consolidated comprehensive loss of US$14.1 million for the six months period ended 30 June 2015 (30 June 2014 (unaudited): loss of US$6.7 million) |
• | Unaudited net asset value of US$148.2 million at 30 June 2015 (31 December 2014 (audited): US$160.5 million) or US$0.699 per share* (31 December 2014 (audited): US$0.757 per share) |
• | Unaudited realisable net asset value of US$229.7 million at 30 June 2015 (31 December 2014 (unaudited): US$247.7 million) or US$1.084 per share* (31 December 2014 (unaudited): US$1.168 per share) |
* NAV per share and RNAV per share as at 30 June 2015 are calculated based on 212,025,000 voting shares (31 December 2014: 212,025,000 voting shares).
Commenting on the results, Mohammed Azlan Hashim, Chairman of Aseana, said:
"The H1 2015 results are reflective of the challenging market conditions in both Malaysia and Vietnam, in particular Malaysia which is currently experiencing a much softer property market due to current economic conditions and the weakening Malaysian Ringgit. The Company will continue to pursue an opportunistic yet cautious approach in managing and maximising the realisation value of all its assets."
The Group has also published its Quarterly Investment Update (including updates on projects and RNAV figures) for the period to 30 June 2015, which can be obtained on its website at www.aseanaproperties.com/quarterly.htm.
For further information:
Aseana Properties Limited | Tel: 603 6411 6388 |
Chan Chee Kian | Email: cheekian.chan@ireka.com.my |
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N+1 Singer | Tel: 020 7496 3000 |
James Maxwell / Liz Yong (Corporate Finance) Sam Greatrex (Sales) | Email: liz.yong@n1singer.com
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Tavistock | Tel: 020 7920 3150 |
Jeremy Carey / Faye Walters | Email: jcarey@tavistock.co.uk |
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Notes to Editors:
London-listed Aseana Properties Limited (LSE: ASPL) is a property developer investing in Malaysia and Vietnam.
Ireka Development Management Sdn Bhd ("IDM") is the exclusive Development Manager for Aseana. It is a wholly-owned subsidiary of Ireka Corporation Berhad, a company listed on the Bursa Malaysia since 1993, which has over 45 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.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report on the half-year results for Aseana Properties Limited ("Aseana") and its group of companies ("the Group") for the six months ended 30 June 2015.
In recent months, the global economy has been rocked by a startling string of events such as the dramatic decline in oil prices, strengthening of the United States Dollar ("US Dollar" or "US$"), the uncertainty in Europe which is amplified by the meltdown of the Greek economy, the slowdown in China and also the much anticipated shift in US monetary policy. Risks remain tilted to the downside, with some pre-existing risks receding but new ones emerging. Despite a strong growth in the early part of the year, the continuous slide in crude oil prices, subdued external demands and the effect of the new tax regime have dampened the Malaysian economy. In addition, the Malaysian Ringgit ("RM") sunk to its seventeen-year low against the US Dollar in August as a result of external factors, particularly the prospects that the United States's monetary policy could be normalised, as well as concerns over the political instability and the state of Malaysia's public finances.
In Vietnam, the economy is continuing its path to recovery and Vietnam is regaining its high growth momentum despite more difficult global economic situation. Vietnam's Gross Domestic Product ("GDP") grew 6.3% during the first half of 2015, surpassing the growth during the same period last year. In a move to maintain Vietnam's exports and to sustain growth relative to other South East Asian economies, the State Bank of Vietnam ("SBV") had in May 2015, devalued the Vietnamese Dong ("VND") against the US Dollar by 1.0% to VND21,673 for the second time during the year following the first devaluation in January 2015. Vietnam's total Foreign Direct Investment ("FDI") disbursement reached US$6.3 billion in the first half of 2015, an increase of 9.6% year-on-year.
Results
For the six months ended 30 June 2015, the Group recorded unaudited revenue of US$16.9 million (H1 2014 (unaudited): US$31.5 million), which was mainly attributable to the sale of completed units in SENI Mont' Kiara. No revenue was recognised for The RuMa, in accordance with IFRIC 15 - Agreements for Construction of Real Estate which prescribes that revenue be recognised only when the properties are completed and occupancy permits are issued.
The Group recorded an unaudited loss before tax for the period of US$5.1 million (H1 2014 (unaudited): loss of US$4.8 million), predominantly due to operating losses and financing costs of City International Hospital of US$5.1 million and of Four Points by Sheraton Sandakan Hotel and Harbour Mall Sandakan totaling US$2.5 million. These are offset by profit from SENI Mont' Kiara of US$3.7 million.
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The Group's unaudited loss after tax for the six-months ended 30 June 2015 stood at US$6.6 million (30 June 2014 (unaudited): loss of US$7.7 million). The Group's unaudited consolidated comprehensive loss for the period of US$14.1 million (30 June 2014 (unaudited): loss of US$6.7 million) has included a foreign currency translation loss of US$8.1 million (30 June 2014 (unaudited): gain of US$1.0 million) which was attributable to the weakening of the Malaysian Ringgit against the US Dollar by 7.9% and an increase in fair value of the share of investment in Nam Long of US$0.6 million.
Unaudited net asset value for the Group for the period under review decreased to US$148.2 million (31 December 2014 (audited): US$160.5 million) due to losses incurred for the period. This is equivalent to US$0.699 per share (31 December 2014 (audited): US$0.757 per share).
Unaudited realisable net asset value for the Group has also decreased to US$229.7 million as at 30 June 2015 (31 December 2014 (unaudited): US$247.7 million) in line with the drop in net asset value for the Group coupled with the weakening of the Malaysian Ringgit against the US Dollar. This is equivalent to US$1.084 per share (31 December 2014 (unaudited): US$1.168 per share).
Review of Activities and Property Portfolio
Sales status (based on Sales and Purchase agreements signed):
Projects | % sales as at 31 July 2015 | % sales as at December 2014 |
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Tiffani by i-ZEN | 99% | 99% |
SENI Mont' Kiara |
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- Proceeds received | 95% | 91% |
- Pending completion | 1% | 2% |
The RuMa Hotel and Residences | 49% | 47% |
Malaysia
On the whole, the lackluster market condition coupled with the political uncertainty in Malaysia have affected the sales performance of both SENI Mont' Kiara and The RuMa. SENI Mont' Kiara recorded approximately 96.0% sales to date, based on sales and purchase agreements signed.
Meanwhile, sales at The RuMa, the only project currently under development, remained at approximately 49.0% to date. The Manager is broadening its marketing focus to overseas markets such as Taiwan, Singapore, Japan and the Middle Eastern countries where there has been favourable response to prime properties in Malaysia on the back of a weaker Malaysian Ringgit. Construction of the main building is underway with completion expected in Q3 2017.
Having been recently awarded the Gold Winner of FIABCI World Prix d'Excellence Awards 2015 in the hotel category, the 482-room Aloft hotel is continuing its commendable results by achieving an occupancy rate of 75.6% for the six-month period up to 30 June 2015.
The business environment and tourism industry in Sabah remain subdued as a result of a number of unfortunate events last year, compounded by the most recent kidnapping incident in Sandakan. This has resulted in countries such as the United States of America, United Kingdom, Canada, Australia and New Zealand maintaining adverse travel advisory notices to the coastal areas of eastern Sabah, including Sandakan. Subsequent to the incident, the national security forces have intensified surveillance and control around the harbour front area where The Harbour Mall Sandakan ("HMS") and FPSS are both located. To date, HMS is 59.2% tenanted, while FPSS achieved an occupancy rate of 36.1% for the six-month period up to 30 June 2015.
Following the approval of the proposals at the June EGM and AGM, which included continuation of Aseana for the next three years to June 2018 and adoption of a new divestment investment policy to orderly realise its assets, Aseana will continue its efforts to dispose the remaining units at SENI Mont' Kiara and to increase the sale of The RuMa. The Company will also focus on improving the performance of the operating assets in preparation for their eventual sale in line with the Company's new divestment policy.
Vietnam
As at 31 July 2015, City International Hospital ("CIH") had registered 2,384 in-patient days (31 July 2014: 1,429), equivalent to a daily average of 11 in-patient days (31 July 2014: 7), with average revenue per in-patient day of US$526.8 (31 July 2014: US$450.5). Outpatient visits as at 31 July 2015 had reached 10,232 visits (31 July 2014: 4,913), equivalent to an average of 65 outpatients daily (31 July 2014: 31), which generated average revenue per visit of US$101.6 (31 July 2014: US$110.6). The operation of the Hospital is still going through a period of stabilisation and the Manager is working closely with Parkway Pantai Limited to improve the performance of the hospital through numerous marketing campaigns, introduction of new service lines and targeted sales.
To date, Aseana has successfully realised VND76.5 billion (US$3.5 million) of its investment in Nam Long Investment Corporation ("Nam Long"), through the placement of 3.8 million shares of Nam Long. Following the block disposal and entry of a new investor into Nam Long, Aseana's effective stake in Nam Long has been reduced from 11.6% to 8.3%. The disposal reflects the Company's on-going effort to strategically reduce its holding in Nam Long at the appropriate time and price, and to optimize its investment portfolio. At the date of this publication, Nam Long shares closed at VND19,500 per share, improving from VND19,000 per share as at 30 June 2015.
MOHAMMED AZLAN HASHIM
Chairman
27 August 2015
DEVELOPMENT MANAGER'S REVIEW
Malaysia Economic Update
The Malaysian economy registered a Gross Domestic Product growth ("GDP") of 4.9% in the second quarter of 2015 and expanded 5.3% in in the first half of 2015. The outlook reflects the overall strength of Malaysia's domestic economy amid ongoing fiscal consolidation, weak global trade and lower commodity prices. The introduction of the Goods and Services Tax ("GST") in April 2015 and the elimination of fuel subsidies have helped Malaysia weather the oil price shock. However, the domestic headwinds that grappled the country during the first six months of the year are expected to creep into the second half, with the weakening of the Ringgit, the controversies surrounding the debt-laden strategic investment fund as well as the uncertain political situation in the country. The Malaysian Ringgit plunged to a seventeen-year low in August 2015 and is currently the worst performing currency in Asia. Further to that, the Malaysian foreign exchange reserves fell to a five-year low of US$100.5 billion in July 2015.
In tandem with the uncertainties surrounding the country's economic and political situation, both the Business Conditions Index ("BCI") and Consumer Sentiment Index ("CSI") issued by the Malaysian Institute of Economic Research ("MIER") exhibited a declining trend in the second quarter of 2015. The BCI fell to 95.4 points (Q1 2015: 101.0 points) on the back of a gloomy outlook for domestic and export orders, coupled with a dip in utilization rate in the manufacturing industry. Meanwhile, the CSI tumbled further to 71.7 points (Q1 2015: 72.6 points) as a result of subdued employment and financial outlook which affected consumers' spending power.
Notwithstanding the above, both Fitch Ratings and Standard & Poor's Ratings Services have recently affirmed Malaysia's foreign currency Issuer Default Rating ("IDR") at "A-" and local currency IDR at "A". In addition, Standard & Poor's has maintained Malaysia's outlook at "Stable", whilst Fitch Ratings has revised its outlook on Malaysia from "Negative" to "Stable". These positive ratings reflect Malaysia's strong external position and considerable monetary flexibility notwithstanding the current economic headwinds and increase in Malaysia's contingent sovereign liabilities.
On the back of moderate global growth, the central bank of Malaysia had in July 2015 maintained the Overnight Policy Rate ("OPR") at 3.25%, of which is supportive of the country's economy activity. However, risks to global growth and financial conditions have risen and the bank has cited that the latest indicators pointed to a more moderate second quarter gross domestic product growth for Malaysia.
Overview of Property Market in Klang Valley, Malaysia
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Offices
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• | Five new office buildings were completed in Q2 2015, increasing the total supply of office space in the Klang Valley to 108.1 million sq.ft. Overall occupancy rate remained stable at 81% (Q1 2015: 81%).
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• | Market rentals and prices remained stable while rental yield remained between 5.5% and 8%.
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• | En-bloc transactions during the quarter: (i) Menara Raja Laut (Secondary A 27 storeys) was sold at a price of RM553 psf (US$147 psf); (ii) Wisma Amanah Raya (Secondary A 15 storeys) was transacted at RM507 psf (US$134 psf).
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• | Occupancy rate is expected to remain stable in short term, with new supply of 4.42 million sq.ft. by end 2015. However the economy uncertainties, weakening currency and softening foreign investment sentiment are expected to have negative pressure on occupancy and rental rates.
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Retail
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• | Market prices and market rentals for retail centres in Klang Valley were generally stable in Q2 2015.
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• | Average occupancy rate in Klang Valley remained stable at 82.0% in Q2 2015 (Q1 2015: 82.0%).
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• | Five new retail centres were completed during Q2 2015.
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Residential
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• | Twenty four projects with 7,583 units of condominium in Klang Valley were completed in Q2 2015.
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• | Eighteen projects with 6,202 units were launched in Q2 2015.
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• | Market prices and market rental rates for condominiums were generally stable in Q2 2015. However, the market continues to see a slowdown in sales especially in the higher end properties.
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• | Selected new launches: (i) The Robertson - South Tower (Level 33 - 42) (121 units), launched in March 2015 with an average price of RM1,400 psf (US$371 psf) achieved 40% take-up rate; (ii) Damai Residence (31 units), launched in April 2015 with an average price of RM1,000 psf (US$265 psf) is 30% sold.
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Hospitality
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• | In Q2 2015, average daily room rate for hotels comparable to Aloft Kuala Lumpur Sentral (inclusive of Aloft) decreased y-o-y by 4.9% to RM347 per room per night.
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• | Average occupancy rate for hotels comparable to Aloft (inclusive of Aloft) dropped by 5% to 69% in Q2 2015 compared to the same period in 2014.
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• | 6.48 million tourists visited Malaysia in Q1 2015, representing a decrease of 8.6% compared to same period in 2014.
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Source: Bank Negara Malaysia website, Jones Lang Wootton Q2 report, MIER, various publications
Exchange rate - 30 June 2015: US$1:RM3.7736
Vietnam Economic Update
Strong economic activity in 2015 has set the stage for acceleration in Vietnam's GDP growth. Vietnam's GDP in the second quarter of 2015 reached a five-year high, hitting 6.4%. The result brought Vietnam's GDP growth for the first half of 2015 to 6.3%, much higher than the same period five years ago. The World Bank has recently revised Vietnam's 2015 GDP growth forecast upwards by 0.4% to 6% on the back of continued strong performance in the manufacturing sector, exports and foreign investment. Recovery in domestic demand and foreign direct investment ("FDI") inflows that continue to support investments and exports are benefitting the country's economy.
In an effort to boost the slowing exports, the State Bank of Vietnam ("SBV") has devalued the Vietnamese Dong, twice so far this year, most recently in May. As a result, the increased interbank exchange rates have put significant impacts on the prices of a number of imported commodities and materials which further led to an increase in the prices of various domestic products. Inflation remains under control, with the Consumer Price Index ("CPI") increasing just 0.9% year-on-year. As a result of the low inflation, the SBV is expected to maintain its monetary policy which is likely to remain accommodative to spur growth.
Attracting FDI has always been a key part of Vietnam's external economic affairs. Equipped with one of the most dynamic economies, young and low cost labour force together with a government committed to creating a fair and attractive business environment, Vietnam is seen to be the perfect destination for foreign investors. According to the Ministry of Planning and Investment ("MPI"), Vietnam attracted US$5.5 billion in FDI in the first six months of the year, down 19.8% year-on-year. However, disbursed FDI increased by 9.6% year-on-year to US$6.3 billion. The implementation of the new Housing Law and the Real Estate Business Law from 1 July 2015 onwards is expected to be significant and will play a pivotal role in opening up the Vietnam real estate market to overseas investment.
Vietnam has also experienced a slump in its trade activities as evidenced by an increase it its trade deficit of US$3.8 billion during the first half of the year. The expanding trade deficit is a result of lower world commodity prices coupled with its economy's dependency on imported machinery and raw materials. Concerns over the stability of the Vietnamese Dong as a result of the increasing trade deficit along with the tendencies of investment capital withdrawals from developing economies will trigger stabilisation efforts from the Vietnamese government. Meanwhile, Vietnam's credit growth was at 6.3%, the highest compared to the same period for the last three years. The robust credit growth is an outcome of strong growth in the manufacturing sector, loosening of credit packages that allowed banks to lend more freely and the encouraging results seen in Vietnam's overall economic recovery.
Falling foreign tourist arrivals to Vietnam after the anti-China protests in 2014 have prompted the Vietnamese government into action to take measures to boost the long neglected tourism sector. The number of foreign tourists visiting Vietnam has decreased by 11.3% year-on-year for the first six months of 2015. In July 2015, authorities dropped visa requirements for tourists from five European countries - France, Germany, the United Kingdom, Spain and Italy. The visa-free policy is expected to lure back European tourists to Vietnam on the back of weaker Euro against the US Dollar.
Overview of Property Market in Vietnam
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Offices
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• | One Grade C office building was completed in Q2 2015, increasing the total supply to 1.47mil sqm by 3% y-o-y and stable q-o-q.
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• | Overall occupancy rate improved by 2% q-o-q and y-o-y to 93%.
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• | Average rental rates remained stable in Q2 2015 at US$25 psm per month.
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• | Total office take-up area increased by 6% q-o-q largely contributed by the take-up of Grade C office building areas. |
Retail
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• | Retail stock increased by 5% q-o-q due to the opening of two shopping centres (Vivo City mall, district 7 and Take Plaza 2, district 3) and one supermarket (within Vivo City Mall, district 7).
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• | Average rental rate in Q2 2015 decreased by 1% q-o-q to US$60 psm per month, while average occupancy remained stable at 92%.
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Residential
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• | Eleven new apartment projects and new phases of eight existing apartment projects were launched in Q2 2015. Total stock increased by 9% q-o-q and 27% y-o-y.
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• | Overall apartments' absorption rate stood at 19%, a decrease of 2% q-o-q but up by 2% y-o-y. Transaction volume was registered at approx. 5,000 units, highest since Q4 2010.
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• | One villa and townhouse mixed project (91 units), one townhouse project (258 units) and two villa projects (121 units), were launched in Q2 2015, increasing the supply of villa/townhouse by 3% q-o-q and 216% y-o-y. Two new projects with sixty two land plots were launched in Q2 2015. Primary land plot supply decreased by 43% q-o-q and 33% y-o-y.
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• | Villa/townhouse market's absorption rates increased by 3% q-o-q while the absorption rate for land plot improved by 6% q-o-q.
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Hospitality
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• | Six new 3-star hotels with 469 rooms were opened, one 5-star hotel which started operation in Q1 2015 opened an additional 218 rooms and one 3-star hotel has reopened with 71 rooms in Q2 2015. However, one hotel closed 20 rooms for internal use. Overall, the hotel stock was up by 6% q-o-q and 10% y-o-y.
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• | Average occupancy rate was at 64%, decreased by 6% q-o-q but up by 3% y-o-y in Q2 2015, while average room rate decreased by 5% q-o-q and 3% y-o-y at US$78 per room per night. The decline in average room rate is mainly due to tougher competition from new entries and increasing supply of 3-star hotels.
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• | Fourteen units of serviced apartments were completed in Q2 2015. Average occupancy rate increased by 3% q-o-q and y-o-y at 85%.
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Source: General Statistics Office of Vietnam, Savills, CBRE, various publications
Exchange rate - 30 June 2015: US$1:VND21,810
LAI VOON HON
President / Chief Executive Officer
Ireka Development Management Sdn. Bhd.
Development Manager
27 August 2015
PROPERTY PORTFOLIO AS AT 30 JUNE 2015
Project | Type | Effective Ownership | Approx. Gross Floor Area (sq m) | Approx. Land Area (sq m) | Actual/Scheduled completion |
Completed projects | |||||
Tiffani by i-ZEN Kuala Lumpur, Malaysia | Luxury condominiums | 100.0% | 81,000 | 15,000 | Completed August 2009 |
SENI Mont' Kiara Kuala Lumpur, Malaysia | Luxury condominiums | 100.0% | 225,000 | 36,000 | Phase 1: Completed April 2011 Phase 2: Completed October 2011 |
Sandakan Harbour Square Sandakan, Sabah, Malaysia | Retail lots, hotel and retail mall | 100.0% | 126,000 | 48,000 | Retail lots Completed 2009 Retail mall: Completed March 2012 Hotel: Completed May 2012 |
Aloft Kuala Lumpur Sentral hotel Kuala Lumpur, Malaysia | Business-class hotel (a Starwood Hotel) | 100.0% | 28,000 | 5,000 | Completed in January 2013 |
Phase 1: City International Hospital, International Hi-tech Healthcare Park, Ho Chi Minh City, Vietnam | Private general hospital | 72.3% | 48,000 | 25,000 | Completed in March 2013 |
Project under development | |||||
The RuMa Hotel and Residences Kuala Lumpur, Malaysia
| Luxury residential tower and boutique hotel | 70.0% | 40,000 | 4,000 | Third quarter of 2017 |
Listed equity investment | |||||
Listed equity investment in Nam Long Investment Corporation, an established developer in Ho Chi Minh City, Vietnam | Listed equity investment | 10.1% | n/a | n/a | n/a |
Undeveloped projects | |||||
Waterside Estates, Ho Chi Minh City, Vietnam
| Villas and high-rise apartments | 55.0% | 94,000 | 57,000 | n/a |
Other developments in International Healthcare Park, Ho Chi Minh City, Vietnam | Commercial and residential development with healthcare theme | 72.3% | 972,000 | 351,000 | n/a |
Kota Kinabalu seafront resort & residences Kota Kinabalu, Sabah, Malaysia | (i) Boutique resort hotel resort villas (ii) Resort homes | 100.0% 80.0% | n/a | 327,000 | n/a |
n/a: Not available / not applicable
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||
SIX MONTHS ENDED 30 JUNE 2015 |
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| Unaudited | Unaudited | Audited |
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| Six months | Six months | Year |
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| ended 30 June | ended 30 June | ended 31 December |
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| 2015 | 2014 | 2014 |
Continuing activities | Notes | US$'000 | US$'000 | US$'000 |
Revenue |
| 16,891 | 31,494 | 85,102 |
Cost of sales | 5 | (12,723) | (24,953) | (51,821) |
Gross profit |
| 4,168 | 6,541 | 33,281 |
Other income |
| 14,140 | 13,349 | 27,369 |
Administrative expenses |
| (874) | (366) | (1,193) |
Foreign exchange gain/(loss) | 6 | 547 | (9) | 716 |
Management fees |
| (1,598) | (1,653) | (3,344) |
Marketing expenses |
| (140) | (591) | (823) |
Other operating expenses |
| (15,947) | (16,265) | (32,715) |
Operating profit |
| 296 | 1,006 | 23,291 |
Finance income |
| 194 | 227 | 577 |
Finance costs |
| (5,565) | (5,760) | (13,760) |
Net finance costs |
| (5,371) | (5,533) | (13,183) |
Gain on disposal of investment in an associate |
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- |
- | 5,641 |
Share of loss of equity-accounted associate, net of tax |
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- |
(229) | (335) |
Net (loss)/profit before taxation |
| (5,075) | (4,756) | 15,414 |
Taxation | 7 | (1,542) | (2,906) | (9,387) |
(Loss)/profit for the period/year |
| (6,617) | (7,662) | 6,027 |
Other comprehensive income/(expense), net of tax Items that are or may be reclassified subsequently to profit or loss Foreign currency translation |
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differences for foreign operations |
| (8,086) | 977 | (7,388) |
Increase in fair value of available-for-sale investments |
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626 |
26 |
125 |
Total other comprehensive |
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(expense)/income for the period/year |
| (7,460) | 1,003 | (7,263) |
Total comprehensive |
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loss for the period/year |
| (14,077) | (6,659) | (1,236) |
(Loss)/profit attributable to: Equity holders of the parent Non-controlling interests |
| (4,428) (2,189) | (5,198) (2,464) |
9,091 (3,064) |
Total |
| (6,617) | (7,662) | 6,027 |
Total comprehensive |
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loss attributable to: |
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Equity holders of the parent |
| (11,492) | (3,939) | 2,074 |
Non-controlling interests |
| (2,585) | (2,720) | (3,310) |
Total |
| (14,077) | (6,659) | (1,236) |
(Loss)/earnings per share Basic and diluted (US cents) |
8 | (2.09) | (2.45) | 4.29 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
| Notes | Unaudited | Unaudited | Audited |
As at 30 June | As at 30 June | As at 31 December | ||
2015 | 2014 | 2014 | ||
US$'000 | US$'000 | US$'000 | ||
Non-current assets |
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Property, plant and equipment |
| 944 | 1,091 | 1,018 |
Investment in an associate |
| - | 2,023 | - |
Available-for-sale investments |
| 11,834 | 12,723 | 12,822 |
Intangible assets |
| 8,668 | 13,208 | 8,798 |
Deferred tax assets |
| 1,652 | 682 | 1,683 |
Total non-current assets |
| 23,098 | 29,727 | 24,321 |
Current assets |
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Inventories |
| 356,001 | 416,597 | 381,778 |
Held-for-trading financial instrument |
| 55 | 388 | 4,041 |
Trade and other receivables |
| 8,832 | 13,446 | 8,359 |
Prepayment |
| 444 | 1,205 | 337 |
Amount due from an associate |
| - | 943 | - |
Current tax assets |
| 900 | 127 | 513 |
Cash and cash equivalents |
| 25,775 | 26,911 | 26,011 |
Total current assets |
| 392,007 | 459,617 | 421,039 |
TOTAL ASSETS |
| 415,105 | 489,344 | 445,360 |
Equity |
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Share capital |
| 10,601 | 10,601 | 10,601 |
Share premium |
| 218,926 | 218,926 | 218,926 |
Capital redemption reserve |
| 1,899 | 1,899 | 1,899 |
Translation reserve |
| (17,937) | (1,872) | (10,247) |
Fair value reserve |
| 877 | 152 | 251 |
Accumulated losses |
| (66,159) | (75,074) | (60,932) |
Shareholders' equity |
| 148,207 | 154,632 | 160,498 |
Non-controlling interests |
| 9,158 | 9,271 | 10,187 |
Total equity |
| 157,365 | 163,903 | 170,685 |
Non-current liabilities |
|
|
|
|
Amount due to non-controlling interests |
| 1,155 | 1,085 | 1,120 |
Loans and borrowings | 9 | 55,536 | 68,972 | 53,364 |
Medium term notes | 10 | 10,369 | 143,333 | 84,993 |
Total non-current liabilities |
| 67,060 | 213,390 | 139,477 |
Current liabilities |
|
|
|
|
Trade and other payables |
| 38,990 | 79,474 | 40,510 |
Amount due to non-controlling interests |
| 10,490 | 9,587 | 10,222 |
Loans and borrowings | 9 | 14,412 | 6,934 | 19,274 |
Medium term notes | 10 | 124,285 | 14,013 | 60,237 |
Current tax liabilities |
| 2,503 | 2,043 | 4,955 |
Total current liabilities |
| 190,680 | 112,051 | 135,198 |
Total liabilities |
| 257,740 | 325,441 | 274,675 |
TOTAL EQUITY AND LIABILITIES |
|
415,105 |
489,344 |
445,360 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2015 - UNAUDITED
|
Share Capital US$'000 |
Share Premium US$'000 |
Capital Redemption Reserve US$'000 | Translation Reserve US$'000 |
Fair Value Reserve US$'000 | Accumulated Losses US$'000 | Total Equity Attributable to Equity Holders of the Parent US$'000 |
Non- Controlling Interests US$'000 |
Total Equity US$'000 |
At 1 January 2015 | 10,601 | 218,926 | 1,899 | (10,247) | 251 | (60,932) | 160,498 | 10,187 | 170,685 |
Changes in ownership interests in subsidiaries |
- |
- |
- |
- |
- |
(799) |
(799) |
799 |
- |
Non-controlling interests contribution | - | - | - | - | - | - | - | 757 | 757 |
Loss for the period | - | - | - | - | - | (4,428) | (4,428) | (2,189) | (6,617) |
Total other comprehensive expense | - | - | - | (7,690) | 626 | - | (7,064) | (396) | (7,460) |
Total comprehensive loss | - | - | - | (7,690) | 626 | (4,428) | (11,492) | (2,585) | (14,077) |
Shareholders' equity at 30 June 2015 | 10,601 | 218,926 | 1,899 | (17,937) | 877 | (66,159) | 148,207 | 9,158 | 157,365 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2014 - UNAUDITED
|
Share Capital US$'000 |
Share Premium US$'000 |
Capital Redemption Reserve US$'000 | Translation Reserve US$'000 |
Fair Value Reserve US$'000 | Accumulated Losses US$'000 | Total Equity Attributable to Equity Holders of the Parent US$'000 |
Non- Controlling Interests US$'000 |
Total Equity US$'000 |
At 1 January 2014 | 10,601 | 218,926 | 1,899 | (3,105) | 126 | (69,876) | 158,571 | 11,429 | 170,000 |
Non-controlling interests contribution | - | - | - | - | - | - | - | 562 | 562 |
Loss for the period | - | - | - | - | - | (5,198) | (5,198) | (2,464) | (7,662) |
Total other comprehensive income | - | - | - | 1,233 | 26 | - | 1,259 | (256) | 1,003 |
Total comprehensive loss | - | - | - | 1,233 | 26 | (5,198) | (3,939) | (2,720) | (6,659) |
Shareholders' equity at 30 June 2014 | 10,601 | 218,926 | 1,899 | (1,872) | 152 | (75,074) | 154,632 | 9,271 | 163,903 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014 - AUDITED
|
Share Capital US$'000 |
Share Premium US$'000 |
Capital Redemption Reserve US$'000 |
Translation Reserve US$'000 | Fair Value Reserve US$'000 |
Accumulated Losses US$'000 | Total Equity Attributable to Equity Holders of the Parent US$'000 |
Non- Controlling Interests US$'000 |
Total Equity US$'000 |
1 January 2014 | 10,601 | 218,926 | 1,899 | (3,105) | 126 | (69,876) | 158,571 | 11,429 | 170,000 |
Changes in ownership interests in subsidiaries |
- |
- |
- |
- |
- |
(147) |
(147) |
147 |
- |
Non-controlling interests contribution |
- |
- |
- |
- |
- |
- |
- |
1,921 |
1,921 |
Profit of the year | - | - | - | - | - | 9,091 | 9,091 | (3,064) | 6,027 |
Total other comprehensive expense |
- |
- |
- |
(7,142) |
125 |
- |
(7,017) |
(246) |
(7,263) |
Total comprehensive loss |
- |
- |
- |
(7,142) |
125 |
9,091 | 2,074 |
(3,310) |
(1,236) |
Shareholders' equity at 31 December 2014 |
10,601 |
218,926 |
1,899 |
(10,247) |
251 |
(60,932) |
160,498 |
10,187 |
170,685 |
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||
SIX MONTHS ENDED 30 JUNE 2015 | |||||
| Unaudited | Unaudited | Audited |
| |
| Six months | Six months | Year |
| |
| ended 30 June | ended 30 June | ended 31 December |
| |
| 2015 | 2014 | 2014 |
| |
| US$'000 | US$'000 | US$'000 |
| |
Cash Flows from Operating Activities |
|
|
|
| |
Net (loss)/ profit before taxation | (5,075) | (4,756) | 15,414 |
| |
Finance income | (194) | (227) | (577) |
| |
Finance costs | 5,565 | 5,760 | 13,760 |
| |
Unrealised foreign exchange (gain)/ loss | (718) | 1 | (291) |
| |
Impairment of goodwill | 129 | 317 | 4,727 |
| |
Depreciation of property, plant and equipment | 53 | 59 | 122 |
| |
Gain on disposal of available-for-sale investments | (214) | - | - |
| |
Gain on disposal of investment in an associate | - | - | (5,641) |
| |
Gain on disposal of property, plant and equipment | - | - | (3) |
| |
Share of loss of equity-accounted associate, net of tax |
- |
229 |
335 |
| |
Fair value loss/(gain) on amount due to non- controlling interests |
35 |
- |
(320) |
| |
Fair value loss/(gain) on held-for-trading financial instrument |
- |
(1) | (39) |
| |
Operating (loss)/profit before changes in working capital |
(419) |
1,382 | 27,487 |
| |
Changes in working capital: |
|
|
|
| |
Decrease in inventories | 4,983 | 16,711 | 29,437 |
| |
(Increase)/ decrease in trade and other receivables and prepayment |
(1,054) |
(4,597) |
647 |
| |
Decrease in trade and other payables | (220) | (5,497) | (40,615) |
| |
Cash generated from operations | 3,290 | 7,999 | 16,956 |
| |
Interest paid | (5,565) | (5,760) | (13,760) |
| |
Tax paid | (4,253) | (2,197) | (6,679) |
| |
Net cash (used in)/generated from operating activities |
(6,528) |
42 |
(3,483) |
| |
|
|
|
|
| |
Cash Flows From Investing Activities |
|
|
|
| |
(Advances to)/ repayment from associate | - | (88) | 853 |
| |
Proceeds from disposal of available-for-sale investments |
1,827 |
- | - |
| |
Proceeds from disposal of investment in an associate |
- |
- | 5,306 |
| |
Proceeds from disposal of property, plant and equipment |
- |
- | 12 |
| |
Disposal of/(purchase of) held-for-trading financial instrument |
3,689 |
- | (3,651) |
| |
Purchase of property, plant and equipment | - | (13) | (20) |
| |
Finance income received | 194 | 227 | 577 |
| |
Net cash generated from investing activities | 5,710 | 126 | 3,077 |
| |
CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D) | |||||
SIX MONTHS ENDED 30 JUNE 2015
| |||||
| Unaudited | Unaudited | Audited | ||
| Six months | Six months | Year | ||
| ended 30 June | ended 30 June | ended 31 December | ||
| 2015 | 2014 | 2014 | ||
| US$'000 | US$'000 | US$'000 | ||
Cash Flows From Financing Activities |
|
|
| ||
Advances from non-controlling interests | 772 | 486 | 1,635 | ||
Issuance of ordinary shares of subsidiaries to non-controlling interests |
757 |
562 |
1,921 | ||
Repayment of loans and borrowings | (9,773) | (6,212) | (16,858) | ||
Drawdown of loans and borrowings | 10,121 | 7,075 | 17,108 | ||
Decrease/(increase) in pledged deposits placed in licensed banks |
411 |
(30) |
- | ||
Net cash generated from financing activities | 2,288 | 1,881 | 3,806 | ||
Net changes in cash and cash equivalents during the period/year | 1,470 | 2,049 | 3,400 | ||
Effect of changes in exchange rates | (621) | 247 | (1,355) | ||
Cash and cash equivalents at the beginning of the period/year |
16,211 | 14,166 | 14,166 | ||
Cash and cash equivalents at the end of the period/year |
17,060 | 16,462 | 16,211 | ||
Cash and Cash Equivalents Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated statement of financial position amounts: | |||||
Cash and bank balances |
11,975 |
8,125 | 12,057 | ||
Short term bank deposits | 13,800 | 18,786 | 13,954 | ||
| 25,775 | 26,911 | 26,011 | ||
Less: Deposits pledged | ( 8,715) | (10,449) | (9,800) | ||
Cash and cash equivalents | 17,060 | 16,462 | 16,211 | ||
During the financial period/year, US$757,000 (30 June 2014: US$562,000; 31 December 2014: US$1,921,000) of ordinary shares of subsidiaries were issued to non-controlling shareholders, which was satisfied via cash consideration.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2015
1 General Information
The principal activities of the Group are acquisition, development and redevelopment of upscale residential, commercial, hospitality and healthcare projects in the major cities of Malaysia and Vietnam. The Group typically invests in development projects at the pre-construction stage and may 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 2015 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 2014 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 2014 as described in those annual financial statements.
The interim report and financial statements were approved by the Board of Directors on 27 August 2015.
3 SegmentAL Information
The Group's assets and business activities are managed by Ireka Development Management Sdn. Bhd. ("IDM") as the Development Manager under a management agreement dated 27 March 2007.
Segmental information represents the level at which financial information is reported to the Executive Management of IDM, being the chief operating decision maker as defined in IFRS 8. The Executive Management consists of the Chief Executive Officer, the Chief Financial Officer, Chief Operating Officer and Chief Investment Officer of IDM. The management determines the operating segments based on reports reviewed and used by the Executive Management for strategic decision making and resource allocation. For management purposes, the Group is organised into project units.
The Group's reportable operating segments are as follows:
(i) Investment Holding Companies - investing activities;
(ii) Ireka Land Sdn. Bhd. - develops Tiffani by i-ZEN;
(iii) ICSD Ventures Sdn. Bhd. - owns and operates Harbour Mall Sandakan and Four Points by Sheraton Sandakan Hotel;
(iv) Amatir Resources Sdn. Bhd. - develops SENI Mont' Kiara;
(v) Iringan Flora Sdn. Bhd. - owns and operates Aloft Kuala Lumpur Sentral Hotel;
(vi) Urban DNA Sdn. Bhd.- develops The RuMa Hotel and Residences; and
(vii) Hoa Lam-Shangri-La Healthcare Group - master developer of International Healthcare Park;
owns and operates City International Hospital.
Other non-reportable segments comprise the Group's other development projects. None of these segments meets any of the quantitative thresholds for determining reportable segments in 2015 and 2014.
Information regarding the operations of each reportable segment is included below. The Executive Management 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/(loss) and profit/ (loss) 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 in Malaysia and Vietnam.
Operating Segments - ended 30 June 2015 - Unaudited
|
Investment Holding Companies |
Ireka Land Sdn. Bhd. |
ICSD Ventures Sdn. Bhd. |
Amatir Resources Sdn. Bhd. |
Iringan Flora Sdn. Bhd. |
Urban DNA Sdn. Bhd. | Hoa Lam-Shangri-La Healthcare Group |
Total | ||
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||
Segment (loss)/profit before taxation | (415) | (224) | (2,499) | 3,717 |
519 | (569) | (5,570) | (5,041) | ||
Included in the measure of segment (loss)/profit are: |
|
|
|
|
|
|
|
| ||
Revenue | - | - | - | 16,891 | - | - | - | 16,891 | ||
Revenue from hotel operations | - | - | 1,851 | - | 9,089 | - | - | 10,940 | ||
Revenue from mall operations | - | - | 588 | - | - | - | - | 588 | ||
Revenue from hospital operations | - | - | - | - | - | - | 1,894 | 1,894 | ||
Cost of acquisition written down # | - - | - | - | (2,388) | - | - | - | (2,388) | ||
Impairment of goodwill | - | - | - | (129) | - | - | - | (129) | ||
Marketing expenses | - | - | - | (21) | - | (119) | - | (140) | ||
Expenses from hotel operations | - | - | (2,238) | - | (6,246) | - | - | (8,484) | ||
Expenses from mall operations | - | - | (776) | - | - | - | - | (776) | ||
Expenses from hospital operations | - | - | - | - | - | - | (5,433) | (5,433) | ||
Depreciation of property, plant and equipment |
- | - | (4) | - | (4) | - | (45) | (53) | ||
Finance costs | - | - | (1,924) | - | (2,213) | - | (1,428) | (5,565) | ||
Finance income | 10 | 1 | 142 | 17 | 2 | 4 | 18 | 194 | ||
Segment assets | 21,589 | 5,032 | 94,535 | 28,957 | 71,207 | 59,260 | 98,725 | 379,305 | ||
Included in the measure of segment assets are: |
|
|
|
|
|
|
|
| ||
Addition to non-current assets other than financial instruments and deferred tax assets | - | - | - | - | - | - | - | - | ||
# Cost of acquisition relates to the fair value adjustment in relation to the inventories upon the acquisition of certain subsidiaries of the Group. The cost of acquisition written down is charged to profit or loss as part of cost of sales upon the sales of these inventories. | ||||||||||
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Profit or loss | US$'000 |
Total loss for reportable segments | (5,041) |
Other non-reportable segments | (34) |
Consolidated loss before taxation | (5,075) |
Operating Segments - ended 30 June 2014 - Unaudited
|
Investment Holding Companies |
Ireka Land Sdn. Bhd. |
ICSD Ventures Sdn. Bhd. |
Amatir Resources Sdn. Bhd. |
Iringan Flora Sdn. Bhd. |
Urban DNA Sdn. Bhd. | Hoa Lam-Shangri-La Healthcare Group |
Total |
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
Segment (loss)/profit before taxation | (694) | 415 | (2,929) | 4,939 |
(245) | (742) | (5,418) | (4,674) |
Included in the measure of segment (loss)/profit are: |
|
|
|
|
|
|
|
|
Revenue | - | 4,069 | - | 27,425 | - | - | - | 31,494 |
Revenue from hotel operations | - | - | 2,056 | - | 9,184 | - | - | 11,240 |
Revenue from mall operations | - | - | 547 | - | - | - | - | 547 |
Revenue from hospital operations | - | - | - | - | - | - | 814 | 814 |
Cost of acquisition written down # | - - | (110) | - | (5,844) | - - | - | - - | (5,954) |
Impairment of goodwill | - | - | - | (317) | - - | - | - | (317) |
Marketing expenses | - | - | - | (226) | - | (365) | - | (591) |
Expenses from hotel operations | - | - | (2,374) | - | (6,843) | - | - | (9,217) |
Expenses from mall operations | - | - | (871) | - | - | - | - | (871) |
Expenses from hospital operations | - | - | - | - | - | - | (4,753) | (4,753) |
Depreciation of property, plant and equipment |
- | - | (5) | - | (4) | - | (48) | (57) |
Finance costs | - | - | (2,130) | - | (2,469) | - | (1,161) | (5,760) |
Finance income | 2 | 7 | 152 | 34 | 12 | 3 | 17 | 227 |
Segment assets | 16,911 | 4,687 | 107,704 | 67,744 | 81,327 | 53,675 | 117,201 | 449,249 |
Included in the measure of segment assets are: |
|
|
|
|
|
|
|
|
Addition to non-current assets other than financial instruments and deferred tax assets | - | - | 12 | - | - | 1 | - | 13 |
| ||||||||
# Cost of acquisition relates to the fair value adjustment in relation to the inventories upon the acquisition of certain subsidiaries of the Group. The cost of acquisition written down is charged to profit or loss as part of cost of sales upon the sales of these inventories.
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Profit or loss | US$'000 |
Total loss for reportable segments | (4,674) |
Other non-reportable segments | (80) |
Depreciation | (2) |
Consolidated loss before taxation | (4,756) |
Operating Segments - ended 31 December 2014 - Audited
|
Investment Holding Companies |
Ireka Land Sdn. Bhd. |
ICSD Ventures Sdn. Bhd. |
Amatir Resources Sdn. Bhd. |
Iringan Flora Sdn. Bhd. |
Urban DNA Sdn. Bhd. | Hoa Lam-Shangri-La Healthcare Group |
Total |
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
Segment profit/(loss) before taxation | 3,100 | 99 | (5,436) | 16,607 |
569 | (1,474) | 1,366 | 14,831 |
Included in the measure of segment profit/(loss) are: |
|
|
|
|
|
|
|
|
Revenue | - | 4,839 | - | 50,923 | - | - | 29,340 | 85,102 |
Revenue from hotel operations | - | - | 4,323 | - | 18,171 | - | - | 22,494 |
Revenue from mall operations | - | - | 1,027 | - | - | - | - | 1,027 |
Revenue from hospital operations | - | - | - | - | - | - | 2,525 | 2,525 |
Cost of acquisition written down # | - | (150) | - | (8,329) | - | - | - | (8,479) |
Impairment of goodwill | - | - | - | (451) | - | - | (4,276) | (4,727) |
Marketing expenses | - | - | - | (266) | - | (557) | - | (823) |
Expenses from hotel operations | - | - | (4,507) | - | (12,499) | - | - | (17,006) |
Expenses from mall operations | - | - | (1,789) | - | - | - | - | (1,789) |
Expenses from hospital operations | - | - | - | - | - | - | (9,702) | (9,702) |
Depreciation of property, plant and equipment |
- | - | (10) | - | (9) | - | (99) | (118) |
Finance costs | - | - | (4,328) | - | (4,906) | - | (4,526) | (13,760) |
Finance income | 24 | 11 | 312 | 115 | 20 | 14 | 81 | 577 |
Segment assets | 19,471 | 5,150 | 100,570 | 45,938 | 76,447 | 58,587 | 101,643 | 407,806 |
Included in the measure of segment assets are: |
|
|
|
|
|
|
|
|
Addition to non-current assets other than financial instruments and deferred tax assets | - | - | - | - | - | 1 | 19 | 20 |
# Cost of acquisition relates to the fair value adjustment in relation to the inventories upon the acquisition of certain subsidiaries of the Group. The cost of acquisition written down is charged to profit or loss as part of cost of sales upon the sales of these inventories.
|
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Profit or loss | US$'000 |
Total profit for reportable segments | 14,831 |
Other non-reportable segments | 587 |
Depreciation | (4) |
Consolidated profit before taxation | 15,414 |
30 June 2015 - Unaudited US$'000 | Revenue | Depreciation | Finance costs | Finance income | Segment assets | Addition to non-current assets |
Total reportable segment | 16,891 | (53) | (5,565) | 194 | 379,305 | - |
Other non-reportable segments | - | - | - | - | 35,800 | - |
Consolidated total | 16,891 | (53) | (5,565) | 194 | 415,105 | - |
30 June 2014 - Unaudited US$'000 | Revenue | Depreciation | Finance costs | Finance income | Segment assets | Addition to non-current assets |
Total reportable segment | 31,494 | (57) | (5,760) | 227 | 449,249 | 13 |
Other non-reportable segments | - | (2) | - | - | 40,095 | - |
Consolidated total | 31,494 | (59) | (5,760) | 227 | 489,344 | 13 |
31 December 2014 - Audited US$'000 | Revenue | Depreciation | Finance costs | Finance income | Segment assets | Addition to non-current assets |
Total reportable segment | 85,102 | (118) | (13,760) | 577 | 407,806 | 20 |
Other non-reportable segments | - | (4) | - | - | 37,554 | - |
Consolidated total | 85,102 | (122) | (13,760) | 577 | 445,360 | 20 |
Geographical Information - ended 30 June 2015 - Unaudited
| Malaysia | Vietnam | Consolidated |
| US$'000 | US$'000 | US$'000 |
Revenue | 16,891 | - | 16,891 |
Non-current assets | 3,932 | 19,166 | 23,098 |
For the financial period ended 30 June 2015, no single customer exceeded 10% of the Group's total revenue.
Geographical Information - ended 30 June 2014 - Unaudited
| Malaysia | Vietnam | Consolidated |
| US$'000 | US$'000 | US$'000 |
Revenue | 31,494 | - | 31,494 |
Non-current assets | 5,288 | 24,439 | 29,727 |
For the financial period ended 30 June 2014, no single customer exceeded 10% of the Group's total revenue.
Geographical Information - ended 31 December 2014 - Audited
| Malaysia | Vietnam | Consolidated |
| US$'000 | US$'000 | US$'000 |
Revenue | 55,762 | 29,340 | 85,102 |
Non-current assets | 4,104 | 20,217 | 24,321 |
For the year ended 31 December 2014, one customer exceeded 10% of the Group's total revenue as follows:
| US$'000 | Segments |
AEON Vietnam Co. Ltd. | 22,991 | Hoa Lam-Shangri-La Healthcare Group |
4 Seasonality
The Group's business operations have not been materially affected by seasonal factors for the period under review.
5 Cost of Sales
| Unaudited | Unaudited | Audited |
| Six months | Six months | Year |
| ended 30 June | ended 30 June | ended 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Direct costs attributable: |
|
|
|
Completed units | 12,594 | 24,636 | 36,856 |
Land held for property development | - | - | 10,238 |
Impairment of intangible assets | 129 | 317 | 4,727 |
| 12,723 | 24,953 | 51,821 |
6 Foreign exchange GAIN/(loss)
| Unaudited | Unaudited | Audited |
| Six months | Six months | Year |
| ended 30 June | ended 30 June | ended 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Foreign exchange gain/(loss) comprises: |
|
|
|
Realised foreign exchange (loss)/ gain | (171) | (8) | 425 |
Unrealised foreign exchange gain/ (loss) | 718 | (1) | 291 |
| 547 | (9) | 716 |
7 Taxation
| Unaudited | Unaudited | Audited |
| Six months | Six months | Year |
| ended 30 June | ended 30 June | ended 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Current tax expense | 1,637 | 2,980 | 10,587 |
Deferred tax credit | (95) | (74) | (1,200) |
Total tax expense for the period/year | 1,542 | 2,906 | 9,387 |
The numerical reconciliation between the income tax expense 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 |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Net (loss)/profit before taxation | (5,075) | (4,756) |
15,414 |
Income tax at a rate of 25% | (1,269) | (1,189) | 3,853 |
|
|
|
|
Add : |
|
|
|
Tax effect of expenses not deductible in determining taxable profit | 1,241 | 1,596 |
2,063 |
Movement of unrecognised deferred tax benefits | 1,284 | 1,673 | 2,621 |
Tax effect of different tax rates in subsidiaries | 1,025 | 1,027 | 1,784 |
Less : |
|
|
|
Tax effect of income not taxable in determining taxable profit | (499) | (201) | (1,415) |
Under provision in respect of prior period/year | (240) | - | 481 |
Total tax expense for the period/year | 1,542 | 2,906 | 9,387 |
The applicable corporate tax rate in Malaysia is 25%.
The Company is treated as a tax resident of Jersey for the purpose of Jersey tax laws and is subject to a tax rate of 0%.
The applicable corporate tax rates in Singapore and Vietnam are 17% and 22% respectively.
A subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd Liability Co is granted preferential corporate tax rate of 10% for the results of the hospital operations. The preferential income tax is given by the government of Vietnam due to the subsidiary's involvement in the healthcare and education industries.
A Goods and Services Tax was introduced in Jersey in May 2008. The Company has been registered as an International Services Entity so it does not have to charge or pay local GST. The cost for this registration is £200 per annum.
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 residents 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
Basic and diluted (loss)/earnings per ordinary share
The calculation of basic and diluted (loss)/earnings per ordinary share for the period/year ended was based on the (loss)/profit attributable to equity holders of the parent and a weighted average number of ordinary shares outstanding, calculated as below:
| Unaudited | Unaudited | Audited |
| Six months | Six months | Year |
| ended 30 June | ended 30 June | ended 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
(Loss)/earnings attributable to equity holders of the parent | (4,428) | (5,198) | 9,091 |
Weighted average number of shares | 212,025 | 212,025 | 212,025 |
(Loss)/earnings per share |
|
|
|
Basic and diluted (US cents) | (2.09) | (2.45) | 4.29 |
9 Loans and Borrowings
|
| Unaudited | Unaudited | Audited |
|
| As at 30 June | As at 30 June | As at 31 December |
|
| 2015 | 2014 | 2014 |
|
| US$'000 | US$'000 | US$'000 |
|
|
|
|
|
Non-current |
|
|
|
|
Bank loans |
| 55,518 | 68,936 | 53,338 |
Finance lease liabilities |
| 18 | 36 | 26 |
|
| 55,536 | 68,972 | 53,364 |
|
|
|
|
|
Current |
|
|
|
|
Bank loans |
| 14,400 | 6,920 | 19,262 |
Finance lease liabilities |
| 12 | 14 | 12 |
|
| 14,412 | 6,934 | 19,274 |
|
| 69,948 | 75,906 | 72,638 |
The effective interest rates on the bank loans and finance lease arrangement for the period ranged from 5.25% to 12.50% (30 June 204: 5.25% to 14.90%; 31 December 2014: 5.25% to 17.70%) per annum and 2.50% to 3.50% (30 June 2014: 2.50%; 31 December 2014: 2.50% to 3.50%) per annum respectively.
Borrowings are denominated in Malaysian Ringgit, United States Dollars and Vietnamese Dong.
Bank loans are repayable by monthly, quarterly or semi-annually instalments.
Bank loans are secured by land held for property development, work-in-progress, operating assets of the Group, pledged deposits and some by the corporate guarantee of the Company.
Finance lease liabilities are payable as follows:
Unaudited | Future minimum lease payment 30 June 2015 US$'000 | Interest 30 June 2015 US$'000 | Present value of minimum lease payment 30 June 2015 US$'000 |
Within one year | 14 | 2 | 12 |
Between one and five years | 21 | 3 | 18 |
| 35 | 5 | 30 |
Unaudited | Future minimum lease payment 30 June 2014 US$'000 | Interest 30 June 2014 US$'000 | Present value of minimum lease payment 30 June 2014 US$'000 |
Within one year | 16 | 2 | 14 |
Between one and five years | 42 | 6 | 36 |
| 58 | 8 | 50 |
Audited | Future minimum lease payment 31 December 2014 US$'000 | Interest 31 December 2014 US$'000 | Present value of minimum lease payment 31 December 2014 US$'000 |
Within one year | 15 | 3 | 12 |
Between one and five years | 30 | 4 | 26 |
| 45 | 7 | 38 |
10 Medium Term Notes
| Unaudited | Unaudited | Audited |
| As at | As at | As at |
| 30 June | 30 June | 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Outstanding medium term notes | 136,210 | 160,060 | 147,004 |
Net transaction costs | (1,556) | (2,714) | (1,774) |
Less: |
|
|
|
Repayment due within twelve months | (124,285) | (14,013) | (60,237) |
Repayment due after twelve months | 10,369 | 143,333 | 84,993 |
The medium term notes ("MTN") were issued pursuant to a programme with a tenure of ten (10) years from the first issue date of the notes. The MTN were issued by a subsidiary, to fund two development projects known as Sandakan Harbour Square and Aloft Kuala Lumpur Sentral Hotel in Malaysia. US$64.93 million (RM245.00 million) was drawn down in 2011 for Sandakan Harbour Square. US$3.97 million (RM15.00 million) was drawn down in 2012 for Aloft Kuala Lumpur Sentral Hotel and the remaining US$67.31 million (RM254 million) in 2013. The Group secured a rollover of MTN amounting US$11.93 million (RM45 million) which was due for repayment on 8 December 2014 to be repaid on 8 December 2017. No repayments were made in the current financial period.
The weighted average interest rate of the MTN was 5.56% per annum at the statement of financial position date. The effective interest rates of the MTN and their outstanding amounts are as follows:
|
Maturity Dates | Interest rate % per annum |
US$'000 |
Series 1 Tranche FG 003 | 8 December 2017 | 5.90 | 6,625 |
Series 1 Tranche BG 003 | 8 December 2017 | 5.85 | 5,300 |
Series 1 Tranche FG 002 | 8 December 2015 | 5.46 | 11,925 |
Series 1 Tranche BG 002 | 8 December 2015 | 5.41 | 7,950 |
Series 2 Tranche FG 001 | 8 December 2015 | 5.46 | 18,550 |
Series 2 Tranche BG 001 | 8 December 2015 | 5.41 | 14,575 |
Series 3 Tranche FG001 | 1 October 2015 | 5.40 | 2,650 |
Series 3 Tranche BG001 | 1 October 2015 | 5.35 | 1,325 |
Series 3 Tranche FG002 | 29 January 2016 | 5.50 | 3,975 |
Series 3 Tranche BG002 | 29 January 2016 | 5.45 | 2,650 |
Series 3 Tranche FG003 | 8 April 2016 | 5.65 | 34,185 |
Series 3 Tranche BG003 | 8 April 2016 | 5.58 | 26,500 |
|
|
| 136,210 |
The medium term notes are secured by way of:
(i) bank guarantee from two financial institutions in respect of the BG Tranches;
(ii) financial guarantee insurance policy from Danajamin Nasional Berhad in respect to the FG Tranches;
(iii) a first fixed and floating charge over the present and future assets and properties of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. by way of a debenture;
(iv) a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.'s assets and land;
(v) assignment of all Iringan Flora Sdn. Bhd.'s present and future rights, title, interest and benefits in and under the Sales and Purchase Agreement to purchase the Aloft Kuala Lumpur Sentral Hotel from Excellent Bonanza Sdn. Bhd.;
(vi) first fixed land charge over the Aloft Kuala Lumpur Sentral Hotel and the Aloft Kuala Lumpur Sentral Hotel's land (to be executed upon construction completion);
(vii) a corporate guarantee by Aseana Properties Limited;
(viii) letter of undertaking from Aseana Properties Limited to provide financial and other forms of support to ICSD Ventures Sdn. Bhd. to finance any cost overruns associated with the development of the Sandakan Harbour Square;
(ix) assignment of all its present and future rights, interest and benefits under the ICSD Ventures Sdn. Bhd.'s and Iringan Flora Sdn. Bhd.'s Put Option Agreements and the proceeds from the Harbour Mall Sandakan, Four Points by Sheraton Sandakan Hotel and Aloft Kuala Lumpur Sentral Hotel;
(x) assignment over the disbursement account, revenue account, operating account, sales proceed account, debt service reserve account and sinking fund account of Silver Sparrow Berhad; revenue account of ICSD Ventures Sdn. Bhd. and escrow account of Ireka Land Sdn. Bhd.;
(xi) assignment of all ICSD Ventures Sdn. Bhd.'s and Iringan Flora Sdn. Bhd.'s present and future rights, title, interest and benefits in and under the insurance policies; and
(xii) a first legal charge over all the shares of the Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. and any dividends, distributions and entitlements.
11 Related Party Transactions
Transactions between the Group with Ireka Corporation Berhad ("ICB") and its group of companies are classified as related party transactions based on ICB's 23.07% shareholding in the Company.
Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel includes all the Directors of the Group, and certain members of senior management of the Group.
| Unaudited | Unaudited | Audited |
| Six months | Six months | Year |
| ended 30 June | ended 30 June | ended 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Accounting and financial reporting services fee charged by an ICB subsidiary |
25 |
27 |
53 |
Construction progress claims charged by an ICB subsidiary |
2,708 |
9,036 |
13,912 |
Management fees charged by an ICB subsidiary |
1,598 |
1,653 |
3,344 |
Marketing commission charged by an ICB subsidiary | 104 | 825 | 1,226 |
Project staff costs reimbursed to an ICB subsidiary | 170 | 397 |
544 |
Rental expenses charged by an ICB subsidiary | 4 | - | 31 |
Secretarial and administrative services fee charged by an ICB subsidiary |
25 |
27 |
53 |
|
|
|
|
Key management personnel |
|
|
|
Remuneration of key management personnel - Directors' fees | 159 | 159 |
317 |
Remuneration of key management personnel - Salaries | 21 | 21 | 49 |
Transactions between the Group with other significant related parties are as follows:
| Unaudited | Unaudited | Audited |
| Six months | Six months | Year |
| ended 30 June | ended 30 June | ended 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Non-controlling interests |
|
|
|
Advances - non-interest bearing | 772 | 486 | 1,635 |
Associate - Excellent Bonanza Sdn. Bhd. |
|
|
|
Advances - non-interest bearing | - | (88) | - |
The above transactions have been entered into in the normal course of business and have been established under negotiated terms.
The outstanding amounts due from/ (to) ICB and its group of companies as at 30 June 2015, 30 June 2014 and 31 December 2014 are as follows:
| Unaudited As at 30 June 2015 US$'000 | Unaudited As at 30 June 2014 US$'000 | Audited As at 31 December 2014 US$'000 |
Amount due to an ICB subsidiary for accounting and financial reporting services fee |
- |
27 |
- |
Amount due to an ICB subsidiary for construction |
|
|
|
progress claims charged net of LAD's |
|
|
|
recoverable of US$Nil (30 June 2014:US$4,359,600; 31 |
|
|
|
December 2014: US$Nil) | 232 | 523 | 891 |
Amount due to an ICB subsidiary for management fees |
- |
280 |
- |
Amount due to an ICB subsidiary for marketing commissions |
- |
725 |
34 |
Amount due to ICB subsidiary for reimbursement of project staff costs |
29 |
55 |
60 |
Amount due to an ICB subsidiary for rental expenses |
3 |
- |
2 |
Amount due to an ICB subsidiary for secretarial and administrative services fee |
- |
27 |
- |
| Unaudited | Unaudited | Audited |
| As at 30 June | As at 30 June | As at 31 December |
| 2015 | 2014 | 2014 |
| US$'000 | US$'000 | US$'000 |
Non-controlling interests |
|
|
|
Advances - non-interest bearing | (11,645) | (10,672) | (11,342) |
Associate - Excellent Bonanza Sdn. Bhd. |
|
|
|
Advances - non-interest bearing | - | 943 | - |
Transactions between the parent company and its subsidiaries are eliminated in these consolidated financial statements.
12 Dividends
The Company has not paid or declared any dividends during the financial period ended 30 June 2015.
13 Events after the Statement of Financial Position Date
On 27 August 2015, Aseana held an Extraordinary General Meeting ("August EGM"), at which shareholders approved amendments to the memorandum and articles of association of the Company and its share capital structure to facilitate a return of capital to shareholders.
14 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.
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.
· Economic
· Strategic
· Regulatory
· Law and regulations
· Tax regimes
· Management and control
· Operational
· Financial
· Going concern
For greater detail, please refer to page 18 of the Company's Annual Report for 2014, a copy of which is available on the Company's website www.aseanaproperties.com.
RESPONSIBILITY STATEMENT
The Directors of the Company confirm that to the best of their knowledge that:
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).
On behalf of the Board
Mohammed Azlan Hashim | Christopher Henry Lovell |
Director | Director |
27 August 2015 |
|