28 Mar 2012 15:07
28 March 2012
VinaLand Limited
Interim results for the six months ended 31 December 2011
VinaLand Limited ("the Company" or "VNL"), the AIM-quoted investment vehicle established to target strategic segments within Vietnam's emerging real estate market, today announces its interim results for the six months ended 31 December 2011 ("the Period").
Financial highlights
·; Net loss for the Period attributable to the Group's shareholders of USD81.8 million (HY10: USD4.4 million net loss) largely reflecting the necessary adjustment in asset values arising from the deterioration in market conditions.
·; Net loss per share of USD0.16 for the Period (HY10: USD0.01 net loss).
·; Net asset value at 31 December 2011 of USD585 million representing USD1.18 per share.
Operational highlights
·; The Company commenced a share buyback programme in the fourth quarter of 2011 as part of its efforts to narrow its discount to NAV, with 2.6 million shares being purchased and cancelled in this period.
·; During the fourth quarter, project revaluations with a valuation date of 31 December 2011 were undertaken which resulted in an 11.1% realized decrease in NAV. Adjustments resulted from an ongoing deterioration of the macroeconomic and property markets, high interest rates of over 20% and a highly illiquid property market.
Commenting, David Henry, Managing Director of VNL's Investment Manager, said:
"Business activity and investor sentiment in the property sector have continued to be adversely affected by extreme illiquidity in the property market resulting from record interest rates and high inflation. This slowdown in transactions has in turn begun to impact upon revaluations of land and development projects. We do believe however that real estate activity should start to improve by the end of 2012 as it begins to feel the impact of improving conditions in the wider economy, and we retain our belief that the fund can offer value and growth in the long-term."
Notes to Editors:
VinaCapital is the leading investment management and real estate development firm in Vietnam, with a diversified portfolio of USD1.6 billion in assets under management. VinaCapital was founded in 2003 and boasts a team of managing directors who bring extensive international finance and investment experience to the firm. Our mission is to produce superior returns for investors by using our experience and knowledge to identify the key trends and opportunities that emerge as Vietnam continues to develop its economy. To achieve this, VinaCapital has industry-leading asset class teams covering capital markets, private equity, fixed income, venture capital, real estate and infrastructure.
VinaCapital manages three closed-end funds trading on the AIM Market of the London Stock Exchange. These funds are: VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL), and Vietnam Infrastructure Limited (VNI). VinaCapital also co-manages the USD32 million DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson.
VinaCapital has offices in Ho Chi Minh City, Hanoi, Danang, Nha Trang, Phnom Penh (Cambodia) and Singapore. More information about VinaCapital is available at www.vinacapital.com
More information on VinaLand Limited is available at www.vinacapital.com/vnl
Enquiries:
David DropseyVinaCapital Investment Management LimitedInvestor Relations/Communications+84 8 821 9930david.dropsey@vinacapital.com
Philip Secrett
Grant Thornton Corporate Finance, Nominated Adviser
+44 (0)20 7583 5100
philip.j.secrett@uk.gt.com
Hiroshi FunakiLCF Edmond de Rothschild Securities, Broker+44 20 7845 5960funds@lcfr.co.uk
David Benda / Hugh JonathanNumis Securities Limited, Broker+44 (0)20 7260 1000Mark WaltersFTI Consulting, Public Relations (Hong Kong)+852 3716 9802mark.walters@fticonsulting.com
Andrew WaltonFTI Consulting, Public Relations (London)+44 (0)20 7269 7204andrew.walton@fticonsulting.com
Chairman's Statement
Dear Shareholders,
We are pleased to present the interim financial statements of VinaLand Limited (AIM: VNL) for the six month period ended 31 December 2011.
The Vietnamese real estate market challenges were persistent throughout the second half of 2011, with systemic macroeconomic problems, high inflation and interest rates, and a highly illiquid property market. During the period, VNL had several divestment negotiations stall or cease all together as a result. Many Vietnam investors and developers, who have historically been purchasers of VNL projects, simply stopped playing an active role in the market. The slowdown in demand coupled with oversupply weighed heavily on all sectors of real estate although residential villa sales were less impacted. Office and retail rental prices softened during the second half of 2011, while some residential developers offered substantially discounted prices. However, the hospitality sector performed relatively well due to the high season and increased visitor numbers.
VNL's NAV at the end of December 2011 was USD585 million, or USD1.18 per share, 16 percent below the NAV at the end of June 2011 of USD672 million, or USD1.34 per share. VNL's share price at the end of December 2011 was USD0.68, compared to USD0.78 at the end of June 2011.
During the fourth quarter, project revaluations were undertaken which resulted in a reduction of 11.1 percent to fund NAV. External third party appraisals were obtained on nine projects. Additionally, the Valuation Committee conducted a review of the remaining VNL portfolio, which resulted in a downward adjustment on fifteen assets, including the fund's hospitality holdings.
Over the period, VNL residential projects continued to see a difficult environment for sales. In total, residential sales contracts of USD25.6 million were signed during the second half of 2011, slightly up from USD22.5 million during the same period the previous year.
On a positive note, Government monetary policy is beginning to make headway, leading to a stable currency and a lowering of both interest and inflation rates. However, interest rates are still high and very disruptive to the overall economy in Vietnam and this, together with government imposed restrictions on the amount that banks can lend to the real estate sector, continues to put pressure on the real estate market. It is anticipated that the interest rate situation will improve through 2012 and, as a result, we believe that real estate activity should improve by the end of the year.
VNL remains committed to the fund's divestment and share buyback programme, which was started during the fourth quarter of 2011. Nearly 2.6 million shares were purchased and cancelled during the period. Closing this discount remains a top priority as the Board continues to believe the fund offers value and the potential for long term growth.
Thank you for your continued support.
Nicholas Brooke
Chairman
VinaLand Limited
27 March 2012
Condensed Interim Consolidated Statement of Financial Position
|
| 31 December 2011 | 30 June 2011 |
| Note | USD'000 | USD'000
|
|
|
|
|
ASSETS |
|
|
|
|
|
| |
Non-current |
|
|
|
Investment properties | 6 | 608,489 | 693,185 |
Property, plant and equipment | 7 | 116,909 | 130,697 |
Goodwill |
| 3,923 | 3,923 |
Intangible assets |
| 13,199 | 12,653 |
Investments in associates | 8 | 83,857 | 83,994 |
Prepayments for operating lease assets |
| 2,887 | 4,687 |
Prepayments for acquisitions of investments | 9 | 35,839 | 41,869 |
Other non-current financial assets |
| 1,992 | 2,556 |
Deferred tax assets |
| 7,968 | 16,301 |
|
| ─────── | ─────── |
Total non-current assets |
| 875,063 | 989,865 |
|
| ─────── | ─────── |
|
|
| |
Current |
|
|
|
Inventories | 10 | 130,841 | 117,476 |
Trade and other receivables | 11 | 90,531 | 108,147 |
Receivables from related parties |
| 2,038 | 2,800 |
Short-term investments |
| 3,300 | 3,605 |
Financial assets at fair value through profit or loss | 12 | 17,831 | 17,831 |
Cash and cash equivalents (excluding bank overdrafts) |
13 |
47,673 |
49,017 |
| ──────── | ──────── | |
Total current assets |
| 292,214 | 298,876 |
|
|
| |
Assets classified as held for sale | 14 | 15,390 | 30,106 |
Total assets |
| ──────── 1,182,667 ════════ | ──────── 1,318,847 ════════ |
|
Note | 31 December 2011 | 30 June 2011 |
EQUITY AND LIABILITIES |
| USD'000 | USD'000
|
EQUITY |
|
|
|
Equity attributable to equity shareholders of the parent |
|
|
|
Share capital | 15 | 4,973 | 4,999 |
Additional paid-in capital | 16 | 585,393 | 588,870 |
Equity reserve |
| 1,634 | - |
Revaluation reserve | 17 | 4,799 | 7,054 |
Translation reserve |
| (46,610) | (40,897) |
Retained earnings |
| 35,174 | 112,262 |
| ─────── | ─────── | |
| 585,363 | 672,288 | |
Non-controlling interests |
| 168,345 | 233,298 |
Total equity |
| ─────── 753,708 ─────── | ─────── 905,586 ─────── |
LIABILITIES |
|
|
|
|
|
| |
Non-current |
|
|
|
Borrowings and debts | 18 | 107,842 | 105,541 |
Non-current trade and other payables | 28,036 | 6,435 | |
Non-current payables to related parties | 28 | 71,862 | 71,545 |
Deferred tax liabilities | 19 | 38,964 | 51,056 |
| ─────── | ─────── | |
Total non-current liabilities |
| 246,704 | 234,577 |
|
|
| |
Current |
|
|
|
Trade and other payables | 20 | 127,909 | 125,303 |
Payables to related parties | 28 | 41,891 | 41,021 |
Borrowings and debts | 18 | 12,125 | 12,030 |
| ─────── | ─────── | |
Total current liabilities |
| 181,925 | 178,354 |
|
|
| |
Liabilities classified as held for sale | 14 | 330 | 330 |
Total liabilities |
| ────── 428,959 | ────── 413,261 |
Total equity and liabilities |
| ────── 1,182,667 | ────── 1,318,847 |
| ════════ | ══════════ | |
Net assets per share attributable to equity shareholder of the parent (USD per share) |
25 |
1.18 |
1.34 |
Condensed Interim Consolidated Statement of Changes in Equity
Equity attributable to equity shareholders of the parent | ||||||||
Share capital | Additional paid-in capital |
Equity reserve |
Revaluation reserve |
Translation reserve |
Retained earnings | Non- controlling interests |
Totalequity | |
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
Balance at 1 July 2010 | 4,999 | 588,870 | - | 3,483 | (29,733) | 114,025 | 224,269 | 905,913 |
Profit/(loss) for the period from 1 July 2010 to 31 December 2010 |
- |
- |
- |
- |
- |
(4,390) |
5,675 |
1,285 |
Currency translation | - | - | - | - | (4,005) | - | (898) | (4,903) |
Revaluation gains on buildings | - | - | - | 6,584 | - | - | 2,947 | 9,531 |
Total comprehensive income/(loss) | ────── - ────── | ────── - ────── | ────── - ────── | ────── 6,584 ────── | ────── (4,005) ────── | ────── (4,390) ────── | ───── 7,724 ───── | ────── 5,913 ────── |
Capital contributions in subsidiaries | - | - | - | - | - | - | 9,007 | 9,007 |
Gain on acquisition of non-controlling interests | - | - | - | - | - | 840 | - | 840 |
Acquisitions of non-controlling interests | - | - | - | - | - | - | (2,040) | (2,040) |
Reversal of non-controlling share premium capital in a subsidiary |
- |
- |
- |
- |
- |
- |
(10,970) |
(10,970) |
Balance at 31 December 2010 | ────── 4,999 ══════ | ─────── 588,870 ═══════ | ─────── - ═══════ | ────── 10,067 ══════ | ──────── (33,738) ════════ | ─────── 110,475 ═══════ | ─────── 227,990 ═══════ | ─────── 908,663 ═══════ |
Balance at 1 July 2011 | 4,999 | 588,870 | - | 7,054 | (40,897) | 112,262 | 233,298 | 905,586 |
Loss for the period from 1 July 2011 to 31 December 2011 |
- |
- |
- |
- |
- |
(81,824) | (47,725) |
(129,549) |
Currency translation | - | - | - | - | (5,713) | - | (4,456) | (10,169) |
Revaluation losses on buildings (note 17) | - | - | - | (2,255) | - | - | (821) | (3,076) |
Total comprehensive loss | ───── - ───── | ───── - ───── | ───── - ───── | ───── (2,255) ───── | ───── (5,713) ───── | ────── (81,824) ────── | ───── (53,002) ───── | ────── (142,794) ────── |
Repurchases of shares | (26) | (3,477) | 1,634 | - | - | - | - | (1,869) |
Capital contributions in subsidiaries | - | - | - | - | - | - | 188 | 188 |
Reversal of non-controlling interests in a subsidiary | - | - | - | - | - | 4,736 | (12,139) | (7,403) |
Balance at 31 December 2011 | ───── 4,973 ═════ | ────── 585,393 ══════ | ────── 1,634 ══════ | ───── 4,799 ═════ | ────── (46,610) ══════ | ────── 35,174 ══════ | ────── 168,345 ══════ | ─────── 753,708 ═══════ |
Consolidated Interim Statement of Income
Six months ended | |||
31 December 2011 | 31 December 2010 | ||
Note | USD'000 | USD'000 | |
Revenue | 27,158 | 12,217 | |
Cost of sales | (19,265) | (7,114) | |
─────── | ─────── | ||
Gross profit | 7,893 | 5,103 | |
Net (loss)/gain on fair value adjustments of investment properties and revaluations of property, plant and equipment |
21 |
(112,415) |
20,745 |
Selling and administration expenses | 22 | (19,088) | (25,327) |
Other income | 5,516 | 702 | |
Other expenses | 23 | (12,534) | (1,296) |
─────── | ─────── | ||
Loss from continuing operations | (130,628) | (73) | |
Finance income | 3,517 | 2,509 | |
Finance expenses | (5,481) | (5,729) | |
Share of (loss)/profit of associates | (137) | 922 | |
─────── | ─────── | ||
Loss before income tax from operations | (132,729) | (2,371) | |
Income tax | 24 | 3,180 | 3,656 |
─────── | ─────── | ||
(Loss)/profit from operations
| (129,549) | 1,285 | |
Attributable to equity shareholders of the parent | (81,824) | (4,390) | |
Attributable to non-controlling interests | (47,725) | 5,675 | |
─────── | ─────── | ||
(Loss)/profit for the period | (129,549) | 1,285 | |
═══════ | ═══════ | ||
Loss per share - basic and diluted (USD per share) |
25 |
(0.16) |
(0.01) |
─────── | ─────── | ||
Condensed Interim Consolidated Statement of Comprehensive Income
Six months ended | |||
31 December 2011 | 31 December 2010 | ||
USD'000 | USD'000 | ||
(Loss)/profit for the period | (129,549) | 1,285 | |
Other comprehensive income | |||
Revaluation (reversal)/gain on buildings | 17 | (3,076) | 9,531 |
Gains on acquisitions of non-controlling interests | - | 840 | |
Exchange differences on translating foreign operations | (10,169) | (4,903) | |
─────── | ─────── | ||
Other comprehensive (loss)/income for the period | (13,245) | 5,468 | |
Total comprehensive (loss)/income for the period | (142,794) | 6,753 | |
─────── | ─────── | ||
Attributable to equity shareholders of the parent | (89,792) | (971) | |
Attributable to non-controlling interests | (53,002) | 7,724 | |
─────── (142,794) ═══════ | ────── 6,753 ══════ | ||
Condensed Interim Consolidated Statement of Cash Flows
Six months ended | |||
Note | 31 December 2011 | 31 December 2010 | |
USD'000 | USD'000 | ||
Operating activities | |||
Net loss before tax | (132,729) | (2,371) | |
Adjustments for: | |||
Depreciation and amortisation | 5,048 | 3,826 | |
Losses/(gains) on fair value adjustments of investment properties | 21 | 112,415 | (20,745) |
Losses from liquidations of investments and subsidiaries | 4,040 | - | |
Allowance for impairment of assets | 23 | 12,077 | - |
Losses from written-off account balances | 1,134 | 56 | |
Share of associates' losses/(gains) | 137 | (922) | |
Losses on disposals of fixed assets | 23 | 229 | 112 |
Unrealised foreign exchange losses/(gains) | 461 | (58) | |
Interest expense | 4,699 | 4,701 | |
Interest income | (2,567) | (2,268) | |
Net profit/(loss) before changes in working capital | ────── 4,944 | ─────── (17,669) | |
| ────── | ────── | |
Change in trade and other assets | 22,859 | (7,529) | |
Change in inventories | (13,365) | 111 | |
Change in trade and other liabilities | (11,680) | 19,682 | |
Income tax paid | (660) | (604) | |
Net cash inflow/(outflow) from/to operating activities | ────── 2,098 ────── | ────── (6,009) ────── | |
Investing activities | |||
Interest received | 2,893 | 4,036 | |
Purchases of investment property, plant, equipment, and other non-current assets | (25,117) | (51,418) | |
Acquisitions of subsidiaries | - | (120) | |
Net proceeds from short-term investments | 305 | 10,220 | |
Deposits for acquisitions of investments | - | (4,695) | |
Proceeds from disposals of financial assets | 22,833 | 6,114 | |
Net proceeds from related party loans | - | 1,495 | |
Net cash inflow/(outflow) from/to investing activities | ───── 914 ───── | ─────── (34,368) ─────── | |
Financing activities | ||
Additional capital contributions from non-controlling interests | 188 | 9,007 |
Loan proceeds from banks 18 | 9,774 | 29,447 |
Loan repayments to banks | (7,378) | (2,667) |
Shares repurchased | (1,718) | - |
Interest paid | (5,100) | - |
Loan proceeds from non-controlling interests | - | 16 |
Net cash (outflow)/inflow to/from financing activities | ────── (4,234) ────── | ────── 35,803 ────── |
Net changes in cash and cash equivalents for the period | (1,222) | (4,574) |
Cash and cash equivalents at the beginning of the period | 49,017 | 79,979 |
Exchange differences on cash and cash equivalents | (122) | - |
Cash and cash equivalents at the end of the period | ────── 47,673 ══════ | ─────── 75,405 ═══════ |
Notes to the Condensed Interim Consolidated Financial Statements
1. General Information
VinaLand Limited ("the Company") is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The Company's primary objective is to focus on key growth segments within Vietnam's emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia. The Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNL.
The Company does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board will convene an extraordinary general meeting of the Company in 2013 where a special resolution will be proposed that the Company continue as presently constituted. If the resolution is passed, the Board intends that a similar resolution will be proposed at an extraordinary general meeting to be convened each third subsequent year thereafter. If the resolution is not passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.
The condensed interim consolidated financial statements for the six months ended 31 December 2011 were approved for issue by the Company's Board of Directors on 27 March 2012.
These condensed interim consolidated financial statements have been reviewed, not audited.
2. Basis of Preparation
The Company and its subsidiaries herein are referred to as the Group.
These condensed interim consolidated financial statements are for the six months ended 31 December 2011. They have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). They do not include all of the information required in the annual consolidated financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRS"). Accordingly, these financial statements are to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2011.
3. Accounting Policies
These condensed interim financial statements (the "interim financial statements") have been prepared in accordance with the accounting policies, methods of computation and presentation adopted in the last annual financial statements for the year ended 30 June 2011.
The AIM Rules for Companies require comparative figures for the balance sheet for the corresponding period end in the preceding financial year which differs to IAS 34 which requires comparative figures for the balance sheet for the immediately preceding financial year end. The Group continues to elect to report in accordance with IAS 34 and as such has agreed with the London Stock Exchange derogation from the above requirement of the AIM Rules for Companies in order to comply with IAS 34.
During the period, the Company had executed a share buy-back programme. Accordingly, the following new accounting policy in respect of repurchase of shares has been adopted. Shares which are purchased by the Company are treated as cancelled and whilst the amount of the authorised share capital is not affected, the issued share capital is reduced.
If the cost of repurchase of shares is less than the net asset value of the shares, the difference is transferred to the Company's equity reserve.
If the cost of repurchase of shares is greater than the net asset value of the shares, i) the amount of any equity reserve, additional paid-in capital account or fully paid share capital of the Company, and ii) any amount representing unrealised profits of the Company for the time being standing to the credit of any revaluation reserve maintained by the Company may be reduced by a sum not exceeding the amount by which the repurchase payment exceeds the net asset value of the shares.
4. Critical Accounting Estimates and Judgements
When preparing the condensed interim consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and may not equal the estimated results.
Information about significant judgements, estimates and assumptions that have the most effect on recognition and measurement of assets, liabilities, income and expenses were the same as those that applied to the last annual consolidated financial statements for the year ended 30 June 2011.
5. Segment Analysis
In identifying its operating segments, management generally follows the Group's sectors of investment which are based on internal management reporting information for the Investment Manager's management, monitoring of investments and decision making. The operating segments by investment portfolio include Commercial, Residential, Office buildings and undetermined use, Hospitality, Mixed-use segments and Cash and short-term investments.
The activities undertaken by the Commercial segment include the development and operation of investment properties. Apartments and villas properties which are developed for sales, land, office buildings and properties held for undetermined future use are included in Residential, office building and undetermined use properties segment. The Hospitality segment includes the development and operation of hotels and related services. Strategic decisions are made on the basis of segment operating results.
The operating segments are managed and monitored separately by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental profit or loss, the majority of expenses are common to all segments and therefore cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.
There is no measure of segment liabilities regularly reported to the Investment Manager, therefore liabilities are not disclosed in the sector analyses.
Segment information can be analysed as follows for the reporting periods under review:
(a) Condensed Interim Consolidated Statement of Income
| Six months ended 31 December 2011 | ||||
|
Commercial | Residential, office building and undetermined use |
Hospitality |
Mixed use |
Total |
| USD'000 | USD'000 | USD'000 | USD'000 | USD'000 |
|
|
|
|
|
|
Revenue | - | 2,012 | 25,146 | - | 27,158 |
Other income | - | 7,094 | 250 | (1,828) | 5,516 |
Finance income | 26 | 1,442 | 1,020 | 1,029 | 3,517 |
Net loss on fair value adjustments of investment properties and revaluations of property, plant and equipment |
(2,962) |
(65,188) |
(5,528) |
(38,737) |
(112,415) |
Share of profits/(losses) of associates | 21 | (840) | 694 | (12) | (137) |
Total | ─────── (2,915) | ─────── (55,480) | ─────── 21,582 | ─────── (39,548) | ─────── (76,361) |
Cost of sales | - | (1,531) | (17,734) | - | (19,265) |
| ─────── | ─────── | ─────── | ─────── | ─────── |
Profit/(loss) before unallocated expenses | (2,915) | (57,011) | 3,848 | (39,548) | (95,626) |
Selling and administration expenses |
|
|
|
| (19,088) |
Other expenses |
|
|
|
| (12,534) |
Finance expenses |
|
|
|
| (5,481) |
Loss before tax |
|
|
|
| ─────── (132,729) |
Income tax |
|
|
|
| 3,180 |
Net loss for the period |
|
|
|
| ─────── (129,549) ═════ |
| Six months ended 31 December 2010 | ||||
|
Commercial | Residential, office building and undetermined use |
Hospitality |
Mixed used |
Total |
| USD'000 | USD'000 | USD'000 | USD'000 | USD'000 |
|
|
|
|
|
|
Revenue | - | 503 | 11,264 | 450 | 12,217 |
Other income | - | 632 | 50 | 20 | 702 |
Finance income | 79 | 1,743 | 153 | 534 | 2,509 |
Net gains on fair value adjustments of investment properties and revaluations of property, plant and equipment |
- |
5,602 |
- |
15,143 |
20,745 |
Share of profits/(losses) of associates | (123) | 1,232 | (187) | - | 922 |
Total | ─────── (44) | ────── 9,712 | ────── 11,280 | ────── 16,147 | ────── 37,095 |
Cost of sales | - | (166) | (6,105) | (843) | (7,114) |
| ─────── | ─────── | ─────── | ─────── | ─────── |
Profit/(loss) before unallocated expenses | (44) | 9,546 | 5,175 | 15,304 | 29,981 |
Selling and administration expenses |
|
|
|
| (25,327) |
Other expenses |
|
|
|
| (1,296) |
Finance expenses |
|
|
|
| (5,729) |
|
|
|
|
| ────── |
Loss before tax |
|
|
|
| (2,371) |
Income tax income |
|
|
|
| 3,656 |
Net profit for the period |
|
|
|
| ────── 1,285 ══════ |
(b) Condensed Interim Consolidated Statement of Financial Position
| As at 31 December 2011 | |||||
|
Commercial |
Residential, office buildings and undetermined use |
Hospitality |
Mixed use |
Cash and short-term investments |
Total |
| USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 |
|
|
|
|
|
|
|
Investment properties | 5,200 | 427,626 | 6,142 | 169,521 | - | 608,489 |
Property, plant and equipment | - | 24,613 | 92,226 | 70 | - | 116,909 |
Goodwill and intangible assets | - | 4,015 | 13,103 | 4 | - | 17,122 |
Investments in associates | 18,549 | 37,417 | 26,755 | 1,136 | - | 83,857 |
Prepayments for acquisitions of investments |
- |
23,528 |
1,860 |
10,451 |
- |
35,839 |
Inventories | - | 54,328 | 54,458 | 22,055 | - | 130,841 |
Cash and cash equivalents | - | - | - | - | 47,673 | 47,673 |
Trade and other receivables | 96 | 69,626 | 16,366 | 4,443 | - | 90,531 |
Financial assets at fair value through profit or loss |
- |
6,652 |
- |
11,179 |
- |
17,831 |
Short-term investments | - | - | - | - | 3,300 | 3,300 |
Assets and disposal group classified as held for sale |
- |
13,434 |
1,956 |
- |
- |
15,390 |
Other assets | 111 | 9,437 | 5,129 | 208 | - | 14,885 |
Total assets | ────── 23,956 ══════ | ─────── 670,676 ═══════ | ─────── 217,995 ═══════ | ─────── 219,067 ═══════ | ─────── 50,973 ═══════ | ─────── 1,182,667 ═══════ |
|
| As at 30 June 2011 | |||||
|
Commercial | Residential, office buildings and undetermined use |
Hospitality |
Mixed use |
Cash and short-term investments |
Total | |
| USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
|
|
|
|
|
|
| |
Investment properties | 7,758 | 494,637 | - | 190,790 | - | 693,185 | |
Property, plant and equipment | - | 27,838 | 102,769 | 90 | - | 130,697 | |
Goodwill and intangible assets | - | 4,002 | 12,571 | 3 | - | 16,576 | |
Cash and cash equivalents | - | - | - | - | 49,017 | 49,017 | |
Inventories | - | 100,095 | 4,029 | 13,352 | - | 117,476 | |
Trade and other receivables | 45 | 89,317 | 15,695 | 3,090 | - | 108,147 | |
Investments in associates | 18,529 | 32,901 | 32,564 | - | - | 83,994 | |
Prepayments for acquisitions of investments |
- |
29,821 |
1,860 |
10,188 |
- |
41,869 | |
Financial assets at fair value through profit or loss |
- |
16,855 |
976 |
- |
- |
17,831 | |
Short-term investments | - | - | - | - | 3,605 | 3,605 | |
Assets and disposal group classified as held for sale |
- |
12,790 |
- |
17,316 |
- |
30,106 | |
Other assets | 352 | 12,282 | 5,083 | 8,627 | - | 26,344 | |
Total assets | ────── 26,684 ══════ | ─────── 820,538 ═══════ | ─────── 175,547 ═══════ | ─────── 243,456 ═══════ | ────── 52,622 ══════ | ─────── 1,318,847 ═══════ | |
6. Investment Properties
31 December 2011 | 30 June 2011 | |
USD'000 | USD'000 | |
| ||
Opening balance (1 July 2011/1 July 2010) | 693,185 | 620,650 |
Additions during the period/year | 23,985 | 46,527 |
Transfers from property, plant and equipment | - | 30,694 |
Net (loss)/gain from fair value adjustments of investment properties |
(106,887) |
78,036 |
Disposals of investment properties | - | (13,041) |
Transfers from prepayments for operating lease assets | 1,602 | - |
Transfers to inventories | - | (25,211) |
Transfers to property, plant and equipment | - | (9,879) |
Transfers to non-current assets classified as held for sale |
- |
(12,755) |
Translation differences | (3,396) | (21,836) |
Closing balance | ────── 608,489 ══════ | ─────── 693,185 ═══════ |
7. Property, Plant and Equipment
| Buildings, hotels and golf courses | Machinery, plant and equipment | Furniture, fixtures and office equipment |
Motor vehicles |
Construction in progress |
Total | ||
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |||
Gross carrying amount | ||||||||
At 1 July 2011 | 147,195 | 25,541 | 2,634 | 2,101 | 39,676 | 217,147 | ||
Additions | 418 | 221 | 38 | 115 | 223 | 1,015 | ||
Transfers from construction in progress |
1,068 |
1,096 |
23 |
- |
(2,187) |
- | ||
Disposals and written-off | (37) | (16) | (7) | (61) | (130) | (251) | ||
Translation differences | (1,613) | (247) | (22) | (33) | (16) | (1,931) | ||
At 31 December 2011 | ─────── 147,031 ─────── | ─────── 26,595 ─────── | ─────── 2,666 ─────── | ─────── 2,122 ─────── | ─────── 37,566 ─────── | ─────── 215,980 ─────── | ||
| ||||||||
Depreciation and revaluations |
| |||||||
At 1 July 2011 | (48,744) | (10,835) | (1,182) | (644) | (25,045) | (86,450) | ||
Charge for the period | (2,188) | (1,552) | (256) | (125) | - | (4,121) | ||
Disposals and written-off | - | 2 | 2 | 18 | - | 22 | ||
Revaluation losses | (8,603) | - | - | - | - | (8,603) | ||
Translation differences | 58 | 8 | 8 | 7 | - | 81 | ||
At 31 December 2011 | ─────── (59,477) ─────── | ─────── (12,377) ─────── | ─────── (1,428) ─────── | ─────── (744) ─────── | ─────── (25,045) ─────── | ─────── (99,071) ─────── | ||
Carrying value | ||||||||
At 1 July 2011 | 98,451 | 14,706 | 1,452 | 1,457 | 14,631 | 130,697 | ||
At 31 December 2011 | ─────── 87,554 ─────── | ─────── 14,218 ─────── | ─────── 1,238 ─────── | ─────── 1,378 ─────── | ─────── 12,521 ─────── | ─────── 116,909 ─────── | ||
Buildings which belong to East Ocean Real Estate and Tourism Joint Stock Company with a total carrying value of USD32.6 million as at 31 December 2011 (30 June 2011: USD36.2 million) are pledged as security for bank borrowings as disclosed in Note 18.
Buildings, equipment and construction in progress which belong to Roxy Vietnam Co. Ltd. with a total carrying value of USD15.9 million as at 31 December 2011 (30 June 2011: USD18.5 million) are pledged as security for bank borrowings disclosed in Note 18.
For the comparative period:
Buildings, hotels and golf courses | Machinery, plant and equipment | Furniture, fixtures and office equipment |
Motor vehicles |
Construction in progress |
Total | |
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
Gross carrying amount | ||||||
At 1 July 2010 | 104,278 | 23,990 | 2,390 | 1,672 | 44,826 | 177,156 |
Additions | 7,258 | 1,488 | 678 | 913 | 8,407 | 18,744 |
Transfers from construction in progress |
12,952 |
984 |
(379) |
- |
(13,557) |
- |
Transferred from investment properties |
9,879 |
- |
- |
- |
- |
9,879 |
Transfers from prepayments for operating lease assets |
34,532 |
- |
- |
- |
- |
34,532 |
Transfers to investment properties |
(30,694) |
- |
- |
- |
- |
(30,694) |
Disposals and written-off | - | (850) | (27) | (411) | - | (1,288) |
Revaluation gains | 9,030 | - | - | - | - | 9,030 |
Translation differences | (40) | (71) | (28) | (73) | - | (212) |
At 30 June 2011 | ─────── 147,195 ─────── | ────── 25,541 ────── | ────── 2,634 ────── | ────── 2,101 ────── | ────── 39,676 ────── | ─────── 217,147 ─────── |
Depreciation and revaluations | ||||||
At 1 July 2010 | (30,984) | (8,428) | (706) | (424) | (25,045) | (65,587) |
Charge for the year | (38) | (2,407) | (478) | (240) | - | (3,163) |
Revaluation losses | (17,730) | - | - | - | - | (17,730) |
Translation differences | 8 | - | 2 | 20 | - | 30 |
At 30 June 2011 | ─────── (48,744) ─────── | ─────── (10,835) ─────── | ─────── (1,182) ─────── | ────── (644) ────── | ─────── (25,045) ─────── | ─────── (86,450) ─────── |
Carrying value | ||||||
At 1 July 2010 | 73,294 | 15,562 | 1,684 | 1,248 | 19,781 | 111,569 |
At 30 June 2011 | ────── 98,451 ══════ | ────── 14,706 ══════ | ────── 1,452 ══════ | ────── 1,457 ══════ | ─────── 14,631 ═══════ | ─────── 130,697 ═══════ |
8. Investments in Associates
31 December 2011 | 30 June 2011 | |
USD'000 | USD'000 | |
Opening balance (1 July 2011/1 July 2010) | 83,994 | 71,789 |
Additions during the period/year | - | 29,090 |
Transfers from prepayments for acquisitions of investments |
- |
1,345 |
Disposals | - | (1,200) |
Write off of investment costs | - | (3,216) |
Reclassification to assets held for sale | - | (15,655) |
Share of (loss)/profit of associates | (137) | 1,841 |
Closing balance | ────── 83,857 ══════ | ─────── 83,994 ═══════ |
9. Prepayments for Acquisitions of Investments
| 31 December 2011 | 30 June 2011 |
USD'000 | USD'000 | |
Prepayments for acquisitions of investments | 41,637 | 51,904 |
Transfers to investments in subsidiaries | - | (7,721) |
Transfers to investments in associates | - | (1,345) |
Reclassification as financial assets at fair value through profit or loss |
- |
(969) |
────── | ────── | |
41,637 | 41,869 | |
Allowance for impairment | (5,798) | - |
────── | ────── | |
35,839 | 41,869 | |
══════ | ══════ |
As at 31 December 2011, an allowance of USD5.8 million had been made against the prepayments for acquisitions of investments of Long Truong and Truong Thinh Garden projects
10. Inventories
31 December 2011 | 30 June 2011 | |
USD'000 | USD'000
| |
Opening balance (1 July 2011/1 July 2010) | 117,476 | 80,769 |
Net additions during the period/year | 25,589 | 46,383 |
Transfers from investment properties | - | 25,211 |
Transfers to cost of sales | (8,977) | (34,350) |
Translation differences | (3,247) | (537) |
────── 130,841 ══════ | ─────── 117,476 ═══════ |
11. Trade and Other Receivables
31 December 2011 | 30 June 2011 | |
USD'000 | USD'000 | |
Trade receivables | 1,874 | 3,047 |
Loans to non-controlling interests | 31,000 | 31,000 |
Compensation receivable for property exchanged | 44,853 | 46,659 |
Receivables from non-controlling interests | 740 | 104 |
Receivables from disposals of subsidiaries | 7,385 | 7,542 |
Tax receivables | 2,325 | 3,594 |
Interest receivables | 5,938 | 6,264 |
Prepayments to suppliers | 8,403 | 8,616 |
Other receivables | 1,260 | 7,804 |
Other current assets | 1,279 | 1,764 |
────── | ────── | |
105,057 | 116,394 | |
Allowance for impairment | (14,526) | (8,247) |
────── 90,531 ══════ | ─────── 108,147 ═══════ |
Included in interest receivables is an amount of USD5.6 million receivable from Thai Thinh Corporation which was fully provided for as at 30 June 2011 and 31 December 2011.
All trade and other receivables are short-term in nature and their carrying values, after allowances for impairment, approximate their fair values at the date of the condensed interim consolidated statement of financial position.
12. Financial Assets at Fair Value through Profit or Loss
| 31 December 2011 | 30 June 2011 |
USD'000 | USD'000 | |
Designated at fair value through profit or loss: | ||
Financial assets in Vietnam | ||
Trustee loans | 2,785 | 2,785 |
Ordinary shares - unlisted | 15,046 | 15,046 |
────── | ────── | |
17,831 | 17,831 | |
══════ | ══════ |
13. Cash and Cash Equivalents
| 31 December 2011 | 30 June 2011 |
USD'000 | USD'000 | |
Cash on hand | 763 | 735 |
Cash at banks | 13,387 | 18,305 |
Cash equivalents | 33,523 | 29,977 |
────── | ────── | |
47,673 | 49,017 | |
══════ | ══════ |
At 31 December 2011, cash and cash equivalents held at the Company level amounted to USD8.5 million (30 June 2011: USD3.6 million). The remaining balance of cash and cash equivalents was held at the local subsidiary level. It may not be possible to transfer cash held by local subsidiaries to the Company due to restrictions imposed by co-investors and Vietnamese regulations.
14. Assets and Liabilities Classified as Held for Sale
Summary of the assets/(liabilities) held for sale at the period end:
31 December 2011 | |||||
Attributable to | |||||
Assets classified as held for sale | Liabilities classified as held for sale | Net assets classified as held for sale | Non-controlling interests | Equity shareholders of the parent | |
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
Oriental Sea Co., Ltd. | 10,827 | - | 10,827 | - | 10,827 |
Glory Tourism Company Ltd. | 1,963 | (330) | 1,633 | - | 1,633 |
Danang Marina Co., Ltd. | 2,600 | - | 2,600 | - | 2,600 |
─────── 15,390 ═══════ | ────── (330) ══════ | ─────── 15,060 ═══════ | ───── - ═════ | ─────── 15,060 ═══════ | |
30 June 2011 | |||||
Attributable to | |||||
Assets classified as held for sale | Liabilities classified as held for sale | Net assets classified as held for sale | Non-controlling interests | Equity shareholders of the parent | |
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
Oriental Sea Co., Ltd. | 10,827 | - | 10,827 | - | 10,827 |
Savico - VinaLand Company Ltd. | 14,716 | - | 14,716 | - | 14,716 |
Glory Tourism Company Ltd. | 1,963 | (330) | 1,633 | - | 1,633 |
Danang Marina Co., Ltd. | 2,600 | - | 2,600 | - | 2,600 |
─────── 30,106 ═══════ | ────── (330) ══════ | ─────── 29,776 ═══════ | ───── - ═════ | ─────── 29,776 ═══════ | |
At the balance sheet date, the above sale transactions were not completed and assets and liabilities of the above entities were classified as non-current assets held for sale.
15. Share Capital
| 31 December 2011 | 30 June 2011 | ||
| Number of shares
|
USD'000 | Number of shares |
USD'000 |
Authorised: Ordinary shares of USD0.01 each |
500,000,000 ───────── |
5,000 ───── |
500,000,000 ───────── |
5,000 ───── |
Issued and fully paid: |
|
|
|
|
Opening balance (1 July 2011/ 1 July 2010) |
499,967,622 |
4,999 |
499,967,622 |
4,999 |
Shares repurchased to be cancelled | (2,595,000) | (26) | - | - |
Closing balance | ────────── 497,372,622 ══════════ | ───── 4,973 ═════ | ────────── 499,967,622 ══════════ | ───── 4,999 ═════ |
16. Additional Paid-In Capital
Additional paid-in capital represents the excess of consideration received over the par value of shares issued.
| 31 December 2011 | 30 June 2011 |
| USD'000 | USD'000 |
|
|
|
Opening balance (1 July 2011/1 July 2010) | 588,870 | 588,870 |
Shares repurchased to be cancelled | (3,477) | - |
Closing balance | ─────── 585,393 ═══════ | ─────── 588,870 ═══════ |
17. Revaluation Reserve
| 31 December 2011 | 30 June 2011 |
USD'000 | USD'000 | |
Opening balance (1 July 2011/1 July 2010) | 7,054 | 3,483 |
Revaluation (reversal)/gains on buildings | (3,076) | 4,928 |
Share of revaluation gain/(reversal) attributable to non-controlling interests |
821 |
(1,357) |
────── | ────── | |
4,799 | 7,054 | |
══════ | ══════ |
18. Borrowings and Debts
31 December 2011 | 30 June 2011 | |
USD'000 | USD'000 | |
Non-current financial liabilities carrying at amortised cost: | ||
Bank borrowings (*) | 116,540 | 112,125 |
Loans from non-controlling interests Less: | 1,292 | 2,622 |
Current portion of long-term borrowings and debts | (9,990) | (9,206) |
────── 107,842 ────── | ─────── 105,541 ─────── | |
Bank borrowings (*) | 2,135 | 2,824 |
Current portion of long-term borrowings | 9,990 | 9,206 |
────── 12,125 ────── | ─────── 12,030 ─────── | |
Total borrowings and debts | 119,967 ══════ | 117,571 ═══════ |
(*) Details of the bank borrowings are as follows:
Lenders | USD'000 | Loan period | Repayment term | Interest |
Non-current |
| |||
EximBank - Ho Chi Minh City branch, Vietnam | 38,016 | Fifteen years | Repayable in quarterly instalments. Fully repayable by 5 September 2024 | 12-month lender saving rate plus a 4% p.a margin for VND and 2% p.a. margin for USD. |
SeABank - Ho Chi Minh City branch, Vietnam | 27,728 | Five to six years | Repayable in 7-12 semi-annual instalments. Fully repayable by 10 May 2015 | 12-month lender saving rate plus a 2.5% p.a. margin . |
Dong A Bank - Ho Chi Minh City branch, Vietnam | 13,645 | Three years | Repayable in 12 instalments. Fully repayable by 5 July 2015 | At basic rate of State Bank of Vietnam. |
VietinBank - HCM City branch, Vietnam | 5,622
| Six years | Within six years. Fully repayable by June 2015 | Floating rate plus 3.2% p.a. for VND loan and 2.7% p.a for USD loan. |
BIDV - Ho Chi Minh City branch, Vietnam | 14,296 | Five years | Repayable in 12 instalments. Fully repayable by 9 February 2015 | USD reference interest rate and 3% p.a for loan in USD and VND reference interest rate and fee loan in VND. |
SHB Bank - Da Nang City branch, Vietnam | 17,233
| Three years | Fully repayable by 15 September 2013 | 12-month lender saving rate plus 3.5% p.a margin for loan in VND and 2.5% p.a for loan in USD. |
────── | ||||
116,540 | ||||
────── | ||||
Current | ||||
SHB Bank - Danang City branch, Vietnam | 2,135 | One year | Fully repayable by September 2012 | 21.5% p.a for loan in VND |
────── 2,135 | ||||
───── |
For all borrowings, the lenders have security over the assets of the subsidiaries.
During the period, the Group's subsidiaries borrowed US$9.8 million (30 June 2011: US$49.9 million) from banks to finance working capital and property development activities.
19. Deferred Tax Liabilities
31 December 2011 | 30 June 2011 | |
USD'000 | USD'000 | |
Opening balance (1 July 2011/1 July 2010) | 51,056 | 50,823 |
Net (decrease)/increase during the period/year from fair value adjustments of investment properties and property, plant and equipment |
(12,092) |
233 |
Closing balance | ────── 38,964 ══════ | ────── 51,056 ══════ |
Deferred tax liabilities are the amounts of income taxes for settlement in future periods in respect of temporary differences between the carrying amounts of revalued assets and their tax bases.
20. Trade and Other Payables
| 31 December 2011 | 30 June 2011 |
| USD'000 | USD'000 |
|
| |
Trade payables | 9,282 | 9,839 |
Payables for property acquisitions and land Compensation | 22,649 |
35,999 |
Deposits from property buyers | 12,492 | 16,410 |
Payables to non-controlling interests | 8,858 | 9,126 |
Tax payable | 2,500 | 4,245 |
Deposits from customers of residential projects | 65,478 | 41,312 |
Other accrued liabilities | 2,724 | 3,349 |
Other payables | 3,926 | 5,023 |
| ────── 127,909 ══════ | ─────── 125,303 ═══════ |
All trade and other payables are short-term in nature. Their carrying values approximate the fair values as at the date of the condensed interim consolidated statement of financial position.
21. Net (Loss)/Gain on Fair Value Adjustments of Investment Properties and Revaluations of Property, Plant and Equipment
| Six months ended | |
| 31 December 2011 | 31 December 2010 |
| USD'000 | USD'000 |
Investment properties |
| |
By real estate sector: |
| |
- Commercial | (2,962) | - |
- Residential, office buildings and undetermined use | (65,188) | 5,602 |
- Mixed use | (38,736) | 15,143 |
| ─────── | ─────── |
| (106,886) | 20,745 |
Property, plant and equipment |
| |
Hospitality | (5,529) | - |
Net (loss)/gain on fair value adjustments of investment properties and revaluations of properties, plant and equipment
| ───────
(112,415) ═══════ | ──────
20,745 ══════ |
22. Selling and Administration Expenses
| Six months ended | |
| 31 December 2011 | 31 December 2010 |
| USD'000 | USD'000 |
|
| |
Management fees (Note 28) | 6,592 | 7,137 |
Professional fees (*) | 3,272 | 6,650 |
Depreciation and amortisation (*) | 1,191 | 3,035 |
General and administration expenses (*) | 1,956 | 2,622 |
Staff costs (*) | 2,546 | 2,686 |
Outside service costs (*) | 3,531 | 3,197 |
| ────── 19,088 ══════ | ────── 25,327 ══════ |
(*) These expenses primarily relate to the operating activities of the Group's subsidiaries.
23. Other Expenses
| Six months ended | |
| 31 December 2011 | 31 December 2010 |
| USD'000 | USD'000 |
|
| |
Allowances for impairments of assets | 12,077 | - |
Losses on disposals of assets | 229 | 112 |
Other expenses | 228 | 1,184 |
| ────── 12,534 ══════ | ────── 1,296 ══════ |
24. Income Tax
VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there are no income, corporation, capital gains or other taxes payable by the Company.
The majority of the Group's subsidiaries are domiciled in the British Virgin Islands ("BVI") and so have a tax exempt status. A number of subsidiaries are established in Vietnam and are subject to corporate income tax in Vietnam. A provision of USD0.6 million has been made for corporate income tax payable by these subsidiaries for the period (period from 1 July 2010 to 31 December 2010: USD0.1 million).
The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense actually recognised in the condensed interim consolidated statement of income can be reconciled as follows:
Six months ended | ||
31 December 2011 | 31 December 2010 | |
USD'000 | USD'000 | |
| ||
Group's loss before tax | (132,729) | (2,371) |
Group's profit multiplied by applicable tax rate (0%) | - | - |
Current income tax expenses for subsidiaries | (615) | (147) |
Deferred income tax (*) | 3,795 | 3,803 |
───── | ────── | |
Income tax | 3,180 | 3,656 |
═════ | ══════ | |
(*) This amount represents the net deferred income tax income/(expense) which arose from the gains/(losses) on fair value adjustments of investment properties and property, plant and equipment and the reversal of deferred tax assets/liabilities as a result of changes to assumptions during the period.
25. Loss and Net Asset Value Per Share
(a) Basic
| Six months ended | |
| 31 December 2011 | 31 December 2010 |
Loss attributable to owners of the Company from continuing and total operations (USD'000) | (81,824) | (4,390) |
Weighted average number of ordinary shares in issue | 499,397,622 | 499,967,622 |
Basic loss per share from continuing and total operations (USD per share) | (0.16) | (0.01) |
| ───────────── | ───────────── |
(b) Diluted
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group has no category of potential dilutive ordinary shares. Therefore, diluted loss per share is equal to basic loss per share.
(c) Net Asset Value Per Share
| 31 December 2011 | 30 June 2011 |
|
|
|
Net asset value (USD'000) | 585,363 | 672,288 |
Number of outstanding ordinary shares in issue | 497,372,622 | 499,967,622 |
Net asset value per share (USD/share) | 1.18 | 1.34 |
| ────────── | ────────── |
26. Seasonality
The Group's management believes that the impact of seasonality on the condensed interim consolidated financial information is not material.
27. Commitments
As at 31 December 2011, the Group was committed under lease agreements to paying the following future amounts:
| 31 December 2011 | 30 June 2011 |
| USD'000 | USD'000 |
|
|
|
Within one year | 3,216 | 659 |
From two to five years | 3,115 | 2,390 |
Over five years | 8,683 | 8,253 |
| ───── 15,014 ═════ | ────── 11,302 ══════ |
As at 31 December 2011, the Group was also committed under construction agreements to pay USD47.9 million (30 June 2011: USD32.6 million) for future construction work of the Group's properties held by subsidiaries.
The Company's subsidiaries and associates have a broad range of commitments relating to investment projects under agreements it has entered into and investment licences it has received. Further investment in many of these arrangements is at the Group's discretion. The Investment Manager has estimated that, based on the agreements signed and the development plan for each project, approximately USD48.1 million will be used to fund these commitments over the next three years.
28. Related Party Transactions and Balances
Management fees
The Group is managed by VinaCapital Investment Management Limited (the "Investment Manager"), an investment management company incorporated in the British Virgin Islands, under a management agreement dated 16 March 2006 (the "Management Agreement"). From 1 January 2011, the Group is managed by VinaCapital Investment Management Limited (the "CI Investment Manager"), a 100% owned subsidiary company of the BVI Investment Manager incorporated and registered as a licensed fund manager in the Cayman Islands, under the novation agreement between the BVI Investment Manager and the CI Investment Manager. The Investment Manager receives a fee based on the net asset value of the Group, payable monthly in arrears, at an annual rate of 2% (31 December 2010: 2%).
Total management fees for the period amounted to USD6,592,254 (31 December 2010: USD7,136,678), with USD6,536,634 (31 December 2010: USD2,300,219) in outstanding accrued fees due to the Investment Manager at the date of the condensed interim consolidated statement of financial position.
Performance fees
In accordance with the Management Agreement, the Investment Manager is also entitled to a performance fee equal to 20% of the annual increase in net asset value over the higher of realised returns over an annualised hurdle rate of 8% (31 December 2010: hurdle rate 8%) and a high-water-mark. There was no performance fee charged for the period (31 December 2010: nil). An amount of USD28,218,000 (30 June 2011: USD28,218,000) was in outstanding payable to the Investment Manager as at 31 December 2011.
Details of payables to related parties at the date of the condensed interim consolidated statement of financial position are as below:
|
|
| 31 December 2011 | 30 June 2011 |
| Relationship | Balances | USD'000 | USD'000 |
Non-current |
|
|
|
|
VinaCapital Vietnam Opportunity Fund Limited | Under common management | Shareholder loans payable (*) |
71,862 ══════ |
71,545 ══════ |
|
|
|
| |
|
|
| 31 December 2011 | 30 June 2011 |
| Relationship | Balances | USD'000 | USD'000 |
Current |
|
|
| |
VinaCapital Vietnam Opportunity Fund Limited | Under common management | Dividend from a subsidiary | 613 | 613
|
|
| Payment on behalf | 2,500
| 2,500
|
VinaSecurities Co. Ltd. | Affiliate of Investment Manager | Professional fee | - | 299 |
VinaCapital Investment Management Ltd. | Investment Manager | Management fees Performance fees | 6,537 28,218 | 7,979 28,218 |
|
| Advances for real estate projects | 1,086 | 1,129
|
VinaCapital Corporate Finance Vietnam Ltd. | Under common management | Loan Loan interest | 2,378 559 | 2,433 350 |
|
|
| ────── 41,891 ══════ | ────── 43,521 ══════ |
(*) This represents shareholder loans granted by VinaCapital Vietnam Opportunity Fund Limited ("VOF") to subsidiaries of the Group. VOF is a non-controlling interest shareholder in these subsidiaries. The loans are to finance real estate projects which are co-invested with VOF. The loans bear interest at 6-month SIBOR plus 3%. The amount of each loan is based on the respective ownership of VOF and the Group in each subsidiary. The loans are carried at cost in the condensed interim consolidated statement of financial position. Interest expense incurred for the period has been waived by both shareholders.
As at 31 December 2011, receivable from related parties mainly comprises of amounts due from VOF as advances to jointly invested real estate projects.
29. Financial Risk Management
(a) Financial risk factors
The Group invests in a diversified property portfolio in Vietnam with the objective to provide shareholders a potential capital growth.
The Group is exposed to a variety of financial risks: market risk (including price risk, currency risk and interest rate risk); credit risk; and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group's risk management is coordinated by its Investment Manager who manages the distribution of the assets to achieve the investment objectives.
The condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 30 June 2011. There have been no changes in the risk management department of the Investment Manager and risk management policies since the most recent year end.
(b) Fair value estimation
The table below analyses financial instruments carried at fair value by valuation method. The difference levels have been defined as follows:
·; Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
·; Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
·; Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2011:
31 December 2011 | Level 1 | Level 2 | Level 3 | Total |
USD'000 | USD'000 | USD'000 | USD'000 | |
Financial assets fair value through profit or loss | ||||
- Ordinary shares - unlisted | - | 15,046 | - | 15,046 |
- Trustee loans | - | 2,785 | - | 2,785 |
────── - ══════ | ────── 17,831 ══════ | ────── - ══════ | ─────── 17,831 ══════ |
30 June 2011 | Level 1 | Level 2 | Level 3 | Total |
USD'000 | USD'000 | USD'000 | USD'000 | |
Financial assets at fair value through profit or loss | ||||
- Ordinary shares - unlisted | - | 15,046 | - | 15,046 |
- Trustee loans | - | 2,785 | - | 2,785 |
────── - ══════ | ────── 17,831 ══════ | ────── - ══════ | ─────── 17,831 ══════ |
There have been no transfers between Levels 1 and 2 during the period.
30. Comparative Figures
Certain comparative figures in the condensed interim consolidated financial statements have been reclassified to conform to the current period's presentation.