vinaland limited and its subsidiaries …...2016/12/31 · vinaland limited and its subsidiaries...

VINALAND LIMITED AND ITS SUBSIDIARIES CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016 (UNAUDITED)

VINALAND LIMITED AND ITS SUBSIDIARIES CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016 TABLE OF CONTENTS PAGE

Report of the Board of Directors 1 Report on Review of Interim Financial Information 4 Condensed Interim Consolidated Balance Sheet 5 Condensed Interim Consolidated Statement of Changes in Equity 7 Condensed Interim Consolidated Income Statement 9 Condensed Interim Consolidated Statement of Comprehensive Income 10 Condensed Interim Consolidated Statement of Cash Flows 11 Notes to the Condensed Interim Consolidated Financial Statements 13

VINALAND LIMITED AND ITS SUBSIDIARIES

1

REPORT OF THE BOARD OF DIRECTORS The Board of Directors submits its report together with the condensed interim consolidated financial statements of VinaLand Limited (“the Company”) and its subsidiaries (together, “the Group”) for the period from 1 July 2016 to 31 December 2016 (“the period”). The Group

VinaLand Limited is incorporated in the Cayman Islands as a company with limited liability. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. VinaLand Limited and its subsidiaries herein are referred to as the Group. Principal activities

The original objective of the Group was to focus on key growth segments within Vietnam’s emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam to provide shareholders a potential capital growth, from investing in a diversified portfolio of mainly property investments. At an Extraordinary General Meeting (“EGM”) held on 21 November 2012 the shareholders approved a proposal that the Company make no new investments and dispose of a portion of its investments in a controlled and orderly manner so as to maximise returns to shareholders. At a subsequent EGM held on 18 November 2016 this strategy was expanded to include the disposal of all remaining investments over a three year period and the return of all proceeds collected, less operating costs, to shareholders.

The principal activities of the subsidiaries are property investment and hospitality management. Results

The results of the Group for the period and the state of its affairs as at that date are set out in the condensed interim consolidated financial statements on pages 5 to 47. Board of Directors

The members of the Board of Directors of the Company during the period and at the date of this report are as follows: Name

Position

Date of appointment

Date of resignation

Michel Casselman Chairman 11 November 2011 - Charles Isaac Director 11 November 2011 - Tran Trong Kien Director 25 September 2015 - Ian Lydall Director 20 October 2016 - Nicholas Brooke Director 13 January 2006 31 December 2016 Nicholas Allen Director 29 June 2010 20 October 2016 Auditor

The Group’s auditor is PricewaterhouseCoopers. Subsequent events after the reporting period No significant events have occurred since the period end which would impact on the financial position of the Group as disclosed in the condensed interim consolidated balance sheet as at 31 December 2016 or on the results of operations and cash flows of the Group for the period then ended.


2

REPORT OF THE BOARD OF DIRECTORS (CONTINUED) Directors’ interests in the Company

As at 31 December 2016, the interests of the Directors in the shares, underlying shares and debentures of the Company were as follows:

No. of shares Percentage of issued capital (direct and indirect

holding)

Direct

Indirect

Nicholas Brooke 243,000 - 0.06% Charles Isaac 794,000 - 0.20% Michel Casselman 1,270,500 - 0.32% Board of Directors’ responsibility in respect of the condensed interim consolidated financial statements In preparing the condensed interim consolidated financial statements, the Board of Directors is required to: i. adopt appropriate accounting policies which are supported by reasonable and prudent

judgements and estimates and then apply them consistently; ii. comply with the disclosure requirements of International Accounting Standard 34, “Interim

Financial Reporting” as issued by the International Accounting Standards Board (“IASB”) or, if there have been any departures in the interest of fair presentation, ensure that these have been appropriately disclosed, explained and quantified in the condensed interim consolidated financial statements;

iii. maintain adequate accounting records and an effective system of internal control;

iv. prepare the condensed interim consolidated financial statements on a going concern basis unless it is inappropriate to assume that the Group will continue its operations in the foreseeable future; and

v. control and direct effectively the Group in all material decisions affecting its operations and performance and ascertain that such decisions and/or instructions have been properly reflected in the condensed interim consolidated financial statements.

The Board of Directors is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Board of Directors confirms that the Group has complied with the above requirements in preparing the condensed interim consolidated financial statements.


5

CONDENSED INTERIM CONSOLIDATED BALANCE SHEET

31 December

2016

30 June

2016

Note USD’000 USD’000

ASSETS

Non-current

Investment properties 6 424,231 389,700

Property, plant and equipment 7 461 500

Intangible assets 2 3

Investments in associates 8 49,285 47,713

Prepayments for acquisitions of investments 9 26,550 27,772

Deferred income tax assets 10 3,212 3,638

Other non-current assets 94 1,024

─────── ───────

Total non-current assets 503,835 470,350

═══════ ═══════

Current

Inventories 11 43,141 54,442

Trade and other receivables 12 4,509 17,581

Tax receivables 2,563 1,985

Receivables from related parties 30 1,348 1,044

Short-term investments 2,235 9,806

Financial assets at fair value through profit or loss 268 384

Restricted cash 13 - 3,392

Cash and cash equivalents 14 58,416 76,903

─────── ───────

Total current assets 112,480 165,537

Assets classified as held for sale 15 3,784 18,628

Total assets

───────

620,099

═══════

───────

654,515

═══════

The notes on pages 13 to 47 are an integral part of these consolidated financial statements.


6

CONDENSED INTERIM CONSOLIDATED BALANCE SHEET (CONTINUED)

31 December

2016

30 June

2016


EQUITY AND LIABILITIES

EQUITY

Equity attributable to equity shareholders of the parent

Share capital 16 3,579 3,938

Additional paid-in capital 17 422,067 452,680

Equity reserve 49,384 42,115

Other reserve (67) (67)

Translation reserve (67,106) (71,877)

Accumulated losses (89,615) (89,953)

─────── ───────

318,242 336,836

Non-controlling interests 126,342 128,413

Total equity

───────

444,584

───────

───────

465,249

───────

LIABILITIES

Non-current

Borrowings and debts 18 81,309 47,416

Deferred income tax liabilities 19 21,795 16,358

─────── ───────

Total non-current liabilities 103,104 63,774

Current

Borrowings and debts 18 2,080 25,704

Trade and other payables 20 68,888 77,174

Payables to related parties 30 984 10,228

Financial liabilities at fair value through profit or loss - 6,945

Tax payables 55 176

─────── ───────

Total current liabilities 72,007 120,227

Liabilities classified as held for sale 15 404 5,265

Total liabilities

───────

175,515

───────

189,266

Total equity and liabilities

───────

620,099

───────

654,515

═══════ ═══════

Net assets per share attributable to equity

shareholders of the parent (USD per share)

28(c) 0.89 0.86

═══════ ═══════



7

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to equity shareholders of the Company

Share

capital

Additional

paid-in

capital

Equity

reserve

Other

reserve

Translation

reserve

Accumulated

losses

Total equity

attributable

to owners of

the Company

Non-

controlling

interests

Total

equity

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Balance at 1 July 2016 3,938 452,680 42,115 (67) (71,877) (89,953) 336,836 128,413 465,249

Profit for the period - - - - - 338 338 10,486 10,824

Currency translation - - - - (4,007) - (4,007) (2,887) (6,894)

Reclassification of currency translation

reserve on disposal of subsidiaries - - - - 8,778 8,778 - 8,778

───── ───── ───── ───── ───── ───── ────── ─────── ──────

Total comprehensive income

-

─────

-

─────

-

─────

-

─────

4,771

─────

338

─────

5,109

──────

7,599

──────

12,708

──────

Transactions with owners in their

capacity as owners:

Repurchase and cancellation of shares (359) (30,613) 7,269 - - - (23,703) - (23,703)

Disposal of subsidiaries - - - - - - - (3,903) (3,903)

Capital contribution in a subsidiary - - - - - - - 41 41

Distribution to non-controlling interests - - - - - - - (5,808) (5,808)

───── ─────── ────── ────── ────── ────── ────── ────── ──────

Balance at 31 December 2016 3,579 422,067 49,384 (67) (67,106) (89,615) 318,242 126,342 444,584

═════ ═══════ ══════ ══════ ══════ ══════ ══════ ══════ ══════



8

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

Equity attributable to equity shareholders of the Company

Share

capital

Additional

paid-in

capital

Equity

reserve

Other

reserve

Translation

reserve

Accumulated

losses

Total equity

attributable

to owners of

the Company

Non-

controlling

interests

Total

equity

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Balance at 1 July 2015 4,301 521,088 30,706 (57) (83,209) (81,638) 391,191 182,821 574,012

Profit for the period - - - - - 5,966 5,966 5,878 11,844

Currency translation - - - - (8,523) - (8,523) (2,566) (11,089)

Reclassification of currency translation

reserve on disposal of subsidiaries - - - - 3,022 - 3,022 - 3,022

───── ───── ───── ───── ───── ─────── ──────── ────── ──────

Total comprehensive (loss)/income

-

─────

-

─────

-

─────

-

─────

(5,501)

─────

5,966

───────

465

────────

3,312

──────

3,777

──────

Transactions with owners in their

capacity as owners:

Repurchase and cancellation of shares (133) (11,978) 4,111 - - - (8,000) - (8,000)

Disposal of subsidiaries - - - - - - - (14,641) (14,641)

Capital contributions in subsidiaries - - - - 2,947 2,947

Distribution to non-controlling interests - - - - - - - (518) (518)

Acquisition of non-controlling interests

in a subsidiary - - - (10) - - (10) (890) (900)

───── ─────── ────── ────── ────── ─────── ─────── ─────── ──────

Balance at 31 December 2015 4,168 509,110 34,817 (67) (88,710) (75,672) 383,646 173,031 556,677

═════ ═══════ ══════ ══════ ══════ ═══════ ═══════ ═══════ ══════



9

CONDENSED INTERIM CONSOLIDATED INCOME STATEMENT

Six months ended

31 December

2016

31 December

2015


Revenue 21 4,508 30,384

Cost of sales 22 (5,338) (24,848)

────── ──────

Gross (loss)/profit (830) 5,536

Net gain on fair value adjustments of investment

properties and revaluations of property, plant and

equipment

23

41,667

20,485

Selling and administration expenses 24 (5,188) (8,905)

Net change in fair value of financial assets at fair value

through profit or loss

-

(173)

Net (loss)/gain on disposals of investments 8 (13,852) 7,609

Reversal of impairment/(impairment) of assets 25 682 (15,470)

Finance income 365 536

Finance expenses 26 (4,302) (3,403)

Share of (losses)/gains of associates, net 8 (1,921) 1,573

Gain due to dilution of ownership in an associate 8 1,613 -

Other income 330 1,781

Other expenses (1,078) (155)

────── ──────

Income from operations before income tax 17,486 9,414

Income tax 27 (6,662) 2,430

────── ──────

Income from operations 10,824 11,844

Attributable to equity shareholders of the Company 338 5,966

Attributable to non-controlling interests 10,486 5,878

────── ──────

Net income for the period 10,824 11,844

══════ ══════

Earning per share

- basic and diluted (USD per share)

28(a)

0.00 0.01

────── ──────



10

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Net income for the period 10,824 11,844

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Reclassification of currency translation reserve on

disposal of subsidiaries

8,778

3,022

Exchange differences on translating foreign operations (6,894) (11,089)

────── ──────

Other comprehensive income/(loss) for the period 1,884 (8,067)

────── ──────

Total comprehensive income for the period 12,708 3,777

══════ ══════

Attributable to equity shareholders of the Company 5,109 465

Attributable to non-controlling interests 7,599 3,312

──────

12,708

══════

──────

3,777

══════



11

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

Six months ended

31 December

2016

31 December

2015


Operating activities

Net operating profit before tax 17,486 9,414

Adjustments for:

Depreciation and amortisation 27 333

Net change in fair values of financial assets at fair value


(6,831)

173

Net gain on fair value adjustments of investment properties

and revaluations of property, plant and equipment

23

(41,667)

(20,485)

Loss/(gain) on disposals of investments, net 8 13,852 (7,609)

(Reversal)/allowance for impairment of assets 25 (682) 15,470

Share of losses/(gain) of associates, net 8 1,921 (1,573)

Gain due to dilution in ownership of associate 8 (1,613) -

Net loss on disposals of fixed assets - 56

Unrealised foreign exchange losses 2 855

Interest expense 4,130 2,519

Interest income (239) (474)

Net loss before changes in working capital

──────

(13,614)

──────

(1,321)

Change in trade receivables and other current assets (852) 1,510

Change in inventories 1,953 18,347

Change in trade payables and other current liabilities (4,179) (1,402)

Income tax paid - (278)

Net cash (outflow)/inflow from operating activities

──────

(16,692)

──────

──────

16,856

──────

Investing activities

Interest received 206 467

Purchases of investment properties, property, plant and

equipment, and other non-current assets

(12,980)

(14,265)

Additional investments in associates (1,880) (668)

Proceeds from disposals of assets/liabilitites classified as

held for sale

1,954

10,500

Proceeds from sales of subsidiaries 26,357 29,412

Collection of prepayment for acquisition 2,955 -

Net proceeds in short-term deposits 7,352 94

Net proceeds in long-term deposits - 14

Net cash inflow from investing activities

──────

23,964

──────

──────

25,554

──────



12

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

Six months ended

31 December

2016

31 December

2015


Financing activities

Additional capital contributions from non-controlling interests 41 2,947

Loan proceeds from banks 36,309 13,793

Loan repayments to banks (1,028) (9,471)

ZDP repayment (25,118) -

Ordinary shares acquired by the Company 16 (23,703) (8,000)

Interest paid (6,514) (5,223)

Acquisition of non-controlling interests in a subsidiary - (900)

Capital refunded to non-controlling interests (5,808) (518)

Net cash outflow to financing activities

──────

(25,821)

──────

──────

(7,372)

──────

Net changes in cash and cash equivalents for the period (18,549) 35,038

Cash and cash equivalents at the beginning of the period 76,903 21,820

Cash and cash equivalents classified as held for sale - (862)

Exchange differences on cash and cash equivalents 62 -

Cash and cash equivalents at the end of the period

14

──────

58,416

══════

──────

55,996

══════

During the period, major non-cash transactions included capital gains tax of USD0.8 million which

crystalised during the period (six months ended 31 December 2016: USD2.6 million) resulting from

realised gains on divestments. The tax amounts due were withheld from disposal proceeds due to the

Group by the buyers and remitted to the tax authorities and as a result these amounts are excluded from

proceeds from disposal of subsidiaries, and disposals of investment properties and investments in

associates, included in the consolidated statement of cash flows.



13

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

VinaLand Limited (“the Company”) is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The original objective of the Company was to focus on key growth segments within Vietnam’s emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia. The Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNL. At an Extraordinary General Meeting (“EGM”) held on 21 November 2012 the shareholders approved a proposal that the Company make no new investments and dispose of a portion of its investments in a controlled and orderly manner so as to maximise returns to shareholders. At a subsequent EGM held on 18 November 2016 this strategy was expanded to include the disposal of all remaining investments. The key changes impacting these financial statements are summarised as follows:

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

• The Third Amended and Restated Investment Management Agreement introduces a new fee structure composed of disposal and alignment fees, prepayment advances and a retention account to ensure that the Investment Manager is incentivised to meet the investing policy (Note 30).

The condensed interim consolidated financial statements for the six months ended 31 December 2016 were approved for issue by the Company’s Board of Directors on 28 March 2017. 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 2016. They have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”). They do not include all of the information required in the annual consolidated financial statements which are prepared in accordance with International Financial Reporting Standards (“IFRSs”). Accordingly, these financial statements are to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2016, which have been prepared in accordance with IFRSs.

3 ACCOUNTING POLICIES

These condensed interim consolidated financial statements (the “interim financial statements”) have been prepared in accordance with the accounting policies, methods of computation and presentation adopted in the last annual consolidated financial statements for the year ended 30 June 2016.


14

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 2016.

4.1 Fair value of investment properties The investment properties of the Group are stated at fair value in accordance with accounting policies 2.5 of the annual consolidated financial statements for the year ended 30 June 2016. The fair values of investment properties are based on valuations by independent professional valuers including CB Richard Ellis, Savills, Jones Lang LaSalle and Cushman & Wakefield. These valuations are based on certain assumptions which are subject to uncertainty and might materially differ from the actual results. The estimated fair values provided by the independent professional valuers are used by the Valuation Committee as the primary basis for estimating each property’s fair value for recommendation to the Board. In making its judgement, the Valuation Committee considers information from a variety of sources including: (i) current prices in an active market for properties of different nature, condition or location

(or subject to different lease or other contracts), adjusted to reflect those differences; (ii) recent prices of similar properties in less active markets, with adjustments to reflect any

changes in economic conditions since the dates of those transactions; (iii) recent developments and changes in laws and regulations that might affect zoning

and/or the Group’s ability to exercise its rights in respect to properties and therefore fully realise the estimated values of such properties;

(iv) discounted cash flow projections based on reliable estimates of future cash flows,

derived from the terms of external evidence such as current market rents and sales prices for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows; and

(v) recent compensation prices made public by the local authority at the province where the

property is located.

As at 31 December 2016, if the discount rates used had been 1% higher/lower (30 June 2016: 1%), the total carrying values of the Group’s investment properties would have been USD13.6 million lower/USD14.7 million higher (30 June 2016: USD13.6 million lower/USD15.2 million higher).

4.2 Prepayments for acquisitions of investments

The Group estimates the recoverable amounts of significant prepayments for acquisitions of investments either based on management’s internal assessment or by engaging independent valuers in accordance with the valuation methods and processes as set out in Notes 2.5 and 3.1 of the annual consolidated financial statements for the year ended 30 June 2016.


15

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5 SEGMENT ANALYSIS

In identifying its operating segments, management generally follows the Group's sectors of investment which are based on internal management reporting information for the Investment Manager’s management, monitoring of investments and decision making. The operating segments by investment portfolio include commercial, residential and office buildings, hospitality, mixed-use segments and cash and short-term investments.

Detail of activities undertaken by each segment and how each segment is managed and monitored, can be found in Note 4 to the annual consolidated financial statements of the Group for the year ended 30 June 2016. There is no measure of segment liabilities regularly reported to the Investment Manager; therefore, liabilities are not disclosed in the sector analysis. Segment information can be analysed as follows for the reporting periods under review:

(a) Condensed Interim Consolidated Income Statement

Six months ended 31 December 2016

Commercial

Residential

and office

buildings

Hospitality

Mixed use

Total

USD’000 USD’000 USD’000 USD’000 USD’000

Revenue - 4,508 - - 4,508

Cost of sales - (5,338) - - (5,338)

────── ────── ───── ───── ──────

Gross profit - (830) - - (830)

Net loss on disposals of investments - (13,852) - - (13,852)

Finance income - 205 3 157 365

Net (loss)/gain on fair value adjustments of

investment properties and revaluations of

property, plant and equipment

(1,045)

8,950

- 33,762

41,667

Share of gains/(losses) of associates, net 102 (2,068) 45 - (1,921)

Loss due to dilution in ownership of

associate

-

1,613

-

-

1,613

(Impairment)/reversal of impairment of

assets

-

74

-

608

682

Other income 8 286 - 36 330

────── ────── ───── ───── ──────

Total (loss)/profit before unallocatable

expenses

(935)

(5,622)

48

34,563

28,054

Selling and administration expenses (5,188)

Finance expenses (4,302)

Other expenses (1,078)

Income before tax

─────

17,486

Income tax (6,662)

Net income for the period

─────

10,824

═════


16

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5 SEGMENT ANALYSIS (CONTINUED)

(a) Condensed Interim Consolidated Income Statement (continued)

Six months ended 31 December 2015

Commercial

Residential

and office

buildings

Hospitality

Mixed use

Total


Revenue - 30,384 - - 30,384

Cost of sales - (24,848) - - (24,848)

────── ────── ───── ───── ──────

Gross profit - 5,536 - - 5,536

Net gain on disposals of investments - 1,149 6,460 - 7,609

Finance income - 286 73 177 536

Net (loss)/gain on fair value adjustments

of investment properties and

revaluations of property, plant and

equipment

(20)

15,866

77

4,562

20,485

Share of (losses)/gains of associates, net (322) 2,574 40 (719) 1,573

Impairment of assets - (15,470) - - (15,470)

Other income 4 1,031 687 59 1,781

────── ────── ───── ───── ──────

Total (loss)/profit before

unallocatable expenses

(338)

10,972

7,337

4,079

22,050

Net change in fair value of financial

assets at fair value through profit or loss

(173)

Selling and administration expenses (8,905)

Finance expenses (3,403)

Other expenses (155)

Profit before tax

─────

9,414

Income tax 2,430

Net profit for the period

─────

11,844

═════


17


(b) Condensed Interim Consolidated Balance Sheet

As at 31 December 2016

Commercial

Residential

and office

buildings

Hospitality

Mixed

use

Cash and

deposits

Total

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Investment properties 3,200 217,981 - 203,050 - 424,231

Property, plant and

equipment

-

53

-

408

-

461

Intangible assets - - - 2 - 2

Investments in associates 16,471 28,337 4,477 - - 49,285

Prepayments for acquisitions

of investments

-

26,550

- -

-

26,550

Inventories - 42,879 - 262 - 43,141

Trade, tax and other

receivables

26

6,574

-

1,820

- 8,420

Short-term investments - - - - 2,235 2,235

Financial assets at fair value


-

-

-

268

-

268

Cash and cash equivalents - - - - 58,416 58,416

Assets classified as held for

sale

-

3,784

-

-

-

3,784

Other assets 14 3,258 - 34 - 3,306

Total assets

──────

19,711

══════

───────

329,416

═══════

──────

4,477

══════

───────

205,844

═══════

──────

60,651

══════

───────

620,099

═══════

Total assets include:

Addition to non-current assets

(other than financial

instruments and deferred tax

assets) 1,880 20,063 - 1,505 - 23,448


18


(b) Condensed Interim Consolidated Balance Sheet (continued)

As at 30 June 2016

Commercial

Residential

and office

buildings

Hospitality

Mixed

use

Cash and

deposits

Total

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Investment properties 4,350 211,200 - 174,150 - 389,700

Property, plant and equipment - 66 - 434 - 500

Intangible assets - - - 3 - 3

Investments in associates 17,513 25,768 4,432 - - 47,713

Prepayments for acquisitions

of investments

-

25,425

-

2,347

-

27,772

Inventories - 51,550 - 2,892 - 54,442

Trade, tax and other

receivables

98

12,955

5,344

2,213

-

20,610

Short-term investments - - - - 9,806 9,806

Financial assets at fair value


-

-

-

269

-

269

Restricted cash - - - - 3,392 3,392

Cash and cash equivalents - - - - 76,903 76,903

Assets classified as held for

sale

-

18,628

-

-

-

18,628

Other assets 197 4,432 - 33 - 4,662

Total assets

──────

22,158

══════

───────

350,024

═══════

──────

9,776

══════

───────

182,341

═══════

──────

90,101

══════

───────

654,400

═══════

Total assets include:

Addition to non-current

assets (other than financial

instruments and deferred tax

assets) 1,950 16,064 - 10,341 - 28,355


19

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 6 INVESTMENT PROPERTIES

31 December

2016

30 June

2016

USD’000 USD’000

Opening balance (1 July 2016/1 July 2015) 389,700 479,454

Additions 17,926 25,697

Disposals (18,647) (119,738)

Transfers to inventories (Note 11) - (9,240)

Exchange of inventories for investment properties - 2,969

Transfers to non-current assets classified as held for sale

(Note 15) - (5,586)

Net gain from fair value adjustments (Note 23) 41,667 24,187

Translation differences (6,415) (8,043)

Closing balance

───────

424,231

═══════

───────

389,700

═══════

The Group’s investment properties were revalued during the period by independent professionally qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and categories of the investment properties valued. Bank borrowings are secured by investment properties with a fair value of USD235.5 million (30 June 2016: USD102.9 million). During the period, the Group capitalised borrowing costs amounting to USD2.2 million (year ended 30 June 2016: USD4.9 million) in investment properties. At 31 December 2016, land use rights certificates have not been fully issued for certain portions of the Group’s investment properties as final issuance is subject to the completion of a number of administrative steps required by local authorities and/or the settlement of any outstanding land taxes. In the Investment Manager’s view, the lack of land use rights certificates does not have any material impact on the existence and valuation of the investment properties as land use rights over the land area for each project have been specifically granted under each investment licence. The Group's policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. All of the Group's investment properties are in Level 3 of the fair value hierarchy. There were no transfers between levels during the period (year ended 30 June 2016: none).


20

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 6 INVESTMENT PROPERTIES (CONTINUED)

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

Level 3 – Range of unobservable inputs

(probability-weighted average)

Sensitivity on management’s estimates

Segment Adopted

valuation

technique

Valuation

(USD’000)

Discount

rate

Cap

rate

Valuation

per square

metre (USD)

Sensitivities in sales price

per square metre (USD’000)

Sensitivities in discount and cap rates (USD’000)

Residential and

office buildings (*)

Discounted

cash flows

92,028 19% - 20.5% N/A N/A

Change in discount rate

-1% 0 1%

94,634 92,028 89,542

Residential and

office buildings

Direct

comparisons

125,953 N/A N/A 30 – 6,853

Change in sales price per

square metre

-10% 0 10% N/A

113,358 125,953 138,548

Mixed use Discounted

cash flows 118,100 17% 8.5% N/A


-1% 0 1%

Change

in cap

rate

-1% 142,300 129,100 117,100

0% 130,200 118,100 107,000

1% 120,700 109,400 98,900

Mixed use Direct

comparisons 84,950 N/A N/A 117 – 1,350


square metre

-10% 0 10% N/A

76,455 84,950 93,445

Commercial Direct

comparisons 3,200 N/A N/A 1,293


square metre

-10% 0 10% N/A

2,880 3,200 3,520


21

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 6 INVESTMENT PROPERTIES (CONTINUED)

For the comparative balance sheet date: Level 3 – Range of unobservable inputs

(probability-weighted average)

Sensitivity on management’s estimates

Segment Valuation

technique

Valuation

(USD’000)

Discount

rate

Cap

rate

Valuation

per square

metre (USD)

Sensitivities in sales price per

square metre (USD’000)

Sensitivities in discount and cap rates (USD’000)

Residential and

office buildings (*)

Discounted

cash flows 102,140 19% - 21.5% N/A N/A


-1% 0% 1%

105,031 102,140 99,202

Residential and

office buildings

Direct

comparisons

109,060 N/A N/A 30 – 5,845


square metre

-10% 0% 10%

98,154 109,060 119,966

Mixed use Discounted

cash flows


103,350 17% 8.5% N/A -1% 0% 1%

Change

in cap

rate

-1% 127,815 114,762 102,915

0% 115,666 103,350 92,673

1% 106,127 94,882 84,641

Mixed use Direct

comparisons 70,800 N/A N/A 258 – 1,040


square metre

-10% 0% 10%

63,720 70,800 77,880

Commercial Direct

comparisons 4,350 N/A N/A 1,758


square metre

-10% 0% 10%

3,915 4,350 4,785

(*) The valuations of these investment properties assume that they will be developed and sold within a definite time period; therefore, no capitalisation

rates are used in such valuations.


22

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 7 PROPERTY, PLANT AND EQUIPMENT

Buildings

Machinery,

plant and

equipment

Furniture,

fixtures and

office

equipment

Motor

vehicles

Total


Gross carrying amount

At 1 July 2016 517 54 44 207 822

Disposals - - (15) - (15)

Translation differences (10) (1) (1) (4) (16)

At 31 December 2016

─────

507

─────

────

53

────

────

28

────

────

203

────

─────

791

─────

Depreciation

At 1 July 2016 (104) (53) (43) (122) (322)

Charge for the period (12) - - (15) (27)

Disposals - - 14 - 14

Translation differences 2 1 1 1 5

At 31 December 2016

─────

(114)

─────

────

(52)

────

────

(28)

────

────

(136)

────

─────

(330)

─────

Carrying value

At 1 July 2016 413 1 1 85 500

At 31 December 2016

═════

393

═════

════

1

════

════

-

════

════

67

════

═════

461

═════ There was no impairment charge to property, plant and equipment during the period ended 31 December 2016 (the year ended 30 June 2016: USD0.8 million).


23

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 7 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

For the comparative balance sheet date:

Buildings

and golf

course

Machinery,

plant and

equipment

Furniture,

fixtures and

office

equipment

Motor

vehicles

Total


Gross carrying amount At 1 July 2015 12,040 274 678 867 13,859 Additions 567 18 8 - 593 Impairment charges (819) - - - (819) Disposals (10,217) (196) (587) (598) (11,598) Write-offs (399) (5) (5) - (409) Transfers to assets classified as held for sale

(606)

(35)

(46)

(56)

(743)

Translation differences (49) (2) (4) (6) (61)

At 30 June 2016

─────

517

─────

────

54

────

────

44

────

────

207

────

─────

822

─────

Depreciation At 1 July 2015 (4,037) (105) (212) (242) (4,596) Charge for the year (1,037) (11) (21) (41) (1,110) Disposals 4,297 38 161 130 4,626 Write-offs 304 5 5 - 314 Transfers to assets classified as held for sale

356

19

22

28

425

Translation differences 13 1 2 3 19

At 30 June 2016

─────

(104)

─────

────

(53)

────

────

(43)

────

────

(122)

────

───── (322)

─────

Carrying value

At 1 July 2015 8,003 169 466 625 9,263

At 30 June 2016

═════

413

═════

════

1

════

════

1

════

════

85

════

═════

500

═════


24

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8 SUBSIDIARIES AND ASSOCIATES (a) Investments in associates

31 December

2016

30 June

2016

USD’000 USD’000


Additions 1,880 1,829

Disposals - (115,758)

Share of losses of associates (1,921) (3,563)

Gain due to dilution of ownership in an associate 1,613 -

Closing balance

───────

49,285

═══════

───────

47,713

═══════ Particulars of material operating associates and their summarised financial information, extracted from their financial statements as at 31 December 2016 and 30 June 2016, are as follows:

As at 31 December 2016

Incorporation

Principal

activity

Assets

Liabilities

Revenue

(Loss)/

profit

Share of

(losses)/

profits to

the Group

Equity

interest

held

USD’000 USD’000 USD’000 USD’000 USD’000 %

Aqua City Joint

Stock Company

Vietnam

Property

53,107

1,538

-

(4,320)

(2,068)

48

Other associates

Vietnam

Property/

Hospitality

67,009

24,814

3,098

38

147

120,116 26,352 3,098 (4,282) (1,921)

As at 30 June 2016

Incorporation

Principal

activity

Assets

Liabilities

Revenue

(Loss)/

profit

Share of

(losses)/

profits to

the Group

Equity

interest

held

USD’000 USD’000 USD’000 USD’000 USD’000 %

Aqua City Joint

Stock Company

Vietnam

Property

59,232

8,942

-

(2,866)

(1,433)

50

Other associates

Vietnam

Property/

Hospitality

65,501

25,872

3,984

(3,138)

(1,946)

124,733 34,814 3,984 (6,004) (3,379)


25

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8 SUBSIDIARIES AND ASSOCIATES (CONTINUED) (a) Investments in associates (continued)

Reconciliation of summarised financial information for a material associate:

Aqua City Joint Stock Company

For the period/year ended

31 December

2016

30 June

2016

USD'000 USD'000

Summarised balance sheet

Current assets

Cash and cash equivalents 78 5

Other current assets 1 -

────── ──────

Total current assets 79 5

Non-current assets 53,028 59,227

Current liabilities

Other current liabilities 1,538 8,942

────── ──────

Total current liabilities 1,538 8,942

Net assets 51,569 50,290

────── ──────

Reconciliation to carrying amounts:

Opening net assets 50,290 53,156

Capital contribution 5,599 -

Loss for the period/year (4,320) (2,866)

────── ──────

51,569 50,290

────── ──────

Group’s share in % 48% 50%

Group’s share in USD 24,690 25,145

────── ──────

Carrying amount 24,690 25,145

────── ──────

Summarised statement of comprehensive income

General and administration expenses (4,320) (27)

Loss on fair value adjustments of investment properties - (2,794)

Other expenses - (45)

────── ──────

Loss for the period/year (4,320) (2,866)

────── ──────


26

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8 SUBSIDIARIES AND ASSOCIATES (CONTINUED) (b) Principal subsidiaries

The Group had the following principal subsidiaries which are held through special purpose vehicles established outside of Vietnam as at at 31 December 2016 and 30 June 2016:

31 December 2016 30 June 2016

Name

Country of

incorporation

and place of

business

Percentage

interest held by

the Group

Percentage interest

held by non-

controlling interests

Percentage

interest held by

the Group

Percentage interest

held by non-

controlling interests

Nature of business

VinaCapital Hoi An Resort Limited Vietnam - - 100.0% - Hospitality

VinaCapital Danang Resort Limited Vietnam - - 75.0% 25.0% Property investment

VinaCapital Commercial Center Limited (*) Vietnam 38.2% 61.8% 38.2% 62.0% Property investment

Mega Assets Company Limited Vietnam 75.0% 25.0% 75.0% 25.0% Property investment

SIH Real Estate Limited Company Vietnam 75.0% 25.0% 75.0% 25.0% Property investment

Dien Phuoc Long Real Estate Company Limited Vietnam 100.0% - 100.0% - Property investment

VinaCapital Phuoc Dien Company Limited Vietnam 100.0% - 100.0% - Property investment

Dong Binh Duong Urban Development Company

Limited Vietnam - -

70.0% 30.0% Property investment

Vina Dai Phuoc Corporation Limited Vietnam 54.0% 46.0% 54.0% 46.0% Property investment

Viet Land Development Corporation Limited Vietnam 90.0% 10.0% 90.0% 10.0% Property investment

Vinh Thai Urban Development Corporation Limited Vietnam 53.3% 46.7% 53.3% 46.7% Property investment

Thang Long Property Company Limited Vietnam 65.0% 35.0% 65.0% 35.0% Property investment

Hoang Phat Investment Joint Stock Company Vietnam 60.0% 40.0% 60.0% 40.0% Hospitality

AA VinaCapital Co. Limited Vietnam 83.2% 16.8% 83.2% 16.8% Property investment

Vina Alliance Company Limited (*) Vietnam 46.5% 53.5% 46.5% 53.5% Property investment

Phu Hoi City Company Limited Vietnam 52.5% 47.5% 52.5% 47.5% Property investment

(*) At the reporting date, the Group has 38.2% and 46.5% equity interests in VinaCapital Commercial Center Limited (Vietnam) and Vina Alliance Company Limited, respectively. Management considers these companies as subsidiaries as the Group has control because it is exposed to variable returns from its involvement with these companies and can affect those returns through its power over them.


27


8 SUBSIDIARIES AND ASSOCIATES (CONTINUED) (b) Principal subsidiaries (continued)

All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held directly by the Group does not differ from the proportion of ordinary shares held except the cases mentioned above. The Group further does not have any shareholding in the preference shares of subsidiary undertakings included in the Group. During the period, the Group sold several subsidiaries, details of which are provided on the following pages. The assets and liabilities held by the subsidiaries sold were as follows:

As at the date of

disposal

USD'000

Current assets

Cash and cash equivalents 15,385

Inventories 4,920

Trade and other receivables 23,921

Other current assets 347

──────

Total current assets 44,573

Non-current assets

Investment properties 18,669

Property, plant and equipment 7,638

Other non-current assets 1,309

──────

Total non-current assets 27,616

Current liabilities

Trade and other payables (24,656)

Other current liabilities (319)

──────

Total current liabilities (24,975)

Non-current liabilities

Long-term trade and other payables (8,579)

──────

Total non-current liabilities (8,579)

──────

Net assets at the date when subsidiaries were sold 38,635

──────

Net assets attributable to the Company 33,368

Net assets attributable to non-controlling interests 5,267

────── Total consideration 28,294 Capital gains tax withheld by buyers (799) Consideration not yet received as at 31 December 2016 (1,760)

────── Consideration received from sales of subsidiaries 25,735


28

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8 SUBSIDIARIES AND ASSOCIATES (CONTINUED) (b) Principal subsidiaries (continued)

Period ended

31 December 2016

USD'000

Consideration received from sales of subsidiaries 25,735

Less: Cash and cash equivalents of subsidiaries sold (15,385)

──────

Cash received from sales of subsidiaries 10,350

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

Period ended

31 December 2016

USD'000

Total consideration 28,294

Carrying amount of net assets sold attributable to the Company (33,368)

──────

Loss on sales of subsidiaries before reclassification of currency

translation reserve (5,074)

Reclassification of currency translation reserve (8,778)

──────

Loss on sales of subsidiaries (13,852)

────── Sale of VinaCapital Danang Resort Limited During the period the Group sold its 75% equity interest in VinaCapital Danang Resort Limited for a total consideration of USD7.0 million. The book value of the net assets at the sale date was USD10.5 million and the reclassification of translation reserve on disposal was USD1.5 million, resulting in a loss of USD5.0 million. Sale of VinaCapital Hoi An Resort Limited During the period the Group sold its 100% equity interest in VinaCapital Hoi An Resort Limited for a total consideration of USD7.8 million. The book value of the net assets at the sale date was USD6.6 million and the reclassification of translation reserve on disposal was USD1.2 million, resulting in no gain/(loss) on this disposal. Sale of Dong Binh Duong Urban Development Company Limited During the period the Group sold its 70% equity interest in Dong Binh Duong Urban Development Company Limited for a total consideration of USD13.5 million. The book value of the net assets at the sale date was USD16.3 million and the reclassification of translation reserve on disposal was USD6.1 million, resulting in a loss of USD8.9 million.


29



Summarised financial information of subsidiaries with material non-controlling interests The total non-controlling interests as at 31 December 2016 is USD126.3 million (30 June 2016: USD128.4 million), allocated as below:

31 December 2016

30 June 2016

USD’000 USD’000 Vina Alliance Company Limited (“Vina Square”) 44,232 40,613 Vina Dai Phuoc Corporation Limited (“Dai Phuoc Lotus”) 32,591 30,529 Thang Long Property Company Limited ("Times Square") 17,756 14,361 Phu Hoi City Company Limited ("Phu Hoi") 14,549 14,563 Others 17,214 28,347 ───────

126,342 ═══════

─────── 128,413

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

Summarised balance sheets

Vina Square Dai Phuoc Lotus Phu Hoi Times Square

As at As at As at As at

31.12.2016 30.06.2016 31.12.2016 30.06.2016 31.12.2016 30.06.2016 31.12.2016 30.06.2016

USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000

Current

Assets 2,460 26 19,612 21,134 2,122 118 13,712 8,944

Liabilities (44,820) (67,250) (16,838) (16,951) (2,495) (468) (36,543) (31,476)

Total current net

(liabilities)/assets (42,360) (67,224) 2,774 4,183 (373) (350) (22,831) (22,532)

Non-current

Assets 118,114 103,368 70,664 62,740 28,412 28,418 54,007 41,610

Liabilities (34,326) (4,920) (938) (2) - - (5,762) (3,259)

Total non-current net

assets 83,788 98,448 69,726 62,738 28,412 28,418 48,245 38,351

Net assets 41,428 31,224 72,500 66,921 28,039 28,068 25,414 15,819


30



Summarised income statements


Period ended

31 December

Period ended

31 December

Period ended

31 December

Period ended

31 December

2016 2015 2016 2015 2016 2015 2016 2015


Revenue - - 1,593 3,301 - - - -

Profit before income tax 15,222 2,376 7,866 1,122 674 3,425 13,011 16,742

Income tax expense (3,493) (336) (938) (316) (206) (813) (2,503) (8)

Post-tax profit from continuing

operations 11,729 2,040 6,928 806 468 2,612 10,508 16,734

Other comprehensive loss (1,525) (2,123) (1,349) (1,813) (497) (664) (913) (1,341)

Total comprehensive

income/(loss) 10,204 (83) 5,579 (1,007) (29) 1,948 9,595 15,393

Total comprehensive

income/(loss) allocated to

non-controlling interests 5,464 (44) 2,062 (633) (14) 924 3,395 4,286

Summarised cash flow statements


Period ended

31 December

Period ended

31 December

Period ended

31 December

Period ended

31 December

2016 2015 2016 2015 2016 2015 2016 2015


Net cash flows from operating

activities (1,641) 196 (97) 1,221 (21) 36 670 54

Net cash flows from investing

activities (24,034) (273) (663) (420) 1,954 (19) 880 (27)

Net cash flows from financing

activities 27,981 - - (558) 72 - - -

Net increase/(decrease) in

cash and cash equivalents 2,306 (77) (760) 243 2,005 17 1,550 27

The information above is before inter-company eliminations.


31


9 PREPAYMENTS FOR ACQUISITIONS OF INVESTMENTS

31 December

2016

30 June

2016

USD’000 USD’000

Prepayments for acquisitions of investments 35,663 43,839

Allowance for impairment (9,113) (16,067)

────── ────── 26,550 27,772

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

As at 31 December 2016, the accumulated impairment allowances amounted to USD9.1 million (30 June 2016: USD16.1 million). During the period, there was a reversal of USD2.5 million due to improvement of market conditions. The relevant recoverable amounts are the fair values of the underlying properties less the costs to sell which have been estimated by independent professional qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and categories of the properties upon which these prepayments have been made. The valuations performed by the independent valuation companies, as adopted by the Group, are prepared using the direct comparison method. All of these fair value less the costs to sell valuations are in Level 3 of the fair value hierarchy and there were no transfers between levels during the period (year ended 30 June 2016: none). As at 31 December 2016, the sales prices per square meter used ranged from USD21 to USD67 (30 June 2016: USD21 to USD64). If the sales prices of similar properties have increased/decreased, it is expected that the recoverable amounts of these prepayments would have moved up/down accordingly. Management’s view is that all of the Group’s prepayments for acquisitions of investments are in Level 3 of the fair value hierarchy. Movements in the balance during the period/year were as follows:

31 December

2016

30 June

2016

USD’000 USD’000


Additions 191 128

Reversal of impairment (Note 25) 2,487 1,560

Collection of prepayment (2,955) -

Other decrease (326) -

Translation differences (619) (488)

────── ──────

Closing balance 26,550 27,772

══════ ══════


32


10 DEFERRED TAX ASSETS

31 December

2016

30 June

2016

USD’000 USD’000


Net change in the period/year (*) (426) (2,779)

Reclassified to non-current assets classified as held for

sales (Note 15) - (155)

Closing balance

─────

3,212

═════

─────

3,638 ═════

Deferred income tax assets to be recovered after more than

12 months - 3,638

Deferred income tax assets to be recovered after within

12 months 3,212 -

───── ─────

3,212 3,638

═════ ═════

(*) The net change mainly arose from changes for tax provisions on fair value adjustments of investment properties during the period/year.

11 INVENTORIES

31 December

2016

30 June

2016

USD’000 USD’000


Additions 3,110 9,744

Transferred to cost of sales (4,754) (30,868)

Write-down (Note 25) (1,805) (18,951)

Sold as part of property disposals (Note 8(b)) (6,600) (4,774)

Transferred from investment properties (Note 6) - 9,240

Exchanged for investment property - (2,969)

Reclassified as held for sale (Note 15) - (4,585)

Translation differences (1,252) (1,306)

─────── ───────

43,141 54,442 ═══════ ═══════

During the period, the Group capitalised borrowing costs amounting to USD0.3 million (year ended 30 June 2016: 0.8 million) into the value of inventories. Inventories which belong to Vinh Thai Urban Development Corporation Limited with a total carrying value of USD25.4 million as at 31 December 2016 (30 June 2016: USD21.2 million) are pledged as security for bank borrowings of USD5.2 million disclosed in Note 18.


33

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 12 TRADE AND OTHER RECEIVABLES

31 December

2016

30 June

2016

USD’000 USD’000

Trade receivables 976 1,409

Receivables from disposals of subsidiaries (*) 2,302 14,806

Interest receivables 60 27

Prepayments to suppliers 583 726

Short-term prepaid expenses - 434

Advances to employees 452 20

Other receivables 136 159

──────

4,509 ══════

──────

17,581 ══════

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

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

13 RESTRICTED CASH

The balance represents property buyers' deposits. They are held in the accounts of several subsidiaries of the Group. These funds are not available for use until the terms of the relevant property sales agreements have been fulfilled. In cases where sales of properties have not yet been finalised pending the completion of certain conditions set out in the relevant sales and purchase agreements, property buyers' deposits which are placed in third party escrow bank accounts are not part of the Group's assets and are therefore not included in either restricted cash or cash and cash equivalents in the consolidated balance sheet.


34

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14 CASH AND CASH EQUIVALENTS

31 December

2016

30 June

2016

USD’000 USD’000

Cash on hand 49 44

Cash at banks 51,618 70,510

Cash equivalents 6,749 6,349

────── ────── 58,416 76,903

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

At 31 December 2016, cash and cash equivalents held at the Company level amounted to USD46.5 million (30 June 2016: USD69 million). The remaining balance of cash and cash equivalents is held by subsidiaries in Vietnam. Cash held in Vietnam is subject to restrictions imposed by co-investors and the Vietnamese government and therefore it cannot be transferred out of Vietnam unless those restrictions are satisfied.

15 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

31 December 2016

Attributable to

Assets

classified as

held for sale

Liabilities

classified as

held for sale

Net assets

classified as

held for sale

Non-

controlling

interests

Equity

shareholders

of the parent


Vinh Thai Parcel 3 3,784 (404) 3,380 1,580 1,800

════ ═══ ════ ════ ════

The assets and liabilities of Parcel 3 of Vinh Thai Urban Development Corporation Limited have been presented as held for sale following the signing of relevant sale and purchase agreements.


35

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 15 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE (CONTINUED)

It is the Group’s view that all of its assets and liabilities classified as held for sales are in Level 3

of the fair value hierarchy. The major classes of assets and liabilities and their movements during

the period/year are as follows:

1 July

2016

Disposals

31 December

2016

USD’000 USD’000 USD’000

Assets classified as held for sale

Available for sales financial assets - - -

Investment properties 3,784 - 3,784

Property, plant and equipment (net of accumulated

depreciation)

318 (318)

-

Intangible assets (net of accumulated amortisation) 9 (9) -

Deferred income tax assets 155 (155) -

Other current assets 41 (41) -

Other non-current assets 468 (468) -

Inventories 4,585 (4,585) -

Trade and other receivables 860 (860) -

Short term investments 219 (219) -

Cash and cash equivalents 8,189 (8,189) -

───── ───── ───── 18,628 (14,844) 3,784

───── ───── ───── Liabilities classified as held for sale

Long-term trade and other payable 2,602 (2,602) -

Accruals and other current liabilities 319 (319) -

Trade and other payables 2,344 (1,940) 404

───── ───── ───── 5,265 (4,861) 404

───── ───── ───── Net assets classified as held for sale 13,363

═════ (9,983)

═════ 3,380

═════


36


15 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE (CONTINUED)

For the comparative year:

30 June 2016

Attributable to

Assets

classified as

held for sale

Liabilities

classified as

held for sale

Net assets

classified as

held for sale

Non-

controlling

interests

Equity

shareholders of

the parent


VinaCapital Danang Resort Limited 14,844 (4,861) 9,983 3,045 6,938

Vinh Thai Parcel 3 3,784 (404) 3,380 1,580 1,800

──────

18,628

══════

─────

(5,265)

═════

──────

13,363

══════

─────

4,625

═════

──────

8,738

══════

1 July

2015

Transferred

in

Fair value

adjustment

Disposals

30 June

2016


Assets classified as held for sale

Available for sales financial assets 851 - - (851) -

Investment properties (Note 6) 12,080 5,587 (1,803) (12,080) 3,784

Property, plant and equipment (net of

accumulated depreciation) (Note 7)

-

318

-

-

318

Intangible assets (net of accumulated

amortisation)

- 9

- -

9

Deferred income tax assets (Note 10) - 155 - - 155

Other current assets - 41 - - 41

Other non-current assets - 468 - - 468

Inventories (Note 11) - 4,585 - - 4,585

Trade and other receivables 172 860 - (172) 860

Short term investments - 219 - - 219

Cash and cash equivalents 130 8,189 - (130) 8,189

────── ────── ────── ─────── ──────

13,233 20,431 (1,803) (13,233) 18,628

────── ────── ────── ─────── ──────

Liabilities classified as held for sale

Long-term trade and other payable - 2,602 - - 2,602

Accruals and other current liabilities 17 319 - (17) 319

Trade and other payables 501 2,344 - (501) 2,344

────── ────── ────── ─────── ──────

518 5,265 - (518) 5,265

────── ────── ────── ─────── ──────

Net assets classified as held for sale 12,715

══════

15,166

══════

(1,803)

══════

(12,715)

═══════

13,363

══════


37

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 16 SHARE CAPITAL

31 December 2016 30 June 2016

Number of

shares

USD’000

Number of

shares

USD’000

Authorised:

Ordinary shares of USD0.01 each

500,000,000

──────────

5,000

─────

500,000,000

──────────

5,000

─────

Issued and fully paid:

Opening balance (1 July 2016/

1 July 2015) 393,808,479 3,938 430,132,220 4,301

Shares purchased and cancelled (35,869,000) (359) (36,323,741) (363)

Closing balance

──────────

357,939,479

══════════

─────

3,579

═════

──────────

393,808,479

══════════

─────

3,938

═════

The Company considers investors holding more than a 10% beneficial interest in the ordinary shares of the Company as major shareholders. As at 31 December 2016, there were two investors that held more than 10% of the ordinary shares of the Company (30 June 2016: two). During the period, the Company purchased and cancelled 35,869,000 of its ordinary shares (year ended 30 June 2016: 36,323,741 shares) for a total cash consideration of USD23.7 million (year ended 30 June 2016: USD22.3 million) at an average cost USD0.661 per share (year ended 30 June 2016: USD0.614 per share). The difference between the cost of the shares repurchased and their net asset value has been recorded in an equity reserve.

17 ADDITIONAL PAID-IN CAPITAL

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

31 December

2016

30 June

2016

USD’000 USD’000


Shares repurchased and cancelled (30,613) (33,348)

Distribution to shareholders - (35,060)

Closing balance

───────

422,067

═══════

───────

452,680

═══════


38


18 BORROWINGS AND DEBTS

31 December

2016

30 June

2016

USD’000 USD’000

Long-term borrowings:

Bank borrowings 82,135 48,276

Loans from non-controlling interests 475 804

Less:

Current portion of long-term borrowings (1,301) (1,664)

────── 81,309

──────

────── 47,416

──────

Short-term borrowings:

Loans from non-controlling interests 779 -

Zero dividend preference shares - 24,040

Current portion of long-term borrowings 1,301 1,664

────── 2,080

──────

────── 25,704 ──────

Total borrowings and debts 83,389

══════

73,120 ══════

Borrowings Borrowings mature on a range of dates until December 2019 and bear average annual interest rates of 9.8% for amounts in VND (30 June 2016: 10.1% for amounts in VND). USD46.6 million of the Group’s borrowings bears fixed interest rates, while the remaining is subject to floating interest rates (30 June 2016: USD38.2 million). All borrowings are secured by certain investment properties and inventories of the Group (Notes 6 and 11). During the period, the Group capitalised borrowing costs amounting to USD2.5 million in qualifying assets (year ended 30 June 2016: USD5.7 million) (Notes 6 and 11).


39

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 18 BORROWINGS AND DEBTS (CONTINUED)

Borrowings (continued)

The maturity of the Group’s borrowings at the end of the reporting period is as follows: 31 December

2016

30 June

2016

USD’000 USD’000

6 months or less 528 539

6-12 months

1-5 years

1,552

81,309

1,125

47,416

────── 83,389

══════

────── 49,080 ══════

The fair value of current borrowings equals their carrying amounts, as the impact of discounting is not significant. The fair value of long-term borrowings is USD81.3 million (30 June 2016: USD47.4 million). These are Level 2 fair values which are estimated using the discounted cash flow method. The Group’s borrowings are denominated in Vietnamese Dong.

During the period, the Group’s subsidiaries borrowed USD36.3 million (six months ended 31 December 2015: USD13.8 million) from banks to finance working capital and property development activities. The Group fully paid off its zero dividend preference shares on 19 December 2016.

19 DEFERRED TAX LIABILITIES

31 December

2016

30 June

2016

USD’000 USD’000


Net change during the period/year from fair value

adjustments of investment properties and property, plant

and equipment 5,437 (11,826)

Closing balance

──────

21,795

══════

──────

16,358

══════

Deferred income tax liabilities to be recovered after more than

12 months 3,996 7,211

Deferred income tax liabilities to be recovered within 12

months 17,799 9,147

────── ──────

21,795 16,358

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


40

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 20 CURRENT TRADE AND OTHER PAYABLES

31 December

2016

30 June

2016

USD’000 USD’000

Trade payables 1,343 1,388

Payables for property acquisitions and land compensation 14,600 36,636

Proceeds payables to a co-investor on disposal of an

investment

-

1,603

Deposits from property buyers 22,239 4,952

Deposits from customers of residential projects 28,988 28,370

Interest payable 526 1,557

Other accrued liabilities - 501

Other payables 1,192 2,167

──────

68,888

══════

──────

77,174

══════

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

21 REVENUE

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Sales of residential projects

4,508

══════

30,384

══════ 22 COST OF SALES

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Residential projects 5,338

══════

24,848

══════

Cost of sales include raw materials and consumables used, construction costs, land lease payments, depreciation and amortisation, staff costs, outside service costs and other expenses.


41

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 23 NET GAIN ON FAIR VALUE ADJUSTMENTS OF INVESTMENT PROPERTIES AND

REVALUATIONS OF PROPERTY, PLANT AND EQUIPMENT

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Investment properties

By real estate sector:

- Commercial (1,045) (20)

- Residential and office buildings 8,950 15,866

- Mixed use 33,762 4,562

────── ──────

41,667 20,408

Property, plant and equipment

Hospitality - 77

Net gain on fair value adjustments of investment

properties and revaluations of property, plant and

equipment

──────

41,667

══════

──────

20,485

══════

24 SELLING AND ADMINISTRATION EXPENSES

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Management fees (Note 30) 1,822 2,968

Fees paid to the Investment Manager (Note 30) 266 -

Professional fees (*) 1,586 2,307

Depreciation and amortisation (**) 56 326

General and administration expenses (**) 767 2,190

Staff costs (**) 328 764

Outside service costs (**) 363 350

─────

5,188

═════

─────

8,905

═════

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

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


42

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 25 REVERSAL OF IMPAIRMENT/(IMPAIRMENT) OF ASSETS

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Reversal of impairment of prepayments for

acquisitions of investments (Note 9) 2,487 1,822

Impairment of property, plant and equipment (Note 7) - (1,112)

Write-down on inventories (Note 11) (1,805) (16,059)

Impairment of non-current assets classified as held for

sale (Note 15) - (121)

───── ─────

682 (15,470)

═════ ═════

26 FINANCIAL EXPENSES

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Realised foreign exchange losses 170 29

Unrealised foreign exchange losses 2 855

Interest expense 4,130 2,519

───── ─────

4,302 3,403

═════ ═════ 27 INCOME TAX

VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there are no income, corporation, capital gains or other taxes payable by the Company. The majority of the Group’s subsidiaries are domiciled in the British Virgin Islands (“BVI”) and so have a tax exempt status. A number of subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in those countries. Deferred tax assets/liabilities of these subsidiaries are estimated based on the tax legislation of each jurisdiction and included in the deferred income tax assets/liabilities on the balance sheet. As is the case with many other developing countries, Vietnam is in the process of implementing comprehensive tax regulations. As a result, the administration of tax regulations by government agencies may be subject to considerable discretion, and in many areas, the legal framework is uncertain and subject to interpretation. The Group has provided for all taxes expected to be payable by it under the current tax regulations in Vietnam. There is, however, an ongoing risk that government agencies might seek to impose additional taxes on the Group based on different interpretations of the regulations or through the restrospective application of new regulations.


43


27 INCOME TAX (CONTINUED) On 19 June 2014, the Vietnamese National Assembly approved a new corporate income tax law. Under the new law, the standard corporate income tax was reduced from 25% to 22% effective 1 January 2015. A further reduction in tax rate to 20% became effective on 1 January 2016. No provision has been made for corporate income tax payable by the Vietnamese subsidiaries for the period because these subsidiaries do not have taxable income in Vietnam (period from 01 July 2015 to 31 December 2015: USD9 thousand). The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense actually recognised in the condensed interim consolidated income statement can be reconciled as follows:

Six months ended

31 December

2016

31 December

2015

USD’000 USD’000

Current income tax

Group’s gain before tax 17,486 9,414

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

Effect of higher tax rate in Vietnam - (9)

Capital gains tax (799) -

───── ─────

Total current tax expense (799) (9)

───── ─────

Deferred income tax

Decrease in deferred tax assets (*) (426) (1,550)

(Increase)/decrease in deferred tax liabilitites (*) (5,437) 3,989

───── ─────

Deferred income tax (5,863) 2,439

───── ─────

Tax (expense)/income (6,662) 2,430

═════ ═════

(*) 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 valuation assumptions during the period.


44

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 28 EARNINGS AND NET ASSET VALUE PER SHARE

(a) Basic

Six months ended

31 December

2016

31 December

2015

Net income attributable to owners of the Company

from continuing and total operations (USD’000) 338 5,966

Weighted average number of ordinary shares in issue 386,050,076 428,515,232

Basic earnings per share from continuing and total

operations (USD per share) 0.00 0.01

────────── ──────────

(b) Diluted

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

(c) Net asset value per share

31 December

2016

30 June

2016

Net asset value (USD’000) 318,242 336,836

Number of outstanding ordinary shares in issue 357,939,479 393,808,479

Net asset value per share (USD/share) 0.89 0.86

────────── ──────────

29 COMMITMENTS

As at 31 December 2016, the Group was committed under lease agreements to paying the following future amounts:

31 December

2016

30 June

2016

USD’000 USD’000

Within one year 340 52

From two to five years 170 306

Over five years - 2,284

───── ─────

510 2,642

═════ ═════ As at 31 December 2016, the Group was also committed under construction agreements to pay USD18.6 million (30 June 2016: USD12.7 million) for future construction work of the Group’s properties held by its subsidiaries


45

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 29 COMMITMENTS (CONTINUED)

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 USD26.3 million (30 June 2016: USD32.1 million) will be used to fund these projects over the next three years.

30 RELATED PARTY TRANSACTIONS AND BALANCES

Management fees The Group is managed by VinaCapital Investment Management Limited (the “Investment Manager”), an investment management company incorporated in the Cayman Islands, under a management agreement effective 21 November 2012 (the “Amended Management Agreement”). Under this agreement the management fee from 21 November 2012 was fixed at USD8.25 million for the subsequent 12 months, USD7.5 million for the next 12 months and USD6.5 million for the next 12 months. Under the Second Amended and Restated Investment Management Agreement effective from 21 November 2015 (the “Second Amended Management Agreement”) the management fee from 21 November 2015 until 21 November 2016 was revised to USD390,000 per month. Total management fees for the period amounted to USD1.8 million (six months ended 31 December 2015: USD3.0 million) which had been fully settled by the date of the condensed interim consolidated balance sheet. Under the Third Amended and Restated Investment Management Agreement effective from 14 December 2016 no further management fees shall be charged by the Investment Manager to the Company. Realisation fees In accordance with the Amended Management Agreement and Seconded Amended Management Agreement, the Investment Manager is entitled to a realisation fee of up to USD28,218,000 based upon the level of distributions made to shareholders from contracted divestments of assets which were signed prior to 21 November 2015 and the proceeds of which were received by 21 November 2016. Of the USD28.2 million realisation fees, USD27.3 million had been paid to the Investment Manager, leaving USD0.9 million outstanding as at 31 December 2016 (30 June 2016: USD7.4 million). Disposal fees and alignment fees Under the Third Amended and Restated Investment Management Agreement effective from 14 December 2016 the Investment Manager will receive a disposal fee and an alignment fee. The disposal fee is calculated at the rate of 3.00% of distributable funds realised in the year starting 22 November 2016, 2.75% in the second year and 2.25% in the third year. The alignment fee is calculated on distributions to shareholders over USD265.0 million during the 3-year period starting 22 November 2016. The Investment Manager will receive 10% of distributions over USD265.0 million and up to USD279.0 million, 15% of distributions over USD279.0 million, and up to USD313.0 million, and 20% of distributions over USD313.0 million. A non-refundable monthly advance of USD200,000 in the year starting 22 November 2016, USD150,000 in the second year, and USD100,000 in the third year, will be paid to the Investment Manager. These advances will be offset against disposal fees and alignment fees. During the period advances of USD0.3 million (30 June 2016: nil) were paid to the Investment Manager.


46

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 30 RELATED PARTY TRANSACTIONS AND BALANCES (continued)

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

31 December

2016

30 June

2016

Relationship Balances USD’000 USD’000

VinaCapital Investment

Management Ltd.

Investment

Manager

Realisation fees 902 7,428

Disposal fees - 139

Development fees

and advances for

real estate projects 50 391

VinaCapital Vietnam

Opportunity Fund Limited

(“VOF”)

Under common

management

Payments on behalf 32 31

Disposals of real

estate projects - 2,239

────── ──────

984 10,228

══════ ══════

As at 31 December 2016 and 30 June 2016, receivables from related parties mainly comprise of amounts due from VOF as advance to jointly invested real estate projects. The interests of the related parties in the shares, underlying shares and debentures of the Company are as follows:

As at

31 December

2016

30 June

2016

Number of shares

Vietnam Master Holding 2 Limited (*) 28,666,326 36,216,326

Asia Investment and Finance Limited (**) 19,860,250 2,372,500

VinaCapital Group Limited 993,333 993,333

VinaCapital Investment Management Limited 79,250 79,250

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

(**) In accordance with the Second Amended Management Agreement, the Investment

Manager is required to use 50% of the realisation fee arising from the contracted divestment proceeds collected by 21 May 2016 to make market purchases of the Company's ordinary shares within three months of the receipt of the realisation fee. As of 31 December 2016, a subsidiary of the Investment Manager, Asia Investment and Finance Limited, had bought a total of 19,860,250 ordinary shares of the Company (30 June 2016: 2,372,500 ordinary shares).


47

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 31 FINANCIAL RISK MANAGEMENT

(a) Financial risk factors The Group holds a diversified property portfolio in Vietnam. As a result the Group is exposed to a variety of financial risks: market risk (including price risk, currency risk and interest rate risk); credit risk; and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group’s risk management is coordinated by its Investment Manager who manages the distribution of the assets to achieve the investment objectives. The condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements as at 30 June 2016. There have been no major changes in the risk management department of the Investment Manager and risk management policies since the most recent year end.

(b) Fair value estimation

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

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

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

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

The following table presents the Group’s assets and liabilities that are measured at fair value at

31 December 2016:

Level 1 Level 2 Level 3 Total As at 31 December 2016 USD’000 USD’000 USD’000 USD’000 Financial assets held at fair

value through profit or loss

- Ordinary shares – unlisted - 269 - 269 ═══ ══════ ═══ ══════ Level 1 Level 2 Level 3 Total As at 30 June 2016 USD’000 USD’000 USD’000 USD’000 Financial assets held at fair

value through profit or loss

- Ordinary shares – unlisted - 269 - 269 - Derivatives - 115 - 115 Financial liabilities - Derivatives

-

(6,945)

-

(6,945)

═══ ══════ ═══ ══════ There were no significant transfers between levels during the period (year ended 30 June 2016: none).

vinaland limited and its subsidiaries …...2016/12/31 · vinaland limited and its subsidiaries...

Documents