Annual Report 2010

Transcription

Annual Report 2010

VinaLand Limited
Annual Report 2010
2
VNL Annual Report 2010
Contents
VinaLand Limited (VNL)
Annual Report 2010
Section 1
Introduction
VinaCapital introduction
Financial highlights
Performance highlights
Chairman’s statement
03
04
05
06
Section 2
Manager’s report
Management team
Real estate investment environment
Portfolio performance
Featured investments
08
11
16
24
Section 3
Financial statements and reports
Board of Directors
Report of the Board of Directors
Governance report
Independent Auditors’ report
Consolidated financial statements and notes
28
30
32
36
38
Section 4
Annex
Investing policy
Historical financial information
VNL overview and details
89
93
95
Taking Vietnam to
the world
VinaCapital is an asset management group inspired by the
energy, creativity and entrepreneurial spirit of the people
of Vietnam.
Formed in 2003, VinaCapital manages USD1.8 billion across
all asset classes - listed and private equities, fixed income,
infrastructure and real estate.
VinaCapital’s growth is driven by the most experienced asset
and fund management teams in Vietnam.
VNL
USD682 million net assets under management.
Vietnam’s largest real estate investment and
development fund.
VNL has the deepest residential sector pipeline of any foreign
real estate fund or developer in Vietnam, alongside the
top portfolio of operating hotels and landmark mixed-use
projects across all major cities.
3
4
Financial highlights
FY2010
FY2009
change %
17,277
28,014
-38%
7,042
12,303
-43%
102,152
(217,082)
147%
75,992
(201,623)
138%
Earnings per share (USD)
0.10
(0.26)
139%
NAV per share (USD)
1.36
1.32
3.2%
Revenue (USD’000)
Gross profit
Operating profit
Net profits
USD1.36
NAV per share
40.2%
NAV gain
since inception
VNL’s stable FY2010 financial
performance was due to strong
results in the launch and sale of
residential units, and success in
obtaining project financing.
The top performing Vietnam
fund over the past three years
according to LCF Edmond de
Rothschild Securities.
Performance highlights
Residential projects with active sales
New units offered to market
Total residential sales commitments
and reservations (USDm)
FY2010
FY2009
7
4
663
413
115.7m
65.7m
Danang Beach Resort (Ocean Villas and Cham Condominiums), World
Trade Center Danang (The Azura), The Garland and Dai Phuoc Lotus all
had sales launches during FY2010.
VNL’s USD115.7 million in residential unit sales commitments and
reservations during FY2010 represents early returns on the largest
pipeline of residential development projects in Vietnam.
VNL’s primary driver
of investment returns
during FY2010 was in
the sales of residential
villas and apartments
to end-users.
5
6
Chairman’s statement
“Investors clearly remain
concerned about macro
issues affecting Vietnam, and
they want greater clarity on
performance and the ability
of the investment manager to
realise proceeds and return
value to shareholders.”
Dear Shareholders,
We are pleased to present the annual report
of VinaLand Limited (AIM: VNL) for the year
ended 30 June 2010.
Vietnam’s real estate market during the
financial year saw strong performance in the
low and mid-range residential sector, and a
much-improved hospitality sector, again with
the best performance seen in the mid-range of
the market.
The pace of foreign investment into Vietnam’s
property sector was slower than the previous
year, with Vietnam appearing to miss out
on the increased investment into emerging
markets around the world. Despite Vietnam’s
rapid economic growth, reaching 6.5 percent
year-on-year over the first half of 2010, foreign
exchange and inflation concerns kept many
investors on the sidelines.
In the real estate market, oversupply in the
office sector persisted, and retail investment
remained slow as large foreign retailers
continued a cautious approach to entering
a market where site access and branch
expansion remain difficult.
VNL’s strategy, however, saw the fund
successfully avoid underperforming sectors.
VNL at the end of June 2010 had an NAV of
USD682 million, or USD1.36 per share, an
increase of 3.2 percent from the end
of June 2009, when VNL had an NAV of
USD660 million, or USD1.32 per share.
The four cent NAV per share gain in FY2010
is a positive turn-around from the 29 cent
NAV per share loss the previous year.
The reason for the turn-around is primarily
due to progress with the development and
sales of several key residential holdings in
the portfolio. During the year, VNL brought
a total of 663 residential units to market,
with residential sales commitments and
reservations totalling USD115.7 million.
Another performance highlight is the
success in obtaining project financing, with
a total of USD197 million in non-recourse
construction loans now secured. There were
five construction starts during the year. In the
hotel portfolio, the Sheraton Nha Trang Hotel
and Spa opened near the end of the year, and
the Movenpick Hotel Saigon re-opened after a
complete renovation in August 2010.
The VNL Board was further strengthened
at the end of the year by the addition of
independent director Nicholas Allen, who
brings valuable accounting expertise to the
Board, built on his previous experience with
PriceWaterhouseCoopers and his participation
in the audit committees of listed companies
CLP Holdings Ltd, Lenovo Group Ltd, and Hysan
Development Company Ltd.
Despite the wide-ranging progress VNL
recorded during FY2010, the company’s
share price continued to trade at a significant
discount to net asset value. Investors clearly
remain concerned about macro issues affecting
Vietnam, and they want greater clarity on
performance and the ability of the investment
manager to realise proceeds and return value
to shareholders.
Recognising this, the Board announced on 28
October 2010 that VNL would distribute 50
percent of cash generated from divestments,
after providing for future investment
commitments, as a semi-annual tender for
the repurchase of shares at NAV. The first
distribution will occur following finalisation of
the 30 December 2010 interim results.
This distribution policy, in addition to other
measures announced at the time, aims to
reduce the share price discount while still
leaving VNL with the ability to invest in new
projects. The Board believes this policy is in the
best interests of the shareholders - particularly
as it will offer the investment manager the
opportunity to continue to demonstrate
the value of the fund’s holdings, as more
projects move to the development and sales/
divestment phases. On 10 December 2010,
shareholders voted at an EGM to allow VNL to
buy back and tender for shares, a decision that
allows the distribution policy to proceed.
The Board welcomes shareholder feedback,
and we hope to be in touch with many of you
over the coming year. Thank you for your
continued support.
Nicholas Brooke
Chairman
VinaLand Limited
17 December 2010
7
8
Management team
1
5
2
4
3
1
(Left to right: Mr. Brook Taylor; Mr. Anthony House; Mr. David Blackhall; Mr. David Henry; Mr. Don Lam)
VNL’s management team have a combined 75 years of
real estate investment and development experience.
They manage Vietnam’s most comprehensive portfolio
of direct real estate assets, including complex township
and landmark mixed-use developments that span
Vietnam’s major cities.
Don Lam
Chief Executive Officer
Don Lam founded VinaCapital in 2003
alongside partners Horst F. Geicke
(Group chairman) and Chris Gradel.
Don has over 15 years experience
in Vietnam, working previously at
PricewaterhouseCoopers, Deutsche
Bank, and Coopers & Lybrand. Don is
one of Vietnam’s most internationally
recognised business leaders, having
brought over USD1.5 billion in
foreign indirect investment into the
country since 2003. Don is an active
member and regular speaker at the
World Economic Forum and other
leading international conferences
and events. He has a degree in
Commerce and Political Science from
the University of Toronto, and is a
member of the Institute of Chartered
Accountants of Canada. He is a
Certified Public Accountant and holds
a Securities Licence in Vietnam.
2
Brook Taylor
Chief Operating Officer
Brook Taylor has almost 20 years
of management experience,
including eight years in Vietnam
as a senior partner with major
accounting firms. Previously, Brook
was deputy managing partner of
Deloitte in Vietnam and head of
the firm’s audit practice. He was
also managing partner of Andersen
Vietnam and a senior audit partner
at KPMG. Brook has expertise
spanning financial audits, internal
audits, corporate finance, taxation,
business planning and IT systems
risk management. He has a B.A.
in Commerce and Administration
from Victoria University of
Wellington, New Zealand, and is
a member of the New Zealand
Institute of Chartered Accountants.
3
David Henry
Managing Director
Real Estate
David Henry has over 30 years
experience in real estate
development. Previously was
Director of Springfield Land Corp.
Pty Ltd, a member of MUR Group,
where he led development of
the 2,860ha Greater Springfield
township. He was executive board
member of MUR Group for past
16 years. His professional experience
includes ten years with Australia’s
Lend Lease Group, developing
projects in Sydney, Brisbane and
the Gold Coast. He worked on
Riverside Centre Brisbane, the
Anchorage Tweed Heads, State Bank
Martin Place Sydney, QE 2 Hospital
Brisbane, Holiday Inn Cairns, and
Times Square Brisbane. David
graduated with a first class honours
Bachelor of Building degree from the
University of New South Wales, and
holds an AMDP (GSD Harvard).
4
David Blackhall
Deputy Managing Director
Asset Management
David Blackhall has 28 years
experience in the property, design
and construction sectors, with
the last 19 years in real estate
fund and asset management.
He worked for 12 years with
Deutsche Bank - RREEF Funds
Management Ltd, one of
Australia’s largest property fund
managers. Prior to this he was
involved in engineering design and
management of large-scale civil
and structural power generation
projects in Australia. David has
five years property industry
experience in Hanoi and Ho Chi
Minh City, Vietnam. He holds a
Masters Degree in Design Science
from the University of Sydney,
Australia and is a Member of the
Royal Institution of Chartered
Surveyors (MRICS).
5
Anthony House
Deputy Managing Director
Development
Anthony House has over 23
years experience in both the
real estate development and
construction management sectors,
of which the past three years
were spent working in Vietnam.
Prior to joining VinaCapital, he
worked for Watpac Limited, a
leading publicly listed Australian
company, specialising in property
development and construction.
Mr. House’s development
experience encompasses a
range of retail, commercial
office and high-rise residential
projects. Mr. House holds a Post
Graduate Diploma in Project
Management and a Bachelor
of Applied Science degree in
Construction Management, both
from the Queensland University of
Technology, Australia.
9
10
Real estate investment environment
Vietnam’s
urbanisation trend
and the rise of a
middle-class keen on
modern living space
will fuel demand for
affordable, high-quality
housing for years to
come.
Economy
Vietnam’s GDP grew by 5.3 percent in 2009, making it one of the
world’s fastest growing economies during a year of financial crisis in
Europe and America. Resilient domestic consumption and effective
government stimulus policies helped Vietnam weather the storm,
while inflation fell to 6.5 percent from 23 percent in 2008.
The pace of economic growth in Vietnam remained stable in the
first half of 2010, even as the government moved to curb inflation and
the global economic recovery lost momentum. Monetary policy was
tightened in late 2009 and credit growth subsequently fell to
10.5 percent over the first half of 2010. Nonetheless, GDP growth
remained healthy at 6.2 percent annualised for H1 2010. With inflation
remaining moderate at under nine percent year-on-year, Vietnam’s
economy has proven resilient and analysts forecast GDP growth of seven
percent or higher in 2011. The trade deficit is less than 10 percent of
exports, but currency stability remains a concern. The Vietnam dong was
devalued by 2.1 percent in August 2010, a move that aimed to forestall
foreign exchange pressure for the remainder of the year.
Real estate market snapshot
Residential sector
Strong demand in the mid-range of the market,
with supply dependent on domestic developers’
access to construction financing.
Office sector
Rents continue to soften across all grades
due to oversupply.
Significant potential as both international and
domestic retailers keen to meet growing demand.
Visitor numbers recovering, outlook is strong
given prospects of Vietnam tourism industry.
Retail sector
Hospitality sector
11
12
Residential
The strength of Vietnam’s residential market is a key indicator of domestic
demand. Construction and sales activity saw a marked turnaround from 2008,
when projects were postponed or stalled due to the economic slowdown and
the retreat of some international developers. Over the first half of 2010, the
total number of condominiums in Ho Chi Minh City and Hanoi had increased
48 percent over the same point a year prior. Ho Chi Minh City saw the addition
of some 10,000 units, still below the estimated yearly demand for 40,000
new households. The UN ranked Vietnam second in urban population growth
among Southeast Asian countries over the past five years, with an urbanisation
rate of 3.26 percent. Vietnam’s Ministry of Construction says the country needs
over 15 million sq.m of new housing each year to accommodate new urban
dwellers. Together with income growth and the rise of a middle-class keen
on modern living space, Vietnam’s urbanisation trend will fuel demand for
affordable and high-quality housing for years to come.
Buying patterns are changing, with end-users now predominant. Developers
are shifting from luxury and high-end products to more affordable and
mid-range residences. CB Richard Ellis reports that 95 percent of new launches
in Ho Chi Minh City in 2009 were mid-range and affordable projects, versus
only 60 percent in 2008. High-end projects have struggled to sell, while sales
figures have been solid across the lower grades. It is evident that the market
has shifted to the growing demand among average Vietnamese for affordable,
quality housing.
Office
Vietnam’s office market saw substantial new supply come online during the
slowdown caused by the global financial crisis. Although absorption rates have
started to recover, oversupply across all office grades will continue for the
next several years. In 2011, Ho Chi Minh City and Hanoi will see a combined
500,000sq.m of additional office supply come on line which equates to about
40% of total current stock. This is well in excess of the annual absorption rate of
200,000sq.m for both markets alone. The office market is likely to experience
further challenges ahead as the market moves into a period of over-supply
creating weakened demand that will have downward pressure on rents.
By the end of Q2 2010, Vietnam’s office market was affected by the impact
stemming from the global financial crisis and the amount of A to C Grade office
buildings being developed. The market remains in favor of tenants where
quality long-term tenancies have been negotiated for lower rents and rent
incentives have been provided by most local office landlords. Ho Chi Minh City
vacancy rates continued to increase across all grades. At Q2 2010, A Grade
average rent in Ho Chi Minh City and Hanoi was USD37.5 and USD39.6 per
square meter respectively, showing drops of 47 percent and 26 percent from
the peak in 2008.
Net Absorption, HCM City
Vacancy rate, HCM City
Net Absorption, Hanoi
Vacancy rate, Hanoi
Asking prices of residential apartments in HCM City, Q2 2010
Net absorption and vacancy rates, HCM City
USD/sq.m
Net absorption (NLA sq.m)
6,000
4,000
20
80,000
Affordable
Mid-end
High-end
Luxury
5,000
Vacancy rate (%)
70,000
15
60,000
50,000
3,000
40,000
2,000
30,000
10
5
20,000
1,000
10,000
0
0
0
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
2004
Q2
2005
Q2
2006
Q2
2007
Q2
2008
Q2
2009
Q2
2010
Q2
Retail
Vietnam’s retail market continues to offer excellent prospects, although
the lack of suitable retail premises has slowed the arrival of international
chains, and put upward pressure on retail rents. The slower than expected
roll-out of foreign brands is one reason Vietnam slipped from first place in
A.T Kearney’s 2008 Global Retail Development Index, to eleventh place in
2010. The Index tracks the retail investment attractiveness of 30 emerging
markets.
The fundamentals of the market remain strong, however. Over the first half
of 2010, retail sales saw a real growth rate of 16.4 percent year-on-year,
eight percent higher than the same period in 2009. The mid- to long-term
outlook for this sector is very positive, given the large, young population
and rising disposable incomes, coupled with a low base of modern
shopping facilities. Demand for prime retail space remains high, with many
international retailers keen to either enter the market or to expand their
current portfolios. Domestic retailers are also expanding their operations
to capitalise on the growing market. Fashion, lifestyle and F&B retailers
continue to lead the way, as expected in an emerging market. CBD rents
have risen as a result of the limited supply of prime shopping destinations
in the inner city areas of Ho Chi Minh City and Hanoi. In these two cities,
CBD retail rents have increased from USD76 to USD123 per sq.m per month,
while average rents in outlying areas have declined slightly.
Retail rates in select Asian cities
USD/sq.m
350
300
250
200
150
100
50
0
HCM City
Hanoi
Bangkok
Manila Kuala Lumpur Singapore
Hospitality
The hospitality sector was heavily affected by the global financial crisis,
with declines in occupancy and average room rates starting in mid-2008.
Over the first half of 2010, the market began to recover, as occupancy rates
at three, four and five-star hotels increased by 9.0, 23.3 and 14.5 percent,
year-on-year, respectively. Vietnam welcomed 2.5 million international
guests in the first six months of 2010, a 32.6 percent year-on-year increase.
Visits from China increased by 92.5 percent. The Vietnam National
Administration of Tourism forecasts 4.5 million total visitors in 2010,
a 20 percent increase over 2009.
Despite the recovery in international arrivals and domestic travel, however,
additional supply will continue to put pressure on occupancy and room
rates. In fact, average room rates in HCM City for three, four and five-star
hotels fell by 25.0, 7.9 and 10.1 percent year-on-year, respectively, over the
first half of 2010. Over the long term, however, the outlook remains strong
as Vietnam increasingly becomes a major travel destination for tourists from
around the world.
13
14
Outlook
The office sector will continue to struggle
in the short term, and developers would
be wise to secure anchor tenants before
starting new projects. The short-term
prospects for the hospitality market are
also challenging, although longer term
the market potential remains strong, with
Vietnam expected to be among the world’s
top ten tourism destinations in the coming
decade. Retail facilities are expected to see
substantial growth and development in the
coming years, and the residential sector
will remain in focus as developers compete
to offer compelling mid-range offerings
that blend affordability and high quality.
Vietnam’s expected high economic growth
rate and political stability will sustain it as
one of Asia’s best long-term real estate
investment opportunities.
15
16
Portfolio performance
VNL has the
largest residential
project pipeline
of any domestic
or foreign real
estate developer
in Vietnam.
VinaLand Limited (VNL) during the year ending
30 June 2010 made significant progress with
the development of several top holdings in its
portfolio, particularly residential resort and
township developments. The sales of villas and
apartments recorded during the year were
an extremely positive indicator of the fund’s
investment and return prospects over the
coming years.
VNL at the end of June 2010 had an NAV of
USD682 million, or USD1.36 per share. This was
an increase of 3.2 percent from the end of June
2009, when VNL had an NAV of USD660 million,
or USD1.32 per share. The share price at the end
of June 2010 was USD0.77, up 11.6 percent from
USD0.69 at the end of June 2009. Despite this
improvement, the discount at 30 June remained
significant at 43.4 percent, a disappointing result
given the comparatively strong performance of
the fund over the year.
The discount first emerged in mid-2008, and has
persisted until now. Addressing the discount and
increasing shareholder value is the manager’s
top concern, and an announcement related to
the fund’s distribution policy was issued after
the period ended, in late October 2010. The
policy will see 50 percent of cash generated
from divestments, after taxes and expenses,
distributed to investors in the form of a tender
for shares. It is anticipated that this policy will
greatly reduce the discount during FY2011.
VNL also continued to benefit from the strong
ongoing demand for newly built residential
housing, a hallmark of Vietnam’s growing middle
class and rising urbanisation. This long-term
trend plays perfectly into VNL’s investment
strategy, which has focused on acquiring
township sites in prime suburban locations,
along with select city-centre locations for
high-end, mixed-use developments. Many
of these sites are already under construction.
VNL is positioned to bring over 10,000 villas and
townhouses, and an equal number of apartment
units, to market over the next five years. No
foreign or domestic real estate developer or
fund has a residential pipeline that compares.
Financing the construction of the residential and
mixed-use assets will be an important driver
of progress for the fund. At 30 June 2010, VNL
had secured USD197 million in project financing
from domestic banks, with several more loan
agreements in the final stages of negotiation.
VNL is supported by an in-house development
team that has a strong project delivery track
record, boding well for further rounds of
financing applications.
Beyond the residential market, VNL is also
well-positioned in other sectors. The fund
holds eight retail assets spread across Hanoi,
Danang, Nha Trang and Ho Chi Minh City, and
negotiations with anchor tenants are underway
at four of these projects. It is expected that
2011 will see construction commence at four
of these projects.
In hospitality, VNL continues to hold Vietnam’s
top portfolio of operating hotels. The year
saw the opening of the Sheraton Nha Trang
Hotel and Spa, the first five-star international
flag along Vietnam’s coast. Shortly after the
financial year ended, the Movenpick Hotel
Saigon re-opened after a substantial renovation.
The hospitality market in Vietnam continues to
recover after the 2008-09 slowdown, with
2010 revenue and gross operating profit of
the VNL-owned hotels up an estimated 28.5
and 27.7 percent, respectively, over 2009.
VNL has now divested full or partial stakes in
13 projects, generating total proceeds of
USD324.7 million on acquisition costs of
USD163.6 million. VNL exited several mature
assets in FY2010, and will look to dispose or find
co-investors on an estimated eight additional
assets in 2011-12. The business plan, agreed by
the VNL Board of Directors, is to hold
25-26 assets in the portfolio, and proceed with
development on all these assets.
FY2010 saw four construction starts, and
FY2011 will see construction commence on five
additional assets, including Times Square Hanoi,
Norman Estates at the Danang Beach Resort,
and VinaSquare Tower, HUD, and Thang Loi in
Ho Chi Minh City.
VNL during the year benefited from the
establishment of VinaProjects, a project and
construction management joint venture with
inProjects of Hong Kong. VinaProjects will
further strengthen project delivery, providing
the most cost-effective support for VinaCapital’s
in-house real estate development team.
Outlook
Vietnam’s macro economy is expected to be
stable in the second half of 2010, with GDP
growth topping seven percent in 2011.
Liquidity should gradually increase as the cost
of debt declines, which will support the real
estate market in general. VNL has a pipeline
that includes over 4,000 new residential
units to bring to market in 2011, most being
mid-range offerings. These holdings depend
less on acquiring financing, as construction is
typically financed via the end-user sales process
(which consists of staged payments). The VNL
strategy is to divest mature projects, develop
and sell residential holdings, and move forward
with retail and office projects only when anchor
tenant leases are in place. The assets VNL holds
are perfect for this strategy, and the fund moves
into 2011 with solid growth prospects.
Performance summary
NAV p.s.
Change on previous year
Share price
Change on previous year
Premium/(discount) to NAV
Number of projects
FY2010 FY2009
1.36
1.32
3.2%
(18%)
0.77
0.69
11.6% (43.4%)
43.4% 47.7%
38
47
Portfolio by geographic region (% NAV)
Hanoi
Central Vietnam
HCM City and region
FY2010 FY2009
13%
19%
25%
25%
62%
56%
17
18
VNL Portfolio by sector (end June 2010)
100%
Township/large-scale
37%
Mixed use/retail
18%
Residential
Office
Hospitality
24%
31%
Township/large-scale
16%
Mixed use/retail
24%
Residential
6%
Office
5%
23%
16%
USD682 million
FY2010
Hospitality
USD660 million
FY2009
NAV vs share price performance
2.0
1.5
1.36
NAV per share
1.0
0.77
Share price
0.5
0.0
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10
Development progress
Completion in 2009-2010
Projects
Movenpick Hotel Hanoi
Movenpick Hotel Saigon
Mercure La Gare Hanoi Hotel
Sheraton Nha Trang Hotel and Spa
Ocean Villas (Danang Beach Resort)
The Garland
Location
Refurbishment
Hanoi
2009
HCM City
2010
Hanoi
2009
Nha Trang
2010
Danang
HCM City
Azura (Danang WTC)
Danang
The Dunes Residences (Danang Beach Resort)
Danang
The Ceana Hoi An
Dai Phuoc Lotus Township
Hoi An
HCM City
My Gia Township
Nha Trang
VinaSquare Tower
HCM City
Green Park Estate (Thang Loi)
HCM City
HUD
HCM City
Times Square Hanoi
Norman Estates (Danang Beach Resort)
Construction
Hanoi
Danang
Construction in
2011 (estimate)
Construction in 2010
On-going
Start
Start
19
20
Project capital structure
Debt to equity ratio of VNL projects
Debt to equity ratio
(% debt)
Danang Beach Resort
37%
WTC Danang
17%
My Gia Nha Trang
28%
The Garland
67%
Long Truong
70%
Hospitality portfolio
66%*
VNL carries no debt at the fund level, and project level debt is
conservative.
Top ten holdings at 30 June 2010
The highest level of debt is in the operating hotels, where the
Movenpick Hanoi and Saigon hotels were recently renovated, and
the four-star Mercure Hanoi La Gare and five-star Sheraton Nha
Trang Hotel and Spa completed construction and opened in 2009
and 2010, respectively.
Danang Beach Resort
Century 21
Dai Phuoc Lotus Township
Pavilion Square
My Gia Nha Trang
VinaSquare Tower
Times Square Hanoi
Aqua City (Long Hung)
Fideco Binh Duong
Mövenpick Hotel Saigon
* Total 14 assets, including five operating hotels.
NAV %
10.0%
9.5%
9.0%
7.0%
6.0%
5.0%
4.3%
4.0%
3.5%
3.0%
Top holdings by region
Hanoi
Hanoi
Times Square Hanoi
Movenpick Hotel Hanoi
Mercure La Gare Hanoi Hotel
Type
Mixed use
Hospitality
Hospitality
Status
Investment licence
Operating asset
Operating asset
Type
Mixed use
Township
Mixed use
Status
Sales underway
Sales underway
Under construction
Type
Hospitality
Township
Status
Operating asset
Sales underway
Type
Township
Residential
Mixed use
Mixed use
Residential
Hospitality
Status
Sales underway
Under construction
Investment licence
Investment licence
Sales underway
Operating asset
Danang
Danang
World Trade Center Danang
Danang Beach Resort
Ceana Hoi An Villas and Hotel
Nha Trang
Nha Trang
Sheraton Nha Trang Hotel and Spa
My Gia Nha Trang
Ho Chi Minh
Ho Chi Minh
Dai Phuoc Lotus
Century 21
VinaSquare Tower
Pavilion Square
The Garland Villas
21
22
VNL owns five
operating hotels
and has reached the
construction and sales
phase on numerous
residential sites in
central Vietnam and
the Ho Chi Minh City
region.
23
24
Featured investments
My Gia Nha Trang
My Gia is a 158-hectare township site strategically positioned between
the mountains and the famous beaches of Nha Trang, one of the most
popular coastal tourist destinations in central Vietnam. The township
will offer a complete community of luxury villas, townhouses,
apartments, hospital, international school, retail centre and
entertainment facilities. A display village is now under construction.
Phase 1 and 2 sales of land lots launched in November 2010,
with 80 percent of the 1,400 land lots available reserved for sale.
VNL holds a 53.25 percent stake in My Gia Nha Trang.
The Movenpick Hotel Saigon re-opened in August 2010 after a
complete renovation that included a redesign of the lobby and
278 guestrooms, five new interiors for the hotel’s restaurants,
a semi-open bar near the third floor pool, and a new rear entrance
framed by a massive Cay Da (Banyan) tree. The renovation follows
VNL’s strategy of acquiring under-performing hotel assets in prime
locations and renovating and re-branding them under international
flags. VNL holds a 52.5 percent stake in the Movenpick Hotel Saigon.
Type Location
Details
Status
Type Location Details
Status
Mixed-use township.
Nha Trang, central Vietnam.
88ha of residential lots, plus school, hospital,
retail, sports and recreation facilities and administrative offices.
Sale of cleared land lots underway.
Five-star hotel.
Ho Chi Minh City (near Tan Son Nhat airport).
278 keys; five food and beverage outlets,
five function rooms, swimming pool, fitness centre, spa and e-gaming club.
Operating asset, newly renovated.
Ceana Villas and Hotel
Danang Beach Resort
The Ceana Villas and boutique hotel project is a 100% VNL-owned
asset on an 8.6ha site on the beach in Hoi An, central Vietnam.
The revised master plan comprises an 82-key boutique hotel and
31 villas for sale. Each of the three- to five-bedroom villas, including
eight beachfront units, will be serviced by the hotel operator.
Preliminary site infrastructure is completed and construction of the
villa foundations is now underway. Marketing efforts will begin once
foundations are complete and target buyers looking to pre-purchase
villas off-plan. Loan negotiations are underway with two banks for
complete financing of the villas and hotel construction.
The 260-hectare Danang Beach Resort is Vietnam’s first truly integrated
luxury beachfront resort. The resort has pioneered the second-home market
in Vietnam, with sales of The Ocean Villas, the first residential component,
successfully launched to entirely domestic buyers. The Dunes golf course,
designed by golf legend Greg Norman, is now open for play and garnering
praise as Vietnam’s top championship-level course. Upcoming residential
components to launch in 2011 include the Norman Estates and Dunes
Residences. The Danang Beach Resort, when fully complete, will set the
standard for Vietnam’s fast-growing hospitality industry. At 30 September
2010, total villa and condominium sales and reservations at the Danang
Beach Resort stood at USD68 million. VNL holds a 75 percent stake in the
Danang Beach Resort, with VOF holding 25 percent.
Type
Location
Details Status
Type
Location
Details
Status
Mixed-use residential and hospitality.
Hoi An, central Vietnam.
31 villas for sale; 82-key boutique hotel.
Villa foundations under construction, marketing
and sales to begin in early 2011.
Mixed-use integrated resort.
Danang, central Vietnam.
Phase 1 components include: The Dunes Golf Course
(18-hole championship course, now open); 115 detached villas (The Ocean Villas); 132 beach condominiums (The Cham);
15 detached golf course villas (The Dunes Residences);
37 branded golf course and oceanfront villas (The Norman Estates); Five-star hotel; The Ocean Villa beach club.
Under construction, with the first golf course operational and over 80 villas built and handed over to owners.
25
26
Dai Phuoc Lotus
Green Park Estate (Thang Loi)
Dai Phuoc Lotus is a unique resort-style township project covering
200 hectares on an island of 400 hectares in a branch of the Saigon
River. The island township is located in Dong Nai Province, between
Ho Chi Minh City and the future Long Thanh International Airport.
Construction of several model villas is underway. A total of 332 villas
have been launched to date, with 233 sales contracts and reservations
signed as of 30 September 2010. VNL holds a 54 percent stake in
Dai Phuoc Lotus.
The Green Park Estate project (formerly called Thang Loi) development
in Ho Chi Minh City is a 26.7 hectare site on a major road link to
the Cambodian border and the TransAsia Expressway. The project
enjoys a high land value as it is located along a planned MRT line
that will connect the site to the central business district. In addition
to residential villas and apartments, warehouse retail will supply
neighbouring townships, the city centre and even Cambodia. Green
Park Estate will be also be a major destination for recreation, as areas
under aviation height constraints will be used for sport facilities and
parks. The residential sections of the development will comprise 1,250
units, with construction of villas to start in Q4 2011, and construction
of the retail components to begin by Q3 2012. VNL holds a 49 percent
stake in Green Park Estate.
Type
Location
Details
Status
Mixed-use township.
Dong Nai Province, near Ho Chi Minh City.
200ha comprising residences, retail, golf course, schools, medical facilities, hotels, parkland
and sports facilities.
Sales underway for Phase 1 villas, covering 20ha.
Type
Location Details Status
Mixed-use.
Ho Chi Minh City.
26.7ha plot with total approved GFA of 342,377sq.m.
Investment licence received, 1:500 master
plan submitted.
Times Square Hanoi
Mercure Hanoi La Gare
Times Square is a landmark four-hectare mixed-use project in the
new suburban area of My Dinh, in western Hanoi. The site is in a
prime location next to Hanoi’s most popular retail hypermarket,
Big C, and across from the National Convention Centre. Times Square
has a distinctive integrated retail podium and high-rise office, hotel
and serviced apartment components. Preparatory work on the site is
underway, with the first phase comprising a 30,300sq.m GFA office
tower, 20,000sq.m GLA retail podium, and 33,200sq.m GFA serviced
apartment. VNL holds a 65 percent stake in this project.
The Mercure Hanoi La Gare opened in September 2009 after
a complete top-to-bottom renovation and rebranding under
Accor’s well-regarded four-star boutique flag. The acquisition of this
city-centre property followed VNL’s strategy of targeting domestic
business travel and mid-range tourism - which proved timely given
the travel downtrend that took hold in 2008. The Mercure has
garnered strong operating results since opening, with occupancy
and room rates above the average for four-star hotels in Hanoi.
VNL holds a 100 percent stake in the Mercure Hanoi La Gare.
Type Location Details
Status
Type
Location
Details
Status
Mixed-use urban landmark.
My Dinh, Hanoi.
40,000sq.m land area, with total approved GFA of 351,140sq.m comprised of retail, office, hotel
and serviced apartment components.
Investment licence received, construction to
start Q1 2011.
Four-star boutique hotel.
Hanoi CBD.
102 keys; food and beverage outlets, conference room and fitness centre.
Operating asset, with 68.8% occupancy and USD70.7 average room rate for 2010 to September.
27
28
Board of Directors
Nicholas Brooke
Chairman
Horst F. Geicke
Director
Don Lam
Director
Mr. Brooke is the Chairman of Professional Property
Services Limited, a Hong Kong-based real estate
consultancy that provides a select range of advisory
services across the Asia Pacific Region. Mr. Brooke
is a former President of the Royal Institution of
Chartered Surveyors and was the first overseas
surveyor to be accorded that honour. Mr. Brooke is
a recognised authority on land administration and
planning matters and has provided advice in these
areas to several Asian governments as well as the US
State Department. He is also a Justice of the Peace,
and a former Deputy Chairman of the Hong Kong
Town Planning Board and a former member of the
Hong Kong Housing Authority. Mr. Brooke also sits as
a Non-executive Director on the Boards of a number
of public companies including Shanghai Forte Land
Company Limited, one of China’s largest residential
developers and Majid Al Futtaim Investments, one
of Middle East’s leading shopping centre developers.
Mr. Brooke has a degree in Estate Management and
a Post Graduate Diploma in Business Administration
from the University of London.
Horst F. Geicke is one of VinaCapital Group’s
three founding partners. He has resided in
Asia for almost 30 years and has over 25 years
of operating and investing experience in the
region, having made several financial and
strategic investments in Vietnam, including the
establishment of a manufacturing plant for his
family business. Mr. Geicke also co-founded
Pacific Alliance Group, a fund management group
in Hong Kong. Mr. Geicke is the President of the
European Chamber of Commerce in Hong Kong
and was previously the President of the German
Chamber of Commerce in Hong Kong. He is the
chairman or board member of numerous public
and private companies. Mr. Geicke has a Masters
degree in Economics and Business Law from the
University of Hamburg, Germany.
Don Lam is a founding partner of VinaCapital
Group, with over 15 years experience in
Vietnam. He has overseen the Group’s growth
from manager of a single USD10 million fund
in 2003 into a full-featured investment firm
managing numerous listed and unlisted funds,
and offering a complete range of corporate
finance and real estate advisory services. Before
founding VinaCapital, Mr. Lam was a partner
at PricewaterhouseCoopers (Vietnam), where
he led the Corporate Finance and Management
Consulting practices throughout the Indochina
region. Mr. Lam has also held management
positions at Deutsche Bank and Coopers &
Lybrand in Vietnam and Canada. He has a degree
in Commerce and Political Science from the
University of Toronto, and is a member of the
Institute of Chartered Accountants of Canada.
He is a Certified Public Accountant and holds a
Securities Licence in Vietnam.
Robert A. E. Gordon
Director
Michael Arnold
Director
Nicholas Allen
Director
Robert Gordon was British Ambassador to
Vietnam from 2003-2007 and to Burma
from 1995-1999. He was head of the Foreign
and Commonwealth Office’s Southeast Asia
Department in London from 1999-2003. He joined
the British Diplomatic Service in 1973 and served
in Poland, Chile and France. After retiring from the
FCO in April 2008, he now advises a number of
companies and organisations on issues concerning
Southeast Asia. He also provides expert advice to
several UK law firms, as well as lecturing at the
University of Strasbourg. Mr. Gordon was
awarded an OBE in 1983 and a CMG in 1999.
He was born in Trieste, Italy and educated at
King’s School Canterbury and graduated from
Magdalene College, Oxford in 1973 with a BA
(later MA) in Modern Languages.
Mr. Arnold is a senior executive with over forty
years experience in the property industry, including
over thirty years in Asia. He retired as an Executive
Director of Hongkong Land in 2002 and is currently
Managing Director of Arnco Ltd, which provides
an advisory service to the property industry in Asia
and the Middle East. Mr. Arnold sits on the boards
of a number of companies including The Link, as
an Independent Non Executive Director, and The
Business Environment Council, as a Non Executive
Director. During his career with Hongkong Land,
Mr. Arnold was responsible for all project
developments in Hong Kong and Asia, spanning
from Australia to Southeast Asia and China.
Mr. Arnold is a Fellow of the Hong Kong Institute
of Surveyors and an Associate of the Royal Institute
of Chartered Surveyors.
Nicholas Charles Allen is an independent
non-executive director of CLP Holdings Ltd, Lenovo
Group Ltd, and Hysan Development Company Ltd.
He is chairman or member of the audit committee
for all three companies. Mr. Allen joined Coopers &
Lybrand in 1977, coming to Hong Kong with that firm
in 1983. In 1998 Coopers & Lybrand merged to form
PricewaterhouseCoopers, and Mr. Allen worked
at PwC until his retirement in 2007. During his 24
years with PwC in Hong Kong, Mr. Allen was the
partner-in-charge of the Consumer and Industrial
Products Group, the Corporate Finance and Recovery
Practice division, and the Hong Kong and China
Assurance Practice. He is a fellow of the Chartered
Accountants in England and Wales and a member
of the Hong Kong Institute of Certified Public
Accountants. Mr. Allen has a B.A. from Manchester
University in the United Kingdom.
29
30
Report of the Board of Directors
The Board of Directors submits its report together
with the consolidated financial statements
of VinaLand Limited (“the Company”) and its
subsidiaries (together “the Group”) for the year
ended 30 June 2010 (“the year”).
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.
Particulars of the Group’s principal subsidiaries
and associates are set out in Note 7 and Note 13.
Principal activities
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 to provide
shareholders with an attractive level of income
and capital growth, from investing in a diversified
portfolio of mainly property investments.
The Board of Directors do not recommend
the payment of dividend for the year ended
30 June 2010 (30 June 2009: USD nil).
Board of Directors
The members of the Board of Directors of the
Company during the year and to the date of this
report are as follows:
Name
Position
Appointed on
Nicholas Brooke
Horst Geicke
Don Lam
Robert Gordon
Michael Arnold
Nicholas Allen
Chairman
Director
Director
Director
Director
Director
13 January 2006
31 August 2005
13 January 2006
16 February 2009
17 March 2009
29 June 2010
On 12 March 2010 Mr. Nicholas Brooke replaced
Mr. Horst Geicke as Chairman of the Board of
Directors.
The principal activities of the subsidiaries are
property investment and hospitality management.
Auditors
The Group’s auditors, Grant Thornton Cayman
Islands, with the assistance of Grant Thornton
Vietnam Ltd., have expressed their willingness
to accept reappointment.
Results and dividend
The results of the Group for the year ended
30 June 2010 and the state of its affairs as at
that date are set out in the consolidated financial
statements on pages 38 to 88.
Subsequent events after the reporting date
Other than the matter outlined in Note 20, there
were no material events after the reporting date
that has a bearing on the understanding of these
consolidated financial statements.
Directors’ interest in the Company
As at 30 June 2010, the interests of the directors
in the shares, underlying shares and debentures of
the Company are as follows:
No. of shares
Direct
Approximate
% of direct
and indirect
holding
Indirect
Horst Geicke
2,750,000 184,979
0.59%
Don Lam
2,457,250 122,649
0.52%
Nicholas Brooke
150,000
-
0.03%
Subsequent to the reporting date, Mr. Michael
Arnold and Mr. Nicholas Allen purchased 64,500
and 95,627 ordinary shares bringing their total
shareholdings to 0.01% and 0.02% respectively.
Subsequent to the reporting date, the Investment
Manager of the Group, VinaCapital Investment
Management Limited, purchased 660,000 shares
on the open market representing 0.13% interest
in the Group. As Mr. Don Lam and Mr. Horst
Geicke are shareholders in this company,
their shareholdings consequently increased
to 0.56% and 0.65% respectively.
Board of Directors’ responsibility in respect of
the consolidated financial statements
The Board of Directors is responsible for ensuring
that the consolidated financial statements are
properly drawn up so as to give a true and fair
view of the financial position of the Group as at
30 June 2010 and of the results of its operations
and its cash flows for the year ended on that
date. When preparing the 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 Financial Reporting Standards
or, if there have been any departures in the
interest of true and fair presentation, ensure
that these have been appropriately disclosed,
explained and quantified in the consolidated
financial statements;
iii. maintain adequate accounting records and an
effective system of internal control;
iv. prepare the 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 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 consolidated financial statements.
Statement by the Board of Directors
In the opinion of the Board of Directors, the
accompanying Consolidated Statement of Financial
Position, Consolidated Statement of Changes
in Equity, Consolidated Statement of Income,
Consolidated Statement of Comprehensive
Income, Consolidated Statement of Cash Flows,
together with the notes thereto, have been
properly drawn up and give a true and fair view of
the financial position of the Group as at 30 June
2010 and the results of its operations and its cash
flows for the year then ended in accordance with
International Financial Reporting Standards.
On behalf of the Board of Directors
Nicholas Brooke
Chairman
Hong Kong, SAR China
17 December 2010
31
32
Governance report
VNL 2010 Corporate Governance Report
The members of the Board of Directors
On behalf of the Board, I am pleased to report
on the activities of the Board and its Committees
during the 2010 financial year. VinaLand Limited
(’VNL’ or ‘the Company’) is a Cayman Island
company established in 2006 and traded on the
AIM Market of the London Stock Exchange.
At the date of this report, the Board is comprised of four independent non-executive
Directors, including the Chairman, and two non-independent Directors. This is in
line with the Combined Code recommendations that at least half the Board are
independent non-executive Directors. The independent non-executive Directors have
all declared that they were, and continue to be, independent from the Company, the
manager and any of its managed vehicles.
The Board is committed to meeting the highest
standards of corporate governance. The ultimate
aim of the corporate governance programme is
to protect shareholders’ and other stakeholders.
In order to achieve this, the Company has created
a clear and effective structure for responsibility
and governance.
At the end of the financial year, the annual aggregate director fees amounted to
USD120,000.
The responsibility of the Board and its committees
is set out in Part 2 of the Company’s Articles of
Association. Over time, these responsibilities have
been further refined and clarified, as presented in
this report.
Compliance to AIM Rules and Corporate Governance
best practice
The Company complied with the AIM rules and
regulations. Furthermore the Company uses as
guidelines other relevant best practice corporate
governance frameworks, such as the UK Combined
Code on Corporate Governance (‘the Combined
Code’) and the Association of Investment
Companies Code of Corporate Governance (‘the
AIC Code’), which adapts the Combined Code
specifically for investment companies.
Current Board Members
Independence to the
Company
Nicholas Brooke
Robert Gordon
Michael Arnold
Nicholas Allen
Don Lam
Yes
Yes
Yes
Yes
No*
No**
Horst Geicke
Exec/Non-exec Director
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive
* Mr. Don Lam is an executive of the Manager, VinaCapital Investment Management Ltd and a director of
VinaCapital Group Ltd
** Mr. Horst Geicke is the Chairman of VinaCapital Group Ltd
Organisation of corporate governance
Shareholders
Audit committee
Investment committee
Board of Directors
Valuation committee
Nomination/Remuneration/
Management evaluation committee
Investment teams
Reporting and accounting
Corporate
communications/
Investor relations
Investment manager
Treasury
The Board provides strategic
direction and has an oversight
role over the investment manager
to ensure that shareholder
returns are maximised.
The investment manager executes
the Board’s strategic direction
within the agreed framework of
reward, incentive and control.
Risk and compliance
Legal
Reporting and accounting
Business development
Operating unit
Country, branch office
Risk
The investment manager cascades
down and apply the framework to
all investment vehicles.
33
34
The responsibility of the Board of Directors
The Board is responsible for managing the Company on behalf of its shareholders. In order to create and deliver
sustainable shareholder value, the Board established the objectives and policies of the Company, and ensured throughout
the year that the overall strategic direction was delivered within the agreed framework of reward, incentive and control.
Certain responsibilities of the Board are delegated to Board Committees to assist the Board in carrying out its functions
and to ensure independent oversight of internal control and risk management. Each Board committee’s terms of
reference endeavoured to follow the model terms of reference from the Institute of Chartered Secretaries and
Administrators (ICSA). The committee’s terms of reference set out the committee administration requirements, duties and
responsibilities of specific areas. The Committee Chairman reports to the Board on matters discussed and any proposals
requiring decision making.
The Board has held four scheduled Board meetings during the year, and used a structured agenda to ensure all key areas
are reviewed over the course of the year.
Summary of the members’ attendance and fees paid are shown below.
Attendance (2)
Board Member
Elected
Current
Audit Valuation
RNME
Board
AC
VC
RNME
Board Committee Committee Committee meetings meetings meetings meetings
Position
(AC)
(VC)
(RNME)
(4)
(4)
(4)
(1)
Nicholas Brooke
2006 Chairman
Member
Robert Gordon
2009 Member
Member
Michael Arnold
2009 Member
Nicholas Allen(1)
2010
Don Lam
2006 Member
Horst Geicke
2006 Member
Member
Total
Fee
USD
Member
4/4
4/4
4/4
2/2 40,000
- Chairman
4/4
4/4
-
2/2 40,000
- Chairman
Member
4/4
-
4/4
-
Member
1/1
1/1
-
1/1
-
-
-
-
4/4
-
-
-
-
-
-
-
4/4
-
-
-
-
- Chairman
Total
(1) Nicholas Allen was appointed to the Board and Committees in June 2010.
(2) Attendances of Board and Committee are from July 2009 to June 2010.
2/2 40,000
120,000
Board Delegated Committees
Audit Committee
The committee monitored the effectiveness of
internal controls, internal audit activities, the risk
management system and financial reporting.
The committee’s terms of reference are based
on The Smith Guidance recommended in the
Code. The committee was also kept informed
of the annual audit and bi-annual review of the
Company’s financial statements. It assessed the
external auditor’s independence and approved
any non-audit services provided by the external
auditor. The committee also evaluated the
performance of both the internal and external
auditors following each audit cycle. At each Board
meeting, the committee’s Chairman presented the
committee’s findings and proposals to the Board.
The committee met four times during the year
(three times in person and once by telephone call).
• Determined and agreed the framework for
the remuneration of the Board and Committee
members;
• Reviewed the structure, size and composition
(skill, knowledge and experience) of the Board
and recommended changes if necessary;
• Evaluated the performance of the Company’s
key third-party service providers, this including
the investment manager, nominated advisor,
company secretary, corporate broker, custodian
and administrator;
• Reviewed and evaluated the Committee’s own
performance, duties and responsibilities and
concluded that it and its members are effective.
The committee’s Chairman reported the
committee’s findings and proposals to the Board
for approval.
Valuation Committee
The committee ensured the investment manager
valuation process and policies are consistent,
transparent and valuation results are determined
on an appropriate basis. The committee
Chairman presented the committee’s findings and
recommendations to the Board for final decisions on
all valuations. The committee met four times during
the year.
Investment Committee
The committee met many times during the year
to consider and approve real estate projects that
the Investment Manager felt were suitable for
investment by VNL. The committee is comprised
of individuals with financial and business
backgrounds combined with extensive hands-on
local experience. The current committee members
include Nicholas Brooke, Horst Geicke, Don Lam
and David Henry.
Remuneration/ Nomination/ Management
Engagement/ Evaluation Committee
The committee met twice during the year and
performed multiple roles. The committee:
Investment Manager
VNL has given VinaCapital, the investment
manager, overall responsibility for conducting
the day-to-day management of the Company’s
investment portfolio including the acquisition,
monitoring and disposal of assets in line with
the strategy adopted by the Board. For further
information of the investment manager please
refer to the AIM admission document.
Internal Controls and Risk Management
In 2009, the Board endeavoured to adopt The
Turnbull Guidance as recommended by the Code
for internal controls and risk management. Thus
the internal audit function was introduced to
the Company in the third quarter of 2009, as
the Board and investment manager sought to
strengthen the internal control process to meet
the Company’s needs. The Board appointed
PricewaterhouseCoopers (PwC) Vietnam as the
internal auditor at the time. The internal audit
work was performed based on an internal audit
plan determined and in agreement with the Audit
Committee. The internal auditor participated in all
audit committee meetings. The audit committee
has decided to continue to outsource the internal
audit function and to reappoint PwC as the internal
auditor for 2011.
Sincerely,
___________________________________________
Nicholas Brooke
Chairman
VinaLand Limited
35
36
Independent Auditors’ report
To the Shareholders of VinaLand Limited
Introduction
We have audited the accompanying consolidated
financial statements of VinaLand Limited and its
subsidiaries (“the Group”) which are comprised of
the Consolidated Statement of Financial Position as
of 30 June 2010, and the Consolidated Statement
of Changes in Equity, Consolidated Statement of
Income, Consolidated Statement of Comprehensive
Income and Consolidated Statement of Cash
Flows for the year then ended, and a summary
of significant accounting policies and other
explanatory notes from page 38 to page 88.
Management’s responsibility for the consolidated
financial statements
Management is responsible for the preparation
and fair presentation of these consolidated
financial statements in accordance with
International Financial Reporting Standards. This
responsibility includes: designing, implementing
and maintaining internal controls relevant to the
preparation and fair presentation of consolidated
financial statements that are free from material
misstatement, whether due to fraud or error;
selecting and applying appropriate accounting
policies; and making accounting estimates that are
reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on
these consolidated financial statements based on
our audit. We conducted our audit in accordance
with International Standards on Auditing. Those
standards require that we comply with ethical
requirements and plan and perform the audit to
obtain reasonable assurance that the consolidated
financial statements are free from material
misstatement.
This report, including the opinion, has been
prepared for and only for the shareholders. We
do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other
person to whom this report is shown or into whose
hands it may come save where expressly agreed by
our prior consent in writing.
Basis of opinion
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the financial statements. The procedures selected
depend upon the auditor’s judgment, including the
assessment of the risks of material misstatement of
the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor
considers internal controls relevant to the entity’s
preparation and fair presentation of the financial
statements in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness
of accounting estimates made by management, as
well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have
obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial
statements give a true and fair view of the financial
position of VinaLand Limited and its subsidiaries
as of 30 June 2010, and of its financial performance
and its cash flows for the year then ended in
accordance with International Financial Reporting
Standards.
GRANT THORNTON
Grand Cayman, Cayman Islands
17 December 2010
37
38
Consolidated statement of financial position
Note
ASSETS
Non-current
Investment properties
Properties developed for sales
Property, plant and equipment
Intangible assets
Investments in associates
Goodwill
Prepayments for operating lease assets
Prepayments for acquisitions of investments
Other long-term financial assets
Deferred tax assets
Non-current assets
Current
Inventories
Trade and other receivables
Receivables from related parties
Short-term investments
Financial assets at fair value through Statement of Income
Cash and cash equivalents
Current assets
Assets classified as held for sale
Total assets
The accompanying notes are an integral part of these statements.
9
10
11
12
13
7
14
15
16
17
18
19
20
21
22
24
30 June 2010
USD’000
30 June 2009
USD’000
(Reclassified)
620,650
80,057
111,569
13,400
71,789
3,923
41,595
52,208
9,980
18,268
1,023,439
446,614
78,908
12,091
104,764
53,041
66,097
1,112
5,024
767,651
712
112,637
4,389
15,215
32,796
79,979
245,728
146
109,901
2,572
34,888
46,298
50,274
244,079
1,269,167
85,321
1,097,051
Consolidated statement of financial position (cont.)
Note
EQUITY AND LIABILITIES
EQUITY
Equity attributable to shareholders of the parent
Share capital
Additional paid-in capital
Revaluation reserve
Translation reserve
Retained earnings
30 June 2010
USD’000
30 June 2009
USD’000
(Reclassified)
4,999
588,870
3,483
(29,733)
114,025
681,644
4,999
588,870
10,799
(16,147)
72,008
660,529
224,269
905,913
166,445
826,974
28
31
29
70,995
76,856
50,823
879
199,553
21,841
65,018
19,367
912
107,138
28
30
31
21,090
116,466
26,145
163,701
20,584
74,354
49,943
144,881
24
363,254
1,269,167
1.36
18,058
270,077
1,097,051
1.32
25
26
27
Non-controlling interests
Total equity
LIABILITIES
Non-current
Long-term borrowings and debts
Long-term payables to related parties
Deferred tax liabilities
Other liabilities
Non-current liabilities
Current
Short-term borrowings and debts
Trade and other payables
Payables to related parties
Current liabilities
Liabilities included in disposal group held for sale
Total liabilities
Total equity and liabilities
Net assets per share attributable to shareholders of the parent
40
39
40
Consolidated statement of changes in equity
Equity attributable to shareholders of the parent
1 July 2008
Currency translation
Revaluation losses on buildings (Note 27)
Total other comprehensive income
Losses for the year ended 30 June 2009
Total comprehensive income
Acquisitions of subsidiaries
Capital contributions in subsidiaries
Dividend distributions to non-controlling interests
30 June 2009
USD‘000
4,999
4,999
Additional
paid-in
capital
USD‘000
588,870
588,870
1 July 2009
Currency translation
Gains on acquisition of non-controlling interests
Revaluation gains on buildings (Note 27)
Total other comprehensive income
Profits for the year ended 30 June 2010
Total comprehensive income
Capital contributions in subsidiaries
Acquisitions of non-controlling interests
Disposals of subsidiaries (Note 27)
Dividend distributions to non-controlling interests
30 June 2010
4,999
4,999
588,870
588,870
Share capital
Non-controlling
interests
Total equity
Revaluation
reserve
Translation
reserve
Retained
earnings
USD‘000
13,844
(3,045)
(3,045)
(3,045)
10,799
USD’000
(4,623)
(11,524)
(11,524)
(11,524)
(16,147)
USD’000
201,437
(129,429)
(129,429)
72,008
USD‘000
219,868
(6,129)
(2,544)
(8,673)
(72,194)
(80,867)
12,553
15,935
(1,044)
166,445
USD‘000
1,024,395
(17,653)
(5,589)
(23,242)
(201,623)
(224,865)
12,553
15,935
(1,044)
826,974
10,799
439
439
439
(7,755)
3,483
(16,147)
(13,586)
(13,586)
(13,586)
(29,733)
72,008
1,683
1,683
48,451
50,134
(8,117)
114,025
166,445
(13,081)
1,387
(11,694)
27,541
15,847
44,119
37,298
(18,133)
(20,685)
(622)
224,269
826,974
(26,668)
1,683
1,826
(23,158)
75,992
52,834
44,119
37,298
(18,133)
(36,557)
(622)
905,913
Consolidated statement of income
Note
Revenue
Cost of sales
Gross profit
32
Year ended
30 June 2010
USD’000
17,277
(10,235)
7,042
Year ended
30 June 2009
USD’000
28,014
(15,711)
12,303
Net gains/(losses) on fair value adjustments of investment properties
Operating, selling and administration expenses
Other net changes in fair value of financial assets at fair value through Statement of Income
Other income
Other expenses
Operating profit/(loss) from continuing operations
33
32
34
35
36
95,487
(46,171)
7,695
45,809
(7,710)
102,152
(153,544)
(35,611)
(4,754)
2,591
(38,067)
(217,082)
Finance income
Finance expenses
Finance (expenses)/income - net
Share of losses of associates
37
38
6,860
(8,244)
(1,384)
(9,609)
(10,993)
91,159
(15,167)
75,992
11,972
(6,735)
5,237
(3,342)
1,895
(215,187)
13,564
(201,623)
48,451
27,541
75,992
(129,429)
(72,194)
(201,623)
0.10
(0.26)
Profit/(loss) from continuing operations before tax
Tax (expense)/income
Net profit/(loss) for the year from continuing and total operations
13
39
Attributable to equity shareholders of the parent
Attributable to non-controlling interests
Earnings per share - basic and diluted (USD per share)
40
41
42
Consolidated statement of comprehensive income
Year ended
30 June 2010
USD’000
Year ended
30 June 2009
USD’000
75,992
(201,623)
Gain/(loss) on revaluation of buildings in the year
1,826
(5,589)
Gains on acquisitions of non-controlling interests
1,683
-
Exchange differences on translating foreign operations
(26,668)
(17,653)
Other comprehensive income/(losses) for the year
(23,158)
(23,242)
Total comprehensive income/(losses) for the year
52,834
(224,865)
Attributable to equity shareholders of the parent
36,987
(143,998)
Attributable to non-controlling interests
15,847
(80,867)
52,834
(224,865)
Profit/(loss) for the year
Other comprehensive income/(losses)
Consolidated statement of cash flows
Note
30 June 2010
USD’000
30 June 2009
USD’000
91,159
(215,187)
(92,186)
198,636
(1,027)
(16,551)
(38,972)
48,906
Operating activities
Net profit/(loss) for the year before tax
Adjustments
41
Net losses before changes in working capital
Change in trade and other assets
Change in inventory
(566)
131
37,958
15,432
-
(19,858)
Corporate income tax paid
(1,224)
(1,352)
Cash flow from operating activities
(3,831)
26,708
6,877
7,420
(151,948)
(80,023)
(18,524)
(7,189)
Change in trade and other liabilities
Cash and cash equivalents classified as held for sale assets
Investing activities
Interest received
Purchases of investment property, plant, equipment, and other non-current assets
Acquisitions of subsidiaries, net of cash
7
Proceeds from disposals of investments
41,438
5,132
Deposits for acquisitions of investments
(12,262)
(11,664)
Proceeds from disposals of held for sale assets/liabilities and financial assets
30,600
10,873
Investments in associates
(3,768)
(61,962)
(210)
(5,774)
Net proceeds from short-term investments
27,405
22,139
Net cash receipts from related parties for real estate projects
27,113
16,072
(53,279)
(104,976)
Acquisitions of long-term assets
Cash flow from investing activities
43
44
Consolidated statement of cash flows (cont.)
Note
30 June 2010
USD’000
30 June 2009
USD’000
37,298
15,935
Financing activities
Additional capital contributions from minority shareholders
Loan proceeds from banks
76,866
42,305
Loan repayments to banks
(26,449)
(8,488)
(622)
(1,044)
-
1,481
(278)
-
-
(2,453)
Cash flow from financing activities
86,815
47,736
Net change in cash and cash equivalents
29,705
(30,532)
Cash and cash equivalents at the beginning of the year
50,274
80,806
79,979
50,274
Dividends paid to non-controlling shareholders
Loans proceeds from non-controlling shareholders
Loan repayments to non-controlling shareholders
Interest paid
Cash and cash equivalents at end of the year
22
Notes to the consolidated financial statements
1. General information
VinaLand Limited 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 consolidated financial statements for the year
ended 30 June 2010 were authorised for issue by the
Board of Directors on 17 December 2010.
2. Statement of compliance with IFRS and
adoption of new and amended standards and
interpretations
2.1 Statement of compliance with IFRS
The consolidated financial statements of the Group
have been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
2.2 Changes in accounting policies
2.2.1 Overall considerations
The Group has adopted the following new
interpretations, revisions and amendments to IFRS
issued by the International Accounting Standards
Board, which are relevant to and effective for the
Group’s financial statements for the annual period
beginning 1 July 2009:
• IAS 1 Presentation of Financial Statements
(Revised 2007)
• IFRS 8 Operating Segments
• IFRS 3 Business Combinations (Revised 2008)
• IAS 27 Consolidated and Separate Financial
Statements (Revised 2008)
• Amendments to IFRS 7 Financial Instruments:
Disclosures - improving disclosures about
financial instruments.
2.2.2 Adoptions of revised and amended standards
IAS1 Presentation of Financial Statements
(Revised 2007)
The adoption of IAS 1 (Revised 2007) made certain
changes to the format and titles of the primary
financial statements and to the presentation of
some items within these statements. It also gave
rise to additional disclosures. The measurement and
recognition of the Group’s assets, liabilities, income
and expenses were unchanged. However, some
items that were recognised directly in equity were
subsequently recognised directly in the Consolidated
Statement of Comprehensive Income, for example
revaluations of property, plant and equipment
and exchange differences on translation of foreign
operations. IAS 1 changed the presentation of
changes in owner’s equity and introduced a
“Statement of Comprehensive Income”.
IAS 1 (Revised 2007) requires an additional
comparative statement of financial position to be
presented whenever an accounting policy is applied
retrospectively. This applies in the current year as
IAS 1 (Revised 2007) is applied for the first time, and
application is retrospective.
45
46
The comparative statement of financial position is
unchanged from when it was previously reported. As
this is the case for the previously reported statement
of financial position as at 30 June 2009 the additional
comparative statement of comprehensive income
is not required as they are not expected to have
a material impact on the Group’s Consolidated
Statement of Financial Position.
IFRS 8 Operating Segments
This standard has been applied retrospectively.
The adoption of IFRS 8 has not affected the identified
operating segments for the Group. However,
reported segment results are based on internal
management reporting information that is regularly
reviewed by the Investment Manager. In the
previous annual consolidated financial statements,
segments were identified by reference to the way
the Investment Manager manages and monitors
the risks and returns of the Group. As the change
in accounting policy only results in additional
disclosures, there is no impact on the historic,
current or future earnings per share ratio.
IFRS 3 Business Combinations (Revised 2008)
The standard is applicable for business combinations
occurring in reporting periods beginning on or after
1 July 2009 and has been applied prospectively. The
new standard introduced changes to the accounting
requirements for business combinations, but still
requires use the purchase method with some of
significant changes. For example, all acquisition
related costs are expensed in the period in which
the costs are incurred rather than included in
the cost of investment. There is a choice on an
acquisition by acquisition basis to measure the
non-controlling interest in the acquiree at fair value
or at the non-controlling interest’s proportionate
share of the acquiree’s net assets. All payments to
purchase a business are recorded at fair value at the
acquisition date. Some changes in the fair value of
contingent consideration that the Group recognises
after the acquisition date may be the result of
additional information that the Group obtained
after the date about facts and circumstances that
existed at the acquisition date. Where the changes
in fair value of the contingent consideration are
not measurement period adjustments, contingent
consideration classified as equity is not re-measured,
contingent consideration classified as an asset
or liability which is a financial instrument within
the scope of IAS 39 is measured at fair value with
gains and losses recognized either in profit or loss
in other comprehensive income according to the
requirements of IAS 39 and contingent consideration
classified as an asset or a liability outside the scope
of IAS 39 is accounted for in accordance with
IAS 37 or other IFRSs as appropriate. The Group
have applied IFRS 3 (Revised 2008) prospectively
to all business combinations from 1 July 2009.
The revaluation surpluses of disposed subsidiaries
previously recognised in equity are transferred
directly to retained earnings when control is lost.
The Group applied IAS 27 (Revised 2008) prospectively
to transactions with non-controlling interests and
disposals of subsidiaries from 1 July 2009.
IAS 27 Consolidated and Separate Financial
Statements (Revised 2008)
The revised standard introduced changes in
accounting for additional acquisition interests
in subsidiaries. Where the Group increases and
decreases its interest in subsidiaries but there is
no change in control, the effects of all transactions
between the Group with non-controlling interests
no longer result in goodwill or any gains or losses,
but are recorded in equity. When control is lost,
any remaining interest in the entity is re-measured
to fair value, and a gain or loss is recognised in the
Consolidated Statement of Income.
At the date of authorisation of these financial
statements, certain new standards, amendments
and interpretations to existing standards have been
published but are not yet effective, and have not
been adopted early by the Group.
Adoption of IFRS 7 Financial Instruments: Disclosure improving disclosures about financial instruments
The amendment requires enhanced disclosures
about fair value measurement and liquidity risk.
In particular, the amendment requires disclosure
of fair value measurement by level of a fair value
measurement hierarchy to be disclosed in the
consolidated financial statements. As the changes in
accounting policy only result in additional disclosures,
there is no impact on the historic, current or future
earnings per share ratio.
2.2.3 Standards, amendments and interpretations to
existing standards that are not yet effective and have
not been adopted early by the Group
Management anticipates that all of the
pronouncements will be adopted in the Group’s
accounting policies for the first period beginning
after the effective date of the pronouncement.
Information on new standards, amendments and
interpretations that are expected to be relevant to
the Group’s financial statements is provided below.
Certain other new standards and interpretations
have been issued but are not expected to have a
material impact on the Group’s financial statements.
IAS 24 Related Party Disclosures (effective from
1 January 2011)
The IASB issued a revised version of IAS 24 Related
Party Disclosures (IAS 24 (2009)) on 4 November
2009 which supersedes IAS 24 (2003).
The changes introduced by IAS 24 (2009) relate
mainly to the related party disclosure requirements
for government-related entities and the definition
of a related party.
In respect of definition of a related party, the
amendments have been made in order to clarify its
meaning and to eliminate previous inconsistencies.
The changes include:
• It has been clarified that, where a Company has
a subsidiary and an associate, for the purposes
of the associate’s separate or individual financial
statements, the subsidiary is regarded as a
related party of the associate as well as the
Company itself;
• The definition of a related party has been
amended such that in the circumstances in
the bullet point above, for the purposes of the
subsidiary’s separate or individual financial
statements, the associate is a related party;
• An inconsistency has been removed in order that,
when considering investments held by individuals
rather than entities, two associates are not
regarded as being related parties simply because
one person has significant influence over one
entity, and a close family member of that person
has significant influence over another entity;
• The criteria for investments held by key
management personnel have been changed, so
that where the key management personnel of
a Company have control or joint control over
other entities, disclosures are required in both
the financial statements of the Company and the
financial statements of the other entities;
• In any circumstances where a Company has joint
control over a second entity, and joint control or
significant influence over a third entity, then the
second and third entities are regarded as being
related to each other.
In addition, other amendments have been made to
the definition of a related party which clarify that:
• References to an associate and a joint venture
include their subsidiaries; and
• Two entities are not related parties by virtue of
a member of key management personnel of one
entity having significant influence over another
entity.
The definition of a ‘close member of the family’ has
also been amended to state that these ‘include’ a
person’s spouse or domestic partner and children,
rather than ‘may include’. The Group selects to adopt
IAS 24 from the effective date of the standard.
Management have yet to assess the impact that
this amendment is likely to have on the financial
statements of the Group. However, they do not
expect to implement the amendments until all
chapters of the IAS 39 replacement have been
published and they can comprehensively assess the
impact of all changes.
IFRS 9 Financial Instruments (effective from
1 January 2013)
The IASB aims to rewrite IAS 39 Financial
Instruments: Recognition and Measurement in its
entirety by the end of 2010, with the replacement
standards to be effective for annual periods
beginning 1 January 2013. IFRS 9 is the first part of
Phase 1 of this project. The main phases are:
• Phase 1: Classification and Measurement
• Phase 2: Impairment methodology
• Phase 3: Hedge accounting
In addition, a separate IASB project team is dealing
with derecognition.
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments (effective from 1 July 2010)
This interpretation clarifies the requirements
of International Financial Reporting Standards
(IFRSs) when the Group negotiates the terms of a
financial liability with its creditor and the creditor
agrees to accept the Group’s shares or other equity
instruments to settle the financial liability fully or
partially. IFRIC 19 clarifies that:
• equity instruments issued to a creditor are
part of the consideration paid to extinguish the
financial liability.
• equity instruments issued are measured at their
fair value. If the fair value cannot be reliably
measured, the equity instruments should be
measured to reflect the fair value of the financial
liability extinguished.
• the difference between carrying amount of
the financial liability extinguished and the
initial measurement amount of the equity
measurements issued is included in the
statement of income for the year.
The Group adopt IFRIC 19 from the effective date of
the standard.
47
48
Management have yet to assess the impact that
this amendment is likely to have on the financial
statements of the Group. However, they do not
expect to implement the amendments until all
chapters of the IAS 39 replacement have been
published and they can comprehensively assess the
impact of all changes.
Disclosure, IAS 1 Presentation of Financial
Statements, IAS 21 The Effects of Changes in
Foreign Exchange Rates, and IAS 28 Investments in
Associates will be relevant to the Group’s accounting
policies. However preliminary assessments indicate
the effect on the Group’s consolidated financial
statements will not be significant.
Annual Improvements 2009
The IASB has issued Improvements for International
Financial Reporting Standards 2009. Most of these
amendments become effective in annual periods
beginning on or after 1 July 2009 or 1 January
2010. The Group expects the amendments to IAS
17 Leases to be relevant to the Group’s accounting
policies. This standard is effective for periods
beginning on or after 1 January 2010 therefore
will apply to the Group’s subsequent consolidated
financial statements. Prior to the amendment
IAS 17 generally required a lease of land to be
classified as an operating lease. The amendment
now requires that leases of land are classified
as finance lease or operating lease applying the
general principles of IAS 17. The Group will need
to reassess the classification of the land elements
of its unexpired leases for the effective period on
the basis of information existing at the inception of
those leases. Any newly classified finance leases are
recognised retrospectively. Preliminary assessments
indicate that the effect on the Group’s financial
statements will not be significant.
IFRS 3 Business Combinations is effective for the
periods beginning on or after 1 July 2010 therefore
will apply to subsequent financial statements. In
respect of transition requirements for contingent
consideration from a business combination that
occurred before the effective date of the revised
IFRS, the improvements clarify that contingent
consideration balances arising from business
combinations that occurred before an entity’s date
of adoption of IFRS 3 (Revised 2008) shall not be
adjusted on the adoption date. Guidance is also
provided on the subsequent accounting for such
contingent balances. In respect of measurement
of non-controlling interest (“NCI”), the choice
of measuring NCI either at fair value of at the
proportionate share in the recognised amounts of
an acquiree’s identifiable assets, is now limited to
NCI that are present ownership instruments and
entitle their holders to a proportionate share of the
acquiree’s net assets in the event of liquidation. This
clarifies that all other components of NCI shall be
measured at their acquisition date fair values, unless
another measurement basis is required by IFRS.
Annual Improvement 2010
The IASB has issued Improvements for International
Financial Reporting Standards 2010. These
amendments become effective for annual periods
beginning on or after 1 July 2010 or 1 January 2011.
The Group expects that the amendments to IFRS 3
Business Combinations, IFRS 7 Financial instruments:
IFRS 7 Financial instruments: Disclosure is effective
for the periods beginning on or after 1 January 2011
therefore will be disclosed in the accounting policies
of the Group’s subsequent financial statements. This
clarifies the disclosure requirement of the standards
to remove inconsistencies, duplicative disclosure
requirements and specific disclosures that may be
misleading.
IAS 1 Presentation of Financial Statements is
effective for the periods beginning on or after
1 January 2011 therefore will be disclosed in the
accounting policies of the Group’s subsequent
financial statements. This clarifies that entities
may present the required reconciliations for each
component of other comprehensive income either
in the Consolidated Statement of Changes in Equity
or in the notes to financial statements.
IAS 21 The Effects of Changes in Foreign Exchange
Rates and IAS 28 Investments in Associates are
effective for the periods beginning on or after 1 July
2010 therefore will apply to the Group’s subsequent
amendments arising from the IAS 27 (Revised 2008)
amendments prospectively, to be consistent with the
related IAS 27 transition requirement.
3. Summary of significant accounting policies
3.1 Presentation of consolidated financial statements
The consolidated financial statements are presented
in United States Dollars (USD) and all values are
rounded to the nearest thousand (’000) unless
otherwise indicated.
The significant accounting policies that have been
used in the preparation of these consolidated
financial statements are summarised below. These
policies have been consistently applied to all the
years presented unless otherwise stated.
The consolidated financial statements have been
prepared using the historical cost convention, as
modified by the revaluation of investment property,
leasehold land and certain financial assets and
financial liabilities, the measurement bases of which
are described in the accounting policies below.
The preparation of consolidated financial statements
in accordance with IFRS requires the use of certain
accounting estimates and assumptions. Although
these estimates are based on management’s best
knowledge of current events and actions, actual
results may ultimately differ from those estimates.
The areas involving a higher degree of judgment
or complexity, or areas where assumptions and
estimates are significant to the consolidated
financial statements, are disclosed in Note 4 to the
consolidated financial statements.
3.2 Basis of consolidation
The consolidated financial statements of the Group
for the year ended 30 June 2010 comprise the
Company and its subsidiaries (together referred to as
the “Group”) and the Group’s interests in associates.
3.3 Subsidiaries
Subsidiaries are all entities over which the Group
has the power to control the financial and operating
policies so as to obtain benefits from their activities.
In assessing control, potential voting rights that
presently are exercisable or convertible, along with
contractual arrangements, are taken into account.
Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They
are excluded from consolidation from the date that
the control ceases. The majority of the Group’s
subsidiaries have a reporting date of 30 June. For
those subsidiaries with a different reporting date the
Group consolidate management information which is
subject to audit for the period to 30 June.
In addition, acquired subsidiaries are subject to
application of the purchase method. This involves
the revaluation at fair value of all identifiable assets
and liabilities, including contingent liabilities of the
subsidiary, at the acquisition date, regardless of
whether or not they were recorded in the financial
statements of the subsidiary prior to acquisition.
On initial recognition, the assets and liabilities of
the subsidiary are included in the consolidated
reporting at their revalued amounts, which are also
used as the basis for subsequent measurement in
accordance with the Group’s accounting policies.
Goodwill represents the excess of acquisition cost
over the fair value of the Group’s share of the
identifiable net assets of the acquired subsidiary at
the date of acquisition. Gain on bargain purchase is
immediately allocated to the statement of income as
at the acquisition date. All acquisition related costs
are expensed in the period in which the costs are
incurred and not included in the cost of investment.
All payments to purchase a business are recorded
at fair value at the acquisition date. Some changes
in the fair value of contingent consideration that
the Group recognises after the acquisition date
may be the result of additional information that
after that date, about facts and circumstances that
existed at the acquisition date. Where the changes
in fair value of the contingent consideration are
not measurement period adjustments, contingent
consideration classified as equity is not re-measured.
Contingent consideration classified as an asset or
a liability which is a financial instrument within the
scope of IAS 39 is measured at fair value with gains
and losses recognised either in the Statement of
Income or in other Comprehensive Income according
to the requirements of IAS 39 and contingent
consideration classified as an asset or a liability
outside the scope of IAS 39 is accounted for in
accordance with IAS 37 or other IFRSs as appropriate.
A non-controlling interest represents the portion
of the profit or loss and net assets of a subsidiary
attributable to an equity interest that is not owned
by the Group. It is based upon the minority’s share
of post-acquisition fair values of the subsidiary’s
identifiable assets and liabilities. Profit or loss and
each component of other comprehensive income
are attributed to the owners of the parent and to
the non-controlling interests. Total comprehensive
income is attributed to the owners of the parent and
to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
All inter-company balances and significant
inter-company transactions and resulting unrealised
profits or losses (unless losses provide evidence of
impairment) are eliminated on consolidation.
Under the equity method, the Group’s interest in an
associate is carried at cost and the carrying amount
is then increased or decreased to recognise the
Group’s share of the profit or loss of the associate
after the date of acquisition plus any changes in
Changes in ownership interests in a subsidiary that
do not result in gaining or losing control of the
subsidiary are accounted for as equity transactions
whereby the difference between the consideration
paid and the proportionate change in the parent
entity’s interest in the carrying value of the
subsidiary’s net assets is recorded directly in the
equity and attributable to the owners. No adjustment
is made to the carrying value of the subsidiary’s
net assets as reported in the consolidated financial
statements.
3.4 Associate entities
Associates are those entities over which the Group
is able to exert significant influence, generally
accompanying a shareholding of between 20%
to 50% of voting rights, but which are neither
subsidiaries nor investments in joint ventures. In
the consolidated financial statements, investments
in associates are initially recorded at cost and
subsequently accounted for using the equity method.
49
50
the associate’s other comprehensive income less
any identified impairment loss, unless it is classified
as held for sale or included in a disposal group
that is classified as held for sale. The consolidated
Statement of Income includes the Group’s share of
the post-acquisition, post-tax results of the associate
entity for the year, including any impairment loss
on goodwill relating to the investment in associate
recognised for the year.
All subsequent changes to the Group’s share of interest
in the equity of the associate are recognised in the
carrying amount of the investment. Changes resulting
from the profit or loss generated by the associate are
reported within “Share of profits/(losses) of associates”
in the Consolidated Statement of Income. These
changes include subsequent depreciation, amortisation
or impairment of the fair value adjustments of assets
and liabilities.
Adjustments to the carrying value of the associate
are necessary for changes in the associate’s
other comprehensive income that have not been
recognised in their Statement of Income, primarily
those arising on the revaluation of plant, property
and equipment. The Group’s share of such changes
are recognised directly in the Statement of
Comprehensive Income.
When the Group’s share of losses in an associate
equals or exceeds its interest in the associate, the
Group does not recognise further losses, unless it has
legal or constructive obligations, or made payments,
on behalf of the associate.
Any excess of the cost of acquisition over the Group’s
share of the net fair value of the identifiable assets,
liabilities and contingent liabilities of an associate
recognised at the date of acquisition is recognised as
goodwill. The cost of acquisition is measured at the
aggregate of the fair values, at the date of exchange,
of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group, plus any
costs directly attributable to the investment.
Goodwill is included within the carrying amount of
an investment and is assessed for impairment as
part of the investment. After the application of the
equity method, the Group determines whether it is
necessary to recognise an additional impairment loss
on the Group’s investments in its associates.
At each reporting date, the Group determines
whether there is any objective evidence that an
investment in an associate is impaired. If such
indications are identified, the Group calculates
the amount of impairment as being the difference
between the recoverable amount of the associate
and its respective carrying amount.
Unrealised gains on transactions between the Group
and its associates are eliminated to the extent of the
Group’s interest in an associate. Unrealised losses
are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
3.5 Functional and presentation currency
The consolidated financial statements are presented
in United States Dollars (USD) (“the presentation
currency”). The financial statements of each
consolidated entity are initially prepared in the
currency of the primary economic environment in
which the entity operates which may be Vietnamese
Dong or USD (“the functional currency”). The
financial statements prepared using Vietnamese
Dong are then translated into the presentation
currency of USD. USD is used as the presentation
currency because it is the primary basis for the
measurement of the performance of the Group
(specifically changes in the Net Asset Value of
the Group) and a large proportion of significant
transactions of the Group are denominated in USD.
3.6 Foreign currency translation
In the individual financial statements of entities,
transactions arising in currencies other than the
functional currency of the individual entity are
translated at exchange rates in effect on the
transaction dates. Monetary assets and liabilities
denominated in currencies other than the functional
currency of the individual entity are translated at
the exchange rates in effect at the reporting date.
Translation gains and losses and expenses relating to
foreign exchange transactions are recognised in the
consolidated Statement of Income.
Non-monetary items measured at historical cost are
translated using the exchange rates at the date of the
transaction (not retranslated at the reporting date).
Non-monetary items measured at fair value are
translated using the exchange rates at the date when
fair value was determined.
In the consolidated financial statements all individual
financial statements of subsidiaries, where the
functional currency is different from the Group’s
presentation currency, are converted into USD.
Assets and liabilities are translated into USD at
the closing rate of the reporting date. Income and
expenses are translated using the exchange rates
at the dates of the transactions. Where the average
rates approximate the exchange rates at the dates
of the transactions, income and expenses are
translated into the Group’s presentation currency at
the average rates. Any differences arising from this
translation are recognised in other comprehensive
income.
3.7 Revenue recognition
Sale of goods and revenues from hotel operations
and other related services
Revenue from sale of goods is recognised in the
Consolidated Statement of Income when the
significant risks and rewards of ownership of goods
have passed to the buyer. Revenue from hotel
operations and other related services is recognised
as and when the services are provided.
Rental income
Rental income from investment property is
recognised in the consolidated Statement of Income
on a straight-line basis over the term of the operating
lease. Lease incentives granted are recognised as an
integral part of the total rental income.
Interest income
Interest income is recognised on an accrual and
effective yield basis.
Dividend income
Dividend income is recorded when the Group’s right
to receive the dividend is established.
3.8 Expense recognition
Borrowing costs
Borrowing costs, comprising interest and related
costs, are recognised as an expense in the period in
which they are incurred, except for borrowing costs
relating to qualifying assets that need a substantial
period of time to get ready for their intended use or
sale to the extent that they are directly attributable
to the acquisition, production or construction of
such assets.
Operating lease payments
Payments made under operating leases are
recognised in the consolidated Statement of Income
on a straight-line basis over the term of the lease.
Lease incentives received are recognised in the
Statement of Income as an integral part of the total
lease expense.
3.9 Goodwill
Goodwill represents the excess of the cost of
acquisition of subsidiary companies and associated
companies over the Group’s share of the fair value of
their identifiable net assets at the date of acquisition.
Goodwill is recognised at cost less any accumulated
impairment losses. The carrying value of goodwill
is subject to an annual impairment review and
whenever events or changes in circumstances
indicate that it may not be recoverable. An
impairment charge will be recognised in the
Statement of Income when the results of such a
review indicate that the carrying value of goodwill is
impaired (see accounting policy 3.16).
Negative goodwill represents the excess of the
Group’s interest in the fair value of identifiable net
assets and liabilities, and contingent liabilities over
costs of acquisition. It is recognised directly in the
Statement of Income at the date of acquisition.
Gains and losses on disposal of an entity include the
carrying amount of goodwill relating to the entity
disposed of.
3.10 Investment properties
Investment properties are properties owned or
held under finance lease to earn rentals or capital
appreciation, or both, or held for a currently
undetermined use. Property held under operating
leases (including leasehold land) that would otherwise
meet the definition of investment property is
classified as investment property on a property by
property basis. If a leased property does not meet this
definition it is recorded as an operating lease.
The property under construction or development
for future use as investment property is treated as
investment property and is measured at fair value
where the fair value of the investment property
under construction or development for future use
is reliably determined.
Investment properties are stated at fair value.
Two independent valuation companies with
appropriately recognised professional qualifications
and recent experience in the location and category
being valued undertake a valuation of every
property each year. On the valuation date the fair
value is estimated assuming there is an agreement
between a willing buyer and a willing seller in an
arm’s length transaction after proper marketing;
wherein the parties have each acted knowledgeably,
prudently and without compulsion. The valuations
are prepared based upon direct comparison with
sales of other similar properties in the area and the
expected future discounted cash flows of a property
using a yield that reflects the risks inherent therein.
Valuations are reviewed by the Valuation Committee
and approved by the Board of Directors. Discount
rates from 10% to 16% are considered appropriate
for properties in different locations. Where the
Valuation Committee consider the discount rate
applied by the independent valuers to be too low
or if there are factors that the external independent
valuers have not considered in their determination
of a property’s fair value, they will adjust the
discount rate upwards in the discounted cash flow
projections, thereby decreasing the property’s net
present valuation.
51
52
Any gain or loss arising from a change in fair value
is recognised in the Statement of Income. Rental
income from investment property is accounted for as
described in the accounting policy 3.7.
reference to the actual rate payable on borrowings
for development purposes or, with regard to that
part of the development cost financed out of general
funds, to the average rate.
If an investment property is reclassified as property,
plant and equipment its fair value at the date
of reclassification becomes its deemed cost for
subsequent accounting.
When an item of property, plant and equipment
is transferred to investment property following a
change in its use, any differences arising at the date
of transfer between the carrying amount of the item
immediately prior to transfer and its fair value is
recognised directly in other comprehensive income
if it is a gain. Upon disposal of the item the gain is
transferred to retained earnings. Any loss arising in
this manner is recognised in the Statement of Income
immediately.
3.11 Property developed for sales
Property that is being constructed or developed for
sales is classified as investment property developed
for sales until construction or development is
complete, at which time it is reclassified and
subsequently accounted for as inventory.
Where parts of an item of property, plant and
equipment have different useful lives, they are
accounted for as separate items of property, plant
and equipment.
Property where more than 10% of the property
is occupied by the Group for the production or
supply of goods and services, or for administration
purposes, is accounted for as property, plant and
equipment (see accounting policy 3.2).
All costs directly associated with the purchase
and construction of an investment property,
and all subsequent capital expenditures for the
development qualifying as acquisition costs are
capitalised.
Borrowing costs for property under construction
or development are capitalised if they are directly
attributable to the acquisition, construction or
production of that qualifying asset. Capitalisation
of borrowing costs commences when the
activities to prepare the asset are in progress and
expenditures and borrowing costs are being incurred.
Capitalisation of borrowing costs continues until
the assets are substantially ready for their intended
use. If the resulting carrying amount of the asset
exceeds its recoverable amount, an impairment loss
is recognised. The capitalisation rate is arrived at by
3.12 Property, plant and equipment
Owned assets
All property, plant and equipment, except buildings
and leasehold land improvements, are stated at
cost less accumulated depreciation and impairment
losses (see accounting policy 3.16). The cost of
self-constructed assets includes the cost of materials,
direct labour, overheads and the initial estimate of
the costs of dismantling and removing the items and
restoring the site on which they are located.
Buildings and leasehold land improvements including
hotels and golf courses are revalued to fair value in
accordance with the methods set out in accounting
policy 3.10. Any surplus arising on the revaluation
is recognised in a revaluation reserve within equity,
except to the extent that the surplus reverses a
previous revaluation deficit on the building charged
to the Consolidated Statement of Income, in which
case a credit to that extent is recognised in the
consolidated Statement of Income. Any deficit on
revaluation is charged in the consolidated Statement
of Income except to the extent that it reverses a
previous revaluation surplus on a building, in which
case it is taken directly to the revaluation reserve. Any
revaluation surplus remaining in equity on disposal of
the asset is transferred to retained earnings.
Subsequent expenditure
The Group recognises in the carrying amount of
an item of property, plant and equipment the cost
of replacing part of such an item when that cost is
incurred if it is probable that the future economic
benefits embodied with the item will flow to the
Group and the cost of the item can be measured
reliably. The carrying values of any parts replaced as a
result of such replacements are expensed at the time
of replacement. All other costs associated with the
maintenance of property, plant and equipment are
recognised in the Statement of Income as incurred.
Depreciation
Depreciation is charged to the Statement of Income
on a straight-line basis over the estimated useful
lives of property, plant and equipment, and major
components that are accounted for separately. The
estimated useful lives are as follows:
Buildings, hotels and golf courses 26 to 45 years
Machinery and equipment
4 to 12 years
Furniture and fixtures
3 to 10 years
Motor vehicles
3 to 8 years
Material residual value estimates and estimates
of useful lives are reviewed at least annually,
irrespective of whether assets are revalued.
Assets held under finance leases which do not
transfer title to the assets to the Group at the end
of the lease are depreciated over the shorter of the
estimated useful lives shown above and the term of
the lease.
3.13 Intangible assets
Intangible assets comprise software and hotel
gaming licences. Intangible assets acquired
separately are measured initially at cost. The cost of
intangible assets acquired in a business combination
is their fair value as at the date of acquisition.
Following initial acquisition, intangible assets are
measured at cost less any accumulated amortisation
and accumulated impairment losses, except for hotel
gaming licences. The carrying value of the assets is
reviewed annually for impairment.
Hotel gaming licences are revalued to fair value in
accordance with the methods set out in accounting
policy 3.10. Any surplus arising on the revaluation
is recognised in a revaluation reserve within equity,
except to the extent that the surplus reverses a
previous revaluation deficit on the licence charged
to the Consolidated Statement of Income, in which
case a credit to that extent is recognised in the
consolidated Statement of Income. Any deficit on
revaluation is charged in the consolidated Statement
of Income except to the extent that it reverses a
previous revaluation surplus on a licence, in which
case it is taken directly to the revaluation reserve.
Intangible assets with finite useful lives are amortised
over the estimated useful lives and assessed for
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method are reviewed at
least at each financial year-end. The estimated useful
lives are as follows:
Gaming licences
Software
16 to 30 years
3 to 5 years
3.14 Leases
Leases under the terms of which the Group assumes
substantially all the risks and rewards of ownership
are classified as finance leases and stated at an
amount equal to the lower of its fair value and the
present value of the minimum lease payments at
inception of the lease, less accumulated depreciation
and impairment losses.
Leases which do not transfer substantially all the
risks and rewards of ownership to the Group are
classified as operating leases. Where the Group has
the use of an asset held under an operating lease,
payments made under the lease are charged to the
Statement of Income on a straight line basis over the
term of the lease. Prepayments for operating leases
represent property held under operating leases
where a portion, or all, of the lease payments have
been paid in advance, and the properties cannot be
classified as an investment property.
3.15 Financial assets
Financial assets are divided into the following
categories: loans and receivables, financial assets
at fair value through the Statement of Income.
Management determines the classification of its
financial assets at initial recognition depending
on the purpose for which the financial assets
were acquired. Where allowed and appropriate
management re-evaluates this designation at each
reporting date. The designation of financial assets
is based on the investment strategy set out in the
Group’s Admission Document to the London Stock
Exchange’s Alternative Investment Market, dated
16 March 2006.
All financial assets are recognised when, and only
when, the Group becomes a party to the contractual
provisions of the instrument.
Derecognition of financial assets occurs when the
rights to receive cash flows from the investments
expires or are transferred and substantially all of
the risks and rewards of ownership have been
transferred. At each reporting date, financial assets
are reviewed to assess whether there is objective
evidence of impairment. If any such evidence exists,
any impairment loss is determined and recognised
based on the classification of the financial assets.
The Group’s financial assets consist primarily of
unlisted equities, loans and receivables.
Loans and receivables
All loans and receivables, except trustee loans,
are non-derivative financial assets with fixed or
determinable payments that are not quoted in an
active market. After initial recognition these are
measured at amortised cost using the effective
interest method, less provision for impairment.
Any change in their value is recognised in the
Statement of Income. Discounting, however,
is omitted where the effect of discounting is
immaterial. The Group’s cash and cash equivalents,
trade and most other receivables fall into this
category of financial instruments.
Significant receivables are considered for impairment
when they are overdue or when other objective
evidence is received that a specific counterparty will
default. Receivables that are not considered to be
individually impaired are reviewed for impairment
in groups, which are determined by reference to the
industry and other available features of shared credit
risk characteristics. The percentage of the write
down is then based on recent historical counterparty
default rates for each identified group. Impairment
of trade and other receivables are presented within
“other expenses”.
53
54
Financial assets at fair value through Statement
of Income
Financial assets at fair value through Statement
of Income include financial assets that are either
classified as held for trading or are designated by the
entity to be carried at fair value through Statement
of Income upon initial recognition. Financial assets at
fair value through Statement of Income held by the
Group include unlisted securities and trustee loans.
Purchase or sale of financial assets is recognised
using trade date accounting. The trade date is the
date that an entity commits itself to purchase or sell
an asset.
Trustee loans are loans provided to banks and other
parties where the Group receives interest and
other income on the loans calculated based on the
proceeds from the sales of specific assets held by the
counterparties. Fair value is determined based on the
expected future discounted cash flows from each loan.
Net changes in fair value of financial assets at fair
value through Statement of Income include net
unrealised gains in fair value of financial assets and
net gains from realisation of financial assets during
the year.
3.16 Impairment of assets
The Group’s goodwill, operating lease prepayments,
property, plant and equipment, intangible assets
and interests in associates are subject to impairment
testing.
For the purpose of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash flows
(cash-generating units). As a result, some assets
are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill
in particular is allocated to those cash-generating
units that are expected to benefit from synergies of
the related business combination and represent the
lowest level within the Group at which management
controls the related cash flows.
Goodwill and intangible assets with an indefinite
life are tested for impairment annually, while other
assets are tested when there is an indicator of
impairment.
An impairment loss is recognised in profit or loss
immediately for the amount by which the asset’s
carrying amount exceeds its recoverable amount
unless the relevant asset is carried at a revalued
amount under the Group’s accounting policy. An
impairment loss on a revalued asset is treated as a
revaluation decrease, but only to the extent of the
revaluation surplus for that same asset. Further
impairment losses are recognised in profit or loss.
The recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell, and
value in use. In assessing value in use, the estimated
future cash flows are discounted to their present
value using a pre-tax discount rate that reflects
current market assessments of the time value of
money and the risks specific to the assets.
3.17 Prepayments for acquisitions of investments
Prepayments for acquisition of investments are
initially measured at cost until such times as approval
is obtained or the conditions are met, at which point
they are transferred to investment properties and
accounted for accordingly. Such payments are made
to vendors for land clearance and other related costs,
professional fees directly attributed to the projects
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. The prepayments
are presented within Prepayments for acquisitions
of investments in the Consolidated Statement of
Financial Position.
3.18 Income taxes
Current income tax assets and/or liabilities comprise
those obligations to, or claims from, fiscal authorities
relating to the current or prior reporting periods that
are unpaid at the reporting date. They are calculated
according to the tax rates and tax laws applicable
to the fiscal periods to which they relate based on
the taxable profit for the year. Current and deferred
tax shall be recognised as income or expense and
included in profit or loss for the year. Current tax and
deferred tax shall be charged or credited directly to
equity if the tax relates to items that are credited or
charged, in the same or a different period, directly
to equity, and if the tax relates to items recognised
in other comprehensive income, it is recognised in
other comprehensive income.
Deferred income taxes are calculated using the
liability method on temporary differences. This
involves the comparison of the carrying amounts
of assets and liabilities in the consolidated financial
statements with their respective tax bases. In
addition, tax losses available to be carried forward
as well as other income tax credits to the Group
are assessed for recognition as deferred tax assets.
However, deferred tax is not provided on the initial
recognition of goodwill, or on the initial recognition
of an asset or liability unless the related transaction
is business combination or affects tax or accounting
profit. Deferred tax on temporary differences
associated with shares in subsidiaries and associates
is not provided if reversal of these temporary
differences can be controlled by the Group and
it is probable that reversal will not occur in the
foreseeable future.
Deferred tax liabilities are always provided for
in full. Deferred tax assets are recognised to the
extent that it is probable that they will be able to
be offset against future taxable income. However,
the deferred income tax is not accounted for if it
arises from initial recognition of an asset or liability
in a transaction other than a business combination
that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred tax assets and liabilities are calculated,
without discounting, at tax rates that are expected
to apply to their respective period of realisation,
provided they are enacted or substantively enacted
at the reporting date. Most changes in deferred tax
assets or liabilities are recognised as a component of
tax expense in the Statement of Income. Only changes
in deferred tax assets or liabilities that relate to a
change in value of assets or liabilities that is charged
directly to other comprehensive income are charged
or credited directly to other comprehensive income.
3.19 Cash and cash equivalents
Cash and cash equivalents include cash at banks
and in hand as well as short-term highly liquid
investments such as money market instruments and
bank deposits with an original maturity term of not
more than three months.
3.20 Non-current assets and liabilities classified as
held for sale
When the Group intends to sell a non-current asset
or a group of assets (a disposal group), if the carrying
amount will principally be recovered through the
sale; they are available for immediate sale in their
present condition subject only to terms that are
usual and customary for sale of such assets and sale
is highly probable at the reporting date, the asset
or disposal group is classified as “held for sale” and
presented separately in the consolidated financial
statements in accordance to IFRS 5 “Non-current
assets held for sale and discontinued operations”.
Liabilities are classified as “held for sale” and
presented as such in the consolidated reporting if
they are directly associated with a disposal group.
Assets classified as “held for sale” are measured at
the lower of their carrying amounts immediately
prior to their classification as held for sale and their
fair values less costs to sell. However, some “held
for sale” assets such as financial assets or deferred
tax assets, continue to be measured in accordance
with the Group’s accounting policy for those assets.
No assets classified as “held for sale” are subject to
depreciation or amortisation, subsequent to their
classification as “held for sale”.
Changes in ownership interests in a subsidiary that
do not result in gaining or losing control of the
subsidiary are accounted for as equity transactions
and recorded in the Consolidated Statement of
Changes in Equity.
3.22 Financial liabilities
The Group’s financial liabilities include trade and
other payables, borrowings and other liabilities.
Financial liabilities are recognised when the Group
becomes a party to the contractual agreements
of the instrument. All interest related charges are
recognised as an expense in finance costs in the
Statement of Income.
Trade payables are recognised initially at their fair
value and subsequently measured at amortised cost,
using the effective interest rate method.
3.21 Equity
Share capital is determined using the nominal value
of shares that have been issued. Additional paid-in
capital includes any premiums received on the initial
issuance of the share capital. Any transaction costs
associated with the issuing of shares are deducted
from additional paid-in capital, net of any related
income tax benefits.
Borrowings are raised for support of long-term
funding of the Group’s investments and are
recognised at fair value plus direct transaction costs
on initial recognition and thereafter at amortised
cost under the effective interest rate method.
Revaluation reserve represents the surplus arising on
the revaluation of the Group’s owned buildings which
are classified under property, plant and equipment.
3.23 Provisions, contingent liabilities and
contingent assets
Provisions are recognised when present obligations
will probably lead to an outflow of economic
resources from the Group that can be reliably
estimated. A present obligation arises from the
presence of a legal or constructive obligation that
has resulted from past events. Provisions are not
recognised for future operating losses.
Currency translation differences on net investment
in foreign operations are included in the translation
reserve.
Retained earnings include all current and prior period
results as disclosed in the Consolidated Statement of
Changes in Equity.
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires.
55
56
3.24 Provisions, contingent liabilities and
contingent assets (cont.)
Provisions are measured at the estimated
expenditure required to settle the present obligation,
based on the most reliable evidence available at the
reporting date, including the risks and uncertainties
associated with the present obligation and where
there is uncertainty about the timing or amount
of the future expenditure require in settlement.
Where there are a number of similar obligations,
the likelihood that an outflow will be required in
settlement is determined by considering the class
of obligations as a whole. Long-term provisions are
discounted to their present values, where the time
value of money is material.
All provisions are reviewed at each reporting date
and adjusted to reflect the current best estimate of
Group’s management.
The Group does not recognise a contingent liability
but discloses its existence in the financial statements.
A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by uncertain future events beyond the
control of the Group or a present obligation that is
not recognised because it is not probable that an
outflow of resources will be required to settle the
obligation. A contingent liability also arises in the rare
circumstance where there is a liability that cannot be
recognised because it cannot be measured reliably.
A contingent asset is a possible asset that arises
from past events that’s existence will be confirmed
by uncertain future events beyond the control of
the Group. The Group does not recognise contingent
assets but discloses their existence when inflows
of economic benefits are probable, but not virtually
certain.
3.25 Related parties
Parties are considered to be related if one party
has the ability to control the other party or exercise
significant influence over the other party in making
financial or operational decisions. Parties are
considered to be related to the Group if:
1. directly or indirectly, a party controls, is
controlled by, or is under common control with
the Group; has an interest in the Group that gives
it significant influence over the Group; or has
joint control over the Group;
2. a party is a jointly-controlled entity;
3. a party is an associate;
4. a party is a member of the key management
personnel of the Group; or
5. a party is a close family member of the above
categories.
3.26 Earnings per share and net asset value per share
The Group presents basic earnings per share (EPS)
for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to the ordinary
shareholders by the weighted average number of
ordinary shares outstanding during the year.
Net asset value (NAV) per share is calculated by
dividing the net asset value attributable to ordinary
shareholders of the Company by the number of
outstanding ordinary shares as at the reporting date.
Net asset value is determined as total assets less
total liabilities and non-controlling interests.
3.27 Segment reporting
An operating segment is a component of the Group:
1. that engages in investment activities from which
it may earn revenues and incur expenses;
2. whose operating results are based on internal
management reporting information that is
regularly reviewed by the Investment Manager to
make decisions about resources to be allocated
to the segment and assess its performance; and
3. for which discrete financial information is available.
4. Critical accounting estimates and judgements
When preparing the 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 significant effect on recognition and
measurement of assets, liabilities, income and
expenses are discussed below:
Fair value of investment properties, leasehold land,
hotels and golf courses
The investment properties, leasehold land, hotels
and golf courses of the Group are stated at fair
value in accordance with accounting policies 3.10
and 3.11. The fair values of investment properties,
leasehold land and buildings have been determined
by independent professional valuers including: CB
Richard Ellis, Savills, Jones Lang LaSalle, Colliers,
Sallmanns and HVS. These valuations are based on
certain assumptions, which are subject to uncertainty
and might materially differ from the actual results.
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 date of the
transactions that occurred at those prices;
(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; and
(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.
Impairment
Investment properties, leasehold land, hotels and
golf courses
Whenever there is an indication of impairment of an
investment property, leasehold land and buildings
the Valuation Committee and management will
assess the need for an impairment adjustment.
The estimation of impairment adjustments is based
on the same principles used to adjust the periodic
independent valuations mentioned above.
The Group’s management determines the provision for
impairment of trade and other receivables on a regular
basis. This estimate is based on the credit history of its
customers and prevailing market conditions.
Other assets
The Group’s goodwill, intangible assets, operating
lease prepayments, other assets and interests
in associates is subject to impairment testing in
accordance with the accounting policy 3.16.
Business combinations
On initial recognition, the assets and liabilities of the
acquired business are included in the consolidated
statement of financial position at their fair values.
In measuring fair value management uses estimates
about future cash flows and discount rates or
independent valuation for investment properties
and buildings.
Useful lives of depreciable assets
Management reviews useful lives of depreciable
assets at each reporting date. Management assesses
that the useful lives represent the expected utility of
the assets to the Group. The carrying amounts are
analysed in Note 11 and Note 12.
5. Comparative figures
The figures for the year ended 30 June 2009, which
are included in this year’s financial statements
for comparative purpose, have been reclassified
to conform to the current year presentation.
The reclassifications did not have any effect on
the Company’s net worth as at 30 June 2009 or
Statement of Income for the year. Details of the
reclassifications and the effect on related items on
the financial statements are as follows:
57
58
Statement of financial position as at 30 June 2009 (extracted):
6. Segment reporting
As previously
reported Reclassifications
USD‘000
USD‘000
ASSETS
Non-current assets
Prepayments for operating lease assets
Deferred tax assets
RESOURCES
Liabilities
Non-current liabilities
Deferred tax liabilities
Restated
USD‘000
489,068
72,161
17,334
286
578,849
(42,454)
6,747
35,707
4,738
4,738
446,614
78,908
53,041
5,024
583,587
14,629
14,629
4,738
4,738
19,367
19,367
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 segment by
investment portfolio include Commercial,
Undetermined use, Hospitality, Mixed-use and Cash
and short-term investments.
The activities undertaken by the Commercial
segment includes the development and operation of
investment properties. Investment, construction and
sales of residential properties such as apartments
and villas are included in the Undetermined use
segment. The Hospitality segment includes the
development and operation of hotels and other
related services. Remaining investments are included
in the Mixed-use segment. Strategic decisions are
made on the basis of segment operating results.
Each of 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 Statement of Income,
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 Statement of Income.
Segment information can be analysed as follows for
the reporting periods under review:
Consolidated Statement of Income
Commercial
USD‘000
Year ended 30 June 2010
Undetermined
use
Hospitality
USD‘000
USD‘000
Mixed use
USD’000
Total
USD’000
Revenue
-
-
17,125
152
17,277
Other income
-
31,677
1,760
12,372
45,809
16
3,338
919
2,587
6,860
(1,051)
60,594
(2,813)
38,757
95,487
-
7,695
-
-
7,695
Share of profit/(losses) of associates
(3,305)
(5,913)
(391)
-
(9,609)
Total
(4,340)
97,391
16,600
53,868
163,519
Finance income
Net gain/(loss) on fair value adjustments of investment properties
Net changes in fair value of financial assets at fair value through Statement of Income
Cost of sales
(10,235)
(46,171)
Other expenses
(7,710)
Finance expenses
(8,244)
Profit/(loss) before tax
91,159
Income tax (expenses)/income
Net profit/(loss) for the year
(15,167)
75,992
59
60
For the comparative year:
Commercial
USD‘000
Undetermined
use
Hospitality
USD‘000
USD‘000
Mixed use
USD’000
Total
USD’000
Revenue
-
537
27,477
-
28,014
Other income
-
2,503
88
-
2,591
16
6,973
1,535
3,448
11,972
1,781
(56,613)
(21,486)
(77,226)
(153,544)
-
1,084
-
(5,838)
(4,754)
Share of profits/(losses) of associates
6,803
(12,920)
(2,366)
5,141
(3,342)
Total
8,600
(58,436)
5,248
(74,475)
(119,063)
Finance income
Net gain/(loss) on fair value adjustments of investment properties
Net changes in fair value of financial assets at fair value through Statement of Income
Cost of sales
(15,711)
(35,611)
Other expenses
(38,067)
Finance expenses
Profit/(loss) before tax
Income tax (expense)/income
Net profit/(loss) for the year
(6,735)
(215,187)
13,564
(201,623)
Consolidated statement of financial position
As at 30 June 2010
Commercial
USD‘000
Undetermined
use
USD‘000
Hospitality
USD‘000
Mixed use
USD‘000
Cash and short-term
investments
USD‘000
Total
USD‘000
7,852
381,450
51,444
179,904
-
620,650
-
29,185
44,336
6,536
-
80,057
23
114
97,401
14,031
-
111,569
Goodwill and intangible assets
1
3,925
13,301
96
-
17,323
-
-
-
-
79,979
79,979
Investment properties developed for sales
578
86,224
18,401
7,434
-
112,637
14,153
51,701
5,935
-
-
71,789
20
41,966
6,498
3,724
-
52,208
-
13,859
-
18,937
-
32,796
-
-
-
-
15,215
15,215
412
17,633
13,469
43,430
-
74,944
23,039
626,057
250,785
274,092
95,194
1,269,167
Investment in associates
Other assets
Total assets
61
62
For the comparative year end (reclassified):
As at 30 June 2009
Commercial
USD‘000
Undetermined
use
USD‘000
Hospitality
USD‘000
Mixed use
USD‘000
Cash and short-term
investments
USD‘000
Total
USD‘000
12,136
288,278
70,182
76,018
-
446,614
34
187
71,871
6,816
-
78,908
Goodwill and intangible assets
1
4
12,079
7
-
12,091
-
-
-
-
50,274
50,274
504
83,399
21,421
4,577
-
109,901
Investment in associates
17,458
53,846
6,327
27,133
-
104,764
20
36,763
1,196
28,118
-
66,097
-
7,588
-
38,710
-
46,298
-
-
-
-
34,888
34,888
Assets and disposal group classified as held for sale
-
-
85,321
-
-
85,321
34
6,722
15,987
39,152
-
61,895
30,187
476,787
284,384
220,531
85,162
1,097,051
Other assets
Total assets
The Group’s revenues, investment income and its non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax
assets and post-employment benefit assets) are attributable to the following geographic areas:
Vietnam
Other countries
Total
Revenue and income
USD’000
Non-current assets
USD’000
Revenue and income
USD’000
Non-current assets
USD’000
126,622
787,214
(119,433)
590,654
65
-
24
-
126,687
787,214
(119,409)
590,654
Revenues and investment income include operating revenue, finance income, net gains/(losses) on fair value adjustments of investment properties and financial assets at
fair value through Statement of Income. These have been identified on the basis of the operation and investment location. Non-current assets are allocated based on their
physical location.
7. Subsidiaries
Additional acquisition of Vina Alliance Company Limited
At 30 June 2009, the Group held 49% equity interest
in Vina Alliance Company Limited, a subsidiary
incorporated in Vietnam. The principal activity of this
company is to build and sell an office building and retail
centre. In October 2009, the Group acquired a further
13% equity interest for consideration of USD7.2 million
which was settled in cash and brings the Group’s total
interest in the project to 62% at the reporting date.
The Group’s share of the fair value of the assets acquired
was USD12.2 million resulting in negative goodwill
of USD5.0 million which has been recognised in the
Statement of Income (Note 35). The company has not
yet started operation.
Acquisition of Phu Hoi City Company Limited
The Group previously made a deposit of USD9 million
in respect of this project which was classified as a
Prepayment for acquisition of investments at 30 June
2009. In addition to the 22.5% interest in the project
held by the Group through the investment licence,
in September 2009 the Group acquired a further
30% interest from a local partner. An amount of
USD5.1 million was reclassified from Prepayment for
acquisition of investments as part of the consideration
of USD16.0 million. The Group’s share of the fair value
of the assets acquired was USD12.1 million resulting in
goodwill of USD3.9 million which has been recognised
in the Statement of Financial Position. The two key
factors which support recognition of goodwill are the
value added in granting of the investment licence and
master plan approval by the local authorities. As a
result, the Group’s total interest in the project is 52.5%
at the reporting date. The company has not yet started
operation.
Disposal of 85% in Golden Gain Vietnam Limited
During the year, the Group disposed of an 85% equity
interest in Golden Gain Vietnam Limited for USD36.4
million. The book value of the net assets as the disposal
date was USD24.5 million resulting in a gain on disposal
which has been recognised in the Statement of Financial
Performance. The remaining stake of 15% was valued in
line with the Sale and Purchase Agreement at the date of
losing control after the reporting date (Note 21).
Additional acquisition of Vinh Thai Urban Development
Corporation
At 30 June 2009 the Group held 51% equity interest of
Vinh Thai Urban Development Corporation, a subsidiary
company is to build and operate a large scale township. In
January 2010, the Group acquired a further 2.25% equity
interest for USD2.8 million which was settled in cash and
brings the Group’s total interest in the project to 53.25%.
The difference of USD0.2 million between the percentage
change in non-controlling interests and the consideration
paid has been recognised directly in equity and attributed
to the owners of the Group.
Additional acquisition of Viet Land Development Corporation
At 30 June 2009, the Group held 60% equity interest
of Viet Land Development Corporation, a subsidiary
company is to build and operate a residential building. In
January 2010, the Group acquired a further 30% equity
interest for USD13.5 million. Of the consideration amount,
USD11.0 million has been accrued at the reporting
date and is included in Trade and other payables in the
Statement of Financial Position (Note 30). The difference
between the percentage change in non-controlling
interest of USD16.6 million and the consideration paid of
USD3.1 million has been recognised directly in equity and
attributed to the owners of the Group.
63
64
Particulars of principal subsidiaries of the Group as of 30 June 2010 are as follows:
Name
Onshine Investments Limited
Vietnam Property Holdings Limited
Prosper Big Investment Limited
VinaCapital Danang Resorts Limited
VinaCapital Commercial Center Limited - Class A Shares
VinaCapital Commercial Center Limited - Class B Shares
Bates Assets Limited
Proforma Asia Limited
Cypress Assets Limited
Roxy Assets Limited
VinaCapital Hoi An Resort Limited
VinaCapital Danang Golf Course Limited
Maplecity Investments Limited
Henry Enterprise Group Limited
VinaCapital Danang Resort Limited
VinaCapital Commercial Center Limited (Vietnam) – Class A Shares
VinaCapital Commercial Center Limited (Vietnam) – Class B Shares
Tungshing International Investment Limited
International Consultant Company Limited
Dien Phuoc Long Real Estate Company Limited
VinaCapital Phuoc Dien Co. Limited
VinaCapital Long Dien Co. Limited
East Ocean Real Estate and Tourism Joint Stock Company
Vina Properties (Singapore) Pte. Limited
21st Century International Development Company Inc.
Roxy Vietnam Co. Limited
Top Star International Limited
Place of incorporation/
operations
Share capital
(USD/
USD equivalents)
Percentage
interest held by
the Group
Principal
activities
BVI
BVI
BVI
BVI
BVI
BVI
BVI
BVI
BVI
BVI
Vietnam
Vietnam
BVI
BVI
Vietnam
Vietnam
Vietnam
BVI
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Singapore
Vietnam
Vietnam
Hong Kong
1
100
50,000
4
28,094,769
1,623,702
4
4
10,000
4
5,900,000
18,083,192
4
11,460,100
13,502,000
27,428,535
1,915,345
1,237,241
2,474,482
2,827,500
3,142,375
22,439,160
1
35,369,206
6,748,923
13
100%
75%
75%
75%
38.25%
75%
100%
100%
77%
75%
80%
75%
75%
61.5%
75%
38.25%
75%
100%
100%
100%
100%
100%
62.55%
75%
61.5%
55.6%
75%
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Hospitality
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Hospitality
Property investment
Property investment
Hospitality
Hospitality
Particulars of principal subsidiaries of the Group as of 30 June 2010 (cont.)
Name
A-1 International (Vietnam) Corporation Limited
Dong Binh Duong Urban Development Co. Limited
Nam Phat Villas and Hotel Company Limited
(formerly known as Ha Trading Co. Limited)
Orchid House Co. Limited
Vina Dai Phuoc Corporation Limited
Prodigy Pacific Vietnam Co. Limited
Pavia Properties Limited
Nguyen Du Joint Venture Company
SIH Investment Limited
SAS Hanoi Royal Hotel Limited (*)
Viet Land Development Corporation Limited
VinaLand Espero Limited
Vinh Thai Urban Development Corporation Limited
Thang Long Property Company Limited
Hoang Phat Investment Joint Stock Company
AA VinaCapital Co. Limited
Vina Alliance Company Limited
Phu Hoi City Company Limited
Place of incorporation/
operations
Share capital
(USD/
USD equivalents)
Percentage
interest held by
the Group
Principal
activities
Vietnam
Vietnam
16,700,000
7,324,043
52.5%
70%
Hospitality
Property investment
Vietnam
2,337,516
100%
Hospitality
Vietnam
Vietnam
Vietnam
BVI
Vietnam
Singapore
Vietnam
Vietnam
BVI
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
565,206
73,046,074
1,500,000
1,896,462
2,324,834
8,379,168
12,000,000
2,500,000
100
37,348,756
4,908,979
2,985,075
8,102,160
38,006,734
43,651,074
55.56%
54%
100%
100%
65%
63.75%
44.63%
90%
75%
53.25%
65%
60%
80%
62%
52.5%
Hospitality
Property investment
Property investment
Property investment
Hospitality
Property investment
Hospitality
Property investment
Property investment
Property investment
Property investment
Hospitality
Property investment
Property investment
Property investment
(*) At the reporting date, the Group has a 44.63% equity interest in SAS Hanoi Royal Hotel Ltd., but it has control through the majority voting rights in this company.
Therefore, the Group’s management considers this company as a subsidiary holding.
65
66
8 Net cash for acquisitions of subsidiaries
Cash payments for acquisitions of subsidiaries:
Vina Alliance Company Limited
Phu Hoi City Company Limited
Vinh Thai Urban Development Corporation
Limited
Vietland Development Corporation Limited
SIH Investment Limited
Vindemia Property Limited
Hoang Phat Investment Joint Stock Company
Cam Ranh Tourism Development Corporation
Limited
Less:
Cash and cash equivalents at the date of
acquisition
Cost of acquisitions settled in prior years
Acquisition costs not yet settled
9. Investment properties
30 June 2010
USD’000
30 June 2009
USD’000
7,181
5,443
-
2,800
-
13,500
600
-
24,767
5,250
-
1,817
29,524
31,834
-
(43)
(11,000)
18,524
(13,618)
(10,984)
7,189
30 June 2010
USD’000
Opening balance
Additions during the year
Net gains/(losses) on fair value adjustments of
investment
properties (Note 33)
Disposals of investment properties
Transferred from prepayments for operating lease
assets (Note 14)
Transferred from prepayments for acquisition of
investment (Note 13)
Transferred to investment properties developed for
sales (Note 10)
Transferred to prepayments for acquisition of
investment (*) (Note 14)
Transferred to property, plant and equipment (*)
Translation differences
Closing balance (**)
446,614
84,097
79,133
30 June 2009
USD’000
(Reclassified)
579,356
41,074
31,166
95,487
(23,052)
(153,544)
(4,332)
5,391
2,589
27,134
-
(80,057)
-
-
(35,707)
(14,097)
620,650
(6,747)
(7,241)
446,614
(*) The amounts represent the reclassifications of properties at subsidiary to conform to current year
representation.
(**) The Group and the local partner have agreed to swap their interests in the Binh Trung Tay and Nam Rach Chiec
sites, which belong to 21st Century International Development Company Inc. (Century 21 Project). After the
swap, the Group will control the Nam Rach Chiec site but have no interest in the Binh Trung Tay site.
Nam Rach Chiec is a 30.11 hectares residential and commercial development located near the future
Long Thanh – Dau Giay highway in district 2, Ho Chi Minh City.
Binh Trung Tay is a 12.52 hectares residential development, located near the Diamond Island, Binh Khanh
township and other residential areas.
As at 30 June 2010, the Group used the fair value of 100% of Nam Rach Chiec to value its interest in the
Century 21 Project.
10. Properties developed for sales
Opening balance
Transferred from investment properties (Note 9)
Closing balance
(*)
30 June 2010
USD’000
80,057
80,057
30 June 2009
USD’000
-
(*) The amount represents the value of investments properties held by subsidiaries of the Group being developed for sales.
11. Property, plant and equipment
Buildings, hotels
and golf courses
USD’000
Machinery and
equipment
USD’000
Furniture and
fixtures
USD’000
Motor vehicles
USD’000
Construction
in progress
USD’000
Total
USD’000
Gross carrying amount
1 July 2009
Additions
Reclassifications
Disposals and written-off
Revaluation gains
30 June 2010
70,743
72
32,563
(3)
903
104,278
14,866
1,869
9,613
(2,356)
(2)
23,990
2,016
186
708
(507)
(13)
2,390
892
814
2
(23)
(13)
1,672
51,323
34,602
(42,886)
4,356
(2,569)
44,826
139,840
37,543
(2,889)
5,259
(2,597)
177,156
Depreciation and impairment
1 July 2009
Charge for the year
Disposals and written-off
Asset impairments
30 June 2010
(26,129)
(2,361)
29
(2,523)
(30,984)
(8,709)
(1,746)
2,027
(8,428)
(776)
(421)
486
5
(706)
(273)
(153)
2
(424)
(25,045)
(25,045)
(60,932)
(4,681)
2,544
(2,523)
5
(65,587)
44,614
73,294
6,157
15,562
1,240
1,684
619
1,248
26,278
19,781
78,908
111,569
Carrying amount 1 July 2009
Carrying amount 30 June 2010
Buildings which belong to East Ocean Real Estate and Tourism Joint Stock Company with a carrying value of USD29.0 million as at 30 June 2010 (30 June 2009:
USD14.8 million) are pledged as security for bank borrowings disclosed in Note 28.
Buildings, equipment and construction in progress, which belong to Roxy Vietnam Co. Ltd. with a carrying value of USD16.0 million as at 30 June 2010 (30 June 2009:
USD19.9 million), are pledged as security for bank borrowings disclosed in Note 28.
67
68
11. Property, plant and equipment (cont.)
Prior year comparatives:
Buildings, hotels
and golf courses
USD’000
Machinery
and equipment
USD’000
Furniture
and fixtures
USD’000
Motor
vehicles
USD’000
Construction
in progress
USD’000
Total
USD’000
(Reclassified)
1 July 2008
137,808
17,858
1,875
1,385
17,550
176,476
4,029
5,857
1,197
115
36,717
47,915
(70,668)
(9,564)
(8)
-
(718)
(80,958)
-
-
-
-
(8,592)
(8,592)
209
551
(10)
(551)
6,538
6,737
(635)
165
(1,026)
(52)
593
(955)
-
(1)
(12)
(5)
(765)
(783)
70,743
14,866
2,016
892
51,323
139,840
(24,796)
(14,726)
(1,623)
(225)
-
(41,370)
Charge for the year
(3,673)
(2,167)
(107)
(103)
-
(6,050)
Asset impairments
(10,868)
-
-
-
(25,045)
(35,913)
12,996
7,631
4
-
-
20,631
-
(50)
23
27
-
-
212
603
924
27
-
1,766
-
-
3
1
-
4
30 June 2009
(26,129)
(8,709)
(776)
(273)
(25,045)
(60,932)
113,012
3,132
252
1,160
17,550
135,106
44,614
6,157
1,240
619
26,278
78,908
Additions
Classified as held for sale
Property exchanged (Note 18)
Reclassifications (*)
Disposals
30 June 2009
Depreciation and impairment
1 July 2008
Reclassifications
Disposals
(*) The amount included USD6.7 million reclassified from investment property relating to construction in progress and buildings at subsidiary to conform to current year presentation.
If the cost model had been used, the carrying amount of buildings would be as follows:
USD’000
(Reclassified)
Buildings at 30 June 2010
At cost
Accumulated depreciation
Net carrying amount
132,512
(13,345)
119,167
Buildings at 30 June 2009
At cost
Accumulated depreciation
Net carrying amount
79,673
(11,739)
67,934
12. Intangible assets
Gaming licences
USD’000
Software
USD’000
Total
USD’000
12,700
239
12,939
-
182
182
1,750
-
1,750
Reclassifications
-
87
87
-
(8)
(8)
14,450
500
14,950
1 July 2009
Additions
Revaluation gains
30 June 2010
Amortisation and impairment
1 July 2009
(796)
(52)
(848)
Charge for the year
(653)
(49)
(702)
30 June 2010
(1,449)
(101)
(1,550)
11,904
187
12,091
13,001
399
13,400
69
70
Prior year comparatives:
Gaming licences
USD’000
Software
USD’000
Total
USD’000
6,802
8
6,810
1 July 2008
Additions
-
223
223
5,898
-
5,898
Reclassifications
-
10
10
-
(2)
(2)
12,700
239
12,939
1 July 2008
(388)
(1)
(389)
Charge for the year
(408)
(51)
(459)
30 June 2009
(796)
(52)
(848)
6,414
7
6,421
11,904
187
12,091
30 June 2010
USD’000
104,764
3,768
(27,134)
(9,609)
71,789
30 June 2009
USD’000
26,270
61,962
19,874
(3,342)
104,764
Revaluation gains
30 June 2009
Amortisation and impairment
13. Investments in associates
Opening balance
Additions during the year, net
Transferred to subsidiary (Note 7) (*)
Transferred from prepayments for acquisitions of investments (Note 15)
Share of associates’ losses
Closing balance
(*) The amount represents the carrying value of the investment in the equity interest of 49% in Vina Alliance Company Limited.
13. Investments in associates (cont.)
Particulars of operating associates and their summarised financial information, extracted from their financial statements as at 30 June 2010 are as follows:
Incorporation
Long An S.E.A Industrial Park Development Co. Ltd. (*)
Aqua City Joint Stock Company (**)
Thang Loi Land Joint Stock Company
Romana Resort and Spa JSC (**)
Savico-Vinaland Co. Ltd.
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Equity
interest held
%
11.25
50
49
50
49.5
Principal
activity
Property
Property
Property
Hospitality
Property
Assets
USD’000
7,469
55,763
12,157
4,909
17,569
97,867
Liabilities
USD’000
3,318
579
705
2,193
476
7,271
Revenue Profit/(loss)
USD’000
USD’000
(250)
102
(11,732)
171
6
1,485
(782)
71
(6,675)
1,829
(19,433)
Share of
(losses)/profit to
the Group
USD’000
(50)
(5,866)
3
(391)
(3,305)
(9,609)
(*) At 30 June 2009, the Group held 18% equity interest in Long An S.E.A Industrial Park Development Co. Ltd. which was changed from a limited company to a joint stock company – Long An Industrial Park Joint
Stock Company during the year. At the same time a local partner became a shareholder in this company. This resulted in the dilution of the Group’s interest from 18% to 11.25%. However, the Group still has
significant influence since it has power to participate in the financial and operating policies of this company, therefore it is considered appropriate to treat this interest as an associate holding.
(**) The Group has a 50% equity interest in Aqua City Joint Stock Company and Romana Resort and Spa JSC but does not have control or joint control due to its limited representation on the Boards. Therefore it is
considered appropriate to treat these interests as associate holdings.
14. Prepayments for operating lease assets
Opening balance
Additions during the year
Charge for the year
Transferred to investment properties (Note 9)
Transferred from investment properties (Note 9)
Impairment of leasehold land
Leasehold land exchanged (Note 18)
Closing balance
30 June 2010
USD’000
53,041
210
(2,417)
(5,391)
(1,688)
(1,335)
(825)
41,595
30 June 2009
USD’000
(Reclassified)
19,635
9,083
5,774
(2,270)
(2,589)
35,707
(4,474)
(5,431)
(2,130)
(264)
53,041
Prepayments for operating leases relates to leasehold land occupied by subsidiaries of the Group. Leasehold land held by Roxy Vietnam Co. Ltd. with a carrying value of
USD1.6 million as at 30 June 2010 (30 June 2009: USD1.9 million) is pledged as security for bank borrowing disclosed in Note 28.
Leasehold land held by East Ocean Real Estate and Tourism Joint Stock Company with a carrying value of USD2.5 million as at 30 June 2010 (30 June 2009: USD3.8 million)
is pledged as security for bank borrowing disclosed in Note 28.
71
72
17. Deferred tax assets
15. Prepayments for acquisitions of investments
Transferred to investments in subsidiary
Allowance for loss on prepayments for
acquisitions of investments
30 June 2010
30 June 2009
30 June 2010
30 June 2009
USD’000
61,648
(4,280)
57,368
USD’000
91,131
(19,874)
71,257
USD’000
(5,160)
(5,160)
USD’000
(Reclassified)
310
4,714
5,024
52,208
66,097
These prepayments are payments 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.
During the year, the Group disposed of the right to invest in a project with
a carrying value of USD10.5 million which resulted in a gain on disposal of
investment rights of USD7.5 million which has been included in the Statement
of Income for the year.
Allowance for impairment of long-term
financial assets
30 June 2010
30 June 2009
USD’000
4,042
5,252
1,050
10,344
USD’000
25
1,087
1,112
(364)
-
9,980
1,112
5,024
13,244
18,268
(*) The increase in the year of USD13.2 million arose from provision for tax losses on fair value
adjustments of investment properties during the year.
Deferred tax assets are the amounts of income taxes recoverable in future
periods in respect of deductible temporary differences and the carry forward of
unused tax losses and credits.
18. Trade and other receivables
Trade receivables
Loans to third parties (*)
Advances to property vendors and contractors
16. Other long-term financial assets
Deposits in banks
Loans to non-controlling interest shareholders
Others
Opening balance
Increase in the year, net (*)
Closing balance
Receivable as compensation for property
exchanged (**)
Receivables from minority shareholders
Receivable from disposal of subsidiary (***)
Interest receivables
Other receivables
Other current assets
Receivables allowance
30 June 2010
30 June 2009
USD’000
566
31,467
9,665
USD’000
294
42,922
20,644
27,004
10,723
10,752
18,227
6,482
9,978
47
114,188
(1,551)
112,637
16,366
7,132
13,318
56
111,455
(1,554)
109,901
18. Trade and other receivables (cont.)
19. Receivables from related parties
(*) This represents short-term loans to third parties, which are
to be repaid in the next 12 months. The loans are unsecured,
interest free or bear interest rates ranging from 7.5% to 15%
per annum. Their carrying value is considered a reasonable
approximation of their expected recovery.
(**) Receivable as compensation for property exchanged
represents:
- an amount of USD12.5 million comprising USD1.3 million
relating to prepayments for leasehold land and USD11.2 million
relating to construction costs incurred by SAS Hanoi Royal
Hotel Ltd.. As at 30 June 2010, the Group owned 52.5% of SIH
Investment Ltd. which has a 70% interest in SAS Hanoi Royal
Hotel Ltd.. The planned project was to build and manage a
four-star hotel on 10,331 square metres of land in Hanoi,
Vietnam. However, as the site has been reserved as a public
area, the Hanoi People’s Committee requested the Group
swap the land for another site. On 28 August 2009, the Group
received a letter from the Hanoi People’s Committee granting
it an alternative site. The Investment Manager is considering
this offer and has estimated that the value and future potential
benefits of the new land and any other compensation granted
is not less than costs incurred on the properties which will be
exchanged.
- an amount of USD17.4 million relating to the Binh Khanh
project. The Ho Chi Minh People’s Committee required the land
for development as a public residential area and request the
Group to swap the land for another site and negotiations are
at an advanced stage. The Investment Manager has estimated
that the value and future potential benefits of the new land and
any other compensation and benefits granted is not less than
costs incurred on the property which will be exchanged. Refer
to Note 9 for further information.
(***) Receivable from disposal of investment in subsidiary
represents the amounts due from the disposal of an 85% in
Golden Gain Vietnam Limited (Note 7).
All other trade and other receivables are
short-term in nature. Their carrying value is
considered a reasonable approximation of their
fair value at reporting date.
30 June 2010
30 June 2009
VinaCapital Vietnam
Opportunity Fund Limited
Relationship
Under common
management
Transactions
Expenses paid for
projects
USD’000
3,644
USD’000
1,863
Romana Resort and Spa JSC
VinaCapital Real Estate
Vietnam Co. Ltd.
Associate
Under common
management
Shareholder loan
Expenses paid for
projects
710
35
709
-
4,389
2,572
All receivables from related parties are short-term in nature. Their carrying value is considered a reasonable
approximation of their fair value at reporting date.
20. Short-term investments
Short-term deposits at banks
Bank secured deposit (*)
30 June 2010
30 June 2009
USD’000
10,466
4,749
15,215
USD’000
21,865
13,023
34,888
As short-term deposits have terms to maturity between than three months and one year, their carrying
value is considered a reasonable approximation of their fair value as at reporting date.
(*) On 8 December 2007, the Group deposited VND560.8 billion (equivalent to USD35 million) with East Asia Commercial Joint
Stock Bank (EAC). Under the terms of the original agreement, the deposit would earn interest at 13% and was repayable within
one year. Under the terms of the agreement, the deposit could be withdrawn by Thai Thinh Capital Joint Stock Company (TTC),
provided that it was fully replenished before the due date. The bank guaranteed to ensure the full repayment of the deposit and
associated accrued interest thereon to the Group upon expiry of the deposit term.
On expiry of the deposit term, TTC was unable to replenish the deposit account and associated accrued interest. By 30 June 2010
VND470.4 billion (equivalent to USD27.2 million) had been repaid to the Group under this arrangement and the parties had held
formal negotiations to enable the full recovery of the remaining outstanding balance. On 26 November 2010 the Group, TTC and
the principal shareholder of TTC, signed a Repayment Agreement to facilitate the recovery of the remaining outstanding amount.
Under the agreement and the subsequent guarantee waiver agreement signed with EAC on 3 December 2010 the remaining
outstanding principal balance was paid to the Group on 7 December 2010 in return for the Group waiving EAC from any liability
under its bank guarantee obligations. The Group expects to fully recover the outstanding accrued interest of VND115.6 billion
(equivalent to USD6.1 million) included within Note 18 prior to 30 September 2011 in the form of cash and other assets with
a fair value at least equal to the carrying value of the outstanding accrued interest. The Group has arranged for certain assets
of TTC and TTC’s principal shareholder to be held as security until the outstanding accrued interest has been fully settled. The
outstanding amount will be subject to 12% interest during the repayment period.
73
74
21. Financial assets held at fair value through Statement of Income
30 June 2010
30 June 2009
USD’000
USD’000
16,690
11,073
5,033
41,266
5,032
32,796
46,298
Designated at fair value through Statement
of Income:
Financial assets in Vietnam
Trustee loans
Ordinary shares - unlisted (Note 7)
Ordinary shares - unlisted
Total financial assets designated at fair value
through Statement of Income
These financial assets are denominated in the following currencies:
United States Dollars
Vietnam Dong
30 June 2010
30 June 2009
USD’000
16,690
16,106
32,796
USD’000
41,266
5,032
46,298
The carrying amounts disclosed above are the Group’s maximum possible
credit risk exposure in relation to these instruments. See Note 46 for further
information on the Group’s exposure to credit risk.
22. Cash and cash equivalents
Cash on hand
Cash at banks
Cash equivalents
30 June 2010
30 June 2009
USD’000
337
57,219
22,423
79,979
USD’000
139
33,972
16,163
50,274
23. Categories of financial assets and liabilities
23. Categories of financial assets and liabilities (cont.)
The carrying amounts presented in the statement of financial position relate to
the following categories of assets and liabilities:
Note
Note
30 June 2010
30 June 2009
USD’000
USD’000
Financial assets
- Ordinary shares - unlisted
21
5,033
5,032
- Ordinary shares - unlisted, selling
price determined subsequent to
reporting date
21
11,073
-
- Trustee loans
21
16,690
32,796
41,266
46,298
16
9,980
1,112
18
19
20
22
112,637
4,389
15,215
79,979
222,200
254,996
109,901
2,572
34,888
50,274
198,747
245,045
Loans and receivables
Non-current:
- Other long-term financial assets
Current:
- Trade and other receivables
- Receivable from related parties
- Short-term investments
- Cash and cash equivalents
30 June 2009
USD’000
USD’000
28
69,792
20,360
28
1,203
1,481
31
76,856
879
148,730
65,018
912
87,771
28
30
31
21,090
116,466
26,145
163,701
312,431
20,584
74,354
49,943
144,881
232,652
Financial liabilities
Financial liabilities measured at
amortised cost:
Non-current:
- Debts and borrowings
Financial assets held for trading
(carried at fair value through
Statement of Income)
30 June 2010
- Debts payable to non-controlling
interests shareholders
- Payable to related parties
- Other liabilities
Current:
- Debts and borrowings
- Trade and other payables
- Payable to related parties
The fair values are presented in the related notes. A description of the Group’s risk
management objectives and policies for financial instruments is given in Note 46.
75
76
24. Assets and liabilities classified as held for sale
Summary of the assets/(liabilities) held for sale at the reporting date is as follows:
30 June 2009
Attributable to
Assets classified as Liabilities classified
held for sale
as held for sale
Opera Holel Ltd.
Long-term loan in Opera Hotel Ltd. transferred to the Purchaser (*)
Net assets
classified as held
for sale
Non-controlling
interests
Equity
shareholders of
the parent
USD’000
85,321
USD’000
(33,892)
USD’000
51,429
USD’000
24,429
USD’000
27,000
-
15,834
15,834
-
15,834
85,321
(18,058)
67,263
24,429
42,834
There were no assets and liabilities classified as held for sale at 30 June 2010.
25. Share capital
30 June 2010
30 June 2009
Number of shares
USD’000
Number of shares
USD’000
500,000,000
5,000
500,000,000
5,000
Opening balance
499,967,622
4,999
499,967,622
4,999
Closing balance
499,967,622
4,999
499,967,622
4,999
30 June 2010
30 June 2009
USD’000
USD’000
Opening balance
588,870
588,870
Closing balance
588,870
588,870
Authorised:
Ordinary shares of USD0.01 each
Issued and fully paid:
26. Additional paid-in capital
Additional paid-in capital represents the excess of consideration received over the par value of shares issued.
27. Revaluation reserve
30 June 2010
30 June 2009
USD’000
USD’000
10,799
13,844
1,826
(5,589)
Share of revaluation (gain)/reversal attributable to
non-controlling interests
(1,387)
2,544
Disposal of subsidiary (*)
(7,755)
-
3,483
10,799
Opening balance
Revaluation gains/(reversal) on buildings
Closing balance
The Group’s share of valuation gains/(losses) resulting from the revaluation of subsidiaries’ hospitality
properties has been recorded directly in the Group’s revaluation reserve under shareholders’ equity.
(*) The amount represents the transfer of the revaluation reverse surplus arising on Opera Hotel Ltd. to retained earnings when
control of the subsidiary transferred to the buyer in the year.
28. Borrowings and debts
30 June 2010
30 June 2009
USD’000
USD’000
79,204
40,944
1,203
1,481
80,407
42,425
(9,412)
(20,584)
70,995
21,841
11,678
-
9,412
20,584
21,090
20,584
92,085
42,425
Non-current financial liabilities carrying at amortised cost at the
reporting date:
Bank borrowings (*)
Debts borrowed from non-controlling interest shareholders
Less:
Current portions of long-term borrowings and debts
Current
Bank borrowings (*)
Current portions of long-term borrowings (*)
Total borrowings and debts
(*) Details of the bank borrowings at the reporting date are as follows:
77
78
28. Borrowings and debts (cont.)
Lenders
Non-current
USD’000
Loan period
Repayment term
Interest
Eximbank - Ho Chi Minh City branch, Vietnam
37,128
Fifteen years
Quarterly
12-month lender saving rate plus a
4% margin for VND and 2% margin
for USD
SeaBank - Ho Chi Minh City branch, Vietnam
29,813
Five to six years
Repayable in 7-12 semi-annual
amounts
2.5% margin
Dong A bank - Ho Chi Minh City branch, Vietnam
7,354
Three years
Quarterly from March 2010
at base rate of State Bank of
Vietnam
BIDV - Ho Chi Minh branch, Vietnam
4,909
Five years
Repaid in 12 instalments from 27th
month from the first drawdown
USD reference interest rate and
3% for loan in US Dollar and VND
reference interest rate and fee loan
in Vietnamese Dong
11,607
One year
20 October 2010
0.875%/month
71
One year
22 January 2010
1%/month
79,204
Current
Bank borrowings
SHB bank - Da Nang branch, Vietnam
Eximbank - Nha Trang branch, Vietnam
11,678
Current portions of long-term borrowings:
Seabank - Ho Chi Minh City branch, Vietnam
3,700
One year
Monthly
2.5% margin
Dong A bank - Ho Chi Minh City branch, Vietnam
5,712
One year
Quarterly from March 2010
at base rate of State Bank of
Vietnam
9,412
21,090
For all borrowings, the lenders have security over the assets of the respective Group subsidiary.
During the year, the Group’s subsidiaries borrowed USD70.3 million from banks and non-controlling interests shareholders to finance working capital and property
development activities.
29. Deferred tax liabilities
30. Trade and other payables
30 June 2010
30 June 2009
30 June 2010
30 June 2009
USD’000
USD’000
USD’000
USD’000
Trade payables
12,987
8,549
Payables for property acquisitions
and land compensation
41,873
37,739
-
8,967
Payables to minority shareholders (*)
18,288
6,471
Tax payables
12,346
1,015
238
728
17,812
-
Other accrued liabilities
7,207
8,020
Other payables
5,715
2,865
116,466
74,354
(Reclassified)
Opening balance
19,367
29,959
Increased/(utilised) during the
year from fair value adjustments of
investment properties
31,476
(15,354)
Reclassified to deferred tax assets
(Note 5)
(Decrease)/addition
Closing balance
-
4,738
(20)
24
50,823
19,367
On recognition of investment properties, leasehold land and buildings at their
fair value, the future recovery of the carrying amount of these assets may result
in a taxable flow of economic benefits to the entity and the amount that will
be deductible for tax purposes will differ from the amount of those economic
benefits. The difference between the carrying amount of the revalued asset and
its tax base is a temporary difference and gives rise to a deferred tax liability.
Advances from property buyers
Payables to suppliers
Deposits from customers on
residential projects
(*) Included in this balance is an amount of USD11.0 million due to the vendors for the purchase of
an additional 30% in Viet Land Development Corporation (Note 7).
All trade and other payables are short-term in nature. Their carrying values are
considered a reasonable approximation of their fair values as at reporting date.
79
80
31. Payables to related parties
30 June 2010
30 June 2009
USD’000
USD’000
Relationship
Transactions
Non-current
VinaCapital Investment Management Ltd.
Investment Manager
Management fees and
performance fee
13,000
-
VinaCapital Vietnam Opportunity Fund Limited
Under common management
Shareholder loans payable (*)
63,856
76,856
65,018
65,018
Current
VinaCapital Vietnam Opportunity Fund Limited
Under common management
VinaSecurities Co. Ltd.
VinaCapital Investment Management Ltd.
Affiliate of Investment Manager
Investment Manager
Dividends from a subsidiary
Advances for real estate projects
Professional fee
Management fees
613
55
981
613
2,971
2,158
Performance fees
Advances for real estate projects
20,218
4,278
26,145
43,218
983
49,943
(*) This represents shareholder loans granted by VinaCapital Vietnam Opportunity Fund Limited (VOF) to subsidiaries of the Group. VOF is a minority shareholder in these subsidiaries. The loans are to finance real
estate projects which are co-invested with VOF. The amount of each loan is based on the respective ownership of VOF and the Group in each subsidiary. The loans are carried at amortised cost in the Statement
of Financial Position.
32. Cost of sales, operation, selling and administration expenses
Management fees
Professional fees
Depreciation and amortisation (*)
General and administration expenses (*)
Staff costs (*)
Outside service costs (*)
Material costs (*)
(*) These costs primarily relate to the operating activities of the Group’s subsidiaries.
Year ended
30 June 2010
USD’000
13,472
11,804
7,856
10,657
6,075
4,769
1,773
56,406
Year ended
30 June 2009
USD’000
14,889
4,578
9,364
7,912
7,331
4,777
2,471
51,322
33. Net gains/(losses) on fair value adjustments of investment properties
By real estate sector:
Commercial
Undetermined use
Hospitality
Mixed use
Net gains/(losses) on fair value adjustments of investment properties
Year ended
30 June 2010
USD’000
Year ended
30 June 2009
USD’000
6,704
27,091
777
60,915
95,487
13,136
(81,594)
(5,522)
(79,564)
(153,544)
Year ended
30 June 2010
USD’000
7,673
22
7,695
Year ended
30 June 2009
USD’000
1,084
(5,838)
(4,754)
Year ended
30 June 2010
USD’000
4,986
20,358
96
20,369
45,809
Year ended
30 June 2009
USD’000
941
99
1,551
2,591
Year ended
30 June 2010
USD’000
5,110
662
1,938
7,710
Year ended
30 June 2009
USD’000
31,402
3,511
1,618
1,040
496
38,067
34.Other net changes in fair value of financial assets at fair value through Statement of Income
Gains on fair value adjustments of held for sale asset and valuations of corporate bonds
Unrealised gains/(losses) from trustee loans’ revalued
35. Other income
Gain on bargain purchase (Note 7)
Gain on disposals of investments
Gain on disposals of fixed assets
Other income
36. Other expenses
Allowances for impairments of assets
Goodwill impairments
Losses from liquidation of investment property, net
Losses on disposals of investments and property, plant and equipment
Other expenses
81
82
37. Finance income
Year ended
Year ended
30 June 2010 30 June 2009
Year ended
Year ended
30 June 2010 30 June 2009
Interest income
Realised gains on foreign exchange differences
Other finance income
USD’000
6,227
633
6,860
USD’000
10,874
850
248
11,972
38. Finance expenses
Year ended
Year ended
30 June 2010 30 June 2009
Realised losses on foreign exchange differences
Unrealised losses on foreign exchange differences
Interest expense
Other finance expenses
USD’000
1,490
3,309
3,407
38
8,244
USD’000
3,069
1,983
1,683
6,735
Group profit/(loss) before tax
Group profit/(loss) multiplied by applicable
tax rate (0%)
Current income tax expenses on Vietnamese
subsidiaries
Deferred income tax income/(expense) (*)
Tax (expense)/income
USD’000
91,159
-
USD’000
(215,187)
-
(1,372)
(1,790)
(13,795)
(15,167)
15,354
13,564
(*) This amount represents the deferred income tax income/(expense) which arose from the
(losses)/gains on fair value adjustments of investment properties in the year.
Under the law of Vietnam, tax losses can be carried forward to offset
against future taxable income for five years from the year a loss is incurred.
Unrecognised deferred tax assets for the current year tax losses of
USD26,526,000 (30 June 2009: USD10,402,000) relating to losses carried forward
have not been recognised due to uncertainties as to their recoverability.
40.Earnings per share
39. Corporate income tax
VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of
the Cayman Islands, there is no income, state, 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 under BVI rules are not subject to Corporate Income Tax. A number
of subsidiaries are established in Vietnam and are subject to corporate income
tax in Vietnam at the regular tax rate of 25% (30 June 2009: 25%). A current tax
provision of USD1,372,000 has been made for these Vietnamese subsidiaries of
the Group for the year ended 30 June 2010 (30 June 2009: USD1,790,000).
The relationship between the expected tax expense based on the applicable tax
rate of 0% and the tax expense actually recognised in the Consolidated Statement
of Income can be reconciled as follows:
(a) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
shareholders of the Group by the weighted average number of ordinary shares
on issue during the year.
Year ended
Year ended
30 June 2010 30 June 2009
Profit/(loss) attributable to equity shareholders
of the Company from continuing and total
operations (USD’000)
Weighted average number of ordinary shares
on issue
Basic earnings/(loss) per share from continuing
and total operations
48,451
(129,429)
499,967,622
499,967,622
0.10
(0.26)
(b) Diluted earnings per share
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 are equal to basic earnings per share.
(c) Net asset value per share
Net asset value (NAV) per share is calculated by dividing the net asset value
attributable to ordinary shareholders of the Company to the number of
outstanding ordinary shares as at the reporting date. Net asset value is
determined as total assets less total liabilities and non-controlling interests.
The following non-cash flow adjustments have been made to the pre-tax result
for the year to arrive at operating cash flow:
Depreciation and amortisation
Other net changes in fair value of financial assets
at fair value through Statement of Income
30 June 2010 30 June 2009
681,644
660,529
Number of outstanding ordinary shares
499,967,622
499,967,622
1.36
1.32
30 June 2010 30 June 2009
USD’000
USD’000
7,856
8,779
(7,695)
5,838
(95,487)
153,544
-
(1,084)
Loss/(gains) from liquidations of investments
and subsidiaries
(8,445)
(128)
Losses from written-off/disposed investment
properties
-
1,618
(Gains)/losses on fair value adjustments of
investment properties
Gain on realisations of financial assets
Net asset value attributable to ordinary
shareholders of the Company (USD’000)
Net asset value per share (USD/share)
41. Operating cash flows
Allowances for impairments of assets
5,813
31,402
(4,986)
(941)
-
2,939
660
267
9,609
3,342
-
268
Unrealised losses on foreign exchange differences
3,309
1,983
Interest expense
3,407
1,683
Interest income
(6,227)
(10,874)
(92,186)
198,636
Negative goodwill
Goodwill impairments
Losses from written-off account balances
Share of associates losses/(gains)
Losses on disposals and written-off property,
plant and equipment
83
84
42.Directors and management remuneration
The directors’ fees payable to members of the Board of Directors during the year
were as follows:
Nicholas Brooke
Robert Gordon
Michael Arnold
Nguen Khoong Tong
Bruno Schoepfer
Nicholas Allen
30 June 2010 30 June 2009
USD’000
USD’000
40
40
40
15
40
12
28
8
120
103
The Board of Management and certain other individuals who act on behalf of the
Group are remunerated by the Investment Manager. However it is not possible
to specifically allocate their cost to the Group. Part of the management fees
disclosed in Note 43 can be allocated to remuneration of these individuals.
43.Related party transactions
Management fees
The Group is managed by VinaCapital Investment Management Limited (the
“Investment Manager”), an investment management company incorporated
in the British Virgin Islands (“BVI”), under a management agreement dated
16 March 2006 (the “Management Agreement”). 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% (30 June 2009: 2%).
Total management fees for the year amounted to USD13,471,000 (30 June 2009:
USD14,889,000), with USD981,000 (30 June 2009: USD2,158,000) in outstanding
accrued fees due to the Investment Manager at the reporting date.
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 an realised returns over an annualised hurdle rate of 8%
(30 June 2009: hurdle rate of 8%) and a high water-mark.
There was no performance fee charged for the year (30 June 2009: nil) with
USD33,218,000 (30 June 2009: USD43,218,000) in outstanding accrued fees
due to the Investment Manager at this date.
Other related party transactions and balances
Mr. Don Lam, a director and the CEO of the Investment Manager, purchased
50,000 shares in the year on the open market. As a result of this transaction,
Mr. Don Lam has a direct and indirect interest of 2,457,250 and 122,649 shares
bringing his total share holding to 0.52% at the reporting date.
Subsequent to the reporting date, Mr. Michael Arnold and Mr. Nicholas
Allen, directors of the Company, purchased 64,000 shares and 95,627 shares,
respectively, bringing their total share holdings to 0.01% and 0.02% respectively.
Subsequent to the reporting date, the Investment Manager of the Group,
VinaCapital Investment Management Limited, purchased 660,000 shares on
the open market representing a 0.13% interest in the Group. As Mr. Don Lam
and Mr. Horst Geicke are shareholders in this company, their shareholdings
consequently increased to 0.56% and 0.65% respectively.
During the year, a local company owned by Mr. Don Lam and Mr. Horst Geicke,
the Company’s directors, paid a deposit to purchase a villa in the Ocean Villas
Project in Danang, Vietnam at the market value in an arm’s length transaction.
During the year, VinaSecurities Joint Stock Company, a related party of the
Group, provided advisory services to the Group and charged USD0.09 million.
All services were conducted at arm’s length and charged accordingly.
44. Contingent liabilities
East Ocean Real Estate and Tourist Joint Stock Company
In 2007 East Ocean Real Estate and Tourist Joint Stock Company (“East Ocean
JSC”), a subsidiary of the Group, engaged AIC Management Co. Ltd. (“AIC”) to
supply project management and associated services in respect of the Sheraton
Nha Trang Resort and Spa Project. The scope of work was expanded in 2008 to
include construction management and associated services. During 2010, various
disputes arose between East Ocean JSC and AIC relating to AIC’s performance,
the scope of work and amounts payable to AIC. In March 2010 all contracts
between the two parties were terminated. Negotiations between the parties
to reach a settlement of the disputes have been unsuccessful and in June 2010
AIC filed a Statement of Claim with the Vietnam International Arbitration Centre
(“VIAC”) for alleged breach of contractual obligations and outstanding payments,
with total claimed amount of USD5.6 million. In September 2010 East Ocean
JSC filed a Statement of Defence denying all claims by AIC and also filed the
Statement of Counter-Claim against AIC for breach of contract and law with the
counter-claim amount of USD4.4 million. The outcome of the Statement
of Claim, Statement of Defence and Statement of Counter-Claim is uncertain.
46. Risk management objectives and policies
45.Commitments
Foreign currency sensitivity
The Group’s exposure to risk resulting from changes in foreign currency exchange
rates is moderate as although transactions in Vietnam are settled in Vietnam
Dong (VND), the value of the Vietnam Dong has historically been closely linked to
that of USD, the presentation currency.
At the reporting date, the Group was committed under non-cancellable
operating lease agreements to paying the following future amounts:
Within one year
From two to five years
Over five years
30 June 2010 30 June 2009
USD’000
USD’000
906
919
3,440
3,407
12,463
12,776
16,809
17,102
As at 30 June 2010, the Group was also committed under construction
agreements to paying USD14.1 million (30 June 2009: USD17.9 million) for
future construction works of the Group’s properties held by subsidiaries.
The Group has a broad range of commitments under investment licences it
has received, and other agreements it has entered into, to acquire and develop,
or make additional investments in investment properties and leasehold land
in Vietnam. Further investment in any of these arrangements is at the Group’s
discretion.
The Group invests in a diversified property portfolio in Vietnam and neighbouring
countries with the objective of providing investors with an attractive level of
investment income, together with the potential for capital growth.
The Group is exposed to a variety of financial risks: market risk (including
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 most significant financial risks to which the Group is exposed are
described below:
The Group’s financial assets and liabilities exposure to risk of fluctuations in
foreign currency exchange rates at the reporting date are as follows:
Short-term exposure
Long-term exposure
VND
USD’000
Others
USD’000
VND
USD’000
Others
USD’000
30 June 2010
Financial assets
Net exposure
144,252
(54,823)
89,429
100,764
(108,878)
(8,114)
9,980
(44,400)
(34,420)
(103,451)
(103,451)
30 June 2009
Financial assets
Net exposure
103,131
(71,498)
31,633
140,802
(73,383)
67,419
1,112
(19,753)
(18,641)
(68,018)
(68,018)
85
86
Sensitivity analysis to a reasonably possible change in exchange rates
Assets valuations in Vietnam are based on a combination of factors linked to both
the USD and VND. Assuming all properties are valued based on VND cash flow, a
5% weakening of the VND against USD at the end of the year ended 30 June 2010
and 30 June 2009 would have impacted net income of the Group’s equity by the
amounts shown below. This analysis assumes that all other variables, in particular
interest rates, remain constant.
5% devaluation of the Vietnam Dong
30 June 2010 30 June 2009
USD’000
USD’000
Net loss
Net loss
(2,750)
(650)
A 5% strengthening of the VND against USD would have had the equal but
opposite effect to the amount shown above, on the basis that all other variables
remain constant.
Price risk sensitivity
Price risk is the risk that the value of the instrument will fluctuate as a result of
changes in market prices, whether caused by factors specific to an individual
investment, its issuer or all factors affecting all instruments traded in the market.
As the majority of the Group’s financial instruments are carried at fair value with
fair value changes recognised in the Statement of Income, all changes in market
conditions will directly affect net investment income.
The Group invests in real estate projects and is exposed to market price risk.
If the prices of the real estate were to fluctuate by 10%, the impact on Statement
of Income and equity would amount to approximately USD46.5 million
(2009: USD51.6 million).
Cash flow and fair value interest rate sensitivity
The Group’s exposure to interest rate risk is related to interest bearing financial
assets and financial liabilities. Cash and cash equivalents, bank deposits and
bonds are subject to interest at fixed rates. They are exposed to fair value
changes due to interest rate changes. The Group currently has some financial
liabilities with floating interest rates which are disclosed in the Notes to the
consolidated financial statements. This is the maximum exposure of the Group to
cash flow interest rate risk.
Credit risk analysis
Credit risk is the risk that a counterparty will be unable to pay amounts in full
when due. Impairment provisions are provided for losses that have been incurred
by the Group at the reporting date.
The Group’s exposure to credit risk is limited to the carrying amount of financial
assets recognised at the reporting date, as summarised below:
30 June 2010 30 June 2009
USD’000
USD’000
Classes of financial assets - carrying amounts:
Ordinary shares - unlisted
Trustee loans
Held for sale asset
5,033
16,690
11,073
9,980
15,215
79,979
117,026
254,996
5,032
41,266
1,112
34,888
50,274
112,473
245,045
The carrying amount of trade and other receivables and loans represent the
Group’s maximum exposure to credit risk in relation to its financial assets.
At 30 June 2010, the amounts of trade receivables that are overdue but not
impaired are insignificant. The Group has no other significant concentrations of
credit risk.
In accordance with the Group’s policy, the Investment Manager continuously
monitors the Group’s credit position on a monthly basis, identified either
individually or by group, and incorporates this information into its credit controls.
The Group’s Investment Manager reconsiders the valuations of financial assets
that are impaired or overdue at each reporting date based on the payment
status of the counterparties, recoverability of receivables, and prevailing
market conditions.
Liquidity risk analysis
Liquidity risk is the risk that the Group will experience difficulty in either realising
assets or otherwise raising sufficient funds to satisfy commitments associated
with investments and financial instruments. There is an inherent liquidity risk
associated with the Company’s primary business, being property investment. As
a consequence, the value of the majority of the Company’s investments cannot
be realised as quickly as other investments such as cash or listed equities.
Furthermore, the development and realisation of the Company’s property
investments will normally require access to debt financing at a reasonable cost
or shareholder loans from the Company’s surplus funds and its co-investors.
The Company seeks to minimise liquidity risk through:
• Preparing and monitoring cash flow forecasts for each investment project and
the Company on a consolidated basis;
• Arranging financing to fund real estate developments as required; and
• Providing ample lead times for the disposal of assets and realisation of cash.
At the reporting date, the Group’s financial liabilities have contractual maturities
which are summarised follows:
Current
Within 6
months
USD’000
Payables to related
parties (*)
Long-term borrowings
and debts
Other liabilities
Current
Non-current
Within 6
months
USD’000
6 to 12
months
USD’000
From 1 to 5
years
USD’000
Over 5
years
USD’000
Trade and other
payables
Short-term borrowings
74,354
20,584
-
-
-
Payables to related
parties (*)
49,943
-
65,018
-
-
-
5,765
14,595
144,881
-
1,481
912
73,176
14,595
30 June 2009
Long-term borrowings
and debts
Long-term payables to
minority shareholders
Other liabilities
Non-current
6 to 12
months
USD’000
From 1 to 5
years
USD’000
Over 5
years
USD’000
(*) Payables to related parties are primarily shareholder loans from related parties to jointly owned
subsidiaries. These loans are not repayable until the respective subsidiaries have sufficient cash
to repay these obligations.
The above contractual maturities reflect the gross cash flows, which may differ
to the carrying value of the liabilities at the reporting date.
30 June 2010
Trade and other
payables
Short-term borrowings
This compares to the maturity of the Group’s financial liabilities in the previous
year as follows:
116,466
21,090
-
-
-
26,145
-
76,856
-
163,701
-
39,603
879
117,338
31,392
31,392
Capital management
The Group’s capital management objectives are:
• To ensure the Group’s ability to continue as a going concern;
• To provide investors with an attractive level of investment income; and
• To preserve a potential capital growth level.
The Group considers the capital to be managed as equal to the net assets
attributable to the holders of ordinary shares. The Group has engaged the
Investment Manager to allocate the net assets in such a way so as to generate
investment returns that are commensurate with the investment objectives
outlined in the Group’s offering documents.
87
88
47. Fair value hierarchy
The Group adopted the amendments to IFRS 7 Improving Disclosures about
Financial Instruments effective from 1 January 2009. These amendments require
the Group to present certain information about financial instruments measured
at fair value in the Consolidated Statement of Financial Position. In the first
year of application, comparative information need not be presented for the
disclosures required by the amendment. Accordingly, the disclosure for the fair
value hierarchy is only presented for the 30 June 2010 year end.
The following table presents financial assets and liabilities measured at fair value
in the Consolidated Statement of Financial Position in accordance with the fair
value hierarchy. This hierarchy groups financial assets and liabilities into three
levels based on the significance of inputs used in measuring the fair value of the
financial assets and liabilities. The fair value hierarchy has the following levels:
- Level 1: quoted prices in active market for identical assets or liabilities;
- Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (ie. as prices) or indirectly
(ie. derived from prices); and
- Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The level within which the financial assets or liability is classified is determined
based on the lowest level of significant input to the fair value measurement.
The financial assets and liabilities measured at fair value in the statement of
financial position are grouped into the fair value hierarchy as follows:
Level 1
Level 2
Level 3
Total
USD’000 USD’000 USD’000 USD’000
Financial assets at fair value through
Statement of Income
- Ordinary share - unlisted
- Held for sale asset
- Trustee loans
-
5,033
11,073
16,690
9,980
15,215
117,026
175,017
There have been no transfers between Level 1 and 2 during the year.
-
5,033
11,073
16,690
9,980
15,215
117,026
175,015
Investing policy
1. Investment objectives
VinaLand Limited (“VNL” or “the Company”) is a
closed-end investment company incorporated in
the Cayman Islands with the primary objective of
achieving medium to long-term (3-5 years) capital
appreciation and providing an attractive level of
income (from interest and dividends) through
investing in a diversified portfolio of mainly
Vietnamese property and development projects.
Investment manager:
VNL is managed by VinaCapital Investment
Management Ltd (“VCIM” or the “Investment
Manager”), a BVI company. VCIM was established
in 2003 and manages three listed and several
unlisted investment companies. In addition, VCIM
employs a Development Advisor, VinaCapital
Real Estate Ltd (VCRE), to manage and develop
property assets, and employs a planning and
project management company, VinaProjects, a
50/50 joint venture with inProjects, a Hong Kongbased project and construction management firm.
2. Investing policy
The Company will adhere to the following
investment policies and restrictions:
Type of investment:
The Company is permitted to engage in all forms
of property investment and property development
as allowed under the laws of each jurisdiction
in which it operates, utilising instruments
and structures that may be suitable to allow
participation in selected investment opportunities.
These investments will be made directly or
through investee companies (which are special
purpose vehicles established specifically for each
project) or by way of joint venture partnerships
with other reputable developers.
Geographical focus:
At least 70 percent of the Gross Asset Value of
the Company will be invested in Vietnam. Up to a
maximum of 30 percent of the Gross Asset Value
may also be invested in neighbouring Asian countries
(namely China, Cambodia and Laos), should the
Directors consider that such investments would offer
potentially attractive returns.
Sector focus:
The Company will target five property sectors:
office, retail, residential, industrial and hospitality/
leisure. The Company’s primary focus will be
Ho Chi Minh City, with a secondary focus on Hanoi
and key leisure areas, including but not limited to
Nha Trang, Hoi An, and Danang.
Control of investments:
The Company will seek to own a controlling
interest in its investments, either by owning a
direct controlling participating interest in the
project or by controlling the investee companies
through which the investments are made. In the
event that the Company holds a minority interest
in a project, it will seek to secure adequate
minority protection rights.
89
90
Realisation of investments:
The Company is a publicly listed investment
company on the London Stock Exchange’s AIM
Market. Investors are free to purchase and sell
shares whenever they please. The Company
will aim to realise individual investments when
the Board, with the advice of the Investment
Manager, the Investment Committee and the
Development Adviser, believes the realisation
would be in the best interests of the Company
and fulfil its investment objectives. The Company
intends to affect exits through disposals of its
projects or interests in investee companies to
institutional and private investors.
Investment size:
No single investment may, at the time of
investment, exceed 20 percent of the Gross
Asset Value.
Cross holdings:
If the Investment Manager and the Directors
deem it appropriate, the Company may also
invest up to 20 percent of its Gross Asset Value
in other property funds which themselves invest
in property in the target region. All investments
must be approved by the Investment Committee
and, where a project or investment exceeds ten
percent of the Net Asset Value, in addition, the
approval of a majority of the Board must also
be obtained.
Leverage:
There is no limit in the Company’s articles
of association to the amount of borrowings
that it may incur. As is typical with real estate
development and investment, investee companies
may use leverage for individual projects. All
leverage will be non-recourse to the Company
and will be incurred by the investee companies.
The level of the debt incurred will vary depending
on the laws and regulations pertaining to the
debt market with regard to the particular type of
project and the ability of the relevant Investee
Company to service the debt.
Other information:
• The Directors will review the investment policies
on an annual basis.
• Changes to the investment policies may be
prompted, inter alia, by changes in government
policies or economic conditions which alter or
introduce additional investment opportunities.
In the event of a breach of any investment
restrictions, the Investment Manager shall
inform the Board upon becoming aware of the
same and if the Board considers the breach
to be material, notification shall be made to a
Regulatory Information Service Provider.
• Cash pending investment, reinvestment or
distribution will be placed in bank deposits,
bonds, government-issued treasury securities
or in local money market funds for the purpose
of protecting the capital value of the Company’s
cash assets.
• In order to hedge against interest rate risks
or currency risk, the Company may, where
appropriate, also enter into forward interest
rate agreements, forward currency agreements,
interest rates and bond futures contracts and
interest rate swaps and purchase and write (sell)
put or call options on interest rates and put or
call options on futures on interest rates.
3. Valuation policy
The Investment Manager will present reports
prepared by independent external valuers to the
valuation sub-committee (“Valuation Committee”)
on at least an annual basis. The Valuation
Committee will accept, reject, apply a discount to
asset valuations or may require the Investment
Manager to obtain other third party valuation
reports if deemed necessary. Every real estate
investment which is required to be recorded at
fair value will be revalued at least annually by two
independent appropriately qualified valuers.
The Net Asset Value and the Net Asset Value per
share shall be calculated (and rounded to two
decimal places), in US dollars by the Administrator
(or such other person as the Directors may
appoint for such purpose from time to time) on a
quarterly basis
The Net Asset Value shall be the value of all
assets of the Company less the liabilities of the
Company determined in accordance with the
valuation guidelines adopted by the Directors
from time to time.
Under current valuation guidelines adopted by
the Directors, such values shall be determined
as follows:
• The value of any cash in hand or on deposit,
bills and demand notes and accounts receivable,
prepaid expenses, cash dividends and interest
declared or accrued as aforesaid and not yet,
received shall be deemed to be the full amount
thereof, unless in any case the Directors shall
have determined that the same is unlikely to
be paid or received in full, in which case the
value thereof shall be arrived at after making
such discount as the Directors may consider
appropriate in such case to reflect the true
value thereof;
• The value of securities which are quoted or
dealt in on any stock exchange (including any
securities traded on an “over the counter
market”) shall be based on the last traded prices
on such stock exchange, or if there is more than
one stock exchange on which the securities
are traded or admitted for trading, that which
is normally the principal stock exchange for
such security, provided that any such securities
which are not freely transferable, or which are
not regularly traded, or which for any other
reason are subject to limited marketability, shall
be valued at a discount (the amount of such
discount being determined by the Directors
in their absolute discretion or in a manner so
approved by the Directors);
• As regards unquoted securities;
-Unquoted investments will initially be valued
at cost price, which will include any expenses
relating to their acquisition;
-A revaluation of unquoted investments to
a value in excess of or below cost may be
made in the circumstances provided by and in
accordance with the guidelines issued by the
British Investment Fund Association or any
successor body;
• All other assets and liabilities shall be valued
at their respective fair values as determined in
good faith by the Directors and in accordance
with generally accepted valuation principles
and procedures;
• Any value other than in US dollars shall be
translated at any officially set exchange rate or
appropriate spot market rate as the Directors
deem appropriate in the circumstances having
regard, inter alia, to any premium or discount
which may be relevant and to costs of exchange.
If the Directors consider that any of the above
bases of valuation are inappropriate in any
particular case or generally, they may adopt
such other valuation or valuation procedure as
they consider is reasonable in the circumstances
provided that such other valuation or valuation
procedure has been approved by the Company’s
auditors. The Directors may delegate to the
Investment Manager any of their discretions
under the valuation guidelines.
4. Co-investments
The Investment Manager may from time to time
manage other funds which have a similar or different
investment objective and policy to that of the
Company. Nevertheless, circumstances may arise
where investment opportunities will be available to
the Company and which are also suitable for one or
more of the other funds managed by the Investment
Manager. Where a conflict arises in respect of an
investment opportunity, the Investment Manager
will allocate the opportunity on a fair basis. In such
event, the allocations will normally be made on a
pro-rata basis between the Company and the other
funds based on the amounts available for investment
in each fund at the time the investment opportunity
arises. However, the Investment Manager will be
entitled to recommend to the Board the allocation of
investment opportunities on a basis otherwise than
as set out above if it deems it appropriate. In those
circumstances the Board will determine what level of
investment the Investment Manager may make on
behalf of the Company.
The Investment Manager may also from time to time
manage one or more funds incorporated in Vietnam.
If appropriate, therefore, the Company may be able to
invest in local companies or projects up to the foreign
ownership restriction then existing with the local fund
making additional investment in order to gain control
of that company or project. This facility would allow
the Company to benefit from majority participation
in local projects thereby reducing the risks which
may be associated with the use of locally established
co-investors/partners and thereby also allowing
effective overall control to be exercised by the
Manager alone.
91
92
5. Ordinary Shares
It is intended that the Company’s income will consist
wholly or mainly of investment income. The Directors
currently intend to reinvest a large part of income
to take advantage of opportunities meeting the
Company’s investment and return objectives, and
where suitable opportunities are not available to
distribute substantially all of the Company’s income
and capital gains after administrative expenses and
tax to holders of the Ordinary Shares, and aim to
increase dividends over the life of the Company.
6. Distributions
Until further notice, the Board of Directors of the
Company has resolved to distribute approximately
50 percent of cash generated from divestments, after
providing for tax and investment commitments. The
Board will make distributions following the finalisation
of the interim (six month) and annual financial
statements. Distributions will be made in the form of
a tender for the repurchase of shares.
7. Life of the Company
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
intends that a special resolution will be proposed
every seventh year that the Company ceases to
continue as presently constituted. If the resolution is
not passed, the Company will continue to operate. If
the resolution is 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.
Historical financial information
Years ended 30 June
2006
2007
2008
2009
2010
Income statement (USD'000)
Total income from ordinary activities
1,873
78,612
379,172
(157,130)
155,809
(1,752)
(28,390)
(101,415)
(58,057)
(64,650)
121
50,222
277,757
(215,187)
91,159
-
(245)
(29,574)
13,564
(15,167)
Profit for the year
121
49,976
248,183
(201,623)
75,992
Minority interests
-
(15,341)
(80,485)
72,194
(27,541)
121
34,635
167,698
(129,429)
48,451
200,146
741,090
1,228,373
1,097,051
1,269,167
(1,563)
(112,218)
(423,846)
(436,522)
(587,523)
198,583
628,872
804,527
660,529
681,644
Basic earnings per share (cents per share)
0.00
0.12
0.34
(0.26)
0.10
Share price at 30 June
0.98
1.49
1.22
0.68
0.77
Ordinary share capital (thousand shares)
204,845
499,968
499,968
499,968
499,968
Market capitalisation at 30 June (USD'000)
200,748
744,952
609,960
339,978
384,975
0.98
1.26
1.61
1.32
1.36
Return on average ordinary shareholders' funds
0.1%
11.6%
33.5%
-25.9%
9.7%
Investment management fees/avr. NAV
3.6%
7.8%
8.5%
2.0%
2.0%
Total expenses from ordinary activities
Operating profit before income tax
Income tax expense
Profit attributable to ordinary equity holders
Statement of financial position (USD'000)
Total assets
Total liabilities
Net assets
Share information
Net assets value per ordinary share (USD)
Ratio
93
94
VinaLand Limited (‘VNL’)
is a closed-end fund trading
on the AIM Market of the
London Stock Exchange.
Launched in 2006, VNL is
the largest listed fund for
investment in Vietnam’s
emerging real estate
sector. The fund invests in
residential, office, retail,
hospitality, and township/
industrial properties. The
manager’s objective is to
provide shareholders with an
attractive level of income as
well as creating a potential
for capital growth.
VNL overview and details
VNL Details
Fund size USD682 million (NAV as of 30 June 2010).
Fund launch 22 March 2006.
Term of fund Seven years subject to shareholder vote for liquidation.
Fund domicile Cayman Islands.
Legal form Exempted company limited by shares.
Structure Single class of ordinary shares trading on the AIM market of the London Stock Exchange plc.
Auditor Grant Thornton (Vietnam).
Nominated advisor (Nomad) Grant Thornton Corporate Finance (UK).
Custodian HSBC Trustee (HK).
Broker
LCF Edmond de Rothschild (UK)
Lawyers Lawrence Graham (UK).
Maples and Calder (Cayman Islands).
Management and performance fee Management fee of 2 percent of NAV. Performance fee of 20 percent
of total NAV increase over the higher of an 8 percent compound annual return and the high watermark.
Investment manager VinaCapital Investment Management Ltd.
Investment policy Medium to long-term capital gains with some recurring income through investment in the following real estate sectors: Office; Residential; Retail; Township/Industrial (large scale); and Hospitality and Leisure.
Investment focus by geography Greater Indochina comprising: Vietnam (minimum of 70 percent), Cambodia, Laos, and southern China.
Registered office
PO Box 309GT, Ugland House, South Church Street, George Town,
Grand Cayman, Cayman Islands.
95
Ho Chi Minh City
17th Floor, Sun Wah Tower
115 Nguyen Hue Blvd., District 1
Ho Chi Minh City, Vietnam
Phone: +84-8 3821 9930
Fax: +84-8 3821 9931
www.vinacapital.com
Hanoi
5th Floor, Sun City Building
13 Hai Ba Trung Street,
Hoan Kiem Dist., Hanoi, Vietnam
Phone: +84-4 3936 4630
Fax: +84-4 3936 4629
Cambodia
Canadia Tower, 20th floor
No. 315, Ang Duong Street
Phnom-Penh, Cambodia
Phone: +855 2399 6688
Fax: +855 2399 6050
Singapore
6 Temasek Boulevard
#42-01 Suntec Tower 4
Singapore 038986
Phone: +65 6332 9081
Fax: +65 6333 9081

Annual Report 2010

Transcription

Similar documents

VIETNAM`S EXPORT/IMPORT AND BUSINESS OPPORTUNITIES

Good Morning Vietnam! - Broadcast Electronics

108 Marina Terra

Corregidor Day Tour Manila City Tour Baguio Overnight Package

Utalii Hotel Tariffs Non Resident HOTEL LAUNDRY ZAWADI GIFT

Winter 2015

Inventory Management Savings.key

chantecler 16-a, las fuentes — $118,00 usd steffen features

CONDO YELAPA, The Park - Vallarta Rentals and Sales

Claude AnShin Thomas Sunday, May 6th, 2012