INVESTMENT GATEWAY TO
MALAYSIA AND VIETNAM
ANNUAL
REPORT
2012
The RuMa Hotel and Residences,
Jalan Kia Peng, Kuala Lumpur
The RuMa is a collection of luxury residences
and hotel suites with the rare combination of
vintage charm and city convenience.
Aloft Kuala Lumpur Sentral Hotel,
Kuala Lumpur
The 482-room Aloft Kuala Lumpur Sentral is the
first Aloft hotel in Malaysia, which is the largest
Aloft hotel in the world to date.
City International Hospital,
Ho Chi Minh City
The 320-bed City International Hospital is
part of the 37.54-hectare mixed development
International Hi-Tech Healthcare Park.
INTRODUCTION
Aseana Properties Limited is a property development company established as an investment gateway to Malaysia and
Vietnam. Product innovation and commitment to excellence are hallmarks of Aseana Properties. With a focus on the
upmarket segment of the property market, Aseana Properties aims to be the premier investment gateway for investors into
Malaysia and Vietnam.
CONTENTS
• Development Manager’s Review
• Corporate Strategy
• Chairman’s Statement
2
3
4
10 • Property Portfolio
11 • Share Price Chart
11 • Performance Summary
12 • Financial Review
13 • Corporate Social Responsibility
14 • Calendar of Events
16 • Board of Directors
18 • Directors’ Report
21 • Report of Directors’
Remuneration
22 • Corporate Governance Statement
25 • Independent Auditor’s Report
26 • Financial Statements
63 • Corporate Information
2 Annual Report 2012
CORPORATE
STRATEGY
Picture shown is for illustration
purpose only. Client to provide
actual photo of choice for final
production.
COVER RATIONALE
INVESTMENT GATEWAY TO MALAYSIA AND VIETNAM
The tea ceremony, practised widely in Asia, is more than an elaborate ritual. It
encompasses the principles of harmony, respect and hospitality which underlines
Aseana Properties’ approach towards business and its relationship with all
stakeholders.
Aseana Properties Limited (“Aseana
Properties”) is a London-listed company
incorporated in Jersey focusing on
property development opportunities in
Malaysia and Vietnam.
Ireka Development Management Sdn.
Bhd. (a wholly-owned subsidiary of Ireka
Corporation Berhad), the Development
Manager for Aseana Properties,
is responsible for the day-to-day
management of its property portfolio as
well as the introduction and facilitation
of new investment opportunities.
Aseana Properties’ investment objective
is to provide shareholders with an
attractive overall total return achieved
primarily through capital appreciation
by investing in properties in Malaysia
and Vietnam. Aseana Properties seeks to
achieve its investment objective through
the acquisition, development and
redevelopment of upscale residential,
commercial, hospitality and healthcare
projects leveraging on the Development
Manager’s experience in these sectors.
Aseana Properties typically invests
in development projects at the pre-
construction stage. It will also selectively
invest in projects under construction and
completed projects with the potential for
high capital appreciation.
Aseana Properties makes investments
both as sole principal and, where
appropriate, in joint arrangements with
third parties, where management control
resides with Aseana Properties. Such
joint arrangements are only undertaken
with parties who have demonstrable
relevant experience or local knowledge.
Currently, approximately 78% of Aseana
Properties’ investment portfolio is
allocated to projects in Malaysia and
approximately 22% to projects in
Vietnam.
KEY FACTS
Exchange
London Stock Exchange Main Market
Symbol
ASPL
Lookup
Reuters - ASPL.L;
Bloomberg - ASPL:LN
Domicile
Jersey
Shares Issued
212,525,000
Management Fee
2% of NAV
Performance Fee
20% of the out performance NAV over
a total return hurdle rate of 10%
Admission Date
5 April 2007
ADVISERS & SERVICE
PROVIDERS
Development Manager
Ireka Development Management
Sdn. Bhd.
Shares Held in Treasury
500,000
Financial Adviser
Murphy Richards Capital LLP
Voting Share Capital
212,025,000
Share Denomination
US Dollars
Corporate Broker
N+1 Singer
Auditor
KPMG Audit Plc
The RuMa Hotel and Residences
Jalan Kia Peng, Kuala Lumpur
Annual Report 2012 3
CHAIRMAN’S
STATEMENT
In accordance with the mandate approved by Shareholders, we
remain committed to completing those projects which Aseana
is already involved with and then disposing of them at a time
and at a price intended to maximise the returns to shareholders.
PROGRESS OF PROPERTY PORTFOLIO
Although 2012 did not see significant sales at SENI Mont’ Kiara,
it was, nevertheless, a busy year in the portfolio. As mentioned
above, the Harbour Mall Sandakan opened in July 2012 and the
Four Points by Sheraton Sandakan Hotel opened in May 2012.
Both were formally launched on 20 October 2012. The Harbour
Mall Sandakan is 42% tenanted as at the end of last year, while
the Four Points by Sheraton Sandakan Hotel achieved 37%
occupancy rate at the end of 2012. The Kuala Lumpur Sentral
office towers and the Aloft Kuala Lumpur Sentral Hotel were
physically completed in December 2012 and January 2013
respectively. The RuMa Hotel and Residences was launched in
March 2013; The Aloft Kuala Lumpur Sentral Hotel opened for
business on 22 March 2013 and shares in Nam Long Investment
Corporation were listed on the Ho Chi Minh Stock Exchange on
8 April 2013.
The construction of City International Hospital (“CIH”) in Ho
Chi Minh City was completed at the end of March 2013. CIH is
currently undergoing testing and commissioning and the
hospital facility is expected to open in June 2013. In view of
continued soft market conditions for high-end residences in
Vietnam, the Board has decided to delay the launch of the
Waterside Estates to the latter half of year 2013.
Further information on each of the Company’s properties is set
out in the Development Manager’s review on pages 5 to 8.
OUTLOOK
Year 2012 and continuing into 2013 saw the completion of a
number of key operating assets within the Group. As such,
despite the challenging operating conditions in both Malaysia
and Vietnam, the key focus in 2013 will be to ensure that the
performance of these assets continues on the right path to
prepare them for eventual sale. The Company will also continue
to focus on realising the remaining units at SENI Mont’ Kiara,
and to drive new sales for The RuMa Hotel and Residences.
In closing, I wish to extend a note of appreciation to my fellow
Directors and our development manager for their continued
commitment and contribution. Our heartfelt thanks also go out
to the Government authorities, financiers, shareholders and
business associates who have remained supportive of our
business endeavours throughout the year.
MOHAMMED AZLAN HASHIM
Chairman
23 April 2013
Global market conditions continued to be subdued in 2012 and
inevitably this had an impact on the economies of both Malaysia
and Vietnam, Aseana Properties’ core markets. Both Malaysia
and Vietnam experienced moderate growth in 2012, with
gross domestic product (“GDP”) growth at 5.6% and 5.03%
respectively, both lower than the year before, with Vietnam’s
growth being the lowest in the past 13 years. In Malaysia,
business confidence has been mixed. Whilst the financial
markets have been buoyed by large initial public offerings of
government linked companies, manufacturers, small and
medium sized businesses are feeling the effects of a slowdown
in the export market and deferred capital spending. The
impending general elections in Malaysia have also created
another level of uncertainty for business decision-making.
The economy has however been underpinned by large scale
public spending that includes the implementation of the first
phase of a mass rapid transit system in Kuala Lumpur.
In Vietnam, stabilisation measures introduced by the
government, at the expense of higher economic growth,
have successfully moderated inflation in 2012 to 9.2%, down
from 18.1% in the previous year. As part of these stabilisation
measures, lending to specific sectors such as real estate and
securities have remained selective. Additionally, non-
performing loans particularly of state-owned enterprises have
continued to be a drag on economic activity in Vietnam.
However, the government is taking active steps to restructure
these non-performing loans and has successfully reduced
interest rates throughout the year to support domestic
business growth.
The performance of the real estate market in Malaysia for
2012 has been mixed. Certain sub-segments of the market
such as medium-end residential, prime retail assets and
projects associated with major government initiatives such as
Iskandar Development Region have received keen interest
from buyers and investors. However, demand for high-end
residential properties and commercial offices remained soft
throughout the year. The Vietnam real estate market is
still very much in a recovery mode. High-end residential
properties, which have dominated the market prior to the
slowdown, still remain in abundant supply. However, towards
the third quarter of 2012, we have seen evidence of improved
market activities in the affordable housing sub-segment as
well as demand for prime retail spaces in central business
district of Ho Chi Minh City.
Aseana Properties registered a significant decrease in
revenue by 92% from US$281.1 million in 2011 to US$23.7
million in 2012 largely due to a lack of sales of major assets
during the year. The revenue was mainly attributable to the
sale of completed units at SENI Mont’ Kiara. Stricter lending
conditions imposed by banks in Malaysia, in particular for the
high-end condominium market have made it more difficult
for purchasers to fund the acquisition of units, particularly
the bulk buyers who the Manager has been in discussions
with. We are continuing to examine ways of disposing the
remaining units at SENI Mont’ Kiara.
The Group recorded a net loss before taxation of US$16.6 million
in 2012, compared to a profit before taxation of US$33.1 million
in 2011. The losses are mainly attributed to the operating losses
from Harbour Mall Sandakan and Four Points by Sheraton
Sandakan Hotel, which commenced operations in July 2012
and May 2012 respectively, and a reduction in the fair value of
Aseana’s holding in Nam Long shares.
4 Annual Report 2012
DEVELOPMENT
MANAGER’S REVIEW
BUSINESS OVERVIEW
Aseana Properties made good progress on a number of projects
within its portfolio in year 2012. The Group successfully
completed and opened the Harbour Mall Sandakan and Four
Points by Sheraton Sandakan Hotel in October 2012. The Group
has also completed the Kuala Lumpur Sentral Office Towers
in December 2012, followed by the completion of the Aloft
Kuala Lumpur Sentral Hotel in January 2013. The Aloft Kuala
Lumpur Sentral Hotel was subsequently opened for business in
March 2013.
Final development approvals were obtained for The RuMa Hotel
and Residences for the development of 253 units of hotel suites,
and 200 units of serviced residences. Marketing and sales of
hotel suite units and residences at The RuMa commenced in
March 2013 and commendable sales were recorded as to-date.
The stricter lending conditions imposed by banks in Malaysia,
in particular for completed high-end condominium units,
have affected the sales performance at SENI Mont’ Kiara. The
Company and the Manager are continuing their efforts to sell
the remaining units at SENI Mont’ Kiara by targeting block
purchasers and considering installment payments for the units.
In Vietnam, the Group focused on advancing the construction
and development of the City International Hospital (“CIH”),
the flagship development at the International Hi-Tech
Healthcare Park. Construction of CIH has completed in March
2013. CIH is now undergoing testing and commissioning
by the hospital operator, Parkway Pantai Limited, and is
expected to open in June 2013. During the year, the Manager
also worked closely with the board and management of Nam
Long Investment Corporation (“Nam Long”), in which Aseana
Properties owns an approximately 16% stake, in pursuing a
listing on the Ho Chi Minh Stock Exchange (“HOSE”). Nam
Long’s shares were listed on the HOSE on 8 April 2013.
The challenging market conditions for
the high-end property market in Vietnam
have resulted in the Group delaying
the launch of Phase 1 of the Waterside
Estates in 2012. Phase 1 of the Waterside
Estates is a 37-unit riverside villa
development scheme and we are now
targeting its launch in Q4 2013.
• Malaysia Economic Update
In 2012, the Malaysian economy
registered a gross domestic product
(“GDP”) growth of 5.6%, up from 5.1%
in 2011. The GDP growth was largely
driven by domestic consumption and
investment, both private and public.
The construction and services sector
were the fastest growing sectors in
2012, mitigating the impact from slower
growth in exports.
The domestic consumption and
investment in Malaysia continues to
be largely driven by projects under the
banner of the Government’s Economic
Transformation Programme (“ETP”). As
at end of year 2012, the ETP consisted
of 161 projects amounting to RM209.78
billion (approximately US$68.42 billion)
in value, involving 11 national key
economic areas that were identified to
transform Malaysia into a high-income
nation by 2020. Effective and timely roll
out of the ETP projects would be key in
ensuring a sustainable growth path for
Malaysia in the medium to long term.
In 2012, the Government also took
steps in ensuring that home ownership
continues to be affordable to all
Malaysians. This included the launch of
a national housing scheme with clearer
development and ownership guidelines
and the increase of Real Property Gains
Tax (“RPGT”) to 15% from 10% for
properties disposed within two years of
purchase to reduce speculative activities
in the property market (RPGT for
Kuala Lumpur Sentral Office
Towers and Aloft Kuala
Lumpur Sentral Hotel
properties disposed between two to five
years increased to 10% (previously 5%)
and properties sold after five years are
exempted from RPGT) with effect from
1 January 2013.
On the back of ongoing challenging global
economic conditions, Malaysia recorded
foreign direct investments of RM29.1
billion (US$9.52 billion) in 2012, a
decrease of 20% from the RM36.6 billion
(US$11.97 billion) recorded in 2011. The
findings of the IFC and World Bank’s
“Doing Business Report 2013” which
ranks Malaysia at number 12 (out of 185
economies) of the world’s most business-
friendly countries further highlights the
strength and resilience of the Malaysian
economy. This ranking is up 6 notches
from 2012 ranking.
• Vietnam Economic Update
Vietnam recorded GDP growth of
5.03% in 2012, down from 5.9% in 2011,
the lowest level of growth recorded
since year 1999. Despite the slowing
economy, which has been hampered by
high inflation and the resultant credit
tightening measures, Vietnam received
FDI pledges amounting to US$16.3
billion, a growth of 11% from 2011, and
with FDI disbursements in year 2012
amounting to US$10.5 billion. As the
government implements the various
monetary and fiscal measures to revive
the economy in the short to medium
term, this positive trend in FDI is
expected to set Vietnam on long-term
sustainable growth.
Vietnam has achieved a positive, albeit
small trade surplus of US$284 million in
2012 after 20 years of running in deficit.
The inflation rate in Vietnam in 2012
was 9.21% (2011: 18.58%) as a result of
the continuing tightening of monetary
policy and the lack of effective demand
due to slowdown in GDP growth. The
credit tightening measures in particular
have resulted in reduced lending and
have exposed Vietnamese banks to rising
level of non-performing loans from
companies, in particular state-owned
companies, that have relied heavily on
debt to fuel their growth over the last
decade. In response to investors rising
concerns on the stability of the banking
sector, the Vietnamese government has
reiterated its commitment to a strong
banking sector and has taken some initial
steps in formulating debt restructuring
strategies.
PORTFOLIO REVIEW
MALAYSIA
Property Market Review
2012 saw the highest number of annual launches on record for
condominiums, after a lull in year 2011 as developers begin to
see an improving outlook in the global and Malaysian economy.
Reception to these new launches has been mixed, where
demand has naturally gravitated to established locations and
developers with strong track records. In the second half of the
year, interest has also been focused on Iskandar Development
Region (“IDR”) in Johor, a special economic development
corridor that has been established by the government in year
2006. IDR has received keen interest from investors as key
supporting infrastructure and facilities such as international
universities and school, theme parks and hotels have
commenced operations in year 2012.
In the Klang Valley commercial office sector, a total of 6.7
million sq ft of space across 27 office buildings was completed in
2012. The net take-up for 2012 increased by 41% to 3.3 million
sq ft where the majority of the take-up was mainly contributed
by the expansion and relocation of occupiers from oil and gas
related companies, government agencies and financial and
banking institutions. With further supply coming on-stream in
2013 of more than 7 million sq ft, the office sector is likely to see
an easing in rental levels in 2013.
On the commercial retail front, it continued its healthy
performance in 2012, especially for prime space, evidenced
by the continued increase in occupancy rates, rental rates
and market prices of these properties. 2012 saw an increase
of approximately 2,700 hotel rooms in Klang Valley, with new
hotel openings as well as refurbishments of existing ones.
Average occupancy rate in 2012 was marginally lower at 68%,
coupled with decline in average daily room rates by 5.6%.
Despite the aforementioned, Malaysia recorded 25 million
international tourists arrivals in 2012, an increase of 1.3% from
year 2011.
Annual Report 2012 5
The 200 units of RuMa Residences
offer a contemporary style of living,
with state-of-the-art design and
technology for unrivalled levels of
comfort and style.
Aseana Properties has six development projects in Malaysia,
ranging from residential, hotels, commercial offices as well as
a retail mall:
1 SENI Mont’ Kiara
Owned 100% by Aseana Properties, SENI Mont’ Kiara is an
upmarket condominium development situated on one of the
highest points in Mont’ Kiara. Construction was completed in
end 2011. The project consists of 605 residential units, with
two 12-storey blocks and two 40-storey blocks. The majority of
the units command impressive views of the city skyline, which
includes the 88-storey Petronas Twin Towers and the KL Tower.
2 Tiff ani by i-ZEN
Tiffani by i-ZEN, wholly-owned by
Aseana Properties, is a completed luxury
condominium project located in Mont’
Kiara. 96% of the 399 residential units have
been sold (as at 31 March 2013). The debt
on the project has been fully repaid. The
Manager has decided to fully fit out and
furnish the remaining units at Tiffani by
i-ZEN to offer buyers and dwellers with a
hassle-free experience of either owning or
renting an apartment unit.
Sales at SENI Mont’ Kiara have been affected by the tightening
of lending conditions imposed by the government and
central bank, in particular for the high-end condominium
market. Some potential buyers aborted their purchases as
they were unable to secure adequate debt finance for their
purchases. The overall level of completed sales at SENI
Mont’ Kiara is now 78% of the units available for sale. The
Manager continues to explore all opportunities to drive the
sales and address the issue of a lack of debt financing. The
Company and the Manager are considering structuring the
payment for block purchasers through a series of instalment
payments to facilitate sales. The remaining units will continue
to be marketed both locally and in selected foreign markets,
targeting home owners seeking immediate occupancy and
investors seeking recurring rental yields.
The development is funded by progressive payments from
buyers and a bridging loan facility of RM57.7 million (US$18.2
million), which was fully drawn down as at 31 December 2011.
RM33.3 million of the bridging loan has been repaid during
2012 thus reducing the bridging loan outstanding to RM24.4
million (US$7.96 million) as at 31 December 2012.
SENI Mont’ Kiara
Kuala Lumpur
❝
SENI MONT’ KIARA WON THE MUCH-
COVETED ASIA PACIFIC PROPERTY
AWARDS 2012 IN THE RESIDENTIAL
HIGH RISE DEVELOPMENT
CATEGORY.
❝
6 Annual Report 2012
DEVELOPMENT
MANAGER’S REVIEW CONT’D
3 The RuMa Hotel and Residences
This project is strategically located in the heart of Kuala Lumpur
City Centre (“KLCC”) on Jalan Kia Peng, near neighbouring
landmarks such as the Grand Hyatt Kuala Lumpur, KLCC
Convention Centre, Suria KLCC shopping mall, KLCC Park and
the world famous Petronas Twin Towers. Aseana Properties
owns 70% of this project and 30% is owned by Ireka Corporation
Berhad. With a development land area of approximately 43,559
square feet, the Group will be developing 200 units of luxury
residences, The RuMa Residences, and a 253-room luxury
bespoke hotel, The RuMa Hotel. The RuMa Hotel will be
managed by Urban Resort Concepts, a renowned bespoke hotel
management company based in Shanghai, which is the creator
and operator of the award-winning The Puli Hotel in Shanghai.
Construction work commenced in February 2013 and is
estimated to be delivered in 2017. The sales launch for The
RuMa Hotel and Residences was held on 8 March 2013.
The land was part financed by a term loan facility of RM65.3
million (US$20.6 million), which was fully drawn down. The
development of the project is funded by progressive payments
from buyers and a bridging loan facility of RM50 million
(US$16.3 million).
4 Kuala Lumpur Sentral Project and
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur Sentral project is a mixed commercial and
hospitality development project consisting of two office
towers and a business class hotel, centrally located in Kuala
Lumpur’s urban transportation hub. The project is owned and
developed by Excellent Bonanza Sdn. Bhd. (“EBSB”), which is
jointly owned by Aseana Properties and Malaysian Resources
Corporation Berhad (a government linked entity) on a 40:60
basis. The two office towers have been conditionally sold for
approximately RM623 million (or US$196.6 million), and
construction has been completed in December 2012.
At the commencement of the project, Aseana Properties
conditionally agreed to purchase the hotel component from
EBSB for a total consideration of approximately RM217
million (or US$68.5 million). Aseana Properties entered into
a Management Agreement appointing Starwood Asia Pacific
Hotels & Resort Pte Ltd as the operator for Kuala Lumpur
Sentral Hotel under the ‘Aloft’ brand name. The sales and
purchase of the 482-room Aloft Kuala Lumpur Sentral Hotel
was completed in April 2013 and operations commenced on
22 March 2013.
The purchase of the Aloft Kuala Lumpur Sentral Hotel together
with fit-out expenses will be part financed by guaranteed
medium term notes of RM270.0 million (US$88.3 million)
which is part of the $162 million MTN programme announced
in November 2011, of which RM15 million was drawn down as
at 31 December 2012. The remaining RM255 million (US$83.4
million) was fully drawn down in April 2013 to complete the
acquisition of the Aloft Kuala Lumpur Sentral Hotel.
5 Sandakan Harbour Square
Sandakan Harbour Square, wholly-owned by Aseana Properties,
is an urban redevelopment project in the commercial centre of
Sandakan, Sabah. Sandakan is a ‘Nature City’ with a population
of approximately 500,000, with eco-tourism and palm oil
plantations as the main drivers of the local economy. The
Sandakan Harbour Square project consists of 4 phases, whereby
Phases 1 and 2 comprise 129 shop lots that are fully sold, while
Phases 3 and 4 consist of the first retail mall (Harbour Mall
Sandakan) and the first international four-star hotel in Sandakan,
known as the Four Points by Sheraton Sandakan Hotel.
The Harbour Mall Sandakan (“HMS”) and Four Points by
Sheraton Sandakan Hotel (“FPSS”) commenced business
in July and May 2012 respectively. The occupancy rate of
the Harbour Mall Sandakan currently stands at 42% of the
total retail space with notable tenants such as Parkwell
Departmental Store and Supermarket, Levi’s, The Body Shop,
GNC and McDonald’s amongst others. Leasing activities at
Harbour Mall Sandakan to both local and
international retailers are still on-going.
Since opening, the FPSS has steadily
gained market share from its competitors
as well as created new demand for hotel
rooms in Sandakan. Occupancy rates
for FPSS stood at 37% at the end of year
2012. The mall and hotel are expected
to go through a period of stabilization
before achieving optimal performance.
The project is funded by guaranteed
medium term notes of RM245.0 million
(US$77.5 million) which is part of
the $162 million MTN programme
announced in November 2011. The
MTNs were fully issued as at 31
December 2011.
6 Kota Kinabalu Seafront Resort
& Residences
Facing the South China Sea, this project is
a resort-themed development consisting
of a boutique resort hotel, resort villas
and resort homes at the seaside area in
Kota Kinabalu, Sabah. Aseana Properties
acquired three adjoining plots of land
amounting in aggregate to approximately
80 acres in September 2008 with the
intention of developing a hotel, villas
and resort homes. Due to the current
market conditions in the resort market,
the Board has decided to delay the start
of this project and is looking to dispose of
the land.
Harbour Mall Sandakan
Sabah
❝
FOUR POINTS BY SHERATON
SANDAKAN IS THE ONLY
INTERNATIONALLY BRANDED HOTEL
IN SANDAKAN WHILE THE HARBOUR
MALL SANDAKAN IS KNOWN AS THE
CITY’S ONLY MODERN LIFESTYLE
MALL.
❝
Four Points by Sheraton Sandakan
Sabah
The hospital will be managed by
Parkway Pantai Ltd, Asia’s leading
private healthcare group.
Annual Report 2012 7
❝
THE CITY
INTERNATIONAL
HOSPITAL IS
STRATEGICALLY
LOCATED IN
THE BINH TAN
DISTRICT, AND IS
APPROXIMATELY
11 KM FROM
DISTRICT 1, THE
CENTRAL BUSINESS
AND COMMERCIAL
DISTRICT OF HO
CHI MINH CITY.
❝
City International Hospital
in International Hi-Tech Healthcare Park
VIETNAM
Property Market Review
The slowdown in the Ho Chi Minh City (“HCMC”) property
market continued in 2012, with developers and buyers having
to grapple with tightening of credit by banks and amidst high
interest rate and oversupply of properties in certain segments of
the market. By the end of year 2012, the macroeconomic outlook
of Vietnam has somewhat improved with the high inflation
coming under control, and the Vietnam interbank discount rate
being eased from 13% at the beginning of the year to 7% at the
end of the year to encourage consumption and investments.
The sales of units in high and medium-end residential sector
remains largely stagnant, leading to some projects under
development being stalled, or developers with strong financial
standing holding back inventories to maintain prices at a
reasonable level. The affordable homes sector, where units are
typically priced in the region of US$25,000 to US$60,000 per
unit continues to attract demand from young buyers seeking
for modern living conditions. As a case in point, Nam Long
Investment Corporation’s (an Aseana Properties investee
company) two affordable home projects in Binh Tan District
and Binh Duong both achieved over 90 percent sales over a
period of less than 2 months from launch.
On the back of healthy foreign direct investments inflows,
the excess supply of office space continues to be absorbed
throughout the year with average occupancy rate at 85% at the
end of 2012. Vietnam also continues to attract international
retailers and brands, where Hermes and Starbucks made their
debuts in Vietnam in year 2012 and early 2013 respectively.
McDonalds is also expected to enter Vietnam in 2013. Interest in
the retail sector is expected to continue to maintain occupancy
and rental rates in prime retail locations at a high level.
Aseana Properties has one equity investment and four
development projects in Vietnam - the latter comprising
two residential projects with its development partner, Nam
Long Investment Corporation; an integrated healthcare
development and a mixed development in District 4. The
highlights are as follow:
1 Nam Long Investment Corporation
In 2008, Aseana Properties acquired a strategic minority stake
in Nam Long Investment Corporation (“Nam Long”), a private
property development company in Vietnam with market
leadership in the low to medium-end segment of the market.
Aseana Properties currently has an effective ownership of
16.32% in Nam Long. Nam Long’s affordable housing projects,
called “E-homes”, continued to be their main revenue driver.
Nam Long currently has a land bank of over 560 hectares,
mainly in HCMC and its neighbouring provinces, making it one
of the largest property developers by land bank in HCMC. Nam
Long is currently undertaking a new township development
in Long An Province, approximately 25 km south of HCMC.
Through this partnership, Aseana Properties is co-developing
the Waterside Estates in District 9 of Ho Chi Minh City with
Nam Long.
At 31 December 2012, a decline in fair value of US$4.8 million
has been recognised in other comprehensive income, with a
further impairment loss of US$4.7 million recognised in the
profit or loss. The Directors have considered various prevailing
factors at year end, including the economic conditions and
market conditions of the Ho Chi Minh Stock Exchange, in
assessing the fair value of the investment. Nam Long was listed
on the Ho Chi Minh Stock Exchange on 8 April 2013.
The reduced fair value approximates the
market value of the shares at the close
of market on 22 April 2013, which is
US$12.6 million.
2 Tan Thuan Dong Residential
Project
Tan Thuan Dong Residential Project is
an upscale residential development in
District 7 of HCMC, a prime suburban
residential and commercial location
of choice for many Vietnamese and
expatriates. This project is to be
developed by Aseana Properties and Nam
Long on a 80:20 basis. The Investment
License for the project was received in
December 2011.
As a result of challenging market
conditions for high-end residential
sector, Aseana and Nam Long have
mutually agreed to terminate the joint
venture agreement for this project. An
official approval of termination was
received from the authorities in March
2013, where final documentations are
underway to effect the termination
of this project. As at 31 December
2012, US$0.47 million of costs have
been written-off in relation to pre-
development costs of this project.
8 Annual Report 2012
DEVELOPMENT
MANAGER’S REVIEW CONT’D
Picture shown is for illustration
purpose only. Client to provide
actual photo of choice for final
production.
Waterside Estates
Ho Chi Minh City
3 Waterside Estates
On 26 April 2011, Aseana Properties entered into an
agreement with Nam Long to develop a residential project on
a 56,212 sq m parcel of land in the prime suburban residential
area of District 9 in Ho Chi Minh City. The project, consisting
of 37 villas (Phase 1) and 460 apartment units (Phase 2),
will be developed by Aseana Properties and Nam Long on
a 55:45 basis. With its low development density, the villas
and apartments will be set in a lush green landscape, with
the river-front view of the Rach Chiec River adding a sense
of nature and tranquility to the development. The project is
expected to have a gross development value of approximately
US$100 million. The Investment License for the project
was received in November 2011, and the sales launch of the
37 units of villas has currently been deferred to the fourth
quarter of 2013 due to the challenging conditions of the high-
end real estate market in Vietnam.
The development is expected to be funded by progressive
payments from buyers, bank debt and further equity
contributions from shareholders of the project. The first
phase of development will be part financed by a term loan of
up to US$5.5 million, with the first drawdown expected to be
at the end of second quarter of 2013.
❝
THE VILLAS AND APARTMENTS
WILL BE SET IN A LUSH GREEN
LANDSCAPE, WITH THE RIVER-
FRONT VIEW OF THE RACH
CHIEC RIVER.
❝
5 Queen’s Place
Queen’s Place is a planned mixed
residential, office and retail development
strategically located on the periphery
of District 4, adjacent to District 1,
the central business and commercial
district of HCMC. This project
received its Investment License in
June 2008. Aseana Properties has a
65% stake in this development, with
Binh Duong Corporation, a Vietnam
property development company
owning the remaining 35%. The joint
venture company has been working
on resettlement planning for the past
two financial years with the relevant
authorities in Ho Chi Minh City, with
delays resulting from finalisation of
public infrastructure planning around the
site. The Board is currently reviewing the
project with a view to exit owing to the
continuing administrative delays.
4 International Hi-Tech Healthcare Park
The International Hi-Tech Healthcare Park (“IHTHP”) is
a planned mixed development over 37.54 hectares of land
comprising world-class private hospitals, mixed commercial,
hospitality and residential developments. This development
is located in the Binh Tan District, close to Chinatown and
is approximately 11 km from District 1, the central business
and commercial district of HCMC. Aseana Properties has a
66.8% stake in this development and its joint venture partner,
Hoa Lam Group holds a significant minority stake together
with a consortium of investors from Singapore, Malaysia and
Vietnam. Approximately 20 hectares will be dedicated to the
hospital and commercial developments, and five hectares has
been allocated for residential developments.
Construction commenced on the first phase of the 320-bed
City International Hospital (“CIH”) in May 2010, and was
completed in March 2013. The opening of CIH is anticipated in
second quarter of 2013, subject to all operating licenses being
obtained. CIH will be managed by Parkway Pantai Limited,
Asia’s leading private healthcare group with a network of more
than 3,300 beds across Singapore, Malaysia, the Middle East
and India. Aseana Properties is currently in discussions with
several strategic investors to participate in the development of
the City International Hospital.
It is expected that the next phase of development at the
IHTHP, consisting of mid-end residential apartments will
begin later this year, subject to a broader recovery of the
property market in Ho Chi Minh City.
To part finance the payment for the land and working capital,
the joint venture companies have secured total loan facilities
of US$17.2 million, of which US$14.5 million had been drawn
down as at 31 December 2012. The development of City
International Hospital is funded by a syndicated term loan of
US$43.3 million, of which US$17.4 million was drawn down as
at 31 December 2012.
Annual Report 2012 9
The Aloft Kuala Lumpur Sentral is a
bold mix of forward-thinking design,
concept and approach.
In closing, I wish to thank the Board
of Aseana Properties, our advisers and
business associates for their support
and guidance throughout the year, as we
continue to look towards success in 2013
and the years to come.
LAI VOON HON
President / Chief Executive Officer
Ireka Development
Management Sdn. Bhd.
Development Manager
23 April 2013
OUTLOOK
With the completion of several
development projects in 2012 and early
2013, Aseana Properties will have three
operating assets in Malaysia, being Four
Points by Sheraton Sandakan Hotel,
Harbour Mall Sandakan and Aloft
Kuala Lumpur Sentral Hotel, and one
operating asset in Vietnam being the City
International Hospital. Efforts will be
focused on stabilising the operations of
these assets in order for them to achieve
optimal capital value. The Manager will
work closely with the Board to explore
and evaluate opportunities to divest
these operating assets. Alongside this,
a key focus in the year ahead will be to
continue to realise the completed units
at SENI Mont’ Kiara.
The Manager will also continue to
manage and evaluate the development
timeline of all other assets within Aseana
Properties’ portfolio with an emphasis
on timely realisation and margin
improvements.
❝
ALOFT KUALA LUMPUR SENTRAL, A VISION OF W HOTELS,
WILL COMPLEMENT KUALA LUMPUR’S HOSPITALITY
INDUSTRY WITH ITS DYNAMIC BLEND OF DECOR, MUSIC,
DESIGN AND TECHNOLOGY.
❝
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur
10 Annual Report 2012
PROPERTY PORTFOLIO
AT 31 DECEMBER 2012
Project
Type
Effective
Approximate
Ownership Gross Floor Area
(sq m)
Approximate
Land Area
(sq m)
Scheduled completion
Completed projects
Tiffani by i-ZEN
Kuala Lumpur, Malaysia
SENI Mont’ Kiara
Kuala Lumpur, Malaysia
Sandakan Harbour Square
Sandakan, Sabah, Malaysia
Projects under development
Kuala Lumpur Sentral Office
Towers & Hotel
Kuala Lumpur, Malaysia
Luxury condominiums
100%
81,000
15,000
Completed in August 2009
Luxury condominiums
100%
225,000
36,000
Retail lots, hotel and retail mall
100%
126,000
48,000
Phase 1: Completed in April 2011
Phase 2: Completed in October 2011
Retail lots: Completed in 2009
Retail mall: Completed in March 2012
Hotel: Completed in May 2012
Office towers and
a business hotel
40%
107,000
8,000
Office Towers: Completed in
December 2012
Hotel: January 2013
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur, Malaysia
Business-class hotel
(a Starwood Hotel)
100%
28,000
5,000
March 2013
Phase 1: City International Hospital,
International Hi-Tech Healthcare Park,
Ho Chi Minh City, Vietnam
Private equity investment
Equity investment in Nam Long
Investment Corporation,
an established developer in
Ho Chi Minh City, Vietnam
Pipeline projects
The RuMa Hotel and Residences
Kuala Lumpur, Malaysia
(formerly KLCC Kia Peng Project)
Tan Thuan Dong Residential Project
Ho Chi Minh City, Vietnam
Waterside Estates
Ho Chi Minh City, Vietnam
(formerly Phuoc Long B Project)
Private general hospital
66.8%*
48,000
25,000
March 2013
Private equity investment
16.3%
n/a
n/a
n/a
Luxury residential tower and
70%
40,000
4,000
First quarter of 2017
boutique hotel
Apartments and commercial
80%
83,000
20,000
In the process of termination
development
Villa and high-rise apartments
55%
94,000
57,000
The project has not commenced
Other developments in International
Hi-Tech Healthcare Park,
Ho Chi Minh City, Vietnam
Commercial and residential
development with healthcare
theme
66.8%*
972,000
351,000
The project has not commenced
Kota Kinabalu seafront resort
& residences
Kota Kinabalu, Sabah, Malaysia
i. Boutique resort hotel
resort villas
ii. Resort homes
Queen’s Place
Ho Chi Minh City, Vietnam
Residential, offices and
retail mall
100%
80%
65%
n/a
327,000
The project has not commenced
n/a
8,000
Under review to exit
* Shareholding as at 31 December 2012
n/a: Not available / not applicable
SHARE PRICE CHART
)
$
S
U
(
E
C
I
R
P
E
R
A
H
S
0.60
0.50
0.40
0.30
0.20
Annual Report 2012 11
Aseana
FTSE All Share
FTSE 350 Real Estate
Volume
30,000
25,000
2,0000
15,000
10,000
5,000
0
)
s
’
0
0
0
(
e
m
u
l
o
V
Jan 12
Feb 12
Mar 12
Apr 12
May 12
Jun 12
Jul 12
Aug 12
Sep 12
Oct 12
Nov 12
Dec 12
PERFORMANCE SUMMARY
Total Returns Since Listing
Ordinary share price
FTSE All-share index
FTSE 350 Real Estate Index
One Year Returns
Ordinary share price
FTSE All-share index
FTSE 350 Real Estate Index
Capital Values
Total assets less current liabilities (US$ million)
Net asset value per share (US$)
Ordinary share price (US$)
FTSE 350 Real Estate Index
Debt-To-Equity Ratio
Debt-to-equity ratio 1
Net debt-to-equity ratio 2
Earnings Per Share
Earnings per ordinary share
- basic (US cents)
- diluted (US cents)
Year ended
31 December 2012
Year ended
31 December 2011
-60.25%
-7.15%
-57.98%
11.97%
8.24%
25.42%
320.32
0.87
0.40
394.09
73.41%
64.19%
-7.94
-7.94
-64.50%
-14.22%
-66.50%
-32.70%
-6.69%
-11.22%
299.27
0.96
0.36
314.21
60.69%
34.69%
7.56
7.56
Notes:
1 Debt-to-equity-ratio = (Total Borrowings ÷ Total Equity) x 100%
2 Net debt-to-equity-ratio = (Total Borrowings less Cash and Cash Equivalents less Held-For-Trading Financial Instrument ÷ Total Equity) x 100%
12 Annual Report 2012
FINANCIAL
REVIEW
INTRODUCTION
CASH FLOW AND FUNDING
The Group recorded losses for the year ended 31 December 2012,
mainly due to pre-opening expenses and operating losses of
Four Points by Sheraton Sandakan Hotel and Harbour Mall
Sandakan, both of which were completed and commenced
operations during the year.
STATEMENT OF COMPREHENSIVE INCOME
The Group’s revenue decreased from US$281.1 million in 2011
to US$23.7 million in the year, representing a drop of 92%.
Compared to 2011, where most of the revenue was attributable
to the completion and handover of SENI Mont’ Kiara properties,
the revenue in 2012 was mainly attributable to the sales of
completed units at SENI Mont’ Kiara.
The Group recorded a net loss before taxation of US$16.6
million, compared to a profit before taxation of US$33.1 million
in 2011. The profit in 2011 was mainly attributable to SENI
Mont’ Kiara, while the losses in 2012 were largely due to
operating losses of Four Points by Sheraton Sandakan Hotel
and Harbour Mall Sandakan, totalling US$8.2 million and a
decline in the fair value of available-for-sale investments,
being Aseana Properties’ holding in Nam Long Investment
Corporation (“Nam Long”) of US$4.7 million. The tax charge
for 2012 was significantly lower at US$1.8 million (2011:
US$19.0 million), resulting in a loss for the year of US$18.4
million (2011: Profit for the year of US$14.1 million).
Net loss attributable to equity holders of the parent was
US$16.8 million in 2012, compared to a net profit of US$16.1
million in 2011.
The consolidated comprehensive expense for the year ended 31
December 2012 was US$19.9 million compared to a consolidated
comprehensive income of US$10.8 million in 2011. The former
includes a gain arising from foreign currency translation
differences for foreign operations of US$3.4 million (2011: loss of
US$3.4 million); and also the reduction in the fair value of shares
in Nam Long of US$4.8 million (2011: US$Nil). The total decline
in fair value of shares in Nam Long during the year amounted to
US$9.5 million, resulting in the carrying amount of US$12.6
million at 31 December 2012.
Changes in cash flow in 2012 were negative at US$18.6 million,
compared to the negative cash flow of US$115.1 million in 2011.
The Group’s subsidiaries borrow to fund property development
projects. At 31 December 2012, the Group had gross borrowings
of US$144.4 million (2011: US$126.0 million), an increase of
14.6% over the previous year. Net debt-to-equity ratio increased
from 34.69% in 2011 to 64.19% in 2012.
Finance income decreased from US$0.6 million in 2011 to
US$0.4 million in 2012. Finance costs increased from US$1.1
million in 2011 to US$4.3 million in 2012.
DIVIDEND
No dividend was paid in 2012.
PRINCIPAL RISKS AND UNCERTAINTIES
A review of the principal risks and uncertainties facing the
Group is set out in the Directors’ Report.
TREASURY AND FINANCIAL
RISK MANAGEMENT
The Group undertakes risk assessments and identifies the
principal risks that affect its activities. The responsibility for the
management of each key risk has been clearly identified and
delegated to the senior management of the Development
Manager. The Development Manager’s senior management
team is involved in the day-to-day operation of the Group.
A comprehensive discussion on the Group’s financial risk
management policies is included in the notes to the financial
statements.
MONICA LAI VOON HUEY
Chief Financial Offi cer
Ireka Development Management Sdn. Bhd.
Development Manager
Basic and diluted loss per share for the year ended 31 December
2012 were both at US cents 7.94 (2011: Earnings per share of US
cents 7.56).
23 April 2013
STATEMENT OF FINANCIAL POSITION
Total assets have decreased by US$5.4 million to US$409.7
million, compared to US$415.1 million in 2011. The decrease was
mainly due to the reduction in fair value of available-for-sale
investments of Nam Long shares. Cash and cash equivalents
were lower at US$16.8 million (2011: US$32.6 million) mainly
due to utilisation for the development of City International
Hospital and operation costs of Four Points by Sheraton
Sandakan Hotel and Harbour Mall Sandakan.
Total liabilities have increased by US$5.5 million to US$213.0
million compared to US$207.5 million in 2011. The increase was
substantially attributable to the issuance of medium term notes
of US$4.9 million to fund the development of Aloft Kuala
Lumpur Sentral Hotel.
Net asset value per share at 31 December 2012 was US cents 86.6
(2011: US cents 95.7).
CORPORATE SOCIAL
RESPONSIBILITY
Aseana Properties’ Corporate Social
Responsibility (“CSR”) guiding
principles are built on the following
six areas, refl ecting current and
emerging CSR standards:
1. MANAGING CORPORATE
RESPONSIBILITY
Aseana Properties believes in responsible
business practice and is committed to
conducting its business with integrity, and
in an open and ethical manner. This means
having in place appropriate policies and
procedures approved by the Board to
ensure a consistent, fair and transparent
standard that governs the manner in
which it treats its customers, employees
and shareholders. Aseana Properties
manages its corporate responsibility
through the development and
management of sustainable, commercially
viable properties that are attractive to
customers and contribute higher returns
to its shareholders. It reviews corporate
responsibility issues as part of its risk
management practices and ensures that
the reputation of the Group is protected
and shareholders’ values are enhanced.
2. ENVIRONMENTAL
MANAGEMENT
Aseana Properties is committed to
environmental protection and
stewardship. It recognises that
development activities will affect the
environment and always aims to operate in
a manner that mitigates the impact on the
environment. For example, Aseana
Properties, through its Development
Manager, works with local authorities and
planners to ensure that environmental
protection and amenity improvements are
key criteria in any project scheme. The
Development Manager also works with
architects and designers to design new
buildings to high and exacting
environmental standards by incorporating
natural elements such as water, greenery,
light, space and air into its schemes. It
promotes best practice among contractors
and suppliers in all issues relating to
resource conservation and pollution
control.
The RuMa Hotel and Residences
Jalan Kia Peng, Kuala Lumpur
The RuMa Hotel
Jalan Kia Peng, Kuala Lumpur
Annual Report 2012 13
3. HEALTH AND SAFETY
Aseana Properties is committed to
the health, safety and welfare of its
stakeholders and others affected by its
business operations, by providing a safe
and healthy environment.
As a property developer, health and safety
at the project sites is a top priority. Its
Development Manager works very closely
with the contractors to ensure that they
meet their legislative and regulatory
requirements, and that the code of best
practice is adhered to at all work sites. It
also ensures that contractors implement
health and safety education and training
programmes to site personnel so as to
ensure continuous improvements in
health and safety standards.
4. EMPLOYEES
Aseana Properties has no employees of its
own and has appointed its Development
Manager, Ireka Development
Management Sdn Bhd, who is responsible
for overseeing the day-to-day operations
of the Group. Aseana Properties works
with the Development Manager to ensure
that all employees are treated fairly and
with dignity and are able to achieve both
personal and career goals whilst delivering
business targets.
5. COMMUNITY
Aseana Properties believes in supporting
and participating in community activities
that enhance social progress and public
welfare. Aseana Properties links its
development projects closely with those
of the societies it serves. During the year,
Aseana Properties participated in various
charity events that contributed in the
areas of education, arts, as well as causes
that benefit children.
6. STAKEHOLDERS
Aseana Properties is proactive in
encouraging meaningful dialogue with
all stakeholders through participation
in shareholders’ meetings, roadshows,
conference calls, briefings, timely
release of annual reports, circulars to
shareholders, financial results, press
releases and various announcements
made during the year, to provide
shareholders with an overview of the
Group’s business strategy and financial
performance. Aseana Properties also
maintains an updated and informative
website (www.aseanaproperties.com)
that is accessible to all stakeholders
and members of the public.
14 Annual Report 2012
CALENDAR OF
EVENTS
16
DEC
2012
Site Visit to City International
Hospital by Representatives
from Government Offi ce and
Mr Vuong Dinh Hue, Minister
from Ministry of Finance.
16
DEC
2012
Site Visit to City International Hospital by Aseana’s shareholders.
30
NOV
2012
Tan Sri and Puan Sri Dato’ Megat
Zaharuddin, Chairman of Maybank,
being introduced to The RuMa Hotel
and Residences @ KLCC at a sales
preview event.
02
NOV
2012
Site Visit to City International Hospital by
the Local Authorities, headed by Mr Nguyen
Tan Quyen (Central Party Member).
17
SEP
2012
Site Visit to City International
Hospital by Representatives from the
Prime Minister’s Offi ce.
09
SEP
2012
Site Visit to City International
Hospital by Representatives from
the President’s offi ce - Mr Vu Huy
(Assistant of President of Vietnam).
20
OCT
2012
Grand Opening of the Four Points by Sheraton Sandakan
and Harbour Mall Sandakan, offi ciated by the Sabah Chief
Minister YAB Datuk Seri Panglima Musa Haji Aman.
19
22
OCT
2012
Site Visit to City International Hospital by Aseana’s
shareholders.
SEP
2012
Mid-Autumn Festival Celebration at SENI Mont’ Kiara for
Buyers and Residents.
Property Marketing Initiatives:
International Marketing Initiatives
for SENI Mont’ Kiara:
• Bangladesh (Dhaka), Sri Lanka and
Pakistan: Feb – Mar 2012
• Russia: Apr – May 2012
Local Marketing Initiatives for
SENI Mont’ Kiara:
• Bunting advertisements in Kuala
Lumpur and Petaling Jaya: Jan 2012
• Opening of sales offi ce in Harbour
Mall Sandakan to showcase SENI
Mont’ Kiara and Harbour Mall
leasing: May – Jun 2012
International Marketing Initiatives
for The RuMa Hotel and Residences:
• Preview in Singapore:
Mar & Apr 2013
• Preview in Hong Kong: Mar 2013
Local Marketing Initiatives for The
RuMa Hotel and Residences:
• Private Preview in Kuala Lumpur:
Nov 2012
• Preview in Kuala Lumpur:
Mar 2013
• Website Campaign: Feb – Apr 2013
• Press Advertisements:
Feb – Apr 2013
• Press Interview:
Feb 2013 (The Edge Malaysia);
Mar 2013 (The Star Malaysia)
Art Events at SENI Gallery in
SENI Mont’ Kiara:
• 14 Jun 2012:
Garden International School’s Art
Exhibition
• 28 Jul 2012:
“Tanah Air” Group Exhibition
• 27 Oct 2012:
“Timeless Splendour” Art Exhibition
by Gary Lim and Nizam Abdullah
• 3 Dec 2012:
Liew Choong Ching’s solo exhibition
“Shadow & Light 2.0”
13
AUG
2012
Site Visit to City
International
Hospital by the
Deputy Minister
of Health, Mrs
Nguyen Thi
Xuyen.
Annual Report 2012 15
Site Visit to City International Hospital by the Deputy Chairman
of HCMC People’s Committee, Mrs Nguyen Thi Hong.
APR
2012
25
24
APR
2012
Site Visit to City International Hospital by the US Consulate.
05
JUN
2012
Site Visit to City International Hospital by the Director of
HCMC Department of Planning and Investment, Mr Thai
Van Re.
30
15
MAY
2012
MAY
2012
Soft Opening of the Four Points by Sheraton Sandakan.
Site Visit to City International Hospital by the US
Consulate.
12
08
APR
2012
APR
2012
Site Visit to City International Hospital by the Former Prime
Minister, Mr Phan Van Khai and delegates.
Site Visit to City International Hospital by Deputy Chairman of
HCMC People’s Committee, Mr Hua Ngoc Thuan.
17
MAR
2012
Site Visit to City
International Hospital by
Chairman of Vietcapital
Bank, Mrs Nguyen Thanh
Phuong.
01
MAR
2012
Media Appreciation Night
at SENI Mont’ Kiara.
27
APR
2012
SENI Mont’ Kiara Wins the Asia Pacifi c Property Awards 2012
− Highly Commended Residential High-Rise Development.
28
MAR
2012
Site Visit to City International Hospital by
Mr. Do Nhat Hoang, Head of Investment
Department from Ministry of Planning &
Investment.
16 Annual Report 2012
BOARD OF
DIRECTORS
MOHAMMED AZLAN
HASHIM
Non-Executive Chairman
CHRISTOPHER HENRY
LOVELL
Non-Executive Director
DAVID HARRIS
Non-Executive Director
Mohammed Azlan Hashim
was appointed as Chairman (Non-
Executive) of Aseana Properties in
March 2007. Currently, Azlan is also
Non-Executive Chairman of Parkway
Pantai Limited, Asiasons Capital
Limited and Chaswood Resources
Holdings Ltd, which are companies
based in Singapore. He is also a
Non-Executive Director of Acibadem
Saglik Hizmetleri Ve Ticaret A.S., a
company listed on the Istanbul Stock
Exchange.
In Malaysia, Azlan serves as
Chairman of several public entities,
listed on Bursa Malaysia Securities
Berhad, including D&O Green
Technologies Berhad and SILK
Holdings Berhad and director of
Scomi Group Bhd.
He has extensive experience working
in the corporate sector including
financial services and investments.
Among others, he has served as Chief
Executive, Bumiputra Merchant
Bankers Berhad, Group Managing
Director, Amanah Capital Malaysia
Berhad and Executive Chairman,
Bursa Malaysia Berhad Group.
Azlan also serves as a Board Member
of various government related
organisations including Khazanah
Nasional Berhad, Labuan Financial
Services Authority and is a member
of Employees Provident Fund and
the Government Retirement Fund
Inc. Investment Panels.
Azlan holds a Bachelor of Economics
from Monash University, Melbourne
and qualified as a Chartered
Accountant in 1981. He is a Fellow
Member of the Institute of Chartered
Accountants, Australia, Member
of the Malaysian Institute of
Accountants, Fellow Member of the
Malaysian Institute of Directors,
Fellow Member of the Institute
of Chartered Secretaries and
Administrators and Hon. Member
of the Institute of Internal Auditors,
Malaysia.
Christopher Henry Lovell
was appointed as Director (Non-
Executive) of Aseana Properties in
March 2007. He was a partner in
Theodore Goddard between 1983
and 1993 before setting up his own
legal practice in Jersey. In 2000, he
was one of the founding principals
of Channel House Trustees Limited,
a Jersey regulated trust company,
which was acquired by Capita Group
plc in 2005, when he became a
director of Capita’s Jersey regulated
trust company until his retirement
from Capita in 2010.
Christopher was a director of BFS
Equity Income & Bond plc between
1998 and 2004, BFS Managed
Properties plc between 2001 and
2005 and Yatra Capital Limited
between 2005 and 2010. His current
non-executive directorships
include Public Service Properties
Investments Limited and a number
of EMAC Illyrian property funds
listed on the Channel Islands
Stock Exchange.
Christopher holds an L.L.B. (Hons)
degree from the London School of
Economics and is a member of the
Law Society of England & Wales.
David Harris was appointed
as Director (Non-Executive) of
Aseana Properties in March 2007.
David is currently Chief Executive
of InvaTrust Consultancy Ltd, a
company that specialises in the
provision of investment marketing
services to the Financial Services
Industry in both the UK and Europe.
He was formerly Managing Director
of Chantrey Financial Management
Ltd, a successful investment and
fund management company linked
to Chartered Accountants, Chantrey
Vellacott. Additionally, he also served
as Director of the Association of
Investment Companies overseeing
marketing and technical training.
He is currently a non-executive
director of a number of quoted
companies in the UK including
Character Group plc, Small
Companies Dividend Trust plc,
F&C Managed Portfolio Trust plc,
Manchester & London Investment
Trust plc and Core VCT V plc.
He writes regularly for both the
national and trade press and appears
regularly on TV and Radio as an
investment commentator. He is a
previous winner of the award “Best
Investment Adviser” in the UK.
Ismail Shahudin was appointed as
Director (Non-Executive) of Aseana
Properties in March 2007. Ismail is
chairman of Maybank Islamic
Berhad, Opus Group Berhad and also
serves as Independent Non-
Executive board member of several
Malaysia public listed entities, among
others, Malayan Banking Berhad
which is Malaysia’s largest bank,
Nadayu Properties Berhad, EP
Manufacturing Berhad, UEM Group
Berhad which is a non-listed wholly-
owned subsidiary of Khazanah
Nasional Berhad, one of the Malaysia
government’s investment arms. He is
also a Non-Independent Non-
Executive Director of Opus
International Consultants Limited, a
company listed on the New Zealand
Stock Exchange and a director of
MCB Bank Limited, Pakistan, a
company listed on the Karachi
Stock Exchange.
Ismail started his career in ESSO
Malaysia in 1974 before joining
Citibank Malaysia in 1979. He was
subsequently posted to Citibank’s
headquarters in New York in 1984,
returning to Malaysia in 1986 as the
Vice President & Group Head of
Public Sector and Financial
Institutions Group. Subsequently, he
served as the Deputy General
Manager for the then United Asian
Bank Berhad before joining Maybank
in 1992 in which he had spent 10
years. Ismail subsequently assumed
the position of Group CEO of MMC
Corporation Berhad in 2002.
Ismail holds a Bachelor of Economics
(Hons) degree from University of
Malaya.
JOHN LYNTON JONES
Non-Executive Director
GERALD ONG
CHONG KENG
Non-Executive Director
ISMAIL SHAHUDIN
Non-Executive Director
Annual Report 2012 17
John Lynton Jones was appointed
as Director (Non-Executive) of
Aseana Properties in March 2007.
Lynton is chairman of Bourse
Consult, a consultancy that advises
clients on initiatives relating to
exchange trading, regulation, clearing
and settlement. He has an extensive
background as a chief executive of
several exchanges in London,
including the International
Petroleum Exchange, the OM London
Exchange and Nasdaq International
(whose operations he set up in Europe
in the late 1980s). He was chairman of
the Morgan Stanley/OMX joint
venture Jiway in 2000 and 2001.
He spent the first 15 years of his
career in the British Diplomatic
Service where he became private
secretary to a minister of state and
Financial Services Attaché at the
British Embassy in Paris.
He has been a board member of
London’s Futures and Options
Association, of the London Clearing
House and of Kenetics Group Limited.
He was the founding chairman of the
Dubai International Financial
Exchange (now known as Nasdaq
Dubai) from 2003 until 2006. He is an
advisor to the City of London
Corporation and a Fellow of the
Chartered Institute for Securities and
Investments. He serves on the board
of and is a Trustee of the Horniman
Museum in London. He studied at the
University of Wales, Aberystwyth,
where he took a first class honours in
International Politics.
Gerald Ong was appointed as
Director (Non-Executive) of Aseana
Properties in September 2009. Gerald
is Chief Executive Officer of
PrimePartners Corporate Finance
Group, has over 20 years of corporate
finance related experience at various
financial institutions providing a
wide variety of services from
advisory, M&A activities and fund
raising exercises incorporating
various structures such as equity,
equity-linked and derivative-
enhanced issues. He was appointed a
Director of Metro Holdings Limited
listed on the Singapore Exchange
Securities Trading Limited in
June 2007.
Gerald has been granted the Financial
Industry Certified Professional status
and is an alumnus of the National
University of Singapore, University of
British Columbia and Harvard
Business School.
18 Annual Report 2012
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2012
The Directors present their report together with the audited
financial statements of the Group for the year ended 31
December 2012.
Other risks faced by the Group in Malaysia and Vietnam include
the following:
PRINCIPAL ACTIVITIES
The principal activities of the Group are acquisition,
development and redevelopment of upscale residential,
commercial, hospitality and healthcare projects in the major
cities of Malaysia and Vietnam.
BUSINESS REVIEW AND
FUTURE DEVELOPMENTS
The statement of comprehensive income for the year is set
out on pages 27 to 28. A review of the development and
performance of the business has been set out in the Chairman’s
Statement, the Development Manager’s Review and the
Financial Review reports.
OBJECTIVES AND STRATEGY
The Company’s investment objective is to provide shareholders
with an attractive overall total return achieved primarily
through capital appreciation by investing in properties in
Malaysia and Vietnam. The Company intends to achieve its
investment objective through acquisition, development and
redevelopment of upscale residential, commercial, hospitality
and healthcare projects leveraging on the Development
Manager’s experience in these sectors. The Company will
typically invest in development projects at the pre-construction
stage. It will also selectively invest in projects under
construction and newly completed projects with the potential
for high capital appreciation.
The Company will only invest in projects where, at the time the
investment is made, both the Company and the Development
Manager reasonably believe that there will be a minimum 30%
annualised Return on Equity (“ROE”) where the Company
makes investments in Vietnam and a minimum of 20% ROE
where the Company makes investments in Malaysia.
PRINCIPAL RISKS AND UNCERTAINTIES
Financial
The Group’s business is property development in Malaysia and
Vietnam. Its principal risks are therefore related to the
property market in these countries in general, and also the
particular circumstances of the property development projects
it is undertaking. More detailed explanations of these risks and
the way they are managed are contained under the heading of
Financial and Capital Risk Management Objectives and Policies
in Note 4 to the financial statements.
Going Concern
Economic
Strategic
Regulatory
Law and
regulations
Inflation, economic recessions and
movements in interest rates could affect
property development activities.
Incorrect strategy, including sector and
geographical allocations and use of
gearing, could lead to poor returns for
shareholders.
Breach of regulatory rules could lead to
suspension of the Company’s Stock
Exchange listing and financial penalties.
Changes in laws and regulations relating
to planning, land use, development
standards and ownership of land could
have adverse effects on the business and
returns for the shareholders.
Tax regimes
Changes in the tax regimes could affect
the tax treatment of the Company and/or
its subsidiaries in these jurisdictions.
Management
and control
Operational
Changes that cause the management
and control of the Company to be
exercised in the United Kingdom could
lead to the Company becoming liable to
United Kingdom taxation on income
and capital gains.
Failure of the Development Manager’s
accounting system and disruption to the
Development Manager’s business, or that
of a third party service providers, could
lead to an inability to provide accurate
reporting and monitoring leading to a
loss of shareholders’ confidence.
Inadequate controls by the Development
Manager or third party service providers
could lead to misappropriation of assets.
Inappropriate accounting policies or
failure to comply with accounting
standards could lead to misreporting or
breaches of regulations or a qualified
audit report.
Failure of property development projects
due to poor sales and collection,
construction delay, inability to secure
financing from banks may result in
inadequate financial resources to
continue operational existence and to
meet financial liabilities and
commitments.
The Board seeks to mitigate and manage these risks through
continual review, policy setting and enforcement of contractual
rights and obligations. It also regularly monitors the economic
and investment environment in countries that it operates in
and the management of the Group’s property development
portfolio. Details of the Group’s internal controls are described
on page 24.
Annual Report 2012 19
RESULTS AND DIVIDENDS
The results for the year ended 31 December 2012 are set out in
the attached financial statements.
No dividends were declared nor paid during the financial year
under review.
PURCHASE OF OWN SHARES
The authority to purchase its own shares up to a total aggregate
value of 14.99% of the issued ordinary shares capital of the
Company was renewed in a resolution at its Annual General
Meeting held on 18 June 2012. The authority shall expire 12
months from the date of passing of the resolution unless
otherwise renewed, varied or revoked.
In January 2012, the Company purchased 500,000 of its
ordinary shares of US$0.05 each in series at prices between
US$0.3375 and US$0.35. Following the purchases, the
Company holds 500,000 shares in treasury and has 212,025,000
shares in issue (excluding shares held in treasury).
SHARE CAPITAL
No shares have been issued in 2012. Further details on share
capital are stated in Note 27 to the financial statements.
DIRECTORS
The following were directors of Aseana who held office
throughout the financial year and up to the date of this report:-
Bursa Malaysia since 1993 which has over 45 years of
experience in construction and property development. Under
the management contract, the Development Manager will be
principally responsible for, inter alia, implementing the real
estate strategy for the Company, engaging, managing and
coordinating third parties in relation to the development and
management of properties to be acquired and lead the
negotiation for the acquisition or disposal of assets and the
financing of such assets.
SUBSTANTIAL SHAREHOLDERS
The Board was aware of the following direct and indirect
interests comprising a significant amount of more than 3%
issued share capital of the Company at the latest practicable
date before the publication of this Report at 18 April 2013:
Number of
Ordinary Shares
Held
Percentage of
Issued Share
Capital
48,913,623
23.07%
39,086,377
18.43%
26,246,171
12.38%
Ireka
Corporation
Berhad
Legacy Essence
Limited
Henderson
Global Investors
• Mohammed Azlan Hashim – Chairman
• Christopher Henry Lovell
• David Harris
•
Ismail Shahudin
• John Lynton Jones
• Gerald Ong Chong Keng
DIRECTORS’ INTERESTS
The interests of the directors in the Company’s shares at 31
December 2012 and at the date of this report were as follows:
Funds managed
by Cayenne Asset
Management
Dr. Thong Kok
Cheong
Charlemagne
Capital
SIX SIS
22,147,559
LIM Advisors
18,109,160
13,000,000
10.45%
8.54%
6.13%
11,090,538
5.23%
6,355,478
3.00%
Number of Shares held:
Director
Christopher Henry Lovell
John Lynton Jones
David Harris
Gerald Ong Chong Keng
Ordinary Shares
of US$0.05 Each
EMPLOYEES
48,000
20,000
120,000
1,500,000
The Company has no executive directors or employees. A
management agreement exists between the Company and its
Development Manager which sets out the role of the
Development Manager in managing the operating units of the
Company. The Development Manager had sixty-six managerial
and technical staff under its employment in Malaysia and
Vietnam at 31 December 2012.
GOING CONCERN
None of the other directors in office at the end of the financial
year had any interest in shares in the Company during the
financial year.
MANAGEMENT
The Board has contractually delegated the development
management of the property development portfolio to Ireka
Development Management Sdn. Bhd. (the “Development
Manager”). The Development Manager is a wholly-owned
subsidiary of Ireka Corporation Berhad, a company listed on
The Directors are confident that the Group has adequate
financial resources to continue in operational existence for the
foreseeable future and therefore continue to adopt the going
concern basis in preparing the financial statements.
20 Annual Report 2012
DIRECTORS’ REPORT CONT’D
FOR THE YEAR ENDED 31 DECEMBER 2012
CREDITORS PAYMENT POLICY
The Directors of the Company confirm that to the best of their
knowledge that:
The Group’s operating companies are responsible for
agreeing on the terms and conditions under which business
transactions with their suppliers are conducted. It is the
Group’s policy that payments to suppliers are made in
accordance with all relevant terms and conditions. Trade
creditors at 31 December 2012 amounted to 83 days (2011: 42
days) of property development cost incurred during the year.
FINANCIAL INSTRUMENTS
•
•
The Group’s principal financial instruments comprise cash
balances, balances with related parties and other payables and
receivables that arise in the normal course of business. The
Group’s Financial and Capital Risk Management Objectives and
Policies are set out in Note 4 to the financial statements.
DIRECTORS’ LIABILITIES
Subject to the conditions set out in the Companies (Jersey)
Law 1991 (as amended), the Company has arranged
appropriate Directors’ and Officers’ liability insurance to
indemnify the directors against liability in respect of
proceedings brought by third parties. Such provisions remain
in force at the date of this report.
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The directors are responsible for preparing the annual
report and the financial statements in accordance with
International Financial Reporting Standards (“IFRS”),
interpretations from the International Financial Reporting
Interpretations Committee (“IFRIC”) and Companies
(Jersey) Law 1991 (as amended).
Jersey Law requires the directors to prepare financial
statements for each financial year, which give a true and fair
view of the state of affairs of the Company and of the Group and
of the profit or loss of the Company and of the Group for that
year. In preparing the financial statements, the directors are
required to:
•
•
select suitable accounting policies and then apply them
consistently;
make judgements and estimates that are reasonable,
comparable, understandable and prudent;
• ensure that the financial statements comply with IFRS; and
prepare the financial statements on the going concern basis,
•
unless it is inappropriate to presume that the Group will
continue in business.
The directors are responsible for maintaining proper
accounting records that disclose with reasonable accuracy at
any time the financial position of the Company and of the
Group and to enable them to ensure that the financial
statements comply with the Jersey Law. The directors are 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 directors are also responsible for the maintenance and
integrity of the Group’s website on the internet. However,
information is accessible in many different countries where
legislation governing the preparation and dissemination of
financial statements may differ from that applicable in the
United Kingdom and Jersey.
the consolidated financial statements have been prepared in
accordance with International Financial Reporting
Standards, including International Accounting Standards
and Interpretations adopted by the International
Accounting Standards Board; and
the sections of this Report, including the Chairman’s
Statement, Development Manager’s Review, Financial
Review and Principal Risks and Uncertainties, which
constitute the management report include a fair review of
all information required to be disclosed by the Disclosure
and Transparency Rules 4.1.8 to 4.1.11 issued by the
Financial Services Authority of the United Kingdom.
DISCLOSURE OF INFORMATION TO
AUDITOR
So far as each person who was a director at the date of approving
this report is aware, there is no relevant audit information,
being information needed by the auditor in connection with
preparing its report, of which the auditor is unaware. Having
made enquiries of fellow directors and the Group’s auditors,
each director has taken all the steps that he is obliged to take as
a director in order to have made himself aware of any relevant
audit information and to establish that the auditor is aware of
that information.
RE-APPOINTMENT OF AUDITOR
The auditor, KPMG Audit Plc, has expressed their willingness
to continue in office. A resolution proposing their re-
appointment will be tabled at the forthcoming Annual
General Meeting.
BOARD COMMITTEES
Information on the Audit Committee, Nomination Committee,
Remuneration Committee, Management Engagement
Committee and Investment Committee is included in the
Corporate Governance section of the Annual Report on pages
22 to 24.
ANNUAL GENERAL MEETING
The tabling of the 2012 Annual Report and Financial
Statements to shareholders will be at an Annual General
Meeting (“AGM”) to be held in June 2013.
During the AGM, investors will be given the opportunity to
question the board and to meet with them thereafter. They will
be encouraged to participate in the meeting.
On behalf of the Board
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
23 April 2013
Annual Report 2012 21
REPORT OF DIRECTORS’
REMUNERATION
DIRECTORS’ EMOLUMENTS
The Company has no executive directors or employees. Since all the directors are non-executive, the provisions of the UK
Corporate Governance Code in respect of the directors’ remuneration are not relevant except in so far as they relate specifically to
non-executive directors.
The Remuneration Committee of the Board of Directors is responsible for setting the framework and reviewing compensation
arrangements for all non-executive directors before recommending the same to the Board for approval. The Remuneration
Committee assesses the appropriateness of the emoluments on an annual basis by reference to comparable market conditions with
the overall objective of ensuring maximum stakeholder benefit from the retention of a high calibre Board. No director participates
in any discussion regarding his own remuneration.
During the year, the Directors received the following emoluments in the form of fees from the Company:
Director
Mohammed Azlan Hashim (Chairman of the Board)
Christopher Henry Lovell (Chairman of the Audit Committee)
David Harris
Ismail Shahudin
John Lynton Jones
Gerald Ong Chong Keng
Total
SHARE OPTIONS
Year ended
31 December 2012
(US$)
Year ended
31 December 2011
(US$)
70,000
55,000
48,000
48,000
48,000
48,000
317,000
70,000
55,000
48,000
48,000
48,000
48,000
317,000
The Company did not operate any share option schemes during the year ended 31 December 2012.
SHARE PRICE INFORMATION
• High for the year
• Low for the year
• Close for the year
- US$0.46
- US$0.31
- US$0.40
PENSION SCHEMES
In view of the non-executive nature of the directorships, no pension schemes exist in the Company.
SERVICE CONTRACTS
In view of the non-executive nature of the directorships, there are no service contracts in existence between the Company and
any of the directors. Each director was appointed by a letter of appointment that states his appointment subject to the Articles of
Association of the Company which set out the main terms of his appointment.
JOHN LYNTON JONES
Chairman of the Remuneration Committee
23 April 2013
22 Annual Report 2012
CORPORATE GOVERNANCE
STATEMENT
The Financial Services Authority requires all companies with a
Premium Listing to comply with the UK Corporate Governance
Code (the “Code”). Aseana Properties is a Jersey incorporated
company with a Standard Listing and is therefore not subject to
the Code. However, the Board recognises the importance and
value of good corporate governance and voluntarily seeks to
apply the principles of the Code where practical and relevant
for a company of Aseana Properties’ size and nature. The
following explains how the relevant principles of governance
are applied to the Company.
THE BOARD
The Company currently has a Board of six non-executive
directors, including the non-executive Chairman. The brief
biographies of the following directors appear on pages 16 to 17
of the Annual Report 2012:
• Mohammed Azlan Hashim (Non-Executive Chairman)
• Christopher Henry Lovell
• David Harris
Ismail Shahudin
•
• John Lynton Jones
• Gerald Ong Chong Keng
The Board did not appoint a Chief Executive and a Senior
Independent Director as it did not consider it appropriate for
the nature of the company and given the external management
of its property portfolio by Ireka Development Management
Sdn Bhd.
ROLE OF THE BOARD OF DIRECTORS
The Board’s role is to provide entrepreneurial leadership of
the Company within a framework of prudent and effective
controls which enables risk to be assessed and managed.
The Board sets the Company’s strategic objectives, monitors
and reviews the Company’s operational and financial
performance, ensures the Company has sufficient funding,
and examines and approves all major potential investment,
acquisitions and disposals. The Board also sets the Company’s
values and standards and ensures that its obligations
to its shareholders and other stakeholders are met. The
implementation of the Company’s strategy is delegated to the
Development Manager and its performance is assessed by the
Board regularly.
Appropriate level of directors’ and officers’ liability insurance
is maintained by the Company.
MEETINGS OF THE BOARD OF
DIRECTORS
The Board meets at least four times a year and at such other
times as the Chairman shall require. The Board met eight
times during the year ended 31 December 2012. The meetings
were attended by all the directors except for Ismail Shahudin
and David Harris who were each absent once. To enable the
Board to discharge its duties effectively, all directors receive
accurate, timely and clear information, in an appropriate form
and quality, including Board papers distributed in advance
of Board meetings. The Board periodically would receive
presentations at Board meetings relating to the Company’s
business and operations, significant financial, accounting and
risk management issues. All directors have access to the advice
and services of the Development Manager, Company Secretary
and advisors, who are responsible to the Board on matters
of corporate governance, board procedures and regulatory
compliance.
BOARD BALANCE AND INDEPENDENCE
Being an externally-managed company, the Board consists
solely of non-executive directors of which Mohammed Azlan
Hashim is the non-executive Chairman. The Board considers
that the directors are independent, who are independent of
management and have no business or other relationship which
could interfere materially with the exercise of their judgement.
The Chairman is responsible for leadership of the Board,
ensuring effectiveness in all aspects of its role and setting
its agenda. Matters referred to the Board are considered by
the Board as a whole and no one individual has unrestricted
powers of decision. Together, the directors bring a wide range
of experience and expertise in business, law, finance and
accountancy, which are required to successfully direct and
supervise the business activities of the Company.
PERFORMANCE APPRAISAL
The Board undertakes an annual evaluation of its own
performance and that of its Committees and individual
directors. In November 2012, the evaluation concluded that the
performance of the Board, the Committees and each individual
director was and remains effective and that all directors
demonstrate full commitment in their respective roles. The
directors are encouraged to continually attend training courses
at the Company’s expense to enhance their skills and knowledge
in matters that are relevant to their role on the Board. The
directors also receive updates on developments of corporate
governance, the state of economy, management strategies and
practices, laws and regulations, to enable effective functioning
of their roles as directors.
RE-ELECTION OF DIRECTORS
The Company’s Articles of Association provides that all
Directors shall submit themselves for election at the first
opportunity after their appointment, and shall not remain in
office for longer than three years since their last election or re-
election without submitting themselves for re-election. At the
Annual General Meeting held on 18 June 2012, Ismail Shahudin
and David Harris who retired by rotation as directors were re-
elected to the Board. The remainder of the Board recommended
their re-appointment.
BOARD COMMITTEES
The Board has established Audit, Nomination, Remuneration,
Management Engagement and Investment Committees which
deal with specific aspects of the Company’s affairs, each of
which has written terms of reference which are reviewed
annually. No one, other than the committee chairman and
members of the relevant committee, is entitled to be present
at a meeting of board committees, but others may attend at the
invitation of the board committees for presenting information
concerning their areas of responsibility. Copies of the terms of
reference are kept by the Company Secretary and are available
on request at the Company’s registered office at 12 Castle Street,
St. Helier, Jersey, JE2 3RT, Channel Islands.
AUDIT COMMITTEE
The Audit Committee consists of three members and is
chaired by Christopher Henry Lovell. Its other members
are Mohammed Azlan Hashim and Ismail Shahudin. The
Committee members have no links with the Company’s
external auditor and are independent of the Company’s
management. The Board considers that collectively the
Audit Committee has sufficient recent and relevant financial
Annual Report 2012 23
experience with the ability to discharge its duties properly,
through extensive service on the Boards and Audit Committees
of other listed companies.
During the year ended 31 December 2012, the Nomination
Committee carried out its functions as set out in its terms of
reference which are summarised below:
The Committee meets at least twice a year and at such other
times as the Chairman of the Audit Committee shall require.
Any member of the Audit Committee or the auditor may
request a meeting if they consider that one is necessary.
The Committee met three times during the year ended 31
December 2012. The meetings were attended by all the
committee members. Representatives of the auditor and the
Chief Financial Officer and Chief Executive Officer of the
Development Manager may attend by invitation.
• regularly reviewing the structure, size and composition
(including skills, knowledge and experience) of the Board and
making recommendations to the Board with regard to any
change;
• considering the re-appointment of any Directors at the
conclusion of their specified term of office or retiring in
accordance with the Company’s Articles of Association;
• identifying and nominating for the approval of the Board,
candidates to fill Board vacancies as and when they arise; and
• considering any matter relating to the continuation in office
The Committee is responsible for:
of any Director at any time.
• monitoring, in discussion with the auditor, the integrity
of the financial statements of the Company, any formal
announcements relating to the Company’s financial
performance and reviewing significant financial reporting
judgements contained in them;
• reviewing the Company’s internal financial controls and risk
management system operated by the Development Manager;
• making recommendations to the Board in relation to the
appointment, re-appointment and removal of the external
auditor and approving the remuneration and terms
of engagement of the external auditor to be put to the
shareholders for their approval in general meetings;
• reviewing and monitoring the external auditor’s
independence and objectivity and effectiveness of the audit
process, taking into consideration relevant UK professional
and regulatory requirements;
REMUNERATION COMMITTEE
The Remuneration Committee is chaired by John Lynton Jones.
Its other members are David Harris and Ismail Shahudin.
The Committee meets at least once a year and at any such times
as the Chairman of the Remuneration Committee shall require.
The Committee met once during the year ended 31 December
2012. The meeting was attended by all the committee members.
Other board members attended the meeting at the invitation of
the Remuneration Committee.
During the year ended 31 December 2012, the Remuneration
Committee carried out its duties as set out in its terms of
reference which are summarised below:
• developing and implementing policy on engagement of the
• determining and agreeing with the Board the framework for
external auditor to supply non-audit services; and
the remuneration of the Directors;
• reporting to the Board any matters in respect of which it
considers that action or improvement is needed and making
recommendations as to the steps to be taken.
During the year ended 31 December 2012, the Audit Committee
performed its duties as set out in the terms of reference.
The main activities carried out by the Audit Committee
encompassed the following:
• setting the remuneration for all Directors; and
• ensuring that provisions regarding disclosure of
remuneration as set out in the Directors’ Remuneration
Report Regulations 2002, are fulfilled.
MANAGEMENT ENGAGEMENT
COMMITTEE
• reviewed the audit plan for the year ended 31 December 2011
with the Company’s Auditor;
• reviewed and discussed the Audit Committee Report for the
year ended 31 December 2011 with the Company’s Auditor;
• reviewed the draft Audited Financial Statements for the year
ended 31 December 2011 as contained in the draft Annual
Report 2011 together with the Company’s Auditor before
tabling to the Board for consideration and approval;
• reviewed other published financial information including
the half year results, the interim management statements
and results announcements before tabling to the Board for
consideration and approval;
• considered the independence of the auditor; and
• reviewed the auditor’s performance and made a
recommendation for the appointment of the Group’s auditor
by shareholders.
NOMINATION COMMITTEE
The Nomination Committee is chaired by Mohammed
Azlan Hashim. Its other members are David Harris, John
Lynton Jones and Gerald Ong Chong Keng. The Committee
meets annually and at any such times as the Chairman of the
Nomination Committee shall require. The Committee met once
during the year ended 31 December 2012 and the meeting was
attended by all the committee members as well as other board
members at the invitation of the Nomination Committee.
The Management Engagement Committee is chaired by
Mohammed Azlan Hashim. Its other members are David
Harris, John Lynton Jones and Gerald Ong Chong Keng. The
Committee meets at least once a year and at any such times as
the Chairman of the Management Engagement Committee
shall require. The Committee met once during the year ended
31 December 2012. The meeting was attended by all the
committee members as well as other board members at the
invitation of the Management Engagement Committee.
During the year ended 31 December 2012, the Management
Engagement Committee carried out its duties as set out in its
terms of reference which are summarised below:
• monitoring compliance by the Development Manager with
the terms of the Management Agreement;
• reviewing the terms of the Management Agreement from
time to time to ensure that the terms thereof conform with
market and industry practice and remain in the best interest
of shareholders;
• from time to time monitor compliance by providers of other
services to the Company with the terms of their respective
agreements; and
• review and consider the appointment and remuneration of
providers of services to the Company.
24 Annual Report 2012
CORPORATE GOVERNANCE
STATEMENT CONT’D
INVESTMENT COMMITTEE
The Investment Committee is appointed by the Board and
comprises four members, being Lai Voon Hon, Mai Xuan
Loc, Monica Lai Voon Huey and Dang The Duc. Mai Xuan
Loc and Dang The Duc are independent while Lai Voon Hon
and Monica Lai are the Chief Executive Officer and the Chief
Financial Officer of the Development Manager respectively.
Kumar Tharmalingam, who was a member of the Committee
since its inception in 2007, has resigned from the Committee
in January 2013 in his own accord. The Investment Committee
meets at such time as required to review and evaluate potential
investments for recommendation to the Board. The Investment
Committee is responsible for providing advisory services to the
Board to consider investment and disposal recommendations of
the Development Manager.
FINANCIAL REPORTING
The Board aims to present a balanced and understandable
assessment of the Company’s position and prospects in all
reports to shareholders, investors and regulatory authorities.
This assessment is primarily provided in the Annual Report
through the Chairman’s Statement, Development Manager’s
Review Statement, Financial Review Statement, Directors’
Report and Independent Auditor’s Report.
The Audit Committee has reviewed the significant reporting
issues and judgements made in connection with the
preparation of the Company’s financial statements including
significant accounting policies, significant estimates and
judgements. The Audit Committee has also reviewed the
clarity, appropriateness and completeness of disclosures in
the financial statements.
INTERNAL AUDIT
The Board has confirmed that the systems and procedures
employed by the Development Manager, including the work
carried out by the internal auditor of the Development
Manager, provide sufficient assurance that a sound system
of internal control is maintained. An internal audit function
specific to the Company is therefore considered not necessary.
However, the directors will continue to monitor if such
need required.
AUDITOR
The Audit Committee’s responsibilities include monitoring and
reviewing the performance and independence of the Company’s
Auditor, KPMG Audit Plc.
Pursuant to audit and ethical standards, the auditor is required
to assess and confirm to the Board their independence, integrity
and objectivity. The auditor has carried out assessment and
considers themselves to be independent, objective and in
compliance with the APB (Auditing Practices Board) Ethical
Standards.
INTERNAL CONTROL
The Board is responsible for the effectiveness of the
Company’s internal control system and is supplied with
information to enable it to discharge its duties. Internal
control systems are designed to meet the particular needs of
the Company and to manage rather than eliminate the risk
of failure to meet business objectives and can only provide
reasonable, and not absolute, assurance against material
misstatement or loss. The process is based principally on
the Development Manager’s existing risk-based approach
to internal controls.
During the year, the Board discharged its responsibility for
internal controls through the following key procedures:
• clearly defined delegation of responsibilities to the
committees of the Board and to the Development Manager,
including authorisation levels for all aspects of the business;
• regular and comprehensive information provided to the
Board covering financial performance and key business
indicators;
• a detailed system of budgeting, planning and reporting which
is approved by the Board and monitoring of results against
budget with variances being followed up and action taken,
where necessary; and
• regular visits to operating units and projects by the Board.
With the Bribery Act 2010 coming into force on 1 July 2011,
the Board has established a framework to comply with the
requirement of the Act.
RELATIONSHIP WITH SHAREHOLDERS
The Board is committed to maintaining good communications
with shareholders and has designated the Development
Manager’s Chief Executive Officer, Chief Financial Officer and
designated members of its senior management as the principal
spokesmen with investors, analysts, fund managers, the press
and other interested parties. The Board is informed on material
information provided to shareholders and are advised on their
feedback. The Board has also developed an understanding of
the views of major shareholders about the Company through
meetings and teleconferences conducted by the financial adviser
and the Development Manager. In addition, the Company
seeks to regularly update shareholders through stock exchange
announcements, press releases and participation in roadshows.
To promote effective communication, the Company has a
website, www.aseanaproperties.com that shareholders and
investors can access for timely information.
ANNUAL GENERAL MEETING (“AGM”)
The AGM is the principal forum for dialogue with shareholders.
At and after the AGM, investors are given the opportunity to
question the Board and seek clarification on the business and
affairs of the Group. All directors attended the 2012 AGM, held
on 18 June 2012.
Notices of the AGM and related papers are sent out to
shareholders in good time to allow for full consideration
prior to the AGM. Each item of special business included is
accompanied by an explanation of the purpose and effect of
a proposed resolution. The Chairman declares the number
of proxy votes received for, against and withheld in respect of
each resolution after the shareholders present have voted on
each resolution. An announcement confirming whether all the
resolutions have been passed at the AGM is made through the
London Stock Exchange.
On behalf of the Board
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
23 April 2013
Annual Report 2012 25
INDEPENDENT AUDITOR’S
REPORT
TO THE MEMBERS OF ASEANA
PROPERTIES LIMITED
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters
where the Companies (Jersey) Law 1991 requires us to report to
you if, in our opinion:
•
•
•
•
proper accounting records have not been kept by the
company; or
proper returns adequate for our audit have not been
received from branches not visited by us; or
the company financial statements are not in agreement with
the accounting records and returns; or
we have not received all the information and explanations
we require for our audit.
BILL HOLLAND
for and on behalf of KPMG Audit Plc
Chartered Accountants and Recognised Auditor
15 Canada Square
London E14 5GL
23 April 2013
Notes:
•
The maintenance and integrity of Aseana’s website is the
responsibility of the directors; the work carried out by
auditors does not involve consideration of these matters
and accordingly, KPMG Audit Plc accepts no responsibility
for any changes that may have occurred to the financial
statements or our audit report since 23 April 2013. KPMG
Audit Plc has carried out no procedures of any nature
subsequent to 23 April 2013 which in any way extends
this date.
•
Legislation in Jersey governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions. The directors shall remain
responsible for establishing and controlling the process for
doing so, and for ensuring that the financial statements are
complete and unaltered in any way.
We have audited the group and parent company financial
statements of Aseana Properties Limited for the year
ended 31 December 2012 which comprise the Consolidated
and Company Statements of Comprehensive Income, the
Consolidated and Company Statements of Financial Position,
the Statement of Changes in Equity, the Consolidated and
Company Statements of Cash Flows and the related notes.
The financial reporting framework that has been applied in
their preparation is applicable law and International Financial
Reporting Standards.
This report is made solely to the company’s members, as a body,
in accordance with Article 113A of the Companies (Jersey) Law
1991. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and
the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF
DIRECTORS AND AUDITORS
As explained more fully in the Statement of Directors’
Responsibilities set out on page 20, the directors are
responsible for the preparation of financial statements which
give a true and fair view. Our responsibility is to audit, and
express an opinion on, the financial statements in accordance
with applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with
the Auditing Practices Board’s Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE
FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the group’s and parent
company’s circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall
presentation of the financial statements. In addition, we read
all the financial and non-financial information in the Annual
Report to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent
material misstatements or inconsistencies we consider the
implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion the financial statements:
•
give a true and fair view, in accordance with International
Financial Reporting Standards of the state of the group’s
and parent company’s affairs as at 31 December 2012 and of
the group’s and the parent company’s loss for the year then
ended; and
•
have been properly prepared in accordance with the
Companies (Jersey) Law 1991.
26 Annual Report 2012
FINANCIAL
STATEMENTS
INVESTMENT GATEWAY TO MALAYSIA AND VIETNAM
CONTENTS
27 • Consolidated Statement of Comprehensive Income
31 • Statement of Changes in Equity
28 • Company Statement of Comprehensive Income
32 • Consolidated Statement of Cash Flows
29 • Consolidated Statement of Financial Position
33 • Company Statement of Cash Flows
30 • Company Statement of Financial Position
34 • Notes to the Financial Statements
Annual Report 2012 27
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2012
Notes
2012
US$’000
2011
US$’000
5
6
7
18
8
9
11
12
13
23,732
(21,459)
281,142
(236,645)
2,273
7,051
(2,582)
(4,653)
524
(3,799)
(2,164)
(9,389)
(12,739)
407
(4,299)
(3,892)
44,497
2,146
(2,053)
–
(1,014)
(3,972)
(2,720)
(3,210)
33,674
602
(1,144)
(542)
(16,631)
(1,798)
33,132
(18,992)
(18,429)
14,140
18
3,407
(4,828)
(3,364)
–
(1,421)
(3,364)
(19,850)
10,776
(16,839)
(1,590)
16,058
(1,918)
(18,429)
14,140
(18,419)
(1,431)
12,625
(1,849)
(19,850)
10,776
14
(7.94)
7.56
Continuing activities
Revenue
Cost of sales
Gross profi t
Other income
Administrative expenses
Decline in fair value of available-for-sale investments
Foreign exchange gain/ (loss)
Management fees
Marketing expenses
Other operating expenses
Operating (loss)/ profit
Finance income
Finance costs
Net finance costs
Net (loss)/ profi t before taxation
Taxation
(Loss)/ profi t for the year
Other comprehensive income/ (expense), net of tax
Foreign currency translation differences for foreign operations
Decline in fair value of available-for-sale investments
Total other comprehensive expense for the year
Total comprehensive (expense)/ income for the year
(Loss)/ profi t attributable to:
Equity holders of the parent
Non-controlling interests
Total
Total comprehensive (expense)/ income attributable to:
Equity holders of the parent
Non-controlling interests
Total
(Loss)/ earnings per share
Basic and diluted (US cents)
The notes to the financial statements form an integral part of the financial statements.
28 Annual Report 2012
COMPANY STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2012
Continuing activities
Revenue
Cost of sales
Gross profi t
Administrative expenses
Foreign exchange (loss)/ gain
Management fees
Impairment of amount due from subsidiaries
Other operating expenses
Operating loss
Finance income
Finance costs
Net finance income
Net loss before taxation
Taxation
Notes
2012
US$’000
2011
US$’000
5
6
8
9
25
11
12
–
–
–
(656)
(278)
(1,644)
(1,885)
(603)
(5,066)
59
–
59
(5,007)
–
–
–
–
(716)
450
(1,613)
(634)
(683)
(3,196)
68
(4)
64
(3,132)
–
Loss for the year/ Total comprehensive expense for the year
(5,007)
(3,132)
The notes to the financial statements form an integral part of the financial statements.
Annual Report 2012 29
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AT 31 DECEMBER 2012
Notes
2012
US$’000
2011
US$’000
15
16
18
19
20
21
22
23
24
26
27
28
29
30
31
32
33
34
35
34
35
36
1,113
–
12,571
13,845
–
4,629
–
22,052
15,003
691
27,529
42,375
350,822
1,370
12,725
239
237
16,752
285,006
21,384
33,485
122
142
32,610
382,145
372,749
409,674
415,124
10,626
218,926
1,874
2,986
–
(50,828)
10,626
219,101
1,874
(262)
4,828
(32,797)
183,584
13,063
203,370
4,276
196,647
207,646
56,764
9,807
20,687
2,097
74,338
–
37,393
4,118
89,355
115,849
–
40,497
83,175
3,006
12,889
75,734
123,672
91,629
213,027
207,478
409,674
415,124
Non-current assets
Property, plant and equipment
Investment in an associate
Available-for-sale investments
Intangible assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Held-for-trading financial instrument
Trade and other receivables
Amount due from an associate
Current tax assets
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Equity
Share capital
Share premium
Capital redemption reserve
Translation reserve
Fair value reserve
Accumulated losses
Shareholders’ equity
Non-controlling interests
Total equity
Current liabilities
Trade and other payables
Amount due to non-controlling interests
Loans and borrowings
Current tax liabilities
Total current liabilities
Non-current liabilities
Amount due to non-controlling interests
Loans and borrowings
Medium term notes
Total non-current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
The financial statements were approved on 23 April 2013 and authorised for issue by the Board and were signed on its behalf by
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
The notes to the financial statements form an integral part of the financial statements.
Notes
2012
US$’000
2011
US$’000
17
80,946
80,946
80,946
80,946
23
25
26
3
155,280
354
198
150,014
5,188
27
28
29
32
33
25
155,637
155,400
236,583
236,346
10,626
218,926
1,874
(22,051)
10,626
219,101
1,874
(17,044)
209,375
214,557
1,677
25,531
947
20,842
27,208
21,789
27,208
21,789
236,583
236,346
30 Annual Report 2012
COMPANY STATEMENT
OF FINANCIAL POSITION
AT 31 DECEMBER 2012
Non-current assets
Investment in subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Amounts due from subsidiaries
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Equity
Share capital
Share premium
Capital redemption reserve
Accumulated losses
Total equity
Current liabilities
Trade and other payables
Amounts due to subsidiaries
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
The financial statements were approved on 23 April 2013 and authorised for issue by the Board and were signed on its behalf by
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
The notes to the financial statements form an integral part of the financial statements.
Annual Report 2012 31
STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2012
Translation
Reserve
US$’000
Fair Value
Reserve
US$’000
Total Equity
Attributable
to Equity
Holders of
the Parent
US$’000
Accumulated
Losses
US$’000
Non-
Total
Controlling
Interests
Equity
US$’000 US$’000
Share
Capital
Premium
US$’000 US$’000
Capital
Share Redemption
Reserve
US$’000
10,626
221,226
1,874
3,171
4,828
(48,858)
192,867
4,346
197,213
–
–
–
–
–
–
–
–
–
–
–
(2,125)
–
–
–
–
–
–
–
–
–
(3,433)
(3,433)
–
–
–
–
–
–
–
3
3
(14)
(11)
–
16,058
–
16,058
–
16,058
(3,433)
12,625
1,793
(1,918)
69
(1,849)
1,793
14,140
(3,364)
10,776
–
(2,125)
–
(2,125)
10,626
219,101
1,874
(262)
4,828
(32,797)
203,370
4,276
207,646
–
–
–
–
–
–
–
–
–
–
–
(175)
–
–
–
–
–
–
–
–
–
3,248
3,248
–
–
–
–
(4,828)
(4,828)
–
(1,192)
(1,192)
1,192
–
–
(16,839)
–
(16,839)
–
–
(16,839)
(1,580)
(18,419)
(175)
9,026
(1,590)
9,026
(18,429)
159
(1,431)
–
(1,421)
(19,850)
(175)
10,626
218,926
1,874
2,986
–
(50,828)
183,584
13,063
196,647
Share
Capital
US$ ’000
Capital
Share Redemption Accumulated
Reserve
Losses
US$ ’000
Total
Equity
US$ ’000 US$ ’000
Premium
US$ ’000
10,626
221,226
1,874
(13,912)
219,814
–
–
–
(2,125)
–
–
(3,132)
(3,132)
–
(2,125)
10,626
219,101
1,874
(17,044)
214,557
–
–
–
(175)
–
–
(5,007)
–
(5,007)
(175)
10,626
218,926
1,874
(22,051)
209,375
Consolidated
1 January 2011
Acquisition from non-controlling
interest (Note 39)
Non-controlling interest
contribution
Profit for the year
Total other comprehensive expense
Total comprehensive income
Dividend to equity holders
of the parent
At 31 December 2011/
1 January 2012
Changes in ownership interests
in subsidiaries (Note 39)
Non-controlling interests
contribution
Loss for the year
Total other comprehensive
income
Total comprehensive expense
Own shares acquired
Shareholders’ equity at
31 December 2012
Company
1 January 2011
Loss for the year/ Total
comprehensive expense
Dividend to equity holders
of the parent
At 31 December 2011/
1 January 2012
Loss for the year/ Total
comprehensive expense
Own shares acquired
Shareholders’ equity at
31 December 2012
The notes to the financial statements form an integral part of the financial statements.
32 Annual Report 2012
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2012
Notes
2012
US$’000
2011
US$’000
Cash Flows from Operating Activities
Net (loss)/ profit before taxation
Finance income
Finance costs
Unrealised foreign exchange (gain)/ loss
Reversal of impairment of trade receivables
Impairment of trade receivables
Impairment of goodwill
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Property, plant and equipment written off
Decline in fair value of available-for-sale investments
Fair value loss/ (gain) on held-for-trading financial instrument
Operating (loss)/ profi t before working capital changes
Changes in working capital:
(Increase)/ decrease in inventories
Decrease/ (increase) in receivables
Decrease in deferred revenue
Decrease in payables
Cash used in operations
Interest paid
Tax paid
Net cash used in operating activities
Cash Flows from Investing Activities
Advances from non-controlling interests
Acquisition of non-controlling interests
Issuance of ordinary shares of subsidaries to non-controlling interests
(Advance)/ repayment from associate
Proceeds from disposal of property, plant and equipment
Purchase of held-for-trading financial instrument
Disposal of held-for-trading financial instrument
Purchase of property, plant and equipment
Finance income received
Net cash generated from/ (used in) investing activities
Cash Flows from Financing Activities
Repurchase of own shares
Repayment of loans and borrowings and medium term notes
Drawdown of loans and borrowings and medium term notes
Dividend paid to equity holders of the parent
Pledged deposits placed in licensed banks
Net cash generated from/ (used in) fi nancing activities
NET CHANGES IN CASH AND CASH EQUIVALENTS DURING THE YEAR
Effect of changes in exchange rates
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
(16,631)
(407)
4,299
(642)
(357)
–
1,158
190
1
31
4,653
81
33,132
(602)
1,144
20
–
419
2,171
142
–
156
–
(26)
(7,624)
36,556
(54,318)
21,117
–
(14,856)
(55,681)
(5,577)
(3,356)
150,591
(2,390)
(188,462)
(39,336)
(43,041)
(5,268)
(8,453)
(64,614)
(56,762)
6,801
–
2,546
(117)
1
–
19,933
(279)
407
–
(11)
1,793
260
–
(24,145)
2,787
(591)
602
29,292
(19,305)
(175)
(12,080)
30,390
–
(1,371)
–
(131,822)
104,732
(2,125)
(9,799)
16,764
(39,014)
(18,558)
(115,081)
1,329
(3,037)
22,811
140,929
5,582
22,811
Cash and Cash Equivalents
Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated statement of financial position amounts:
Cash and bank balances
Short term bank deposits
Cash and cash equivalents
Less: Deposits pledged
26
26
26
5,152
11,600
16,752
(11,170)
18,320
14,290
32,610
(9,799)
5,582
22,811
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of US$311,833 (2011: US$590,880) of which US$32,700 (2011: US$Nil) was
acquired by means of finance leases.
During the financial year, US$9,026,000 (2011: US$1,793,000) of ordinary shares of subsidiaries were issued to non-controlling shareholders, of which US$2,546,000 (2011:
US$1,793,000) was satisfied via cash consideration. The remaining amount of US$6,480,000 (2011: US$Nil) was satisfied via contribution of land held for property development
by non-controlling interest.
The notes to the financial statements form an integral part of the financial statements.
Annual Report 2012 33
COMPANY STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2012
Notes
2012
US$’000
2011
US$’000
Cash Flows from Operating Activities
Net loss before taxation
Impairment of amount due from subsidiaries
Finance income
Finance costs
Unrealised foreign exchange loss/ (gain)
Operating loss before working capital changes
Changes in working capital:
Decrease/ (increase) in receivables
Increase in payables
Cash used in operations
Interest paid
Net cash used in operating activities
Cash Flows from Investing Activities
Advances to subsidiaries
Finance income received
Net cash used in investing activities
Cash Flows from Financing Activities
Advances from subsidiaries
Repurchase of own shares
Dividend paid to equity holders of the parent
Net cash generated from fi nancing activities
NET CHANGES IN CASH AND CASH EQUIVALENTS DURING THE YEAR
Effect of changes in exchange rates
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
(5,007)
1,885
(59)
–
256
(3,132)
634
(68)
4
(89)
(2,925)
(2,651)
195
730
(2,000)
–
(184)
359
(2,476)
(4)
(2,000)
(2,480)
(7,151)
59
(19,592)
68
(7,092)
(19,524)
4,689
(175)
–
5,115
–
(2,125)
4,514
2,990
(4,578)
(19,014)
(256)
89
5,188
24,113
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
26
354
5,188
The notes to the financial statements form an integral part of the financial statements.
34 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS
1
GENERAL INFORMATION
The principal activities of the Group and the Company are acquisition, development
and redevelopment of upscale residential, commercial, hospitality and healthcare
projects in the major cities of Malaysia and Vietnam. The Group typically invests in
development projects at the pre-construction stage and may also selectively invest
in projects in construction and newly completed projects with potential capital
appreciation.
2
BASIS OF PREPARATION
2.1 Statement of compliance and going concern
The Group and the Company financial statements have been prepared in
accordance with International Financial Reporting Standards (“IFRS”), and
IFRIC interpretations issued, and effective, or issued and early adopted, at the
date of these financial statements.
The preparation of financial statements in conformity with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported amounts
of expenses during the reporting period. Although these estimates are based
on management’s best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates. The Board has reviewed
the accounting policies set out below and considers them to be the most
appropriate to the Group’s business activities.
The financial statements have been prepared on the historical cost basis except
for available-for-sale investments which are measured at fair value and on the
assumption that the Group and the Company are going concerns.
The Group has prepared and considered prospective financial information
derived based on assumptions and events that may occur for at least 12 months
from the date of approval of the financial statements and the possible actions
to be taken by the Group. Prospective financial information includes the
Group’s profit and cash flow forecasts for the ongoing projects. In preparing
the cash flow forecasts, the Directors have considered the availability of cash
and held-for-trading financial instruments, along with the adequacy of bank
loans and medium term notes described in Notes 35 and 36. The forecasts
incorporate current payables, committed expenditure included in Note 41 and
other future expected expenditure, along with a prudent estimate of sales in
addition to the disposal of certain land held for property development.
Based on these forecasts, cash resources and existing credit facilities, the
Directors consider that the Group and the Company have adequate resources
to continue in business for the foreseeable future. For this reason, the Directors
continue to adopt the going concern basis in preparing the financial statements.
The Group and the Company have not applied the following new/revised
accounting standards that have been issued by International Accounting
Standards Board but are not yet effective.
New/ Revised International
Financial Reporting Standards
Issued/
Revised
Effective Date
IFRS 9
Financial Instruments
- Classification and
November
2009
Annual periods beginning
on or after 1 January 2015
Measurement
IFRS 10 Consolidated Financial
Statements
- First Impressions:
Consolidated Financial
Statements
IFRS 11
Joint Arrangements
- First Impressions:
Joint Arrangements
IFRS 12 Disclosure of Interests in
Other Entities
- In the Headlines
- Issue 2011/16
IFRS 13
Fair Value Measurement
- First Impressions:
Fair Value Measurement
May 2011
Annual periods beginning
on or after 1 January 2013
May 2011
Annual periods beginning
on or after 1 January 2013
May 2011
Annual periods beginning
on or after 1 January 2013
May 2011
Annual periods beginning
on or after 1 January 2013
New/ Revised International
Financial Reporting Standards
IAS 1
IAS 27
IAS 28
IAS 32
Presentation of Financial
Statements
- Amendments resulting
from Annual
Improvements 2009-
2011 Cycle (comparative
information)
Consolidated and
Separate Financial
Statements
- Original issue
Investments in Associates
and Joint Ventures
- Original issue
Financial Instruments:
Presentation
- Amendments relating to
the offsetting of assets
and liabilities
Issued/
Revised
May 2012
Effective Date
Annual periods beginning
on or after 1 January 2013
May 2011
Annual periods beginning
on or after 1 January 2013
May 2011
Annual periods beginning
on or after 1 January 2013
December
2011
Annual periods beginning
on or after 1 January 2014
The Directors anticipate that the adoption of IFRS 9, 10, 11, 12, 13,
Amendments to IAS 1, 27, 28 and 32 in future periods will have no material
impact on the financial information of the Group or Company. IFRS 9,
which becomes mandatory for the Group’s 2015 Consolidation Financial
Statements, could change the classification and measurement of financial
assets. The Directors are currently determining the impact of IFRS 9.
2.2 Functional and presentation currency
These financial statements are presented in US Dollar (US$), which is the
Company’s functional currency and the Group’s presentation currency. All
financial information is presented in US$ and has been rounded to the nearest
thousand, unless otherwise stated.
2.3 Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that
have the most significant effect on the amounts recognised in the consolidated
financial statements are discussed below:
(a) Net realisable value of inventories
The Group assesses the net realisable of inventories under development
and completed properties held for sale according to their recoverable
amounts based on the realisability of these properties, taking into account
estimated costs to completion based on past experience and committed
contracts and estimated net sales based on prevailing market conditions.
Provision is made when events or changes in circumstances indicate that
the carrying amounts may not be realised. The assessment requires the use
of judgement and estimates.
(b) Fair value of available-for-sale fi nancial assets
The fair value of available-for-sale investments which are not traded in an
active market is determined based on the transaction price of the
investment agreed between the shareholders of the investee company,
based on the latest transacted price of the new issue of shares by the
investee company or by the use of a relevant valuation model.
(c) Amortisation of licence contracts and related relationships
Licence contracts and related relationships represent the rights to develop
the Hi-Tech Healthcare Park venture with the operation period ending on
9 July 2077.
The Group amortises licence contracts and related relationships when a
component of the venture is disposed of.
Annual Report 2012 35
3
SIGNIFICANT ACCOUNTING POLICIES
3.1 Basis of Consolidation
(a) Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which control
is transferred to the Group. Control is the power to govern the
financial and operating policies of an entity so as to obtain benefits
from its activities. In assessing control, the Group takes into
consideration potential voting rights that currently are exercisable.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree;
plus
• if the business combination is achieved in stages, the fair value of the pre-
existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable
assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised
immediately in profit or loss.
The consideration transferred does not include amounts related to the
settlement of pre-existing relationships. Such amounts generally are
recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue
of debt or equity securities, that the Group incurs in connection with a
business combination are expensed as incurred.
Any contingent consideration payable is measured at fair value at the
acquisition date. If the contingent consideration is classified as equity,
then it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
Acquisitions prior to 1 January 2010
For acquisitions prior to 1 January 2010, goodwill represents the excess of
the cost of the acquisition over the Group’s interest in the recognised
amount (generally fair value) of the identifiable assets, liabilities and
contingent liabilities of the acquiree. When the excess was negative, a
bargain purchase gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or
equity securities, that the Group incurred in connection with business
combinations were capitalised as part of the cost of the acquisition.
(b) Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions
with owners in their capacity as owners and therefore no goodwill is
recognised as a result. Adjustments to non-controlling interests arising
from transactions that do not involve the loss of control are based on a
proportionate amount of the net assets of the subsidiary.
accounted for as an equity-accounted investee or as an available-for-
sale financial asset depending on the level of influence retained.
(e) Associates
Associates are those entities in which the Group exercises significant
influence, but not control over the financial and operating policies.
Significant influence is presumed to exist when the Group holds between
20% to 50% of the voting power of another entity.
Investments in associated entities are accounted for using the equity
method and are recognised initially at cost. The cost of investment
includes transaction costs.
The consolidated financial statements include the Group’s share of the
profit or loss and other comprehensive income of equity accounted
investees, after adjustments to align the accounting policies with those of
the Group, from the date that significant influence until the date that
significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity-
accounted investee, the carrying amount of investment, including any
long-term interests that form part thereof, is reduced to zero, and the
recognition of further losses is discontinued except to the extent that the
Group has an obligation or has made payments on behalf of the investee.
(f ) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and
expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains
arising from transactions with equity-accounted investees are eliminated
against the investment to the extent of the Group’s interest in the
investee. Unrealised losses are eliminated in the same way as unrealised
gains, but to the extent that there is no evidence of impairment.
3.2 Foreign Currencies
(a) Foreign currency transactions
The Group financial statements are presented in United States Dollar
(“US$”), which is the Company’s functional and Group’s presentation
currency. Each entity in the Group determines its own functional currency
and items included in the financial statements of each entity are measured
using that functional currency. Transactions in foreign currencies are
translated to the respective functional currencies of the Group entities at
exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency
at the exchange rate at the date that the fair value was determined. Non-
monetary items in a foreign currency that are measured in terms of
historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on retranslation are
recognised in profit or loss, except for differences arising on the
retranslation of available-for-sale equity investments, which are
recognised in other comprehensive income.
(c) Subsidiaries
(b) Foreign operations
Subsidiaries are entities controlled by the Group. The financial statements
of subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when
necessary to align them with the policies adopted by the Group.
Investments in subsidiaries are stated in the Company’s statement of
financial position at cost less any impairment losses, unless the
investment is held for sale.
(d) Loss of control
On the loss of control, the Group derecognises the assets and liabilities
of the subsidiary, any non-controlling interests and the other
components of equity related to the subsidiary. Any surplus or deficit
arising on the loss of control is recognised in profit or loss. If the Group
retains any interest in the previous subsidiary, then such interest is
measured at fair value at the date that control is lost. Subsequently it is
The assets and liabilities of foreign operations, including goodwill and
fair value adjustments arising on acquisition, are translated to US$ at
exchange rates at the reporting date. The income and expenses of foreign
operations, are translated to US$ at exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in other comprehensive
income, and presented in the foreign currency translation reserve
(translation reserve) in equity. However, if the foreign operation is a non-
wholly owned subsidiary, then the relevant proportionate share of the
translation difference is allocated to the non-controlling interest. When
a foreign operation is disposed of such that control, significant influence
or joint control is lost, the cumulative amount in the translation reserve
related to that foreign operation is reclassified to profit or loss as part of
the gain or loss on disposal. When the Group disposes of only part of its
interest in a subsidiary that includes a foreign operation while retaining
control, the relevant proportion of the cumulative amount is reattributed
to non-controlling interests. When the Group disposes of only part of its
36 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
3
SIGNIFICANT ACCOUNTING POLICIES cont’d
3.2 Foreign Currencies cont’d
(b) Foreign operations cont’d
investment in an associate that includes a foreign operation while
retaining significant influence or joint control, the relevant proportion
of the cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a
foreign operation is neither planned nor likely in the foreseeable future,
foreign exchange gains and losses arising from such a monetary item are
considered to form part of a net investment in a foreign operation and are
recognised in other comprehensive income, and presented in the
translation reserve in equity.
3.3 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is
recognised:
(a) Sale of development properties
Revenue from sales of properties is recognised when effective control
of ownership of the properties is transferred to the purchasers which is
the completion certificate or occupancy permit has been issued as
described in Note 5.
(b) Interest income
Interest income is recognised as it accrues using the effective interest
method in profit or loss.
(c) Services
Expenditure incurred after the equipment has been placed into operation, such
as repairs and maintenance and overhaul costs, are normally charged to the
statement of comprehensive income in the year in which the costs are incurred.
In situations where it can be clearly demonstrated that the expenditure has
resulted in an increase in the future economic benefits expected to be obtained
from the use of an item of equipment beyond its original assessed standard of
performance, the expenditures are capitalised as an additional cost of
equipment. The useful life and depreciation method are reviewed periodically
to ensure that the method and period of depreciation are consistent with the
expected pattern of economic benefits from items of equipment.
An item of equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss on de-
recognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the profit or loss
in the period the asset is derecognised.
3.5 Leased asset
Finance lease
Leases in terms of which the Group or the Company assumes substantially all
the risks and rewards of ownership are classified as finance leases. Upon initial
recognition, the leased asset is measured at an amount equal to the lower of its
fair value and the present value of the minimum lease payments. Subsequent to
initial recognition, the asset is accounted for in accordance with the accounting
policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between
the finance expense and the reduction of the outstanding liability. The finance
expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease
payments over the remaining term of the lease when the lease adjustment is
confirmed.
Revenue from services rendered is recognised in profit or loss based on the
stage of completion of the transaction at the end of the reporting period.
The stage of completion is assessed by reference to work performed.
3.6 Income tax
(d) Rental income
Rental income is recognised in profit or loss on a straight-line basis over
the lease term. Lease incentives granted are recognised as an integral part
of the total rental income, over the term of the lease. Rental income is
recognised as other income.
(e) Revenue from hotel and mall operations
Revenue from hotel and mall operations have been treated as other income.
3.4 Property, Plant and Equipment
All property, plant and equipment are stated at cost less depreciation unless
otherwise stated. Cost includes all relevant external expenditure incurred in
acquiring the asset.
The Group selects its depreciation rates carefully and reviews them regularly
to take account of any changes in circumstances. When determining expected
economic lives, the Group considers the expected rate of technological
developments and the intensity at which the assets are expected to be used. All
assets are subject to annual review and where necessary, further write-downs
are made for any impairment in value.
Property, plant and equipment are recorded at cost, excluding the costs of day-
to-day servicing, less accumulated depreciation and accumulated impairment
in value. Such cost includes the cost of replacing parts of such plant and
equipment when that cost is incurred if the recognition criteria are met.
Property, plant and equipment under construction are not depreciated until
the assets are ready for their intended use. Depreciation is provided at rates
calculated to write off the cost, less estimated residual value, of each asset on a
straight line basis over its expected useful life:
Leasehold building
Furniture, fittings and equipment
Motor vehicles
6 - 25 years
4 - 10 years
5 years
The initial cost of equipment comprises its purchase price, including import
duties and non-refundable purchase taxes and any directly attributable costs of
bringing the asset to its working condition and location for its intended use.
Income tax expense comprises current tax and deferred tax. Current tax and
deferred tax is recognised in profit or loss except to the extent that it relates to a
business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted by the end of the reporting period,
and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the liability method, providing for temporary
differences between the carrying amounts of assets and liabilities in the
statement of financial position and their tax bases. Deferred tax is not
recognised for the following temporary differences: the initial recognition of
goodwill, and the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable
profit or loss. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right
to offset current tax liabilities and assets, and they relate to taxes levied by the
same tax authority on the same taxable entity, or on different tax entities, but
they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future
taxable profits will be available against which the temporary difference can be
utilised. Deferred tax assets are reviewed at the end of each reporting date and
are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
3.7 Financial instruments
(a) Non-derivatives fi nancial assets
The Group initially recognises loans and receivables and deposits on the
date that they are originated. All other financial assets are recognised
initially on the trade date, which is the date that the Group becomes a
party to the contractual provisions of the instrument.
Annual Report 2012 37
Subsequent to initial recognition, these financial liabilities are measured
at amortised cost using the effective interest method.
Other financial liabilities comprise loan and borrowings, bank overdrafts,
and trade and other payables.
Accounting for interest income and finance cost is discussed in Note
3.3(b) and 3.12.
(g) Share capital
Equity instruments are measured at the proceeds received net of
direct issue costs.
Repurchase of share apital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the
consideration paid, including directly attributable costs, is recognised as a
deduction from equity. Repurchased shares that are not subsequently
cancelled are classified as treasury shares and are presented as a deduction
from total equity.
Where treasury shares are distributed as share dividends, the cost of the
treasury shares is applied in the reduction of the share premium account
or distributable reserves, or both.
Where treasury shares are reissued by re-sale in the open market, the
sales consideration is recognised in equity.
Where treasury shares are cancelled, the equivalent will be credited to
capital redemption reserves.
(h) Derecognition
A financial asset or part of it is derecognised when, and only when the
contractual rights to the cash flows from the financial asset expire or the
financial asset is transferred to another party without retaining control or
substantially all risks and rewards of the asset. On derecognition of a financial
asset, the difference between the carrying amount and the sum of the
consideration received (including any new asset obtained less any new liability
assumed) and any cumulative gain or loss that had been recognised in equity is
recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the
obligation specified in the contract is discharged or cancelled or expire. On
derecognition of a financial liability, the difference between the carrying
amount of the financial liability extinguished or transferred to another party
and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
3.8 Intangible Assets
Intangible assets comprise of licence contracts and related relationships and
goodwill.
(a) Licence Contracts and Related Relationships
On acquisition, value is attributable to non-contractual relationships and
other contracts of long-standing to the extent that future economic
benefits are expected to flow from the relationships. Acquired licence
contracts and related relationships have finite useful lives.
Subsequent measurement
When a component of the project to which the licence contracts and
related relationships relate is disposed of, the part of the carrying amount
of the licence contracts and related relationships that has been allocated
to the component is recognised in profit or loss.
(b) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in
intangible assets. For the measurement of goodwill at initial recognition,
see note 3.1(a).
3
SIGNIFICANT ACCOUNTING POLICIES cont’d
3.7 Financial instruments cont’d
(a) Non-derivatives fi nancial assets cont’d
The Group derecognises a financial asset when the contractual rights to
the cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all the risks
and rewards of ownership of the financial assets are transferred. Any
interest in transferred financial assets that is created or retained by the
Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in
the statement of financial position when, and only when, the Group has a
legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following
categories: loans and receivables and available-for-sale financial assets.
(b) Financial assets at fair value through profi t or loss
A financial asset is classified as at fair value through profit or loss if it is
classified as held-for-trading or is designated as at fair value through
profit or loss if the Group manages such investments and makes purchase
and sale decisions based on their fair value in accordance with the Group’s
documented risk management or investment strategy. Attributable
transaction costs are recognised in profit or loss as incurred. Financial
assets at fair value through profit or loss are measured at fair value and
changes therein, which takes into account any dividend income, are
recognised in profit or loss.
(c) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, loans and receivables
are measured at amortised cost using the effective interest method, less
any impairment losses.
Loans and receivables comprise cash and cash equivalents, trade and
other receivables.
(d) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and at bank, deposits
held at call and short term highly liquid investments that are subject to an
insignificant risk of changes in value. Bank overdrafts are included within
borrowings in the current liabilities section on the statement of financial
position.
(e) Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are
designated as available for sale or are not classified in any of the other
categories of financial assets. Available-for-sale financial assets are
recognised initially at fair value plus any directly attributable transaction
costs. Subsequent to initial recognition, they are measured at fair value and
changes therein, other than impairment losses, are recognised in other
comprehensive income and presented in the fair value reserve in equity.
When an investment is derecognised, the gain or loss accumulated in equity
is reclassified to profit or loss.
(f ) Non-derivatives fi nancial liabilities
All financial liabilities are recognised initially on the trade date, which is
the date that the Group becomes a party to the contractual provisions of
the instrument.
The Group derecognises a financial liability when the contractual
obligations are discharged, cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in
the statement of financial position when, and only when, the Group has a
legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into other
financial liability category. Such financial liabilities are recognised
initially at fair value plus any directly attributable transaction costs.
38 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
3 SIGNIFICANT ACCOUNTING POLICIES cont’d
(d) Non-fi nancial assets
3.9
Inventories
Inventories comprise land held for property development, work-in-progress
and stock of completed units.
Inventories are stated at the lower of cost and net realisable value. Net
realisable value represents the estimated net selling price in the ordinary
course of business, less estimated total costs of completion.
Land held for property development consists of reclaimed land, freehold land,
leasehold land and land use rights on which development work has not been
commenced along with related costs on activities that are necessary to prepare
the land for its intended use. Land held for property development is transferred
to work-in-progress when development activities have commenced.
Work-in-progress comprises all costs directly attributable to property
development activities or that can be allocated on a reasonable basis to these
activities.
Upon completion of development, unsold completed development properties
are transferred to stock of completed units.
3.10 Impairment
(a) Non-derivative fi nancial assets
A financial asset not classified as at fair value through profit or loss is
assessed at each reporting date to determine whether there is objective
evidence that it is impaired. A financial asset is impaired if objective
evidence of impairment as a result of one or more events that occurred
after the initial recognition of the asset, and that the loss event had an
impact on the estimated future cash flows of that asset that can be
estimated reliably.
Objective evidence that financial assets (including equity securities) are
impaired can include default or delinquency by a debtor, restructuring of
an amount due to the Group on terms that the Group would not consider
otherwise, indications that a debtor or issuer will enter bankruptcy,
adverse changes in the payment status of borrowers or issuers in the
Group, economic conditions that correlate with defaults or the
disappearance of an active market for a security. In addition, for an
investment in an equity security, a significant or prolonged decline in its
fair value below its cost is objective evidence of impairment.
(b) Loans and receivables
The Group considers evidence of impairment for loans and receivables at
a specific asset level. All individually significant receivables are assessed
for specific impairment.
An impairment loss in respect of loans and receivables is recognised in
profit or loss and is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted
at the asset’s original effective interest rate. The carrying amount of the
asset is reduced through the use of an allowance account, and the loss is
recognised in the statement of comprehensive income within
administrative expenses. When a receivable is uncollectible, it is written
off against the allowance account for receivables. Subsequent recoveries
of amounts previously written off are credited against administrative
expenses in the statement of comprehensive income.
The carrying amounts of non-financial assets (except for inventories and
deferred tax asset) are reviewed at the end of each reporting date to
determine whether there is any indication of impairment.
If any such indication exists, then the asset’s recoverable amount is
estimated. For the purpose of impairment testing, assets are grouped
together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of
other assets or groups of assets (the “cash-generating unit”). The goodwill
acquired in a business combination, for the purpose of impairment
testing, is allocated to cash-generating units that are expected to benefit
from the synergies of the combination. Goodwill is tested for impairment
on an annual basis.
The recoverable amount of an asset or cash-generating unit is the greater
of its value in use and its fair value less costs to sell. 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 asset.
An impairment loss is recognised if the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses
recognised in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the units and
then to reduce the carrying amount of the other assets in the unit
(groups of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other
assets, impairment losses recognised in prior periods are assessed at the
end of each reporting period for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable amount
since the last impairment loss was recognised. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
Reversals of impairment losses are credited to profit or loss in the year in
which the reversals are recognised.
3.11 Employee Benefi ts
(a) Short-term employee benefi ts
Short term employee benefit obligations in respect of salaries, annual
bonuses, paid annual leave and sick leave are measured on an
undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to the paid under short-
term cash bonus or profit-sharing plans if the Group has a present legal or
constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
(b) Defi ned contribution plan
Certain companies in the Group maintain a defined contribution plan
in Malaysia and Vietnam for providing employee benefits, which is
required by laws in Malaysia and Vietnam respectively. The retirement
benefit plan is funded by contributions from both the employees and the
companies to the employees’ provident fund. The Group’s contributions
to employees’ provident fund are charged to the statement of
comprehensive income in the year to which they relate.
When a subsequent event (e.g. repayment by a debtor) causes the amount
of impairment loss to decrease, the decrease in impairment loss is
reversed through profit or loss.
3.12 Finance Costs
(c) Impairment of available-for-sale investment
An impairment loss in respect of available-for-sale financial assets is
recognised in profit or loss and is measured as the difference between the
asset’s acquisition cost (net of any principal repayment and amortisation)
and the asset’s current fair value, less any impairment loss previously
recognised. Where a decline in the fair value of an available-for-sale
financial asset has been recognised in the other comprehensive income,
the cumulative loss in other comprehensive income is reclassified from
equity and recognised to profit or loss.
Impairment losses recognised in profit or loss for an investment in an
equity instrument is not reversed through profit or loss.
Finance costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that take a substantial period
of time to get ready for their intended use or sale, are capitalised to the cost of
those assets, until such time as the assets are substantially ready for their
intended use or sale. Investment income earned on the temporary investment
of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other finance costs are recognised in the statement of comprehensive
income in the period in which they are incurred.
Annual Report 2012 39
3
SIGNIFICANT ACCOUNTING POLICIES cont’d
3.13 Separately Disclosable Items
Items that are both material in size and unusual and infrequent in nature are
presented as separately disclosable items in the statement of comprehensive
income or separately disclosed in the notes to the financial statements. The
Directors are of the opinion that the separate recording of these items provides
helpful information about the Group’s underlying business performance.
3.14 Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its
ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period.
3.15 Provisions
Provisions are recognised if, as a result of past event, the Group has a present
legal or constructive obligation that can be estimated reliably as a result of a
past event and it is probable that an outflow of economic benefits will be
required to settle the obligation. Where the Group expects some or all of a
provision to be reimbursed, the reimbursement is recognised as a separate
asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in statement of comprehensive income
net of any reimbursement. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is recognised as a borrowing
cost.
3.16 Commitments and Contingencies
Commitments and contingent liabilities are disclosed in the financial
statements and described in Note 41. They are disclosed unless the possibility
of an outflow of resources embodying economic benefits is remote. A
contingent asset is not recognised in the financial statements but disclosed
when an inflow of economic benefits is probable.
3.17 Segment reporting
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group’s other
components. An operating segment’s operating results are reviewed regularly
by the chief operating decision maker, which in this case is the Executive
Management of Ireka Development Management Sdn. Bhd. (“IDM”), to make
decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Executive Management of IDM include
items directly attributable to a segment as well as those that can be allocated on a
reasonable basis. Unallocated items comprise mainly the Group’s administrative
functions.
Segment capital expenditure is the total cost incurred during the year to
acquire property, plant and equipment, and intangible assets other than
goodwill.
4 FINANCIAL RISK MANAGEMENT
4.1 Financial Risk Management Objectives and Policies
The Group’s international operations and debt financing arrangements
expose it to a variety of financial risks: credit risk, liquidity risk and market risk
(including foreign exchange risk, interest rate risk and price risk). The Group’s
financial risk management policies and their implementation on a group-wide
basis are under the direction of the Board of Aseana Properties Limited.
The Group’s treasury policies are formulated to manage the financial impact of
fluctuations in interest rates and foreign exchange rates to minimise the
Group’s financial risks. The Group has not used derivative financial
instruments, principally interest rate swaps and forward foreign exchange
contracts for hedging transactions. The Group does not envisage using these
derivative hedging instruments in the short term as it is the Group’s policy to
borrow in the currency to match the revenue stream to give it a natural hedge
against foreign currency fluctuation. The derivative financial instruments will
only be used under the strict direction of the Board. It is also the Group’s policy
not to enter into derivative transactions for speculative purposes.
4.2 Credit Risk
The Group’s credit risk is primarily attributable to deposits with banks and
credit exposures to customers. The Group has credit policies in place and the
exposures to these credit risks are monitored on an ongoing basis. The Group
manages its deposits with banks and financial institutions by monitoring
credit ratings and limiting the aggregate risk to any individual counterparty. At
31 December 2012, 93% (2011: 95%) of deposits and cash balances were placed
at banks and financial institutions with credit ratings of no less than A
(Moody’s/ Rating Agency Malaysia) and 7% (2011: 5%) with local banks, in the
case of Vietnam. Management did not expect any counterparty to fail to meet
its obligations.
In respect of credit exposures to customers, the Group receives progress
payments from sales of commercial and residential properties to individual
customers prior to the completion of transactions. In the event of default by
customers, the Group companies undertake legal proceedings to recover the
properties. The Group has limited its credit exposure to customers due to
secured bank loans taken by the purchasers. At 31 December 2012, there was
no significant concentration of credit risk within the Group.
Amounts due from an associate are supported by underlying assets. The
maximum exposure to credit risk was represented by the carrying
amount of each financial asset in the statement of financial position
after deducting any impairment allowance.
The Group’s exposure to credit risk arising from total debtors is set out in Note
23 and totals US$12.7 million (2011: US$33.5 million). The Group’s exposure to
credit risk arising from deposits and balances with banks is set out in Note 26
and totals US$16.8 million (2011: US$32.6 million).
At the end of the reporting period, the maximum exposure to credit risk as
represented by the outstanding banking and credit facilities of the
subsidiaries is as follows:
Company
2012
US$’000
2011
US$’000
Financial institutions for bank facilities
granted to its subsidiaries
124,807
77,322
At the end of the reporting period there was no indication that any subsidiary
would default on payment.
The financial guarantee has not been recognised since the fair value on initial
recognition was not material.
4.3 Liquidity Risk
The Group raises funds as required on the basis of budgeted expenditure and
inflows for the next twelve months with the objective of ensuring adequate
funds to meet commitments associated with its financial liabilities. When
funds are sought, the Group balances the costs and benefits of equity and debt
financing against the developments to be undertaken. At 31 December 2012,
the Group’s borrowings to fund the developments had tenors of less than ten
years.
Cash flows are monitored on an on-going basis. The Group manages its
liquidity needs by monitoring scheduled debt servicing payments for long
term and short term financial liabilities as well as cash out flows due in its day
to day operations while ensuring sufficient headroom on its undrawn
committed borrowing facilities at all times so that borrowing limits and
covenants are not breached. Capital investments are committed only after
confirming the source of funds, e.g. securing financial liabilities.
Management is of the opinion that most of the bank borrowings can be
renewed or re-financed based on the strength of the Group’s earnings,
cash flow and asset base.
40 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
4 FINANCIAL RISK MANAGEMENT cont’d
4.3
Liquidity Risk cont’d
The maturity profile of the Group’s and the Company’s financial liabilities at the statement of financial position date, based on the contracted undiscounted payments,
were as follows:
Carrying Contractual Contractual
cash fl ows
interest rate
US$’000
amount
US$’000
Under
1 year
US$’000
1 – 2
years
US$’000
2 – 5 More than
5 years
years
US$’000
US$’000
30
144,329
56,764
2.50%
5.20% - 23%
–
34
168,688
56,764
7
30,306
56,764
7
32,013
–
20
96,277
–
–
10,092
–
201,123
225,486
87,077
32,020
96,297
10,092
126,016
74,338
5.33% - 23%
–
146,836
74,338
44,184
74,338
33,487
–
69,165
–
200,354
221,174
118,522
33,487
69,165
–
–
–
Carrying Contractual Contractual
cash fl ows
interest rate
US$’000
amount
US$’000
Under
1 year
US$’000
1 – 2
years
US$’000
2 – 5 More than
5 years
years
US$’000
US$’000
1,677
1,677
947
947
–
1,677
1,677
1,677
1,677
–
947
947
947
947
–
–
–
–
–
–
–
–
–
–
–
–
Group
At 31 December 2012
Finance lease liabilities
Interest bearing loans and borrowings
Trade and other payables
At 31 December 2011
Interest bearing loans and borrowings
Trade and other payables
Company
At 31 December 2012
Trade and other payables
At 31 December 2011
Trade and other payables
The above table excludes current tax liabilities.
4.4 Market Risk
(a) Foreign Exchange Risk
Entities within the Group are exposed to foreign exchange risk from future commercial transactions and net monetary assets and liabilities that are denominated in
a currency that is not the entity’s functional currency. The foreign currency exposure is not hedged.
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property or investment is located or by borrowing
in currencies that match the future revenue stream to be generated from its investments.
Management monitors the foreign currency exposure closely and takes necessary actions in consultation with the bankers to avoid unfavourable exposure.
The Group is exposed to foreign currency risk on cash and cash equivalents which are denominated in currencies other than the functional currency of the relevant
Group entity. The Group’s exposure to foreign currency risk on cash and cash equivalents at year end is as follows:
Group
Euros
Others
2012
US$’000
2011
US$’000
205
108
313
411
10
421
At 31 December 2012, if cash and cash equivalents denominated in a currency other than the functional currency of the Group entity strengthened / (weakened) by
10% and all other variables were held constant, the effects on the Group profit and loss and equity expressed in US$ would have been US$31,300 / (US$31,300).
(2011 : US$42,100 /(US$42,100)).
Annual Report 2012 41
4 FINANCIAL RISK MANAGEMENT cont’d
4.4 Market Risk cont’d
(a) Foreign Exchange Risk cont’d
Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency. Differences
resulting from the translation of financial statements into the Group’s presentation currency are not taken into consideration.
Subsequent to year end, there are no significant monetary balances held by group companies that are denominated in a non-functional currency.
(b) Interest Rate Risk
The Group’s policy is to minimise interest rate risk on bank loans and borrowings using a mix of fixed and variable rate debts that represent market rates. The Group
prefers to maintain flexibility on the desired mix of fixed and variable interest rates as this will depend on the economic environment, the type of borrowings available
and the funding requirements of the project when a decision is to be made.
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instrument, based on carrying amounts at the end of the reporting
period was:
Fixed rate instruments:
Financial assets
Financial liabilities
Floating rate instruments:
Financial liabilities
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
16,752
83,205
32,610
75,734
354
–
5,188
–
61,154
50,282
–
–
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s liabilities with a floating interest rate. The fixed and floating
interest rates were not hedged and would therefore expose the Group to cash flow interest rate risk. Borrowings at fixed rate represent 58% (2011: 60%) of the Group’s
borrowings at 31 December 2012.
Interest rate risk is reported internally to key management personnel via a sensitivity analysis, which is prepared based on the exposure to variable interest rates for
non-derivative instruments at the statement of financial position date. For variable-rate borrowings, the analysis is prepared assuming that the amount of liabilities
outstanding at the statement of financial position date will be outstanding for the whole year. A 100 basis point increase or decrease is used and represents the
management’s assessment of the reasonable possible change in interest rate.
Sensitivity analysis for fl oating rate instrument
At 31 December 2012, if the interest rate had been 100 basis point higher/ lower and all other variables were held constant, this would (decrease)/ increase the Group’s
profit for the year by approximately (US$611,540)/ US$611,540 (2011: increase/(decrease) by US$502,820/ (US$502,820)).
(c) Price Risk
Equity price risk arises from the Group’s investments in unquoted shares which are available-for-sale and held by the Group at fair value at reporting date. Gains and
losses arising from changes in the fair value of available-for-sale investments are recognised in other comprehensive income/expense.
The Group had no exposure to listed equity investments at the reporting date.
4.5
Fair Values
The carrying amount of trade and other receivables, deposits, cash and cash equivalents, trade and other payables, accruals and current loans and borrowings approximate
their fair values in the current and prior years due to relatively short term in nature of these financial instruments.
Non-current loans and borrowings earn interest at floating rates and the fair value in the current and prior years approximates to the carrying value.
The fair value of Medium Term Notes (“MTN”), together with the carrying amounts shown in the statement of financial position, is as follows:
Group
MTN
2012
2011
Carrying
amount
US$’000
Fair
value
US$’000
Carrying
amount
US$’000
Fair
value
US$’000
83,175
80,048
75,734
72,175
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate
of interest rate at the end of the reporting period. In respect of the liability component of convertible notes, the market rate of interest is determined by reference to similar
liabilities that do not have a conversion option.
At 31 December 2012, the interest rate used to discount estimated cash flows of the MTN is 7.32%.
At 31 December 2011, the interest rate used to discount estimated cash flows of the MTN is 7.08%.
42 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
4 FINANCIAL RISK MANAGEMENT cont’d
4.6 Management and Control
Changes that cause the management and control of the Company to be exercised in the United Kingdom could lead to the Company becoming liable to United Kingdom
taxation on income and capital gains.
4.7 Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns to shareholders and benefits
to other stakeholders and to maintain an optimal capital structure to reduce cost of capital.
The capital structure of the Group consisted of held-for-trading financial instrument, cash and cash equivalents, loans and borrowings, medium term notes and equity
attributable to equity holders of the parent, comprising issued share capital and reserves, were as follows:
Group
Capital structure analysis:
Held-for-trading financial instrument
Cash and cash equivalents
Loans and borrowings
Medium term notes
Equity attributable to equity holders of the parent
Total capital
2012
US$’000
2011
US$’000
1,370
16,752
(61,184)
(83,175)
(183,584)
21,384
32,610
(50,282)
(75,734)
(203,370)
(309,821)
(275,392)
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares
or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of net debt-to-equity ratio.
Net debt-to-equity ratio is calculated as a total of interest-bearing borrowings less held-for-trading financial instrument and cash and cash equivalents to the total equity.
The Group’s policy is to maintain the net debt-to-equity ratio of less than 1.0. The net debt-to-equity ratios at 31 December 2012 and 31 December 2011 were as follows:
Group
Total borrowings
Less: Held-for-trading financial instrument (Note 22)
Less: Cash and cash equivalents (Note 26)
Net debt
Total equity
Net debt-to-equity ratio
5 REVENUE AND SEGMENTAL INFORMATION
2012
US$’000
2011
US$’000
144,359
(1,370)
(16,752)
126,016
(21,384)
(32,610)
126,237
72,022
196,647
207,646
0.64
0.35
The gross revenue represents the sales value of development properties where the effective control of ownership of the properties is transferred to the purchasers when the
completion certificate or occupancy permit has been issued.
The Company is an investment holding company and has no operating revenue. The Group’s operating revenue for the year was mainly attributable to the sale of development
properties in Malaysia.
5.1 Revenue recognised during the year as follows:
Sale of development properties
Project management fee
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
23,363
369
280,788
354
23,732
281,142
–
–
–
–
–
–
Annual Report 2012 43
5 REVENUE AND SEGMENTAL INFORMATION cont’d
5.2
Segmental Information
The Group’s assets and business activities are managed by Ireka Development Management Sdn. Bhd. (“IDM”) as the Development Manager under a management
agreement dated 27 March 2007.
Segmental information represents the level at which financial information is reported to the Executive Management of IDM, being the chief operating decision maker
as defined in IFRS 8. The Executive Management consists of the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer of IDM. Management
determines the operating segments based on reports reviewed and used by the Executive Management for strategic decision making and resource allocation. For
management purposes, the Group is organised into project units.
The Group’s reportable operating segments are as follows:
(i)
Investment holding companies – investing activities;
(ii) Ireka Land Sdn. Bhd. – develops Tiffani by i-ZEN and 1 Mont’ Kiara by i-ZEN;
(iii) ICSD Ventures Sdn. Bhd. – develops Sandakan Harbour Square;
(iv) Amatir Resources Sdn. Bhd. – develops SENI Mont’ Kiara; and
(v) Hoa Lam-Shangri-La Healthcare Group – develops City International Hospital and Hi-Tech Healthcare Park.
Other non-reportable segments comprise the Group’s other new development projects. None of these segments meets any of the quantitative thresholds for determining
reportable segments in 2012 and 2011.
Information regarding the operations of each reportable segment is included below. The Executive Management monitors the operating results of each segment for the
purpose of performance assessments and making decisions on resource allocation. Performance is based on segment gross profit and profit before taxation, which the
Executive Management believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets and liabilities are presented
inclusive of inter-segment balances and inter-segment pricing is determined on an arm’s length basis.
The Group’s revenue generating development projects are currently only in Malaysia since development activities in Vietnam are still at approved and construction stages.
5.3 Analysis of the group’s reportable operating segments is as follows: –
Operating Segments – ended 31 December 2012
Investment
Holding
US$’000
Ireka
Land
Sdn. Bhd.
US$’000
ICSD
Hoa Lam-
Amatir Shangri-La
Ventures Resources Healthcare
Group
Sdn. Bhd.
Sdn. Bhd.
US$’000
US$’000
US$’000
Total
US$’000
Segment profi t/ (loss) before taxation
(7,904)
2,199
(8,153)
1,096
(1,950)
(14,712)
Included in the measure of segment profit/ (loss) are:
Revenue
Cost of acquisition written down
Goodwill impairment
Marketing expenses
Depreciation of property, plant and equipment
Finance costs
Finance income
Segment assets
Included in the measure of segment assets are:
Addition to non-current assets other than financial instruments and
deferred tax assets
–
–
–
–
–
(31)
76
–
(392)
–
(54)
(8)
–
18
852
(69)
(946)
(2)
(86)
(3,071)
217
22,511
(3,912)
(212)
(1,898)
(1)
(731)
63
–
–
–
–
(92)
(434)
7
23,363
(4,373)
(1,158)
(1,954)
(187)
(4,267)
381
13,205
11,164
112,363
102,178
77,962
316,872
–
–
273
–
27
300
Reconciliation of reportable segment revenues, profi t or loss, assets and liabilities and other material items
Profi t or loss
Total profit or loss for reportable segments
Other non-reportable segments
Depreciation
Finance cost
Finance income
Consolidated loss before taxation
US$’000
(14,712)
(1,910)
(3)
(32)
26
(16,631)
44 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
5 REVENUE AND SEGMENTAL INFORMATION cont’d
5.3 Analysis of the group’s reportable operating segments is as follows: cont’d
Operating Segments – ended 31 December 2011
Investment
Holding
US$’000
Ireka
Land
Sdn. Bhd.
US$’000
ICSD
Hoa Lam-
Amatir Shangri-La
Ventures Resources Healthcare
Group
Sdn. Bhd.
Sdn. Bhd.
US$’000
US$’000
US$’000
Total
US$’000
Segment profi t/ (loss) before taxation
(3,334)
2,204
(1,488)
38,725
(2,747)
33,360
Included in the measure of segment profit/ (loss) are:
Revenue
Cost of acquisition written down
Goodwill impairment
Marketing expenses
Depreciation of property, plant and equipment
Finance costs
Finance income
Segment assets
Included in the measure of segment assets are:
Addition to non-current assets other than financial instruments and
deferred tax assets
–
–
–
–
–
(425)
89
1,885
(1,216)
–
–
(19)
–
238
3,932
(1,030)
–
(80)
(23)
(65)
95
274,971
(40,053)
(2,171)
(2,640)
(1)
(203)
163
–
–
–
–
(99)
(412)
8
280,788
(42,299)
(2,171)
(2,720)
(142)
(1,105)
593
30,115
23,913
94,286
128,669
48,321
325,304
–
–
63
–
193
256
Reconciliation of reportable segment revenues, profi t or loss, assets and liabilities and other material items
Profi t or loss
Total profit or loss for reportable segments
Other non-reportable segments
Depreciation
Finance cost
Finance income
Consolidated profit before taxation
2012
US$’000
Total reportable segment
Other non-reportable segments
Consolidated total
2011
US$’000
Total reportable segment
Other non-reportable segments
Consolidated total
US$’000
33,360
(198)
–
(39)
9
33,132
Revenue Depreciation
Finance
costs
Finance
income
Addition to
Segment non-current
assets
assets
23,363
369
23,732
(187)
(3)
(4,267)
(32)
381
26
316,872
92,802
(190)
(4,299)
407
409,674
300
12
312
Revenue Depreciation
Finance
costs
Finance
income
Addition to
Segment non-current
assets
assets
280,788
354
281,142
(142)
–
(1,105)
(39)
(142)
(1,144)
593
9
602
325,304
89,820
415,124
256
335
591
5 REVENUE AND SEGMENTAL INFORMATION cont’d
5.3 Analysis of the group’s reportable operating segments is as follows: cont’d
Geographical Information – ended 31 December 2012
Revenue
Non-current assets
In 2012, no single customer exceeded 10% of the Group’s total revenue.
Geographical Information – ended 31 December 2011
Revenue
Non-current assets
In 2011, no single customer exceeded 10% of the Group’s total revenue.
6 COST OF SALES
Annual Report 2012 45
Malaysia Vietnam Consolidated
US$’000
US$’000 US$’000
23,732
3,188
–
24,341
23,732
27,529
Malaysia Vietnam Consolidated
US$’000
US$’000 US$’000
281,142
8,504
–
33,871
281,142
42,375
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
Direct costs attributable to property development
21,459
236,645
–
–
7 OTHER INCOME
Group
Dividend income
Investment income
Late payment interest income
Rental income
Revenue from hotel operation (a)
Revenue from mall operation (b)
Reversal of impairment of trade receivables
Sale of land (c)
Sundry income
(a) Revenue from hotel operation
2012
US$’000
2011
US$’000
314
234
66
554
1,919
638
357
2,533
436
268
295
514
643
–
–
–
–
426
7,051
2,146
A subsidiary of the Company, ICSD Ventures Sdn. Bhd. has commenced the operation of its hotel - Four Points by Sheraton Sandakan Hotel in May 2012. The revenue earned
from hotel operation is included in other income in line with management’s intention to dispose of the hotel.
(b) Revenue from mall operation
A subsidiary of the Company, ICSD Ventures Sdn. Bhd. has commenced the operation of its retail mall - Harbour Mall Sandakan in July 2012. The revenue earned from mall
operation is included in other income in line with management’s intention to dispose of the mall.
(c) Sale of land
A subsidiary of the Company, Ireka Land Sdn. Bhd. sold a piece of land where the show unit of Tiffani by i-ZEN was located for US$ 2,533,440 (RM 7,800,000) in April 2012.
The cost of the land had been charged to the development of Tiffani by i-ZEN in August 2009.
46 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
8 FOREIGN EXCHANGE GAIN/ (LOSS)
Foreign exchange gain/ (loss) comprises:
Realised foreign exchange (loss)/ gain
Unrealised foreign exchange gain/ (loss)
9 MANAGEMENT FEES
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
(118)
642
(994)
(20)
(22)
(256)
524
(1,014)
(278)
361
89
450
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
Management fees
3,799
3,972
1,644
1,613
The management fees payable to the Development Manager are based on 2% of the Group’s net asset value calculated on the last business day of March, June, September and
December of each calendar year and payable quarterly in advance. The management fees were allocated to the subsidiaries and Company based on where the service was provided.
In addition to the annual management fee, the Development Manager is entitled to a performance fee calculated at 20% of the out performance net asset value over a total return
hurdle rate of 10%. No performance fee has been paid or accrued during the year (2011: US$Nil).
10 STAFF COSTS
Group
Wages, salaries and others
Employees’ provident fund, social security and other pension costs
2012
US$’000
2011
US$’000
1,705
113
1,818
924
33
957
The Company has no executive directors or employees under its employment. The Group’s subsidiaries, ICSD Ventures Sdn. Bhd., ASPL PLB-Nam Long Ltd Liability Co, Aseana-
BDC Co Ltd, Hoa Lam Service Co Ltd, Hoa Lam – Shangri-La Healthcare Ltd Liability Co and Hoa Lam – Shangri-la 1 Liability Ltd Co have a total of 253 (2011: 56) employees.
11 FINANCE (COSTS)/ INCOME
Interest income from banks
Agency fees
Annual trustees monitoring fee
Bank guarantee commission
Interest on bank overdraft
Interest on bank loans
Interest on financial liabilities at amortised cost
Interest on medium term notes
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
407
(27)
(7)
(4)
–
(1,189)
(1)
(3,071)
602
(26)
(6)
(152)
(4)
(956)
–
–
(3,892)
(542)
59
–
–
–
–
–
–
–
59
68
–
–
–
(4)
–
–
–
64
Annual Report 2012 47
Group
Company
2012
US$’000
2011
US$’000
2012
US$’000
2011
US$’000
229
10
317
4,653
190
3,290
2,192
81
–
1,158
(357)
1
31
1,818
15
193
29
317
–
142
–
–
(26)
–
2,171
419
–
156
957
8
121
–
317
–
–
–
–
–
1,885
–
–
–
–
–
–
106
13
317
–
–
–
–
–
634
–
–
–
–
–
–
2012
US$’000
2011
US$’000
1,087
711
128
18,864
1,798
18,992
12 NET (LOSS)/ PROFIT BEFORE TAXATION
Net (loss)/ profit before taxation is stated after charging/(crediting):
• Auditor’s remuneration
- current year
- under provision in prior year
• Directors’ fees
• Decline in fair value of available-for-sale investments
• Depreciation of property, plant and equipment
• Expenses of hotel operation
• Expenses of mall operation
• Fair value loss/ (gain) on held-for-trading financial instrument
Impairment of amount due from subsidiaries
•
Impairment of goodwill
•
•
(Reversal of ) / impairment of trade receivables
• Loss on disposal of property, plant and equipment
• Property, plant and equipment written off
• Staff costs
• Tax services
13 TAXATION
Group
Current tax
Deferred tax
Total tax expense for the year
The numerical reconciliation between the income tax expenses and the product of accounting results multiplied by the applicable tax rate is computed as follows:
Group
Accounting (loss)/ profit
Income tax at a rate of 25%*
Add :
Tax effect of expenses not deductible in determining taxable profit
Movement of unrecognised deferred tax benefits
Tax effect of different tax rates in subsidiaries**
Less :
Tax effect of income not taxable in determining taxable profit
(Over)/ under provision
Total tax expense for the year
* The applicable corporate tax rate in Malaysia and Vietnam is 25%.
2012
US$’000
2011
US$’000
(16,631)
33,132
(4,158)
8,283
4,329
1,663
362
(244)
(154)
9,179
1,190
477
(186)
49
1,798
18,992
**
The applicable corporate tax rate in Singapore is 17%. A subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd Liability Co is granted preferential corporate tax rate of
10% for its profit arising from hospital income. The preferential income tax is given by the government of Vietnam due to the subsidiary’s involvement in the healthcare and
education industries.
The Company is treated as a tax resident of Jersey for the purpose of tax laws and is subject to a tax rate of 0%.
A Goods and Services Tax was introduced in Jersey in May 2008. The Company has been registered as an International Services Entity so it does not have to charge or pay local
GST. The cost for this registration is £200 per annum.
The Directors intend to conduct the Group’s affairs such that the central management and control is not exercised in the United Kingdom and so that neither the Company nor
any of its subsidiaries carries on any trade in the United Kingdom. The Company and its subsidiaries will thus not be residents in the United Kingdom for taxation purposes. On
this basis, they will not be liable for United Kingdom taxation on their income and gains other than income derived from a United Kingdom source.
48 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
14 (LOSS)/ EARNINGS PER SHARE
Basic and diluted (loss)/ earnings per ordinary share
The calculation of basic and diluted (loss)/ earnings per ordinary share for the year ended 31 December 2012 was based on the (loss)/ profit attributable to equity holders of the
parent and a weighted average number of ordinary shares outstanding, calculated as below:
Group
(Loss)/ profit attributable for the year attributable to equity holders of the parent
Weighted average number of shares
(Loss)/ earnings per share (US cents):
Basic and diluted
15 PROPERTY, PLANT AND EQUIPMENT
Group
Cost
At 1 January 2012
Exchange adjustments
Additions
Disposal
Transfer to inventories
Written off
At 31 December 2012
Accumulated Depreciation
At 1 January 2012
Exchange adjustments
Charge for the year
Disposal
Transfer to inventories
Written off
At 31 December 2012
Net carrying amount at 31 December 2012
Cost
At 1 January 2011
Exchange adjustments
Additions
Written off
At 31 December 2011
Accumulated Depreciation
At 1 January 2011
Exchange adjustments
Charge for the year
Written off
At 31 December 2011
Net carrying amount at 31 December 2011
2012
US$’000
2011
US$’000
(16,839)
212,047
16,058
212,525
(7.94)
7.56
Furniture,
Fittings &
Equipment
US$’000
Motor
Vehicles
US$’000
Leasehold
Building
US$’000
Work In
Progress
US$’000
Total
US$’000
595
12
279
–
(363)
(73)
450
160
4
121
–
(72)
(42)
171
279
779
(29)
88
(243)
595
171
(5)
81
(87)
160
435
137
2
33
(3)
–
–
169
38
1
31
(1)
–
–
69
100
142
(8)
3
–
137
24
(1)
15
–
38
99
847
7
–
–
–
–
854
81
1
38
–
–
–
120
734
735
(53)
165
–
847
39
(4)
46
–
81
3,329
120
–
–
(3,449)
–
–
–
–
–
–
–
–
–
–
3,075
(81)
335
–
4,908
141
312
(3)
(3,812)
(73)
1,473
279
6
190
(1)
(72)
(42)
360
1,113
4,731
(171)
591
(243)
3,329
4,908
–
–
–
–
–
234
(10)
142
(87)
279
766
3,329
4,629
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of US$311,833 (2011: US$590,880) of which US$32,700 (2011: US$Nil) was
acquired by means of finance lease. Motor vehicle of the Group with net carrying amount of US$25,179 (2011: US$Nil) is held under hire purchase arrangement at year end.
Annual Report 2012 49
16 INVESTMENT IN AN ASSOCIATE
The Company, via a wholly-owned subsidiary ASPL M3A Limited, has a 40% equity interest in a company known as Excellent Bonanza Sdn. Bhd., a company incorporated in
Malaysia, which is a vehicle set up to undertake a commercial development in Kuala Lumpur, Malaysia.
A summary of the current assets, non-current assets, current liabilities, non-current liabilities, income and expenses of the associate is as follows:
Group
Statement of Financial Position
Non-current assets
Current assets
Total Assets
Current liabilities
Total liabilities
Equity
Total Equity and Liabilities
Statement of Comprehensive Income
Other operating income
Cost of sales, expenses including finance costs and taxation
Profi t/ (loss)
2012
US$’000
2011
US$’000
11,345
378,270
4,527
125,409
389,615
129,936
390,224
131,392
390,224
(609)
131,392
(1,456)
389,615
129,936
–
899
899
12
(500)
(488)
The amount of unrecognised share of profit for the current year and cumulatively is US$338,567 (2011: share of loss US$184,732) and US$243,727 (2011: US$582,294)
respectively.
17 INVESTMENT IN SUBSIDIARIES
Company
Unquoted shares, at cost
Discount on loans to subsidiaries
A list of the main operating subsidiaries is provided in Note 40.
2012
US$’000
2011
US$’000
66,428
14,518
66,428
14,518
80,946
80,946
50 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
18 AVAILABLE-FOR-SALE INVESTMENTS
Group
2012
1 January – fair value
Recognised in other comprehensive income
Recognised in profit or loss
At 31 December – fair value
Unquoted shares
US$’000
22,052
(4,828)
(4,653)
12,571
The available-for-sale investments represent the investment in shares of Nam Long Investment Corporation (“Nam Long”) which the Group acquired over four tranches in 2008
and 2009.
Group
2011
1 January – fair value
At 31 December – fair value
Unquoted shares
US$’000
22,052
22,052
At 31 December 2012, a decline in fair value of US$4.8 million has been recognised in other comprehensive income, with a further impairment loss of US$4.7 million recognised
in the profit or loss. The Directors have considered various prevailing factors at year end, including the economic conditions and market conditions of the Ho Chi Minh Stock
Exchange (Nam Long was subsequently listed in the Exchange on 8 April 2013) in assessing the fair value of the investment.
IFRS 7 Financial Instruments: Disclosures includes a requirement that financial instruments carried at fair value be analysed by level of the IFRS 7 defined fair value hierarchy.
This hierarchy is based on the inputs of the fair value measurement and reflects the lowest level input that is significant to the remeasurement. The Directors are of the opinion
that the available-for-sale investments at 31 December 2012 and 2011 is classified under Level 3 (fair values measured using inputs for the asset or liability that are not based on
observable market data).
The Directors are of the opinion that the carrying value approximates the investment’s fair value at 31 December 2012.
19 INTANGIBLE ASSETS
Group
Cost
Licence
Contracts and
Related
Relationships
US$’000
Goodwill
US$’000
Total
US$’000
At 1 January 2011/ 31 December 2011 / 31 December 2012
10,695
6,479
17,174
Accumulated impairment losses
At 1 January 2011
Impairment loss
At 31 December 2011 / 1 January 2012
Impairment loss
At 31 December 2012
Carrying amounts
At 31 December 2011
At 31 December 2012
–
–
–
–
–
–
2,171
2,171
1,158
–
2,171
2,171
1,158
3,329
3,329
10,695
4,308
15,003
10,695
3,150
13,845
The licence contracts and related relationships represents the rights to develop the International Hi-Tech Healthcare Park. The Phase 1 of City International Hospital is
anticipated to be completed in 2013. Other than Phase 1 of City International Hospital, the rest of the projects are at their early stage.
For the purpose of impairment testing, goodwill and licence contracts and related relationships are allocated to the Group’s operating divisions which represent the lowest level
within the Group at which the goodwill and licence contracts and related relationships are monitored for internal management purposes.
19 INTANGIBLE ASSETS cont’d
The aggregate carrying amounts of intangible assets allocated to each unit are as follows:
Group
Licence, contracts and related relationships
International Hi-Tech Healthcare Park
Goodwill
SENI Mont’ Kiara
Sandakan Harbour Square
Annual Report 2012 51
2012
US$’000
2011
US$’000
10,695
10,695
1,203
1,947
3,150
1,415
2,893
4,308
The recoverable amount of licence, contracts and related relationships has been tested based on the fair value less cost to sell of the Land Use Rights (“LUR”) owned by the
subsidiaries, discounted using a discount rate at 11% (2011: 17%) per annum. The key assumption used is the expected market value of the LUR. The Group believes that any
reasonably possible changes in the above key assumptions applied is not likely to materially cause the recoverable amount to be lower than its carrying amount.
Impairment losses of US$212,008 (2011: US$2,170,516) and US$945,761 (2011: US$Nil) in relation to the SENI Mont’ Kiara and Sandakan Harbour Square projects have been
recognised as the recoverable amount of the cash generating units, estimated based on fair value less costs to sell is below their carrying amount.
The recoverable amount of goodwill has been tested by reference to underlying profitability of the developments using discounted cash flow projections.
20 DEFERRED TAX ASSETS
Group
At 1 January
Exchange adjustments
Deferred tax credit relating to origination and reversal of temporary differences during the year
At 31 December
The deferred tax assets comprise:
Group
Taxable temporary differences between net carrying amount and tax written down value of property, plant and equipment and others
Deductible temporary differences recognised for the impairment loss on trade receivables
Deductible temporary differences arising from unused tax losses and unabsorbed capital allowances
Deductible temporary differences recognised for the accrual of construction costs
At 31 December
2012
US$’000
2011
US$’000
691
20
(711)
19,400
155
(18,864)
–
691
2012
US$’000
2011
US$’000
–
–
–
–
–
(20)
101
25
585
691
Deferred tax assets have not been recognised in respect of unused tax losses of US$15,499,267 (2011: US$7,533,932) and other tax benefits which includes temporary differences
between net carrying amount and tax written value of property, plant and equipment and accrual of construction costs of US$180,231 (2011: US$1,492,107) which are available for
offset against future taxable profits. Deferred tax assets have not been recognised due to the uncertainty of the recovery of the losses.
52 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
21 INVENTORIES
Group
Land held for property development
Work-in-progress
Stock of completed units, at cost
At 31 December
(a) Land held for property development
Group
At 1 January
Exchange adjustments
Additions
Transfer to work-in-progress
At 31 December
(b) Work-in-progress
Group
At 1 January
Add :
Work-in-progress incurred during the year
Contribution from non-controlling interest
Transfer from property, plant and equipment
Transfer from land held for property development
Transfer to stock of completed units
Exchange adjustments
Less :
Costs recognised as expenses in the statement of comprehensive income during the year
At 31 December
The above amounts included borrowing cost capitalised of US$1,277,841 (2011:US$4,124,274).
22 HELD-FOR-TRADING FINANCIAL INSTRUMENT
Notes
2012
US$’000
2011
US$’000
(a)
(b)
24,912
116,876
209,034
23,525
148,024
113,457
350,822
285,006
2012
US$’000
2011
US$’000
23,525
564
823
–
27,749
(1,338)
411
(3,297)
24,912
23,525
2012
US$’000
2011
US$’000
148,024
385,579
64,272
6,480
3,740
–
(108,342)
4,121
107,950
–
–
3,297
(142,139)
(1,234)
118,295
353,453
(1,419)
(205,429)
116,876
148,024
The financial asset represents a placement in money market fund (“Fund”), which is held as a trading instrument. The market value and the market price per unit of the Fund at
31 December 2012 were US$1,369,749 (2011:US$21,383,754) and US$0.33 (2011:US$0.32) respectively. During the year, the Group recognised a fair value loss of US$80,776 (2011:
fair value gain of US$26,066) in relation to the investment.
The Fund is permitted under the Deed to invest in the following:
Bank deposits;
(i)
(ii) Money market instruments such as treasury bills, bankers acceptance, negotiable certificates of deposits, Bank Negara Malaysia bills, Bank Negara Malaysia negotiable
notes, Negotiable Instruments of Deposit and Negotiable Islamic Debt Certificate with maturities not exceeding one (1) year; and
(iii) Malaysian Government Securities and/or securities guaranteed by the Government of Malaysia and/or notes/securities issued by Bank Negara Malaysia with maturity not
exceeding two (2) years.
IFRS 7 Financial Instruments: Disclosures includes a requirement that financial instruments carried at fair value be analysed by level of the IFRS 7 defined fair value hierarchy.
This hierarchy is based on the inputs of the fair value measurement and reflects the lowest level input that is significant to the measurement. The Directors are of the opinion that
the held-for-trading financial asset at 31 December 2012 is classified under Level 2 (fair value measured using inputs for the asset or liability that are observable for the asset or
liability, either directly or indirectly).
23 TRADE AND OTHER RECEIVABLES
Group
Gross trade receivables
Impairment loss
Exchange adjustments
Net trade receivables
Other receivables
Sundry deposits
Prepayments
Accrued revenue
Company
Other receivables
Annual Report 2012 53
2012
US$’000
2011
US$’000
4,100
–
–
4,100
7,623
219
783
–
18,170
(419)
15
17,766
12,126
362
659
2,572
12,725
33,485
2012
US$’000
2011
US$’000
3
198
Trade receivables represent progress billings receivable from the sale of development properties, which are generally due for settlement within 21 days from the date of invoice
and are recognised and carried at the original invoice amount less allowance for any uncollectible amounts. They are recognised at their original invoice amounts which represent
their fair values on initial recognition less provision for impairment where it is required.
The ageing analysis of trade receivables past due is set out below. These relate to a number of independent customers for whom there is no recent history of default.
Group
2012
US$’000
Within credit terms
Stakeholder sums
Past due
0 – 60 days
61 –120 days
More than 120 days
Group
2011
US$’000
Within credit terms
Stakeholder sums
Past due
0 – 60 days
61 –120 days
More than 120 days
Individual
Gross Impairment
–
3,966
–
–
134
4,100
–
–
–
–
–
–
Individual
Gross Impairment
4,022
13,071
457
67
553
–
–
(153)
(60)
(191)
Net
–
3,966
–
–
134
4,100
Net
4,022
13,071
304
7
362
18,170
(404)
17,766
Included in the stakeholder sums is approximately US$3.0 million (2011: US$9.4 million) in respect of SENI Mont’ Kiara which is receivable upon the expiry of 6 months and 18
months from the date of vacant possession. It also includes stakeholder sums of approximately US$1.0 million (2011: US$3.4 million) receivable from 1MK Retail Sdn. Bhd. and
1MK Office Sdn. Bhd., receivable upon the expiry of the defect liability period and issuance of strata title from land office. The Group received approximately US$0.2 million of the
debts upon the expiry of defect of liability period in March 2013.
There is no concentration of credit risk with respect to trade receivables as the Group has a large number of customers whose property purchases are mainly secured by personal
bank financing. No allowance for impairment loss of trade receivables has been made for the remaining past due receivables as the Group monitors the repayment of the customers
regularly and are confident of the ability of the customers to repay the balance outstanding.
During the financial year, reversal of US$357,000 in relation to impairment of trade receivables has been made with regards to the debts as the amount has been fully collected.
Other receivables, sundry deposits and prepayments are for normal transactions of the Group.
Accrued revenue represents the excess of revenue recognised in the statement of comprehensive income over billings to purchasers of development properties.
54 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
24 AMOUNT DUE FROM AN ASSOCIATE
The amount due from an associate represents project management fees receivable.
25 AMOUNTS DUE FROM / (TO) SUBSIDIARIES
Company
Due from subsidiaries (Current portion)
Less : Impairment loss
Due to subsidiaries (Current portion)
2012
US$’000
2011
US$’000
172,756
(17,476)
165,605
(15,591)
155,280
150,014
(25,531)
(20,842)
The amounts due from / (to) subsidiaries are current, unsecured and repayable on demand.
At the end of the reporting period, inter-company balances that were assessed to be irrecoverable were impaired by US$1,884,919 (2011: US$633,610).
26 CASH AND CASH EQUIVALENTS
Group
Cash and bank balances
Short term bank deposits
Company
Cash and bank balances
2012
US$’000
2011
US$’000
5,152
11,600
18,320
14,290
16,752
32,610
2012
US$’000
2011
US$’000
354
354
5,188
5,188
Included in deposits placed with licensed bank is US$11,170,598 (2011: US$9,799,380) pledged for banking facilities granted to its subsidiaries.
The interest rate of cash and cash equivalents, excluding deposit pledged with licensed bank of US$11,170,598 (2011: US$9,799,380) pledged for banking facilities granted to its
subsidiaries range from 2.55% to 3.00% per annum (2011: 2.25% to 2.85% per annum) and the maturity period ranges from 1 day to 1 month (2011: 1 day to 1 month).
The interest rate of deposits placed with licensed bank pledged for banking facilities granted to its subsidiaries range from 0.5% to 3.15% per annum (2011: 2.25% to 2.85% per
annum) and the maturity period range from 1 month to 1 year (2011: less than 1 month).
Annual Report 2012 55
2012
Number of
Shares’000
2011
Number of
Shares’000
2,000,000
2,000,000
212,525
212,525
2012
US$’000
2011
US$’000
100,000
100,000
10,626
10,626
27 SHARE CAPITAL
Group & Company
Authorised Share Capital
Issued Share Capital
At 1 January / 31 December
Group & Company
Authorised Share Capital of US$0.05 each
Issued Share Capital of US$0.05 each
At 1 January / 31 December
28 SHARE PREMIUM
Share premium represents the excess of proceeds raised on the issuance of shares over the nominal value of those shares. The costs incurred in issuing shares were deducted from
the share premium.
Group & Company
At 1 January
Own shares acquired
Dividend paid to equity holders of the parent
At 31 December
2012
US$’000
2011
US$’000
219,101
(175)
–
221,226
–
(2,125)
218,926
219,101
The Company paid an interim dividend of US$0.01 per share amounting US$2,125,250 for the financial year ended 31 December 2011 on 15 December 2011 from the share
premium account.
In January 2012, the Company purchased 500,000 of its ordinary shares of US$0.05 each in series at prices between US$0.3375 and US$0.35. Following the purchases, the
Company held 500,000 shares in treasury and has 212,025,000 shares in issue (excluding shares held in treasury).
29 CAPITAL REDEMPTION RESERVE
The capital redemption reserve was incurred after the Company cancelled its 37,475,000 ordinary shares of US$0.05 per share in 2009.
30 TRANSLATION RESERVE
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
31 FAIR VALUE RESERVE
The fair value reserve comprises the cumulative change in the fair value of available-for-sale investments until the investments are derecognised or impaired.
56 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
32 ACCUMULATED LOSSES
Group
At 1 January
(Loss)/ profit attributable to equity holders of the parent
Changes in ownership interestes in subsidiaries
Acquisition of non-controlling interests
At 31 December
Company
At 1 January
Loss attributable to equity holders of the parent
At 31 December
33 TRADE AND OTHER PAYABLES
Group
Trade payables
Other payables
Deposits refundable
Accruals
Company
Other payables
Accruals
2012
US$’000
2011
US$’000
(32,797)
(16,839)
(1,192)
–
(48,858)
16,058
–
3
(50,828)
(32,797)
2012
US$’000
2011
US$’000
(17,044)
(5,007)
(13,912)
(3,132)
(22,051)
(17,044)
2012
US$’000
2011
US$’000
22,761
7,588
4,550
21,865
25,528
16,517
173
32,120
56,764
74,338
2012
US$’000
2011
US$’000
1,425
252
1,677
17
930
947
Trade payables represent trade purchases and services rendered by suppliers as part of the normal business transactions of the Group. The credit terms granted by trade suppliers
range from 30 to 90 days.
Included in the other payables is cost of land use rights due and payable amounting to US$Nil (2011:US$8,597,371).
Deposits and accruals arose from normal business transactions of the Group.
34 AMOUNT DUE TO NON-CONTROLLING INTERESTS
Group
Non-current
Minority Shareholders of Shangri-La Healthcare Investment Pte Ltd:
- Tran Thi Lam
- Econ Medicare Centre Holdings Pte Ltd
- Value Energy Sdn. Bhd.
- Thang Shieu Han
- Nguyen Quang Duc
Minority Shareholder of Bumiraya Impian Sdn. Bhd.:
- Global Evergroup Sdn. Bhd.
Current
Minority Shareholders of Shangri-La Healthcare Investment Pte Ltd:
- Tran Thi Lam
- Econ Medicare Centre Holdings Pte Ltd
- Value Energy Sdn. Bhd.
- Thang Shieu Han
- Nguyen Quang Duc
Minority Shareholder of Bumiraya Impian Sdn. Bhd.:
- Global Evergroup Sdn. Bhd.
Minority Shareholders of Hoa Lam Services Co Ltd:
- Tran Thi Lam
- Tri Hanh Consultancy Co Ltd
- Investment Joint Stock Company
- Duong Ngoc Hoa
Minority Shareholder of Urban DNA Sdn. Bhd.:
- Ireka Corporation Berhad
Annual Report 2012 57
2012
US$’000
2011
US$’000
–
–
–
–
–
–
–
533
632
189
72
14
1,621
1,567
541
41
27
4,570
9,807
533
632
189
72
14
1,566
3,006
–
–
–
–
–
–
–
–
–
–
–
–
9,807
3,006
The amount due to non-controlling interests amounting to US$9,807,000 (2011: US$ Nil) are unsecured, interest free and repayable on demand.
In financial year 2011, amount due to non-controlling interest were unsecured, and without fixed term of repayment and no repayment was expected until profit is generated from
the subsidiaries which was not expected in the following 12 months.
35 LOANS AND BORROWINGS
Group
Non-current
Bank loans
Finance lease liabilities
Current
Bank loans
Finance lease liabilities
2012
US$’000
2011
US$’000
40,473
24
12,889
–
40,497
12,889
20,681
6
37,393
–
20,687
37,393
61,184
50,282
58 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
35 LOANS AND BORROWINGS cont’d
The effective interest rates of the bank loans and hire purchase arrangement for the year ranged from 5.20% to 23% (2011: 5.84% to 23%) per annum and is 2.50% (2011: n/a) per
annum respectively.
Borrowings are denominated in Malaysian Ringgit, United States Dollars and Vietnam Dong.
Bank loans are repayable by monthly or quarterly instalments.
Bank loans are secured by land held for property development and work-in-progress and some by the corporate guarantee of the Company.
The carrying amount of borrowings approximates its fair value at statement of financial position date and non-current bank loans earn interest at floating rates.
Finance lease liabilities are payable as follows:
Group
Within one year
Between one and five years
36 MEDIUM TERM NOTES
Group
Outstanding medium term notes
Finance costs
Transaction costs
Less:
Repayment due within twelve months
Repayment due after twelve months
Future
minimum
lease
payment
2012
US$’000
Present
value of
Future
minimum minimum
lease
payment
2011
US$’000
lease
payment
2012
US$’000
Interest
2012
US$’000
Present
value of
minimum
lease
payment
2011
US$’000
Interest
2011
US$’000
7
27
34
1
3
4
6
24
30
–
–
–
–
–
–
–
–
–
2012
US$’000
2011
US$’000
85,020
4,608
(6,453)
77,322
285
(1,873)
–
–
83,175
75,734
2012
The medium term notes were issued by a subsidiary, incorporated on 5 May 2011, to fund two development projects known as Sandakan Harbour Square and Aloft Kuala Lumpur
Sentral hotel in Malaysia. US$77.3 million has been drawn down in 2011 for Sandakan Harbour Square. US$4.9 million had been drawn down in 2012 for Aloft Kuala Lumpur
Sentral hotel and the remaining US$83.1 million has been fully drawn down in 2013. The weighted average interest rate of the loan was 5.42% per annum at the statement of
financial position date. The effective interest rates of the medium term notes and their outstanding amounts are as follows:
Maturity Dates
Interest rate % per annum
US$’000
Series 1 Tranche FG 001
Series 1 Tranche BG 001
Series 1 Tranche FG 002
Series 1 Tranche BG 002
Series 2 Tranche FG 001
Series 2 Tranche BG 001
Series 3 Tranche FG 001
Series 3 Tranche BG 001
8 December 2014
8 December 2014
8 December 2015
8 December 2015
8 December 2015
8 December 2015
1 October 2015
1 October 2015
5.38
5.33
5.46
5.41
5.46
5.41
5.40
5.35
8,175
6,540
14,715
9,810
22,890
17,985
3,270
1,635
85,020
Annual Report 2012 59
36 MEDIUM TERM NOTES cont’d
The medium term notes are secured by way of:
(i)
bank guarantee from two financial institutions in respect of the BG Tranches;
(ii)
financial guarantee insurance policy from Danajamin Nasional Berhad in respect to the FG Tranches;
(iii)
a first fixed and floating charge over the present and future assets and properties of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. by way of
a debenture;
(iv) a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.’s assets and land;
(v)
assignment of all Iringan Flora Sdn. Bhd.’s present and future rights, title, interest and benefits in and under the Sales and Purchase Agreement to purchase the Aloft Kuala
Lumpur Sentral hotel from Excellent Bonanza Sdn. Bhd.;
(vi)
first fixed land charge over the Aloft Kuala Lumpur Sentral hotel and the Aloft Kuala Lumpur Sentral hotel’s land (to be executed upon construction completion);
(vii) a corporate guarantee by Aseana Properties Limited;
(viii) letter of undertaking from Aseana Properties Limited to provide financial and other forms of support to ICSD Ventures Sdn. Bhd. to finance any cost overruns associated
with the development of the Sandakan Harbour Square;
(ix)
assignment of all its present and future rights, interest and benefits under the ICSD Ventures Sdn. Bhd.’s and Iringan Flora Sdn. Bhd.’s Put Option Agreements and the
proceeds from the Harbour Mall Sandakan, Four Points by Sheraton Sandakan hotel and Aloft Kuala Lumpur Sentral hotel;
(x) assignment over the disbursement account, revenue account, Harbour Mall Sandakan operating account, sales proceed account, debt service reserve account and sinking
fund account;
(xi) assignment of all ICSD Ventures Sdn. Bhd.’s and Iringan Flora Sdn. Bhd.’s present and future rights, title, interest and benefits in and under the insurance policies; and
(xii) a first legal charge over all the shares of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. and any dividends, distributions and entitlements.
37 PURCHASE OF OWN SHARES AND CANCELLATION OF SHARES
The Company renewed its authority to purchase its own shares up to a total aggregate value of 14.99% of the issued ordinary shares capital in a resolution at its Annual General
Meeting held on 18 June 2012. The authority shall expire 12 months from the date of passing of the resolution unless otherwise renewed, varied or revoked.
In January 2012, the Company purchased 500,000 of its ordinary shares of US$0.05 each in series at prices between US$0.3375 and US$0.35. Following the purchases, the
Company held 500,000 shares in treasury and has 212,025,000 shares in issue (excluding shares held in treasury).
60 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
38 RELATED PARTY TRANSACTIONS
Transactions between the Group and the Company with Ireka Corporation Berhad (“ICB”) and its group of companies are classified as related party transactions based on ICB’s
23.07% shareholding in the Company. ICB’s relationship with the Group is also mentioned on page 19 of the Directors’ Report under the headings of ‘Management’.
Group
Project management fee charged to an associate
Accounting and financial reporting services fee charged by an ICB subsidiary
Cleaning services fee charged by an ICB subsidiary
Construction progress claims charged by an ICB subsidiary
Management fees charged by an ICB subsidiary
Office rental and deposit charged by ICB
Project management fee for interior fit out works charged by an ICB subsidiary
Sales and administrative fee and marketing commissions charged by an ICB subsidiary
Secretarial and administrative services fee charged by an ICB subsidiary
Project staff costs reimbursed to an ICB subsidiary
Remuneration of key management personnel - Salaries
Company
Accounting and financial reporting services fee charged by an ICB subsidiary
Management fees charged by an ICB subsidiary
Secretarial and administrative services fee charged by an ICB subsidiary
Group
Amount due by an associate for project management fee
Amount due to an ICB subsidiary for accounting and financial reporting services fee
Amount due to an ICB subsidiary for cleaning services fee
Amount due to an ICB subsidiary for contract works performed net of LAD’s recoverable of US$6,046,394 (2011: US$7,273,633)
Amount due to an ICB subsidiary for management fees
Amount due to an ICB subsidiary for marketing commissions
Amount due to an ICB subsidiary for secretarial and administrative services fee
Amount due to an ICB subsidiary for project staff costs
Company
Amount due to an ICB subsidiary for accounting and financial reporting services fee
Amount due to an ICB subsidiary for management fees
Amount due to an ICB subsidiary for secretarial and administrative services fee
2012
US$’000
2011
US$’000
369
53
–
31,048
4,231
11
124
557
53
776
39
354
53
16
75,767
4,196
10
52
324
53
947
76
2012
US$’000
2011
US$’000
53
1,644
53
53
1,613
53
2012
US$’000
2011
US$’000
239
26
–
6,043
3,345
153
26
420
122
–
10
10,264
2,097
486
–
748
2012
US$’000
2011
US$’000
26
1,212
26
–
808
–
Transactions between the parent company and its subsidiaries are eliminated in these consolidated financial statements. A list of the main operating subsidiaries is provided in
Note 40.
Annual Report 2012 61
39 ACQUISITION OF BUSINESS
Aseana Properties Limited is the parent company of a group of companies involved in property development business.
2012
During the financial year, the Group increased its equity interest in Shangri-La Healthcare Investment Pte Ltd (“SHIPL”) from 51% to 73% resulting from additional new issue of
shares in the subsidiary. Resulting from the increase in equity interest in SHIPL, the effective equity interest in Hoa Lam - Shangri-La Healthcare Ltd Liability Co, Hoa Lam -
Shangri-la 1 Liability Ltd Co, Hoa Lam - Shangri-la 2 Ltd Liability Co, Hoa Lam - Shangri-la 3 Liability Ltd Co, subsidiaries of SHIPL, increased to 67%.
The Group recognised a decrease in non-controlling interests of US$1,192,000 and an increase in accumulated losses of US$1,192,000 resulting from the increase in equity interest
in the above subsidiaries. The transaction was accounted for using the purchase method of accounting.
2011
On 31 July 2011, the Group acquired the remaining 14.9% of the issued share capital of Legolas Capital Sdn. Bhd. for a total cash consideration of US$10,611, increasing in ownership
from 85.1% to 100%. The carrying amount of Legolas Capital Sdn. Bhd.’s net asset in the Group’s financial statement on the date of acquisition was US$100,752. The Group recognised
a decrease in non-controlling interest of US$13,595 and an increase in retained earnings of US$2,942. The transaction was accounted for using the purchase method of accounting.
The following summarises the effect of changes in the equity interest in Legolas Capital Sdn. Bhd. that is attributable to equity holders of the parent.
Group
Equity interest at 1 Jan 2011
Effect of increase in Company’s ownership interest
Share of comprehensive loss
Equity interest at 31 December 2011
US$’000
85
11
(1)
95
40 INVESTMENT IN PRINCIPAL SUBSIDIARIES AND ASSOCIATE
Name
Country of incorporation
Principal activities
Eff ective ownership interest
2012
2011
Ireka Land Sdn. Bhd.
Bumijaya Mawar Sdn. Bhd.
Bumijaya Mahligai Sdn. Bhd.
Amatir Resources Sdn. Bhd.
ICSD Ventures Sdn. Bhd.
Priority Elite Sdn. Bhd.
Iringan Flora Sdn. Bhd.
Legolas Capital Sdn. Bhd.
Silver Sparrow Berhad
Bumiraya Impian Sdn. Bhd.
The RuMa Hotel KL Sdn. Bhd.*
(Formerly known as Fourseason Alliance
Sdn. Bhd.)
Urban DNA Sdn. Bhd.
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Property development
Property development
Property development
Property development
Property development
Project management services
Hotel ownership and operation
Project and finance management and supervisory services
Participating in the transactions contemplated under the
Guaranteed MTN Programme
Property development
Investment holding
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
70%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
–
Property development
70%
70%
62 Annual Report 2012
NOTES TO THE
FINANCIAL STATEMENTS CONT’D
40 INVESTMENT IN PRINCIPAL SUBSIDIARIES AND ASSOCIATE cont’d
Name
Country of incorporation
Principal activities
Aseana-BDC Co Ltd
ASPL PLB-Nam Long Ltd Liability Co
Hoa Lam Services Co Ltd
Shangri-La Healthcare Investment Pte Ltd
and its subsidiaries
Hoa Lam - Shangri-La Healthcare Ltd
Liability Co
Hoa Lam - Shangri-la 1 Liability Ltd Co
Hoa Lam - Shangri-la 2 Ltd Liability Co*
Hoa Lam - Shangri-la 3 Liability Ltd Co*
Excellent Bonanza Sdn. Bhd.**
Vietnam
Vietnam
Vietnam
Singapore
Vietnam
Vietnam
Vietnam
Vietnam
Malaysia
Property development
Property development
Property development
Property development
Property development
Property development
Property development
Property development
Property development
* These subsidiaries were incorporated during the current financial year.
** Not audited by KPMG
Principal subsidiaries and associate are those which materially affect the results or assets of the Group.
The shareholdings of the principal subsidiaries and associate are held through subsidiaries.
41 COMMITMENT AND CONTINGENCIES
The Group and Company do not have any contingencies at the statement of financial position date except as follows:
Eff ective ownership interest
2012
2011
65%
55%
51%
73%
67%
67%
67%
67%
40%
65%
55%
51%
51%
51%
51%
–
–
40%
(a) Purchase of hotel property
On 6 July 2010, a subsidiary of the Group entered into a Sales and Purchase Agreement with an associate to purchase a hotel property. The remaining estimated contracted
sum of US$67 million is payable upon completion of hotel property in April 2013 and is funded by the medium term notes programme state in Note 36.
(b) Debt service reserve account
Under the medium term notes programme of up to US$162 million, Silver Sparrow Berhad (“SSB”) had opened a Malaysian Ringgit debt service reserve account (“DSRA”) and
shall ensure that an amount equivalent to RM30.0 million (US$9.50 million) (the “Minimum Deposit”) be maintained in the DSRA at all times. In the event the funds in the
DSRA falls below the Minimum Deposit, SSB shall within five (5) Business Days from the date of receipt of written notice from the facility agent or upon SSB becoming aware
of the shortfall, whichever is earlier, deposit such sums of money into the DSRA to ensure the Minimum Deposit is maintained.
Copies of the Annual Report
Copies of the annual report will be available on the Company’s website at www.aseanaproperties.com and from the Company’s registered office, 12 Castle Street, St. Helier, Jersey,
JE2 3RT, Channel Islands.
Annual Report 2012 63
❝
SYMBOLIC HAND OVER
BY MOHAMMED AZLAN
HASHIM (CHAIRMAN,
ASEANA PROPERTIES
LIMITED) TO PAOLO
CAMPILLO (HOTEL
GENERAL MANAGER)
DURING ALOFT KUALA
LUMPUR SENTRAL
OFFICIAL OPENING ON
22 MARCH 2013.
❝
CORPORATE
INFORMATION
Kuala Lumpur Sentral Office Towers and
Aloft Kuala Lumpur Sentral Hotel
NON-EXECUTIVE CHAIRMAN
Mohammed Azlan Hashim
NON-EXECUTIVE DIRECTORS
Christopher Henry Lovell
David Harris
Ismail Shahudin
John Lynton Jones
Gerald Ong Chong Keng
COMPANY SECRETARY
AND REGISTERED OFFICE
Capita Secretaries Limited
12 Castle Street, St. Helier
Jersey JE2 3RT
Channel Islands
WEBSITE
www.aseanaproperties.com
LISTING DETAILS
Main Market of the
London Stock Exchange
under the ticker symbol ASPL
AUDITOR
KPMG Audit Plc
15 Canada Square
London E14 5GL
United Kingdom
REGISTRAR
Computershare Investor Services
(Jersey) Limited
FINANCIAL ADVISER
Murphy Richards Capital LLP
Empire House
175 Piccadilly
London W1J 9EN
United Kingdom
CORPORATE BROKER
N+1 Singer
One Bartholomew Lane
London EC2N 2AX
United Kingdom
PUBLIC RELATIONS
Tavistock Communications
131 Finsbury Pavement
London EC2A 1NT
United Kingdom
For shareholder related
queries, please contact:
Computershare Investor
Services (Jersey) Limited
Queensway House
Hilgrove Street, St. Helier
Jersey JE1 1ES
Channel Islands
T +44 (0) 870 707 4040
F +44 (0) 870 873 5851
E info@computershare.je
64 Annual Report 2012
ASEANA PROPERTIES LIMITED
Registered Offi ce
12 Castle Street, St. Helier, Jersey JE2 3RT, Channel Islands
T + 44(0) 1534 847 000 F +44 (0) 1534 847 001 www. aseanaproperties.com
This report is printed on environmental friendly paper