ANNUAL
REPORT
INVESTMENT GATEWAY TO
MALAYSIA AND VIETNAM
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
2
| Corporate Strategy
| Chairman’s Statement
3
4
14 | Calendar of Events
16 | Board of Directors
| Development Manager’s Review
18 | Directors’ Report
10 | Property Portfolio
11 | Share Price Chart
11 | Performance Summary
12 | Financial Review
21 | Report of Directors’ Remuneration
22 | Corporate Governance Statement
25 | Independent Auditor’s Report
26 | Financial Statements
13 | Corporate Social Responsibility
63 | Corporate Information
The RuMa is a collection of luxury
residences and hotel suites with
the rare combination of vintage
charm and city convenience.
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.
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.
2 ASEANA
PROPERTIES
LIMITED
CORPORATE STRATEGY
Share Denomination
US Dollars
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
KEY FACTS
Exchange
London Stock Exchange
Main Market
Symbol
ASPL
Lookup
Reuters - ASPL.L;
Bloomberg - ASPL:LN
Domicile
Jersey
Shares Issued
212,025,000
Voting Share Capital
212,025,000
ADVISERS & SERVICE
PROVIDERS
Development Manager
Ireka Development Management Sdn. Bhd.
Corporate Broker
N+1 Singer
Auditor
KPMG Audit Plc
The RuMa Hotel and Residences
Jalan Kia Peng, Kuala Lumpur
COVER RATIONALE
2013 was a year for completion of several important assets within Aseana Properties’ portfolio in Malaysia and
Vietnam, in collaboration with key partners in both countries. The report card for the year shows that Aseana
Properties is making sound progress having completed all its operating assets. In the coming years, the focus is
on improving operations, priming the assets for its eventual exit, and ultimately realising the Company’s primary
objective of capital return to shareholders.
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.
dd
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 and
hospitality 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 typically 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 75% of Aseana Properties’
investment portfolio is allocated to projects in Malaysia
and approximately 25% to projects in Vietnam.
CHAIRMAN’S STATEMENT
ANNUAL
REPORT
2013 3
The global economy continued to expand at a modest
pace amid a bumpy growth environment across the
globe, with growth in emerging markets losing pace
while developed nations gained strength. Closer
to home for Aseana Properties and its group of
companies (“the Group”), both the Malaysian and
Vietnamese economies experienced moderate growth
in 2013 with Gross Domestic Product (“GDP”) growth
of 4.7% and 5.4% respectively.
The Malaysian economy, which grew at a slower
pace compared to previous year, was largely driven
by growth in domestic demand. Despite the weaker
external environment in the first half of 2013,
domestic demand remained resilient throughout
the year, led by robust private sector activity, on the
back of public sector spending on large infrastructure
projects. However, growth was somewhat tempered
by a series of measures implemented by the Malaysian
government to ease concern on the national budget
deficit. These measures include subsidy cuts to petrol
and fuel, resulting in the inflation rate for 2013 rising
to its highest level since June 2011, at an annual
average rate of 2.1%. In addition, the impending
implementation of the Goods and Services Tax
(“GST”) on 1 April 2015 is expected to be one of the
main drivers of rising inflation going forward.
2013 proved to be a more positive year for the
Vietnamese economy. Vietnam’s GDP grew 5.4% in
2013, slightly above the 5.3% growth recorded in 2012.
Its macro-economic outlook is seen to be improving
with the most notable achievement being the 6.6%
inflation rate, the lowest rise in the last decade.
These were seen to be the positive outcome from the
Government’s successful economic restructuring
plans and efforts aimed to boost investment efficiency.
To ensure sustainable growth moving forward, the
government is focusing on restructuring the banking
system and state-owned enterprises, as well as
attracting foreign direct investment (“FDI”). FDI
continues to be a strong driver of Vietnam’s growth
with US$21.6 billion being recorded in year 2013.
The Malaysian property market showed signs of
a slowdown with less transactions being recorded
in 2013. However, this is contrasted against an
increase in the total value of transactions, indicating
rising property prices. For a large part of year
2013, the market was affected by the uncertainty
over the outcome of the 13th General Election,
with investors adopting a cautious, ‘wait-and-see’
approach. Continuing with its measures to curb
property speculation, the Malaysian government has
in its 2014 Budget introduced stricter Real Property
Gains Tax (“RPGT”) rules, the abolishment of the
Developer Interest Bearing Scheme (“DIBS”) and also
the increase in the minimum price for foreigners to
purchase properties in the country from RM500,000
to RM1.0 million. Amid these challenging property
market conditions, competition among developers is
very keen with successful projects thriving on strong
track record of the developer, creative marketing
strategies and innovative products.
Towards the end of 2013, the Vietnamese property
market showed signs of recovery with a rising number
of transactions recorded. Leading the way is the
affordable homes segment that addresses the primary
needs of first-time home buyers in Ho Chi Minh
City. The Government has been encouraging home
ownership in this segment with the introduction
of a bank loan interest subsidy scheme. There are
also tangible signs of increasing confidence among
international investors with a number of sizable
foreign investments in new township developments
and retail projects. This bodes well for Aseana
Properties as we look forward to a broader and more
sustainable recovery in the property market.
Aseana Properties registered a 23.6% increase in its
revenue from US$23.7 million in 2012 to US$29.3
million in 2013. The increase is largely attributed
to the increased level of sales at SENI Mont’ Kiara.
Notwithstanding the increase in revenue, the Group
recorded a higher net loss before taxation of US$18.8
million as compared to a net loss of US$16.6 million
in 2012. The increase in losses is mainly attributed
to operating losses from Sandakan Harbour Mall and
Four Points by Sheraton Sandakan Hotel, pre-opening
expenses and operating losses from Aloft Kuala
Lumpur Sentral Hotel as well as the City International
Hospital which commenced business in March 2013
and September 2013 respectively.
In accordance with the mandate approved by
Shareholders, we remain committed to complete these
projects which Aseana is already involved with and
to dispose of them at a time and at a price intended to
optimise returns to shareholders.
PROGRESS OF PROPERTY
PORTFOLIO
The RuMa Hotel and Residences
Jalan Kia Peng, Kuala Lumpur
2013 was another busy year for Aseana Properties
with the completion and opening of several key
assets within the portfolio. Sales performance
of SENI Mont’ Kiara picked up during 2013 and
continued into 2014, with sales moving from 78.0%
at the beginning of the year 2013 to 87.1% for year to
date in 2014. The RuMa Hotel and Residences was
launched in March 2013 and has made good sales
progress of 41.4% to date. The Aloft Kuala Lumpur
Sentral Hotel opened for business on 22 March 2013
and had achieved 51.9% occupancy rate at the end of
2013, and has continued to improve in 2014, reaching
a high of 78.4% in March 2014. However, progress
has been more subdued in Sandakan, the Harbour
Mall Sandakan was 47.6% tenanted as at the end of
last year, a slight increase from 41.9% in the previous
year, while the occupancy of Four Points by Sheraton
Hotel remained flat at 35.1% at the end of 2013. The
Manager is working closely with the operator and
the management team of these assets to improve its
performance in the coming year.
City International Hospital (“CIH”) in Ho Chi
Minh City was physically completed at the end of
March 2013. The Hospital commenced operation
in September 2013 with limited services and was
officially launched on 5th January 2014. Operations
of CIH will go through a period of stabilisation under
the management of Parkway Health, Asia’s leading
private healthcare provider. Nam Long Investment
Corporation (“Nam Long”) in which Aseana owns
a strategic minority stake, achieved a significant
milestone by listing on the Ho Chi Minh Stock City
Exchange in April 2013. Nam Long has subsequently
completed a private placement of 25.5 million shares
to raise approximately US$21.8 million in February
2014 to a group of reputable institutional investors
including International Finance Corporation, a
member of the World Bank Group. The successful
placement underlines the Nam Long’s strength and
resilience as a leading property company in the
affordable homes segment.
Further information on each of the Company’s
properties is set out in the Manager’s report on pages
4 to 9.
OUTLOOK
With the completion of all the Company’s operating
assets over the past two years, the Company is
sharpening its focus improving the operations of these
assets in preparation for eventual sale in the near
future. Continuous efforts on realising the remaining
units at SENI Mont’ Kiara and The RuMa Hotel and
Residences are also the key focus for the Company.
On behalf of the Board of Directors, I would like to
extend our sincere appreciation to our Development
Manager for their continued commitment and
contribution. Our 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 2014
4 ASEANA
PROPERTIES
LIMITED
DEVELOPMENT MANAGER’S REVIEW
Kuala Lumpur Sentral Office Towers and Aloft Kuala Lumpur Sentral Hotel
BUSINESS OVERVIEW
Aseana Properties achieved a significant milestone
in year 2013 in both Malaysia and Vietnam with
the completion of the remaining operating assets
within its portfolio. The Aloft Kuala Lumpur Sentral
Hotel (“Aloft”) commenced business on 22 March
2013 and The City International Hospital (“CIH”) in
Ho Chi Minh City, the flagship development at the
International Hi-Tech Healthcare Park, commenced
business on 24 September 2013 with its official
opening subsequently being held on 5 January 2014.
In November 2013, SENI Mont’ Kiara (“SENI”)
has done the Group proud by winning the FIABCI
Malaysia Property Award 2013 for the Best High Rise
Residential Development. The Malaysian Property
Award is hailed as the pre-eminent accolade of
achievements in the Malaysia property industry, in
which winners will compete on the global stage for
the FIABCI World Prix d’Excellence Awards. On the
SENI Mont’ Kiara
Kuala Lumpur
SENI Mont’ Kiara won the FIABCI Malaysia
Property Award 2013 (High Rise Residential
category) and the Asia Pacific Property Awards 2012
(Residential High Rise Development category).
back of this achievement, the Manager has launched
a targeted sales effort at realising the remaining
units at SENI. Total sales to date is 87.1% with the
expectation that the remaining units will be sold by
the end of year 2014.
The RuMa Hotel and Residences (“The RuMa”) was
launched for sale on 8 March 2013 with commendable
sales of 41.4% recorded to-date. Construction of the
main building at The RuMa commenced in October
2013 and is progressing well, with completion targeted
for early 2017. Sales at both SENI and The RuMa
are progressing well against the backdrop of the
challenging property market outlook in Malaysia due
to the introduction of new cooling measures in Budget
2014 by the government.
In Vietnam, Nam Long was listed on the Ho Chi Minh
Stock Exchange in April 2013 at a price of VND27,000
(US$1.296) per share. Subsequently in early 2014, Nam
Long successfully completed a placing of 25,500,000
new shares at VND 18,000 (approximately US$0.855)
per share to a prominent list of institutional investors,
which includes International Finance Corporation
(a member of the World Bank Group), to raise VND
459.0 billion (approximately US$21.8 million). The
challenging market conditions for the high-end
property sector in Vietnam have resulted in the
Group delaying the launch of Phase 1 of the Waterside
Estates, a 37-unit riverside villa development scheme,
until clearer signs of a broader recovery of the high-
end property market emerge.
MALAYSIA ECONOMIC
UPDATE
Despite the sluggish world economic conditions
throughout 2013, which appear to be improving
as the new year begins, major indicators seem to
suggest Malaysia’s economy has entered a stabilised
phase and the momentum in the economy is picking
up after a slow start at the beginning of the year. In
the fourth quarter of 2013, the Malaysian economy
had expanded by 5.1% year-on-year and the overall
growth of the gross domestic product (“GDP”)
had moderated from 5.6% in 2012 to 4.7% in 2013,
meeting the targeted forecast of 4.5% to 5.0%. On
top of that, Moody’s Investor Service has reviewed
the outlook of Malaysia’s government bond and
issuer ratings from “stable” to “positive” driven by
continuous macro economic stability. Growth in
the construction sector has remained steady driven
by increased infrastructure spending by the public
sector and the residential and non-residential
activities in the private sector.
Notwithstanding signs of improvement shown in the
Malaysian economy towards the end of 2013, inflation
in December rose to 3.2% year-on-year and averaged
at 2.1% for the year as a whole compared with 1.6% in
2012. The higher inflation was mainly the result of the
long-delayed fiscal corrective measures introduced
by the Government, resulting in the increase in
consumer prices and the rising cost of living coupled
with the Ringgit depreciation. Inflation is expected
to be higher at least in the next two years contributed
by numerous adjustment measures implemented by
the Government through subsidy rationalisation and
broadening of the tax base from the introduction of the
Goods and Services Tax (“GST”) which will take effect
from 1 April 2015.
ANNUAL
REPORT
2013 5
The hospital will be managed by Parkway Pantai Ltd,
Asia’s leading private healthcare group.
Four Points by Sheraton Sandakan
Sabah
VND denominated loans were less than 13.0% per
annum and approximately 8.0% to 9.0% per annum
for new short-term loans. Meanwhile, since the
establishment of a national debt restructuring agency,
the Vietnam Asset Management Company (“VAMC”)
has successfully swapped VND 39.0 trillion (US$1.8
billion) worth of bad debts from 35 banks, surpassing
its target for 2013.
PORTFOLIO REVIEW
MALAYSIA
Property Market Review
In 2013, the volume of property transactions slowed
down despite an upward trajectory in value, which
indicated the rising prices of properties. Stricter
mortgage lending by banks played a major role in
the slowdown of new transactions taking place. The
deceleration was further aggravated by the cooling
measures introduced in October 2013 by the Malaysian
Government in the 2014 Budget. The Government has
introduced stricter Real Property Gains Tax (“RPGT”)
rules in a bid to clamp down on property speculation.
Under the new RPGT rules, owners who dispose of their
residential properties within the first three years will
be charged 30.0% of the transaction value, with RPGT
rates going down to 20.0% in the fourth year, 15.0% in
the fifth year. A further 5.0% tax will be imposed on
corporate and foreign buyers for disposal of properties
from the sixth year onwards. In addition, the minimum
price of properties that are allowed to be purchased by
foreigners has doubled to RM1.0 million. Furthermore,
the Developer Interest Bearing Scheme (“DIBS”) which
allowed buyers to purchase new properties without
having to make any progressive payments over the
course of construction has been abolished.
The supply of commercial office space in the Klang
Valley increased to 104.2 million sq. ft. contributed
by the completion of 13 office buildings in 2013 and
overall occupancy rates increased marginally to
80.0%. The market remained stable despite mounting
pressure on occupancy and rental rates as supply
continues to outstrip demand. Meanwhile, the
commercial retail sector in Klang Valley recorded
a relatively weak performance in 2013, indicated
by a total net take-up rate of 1.138 million sq. ft.
for purpose-built retail centre and hypermarkets
compared with 2.846 million sq. ft. of take-up recorded
in 2012. The outlook for the local retail sector is of
cautious optimism as consumers are expected to
tighten spending ahead of further government subsidy
rationalisation measures.
On the back of strong growth in the Malaysian tourism
industry, the hotel sector has remained resilient in
2013. Hotel room inventory increased by 1,114 rooms
from 40,158 rooms in 2012 to 41,272 rooms in 2013.
Average occupancy rate inched up marginally to
68.5% as compared to 68.3% recorded in 2012. The
scheduled opening of the new low-cost regional airport
hub, KLIA2 in 2014 is expected to increase flight
frequencies and hence tourist arrivals going forward.
Aseana Properties has six development projects in
Malaysia, ranging from residential, hotels, commercial
offices as well as a retail mall:
The improvement at the macro-economic level is
however in contrast with the consumer and business
sentiment, which is largely affected by rising prices
domestically and the still weak global economic
outlook. The Business Conditions Index (“BMI”)
by the Malaysian Institute of Economic Research
(“MIER”) decreased further to 92.0 points in the
fourth quarter of 2013 attributed to the sluggish
domestic orders, deterioration of sales performance
and fewer export orders. The fourth quarter 2013
Consumer Sentiment Index (“CSI”) plunged to 82.4
points, well below the 100-point threshold for the
first time in five years, in tandem with the increase
in inflation which has resulted in deterioration of
current household income.
In spite of the generally weak consumer and business
sentiment, Malaysia achieved its highest-ever foreign
direct investment (“FDI”) in 2013 at RM38.8 billion,
surging 3.9% past its previous record of RM37.3 billion
in 2011 and was also 24.8% higher than RM31.1 billion
recorded in 2012. This is in line with the Government’s
continued policy to create a conducive environment
for the businesses in Malaysia. Malaysia surged
to become the 6th easiest place in the world to do
business according to World Bank’s “Doing Business
Report 2014” and was ranked high as a destination
for investments in the Asean region based on the
latest survey by the Asean Business Advisory Council
(“Asean-BAC”), with 42.0% survey respondents saying
they have plans to invest in Malaysia.
VIETNAM ECONOMIC
UPDATE
The Vietnamese economy has shown positive signs
towards the end of year 2013 and is finally in recovery
mode. The gradual improvement in its macro-
economic environment is reflected by faster GDP
growth, well controlled inflation and stable value
of the Vietnamese Dong (“VND”). These are the
favourable outcomes from the implementation of the
Government’s policies and measures, namely banking
reform together with certain stimulus packages for the
real estate sector, which encourages home ownership
in the affordable segment of the market. Vietnam
registered GDP growth of 5.4% in 2013, slightly below
the target of 5.5% but higher than the 5.3% recorded in
2012. Inflation has slowed down significantly in 2013
to 6.6% (2012: 9.2%; 2011: 18.6%), the lowest level in
the last decade.
In 2013, newly registered and additional FDI in Vietnam
reached US$21.6 billion, up by 54.5% year-on-year with
1,275 new investments licensed with total registered
capital of US$14.3 billion and 472 investments adding
US$7.3 billion to their existing capital. The FDI in 2013
focused mainly on the manufacturing industry with
US$16.6 billion (76.9%) of total registered capital, the
power generation and supply industry with US$2.0
billion (9.4%) and other industries with US$3.0 billion
(13.7%). Strong capital inflows of FDI have helped to
create new financing sources to counterbalance the
sluggish domestic situation.
Vietnam’s banking sector also saw a number of
improvements, particularly the reduction in the
refinancing rate by the State Bank of Vietnam (“SBV”)
from 9.0% in December 2012 to 6.5% to date. By the
end of 2013, commercial interest rates on existing
6 ASEANA
PROPERTIES
LIMITED
DEVELOPMENT MANAGER’S REVIEW cont’d
• SENI Mont’ Kiara
100.0% owned 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 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.
Sales at SENI Mont’ Kiara have been improving at
a rapid pace with 87.1% of sales achieved to date. In
November 2013, SENI Mont’ Kiara won the much
sought after FIABCI Malaysia Property Award 2013
for the Best High Rise Residential Development. On
the back of this milestone, the Manager has launched
targeted sales drive in an effort to dispose of all
remaining units by the end of year 2014.
The development is funded by progressive payments
from buyers and a bridging loan facility of RM57.7
million (US$17.6 million), which was fully drawn down
as at 31 December 2011 and fully repaid in 2013.
• Tiffani by i-ZEN
Tiffani by i-ZEN, wholly-owned by Aseana Properties,
is a completed luxury condominium project located
in Mont’ Kiara. 98.5% of the 399 residential units
have been sold (as at 31 March 2014). The debt on the
project has been fully repaid. The Manager has decided
to fully fit out and furnish two remaining units of
penthouses and three large units at Tiffani by i-ZEN to
offer buyers and dwellers with a hassle-free experience
of owning an apartment unit.
• 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 70.0% of this project and 30.0% is owned by Ireka
Corporation Berhad. With a development land area of
approximately 43,559 square feet, the Group will be
developing 199 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 completed in 2017. The sales
launch for The RuMa Hotel and Residences was held
on 8 March 2013. To date, sales at The RuMa Hotel
and Residences have shown encouraging progress,
achieving 41.4% sales to date based on sales and
purchase agreements signed. A further 6.6% was
booked with deposits paid.
The land was part financed by a term loan facility of
RM65.3 million (US$19.9 million), which was fully
drawn down. The development of the project is funded
by progressive payments from buyers.
Harbour Mall Sandakan
Sabah
• 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 sold for
approximately RM623.0 million (or US$190.2 million),
and construction was completed in December 2012.
The collection of the remaining 90% of the proceeds is
expected in December 2015.
At the start of the project, Aseana Properties
conditionally agreed to purchase the hotel component
from EBSB for a total consideration of approximately
RM217.0 million (or US$66.2 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 sale 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 are financed by
guaranteed medium term notes of RM270.0 million
(US$82.4 million) which is part of the RM515.0 million
(approximately US$157.2 million) MTN programme
announced in November 2011, of which RM15.0
million was drawn down as at 31 December 2012. The
remaining RM254.0 million (US$77.5 million) was
drawn down in April 2013 to complete the acquisition
of the Aloft Kuala Lumpur Sentral Hotel.
The Aloft Kuala Lumpur Sentral Hotel has achieved
excellent progress since its commencement of
business on 22 March 2013. Nook restaurant at
the Aloft managed to clinch four awards from The
Four Points by Sheraton Sandakan
Sabah
Four Points by Sheraton Sandakan is the first
international four-star hotel in Sandakan while
the Harbour Mall Sandakan is the city’s modern
lifestyle mall.
Malaysian International Gourmet Festival (“MIGF”)
2013 in categories such as the Most Innovative Cuisine
at the Gala Launch (Judges and People’s choice), Most
Outstanding Cuisine at the Gala Launch (Judges
choice) and Most Creative Food Presentation at the
Gala Launch (People’s choice). The hotel has also
been awarded with the “Best Nightlife Experience:
Excellence Award” from the Best of Malaysia Awards
2013 by Expatriate Lifestyle. The hotel recorded an
occupancy rate of 67.1% to date, and a high of 78.4%
in March 2014 and an Average Daily Rate (“ADR”)
of RM315.9. The Manager is confident that the hotel
will achieve its stabilisation level over the next few
quarters of 2014, given the positive improvements
shown over the last year since its commencement of
business.
• 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
ANNUAL
REPORT
2013 7
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 at the Harbour Mall Sandakan is
currently recorded at 47.6%. Notable tenants of
the mall include Parkwell Departmental Store,
Levi’s, The Body Shop, GNC and McDonald’s and
leasing activities at Harbour Mall Sandakan to both
local and international retailers are still on-going.
Meanwhile, FPSS recorded an occupancy rate of
40.9% as at 31 March 2014, with an ADR of RM194.0.
The management of FPSS continues to improve the
efficiency of operations, and to work with relevant
authorities to improve tourist arrivals to Sandakan.
The mall and hotel are expected to go through a period
of stabilization before achieving optimal performance.
The performance of both HMS and FPSS over the past
twelve months has been affected by an incursion by a
small group of armed dissidents in early 2013.
The project is funded by guaranteed medium term
notes of RM245.0 million (US$74.8 million) which is
part of the RM515.0 million (US$157.2 million) MTN
programme announced in November 2011. The MTNs
were fully issued as at 31 December 2011.
• 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. The Board has decided to dispose of the land.
VIETNAM
Property Market Review
After a lackluster period of several years for the
property market in Vietnam, things are starting to
look more positive as indicated by the increasing
number of transactions, especially during the last
few months of 2013. The proposed deregulation of
legislation on foreign ownership of real estate in
Vietnam is expected to provide a boost to the market
in the near future.
In Vietnam’s residential sector, majority of the newly
launched units and transactions for condominiums
were in the medium low segments resulting in
lower average primary price level of US$781 per
square meter. In order to attract buyers, developers
have started to offer additional incentives as well
as introducing more flexible and longer payment
terms. On the commercial retail front, more Western
franchises are entering the Vietnamese market.
McDonald’s has officially opened its first outlet in Ho
Chi Minh City in February 2014, with an additional
outlet under construction and set to be launched in the
second half of 2014. AEON of Japan has also launched
City International Hospital in
International Hi-Tech Healthcare Park
Ho Chi Minh City
The hospital is managed by Parkway Pantai Ltd,
Asia’s leading private healthcare group.
its first mall, with 50,000 square meters of net leasable
area, in Ho Chi Minh City in January 2014. In addition,
a French grocery giant, Auchan has become the latest
international retailer to announce its investment
in Vietnam and is considering investing US$500.0
million into Vietnam over the next 10 years.
The overall occupancy rate for the office sector has
increased to 89.0%, the highest over the past 4 years.
The office market has exhibited positive signs in 2013
for the first time in 4 years as new buildings such
as Lim Tower, President Place and Empress Tower
were able to achieve good pre-commitments for their
space. On the hospitality side, Vietnam has recorded
approximately 7.5 million visitors in 2013, up 10.6%
year-on-year.
City International Hospital in International Hi-Tech Healthcare Park
Ho Chi Minh City
The City International Hospital, the first private international standard general hospital, consists of 320 beds complete with inpatient and outpatient wards with
modern facilities.
8 ASEANA
PROPERTIES
LIMITED
DEVELOPMENT MANAGER’S REVIEW cont’d
Aseana Properties has one equity investment and two
development projects in Vietnam - the latter comprising
one residential project with its development partner,
Nam Long Investment Corporation and an integrated
healthcare development. The highlights are as follow:
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.
• International Hi-Tech Healthcare Park and City
International Hospital
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 67.2% stake in this
development and its joint venture partner, Hoa Lam
Construction commenced on the first phase of the
320-bed City International Hospital (“CIH”) in
May 2010, and was completed in March 2013. CIH
commenced business on 24 September 2013 and its
official opening was subsequently held on 5 January
2014. CIH is a modern private care hospital of
international standards with 320 beds (Phase 1: 168
beds) and is managed by Parkway Pantai Limited,
Asia’s leading private healthcare group with a network
of more than 3,300 beds across Singapore, Malaysia,
Waterside Estates
Ho Chi Minh City
E-homes by Nam Long
Ho Chi Minh City
the Middle East and India. The operations of CIH are
expected to go through a period of stabilisation over
next two years before reaching optimal performance.
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 in 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$29.6 million, of which US$18.8
million had been drawn down as at 31 December 2013.
The development of City International Hospital is
funded by a syndicated term loan of US$43.3 million,
of which US$35.0 million was drawn down as at 31
December 2013.
• 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. Nam
Long was subsequently listed on the Ho Chi Minh
Stock Exchange on 8 April 2013. In February 2014,
Nam Long completed a placing of 25,500,000 new
shares at VND18,000 (approximately US$0.855) per
share to a prominent list of institutional investors,
to raise VND459.0 billion (approximately US$21.8
million). The proceeds will be used as working capital
for Nam Long’s development projects. The placing,
which enlarges Nam Long’s outstanding share capital
to 121,013,523 shares, saw International Finance
Corporation (a member of World Bank Group),
Bridger Capital, Probus Asia among other investors
join the existing institutional investors in Nam Long
such as Nam Viet Ltd (Goldman Sachs Group) and
Vietnam Azalea Fund (Mekong Capital). Subsequent
to the placing, Aseana Properties’ effective stake in
Nam Long has reduced to 12.9% from 16.3%.
Nam Long’s affordable housing projects, branded as
“E-homes”, continue to be their main revenue driver.
During 2013, Nam Long has successfully launched
three affordable homes projects. The Nam Long
E-homes are priced in the region of US$25,000 to
US$60,000 per unit.
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.
ANNUAL
REPORT
2013 9
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur
The Aloft Kuala Lumpur Sentral is a bold mix of
forward-thinking design, concept and approach.
OUTLOOK
2013 was a milestone year for Aseana Properties with
the completion of all operating assets in Malaysia,
namely Four Points by Sheraton Sandakan Hotel,
Harbour Mall Sandakan and Aloft Kuala Lumpur
Sentral Hotel and City International Hospital
in Vietnam. The Manager continues to focus on
stabilising the operations of these assets to achieve
optimum capital value.
In view of the recent stringent measures introduced
by the Malaysian government aimed at combatting
property speculation, there are looming uncertainties
on the outlook of the Malaysian property market for
the next few years. Similarly, the current economic
condition in Vietnam remains challenging despite
signs of improvements towards the end of last year.
Nonetheless, the Manager is working closely with
the Board to explore every opportunity to realise and
divest Aseana’s assets in both Malaysia and Vietnam.
I wish to express my utmost gratitude to 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
2014 and the years to come.
LAI VOON HON
President / Chief Executive Officer
Ireka Development Management Sdn. Bhd.
Development Manager
23 April 2014
• 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$100.0 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 second half of
2014 due to the challenging conditions in 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.
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur
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.
10 ASEANA
PROPERTIES
LIMITED
PROPERTY PORTFOLIO
AS AT 31 DECEMBER 2013
Project
Type
Effective
Ownership Gross Floor Area
(sq m)
Approximate Approximate
Land Area
(sq m)
Scheduled completion
COMPLETED PROJECTS
Tiffani by i-ZEN
Kuala Lumpur, Malaysia
Luxury condominiums
100.0%
81,000
15,000
Completed in August 2009
1 Mont’ Kiara by i-ZEN
Kuala Lumpur, Malaysia
Office suites, office tower and
retail mall
100.0%
96,000
14,000
Completed in November 2010
SENI Mont’ Kiara
Kuala Lumpur, Malaysia
Sandakan Harbour Square
Sandakan, Sabah, Malaysia
Luxury condominiums
100.0%
225,000
36,000
Retail lots, hotel and retail mall
100.0%
126,000
48,000
Kuala Lumpur Sentral Office
Towers & Hotel
Kuala Lumpur, Malaysia
Office towers and
a business hotel
40.0%
107,000
8,000
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: Completed in
December 2012
Hotel: Completed in January 2013
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur, Malaysia
Business-class hotel
(a Starwood Hotel)
100.0%
28,000
5,000
Completed in January 2013
Phase 1: City International Hospital,
International Hi-Tech Healthcare Park,
Ho Chi Minh City, Vietnam
Private general hospital
67.2%*
48,000
25,000
Completed in March 2013
PROJECTS UNDER DEVELOPMENT
The RuMa Hotel and Residences
Kuala Lumpur, Malaysia
(formerly KLCC Kia Peng Project)
Luxury residential tower and
boutique hotel
LISTED EQUITY INVESTMENT
70.0%
40,000
4,000
First quarter of 2017
Listed equity investment in Nam Long
Investment Corporation,
an established developer in
Ho Chi Minh City, Vietnam
PIPELINE PROJECTS
Waterside Estates
Ho Chi Minh City, Vietnam
(formerly Phuoc Long B Project)
Listed equity investment
16.3%
n/a
n/a
n/a
Villa and high-rise apartments
55.0%
94,000
57,000
n/a
Other developments in International
Hi-Tech Healthcare Park,
Ho Chi Minh City, Vietnam
Commercial and residential
development with healthcare
theme
67.2%*
972,000
351,000
n/a
Kota Kinabalu seafront resort
& residences
Kota Kinabalu, Sabah, Malaysia
i. Boutique resort hotel
resort villas
ii. Resort homes
100.0%
80.0%
n/a
327,000
n/a
* Shareholding as at 31 December 2013
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
2013 11
25,000
2,0000
15,000
10,000
’
)
S
0
0
0
(
E
M
U
L
O
V
5,000
0
Jan 13
Feb 13
Mar 13
Apr 13
May 13
Jun 13
Jul 13
Aug 13
Sep 13
Oct 13
Nov 13
Dec 13
Aseana
FTSE All Share
FTSE 350 Real Estate
Volume
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-ratio1
Net debt-to-equity-ratio2
EARNINGS PER SHARE
Earnings per ordinary share
- basic (US cents)
- diluted (US cents)
Year ended
31 December 2013
Year ended
31 December 2012
-56.00%
8.34%
-49.95%
10.69%
16.69%
19.10%
361.63
0.75
0.44
469.38
134.94%
120.25%
-8.96
-8.96
-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
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 ASEANA
PROPERTIES
LIMITED
FINANCIAL REVIEW
INTRODUCTION
The Group recorded losses for the year ended 31
December 2013, mainly due to operating losses of Four
Points by Sheraton Sandakan Hotel and Harbour Mall
Sandakan and pre-opening expenses and operating
losses of Aloft Kuala Lumpur Sentral Hotel and City
International Hospital, both of which were completed
and commenced operation during the year.
Total liabilities have increased from US$213.0 million
in 2012 to US$324.8 million in 2013, a rise of US$111.8
million. The increase was substantially attributable to
issuance of Medium Term Notes of US$77.5 million to
fund the purchase of Aloft Kuala Lumpur Sentral
Hotel and term loan of US$17.9 million to fund the City
International Hospital.
Net asset value per share at 31 December 2013 was US
cents 74.8 (2012: US cents 86.6).
STATEMENT OF COMPREHENSIVE
INCOME
CASH FLOW AND FUNDING
The Group’s revenue increased from US$23.7 million
in 2012 to US$29.3 million in the year, representing an
increase of 23.6%. The revenue in 2013 was mainly
attributable to the sales of completed units at SENI
Mont’ Kiara.
The Group recorded a net loss before taxation of
US$18.8 million, compared to a loss before taxation of
US$16.6 million in 2012. The losses in 2013 were
largely due to operating loss of Four Points by
Sheraton Sandakan Hotel and Harbour Mall Sandakan,
totalling US$5.9 million; and pre-opening expenses
and operating losses of Aloft Kuala Lumpur Sentral
Hotel and City International Hospital of US$4.4
million and US$5.9 million respectively. Finance cost
for these four operating assets totalled US$9.2 million.
Net loss attributable to equity holders of the parent
was US$19.0 million in 2013, compared to a net loss of
US$16.8 million in 2012. Tax charge for 2013 was
higher at US$2.9 million (2012: US$1.8 million) due to
corresponding higher revenue.
The consolidated comprehensive loss for the year
ended 31 December 2013 was US$27.7 million
compared to a consolidated comprehensive loss of
US$19.9 million in 2012. The former includes a loss
arising from foreign currency translation differences
for foreign operations of US$6.2 million (2012: Gain of
US$3.4 million) due to weakening of Ringgit against
US Dollars during the year; and an increase in the fair
value of shares in Nam Long of US$0.13 million (2012:
Decrease of US$ 4.8 million). The carrying amount of
shares in Nam Long was US$12.7 million as at 31
December 2013 (2012: US$ 12.6 million).
Basic and diluted loss per share for the year ended 31
December 2013 were both US cents 8.96 (2012: Loss
per share of US cents 7.94).
STATEMENT OF FINANCIAL
POSITION
Total assets at 31 December 2013 was US$494.8
million, compared to US$409.7 million for 2012,
representing an increase of US$85.1 million. The
increase was mainly due to an increase in inventories
following the completion of Aloft Kuala Lumpur
Sentral Hotel and City International Hospital. Cash
and cash equivalents (excluding the impact of deposit
pledged) were higher at US$24.6 million (2012:
US$16.8 million) mainly due to higher sales collection
for SENI Mont’ Kiara in 2013.
Changes in cash flow in 2013 were positive at US$8.8
million, compared to the negative cash flow of US$18.6
million in 2012.
The Group’s subsidiaries borrow to fund property
development projects. At 31 December 2013, the
Group had gross borrowings of US$229.4 million
(2012: US$144.4 million), an increase of 58.86% over
the previous year. Net debt-to-equity ratio
increased from 64.19% in 2012 to 120.25%in 2013.
Moving forward, the Group will focus on parring
down its borrowings.
Finance income remained at US$0.4 million in 2013.
Finance costs increased from US$4.3 million in 2012
to US$9.8 million in 2013. The increase was mainly
attributable to Aloft Kuala Lumpur Sentral Hotel and
City International Hospital.
DIVIDEND
No dividend was paid in 2013.
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 Officer
Ireka Development Management Sdn. Bhd.
Development Manager
23 April 2014
CORPORATE SOCIAL RESPONSIBILITY
ANNUAL
REPORT
2013 13
The Group strongly believes that adhering to
corporate social responsibility obligations
through its operations and sustainable
development, is integral to business
success. The Group strives to operate in an
environmentally friendly, safer and more
efficient way, in order to create a better life
for all. The Group builds this on the following
six areas, reflecting current and emerging
corporate social responsibility standards:
1. MANAGING CORPORATE
RESPONSIBILITY
Aseana Properties believes in responsible business
practice and is committed to doing so with integrity
and in an open and ethical manner. The Board of
Directors is responsible for approving appropriate
policies and procedures to govern the manner in
which the Group treats its customers, employees and
shareholders. Aseana Properties adheres to corporate
social responsibility obligations in 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
the risk of business, and ensures that the reputation
of Aseana Properties is protected and shareholders’
values are enhanced.
2. ENVIRONMENTAL
MANAGEMENT
Environmental management involves a set of
processes and practices that enables an organisation
to reduce its environmental impact and increase its
operating efficiency. Aseana Properties is committed
to environmental protection and to this end,
recognises that development activities will have an
impact on the environment and therefore always aims
to operate in a manner that mitigates environmental
impact. For example, Aseana Properties, through
its Development Manager, Ireka Development
Management Sdn Bhd, works with local authorities
and planners to ensure that environmental protection
and amenity improvements are key criteria in any
project scheme. The Group also works with architects
and designers to incorporate natural elements such
as water, greenery, light and air into its schemes.
Additionally, the Development Manager also works
with contractors and suppliers to promote best
practice in issues relating to resource conservation
and pollution control.
City International Hospital in International Hi-Tech Healthcare Park
Ho Chi Minh City
3. HEALTH AND SAFETY
As a property developer, Aseana Properties makes
health and safety its top priority. Its Development
Manager works closely with all contractors to
ensure that they meet legislative and regulatory
requirements and that the best practice code is
adhered to at all work sites.
Aseana Properties is also committed to the health,
safety and welfare of its stakeholders and others
affected by its business operations, by providing a safe
and healthy work environment.
4. EMPLOYEES
Aseana Properties works closely with its
Development Manager to ensure that all employees
are treated fairly and with dignity.
5. COMMUNITY
Aseana Properties believes in supporting and
participating in community activities that enhance
social progress and community welfare. During the
year, Aseana Properties participated in various charity
events and contributed in the areas of education, arts
as well as causes that benefit children.
6. STAKEHOLDERS
Aseana Properties is committed to meaningful
dialogue and relevant actions with all stakeholders,
through participating in stakeholders’ meetings,
roadshows, conference calls, briefings, timely release
of annual reports and its quarterly magazine, CiTi-ZEN.
Aseana Properties also maintains an updated and
informative website ( www.aseanaproperties.com)
that is accessible to stakeholders and members of
the public.
14 ASEANA
PROPERTIES
LIMITED
CALENDAR OF EVENTS
JAN
2013
FEB
2013
MAR
2013
APR
2013
MAY
2013
JUN
2013
02
FEB
08
MAR
17
till
23
MAR
Site Visit to City International Hospital by Ms Nguyen Thi Kim Tien,
Vietnam’s Minister of Health. The hospital is a flagship development of
the International Hi-Tech Healthcare Park (‘IHHP’). IHHP is Vietnam’s
first and only premier international healthcare development, featuring
a fully integrated healthcare environment for patients and medical
professionals alike.
The RuMa Hotel and Residences (‘The RuMa’) was officially launched
for sale. Strategically located in Kuala Lumpur City Centre, the hotel
component will be managed by international bespoke luxury hotel
operator, Urban ResortTM Concepts (URC). The RuMa hotel suites are
sold off-plan on a sale and lease-back basis for an initial 10 years with a
guaranteed rental return of 6% for the first 5 years.
Aloft Kuala Lumpur Sentral was selected to host the sixth Mercedes-
Benz Stylo Fashion Grand Prix 2013 prior to the hotel’s opening.
Themed ‘The Mannequin Fantasies’, the annual fashion show served as
a platform for ancillary and supporting industries around fashion design.
22
MAR
The 482-room Aloft Kuala Lumpur Sentral Hotel, managed and
operated by Starwood Asia Pacific Hotels Resort Pte. Ltd. commenced
business.
08
APR
Aseana Properties announced that its investee company,
Nam Long Investment Corporation, a real estate developer in
Vietnam, in which Aseana Properties holds 16.32% stake, has
listed its shares on the Ho Chi Minh Stock Exchange at a price of
VND27,000 (approximately US$1.29) per share, valuing Nam Long
at approximatetely VND2.58 billion (US$123.82 million).
24
APR
17
MAY
31
MAY
18
JUN
Aseana Properties announced its audited Full Year Results for the
financial year ended 31 December 2012.
Aseana Properties issued the Interim Management Statement for
the period 1 January 2013 to 16 May 2013.
City International Hospital successfully obtained its operating
license from Vietnam’s Ministry of Health. This project will address
the current shortage of world class, comprehensive healthcare
services and facilities in Ho Chi Minh City, serving its estimated 9
million people as well as the surrounding region.
Aseana Properties hosted its 7th Annual General Meeting in Jersey,
United Kingdom.
ANNUAL
REPORT
2013 15
JUL
2013
AUG
2013
SEP
2013
OCT
2013
NOV
2013
DEC
2013
12
JUL
The RuMa Hotel and Residences private preview at PuLi Hotel & Spa,
Shanghai, China was also attended by renowned Malaysian and world
shoe designer, Datuk Jimmy Choo. The RuMa Hotel and Residences
sits at Jalan Kia Peng located in the heart of Kuala Lumpur City Centre.
09
NOV
SENI Mont’ Kiara won the Asia Pacific Property Awards 2013
– High Rise Residential. SENI Mont’ Kiara is a prestigious
residential resort located on the highest point of Mont’ Kiara,
offering majority of its luxury residences impressive views of the
Kuala Lumpur city skyline.
29
AUG
Aseana Properties announced its Half-Year Results for the six-month
period ended 30 June 2013.
24
SEP
City International Hospital (‘CIH’), a modern private care hospital of
international standards with 320 beds, commenced its business. CIH
is managed by Parkway Pantai, one of Asia’s largest private healthcare
services provider. It is also CIH’s Patient Recognition Day.
19
NOV
28
NOV
Aseana Properties issued the Interim Management Statement
for the period 1 July 2013 to 19 November 2013.
Site Visit to City International Hospital by the representatives of
the Reward Emulation deputation from different regions in South
Vietnam, headed by Ms Tran Thi Ha, Vice President of the Central
Board of Emulation, Deputy Minister of Internal Affair. The hospital
is installed with the latest equipment for diagnostic imaging,
advanced laboratory testing and surgical procedures.
05
DEC
Site Visit to City International
Hospital (‘CIH’) by Mr Dang
Ngoc Tung, President of Vietnam
General Confederation of Labour.
CIH’s building layout is oriented
to minimize sunlight, where
large windows were installed
throughout to allow more natural
lighting while its extensive
landscaping of trees and flowering
shrubs help to create a fresh green
environment for the staff, patients
and visitors.
16 ASEANA
PROPERTIES
LIMITED
BOARD OF DIRECTORS
MOHAMMED AZLAN HASHIM
Non-Executive Chairman
CHRISTOPHER HENRY LOVELL
Non-Executive Director
DAVID HARRIS
Non-Executive Director
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 LI.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.
Mohammed Azlan Hashim was appointed as
Chairman (Non-Executive) of Aseana Properties
in March 2007.
In Malaysia, Azlan serves as Chairman of several
public entities, listed on the Bursa Malaysia
Securities Berhad, including D&O Green
Technologies Berhad, SILK Holdings Berhad,
Scomi Group Berhad and Deputy Chairman of
IHH Healthcare Berhad.
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, Malaysian Institute of
Directors, Institute of Chartered Secretaries and
Administrators, Hon. Member of the Institute of
Internal Auditors, Malaysia and Member of the
Malaysian Institute of Accountants.
ANNUAL
REPORT
2013 17
ISMAIL SHAHUDIN
Non-Executive Director
JOHN LYNTON JONES
Non-Executive Director
GERALD ONG CHONG KENG
Non-Executive Director
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, 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 was appointed as Director
(Non-Executive) of Aseana Properties in March
2007. Lynton is Chairman Emeritus 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.
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. In June 2007, he was
appointed a Director of Metro Holdings Limited
which is listed on the Singapore Exchange
Securities Trading Limited.
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.
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.
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 was a Trustee of the
Horniman Museum in London for 8 years until
2013. He studied at the University of Wales,
Aberystwyth, where he took a first class honours
in International Politics.
18 ASEANA
PROPERTIES
LIMITED
DIRECTORS’ REPORT
For The Year Ended 31 December 2013
Other risks faced by the Group in Malaysia and Vietnam include the following:
The Directors present their report together with the
audited financial statements of the Group for the year
ended 31 December 2013.
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.
ECONOMIC
STRATEGIC
REGULATORY
BUSINESS REVIEW AND FUTURE
DEVELOPMENTS
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
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.
OPERATIONAL
FINANCIAL
GOING CONCERN
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 a 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.
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
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.
ANNUAL
REPORT
2013 19
RESULTS AND DIVIDENDS
DIRECTORS’ INTERESTS
The results for the year ended 31 December 2013 are
set out in the attached financial statements.
The interests of the directors in the Company’s shares at 31 December 2013 and at the date of this report were
as follows:
No dividends were declared nor paid during the
financial year under review.
Number of Shares held:
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 2013. The
authority shall expire 12 months from the date of passing
of the resolution unless otherwise renewed, varied or
revoked. The Company did not purchase its own shares
during the year ended 31 December 2013.
SHARE CAPITAL
No shares have been issued in 2013. All the 500,000
ordinary shares held in treasury were cancelled on 30
December 2013. Following this cancellation, the total
number of shares in issue and the voting share capital
of the Company is 212,025,000. Further details on
share capital are stated in Note 28 to the financial
statements.
Director
Ordinary Shares of US$0.05 each
Christopher Henry Lovell
John Lynton Jones
David Harris
Gerald Ong Chong Keng
48,000
20,000
165,000
2,250,000
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 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.
DIRECTORS
SUBSTANTIAL SHAREHOLDERS
The following were directors of Aseana who held office
throughout the financial year and up to the date of this
report:
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 11 April 2014:
• Mohammed Azlan Hashim – Chairman
• Christopher Henry Lovell
• David Harris
Ismail Shahudin
•
• John Lynton Jones
• Gerald Ong Chong Keng
Number of Ordinary Shares Held
Percentage of Issued Share Capital
48,913,623
40,169,013
39,086,377
29,109,160
11,090,538
7,570,000
7,175,000
23.07%
18.95%
18.43%
13.73%
5.23%
3.57%
3.38%
Ireka Corporation Berhad
SIX SIS
Legacy Essence Limited
LIM Advisors
Dr. Thong Kok Cheong
Henderson Global Investors
Ironsides Partners CFD
EMPLOYEES
The Company has no executive directors or employees. Certain subsidiaries of the Group have a total of 790
employees at 31 December 2013. 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-four managerial and technical staff under its employment in Malaysia and
Vietnam at 31 December 2013.
GOING CONCERN
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.
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 2013 Annual Report and Financial
Statements to shareholders will be at an Annual
General Meeting (“AGM”) to be held in June 2014.
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 2014
20 ASEANA
PROPERTIES
LIMITED
DIRECTORS’ REPORT cont’d
For The Year Ended 31 December 2013
CREDITORS PAYMENT POLICY
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
2013 amounted to 16 days (2012: 83 days) of property
development cost incurred during the year.
FINANCIAL INSTRUMENTS
The Group’s principal financial instruments comprise
cash balances, balances with related parties, other
payables, receivables and loans and borrowings 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 Directors of the Company confirm that to the best
of their knowledge that:
•
•
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
Our auditors, KPMG Audit Plc has instigated an
orderly wind down of business. The Board has
decided to put KPMG LLP forward to be appointed as
auditors and resolution concerning their
appointment will be put to the forthcoming Annual
General Meeting of the Company.
ANNUAL
REPORT
2013 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
Year ended
Year ended
31 December 2013 31 December 2012
(US$)
(US$)
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
70,000
55,000
48,000
48,000
48,000
48,000
70,000
55,000
48,000
48,000
48,000
48,000
Total
317,000
317,000
SHARE OPTIONS
The Company did not operate any share option schemes during the year ended 31 December 2013.
SHARE PRICE INFORMATION
- US$0.44
• High for the year
• Low for the year
- US$0.37
• Close for the year - US$0.44
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 2014
22 ASEANA
PROPERTIES
LIMITED
CORPORATE GOVERNANCE STATEMENT
The Financial Conduct 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 on the UK Listing Authority’s Official
List 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 2013:
• 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 or a
Senior Independent Director as it did not consider
it appropriate given the nature of the Company’s
business and that the Company’s property portfolio
is externally managed by Ireka Development
Management Sdn Bhd (the “Development Manager”).
ROLE OF THE BOARD OF
DIRECTORS
The Board’s role is to provide entrepreneurial
leadership to the Company, within a framework of
prudent and effective controls, enabling risks 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 six times during the year ended 31
December 2013. The meetings were attended by all
the Directors except for Ismail Shahudin who was
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, being independent of management and
also having no business or other relationships 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 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
Director’s. In November 2013, 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 states 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 2013, Christopher Henry
Lovell and Gerald Ong Chong Keng who retired by
rotation as Directors were re-elected to the Board.
The remainder of the Board recommended their re-
election.
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.
Necessary recommendations are then made to the
Board for its consideration and decision-making. 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 experience
with the ability to discharge its duties properly,
through extensive service on the Boards and Audit
Committees of other listed companies.
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 2013.
The meetings were attended by all the committee
members. Representatives of the auditors, the Chief
Financial Officer and Chief Executive Officer of the
Development Manager may attend by invitation.
The Committee is responsible for:
•
•
•
•
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 systems 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;
ANNUAL
REPORT
2013 23
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.
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. The Investment Committee has not met
during the year ended 31 December 2013.
FINANCIAL REPORTING
The Board aims to present a fair, 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 and
Directors’ 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 risk management
and 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.
•
•
developing and implementing policy on
engagement of the external auditor to supply
non-audit services; and
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.
Since the start of the financial year ended 31 December
2013, 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:
•
•
•
•
reviewing the audit plan with the Company’s
Auditor;
reviewing and discussing the Audit Committee
Report with the Company’s Auditor;
reviewing the draft Audited Financial Statements
as contained in the draft Annual Report together
with the Company’s Auditor before tabling to the
Board for consideration and approval;
reviewing 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;
• considering the independence of the auditor; and
•
reviewing the auditor’s performance and made
a recommendation for the reappointment of the
Group’s auditor by shareholders.
NOMINATION COMMITTEE
The Nomination Committee is chaired by Mohammed
Azlan Hashim. Other committee 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 2013 and the meeting was attended
by all committee members and other board members at
the invitation of the Nomination Committee.
During the year ended 31 December 2013, the
Nomination Committee carried out its functions
as set out in its terms of reference which are
summarised below:
•
•
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 or re-election 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 of any Director at any time.
REMUNERATION COMMITTEE
The Remuneration Committee is chaired by John
Lynton Jones. Other committee 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 2013. The meeting
was attended by all committee members and other
board members at the invitation of the Remuneration
Committee.
During the year ended 31 December 2013, the
Remuneration Committee carried out its duties as set out
in its terms of reference which are summarised below:
•
determining and agreeing with the Board the
framework for the remuneration of the Directors;
•
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
The Management Engagement Committee is chaired by
Mohammed Azlan Hashim. Other committee 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 2013. The meeting was attended by all
committee members and other Board members at the
invitation of the Management Engagement Committee.
During the year ended 31 December 2013, 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
reviewing and considering the appointment and
remuneration of providers of services to the
Company.
24 ASEANA
PROPERTIES
LIMITED
CORPORATE GOVERNANCE STATEMENT cont’d
RISK MANAGEMENT AND
INTERNAL CONTROL
The Board is responsible for the effectiveness of the
Company’s risk management and internal control
systems and is supplied with information to enable
it to discharge its duties. Such 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 risk management and internal
control.
During the year, the Board discharged its
responsibility for risk management and internal
control 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
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 2013 AGM, held on 18 June
2013.
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.
•
regular visits to operating units and projects by the
Board.
On behalf of the Board
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
23 April 2014
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. The Development
Manager had set up a legal and compliance function
for the purposes of implementing the anti-corruption
and anti-bribery policy. Training and briefing sessions
were conducted for the Development Manager’s senior
management and employees. Compliance review
would be carried out as and when required to ensure
the effectiveness of the policy.
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 spokepersons with investors, analysts, fund
managers, the press and other interested parties. The
Board is informed of material information provided
to shareholders and are advised on their feedback.
ANNUAL
REPORT
2013 25
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 2014. KPMG Audit Plc has carried out no
procedures of any nature subsequent to 23 April
2014 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.
INDEPENDENT AUDITOR’S REPORT
any information that is apparently materially
incorrect based on, or materially inconsistent
with, the knowledge acquired by us in the course
of performing the audit. 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 2013 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.
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 2014
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS OF
ASEANA PROPERTIES LIMITED
We have audited the group and parent company
financial statements of Aseana Properties Limited
for the year ended 31 December 2013 which comprise
the Consolidated and Company Statements of
Comprehensive Income, the Consolidated and
Company Statements of Financial Position, the
Consolidated and Company Statements 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 and to identify
26 ASEANA
PROPERTIES
LIMITED
FINANCIAL STATEMENTS
INVESTMENT
GATEWAY TO
MALAYSIA AND
VIETNAM
CONTENTS
27 | Consolidated Statement of
Comprehensive Income
28 | Company Statement of
Comprehensive Income
29 | Consolidated Statement of
Financial Position
30 | Company Statement of
Financial Position
31
| Statements of Changes in Equity
32 | Consolidated Statement of
Cash Flows
33 | Company Statement of
Cash Flows
34 | Notes to the Financial Statements
ANNUAL
REPORT
2013 27
2012
2013
Notes US$’000 US$’000
5
6
7
19
8
9
11
12
13
19
14
29,269
(22,768)
23,732
(21,459)
6,501
16,122
(1,622)
–
(1,105)
(3,762)
(1,953)
(23,635)
(9,454)
424
(9,766)
(9,342)
(18,796)
(2,854)
2,273
7,051
(2,582)
(4,653)
524
(3,799)
(2,164)
(9,389)
(12,739)
407
(4,299)
(3,892)
(16,631)
(1,798)
(21,650)
(18,429)
(6,220)
126
3,407
(4,828)
(6,094)
(1,421)
(27,744)
(19,850)
(19,006)
(2,644)
(16,839)
(1,590)
(21,650)
(18,429)
(24,971)
(2,773)
(18,419)
(1,431)
(27,744)
(19,850)
15
(8.96)
(7.94)
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
Continuing activities
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Decline in fair value of available-for-sale investments
Foreign exchange (loss)/ gain
Management fees
Marketing expenses
Other operating expenses
Operating loss
Finance income
Finance costs
Net finance costs
Net loss before taxation
Taxation
Loss for the year
Other comprehensive income/ (expense), net of tax
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation differences for foreign operations
Increase/ (decrease) in fair value of available-for-sale investments
Total other comprehensive expense for the year
Total comprehensive loss for the year
Loss attributable to:
Equity holders of the parent
Non-controlling interests
Total
Total comprehensive loss attributable to:
Equity holders of the parent
Non-controlling interests
Total
Loss per share
Basic and diluted (US cents)
The notes to the financial statements form an integral part of the financial statements.
28 ASEANA
PROPERTIES
LIMITED
COMPANY STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
Continuing activities
Revenue
Cost of sales
Gross profit
Administrative expenses
Foreign exchange gain/ (loss)
Management fees
Impairment of investment in subsidiaries
Impairment of amount due from subsidiaries
Other operating expenses
Operating loss
Finance income
Net loss before taxation
Taxation
2012
2013
Notes US$’000 US$’000
5
6
8
9
18
26
11
12
–
–
–
(456)
198
(1,238)
(6,305)
(12,950)
(485)
(21,236)
5
(21,231)
–
–
–
–
(656)
(278)
(1,644)
–
(1,885)
(603)
(5,066)
59
(5,007)
–
Loss for the year/ Total comprehensive loss for the year
(21,231)
(5,007)
The notes to the financial statements form an integral part of the financial statements.
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AT 31 DECEMBER 2013
Non-current assets
Property, plant and equipment
Investment in an associate
Available-for-sale investments
Intangible assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Held-for-trading financial instrument
Trade and other receivables
Amount due from an associate
Current tax assets
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Equity
Share capital
Share premium
Capital redemption reserve
Translation reserve
Fair value reserve
Accumulated losses
Shareholders’ equity
Non-controlling interests
Total equity
Non-current liabilities
Amount due to non-controlling interests
Loans and borrowings
Medium term notes
Total non-current liabilities
Current liabilities
Trade and other payables
Amount due to non-controlling interests
Loans and borrowings
Medium term notes
Current tax liabilities
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
ANNUAL
REPORT
2013 29
2012
2013
Notes US$’000 US$’000
16
17
19
20
21
22
23
24
25
27
28
29
30
31
32
33
35
36
37
34
35
36
37
1,146
2,252
12,697
13,525
595
1,113
–
12,571
13,845
–
30,215
27,529
428,609
375
9,912
853
233
24,585
350,822
1,370
12,725
239
237
16,752
464,567
382,145
494,782
409,674
10,601
218,926
1,899
(3,105)
126
(69,876)
158,571
11,429
10,626
218,926
1,874
2,986
–
(50,828)
183,584
13,063
170,000
196,647
1,440
49,309
140,877
*
1,440
40,497
83,175
191,626
125,112
83,640
9,008
25,466
13,739
1,303
56,764
8,367
20,687
–
2,097
133,156
87,915
324,782
213,027
494,782
409,674
The financial statements were approved on 23 April 2014 and authorised for issue by the Board and were signed on its behalf by
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
* The amount due to non-controlling interests have been reclassified from current liabilities to non-current liabilities to conform with the current year’s presentation. The
reclassification does not have any material impact to the statement of comprehensive income.
The notes to the financial statements form an integral part of the financial statements.
30 ASEANA
PROPERTIES
LIMITED
COMPANY STATEMENT OF
FINANCIAL POSITION
AT 31 DECEMBER 2013
Non-current assets
Investment in subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Amounts due from subsidiaries
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Equity
Share capital
Share premium
Capital redemption reserve
Accumulated losses
Total equity
Current liabilities
Trade and other payables
Amounts due to subsidiaries
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
The financial statements were approved on 23 April 2014 and authorised for issue by the Board and were signed on its behalf by
MOHAMMED AZLAN HASHIM
Director
CHRISTOPHER HENRY LOVELL
Director
2012
2013
Notes US$’000 US$’000
18
74,641
80,946
74,641
80,946
24
26
27
–
161,785
1,703
3
155,280
354
163,488
155,637
238,129
236,583
28
29
30
33
10,601
218,926
1,899
(43,282)
10,626
218,926
1,874
(22,051)
188,144
209,375
34
26
1,253
48,732
1,677
25,531
49,985
27,208
49,985
27,208
238,129
236,583
The notes to the financial statements form an integral part of the financial statements.
STATEMENTS OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
ANNUAL
REPORT
2013 31
Translation
Reserve
US$’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
Consolidated
1 January 2012
Changes in ownership interests in
subsidiaries (Note 40)
Non-controlling interest
contribution
Loss for the year
Total other comprehensive expense
Total comprehensive loss
Own shares acquired
At 31 December 2012/
1 January 2013
Changes in ownership interests in
subsidiaries (Note 40)
Non-controlling interests
contribution
Loss for the year
Total other comprehensive expense
Total comprehensive loss
Cancellation of shares
Shareholders’ equity at
31 December 2013
10,626
219,101
1,874
(262)
4,828
(32,797)
203,370
4,276
207,646
–
–
–
–
–
–
–
–
–
–
–
(175)
–
–
–
–
–
–
–
–
–
3,248
3,248
–
–
(1,192)
(1,192)
1,192
–
–
–
(4,828)
(4,828)
–
–
(16,839)
-
(16,839)
–
–
(16,839)
(1,580)
(18,419)
(175)
9,026
(1,590)
159
(1,431)
–
9,026
(18,429)
(1,421)
(19,850)
(175)
10,626
218,926
1,874
2,986
–
–
–
–
–
(25)
–
–
–
–
–
–
–
–
–
–
–
25
–
–
–
(6,091)
(6,091)
–
–
–
–
–
126
126
–
(50,828)
183,584
13,063
196,647
(42)
(42)
42
–
–
(19,006)
–
(19,006)
–
–
(19,006)
(5,965)
(24,971)
–
1,097
(2,644)
(129)
(2,773)
–
1,097
(21,650)
(6,094)
(27,744)
–
10,601
218,926
1,899
(3,105)
126
(69,876)
158,571
11,429
170,000
Company
1 January 2012
Loss for the year/ Total comprehensive loss
Own shares acquired
At 31 December 2012/ 1 January 2013
Loss for the year/ Total comprehensive loss
Cancellation of shares
Share
Capital
US$ ’000
10,626
–
–
10,626
–
(25)
Capital
Share Redemption Accumulated
Reserve
Losses
US$ ’000
Total
Equity
US$ ’000 US$ ’000
Premium
US$ ’000
219,101
–
(175)
218,926
–
–
1,874
–
–
1,874
–
25
(17,044)
(5,007)
–
214,557
(5,007)
(175)
(22,051)
(21,231)
–
209,375
(21,231)
–
Shareholders’ equity at 31 December 2013
10,601
218,926
1,899
(43,282)
188,144
The notes to the financial statements form an integral part of the financial statements.
32 ASEANA
PROPERTIES
LIMITED
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2013
Cash Flows from Operating Activities
Net loss before taxation
Finance income
Finance costs
Unrealised foreign exchange loss/ (gain)
Reversal of 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 on held-for-trading financial instrument
Operating loss before working capital changes
Changes in working capital:
Increase in inventories
Decrease in receivables
Increase/ (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
Issuance of ordinary shares of subsidiaries to non-controlling interests
Advances to associate
Proceeds from disposal of property, plant and equipment
Disposal of held-for-trading financial instrument
Purchase of property, plant and equipment
Finance income received
Net cash generated from 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
Decrease/ (increase) in pledged deposits placed in licensed banks
Net cash generated from financing 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
2012
2013
Notes US$’000 US$’000
(18,796)
(424)
9,766
1,065
–
320
114
–
7
–
5
(16,631)
(407)
4,299
(642)
(357)
1,158
190
1
31
4,653
81
(7,943)
(7,624)
(96,690)
2,063
28,884
(73,686)
(9,766)
(4,029)
(54,318)
21,117
(14,856)
(55,681)
(5,577)
(3,356)
(87,481)
(64,614)
1,081
1,097
(630)
–
899
(154)
424
6,801
2,546
(117)
1
19,933
(279)
407
2,717
29,292
–
(17,341)
110,860
77
(175)
(12,080)
30,390
(1,371)
93,596
16,764
8,832
(248)
5,582
(18,558)
1,329
22,811
14,166
5,582
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
Less: Deposits pledged
Cash and cash equivalents
27
27
27
11,498
13,087
24,585
(10,419)
5,152
11,600
16,752
(11,170)
14,166
5,582
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of US$194,000 (2012: US$312,000) of which US$40,000 (2012: US$33,000)
was acquired by means of finance leases.
During the financial year, US$1,097,000 (2012: US$9,026,000) of ordinary shares of subsidiaries were issued to non-controlling shareholders, of which US$1,097,000 (2012:
US$2,546,000) was satisfied via cash consideration. The remaining amount of US$6,480,000 for 2012 was satisfied via contribution of land held for property development by
non-controlling interest.
The notes to the financial statements form an integral part of the financial statements.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2013
Cash Flows from Operating Activities
Net loss before taxation
Impairment of investment in subsidiaries
Impairment of amount due from subsidiaries
Finance income
Unrealised foreign exchange (gain)/ loss
Operating loss before working capital changes
Changes in working capital:
Decrease in receivables
(Decrease)/ increase in payables
Net cash used in operating activities
Cash Flows from Investing Activities
Advances to subsidiaries
Finance income received
Net cash used in investing activities
Cash Flows from Financing Activities
Advances from subsidiaries
Repurchase of own shares
Net cash generated from financing activities
Net changes in cash and cash equivalents during the year
Effect of changes in exchange rates
Cash and cash equivalents at the beginning of the year
ANNUAL
REPORT
2013 33
2012
2013
Notes US$’000 US$’000
(21,231)
12,950
6,305
(5)
(151)
(5,007)
–
1,885
(59)
256
(2,132)
(2,925)
3
(424)
195
730
(2,553)
(2,000)
(19,455)
5
(7,151)
59
(19,450)
(7,092)
23,201
–
4,689
(175)
23,201
4,514
1,198
151
354
(4,578)
(256)
5,188
Cash and cash equivalents at the end of the year
27
1,703
354
The notes to the financial statements form an integral part of the financial statements.
34 ASEANA
PROPERTIES
LIMITED
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 and held-for-trading financial instrument
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 and refinancing of these medium term notes (as
described in Notes 36 and 37). The forecasts incorporate current payables,
committed expenditure and other future expected expenditure, along with a
prudent estimate of sales in addition to the disposal of certain land held for
property development and available-for-sale investments.
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 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
Amendments relating to
Investment Entities
October
2012
Annual periods beginning on or
after 1 January 2014
December
2011
Annual periods beginning on or
after 1 January 2014
May 2013
Annual periods beginning on or
after 1 January 2014
December
2013
Annual periods beginning on or
after 1 July 2014
December
2013
Annual periods beginning on or
after 1 July 2014
December
2013
Annual periods beginning on or
after 1 July 2014
IFRS 10,
IFRS 12
and
IAS 27
IAS 32
IAS 36
IFRS 3
IFRS 8
IFRS 13
IAS 16
Amendments relating to
Offsetting Financial Assets and
Financial Liabilities
Amendments relating to
recoverable amount disclosures
for non-financial assets
Business combinations –
classification and
measurement of contingent
consideration
– amendments resulting from
Annual Improvements to
IFRSs – 2010-2012 Cycle
Operating segments –
disclosures on the aggregation
of operating segments
– amendments resulting from
Annual Improvements to
IFRSs – 2010-2012 Cycle
Fair value measurement –
measurement of short-term
receivables and payables
– amendments resulting from
Annual Improvements to
IFRSs – 2010-2012 Cycle
Property, plant and equipment
and intangible assets –
restatement of accumulated
depreciation (amortisation) on
revaluation
– amendments resulting from
Annual Improvements to
IFRSs – 2010-2012 Cycle
New/ Revised International
Financial Reporting Standards
IAS 24
IFRS 1
IFRS 3
IFRS 13
IAS 40
Related party disclosures –
definition of ‘related party’
– amendments resulting from
Annual Improvements to
IFRSs – 2010-2012 Cycle
First-time adoption of
International Financial
Reporting Standards – IFRS
version that a first-time
adopter can apply;
– amendments resulting from
Annual Improvements to
IFRSs – 2011-2013 Cycle
Business combinations – scope
exclusion for the formation of
joint arrangements;
– amendments resulting from
Annual Improvements to
IFRSs – 2011-2013 Cycle
Fair value measurement –
scope of portfolio exception
– amendments resulting from
Annual Improvements to
IFRSs – 2011-2013 Cycle
Investment property –
inter-relationship of IFRS 3
and IAS 40
– amendments resulting from
Annual Improvements to
IFRSs – 2011-2013 Cycle
Issued/
Revised
December
2013
Effective Date
Annual periods beginning on or
after 1 July 2014
December
2013
Annual periods beginning on or
after 1 July 2014
December
2013
Annual periods beginning on or
after 1 July 2014
December
2013
Annual periods beginning on or
after 1 July 2014
December
2013
Annual periods beginning on or
after 1 July 2014
IFRS 9
Financial Instruments
November
2013
Annual periods beginning on or
after 1 January 2018
The Directors anticipate that the adoption of the above standards,
amendments and interpretations 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 2018 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 value of inventories under
development, land held for 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 at
completion of development may exceed net reliasable value. The
assessment requires the use of judgement and estimates.
(b) Impairment 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 assesses the recoverable amount of license contracts and
related relationships by reference to the reaslisability of the properties of
which the license contracts and related relationship is attached (refer
Note 2.3(a)).
December
2013
Annual periods beginning on or
after 1 July 2014
The Group amortises licence contracts and related relationships when a
component of the venture is disposed of.
(c) Impairment of goodwill
The Group assesses the recoverable amount of goodwill by reference to
the realisability of the properties of which the goodwill is attached to
(refer Note 2.3(a)).
ANNUAL
REPORT
2013 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.
For new acquisitions, the Group measures the cost of 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
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.
Transaction 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.
(c) Subsidiaries
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.
The Group adopted IFRS 10, Consolidated Financial Statements in the
current financial year. This resulted in changes to the following policies:
•
•
•
Control exists when the Group is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. In the previous
financial years, controls exists when the Group has the ability to
exercise its power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities.
Potential voting rights are considered when assessing control only
when such rights are substantive. In the previous financial years,
potential voting rights are considered when assessing control when
such rights are presently exercisable.
The Group considers it has the de facto power over an investee when,
despite not having the majority of voting rights it has the current
ability to direct the activities of the investee that significantly affect
the investee’s return. In the previous financial years, the Group did not
consider de facto power in its assessment of control.
The change in accounting policy has been made retrospectively and in
accordance with the transitional provision of IFRS 10. The adoption
of IFRS 10 has had no significant impact on the financial statements
of 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 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 commences until the
date that significant influence ceases.
When the Group’s shares of losses exceeds its interest in an associate, the
carrying amount of that 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 associate.
(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$”), which is the Company’s functional and presentation currency.
Each entity in the Group determines its own functional currency and
items included in the financial statements of each entity are measured
using that functional currency. Transactions in foreign currencies are
translated to the respective functional currencies of the Group entities at
exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency
at the exchange rate at the date that the fair value was determined. Non-
monetary items in a foreign currency that are measured in terms of
historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on retranslation are
recognised in profit or loss, except for differences arising on the
retranslation of available-for-sale equity investments, which are
recognised in other comprehensive income.
(b) Foreign operations
The assets and liabilities of foreign operations, including goodwill and
fair value adjustments arising on acquisition, are translated to US$ 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.
36 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
3 SIGNIFICANT ACCOUNTING POLICIES cont’d
3.2 Foreign Currencies cont’d
(b) Foreign operations cont’d
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 interest. When the Group disposes of only part of its
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
when 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 except for interest income arising from temporary
investment of borrowings taken specifically for the purpose of obtaining a
qualifying asset which is accounted for in accordance with the accounting
policy on borrowing costs.
(c) Services
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.
(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, hospital and mall operations
Revenue from hotel, hospital 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.
Expenditure incurred after the equipment has been placed into operation, such
as repairs and maintenance and overhaul costs, are normally charged to profit
or loss 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.
When significant parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
The cost of property, plant and equipment recognised as a result of a business
combination is based on fair value at acquisition date. The fair value of property
is the estimates amount for which a property could be exchanged between
knowledgeable willing parties in an arm’s length transaction after proper
marketing wherein the parties had each acted knowledgeably, prudently and
without compulsion. The fair value of other items of plant and equipment is
based on the quoted market prices for similar items when available and
replacement cost when appropriate.
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 Assets
Finance leases
Leases where 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 of 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.
3.6 Income Tax
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.
ANNUAL
REPORT
2013 37
3 SIGNIFICANT ACCOUNTING POLICIES cont’d
3.7 Financial Instruments
(a) Non-derivative financial assets
Other financial liabilities comprise loan and borrowings, bank overdrafts,
and trade and other payables.
Accounting for interest income and finance costs is discussed in Notes
3.3 (b) and 3.12.
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.
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 asset are transferred. Any
interest in transferred financial assets that are 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: financial assets at fair value through profit or loss, loans and
receivables, cash and cash equivalents and available-for-sale investments.
(c) 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.
(i) Financial assets at fair value through profit or loss
3.8 Intangible Assets
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.
(ii) 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.
(iii) 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.
(iv) 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
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.
losses, are recognised
impairment
(b) Non-derivative financial 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.
Subsequent to initial recognition, these financial liabilities are measured
at amortised cost using the effective interest method.
Intangible assets comprise 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).
3.9 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 and the estimated costs
necessary to make the sale.
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 financial 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.
38 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
3 SIGNIFICANT ACCOUNTING POLICIES cont’d
3.10 Impairment cont’d
(a) Non-derivative financial assets cont’d
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, economics 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 profit or loss.
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. The impairment loss is reversed, to the
extent that the debtor’s carrying amount does not exceed what the
carrying amount would have been had the impairment not been
recognised at the date the impairment is reversed.
(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 other comprehensive income, the
cumulative loss in other comprehensive income is reclassified from
equity and recognised in profit or loss.
Impairment losses recognised in profit or loss for an investment in an
equity instrument are classified as available for sale not reversed through
profit or loss.
(d) Non-financial assets
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.
(e) Equity instruments
Instruments classified as equity are measured at cost on initial recognition
and are not remeasured subsequently.
(i) Ordinary shares
Ordinary shares are classified as equity.
(ii)
Issue expenses
Costs directly attributable to the issue of instruments classified as
equity are recognised as a deduction from equity.
(iii)
Repurchase, disposal and reissue of share capital
(treasury shares)
When share capital recognised as equity is repurchased, the amount
of the consideration paid, including directly attributable costs, net
of any tax effects, is recognised as a deduction from equity.
Repurchased shares that are not subsequently cancelled are
classified as treasury shares in the statement of changes in equity.
Where treasury shares are sold or reissued subsequently, the
difference between the sales consideration net of directly
attributable costs and the carrying amount of the treasury shares is
recognised in 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.
3.11 Employee Benefits
(a) Short-term employee benefits
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) State plans
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 profit or loss in the year to
which they relate.
3.12 Finance Costs
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 profit or loss in the period in which
they are incurred.
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.
ANNUAL
REPORT
2013 39
3 SIGNIFICANT ACCOUNTING POLICIES cont’d
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.
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.
3.15 Provisions
4.2 Credit Risk
Provisions are recognised if, as a result of past event, the Group has a present
legal or constructive obligation that can be estimated reliably 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 profit or loss 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 42. 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.
3.18 Fair Value Measurements
From 1 January 2013, the Group adopted IFRS 13, Fair Value Measurement
which prescribed that fair value of an asset or a liability, except for lease
transactions, is determined as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The measurement assumes that the
transaction to sell the asset or transfer the liability takes place either in the
principal market or in the absence of a principal market, in the most
advantageous market.
For non-financial assets, the fair value measurement takes into account a
market participant’s ability to generate economic benefits by using the assets
in its highest and best use by selling it to another market participant that
would use the asset in its highest and best use.
In accordance with the transitional provision of IFRS 13, the Group applied the
new fair value measurement guidance prospectively, and has not provided any
comparative fair value information for new disclosures. The adoption of IFRS
13 has not significantly affected the measurements of the Group’s assets or
liabilities or the financial statements other than the additional disclosures.
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 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 2013, 96% (2012: 93%) 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 4% (2012: 7%) 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 2013, there was
no significant concentration of credit risk within the Group.
The Group’s exposure to credit risk arising from total debtors was set out in
Note 24 and totals US$9.9 million (2012: US$12.7 million). The Group’s
exposure to credit risk arising from deposits and balances with banks is set
out in Note 27 and totals US$24.6million (2012: US$16.8 million).
Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of
banking facilities granted to certain subsidiaries. The Company monitors on
an ongoing basis the results of the subsidiaries and repayments made by
subsidiaries.
At the end of the reporting period, the maximum exposure to credit risk as
represented by the outstanding banking and credit facilities of the subsidiaries
is as follows:
Company
2013
US$’000
2012
US$’000
Financial institutions for bank facilities
granted to its subsidiaries
199,196
124,807
At the end of the reporting period, there was no indication that any subsidiary
would default on repayment.
The financial guarantees have 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 2013, the Group’s borrowings to fund the developments had
terms 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 ASEANA
PROPERTIES
LIMITED
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:
Group
At 31 December 2013
Finance lease liabilities
Interest bearing loans and borrowings
Trade and other payables
Amount due to non-controlling interests
At 31 December 2012
Finance lease liabilities
Interest bearing loans and borrowings
Trade and other payables
Amount due to non-controlling interests
Company
At 31 December 2013
Trade and other payables
At 31 December 2012
Trade and other payables
The above table excludes current tax liabilities.
4.4 Market Risk
(a) Foreign Exchange Risk
Carrying Contractual Contractual
cash flows
US$’000
amount
US$’000
interest rate
Under
1 year
US$’000
1 – 2
years
US$’000
2 – 5 More than
5 years
years
US$’000
US$’000
56 2.50% - 3.50%
229,335 5.25% - 17.7%
–
83,640
–
10,448
65
263,163
83,640
10,448
16
51,301
83,640
9,008
16
84,492
–
–
33
104,520
–
–
–
22,850
–
1,440
323,479
357,316
143,965
84,508
104,553
24,290
30
144,329
56,764
9,807
210,930
2.50%
5.20% - 23%
–
–
34
168,688
56,764
9,807
7
30,306
56,764
8,367
7
32,013
–
–
20
96,277
–
–
–
10,092
–
1,440
235,293
95,444
32,020
96,297
11,532
Carrying Contractual Contractual
cash flows
US$’000
amount interest rate
US$’000
Under
1 year
US$’000
1 – 2
years
US$’000
2 – 5 More than
5 years
years
US$’000
US$’000
1,253
1,253
1,677
1,677
–
1,253
1,253
1,253
1,253
–
1,677
1,677
1,677
1,677
–
–
–
–
–
–
–
–
–
–
–
–
Entities within the Group are exposed to foreign exchange risk from future commercial transactions and net monetary assets and liabilities that are denominated
in a currency that is not the entity’s functional currency. The foreign currency exposure is not hedged.
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property or investment is located or by borrowing
in currencies that match the future revenue stream to be generated from its investments.
Management monitors the foreign currency exposure closely and takes necessary actions in consultation with the bankers to avoid unfavourable exposures.
The Group is exposed to foreign currency risk on cash and cash equivalents which are denominated in currencies other than the functional currency of the relevant
Group entity.
4 FINANCIAL RISK MANAGEMENT cont’d
4.4 Market Risk cont’d
(a) Foreign Exchange Risk cont’d
The Group’s exposure to foreign currency risk on cash and cash equivalents at year end is as follows:
Group
Ringgit Malaysia
Others
ANNUAL
REPORT
2013 41
2013
US$’000
2012
US$’000
1,684
25
1,709
12
301
313
At 31 December 2013, if cash and cash equivalents denominated in a currency other than the functional currency of the Group entity strengthened/ (weakened)
by 10% and all other variables were held constant, the effects on the Group profit and loss and equity expressed in US$ would have been US$170,900/
(US$170,900) (2012: US$31,300/ (US$31,300)).
Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency.
Differences resulting from the translation of financial statements into the Group’s presentation currency are not taken into consideration.
Subsequent to year end, there are no significant monetary balances held by group companies that are denominated in a non-functional currency.
(b) Interest Rate Risk
The Group’s policy is to minimise interest rate risk on bank loans and borrowings using a mix of fixed and variable rate debts that represent market rates. The Group
prefers to maintain flexibility on the desired mix of fixed and variable interest rates as this will depend on the economic environment, the type of borrowings
available and the funding requirements of the project when a decision is to be made.
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instrument, based on carrying amounts at the end of the reporting
period was:
Fixed rate instruments:
Financial assets
Financial liabilities
Floating rate instruments:
Financial liabilities
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
24,585
154,672
16,752
83,205
1,703
–
74,719
61,154
–
354
–
–
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 67% (2012: 58%) of the
Group’s borrowings at 31 December 2013.
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 floating rate instrument
At 31 December 2013, if the interest rate had been 100 basis point higher/ lower and all other variables were held constant, this would increase/ (decrease) the
Group loss for the year by approximately US$747,190/ (US$747,190) (2012: increase/ (decrease) by US$611,540/ (US$611,540)).
(c) Price Risk
Equity price risk arises from the Group’s investments in quoted shares on the Ho Chi Minh Stock Exchange (“HOSE”) which are available-for-sale and held by the
Group at fair value at the reporting date. Gains and losses arising from changes in the fair value of available-for-sale investments are recognised in other comprehensive
income/expense.
Equity price risk sensitivity analysis
This analysis assumes that all other variables remain constant and the Group’s equity investment moved in correlation with HOSE.
A 10% (2012: Nil) strengthening of the HOSE at the end of the reporting period would have increased equity by US$1,269,700 (2012: Nil) for investment classified as
available for sale. A 10% (2012: Nil) weakening of the HOSE would have had an equal but opposite effect on equity.
42 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
4 FINANCIAL RISK MANAGEMENT cont’d
4.5 Fair Values
The carrying amount of trade and other receivables, amount due from an associate, deposits, cash and cash equivalents, trade and other payables and accruals of the
Group and Company approximate their fair values in the current and prior years due to relatively short term nature of these financial instruments.
The table below analyses financial instruments carried at fair value and those not carried at fair value, along with their carrying amounts shown in the statement of
financial position:
2013
Group
US$’000
Fair value of financial instruments
carried at fair value
Level 3
Level 2
Level 1
Total
Level 1
Fair value of financial instruments
not carried at fair value*
Level 2
Level 3
Total
Total
Total
fair value
Carrying
amount
Financial assets
Held-for-trading
financial instrument
–
375
Available-for-sale
investments
–
–
12,697
13,072
Financial liabilities
Amount due to
non-controlling interests –
Bank loan and borrowings –
–
Finance lease liabilities
–
Medium term notes
–
–
–
–
–
–
–
–
–
–
–
–
–
–
375
12,697
13,072
–
–
–
–
–
–
–
–
375
375
–
–
–
–
12,697
12,697
13,072
13,072
–
–
–
–
–
–
–
–
–
–
(74,719)
(56)
(147,381)
(10,059)
–
–
–
(10,059)
(74,719)
(56)
(147,381)
(10,059)
(74,719)
(56)
(147,381)
(10,448)
(74,719)
( 56)
(154,616)
–
(222,156)
(10,059)
(232,215)
(232,215)
(239,839)
2012
Group
US$’000
Financial assets
Held-for-trading
financial instrument
Available-for-sale
investments
Fair value of financial instruments
carried at fair value
Level 3
Level 2
Total
Level 1
–
–
–
1,370
–
1,370
–
12,571
12,571
1,370
12,571
13,941
Financial liabilities
Amount due to
non-controlling interests –
Bank loan and borrowings –
–
Finance lease liabilities
–
Medium term notes
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Fair value of financial instruments
not carried at fair value*
Total
Total
fair value
Carrying
amount
–
–
–
(9,354)
(61,154)
(30)
(80,048)
(150,586)
1,370
1,370
12,571
12,571
13,941
13,941
(9,354)
(61,154)
(30)
(80,048)
(9,807)
(61,154)
(30)
(83,175)
(150,586)
(154,166)
* Comparative figures have not been analysed by levels, by virtue of transitional provisions in Appendix C2 of IFRS 13.
Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.
Level 1 fair value
Level 1 fair value is derived from a quoted price (unadjusted) in an active market for identical financial assets or liabilities that the entity can access at the
measurement date.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assets or liabilities, either directly or
indirectly.
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and 2 fair values during the financial year (2012: no transfer in either directions).
Transfers between Level 2 and Level 3 fair values
During the financial year, available-for-sale investments with a carrying amount of US$12,571,000 were transferred from Level 3 to Level 2 as the quoted price in the
market for the equity instrument became available following the listing of the instrument on the Ho Chi Minh Stock Exchange (2012: no transfer in either direction).
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate
of interest at the end of the reporting period. At 31 December 2013, the interest rate used to discount estimated cash flows of the amount due to non-controlling interests
and MTN are 6.5% (2012: 6.5%) and 7.44% (2012: 7.32%) respectively.
ANNUAL
REPORT
2013 43
4 FINANCIAL RISK MANAGEMENT cont’d
4.6 Management and Control
Changes that cause the management and control of the Company to be exercised in the United Kingdom could lead to the Company becoming liable to United Kingdom
taxation on income and capital gains.
4.7 Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns to shareholders and benefits to
other stakeholders and to maintain an optimal capital structure to reduce cost of capital.
The capital structure of the Group consists of held-for-trading financial instrument, cash and cash equivalents, loans and borrowings, medium term notes and equity
attributable to equity holders of the parent, comprising issued share capital and reserves, were as follows:
Group
Capital structure analysis:
Held-for-trading financial instrument
Cash and cash equivalents
Loans and borrowings
Medium term notes
Equity attributable to equity holders of the parent
Total capital
2013
US$’000
2012
US$’000
375
24,585
(74,775)
(154,616)
(158,571)
1,370
16,752
(61,184)
(83,175)
(183,584)
(363,002)
(309,821)
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares
or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of net debt-to-equity ratio.
Net debt-to-equity ratio is calculated as a total of interest-bearing borrowings less held-for-trading financial instrument and cash and cash equivalents to the total equity.
The net debt-to-equity ratios at 31 December 2013 and 31 December 2012 were as follows:
Group
Total borrowings
Less: Held-for-trading financial instrument (Note 23)
Less: Cash and cash equivalents (Note 27)
Net debt
Total equity
Net debt-to-equity ratio
5 REVENUE AND SEGMENTAL INFORMATION
2013
US$’000
2012
US$’000
229,391
(375)
(24,585)
144,359
(1,370)
(16,752)
204,431
126,237
170,000
196,647
1.20
0.64
The gross revenue represents the sales value of development properties where the effective control of ownership of the properties is transferred to the purchasers when the
completion certificate or occupancy permit has been issued.
The Company is an investment holding company and has no operating revenue. The Group’s operating revenue for the year was mainly attributabe to the sale of development
properties in Malaysia.
5.1 Revenue recognised during the year as follows:
Sale of development properties
Project management fee
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
29,269
–
23,363
369
29,269
23,732
–
–
–
–
–
–
44 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
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, Chief Financial Officer, Chief Operating Officer and Chief Investment 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:
Investment Holding Companies – investing activities;
(i)
(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;
(v)
(vi) Hoa Lam-Shangri-La Healthcare Group – develops City International Hospital and Hi-Tech Healthcare Park.
Iringan Flora Sdn. Bhd. – operates Aloft Kuala Lumpur Sentral Hotel; and
Other non-reportable segments comprise the Group’s new development projects. None of these segments meet any of the quantitative thresholds for determining
reportable segments in 2013 and 2012.
Information regarding the operations of each reportable segment is included below. The Executive Management monitors the operating results of each segment for the
purpose of performance assessments and making decisions on resource allocation. Performance is based on segment gross profit/ (loss) and profit/ (loss) before taxation,
which the Executive Management believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets and liabilities are
presented inclusive of inter-segment balances and inter-segment pricing is determined on an arm’s length basis.
The Group’s revenue generating development projects are currently only in Malaysia since developement activities in Vietnam are still at early stages of development
and operation.
5.3 Analysis of the group’s reportable operating segments is as follows:
Operating Segments - ended 31 December 2013
Investment
Holding
Companies
US$’000
Ireka Land
Sdn. Bhd.
US$’000
ICSD
Amatir
Ventures Resources
Sdn. Bhd.
Sdn. Bhd.
US$’000
US$’000
Hoa Lam-
Iringan Shangri-La
Flora Healthcare
Group
US$’000
Sdn. Bhd.
US$’000
Total
US$’000
Segment (loss)/ profit before taxation
(2,217)
(323)
(5,927)
4,169
(4,382)
(7,559)
(16,239)
Included in the measure of segment (loss)/ profit 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
–
–
–
–
–
–
7
1,278
(33)
–
–
(2)
–
4
433
(68)
–
–
(10)
(4,464)
301
27,558
(5,918)
(320)
(711)
(1)
(252)
28
–
–
–
–
(7)
(3,841)
44
–
–
–
–
(91)
(1,209)
27
29,269
(6,019)
(320)
(711)
(111)
(9,766)
411
18,273
9,703
105,954
81,743
79,231
110,545
405,449
–
–
5
–
44
145
194
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Statement of comprehensive income
Total loss for reportable segments
Other non-reportable segments
Depreciation
Finance income
Consolidated loss before taxation
US$’000
(16,239)
(2,567)
(3)
13
(18,796)
ANNUAL
REPORT
2013 45
5 REVENUE AND SEGMENTAL INFORMATION cont’d
5.3 Analysis of the group’s reportable operating segments is as follows: cont’d
Investment
Holding
Companies
US$’000
Ireka Land
Sdn. Bhd.
US$’000
ICSD
Amatir
Ventures Resources
Sdn. Bhd.
Sdn. Bhd.
US$’000
US$’000
Hoa Lam-
Iringan Shangri-La
Flora Healthcare
Group
US$’000
Sdn. Bhd.
US$’000
Total
US$’000
Segment (loss)/ profit before taxation
(7,904)
2,199
(8,153)
1,096
(593)
(1,950)
(15,305)
Included in the measure of segment (loss)/ profit 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
–
–
–
–
–
(32)
12
–
–
–
–
(92)
(434)
7
23,363
(4,373)
(1,158)
(1,954)
(187)
(4,299)
393
13,205
11,164
112,363
102,178
10,721
77,962
327,593
–
–
273
–
–
27
300
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
NOTES TO THE
FINANCIAL STATEMENTS con’t
Statement of comprehensive income
Total loss for reportable segments
Other non-reportable segments
Depreciation
Finance income
Consolidated loss before taxation
2013
US$’000
Total reportable segment
Other non-reportable segments
Consolidated total
2012
US$’000
Total reportable segment
Other non-reportable segments
Consolidated total
US$’000
(15,305)
(1,337)
(3)
14
(16,631)
Revenue Depreciation
Finance
costs
Finance
income
Addition to
Segment non-current
assets
assets
29,269
–
(111)
(3)
(9,766)
–
411
13
405,449
*
89,333
29,269
(114)
(9,766)
424
494,782
194
–
194
Revenue Depreciation
Finance
costs
Finance
income
Addition to
Segment non-current
assets
assets
23,363
369
23,732
(187)
(3)
(4,299)
–
(190)
(4,299)
393
14
407
327,593
*
82,081
409,674
300
12
312
* Included in segment asset for other non-reportable segments is US$49,696,000 (2012: US$39,348,000) in relation to assets of Urban DNA Sdn. Bhd..
46 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
5 REVENUE AND SEGMENTAL INFORMATION cont’d
5.3 Analysis of the group’s reportable operating segments is as follows: cont’d
Geographical Information – ended 31 December 2013
Revenue
Non-current assets
In 2013, no single customer exceeded 10% of the Group’s total revenue.
Geographical Information – ended 31 December 2012
Revenue
Non-current assets
In 2012, no single customer exceeded 10% of the Group’s total revenue.
6 COST OF SALES
Malaysia
US$’000
Vietnam Consolidated
US$’000
US$’000
29,269
5,741
–
24,474
29,269
30,215
Malaysia
US$’000
Vietnam Consolidated
US$’000
US$’000
23,732
3,188
–
24,341
23,732
27,529
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
Direct costs attributable to property development
22,768
21,459
–
–
7 OTHER INCOME
Group
Dividend income
Investment income
Late payment interest income
Novation fee (a)
Rental income
Revenue from hotel operations (b)
Revenue from mall operations (c)
Revenue from hospital operations (d)
Reversal of impairment of trade receivables
Sale of land (e)
Sundry income
2013
US$’000
2012
US$’000
15
92
9
641
209
13,498
954
179
–
–
525
16,122
314
234
66
–
554
1,919
638
–
357
2,533
436
7,051
(a) Novation fee
The amount relates to income receivable from a third party for assigning the rights, title, interests, benefits and obligation and/or liabilities under a Sales and Purchase
Agreement for acquisition of car park bays in Nu Towers by a subsidiary of the Group.
(b) Revenue from hotel operations
The revenue relates to the operations of two hotels - Four Points by Sheraton Sandakan Hotel and Aloft Kuala Lumpur Sentral Hotel. The latter is owned by a
subsidiary of the Company, Iringan Flora Sdn. Bhd. and commenced operation in March 2013. The revenue earned from hotel operations is included in other
income in line with management’s intention to dispose of the hotels.
(c) Revenue from mall operations
The revenue relates to operation of Harbour Mall Sandakan which is owned by a subsidiary of the Company, ICSD Ventures Sdn. Bhd.. The revenue earned from mall
operations is included in other income in line with management’s intention to dispose of the mall.
(d) Revenue from hospital operations
A subsidiary of the Company, City International Hospital Company Limited (formerly known as Hoa Lam–Shangri-la 1 Liability Ltd Co) has commenced operation of its
hospital – City International Hospital in September 2013. The revenue earned from hospital operations is included in other income in line with management’s intention
to dispose of the hospital.
(e) Sale of land
In 2012, 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$2,533,440 (RM 7,800,000). The
cost of the land had been charged to the development of Tiffani by i-ZEN in August 2009.
8 FOREIGN EXCHANGE (LOSS)/ GAIN
Foreign exchange (loss)/ gain comprises:
Realised foreign exchange (loss)/ gain
Unrealised foreign exchange (loss)/ gain
9 MANAGEMENT FEES
ANNUAL
REPORT
2013 47
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
(40)
(1,065)
(118)
642
(1,105)
524
47
151
198
(22)
(256)
(278)
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
Management fees
3,762
3,799
1,238
1,644
The management fees payable to the Development Manager are based on 2% of the Group’s net asset value calculated on the last business day of March, June, September and
December of each calendar year and payable quarterly in advance. The management fees were allocated to the subsidiaries and Company based on where the service was provided.
In addition to the annual management fee, the Development Manager is entitled to a performance fee calculated at 20% of the out performance of net asset value over a total
return hurdle rate of 10%. No performance fee has been paid or accrued during the year (2012: US$ Nil).
10 STAFF COSTS
Group
Wages, salaries and others
Employees’ provident fund, social security and other pension costs
2013
US$’000
2012
US$’000
2,584
490
3,074
1,705
113
1,818
The Company has no executive directors or employees under its employment. Certain subsidiaries of the Group have a total of 790 (2012: 253) employees.
11 FINANCE (COSTS)/ INCOME
Interest income from banks
Agency fees
Annual trustees monitoring fee
Bank guarantee commission
Interest on bank loans
Interest on financial liabilities at amortised cost
Interest on medium term notes
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
424
(25)
(7)
(4)
(1,460)
(1)
(8,269)
407
(27)
(7)
(4)
(1,189)
(1)
(3,071)
(9,342)
(3,892)
5
–
–
–
–
–
–
5
59
–
–
–
–
–
–
59
48 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
12 NET LOSS BEFORE TAXATION
Net loss 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 operations
• Expenses of mall operations
• Expenses of hospital operations
• Fair value loss on held-for-trading financial instrument
• Impairment of amounts due from subsidiaries
• Impairment of investment in subsidiaries
• Impairment of goodwill
• Reversal of impairment of trade receivables
• Loss on disposal of property, plant and equipment
• Property, plant and equipment written off
• Tax services
13 TAXATION
Group
Current tax expense
Deferred tax (credit)/ expense
Total tax expense for the year
Group
Company
2013
US$’000
2012
US$’000
2013
US$’000
2012
US$’000
238
2
317
–
114
13,945
1,659
4,538
5
–
–
320
–
–
7
11
229
10
317
4,653
190
3,290
2,192
–
81
–
–
1,158
(357)
1
31
15
120
–
317
–
–
–
–
–
–
12,950
6,305
–
–
–
–
–
121
–
317
–
–
–
–
–
–
1,885
–
–
–
–
–
–
2013
US$’000
2012
US$’000
3,470
(616)
2,854
1,087
711
1,798
The numerical reconciliation between the income tax expense and the product of the accounting results multiplied by the applicable tax rate is computed as follows:
Group
Net loss before taxation
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
Under/ (Over) provision
Total tax expense for the year
* The applicable corporate tax rate in Malaysia and Vietnam is 25%.
2013
US$’000
2012
US$’000
(18,796)
(16,631)
(4,699)
(4,158)
4,989
1,833
960
(377)
148
4,329
1,663
362
(244)
(154)
2,854
1,798
**
The applicable corporate tax rate in Singapore is 17%. A subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd Liability Co is granted a preferential corporate tax
rate of 10% for its profit/ (loss) arising from hospital income. The preferential income tax rate 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 Jersey 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.
ANNUAL
REPORT
2013 49
2013
US$’000
2012
US$’000
(6,220)
126
3,407
(4,828)
(6,094)
(1,421)
14 OTHER COMPREHENSIVE EXPENSE
Group
Items that are or may be reclassified subsequently to profit or loss, net of tax
Foreign currency translation differences for foreign operations
Fair value of available-for-sale investments
15 LOSS PER SHARE
Basic and diluted loss per ordinary share
The calculation of basic and diluted loss per ordinary share for the year ended 31 December 2013 was based on the loss attributable to equity holders of the parent and a
weighted average number of ordinary shares outstanding, calculated as below:
Group
Loss attributable to equity holders of the parent
Weighted average number of shares
Loss per share
Basic and diluted (US cents)
16 PROPERTY, PLANT AND EQUIPMENT
Group
Cost
At 1 January 2013
Exchange adjustments
Additions
Transfer to inventories
Written off
At 31 December 2013
Accumulated Depreciation
At 1 January 2013
Exchange adjustments
Charge for the year
Transfer to inventories
Written off
At 31 December 2013
Net carrying amount at 31 December 2013
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
2013
US$’000
2012
US$’000
(19,006)
212,025
(16,839)
212,047
(8.96)
(7.94)
Furniture,
Fittings &
Equipment
US$’000
Motor
Vehicles
US$’000
Leasehold
Building
US$’000
Work In
Progress
US$’000
Total
US$’000
450
(8)
31
(28)
(53)
392
171
(3)
49
(5)
(46)
166
226
595
12
279
–
(363)
(73)
450
160
4
121
–
(72)
(42)
171
279
169
(6)
163
–
–
326
69
(3)
28
–
–
94
232
137
2
33
(3)
–
–
169
38
1
31
(1)
–
–
69
100
854
(11)
–
–
–
843
120
(2)
37
–
–
155
688
847
7
–
–
–
–
854
81
1
38
–
–
–
120
734
–
–
–
–
–
–
–
–
–
–
–
–
–
3,329
120
–
–
(3,449)
–
–
–
–
–
–
–
–
–
–
1,473
(25)
194
(28)
(53)
1,561
360
(8)
114
(5)
(46)
415
1,146
4,908
141
312
(3)
(3,812)
(73)
1,473
279
6
190
(1)
(72)
(42)
360
1,113
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of US$194,000 (2012: US$312,000) of which US$40,000 (2012:
US$33,000) was acquired by means of finance lease. Motor vehicles of the Group with a net carrying amount of US$59,000 (2012: US$25,000) are held under hire purchase
arrangement at year end.
50 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
17 INVESTMENT IN AN ASSOCIATE
The Company, via a wholly-owned subsidiary ASPL M3A Limited, has a 40% equity interest in a company known as Excellent Bonanza Sdn. Bhd., a company incorporated in
Malaysia, which is a vehicle set up to undertake a commercial development in Kuala Lumpur, Malaysia.
Group
At cost - unquoated shares
Share of post-acquisition reserves
A summary of the current assets, non-current assets, current liabilities, non-current liabilities, income and expenses of the associate is as follows:
Group
Statement of Financial Position
Non-current assets
Current assets
Total Assets
Non-current liabilities
Current liabilities
Total Liabilities
Equity
Total Equity and Liabilities
Statement of Comprehensive Income
Revenue
Finance income
Cost of sales, expenses including finance costs and taxation
Profit
2013
US$’000
2012
US$’000
611
1,641
2,252
611
(611)
–
2013
US$’000
2012
US$’000
148,041
5,281
11,345
378,270
153,322
389,615
3,239
144,452
147,691
5,631
–
390,224
390,224
(609)
153,322
389,615
218,452
1,627
(213,880)
6,199
–
–
899
899
During the financial year, the Group’s share of results from its associate was reduced by the share of unrealised profit arising from sale of Aloft Kuala Lumpur Sentral Hotel
by the associate to a subsidiary of the Group.
In 2012, the amount of unrecognised share of profit for the year and share of loss cumulatively is US$ 339,000 and US$ 228,000 respectively.
18 INVESTMENT IN SUBSIDIARIES
Company
Unquoted shares, at cost
Discount on loans to subsidiaries
Less: Impairment loss
A list of the main operating subsidiaries is provided in Note 41.
Non-controlling interests in subsidiaries
The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows:
2013
ASPL PLB-
Shangri-La Nam Long
Ltd
Liability
Co
US$’000
Hoa Lam Healthcare
Services Investment
Pte Ltd
US$’000
Co Ltd
US$’000
2013
US$’000
2012
US$’000
66,428
14,518
(6,305)
74,641
66,428
14,518
–
80,946
Other
Urban individually
immaterial
Sdn. Bhd. subsidiaries
US$’000
US$’000
DNA
Total
US$’000
NCI percentage of ownership interest and voting interest
Carrying amount of NCI
Comprehensive loss allocated to NCI
49%
2,648
(812)
26%
3,787
(1,226)
45%
6,352
(102)
30%
(592)
(619)
(766)
(14)
11,429
(2,773)
Summarised financial information before intra-group elimination
As at 31 December
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets/ (liabilities)
22,568
33,939
(11,788)
(26,246)
50,653
79,190
(27,506)
(58,090)
4
15,292
–
(1,181)
–
49,694
(41,692)
(9,974)
18,473
44,247
14,115
(1,972)
ANNUAL
REPORT
2013 51
Other
Urban individually
immaterial
Sdn. Bhd. subsidiaries
US$’000
US$’000
DNA
Total
US$’000
ASPL PLB-
Shangri-La Nam Long
Ltd
Liability
Co
US$’000
Hoa Lam Healthcare
Services Investment
Pte Ltd
US$’000
Co Ltd
US$’000
–
(1,618)
(1,659)
–
(4,543)
(4,734)
35
(15,284)
15,715
(4,451)
(31,826)
37,362
–
(70)
(226)
(333)
(13)
229
–
(2,126)
(2,063)
(77)
–
1,284
18 INVESTMENT IN SUBSIDIARIES cont’d
Non-controlling interests in subsidiaries cont’d
2013
Year ended 31 December
Revenue
Loss for the year
Total comprehensive loss
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/ (decrease) in cash and cash equivalents
466
1,085
(117)
1,207
2012
ASPL PLB-
Shangri-La Nam Long
Ltd
Liability
Co
US$’000
Hoa Lam Healthcare
Services Investment
Pte Ltd
US$’000
Co Ltd
US$’000
Other
Urban individually
immaterial
Sdn. Bhd. subsidiaries
US$’000
US$’000
DNA
Total
US$’000
NCI percentage of ownership interest and voting interest
Carrying amount of NCI
Comprehensive loss allocated to NCI
49%
3,467
(278)
26%
3,958
(571)
45%
6,454
(21)
30%
27
(65)
(843)
(496)
13,063
(1,431)
Summarised financial information before intra-group elimination
As at 31 December
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Year ended 31 December
Revenue
Loss for the year
Total comprehensive loss
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
17,051
21,694
(6,533)
(17,481)
37,815
50,440
(15,245)
(41,104)
8
15,438
–
(1,104)
–
39,346
(18,695)
(20,560)
14,731
31,906
14,342
91
–
(639)
(567)
–
(2,233)
(2,155)
(4,549)
(39,430)
39,337
(6,925)
(41,708)
44,307
–
(106)
(47)
(1,107)
(26)
690
–
(226)
(217)
(4,108)
–
4,170
Net (decrease)/ increase in cash and cash equivalents
(4,642)
(4,326)
(443)
62
19 AVAILABLE-FOR-SALE INVESTMENTS
The available-for-sale investments represents the investment in shares of Nam Long Investment Corporation (“Nam Long”) which the Group acquired over four tranches in
2008 and 2009.
Group
2013
1 January – fair value
Recognised in other comprehensive income
At 31 December – fair value
Quoted
shares
US$’000
12,571
126
12,697
52 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
19 AVAILABLE-FOR-SALE INVESTMENTS cont’d
Group
2012
1 January – fair value
Recognised in other comprehensive income
Recognised in profit or loss
At 31 December – fair value
Unquoted
shares
US$’000
22,052
(4,828)
(4,653)
12,571
At 31 December 2013, an increase in fair value of US$0.126 million (2012: decrease in fair value of US$4.8 million) has been recognised in other comprehensive income. In 2012,
impairment loss of US$4.7 million was recognised in the profit or loss of the Group. The Directors have considered various prevailing factors at year end, including the
economic conditions and market conditions of the Ho Chi Minh Stock Exchange (“the Exchange”) (Nam Long was listed in the Exchange on 8 April 2013) in assessing the fair
value of the investment.
20 INTANGIBLE ASSETS
Group
Cost
At 1 January 2012 / 31 December 2012 / 31 December 2013
Accumulated impairment losses
At 1 January 2012
Impairment loss
At 31 December 2012 / 1 January 2013
Impairment loss
At 31 December 2013
Carrying amounts
At 31 December 2012
At 31 December 2013
Licence
Contracts and
Related
Relationships
US$’000
Goodwill
US$’000
Total
US$’000
10,695
6,479
17,174
–
–
–
–
–
2,171
1,158
3,329
320
2,171
1,158
3,329
320
3,649
3,649
10,695
3,150
13,845
10,695
2,830
13,525
The licence contracts and related relationships represents the rights to develop the International Hi-Tech Healthcare Park. In 2013, other than Phase 1 of City International
Hospital, the rest of the projects have not commenced development.
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.
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
2013
US$’000
2012
US$’000
10,695
10,695
883
1,947
2,830
1,203
1,947
3,150
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. 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$320,000 (2012: US$212,000) and US$Nil (2012: US$946,000) in relation to the SENI Mont’ Kiara and Sandakan Harbour Square projects have been
recognised as the recoverable amount of the cash generating units, estimated based on fair value less costs to sell is below their carrying amount.
The recoverable amount of goodwill has been tested by reference to underlying profitability of the developments using discounted cash flow projections.
21 DEFERRED TAX ASSETS
Group
At 1 January
Exchange adjustments
Deferred tax credit/ (charge) relating to origination and reversal of
temporary differences during the year
At 31 December
The deferred tax assets comprise:
Group
Taxable temporary differences between accounting profit and taxable profit of property development units sold
At 31 December
ANNUAL
REPORT
2013 53
2013
US$’000
2012
US$’000
–
(21)
616
595
691
20
(711)
–
2013
US$’000
2012
US$’000
595
595
–
–
Deferred tax assets have not been recognised in respect of unused tax losses of US$22,983,000 (2012: US$15,500,000) 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$29,000 (2012: US$180,000) 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.
22 INVENTORIES
Group
Land held for property development
Work-in-progress
Stock of completed units, at cost
Consumables
At 31 December
(a) Land held for property development
Group
At 1 January
Exchange adjustments
Additions
Transfer to stock of completed units
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 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 costs capitalised during the year of US$2,446,000 (2012: US$1,278,000).
Notes
2013
US$’000
2012
US$’000
(a)
(b)
24,403
73,134
330,475
597
24,912
116,876
209,034
–
428,609
350,822
2013
US$’000
2012
US$’000
24,912
(1,036)
1,344
(817)
23,525
564
823
–
24,403
24,912
2013
US$’000
2012
US$’000
116,876
148,024
112,390
–
–
(151,889)
(4,243)
64,272
6,480
3,740
(108,342)
4,121
73,134
118,295
–
(1,419)
73,134
116,876
54 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
23 HELD-FOR-TRADING FINANCIAL INSTRUMENT
The financial asset represents a placement in a 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 2013 were US$375,000 (2012: US$1,370,000) and US$0.31 (2012:US$0.33) respectively. During the year, the Group recognised a fair value loss of
US$5,000(2012: US$81,000) in relation to the investment.
The Fund is permitted under the Deed to invest in the following:
(i) Bank deposits;
(ii)
Money market instruments such as treasury bills, bankers acceptance, negotiable certificates of deposits, Bank Negara Malaysia bills, Bank Negara Malaysia negotiable
notes, Negotiable Instruments of Deposit and Negotiable Islamic Debt Certificate with maturities not exceeding one (1) year; and
(iii) Malaysian Government Securities and/or securities guaranteed by the Government of Malaysia and/or notes/securities issued by Bank Negara Malaysia with maturity
not exceeding two (2) years.
24 TRADE AND OTHER RECEIVABLES
Group
Trade receivables
Other receivables
Sundry deposits
Prepayments
Company
Other receivables
2013
US$’000
2012
US$’000
1,482
7,772
400
258
9,912
4,100
7,623
219
783
12,725
2013
US$’000
2012
US$’000
–
3
Trade receivables represents progress billings receivable from the sale of development properties, which are generally due for settlement within 21 days from the date of
invoice and are recognised and carried at the original invoice amount less allowance for any uncollectible amounts. They are recognised at their original invoice amounts which
represent their fair values on initial recognition less provision for impairment where it is required.
The ageing analysis of trade receivables past due is set out below. These relate to a number of independent customers for whom there is no recent history of default.
Group
2013
US$’000
Within credit terms
Stakeholder sums
Past due
0 – 60 days
61 –120 days
More than 120 days
Group
2012
US$’000
Within credit terms
Stakeholder sums
Past due
0 – 60 days
61 –120 days
More than 120 days
Individual
Gross Impairment
376
938
–
–
168
1,482
–
–
–
–
–
–
Individual
Gross Impairment
–
3,966
–
–
134
4,100
–
–
–
–
–
–
Net
376
938
–
–
168
1,482
Net
–
3,966
–
–
134
4,100
Included in the stakeholder sums is approximately US$0.17 million (2012: US$3.0 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$0.76 million (2012: US$1.0 million) receivable from 1MK Retail Sdn. Bhd.
and 1MK Office Sdn. Bhd., receivable upon the issuance of strata titles from land office.
There is no concentration of credit risk with respect to trade receivables as the Group has a large number of customers whose property purchases are mainly secured by
personal bank financing. No allowance for impairment loss of trade receivables has been made for the remaining past due receivables as the Group monitors the repayment of
the customers regularly and are confident of the ability of the customers to repay the balances outstanding.
ANNUAL
REPORT
2013 55
2013
US$’000
2012
US$’000
192,211
(30,426)
172,756
(17,476)
161,785
155,280
(48,732)
(25,531)
25 AMOUNT DUE FROM AN ASSOCIATE
The amount due from an associate is unsecured, interest free and repayable on demand.
26 AMOUNTS DUE FROM / (TO) SUBSIDIARIES
Company
Due from subsidiaries (Current portion)
Less : Impairment loss
Due to subsidiaries (Current portion)
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$12,950,000 (2012: US$1,885,000).
27 CASH AND CASH EQUIVALENTS
Group
Cash and bank balances
Short term bank deposits
Company
Cash and bank balances
Short term bank deposits
2013
US$’000
2012
US$’000
11,498
13,087
5,152
11,600
24,585
16,752
2013
US$’000
2012
US$’000
726
977
1,703
354
–
354
Included in short term bank deposits is US$10,419,000 (2012: US$11,170,000) pledged for banking facilities granted to subsidiaries.
The interest rate on cash and cash equivalents, excluding deposits placed with licensed bank of US$10,419,000 (2012: US$11,170,000) pledged for banking facilities granted to
subsidiaries, ranges from 2.55% to 3.15% per annum (2012: 2.55% to 3.00% per annum) and the maturity period ranges from 1 day to 1 month (2012: 1 day to 1 month).
The interest rate on short term bank deposits pledged for banking facilities granted to subsidiaries ranges from 0.5% to 7% per annum (2012: 0.5% to 3.15% per annum) and
the maturity period range from 1 month to 1 year (2012: 1 month to 1 year).
56 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
28 SHARE CAPITAL
Group & Company
Authorised Share Capital
Issued Share Capital
At 1 January
Cancellation of shares (Note 38)
At 31 December
Group & Company
Authorised Share Capital of US$0.05 each
Issued Share Capital of US$0.05 each
At 1 January
Cancellation of shares (Note 38)
At 31 December
29 SHARE PREMIUM
2013
2012
Number of Number of
Shares’000 Shares’000
2,000,000
2,000,000
212,525
(500)
212,525
–
212,025
212,525
2013
US$’000
2012
US$’000
100,000
100,000
10,626
(25)
10,626
–
10,601
10,626
Share premium represents the excess of proceeds raised on the issuance of shares over the nominal value of those shares. The costs incurred in issuing shares were deducted
from the share premium.
Group & Company
At 1 January
Own shares acquired
At 31 December
2013
US$’000
2012
US$’000
218,926
–
219,101
(175)
218,926
218,926
In January 2012, the Company purchased 500,000 of its ordinary shares of US$0.05 each at prices between US$0.3375 and US$0.35. The shares repurchased were
subsequently cancelled in 2013.
30 CAPITAL REDEMPTION RESERVE
The capital redemption reserve was incurred after the Company cancelled its 37,475,000 and 500,000 ordinary shares of US$0.05 per share in 2009 and 2013 respectively.
31 TRANSLATION RESERVE
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
32 FAIR VALUE RESERVE
The fair value reserve comprises the cumulative change in the fair value of available-for-sale investments until the investments are derecognised or impaired.
33 ACCUMULATED LOSSES
Group
At 1 January
Loss attributable to equity holders of the parent
Changes in ownership interests in subsidiaries
At 31 December
Company
At 1 January
Loss attributable to equity holders of the parent
At 31 December
2013
US$’000
2012
US$’000
(50,828)
(19,006)
(42)
(32,797)
(16,839)
(1,192)
(69,876)
(50,828)
2013
US$’000
2012
US$’000
(22,051)
(21,231)
(17,044)
(5,007)
(43,282)
(22,051)
34 TRADE AND OTHER PAYABLES
Group
Trade payables
Other payables
Progress billings
Deposits refundable
Accruals
Company
Other payables
Accruals
ANNUAL
REPORT
2013 57
2013
US$’000
2012
US$’000
10,389
17,950
27,775
8,278
19,248
22,761
7,588
2,837
1,713
21,865
83,640
56,764
2013
US$’000
2012
US$’000
1,135
118
1,253
1,425
252
1,677
Trade payables represent trade purchases and services rendered by suppliers as part of the normal business transactions of the Group. The credit terms granted by trade
suppliers range from 30 to 90 days.
Progress billings represent the proceeds received from purchasers for disposal of two plots of undeveloped land in Vietnam and development properties i.e. SENI Mont’ Kiara,
Tiffani by i-ZEN and The RuMa Hotel and Residences which are pending for transfer of vacant possession.
Deposits and accruals are from normal business transactions of the Group.
35 AMOUNT DUE TO NON-CONTROLLING INTERESTS
Group
Non-current
Minority Shareholders of Shangri-La Healthcare Investment Pte Ltd:
- Tran Thi Lam
- Econ Medicare Centre Holdings Pte Ltd
- Value Energy Sdn. Bhd.
- Thang Shieu Han
- Nguyen Quang Duc
Current
Minority Shareholder of Bumiraya Impian Sdn. Bhd.:
- Global Evergroup Sdn. Bhd.
Minority Shareholders of Hoa Lam Services Co Ltd:
- Tran Thi Lam
- Tri Hanh Consultancy Co Ltd
- Hoa Lam Development Investment Joint Stock Company
- Duong Ngoc Hoa
Minority Shareholders of Urban DNA Sdn. Bhd.:
- Ireka Corporation Berhad
2013
US$’000
2012
US$’000
533
632
189
72
14
533
632
189
72
14
1,440
1,440
1,514
1,621
1,613
1,191
89
60
4,541
9,008
10,448
1,567
541
41
27
4,570
8,367
9,807
The current amount due to non-controlling interests amounting to US$9,008,000 (2012: US$8,367,000) is unsecured, interest free and repayable on demand.
The non-current amount due to non-controlling interests amounting to US$1,440,000 (2012: US$1,440,000) is unsecured, interest free and shall only be repayable to the
respective minority shareholders if the minority shareholders cease to be a shareholder in Shangri-La Healthcare Investment Pte Ltd.
58 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
36 LOANS AND BORROWINGS
Group
Non-current
Bank loans
Finance lease liabilities
Current
Bank loans
Finance lease liabilities
2013
US$’000
2012
US$’000
49,267
42
40,473
24
49,309
40,497
25,452
14
20,681
6
25,466
20,687
74,775
61,184
The effective interest rates on the bank loans and hire purchase arrangement for the year ranged from 5.25% to 17.7% (2012: 5.20% to 23%) per annum and 2.5% to 3.5%
(2012: 2.5%) per annum respectively.
Borrowings are denominated in Ringgit Malaysia, United States Dollars and Vietnam Dong.
Bank loans are repayable by monthly, quarterly or semi-annually instalments.
Bank loans are secured by land held for property development, work-in-progress, operating assets of the Group, pledged deposits and some by the corporate guarantee of
the Company.
Included in the current bank loans is a loan of US$9,974,000 which is due in April 2014. Subsequent to year end, the bank has approved the deferment of repayment of the
amount from April 2014 to April 2015.
Finance lease liabilities are payable as follows:
Group
Within one year
Between one and five years
37 MEDIUM TERM NOTES
Group
Outstanding medium term notes
Net transaction costs
Less:
Repayment due within twelve months
Repayment due after twelve months
Future
minimum
lease
payment
2013
US$’000
Present
value of
Future
minimum minimum
lease
payment
2012
US$’000
lease
payment
2013
US$’000
Interest
2013
US$’000
Present
value of
minimum
lease
payment
2012
US$’000
Interest
2012
US$’000
16
49
65
2
7
9
14
42
56
7
27
34
1
3
4
6
24
30
2013
US$’000
2012
US$’000
156,924
(2,308)
85,020
(1,845)
(13,739)
–
140,877
83,175
ANNUAL
REPORT
2013 59
37 MEDIUM TERM NOTES cont’d
2013
The medium term notes were issued by a subsidiary to fund two development projects known as Sandakan Harbour Square and Aloft Kuala Lumpur Sentral Hotel in
Malaysia. US$74.8 million had been drawn down in 2011 for Sandakan Harbour Square. US$4.6 million had been drawn down in 2012 for Aloft Kuala Lumpur Sentral Hotel
and the remaining US$77.5 million has been drawn down in 2013. The weighted average interest rate of the loan was 5.51% per annum at the statement of financial position
date. The effective interest rates of the medium term notes and their outstanding amounts are as follows:
Series 1 Tranche FG 001
Series 1 Tranche BG 001
Series 1 Tranche FG 002
Series 1 Tranche BG 002
Series 2 Tranche FG 001
Series 2 Tranche BG 001
Series 3 Tranche FG 001
Series 3 Tranche BG 001
Series 3 Tranche FG 002
Series 3 Tranche BG 002
Series 3 Tranche FG 003
Series 3 Tranche BG 003
Maturity
Dates
Interest rate %
per annum
US$’000
8 December 2014
8 December 2014
8 December 2015
8 December 2015
8 December 2015
8 December 2015
1 October 2015
1 October 2015
29 January 2016
29 January 2016
8 April 2016
8 April 2016
5.38
5.33
5.46
5.41
5.46
5.41
5.40
5.35
5.50
5.45
5.65
5.58
7,633
6,106
13,738
9,159
21,371
16,791
3,053
1,527
4,579
3,053
39,384
30,530
156,924
The medium term notes are secured by way of:
(i)
bank guarantee from two financial institutions in respect of the BG Tranches;
(ii)
financial guarantee insurance policy from Danajamin Nasional Berhad in respect to the FG Tranches;
(iii)
a first fixed and floating charge over the present and future assets and properties of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. by way
of a debenture;
(iv)
a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.’s assets and land;
(v)
assignment of all Iringan Flora Sdn. Bhd.’s present and future rights, title, interest and benefits in and under the Sales and Purchase Agreement to purchase the Aloft
Kuala Lumpur Sentral Hotel from Excellent Bonanza Sdn. Bhd.;
(vi)
first fixed land charge over the Aloft Kuala Lumpur Sentral Hotel and the Aloft Kuala Lumpur Sentral Hotel’s land (to be executed upon construction completion);
(vii)
a corporate guarantee by Aseana Properties Limited;
(viii)
letter of undertaking from Aseana Properties Limited to provide financial and other forms of support to ICSD Ventures Sdn. Bhd. to finance any cost overruns
associated with the development of the Sandakan Harbour Square;
(ix)
assignment of all its present and future rights, interest and benefits under the ICSD Ventures Sdn. Bhd.’s and Iringan Flora Sdn. Bhd.’s Put Option Agreements and the
proceeds from the Harbour Mall Sandakan, Four Points by Sheraton Sandakan Hotel and Aloft Kuala Lumpur Sentral Hotel;
(x)
assignment over the disbursement account, revenue account, operating account, sales proceed account, debt service reserve account and sinking fund account of Silver
Sparrow Berhad; revenue account of ICSD Ventures Sdn. Bhd. and escrow account of Ireka Land Sdn. Bhd.;
(xi)
assignment of all ICSD Ventures Sdn. Bhd.’s and Iringan Flora Sdn. Bhd.’s present and future rights, title, interest and benefits in and under the insurance policies; and
(xii)
a first legal charge over all the shares of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. and any dividends, distributions and entitlements.
38 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 2013. The authority shall expire 12 months from the date of passing of the resolution unless otherwise renewed, varied or revoked. The
Company did not purchase its own shares during the year ended 31 December 2013.
For the financial year ended 31 December 2012, the Company repurchased 500,000 of its issued share capital of US$0.05 at prices between US$0.3375 and US$0.35.
Subsequent cancellation of treasury shares
The shares repurchased were cancelled in 2013 and an amount equivalent to their nominal value was transferred to the capital redemption reserve in accordance with the
requirement of Section 61 of the Companies (Jersey) Law 1991. The transfer to capital redemption reserve on the shares repurchased were made as a reduction of share capital.
60 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
39 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 heading ‘Management’.
Group
Accounting and financial reporting services fee charged by an ICB subsidiary
Construction progress claims charged by an ICB subsidiary
Management fees charged by an ICB subsidiary
Marketing commission 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
Project staff costs reimbursed to an ICB subsidiary
Remuneration of key management personnel - Salaries
Sales and administrative fee charged by an ICB subsidiary
Secretarial and administrative services fee charged by an ICB subsidiary
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
Transactions between the Group with other significant related parties are as follows:
Group
Non-controlling interests
Advances – non-interest bearing (Note 35)
Associate – Excellent Bonanza Sdn. Bhd.
Advances – non-interest bearing
Settlement of purchase consideration of Aloft Kuala Lumpur Sentral Hotel
The above transactions have been entered into in the normal course of business and have been established under negotiated terms.
The outstanding amounts due from/ (to) ICB and its group of companies as at 31 December 2013 and 31 December 2012 are as follows:
Group
2013
US$’000
2012
US$’000
53
11,035
3,762
330
–
90
682
40
50
53
53
31,048
4,231
350
11
124
776
39
207
53
2013
US$’000
2012
US$’000
53
1,238
53
53
1,644
53
2013
US$’000
2012
US$’000
1,081
6,801
630
63,867
117
–
2013
US$’000
2012
US$’000
Amount due to an ICB subsidiary for accounting and financial reporting services fee
Amount due to an ICB subsidiary for construction progress claims charged net of LAD’s recoverable of US$6,046,000 (2012: US$6,046,000)
Amount due to an ICB subsidiary for management fees
Amount due to an ICB subsidiary for reimbursement of project staff costs
Amount due to an ICB subsidiary for marketing commissions
Amount due to an ICB subsidiary for secretarial and administrative services fee
53
965
2,343
488
151
80
26
6,043
3,345
420
153
26
Company
Amount due to an ICB subsidiary for accounting and financial reporting services fee
Amount due to an ICB subsidiary for management fees
Amount due to an ICB subsidiary for secretarial and administrative services fee
The outstanding amounts due from/(to) the other significant related parties as at 31 December 2013 and as at 31 December 2012 are as follows:
Group
Non-controlling interests
Advances – non-interest bearing (Note 35)
Associate – Excellent Bonanza Sdn. Bhd.
Advances – non-interest bearing
2013
US$’000
2012
US$’000
53
948
80
26
1,212
26
2013
US$’000
2012
US$’000
(10,448)
(9,807)
853
239
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 41.
ANNUAL
REPORT
2013 61
40 ACQUISITION OF BUSINESS
During the financial year, the Group increased its equity interest in Shangri-La Healthcare Investment Pte Ltd (“SHIPL”) from 73.5% to 74.1% (2012: 51.0% to 73.5%) resulting
from an issue of new shares in the subsidiary. Consequently, the effective equity interest in Hoa Lam – Shangri-La Healthcare Ltd Liability Co, City International Hospital
Company Limited (formerly known as 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 67.2% (2012: 66.8%).
The Group recognised an increase in non-controlling interests of US$42,000 (2012: US$1,192,000) and an increase in accumulated losses of US$42,000 (2012: 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.
41 INVESTMENT IN PRINCIPAL SUBSIDIARIES AND ASSOCIATE
Name
Country of
incorporation
Principal activities
Effective ownership interest
2012
2013
Principal subsidiaries
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.
Urban DNA Sdn. Bhd.
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
City International Hospital Co Ltd
(Formerly known as Hoa Lam-Shangri-la 1 Liability Ltd Co)
Hoa Lam-Shangri-la 2 Ltd Liability Co
Hoa Lam-Shangri-la 3 Liability Ltd Co
Associate
Excellent Bonanza Sdn. Bhd.**
* The subsidiary was dissolved in 2014
** Not audited by KPMG
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Vietnam
Vietnam
Vietnam
Singapore
Vietnam
Vietnam
Vietnam
Vietnam
Property development
Property development
Property development
Property development
Hotel and mall ownership and operation
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
Property development
Investment holding
Property development
Investment holding
Investment holding
Property development
Hospital ownership and operation
Property development
Property development
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
70%
70%
65%
55%
51%
74%
67%
67%
67%
67%
80%
70%
70%
65%
55%
51%
74%
67%
67%
67%
67%
Malaysia
Property development
40%
40%
Principal subsidiaries and associate are those which materially affect the results or assets of the Group.
The shareholdings in the principal subsidiaries and associate are held through subsidiaries.
62 ASEANA
PROPERTIES
LIMITED
NOTES TO THE
FINANCIAL STATEMENTS cont’d
42 COMMITMENTS AND CONTINGENCIES
The Group and Company do not have any contingencies at the statement of financial position date except as follows:
Debt service reserve account
Under the medium term notes programme of up to US$157 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$9.20 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.
43 EVENT AFTER STATEMENT OF FINANCIAL POSITION DATE
In February 2014, Nam Long Investment Corporation (“Nam Long”) completed a placement of 25,500,000 new ordinary shares at VND18,000 (approximately US$0.855) per
share. Subsequent to the placement, the Group’s effective stake in Nam Long has reduced to 12.88% from 16.32%.
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.
CORPORATE INFORMATION
ANNUAL
REPORT
2013 63
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
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
REGISTRAR
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
Aloft Kuala Lumpur Sentral Hotel
Kuala Lumpur
64 ASEANA
PROPERTIES
LIMITED
ASEANA PROPERTIES LIMITED
REGISTERED OFFICE
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