Interim results for six months ended 31 Dec 2014
30 March 2015
VinaCapital Vietnam Opportunity Fund Limited
Interim results for the six months ended 31 December 2014
VinaCapital Vietnam Opportunity Fund Limited (the "Company" or "VOF"), an investment company focused on Vietnam, today announces its interim results for the six months ended 31 December 2014 ("the Period").
Financial highlights:
· Net Asset Value ("NAV") of USD742.3 million (30 June 2014, restated: USD771.4 million)
· NAV per share of USD3.27 (30 June 2014, restated: USD3.24).
Operational highlights:
· As at 31 December 2014, the Company has spent a total of USD197.1 million overall repurchasing 97.9 million shares, representing 30.2% of total shares in issue.
· Shareholders supported the recommendations by members of the Board regarding all six resolutions which were put to a vote at the Company's Annual General Meeting (AGM) held on 26 November 2014 in Singapore.
Notes to Editors:
VinaCapital is the leading investment management and real estate development firm in Vietnam, with a diversified portfolio of USD1.5 billion in assets under management. VinaCapital was founded in 2003 and boasts a team of managing directors who bring extensive international finance and investment experience to the firm. Our mission is to produce superior returns for investors by using our experience and knowledge to identify the key trends and opportunities that emerge as Vietnam continues to develop its economy. To achieve this, VinaCapital has industry-leading asset class teams covering capital markets, private equity, fixed income, venture capital, real estate and infrastructure.
VinaCapital manages three closed-end funds trading on the AIM Market of the London Stock Exchange. These funds are: VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL), and Vietnam Infrastructure Limited (VNI). VinaCapital also co-manages the USD32 million DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson.
VinaCapital has offices in Ho Chi Minh City, Hanoi, Danang, Nha Trang, Singapore and Yangon. More information about VinaCapital is available at www.vinacapital.com.
More information on the Company is available at www.vinacapital.com/vof.
Enquiries:
David Dropsey
VinaCapital Investment Management Limited
Investor Relations/Communications
+84 8 3821 9930
Philip Secrett
Grant Thornton UK LLP, Nominated Adviser
+44 (0)20 7383 5100
Hiroshi Funaki / Andrew Davies
Edmond de Rothschild Securities, Broker
+44 (0)20 7845 5960
David Benda / Hugh Jonathan
Numis Securities Limited, Broker
+44 (0)20 7260 1000
Andrew Walton
FTI Consulting, Public Relations (London)
+44 (0)20 7269 7204
andrew.walton@fticonsulting.com
VOF Chairman's Statement - interim FY 2015
Investment Performance
During the first six months of the 2015 Fiscal Year, which covers the period from 1 July 2014 to 31 December 2014, the net asset value (NAV) per share of Vinacapital Vietnam Opportunity Fund ("VOF" or the "Company") rose by 0.9%, which compares with a decline of 6.0% in the Vietnamese Index in US Dollar terms. This return combines contributions from the components which make up VOF's portfolio, and the most important of these are set out below:
Listed Stocks: +1.1% (58% of assets, including our holdings in VinaLand Ltd, Vietnam Infrastructure Ltd and OTC stocks)
Real Estate: -1.5% (16% of assets)
Private Equity: +2.7% (8% of assets)
Hospitality: +0.4% (9% of assets)
Balance of assets: 9%, held in cash or equivalent
There was also an accretion to NAV of 0.9% from the effect of the share buybacks conducted during the period, which amounted to a value of $30.6 million.
The results achieved in the listed part of the portfolio are very good compared to the equity benchmark and reflect an underweight position in the Oil & Gas sector, which fell sharply during the fourth calendar quarter of 2014. Within the peer group, the performance was in the middle of the pack, with the biggest determinant of the pecking order being the sector weighting. It is worth noting that for large funds, it is in effect impossible to achieve an index weight in this industry because the largest stock, PetroVietnam Gas, represents nearly 14% of the index but has a free float of only 3% of its equity, the balance being owned by the State.
The returns in other parts of the portfolio reflect small changes in directors' valuation of the assets. Two real estate projects were written down modestly, while a provision against one of the private equity holdings was written back after it was recovered.
There were two transactions of note during the period. The first was the sale of our 23.6% holding of An Giang Plant Protection (AGPP) to Standard Chartered Private Equity in Singapore for $63.1 million. This investment was originally purchased five years ago and the sale represents an IRR of 23.7% per annum over the holding period. It is encouraging that foreign investors continue to see attractive opportunities in the country and that the original investment rationale of taking a large stake in an illiquid asset has borne fruit for shareholders.
The second was a new $34.5 million private equity investment for 56% of one of Vietnam's largest dairy businesses, International Dairy Products (IDP) in conjunction with Japanese private equity investor Daiwa. IDP is a significant business, generating around $80 million of sales annually from the yoghurt, milk and nutritional products markets. New management has been brought in and the objective is to inject fresh impetus into the marketing strategy.
The Manager also reduced the holding in Vinamilk, which has for a long time been VOF's largest position, in order to realise some profits. Shares to the value of $21 million were sold at a premium to the market price, reflecting the scarcity of stock available to overseas portfolio investors because of the limits on foreign ownership. The position in Vinamilk is still the largest in our listed portfolio, representing 10% of VOF's assets. The holding in Kinh Do Corporation, a bakery and confectionery business, was realized for proceeds of $32 million on the basis that the Manager believed that the company was fully valued.
VOF's strategy has been to reduce its holdings in direct real estate while increasing holdings in so called equitisation opportunities, which come about as a result of the privatization process. As far as real estate goes, the market remains quite subdued and it is disappointing that there have been no significant disposals during the period. Negotiations are ongoing for the sale of a number of projects, but progress is slow and intermittent. The Board remains hopeful that significant disposals will be made over the course of 2015.
The proportion of assets invested in OTC stocks has fallen (from 9% to 3%) because of the sale of AGPP but the Manager's intention is to add new positions as and when attractive opportunities become available. The Vietnamese government has ambitions to privatize a huge slate of companies, but these are often small, low quality businesses which do not fit with VOF's investment strategy. A handful of interesting opportunities are expected to become available over the next few months but, as with everything which involves bureaucracy, the timing is very uncertain.
In private equity, the pipeline has a number of interesting opportunities in media, agriculture and education; and the Manager is optimistic that another significant investment can be made this year. In the meantime, exit opportunities for existing positions are being actively sought.
Share Price
The discount to net asset value remains a persistent problem and currently sits at around 22%. We have continued to buy back shares, notching up close to $200 million since we began the programme. In previous statements we have speculated as to the cause of the problem, but the evidence is that it cannot be solved by simply buying stock back. A more complete approach is needed. In practice, there are four levers the Board can pull:
1. We can define the Company's strategy clearly so that any unwarranted discount from investor uncertainty disappears. One of the proximate causes of the discount is almost certainly the holding in direct real estate. Property assets in Vietnam typically trade at significant discounts to their net asset values, no doubt because investors question those values in the absence of an active and transparent market. We have been very clear that it is our intention to reduce our exposure to this area and I reiterate that commitment here. It is worth noting that the limited number of transactions which have taken place are clearing at prices close to the directors' valuation levels;
2. We can attempt to influence the demand for shares. This involves communicating the 'story' to as wide an audience as possible, ensuring that the listing of the Company is in the best possible market, its governance is good and that information is clear, transparent and easily available. The manager is spending more time and effort on seeking new shareholders and increasing the demand for the shares. As mentioned in the annual report, the Board is still considering the benefits of applying for a premium listing on the Main Market of the London Stock Exchange and it will alter its corporate structure and governance to comply with best practice. This is a project for the second half of the year.
3. We can influence the supply of stock. The primary vector through which we attempt this is by buying stock back, but it is also possible to achieve the same goal through other means. For the time being we are persisting with the buyback programme, but other mechanisms are under constant review.
4. We can offer shareholders some form of restructuring of the Company. This is a potentially radical solution and is likely to be both expensive and divisive of the shareholder base. Nevertheless, if the Board felt that it was in the Company's best interests to consider such an option, it would do so.
For now, we are using the first three levers and expect these initiatives to increase demand for the shares and to yield results over time. In particular, we had hoped to be moving more quickly on proposals to list the shares on the Main Market in London but we have been delayed by the regulatory requirement to issue full year accounts to a new accounting standard as described below.
Changes to Accounting Standards
As noted in the last Annual Report and Accounts, the recent amendments to International Financial Reporting Standards introduced in IFRS10A the concept of investment entities. By adopting IFRS10A from the date of this Interim Report, the Company is now exempt from the requirement to consolidate investments where it has a controlling stake and all of our investments are recorded at fair value through profit or loss. This change requires the restatement of the accounts as at 30 June 2014. The NAV per share reported in this Interim Statement of $3.27 compares with a restated NAV of $3.24 as at 30 June 2014. The latter figure represents a $0.03 reduction compared with the number stated in our last annual report, reflecting the consequences of the application of the new standard. In the notes to this Interim Report we set out some quite complex reconciliations of the accounts to 30 June 2014 as previously published and the same accounts under the new IFRS requirements. The restatement in itself is complex, but the resulting accounts are more appropriate to the nature of VOF as a fund. However, there are some aspects of IFRS10A which are potentially confusing. In particular:
- All assets, including cash, are classified as Level 3, a classification normally reserved for private equity investments, because they are held via subsidiaries. In note 22b we have recategorised these assets on a look-through basis;
- Cash, as it appears on the balance sheet, is not representative of the total cash held by the Company because of the Level 3 classification described above. As at 31 December 2014, net cash held was approximately 9% of assets; and
- The classification of assets as either current or non-current would have been confusing under IFRS10A, so we have opted to present the balance sheet in order of liquidity as opposed to using the current and non-current classifications.
Aside from these points, the accounts should be more easy to read than hitherto.
Outlook
Since the end of the year, the Vietnamese market has risen and is ahead of the general emerging market benchmarks which continue to struggle in this era of US Dollar strength. Vietnam itself has seen inflation fall substantially while GDP growth marginally exceeded expectations in the last year. The effect of the dramatic swing in oil prices is minimal, as Vietnam is both a producer and an importer of oil. The country continues to attract increasing levels of foreign direct investment; this was estimated at $12.4 billion in 2014, a 7% increase over the previous year. Much of this investment is in manufacturing and a $2 billion trade surplus was achieved in 2014. It is well known that economic growth does not necessarily correlate with stock market returns but given a market which does not look as overvalued as some, and some foreign investor interest, the prospects for the year ahead are reasonably positive.
CONDENSED INTERIM BALANCE SHEET
|
|
|
31 December 2014 |
30 June 2014 |
|
|
|
Note |
USD'000 |
USD'000 |
|
|
|
|
Unaudited |
Restated |
|
|
ASSETS
|
|
|
|
|
|
Cash and cash equivalents |
7 |
940 |
1,311 |
|
|
Short-term receivables from a related party |
20 |
197 |
331 |
|
|
Trade and other receivables |
|
- |
100 |
|
|
Financial assets at fair value through profit or loss |
9 |
744,508 |
773,653 |
|
|
Prepayments for acquisitions of investment properties |
10 |
6,250 |
6,250 |
|
|
Total assets
|
|
────── 751,895 ══════ |
────── 781,645 ══════ |
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Share capital |
11 |
3,246 |
3,246 |
|
|
Additional paid-in capital |
|
722,064 |
722,064 |
|
|
Treasury shares |
12 |
(196,531) |
(165,939) |
|
|
Retained earnings |
|
213,471 |
212,009 |
|
|
Total equity |
|
────── 742,250 ────── |
────── 771,380 ────── |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
Other payables |
|
22 |
19 |
|
|
Payables to related parties |
13 |
9,623 |
10,246 |
|
|
|
|
────── |
────── |
|
|
Total liabilities
|
|
9,645 ────── |
10,265 ────── |
|
|
Total equity and liabilities
|
|
751,895 ══════ |
781,645 ══════ |
|
|
|
|
|
|
|
|
Net asset value, USD per share |
17(c) |
3.27 |
3.24 |
|
|
|
|
══════ |
═════ |
|
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
|
|
Share capital |
Additional paid-in capital |
Treasury shares |
Retained earnings |
Total equity |
|
|
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
|
|
|
|
|
|
|
|
Balance at 1 July 2013 (restated) |
3,246 |
722,064 |
(113,639) |
123,026 |
734,697 |
|
Profit for the six-month period to 31 December 2013 (restated) |
- |
- |
- |
34,357 |
34,357 |
|
Total comprehensive income (restated) |
─────
- |
───────
- |
───────
- |
──────
34,357 |
──────
34,357 |
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
Shares repurchased |
- |
- |
(28,560) |
- |
(28,560) |
|
Balance at 31 December 2013 (restated) |
─────
3,246 ═════ |
───────
722,064 ═══════ |
───────
(142,199) ═══════ |
───────
157,383 ═══════ |
───────
740,494 ═══════ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 July 2014 (restated) |
3,246 |
722,064 |
(165,939) |
212,009 |
771,380 |
|
Profit for the six-month period to 31 December 2014 |
- |
- |
- |
1,462 |
1,462 |
|
Total comprehensive income |
───── - |
─────── - |
─────── - |
────── 1,462 |
────── 1,462 |
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
Shares repurchased |
- |
- |
(30,592) |
- |
(30,592) |
|
Balance at 31 December 2014 |
───── 3,246 ═════ |
─────── 722,064 ═══════ |
─────── (196,531) ═══════ |
─────── 213,471 ═══════ |
─────── 742,250 ═══════ |
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
|
|
|
Six months ended |
|
|||
|
|
|
31 December 2014 |
31 December 2013 |
|
||
|
|
Note |
USD'000 |
USD'000 |
|
||
|
|
|
Unaudited |
Restated |
|
||
|
|
|
|
|
|
||
|
Net gain on financial assets at fair value through profit or loss |
14 |
17,096 |
40,706 |
|
||
|
General and administration expenses |
15 |
(15,634) |
(6,499) |
|
||
|
Other income |
|
- |
150 |
|
||
|
Operating profit |
|
───── 1,462 ───── |
───── 34,357 ───── |
|
||
|
|
|
|
|
|
||
|
Profit before tax |
|
1,462 |
34,357 |
|
||
|
Corporate income tax |
16 |
- |
- |
|
||
|
Profit for the period
|
|
───── 1,462 ═════ |
───── 34,357 ═════ |
|
||
|
|
|
|
|
|
||
|
Earnings per share - basic and diluted (USD per share) |
17(a),(b) |
0.01 ═════ |
0.14 ═════ |
|
||
|
|
|
|
|
|||
|
|
|
───── |
───── |
|||
|
Total comprehensive income for the period |
|
1,462 ═════ |
34,357 ═════ |
|||
CONDENSED INTERIM STATEMENT OF CASH FLOWS
|
|
|
Six months ended |
|
|
|
|
31 December 2014 |
31 December 2013 |
|
|
|
USD'000 |
USD'000 |
|
|
|
Unaudited |
Restated |
|
|
|
|
|
|
Operating activities |
|
|
|
|
Profit before tax |
|
1,462 |
34,357 |
|
Adjustment for: |
|
|
|
|
Unrealised gain on financial assets at fair value through profit or loss |
|
(16,982) |
(40,706) |
|
|
|
───── (15,520) |
───── (6,349) |
|
|
|
|
|
|
Change in financial assets at fair value through profit or loss |
|
15,535 |
14,808 |
|
Change in trade receivables and other assets |
|
234 |
2,428 |
|
Change in trade payables and other liabilities |
|
(620) |
(8,099) |
|
Net cash (outflow)/inflow from operating activities |
|
───── (371) ───── |
──── 2,788 ──── |
|
|
|
|
|
|
Net change in cash and cash equivalents for the period |
|
(371) |
2,788 |
|
Cash and cash equivalents at the beginning of the period |
|
1,311 |
4,502 |
|
Cash and cash equivalents at the end of the period |
|
───── 940 ═════ |
───── 7,290 ═════ |
|
|
|
|
|
|
The condensed interim statement of cash flow does not include payments made for share repurchases of USD30.6 million (period ended 31 December 2013: USD28.6 million) because these payments were made by a subsidiary. |
|||
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
1 GENERAL INFORMATION
VinaCapital Vietnam Opportunity Fund Limited ("the Company") is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The Company's primary objective is to undertake various forms of investment primarily in Vietnam, but it may also invest in Cambodia, Laos and Southern China. The Company is quoted on the AIM market of the London Stock Exchange under the ticker symbol VOF.
The Company does not have a fixed life but the Company's Admission Document to the AIM market of the London Stock Exchange states that the Board considers it desirable that shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends that a special resolution will be proposed every fifth year that the Company ceases to continue as presently constituted. If the resolution is not passed, the Company will continue to operate. If the resolution is passed, the Directors will be required to formulate proposals to be put to shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up. The Board tabled such a special resolution on 22 July 2013 and it was not passed, allowing the Company to continue as presently constituted for another five years.
The condensed interim financial statements for the six-month period ended 31 December 2014 were approved for issue by the Board on 30 March 2015.
2 BASIS OF PREPARATION
These condensed interim financial statements for the six-month period ended 31 December 2014 have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). They do not include all of the information required in the annual financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRS"). Accordingly, these financial statements are to be read in conjunction with the annual consolidated financial statements of the Company and its subsidiaries for the year ended 30 June 2014.
3 ACCOUNTING POLICIES
The accounting policies adopted are consistent with those of the previous financial year except as described below:
· The Company has adopted the "Investment Entities" amendments to IFRS 10, "Consolidated financial statements". The amendments define an investment entity and introduce an exception from the consolidation requirements for investment entities. On adoption, the Company has determined that it meets the definition of an investment entity (see Note 4.1 below). As a result, it has changed its accounting policy with respect to its investments in subsidiaries. The Company's subsidiaries, which were previously consolidated, are now accounted for at fair value through profit or loss. This change in accounting policy has been applied retrospectively in accordance with the transition provision of IFRS 10 and the amendments to IFRS 10. The impact of the change has been disclosed in Note 3.2 below.
· The Company has adopted amendments to IFRS 12, "Disclosure of interests in other entities", which introduce new disclosure requirements related to investment entities. Required disclosures are presented in Note 6.
· IAS 27 (revised 2011), "Separate financial statements" and amendments to IAS 27 have been adopted by the Company. The standard prescribes the accounting and disclosure requirements when an entity prepares separate financial statements. The amendments require an investment entity as defined in IFRS 10 to present separate financial statements as its only financial statements in the case where it measures all of its subsidiaries at fair value through profit or loss and to disclose that fact.
· The Company has opted to value all of its investments at fair value in accordance with IAS 28 (revised 2011), "Investments in associates and joint ventures". As a result, the Company has ceased the application of equity accounting to its investments in associates. It now classifies its investments in associates as financial assets at fair value through profit or loss. The Company has applied this change in accounting policy retrospectively in accordance with IAS 8, "Accounting policies, changes in accounting estimates and errors".
3.1 Subsidiaries and associates
As a result of the adoption the amendments to IFRS 10 and the fair value option under IAS 28, the Company has changed its accounting policy with respect to its investments in subsidiaries and associates. Its subsidiaries and associates which were previously consolidated or equity accounted, are now accounted for at fair value through profit and loss. At the date of initial application of IFRS 10, the Company measured these investments at fair value through profit or loss as if it had done so since inception. As part of the required retrospective application of those changes, the Company adjusted retained earnings at the beginning of the immediately preceding period for any difference between:
(a) the previous carrying amount of the investments; and
(b) the fair value of the Company's investments in subsidiaries and associates.
The cumulative amount of any fair value adjustments previously recognised in other comprehensive income was transferred to retained earnings at the beginning of the
period immediately preceding the date of initial application.
At the end of each half of the financial year, the fair values of a selection of investments in subsidiaries and associates are assessed such that the fair values of all investments in subsidiaries and associates are assessed at least once each financial year. The fair values of the majority of these investments are estimated by a qualified independent professional services firm, KPMG Limited. The valuations by this professional services firm are prepared using a number of approaches such as adjusted net asset valuations, discounted cash flows, income-related multiples and price-to-book ratio. These estimated fair values are used by the Audit and Valuation Committee ("AVC") as the primary basis for estimating each subsidiary's or associate's fair value.
Any gain or loss arising from a change in the fair value of investments in subsidiaries and associates is recognised in the statement of comprehensive income.
3.2 Impacts of changes in accounting policies
As a result of the changes in the Company's accounting policies, financial statements for prior periods were restated. The Company changed from preparing consolidated financial statements to issuing separate financial statements with its investments in subsidiaries and associates classified as financial assets at fair value through profit or loss. The Company has opted to present the balance sheet in order of liquidity as opposed to using the current and non-current classifications. The following tables show the adjustments recognised for each individual line item.
Balance sheet as at 30 June 2014
|
|
30 June 2014 |
|
30 June 2014 |
|
|
(Consolidated) |
Adjustments |
(Restated) |
|
|
USD'000 |
USD'000 |
USD'000 |
|
Assets |
|
|
|
|
Non-current |
|
|
|
|
Plant and equipment |
3,114 |
(3,114) |
- |
|
Investment properties |
4,175 |
(4,175) |
- |
|
Investments in associates |
169,505 |
(169,505) |
- |
|
Prepayments for acquisition of investment properties |
7,895 |
(1,645) |
6,250 |
|
Financial assets at fair value through profit or loss |
4,697 |
604,787 |
609,484 |
|
Available-for-sale financial assets |
6,033 |
(6,033) |
- |
|
Other non-current assets |
792 |
(792) |
- |
|
Total non-current assets
|
────── 196,211 ────── |
────── 419,523 ────── |
────── 615,734 ────── |
|
|
|
|
|
|
Current |
|
|
|
|
Inventories |
7,216 |
(7,216) |
- |
|
Trade and other receivables |
14,515 |
(14,415) |
100 |
|
Short-term loans to related parties |
5,235 |
(5,235) |
- |
|
Short-term receivables from related parties |
- |
331 |
331 |
|
Financial assets at fair value through profit or loss |
552,339 |
(388,170) |
164,169 |
|
Other financial assets |
4,695 |
(4,695) |
- |
|
Cash and cash equivalents |
21,551 |
(20,240) |
1,311 |
|
Total current assets
|
────── 605,551 ────── |
────── (439,640) ────── |
────── 165,911 ────── |
|
|
|
|
|
|
Assets classified as held for sale |
3,726 |
(3,726) |
- |
|
Total assets
|
────── ══════ |
────── (23,843) ══════ |
────── 781,645 ══════ |
|
|
|
|
|
|
|
30 June 2014 |
|
30 June 2014 |
|
|
(Consolidated) |
Adjustments |
(Restated) |
|
|
USD'000 |
USD'000 |
USD'000 |
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
Equity
|
|
|
|
|
Equity attributable to shareholders of the Company |
|
|
|
|
Share capital |
3,246 |
- |
3,246 |
|
Additional paid-in capital |
722,064 |
- |
722,064 |
|
Treasury shares |
(165,939) |
- |
(165,939) |
|
Revaluation reserve |
33,281 |
(33,281) |
- |
|
Translation reserve |
(19,186) |
19,186 |
- |
|
Retained earnings |
205,489 |
6,520 |
212,009 |
|
|
|
|
|
|
Total equity attributable to shareholders of the Company |
───── 778,955 ───── |
───── (7,575) ───── |
───── 771,380 ───── |
|
Non-controlling interests |
849 |
(849) |
- |
|
Total equity |
───── 779,804 ─────
|
───── (8,424) ─────
|
───── 771,380 ───── ─ |
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Non-current |
|
|
|
|
Other long-term liabilities |
189 |
(189) |
- |
|
Total non-current liabilities
|
───── 189 ───── |
───── (189) ───── |
──── - ──── |
|
|
|
|
|
|
Current |
|
|
|
|
Short-term borrowings |
7,839 |
(7,839) |
- |
|
Trade and other payables |
4,566 |
(4,547) |
19 |
|
Payables to related parties |
13,090 |
(2,844) |
10,246 |
|
Total current liabilities
|
───── 25,495 ═════ |
───── (15,230) ═════ |
───── 10,265 ═════ |
|
Total liabilities
|
25,684 ───── |
(15,419) ───── |
10,265 ───── |
|
Total equity and liabilities
|
805,488 ───── |
(23,843) ───── |
781,645 ───── |
|
|
|
|
|
|
Net asset value, USD per share attributable to shareholders of the Company |
3.27 |
(0.03) |
3.24 |
|
|
═════ |
═════ |
═════ |
Statement of income for the six months ended 31 December 2013
|
|
Six months ended |
||
|
|
31 December 2013 |
Adjustments |
31 December 2013 |
|
|
USD'000 |
USD'000 |
USD'000 |
|
|
(Consolidated) |
|
(Restated) |
|
|
|
|
|
|
Revenue |
4,856 |
(4,856) |
- |
|
Cost of sales |
(3,289) ───── |
3,289 ───── |
- ───── |
|
Gross profit |
1,567 |
(1,567) |
- |
|
|
|
|
|
|
Dividend income |
10,169 |
(10,169) |
- |
|
Interest income |
831 |
(831) |
- |
|
Net gains from financial assets at fair value through profit or loss, net |
32,655 |
8,051 |
40,706 |
|
Selling, general and administration expenses |
(8,405) |
1,906 |
(6,499) |
|
Other income |
880 |
(730) |
150 |
|
Other expenses |
(653) |
653 |
- |
|
Operating profit |
───── 37,044 ───── |
───── (2,687) ───── |
───── 34,357 ───── |
|
|
|
|
|
|
Finance income |
44 |
(44) |
- |
|
Finance costs |
(370) ───── |
370 ───── |
- ───── |
|
Finance costs - net |
(326) |
326 |
- |
|
Share of losses of associates, net of tax |
(12,996) |
12,996 |
- |
|
|
───── (13,322) ───── |
───── 13,322 ───── |
───── - ───── |
|
Profit before tax |
23,722 |
10,635 |
34,357 |
|
Corporate income tax |
(18) |
18 |
- |
|
Withholding taxes imposed on investment income |
(321) |
321 |
- |
|
Profit for the period
|
───── 23,383 ═════ |
───── 10,974 ═════ |
───── 34,357 ═════ |
|
|
|
|
|
|
Profit attributable to: Owners of the Company |
23,536 |
(23,536) |
- |
|
Non-controlling interests |
(153) |
153 |
- |
|
|
───── 23,383 ───── |
───── (23,383) ───── |
───── - ───── |
|
Earnings per share - basic and diluted (USD per share) |
0.09 ═════ |
0.05 ═════ |
0.14 ═════ |
Statement of comprehensive income for the six months ended 31 December 2013
|
|
Six months ended |
|||
|
|
31 December 2013 |
Adjustments |
31 December 2013 |
|
|
|
USD'000 |
USD'000 |
USD'000 |
|
|
|
(Consolidated) |
|
(Restated) |
|
|
|
|
|
|
|
|
Profit for the period |
23,383 |
10,974 |
34,357 |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
Items that will be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
- Currency translation differences |
847 |
(847) |
- |
|
|
|
───── 847 |
────── (847) |
────── - |
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
|
|
|
- Share of revaluation reserves of associates |
780 |
(780) |
- |
|
|
Other comprehensive income for the period |
────── 1,627 ────── |
────── (1,627) ────── |
────── - ────── |
|
|
Total comprehensive income for the period
|
25,010 ══════ |
9,347 ══════ |
34,357 ══════ |
|
Statement of cash flow for the six months ended 31 December 2013
|
|
Six months ended |
|||
|
|
31 December 2013 |
Adjustments |
31 December 2013 |
|
|
|
USD'000 |
USD'000 |
USD'000 |
|
|
|
(Consolidated) |
|
(Restated) |
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
Profit before tax |
23,722 |
10,635 |
34,357 |
|
|
Adjustments for: |
|
|
|
|
|
Depreciation and amortisation |
279 |
(279) |
- |
|
|
Unrealised gains on financial assets at fair value through profit or loss |
(28,316) |
(12,390) |
(40,706) |
|
|
Impairment of assets |
159 |
(159) |
- |
|
|
Share of losses of associates |
12,996 |
(12,996) |
- |
|
|
Unrealised foreign exchange gain - net |
(18) |
18 |
- |
|
|
Interest expense |
128 |
(128) |
- |
|
|
Profits/(loss) before changes in working capital |
───── 8,950 ───── |
────── (15,299) ────── |
───── (6,349) ───── |
|
|
Change in financial assets at fair value through profit or loss |
- |
14,808 |
14,808 |
|
|
Change in trade receivables and other assets |
1,917 |
511 |
2,428 |
|
|
Change in inventories |
521 |
(521) |
- |
|
|
Change in trade payables and other liabilities |
(8,219) |
120 |
(8,099) |
|
|
Income taxes paid |
(339) |
339 |
- |
|
|
Net cash inflow from operating activities
|
────── 2,830 ────── |
────── (42) ────── |
───── 2,788 ───── |
|
|
Investing activities |
|
|
|
|
|
Dividends received |
1,355 |
(1,355) |
- |
|
|
Purchases of plant and equipment |
(158) |
158 |
- |
|
|
Purchases of financial assets |
(18,246) |
18,246 |
- |
|
|
Investments in associates |
(982) |
982 |
- |
|
|
Proceeds from disposals of financial assets |
50,794 |
(50,794) |
- |
|
|
Shareholder loans refunded |
237 |
(237) |
- |
|
|
Proceeds from disposals of investments |
1,613 |
(1,613) |
- |
|
|
Net cash inflow from investing activities
|
───── 34,613 ───── |
────── (34,613) ────── |
───── - ───── |
|
|
Financing activities |
|
|
|
|
|
Interest paid |
(128) |
128 |
- |
|
|
Payments for shares repurchased |
(28,560) |
28,560 |
- |
|
|
Loan proceeds from banks |
3,187 |
(3,187) |
- |
|
|
Loan repayment to banks |
(2,906) |
2,906 |
- |
|
|
|
───── |
───── |
───── |
|
|
Net cash outflow from financing activities |
(28,407) |
28,407 |
- |
|
|
|
───── |
───── |
───── |
|
|
Net increase in cash and cash equivalents for the period |
9,036 |
(6,248) |
2,788 |
|
|
Cash and cash equivalents at the beginning of the period |
53,392 |
(48,890) |
4,502 |
|
|
Exchange differences on cash and cash equivalents |
18 |
(18) |
- |
|
|
Cash and cash equivalents at the end of the period
|
───── 62,446 ═════ |
───── (55,156) ═════ |
───── 7,290 ═════ |
|
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
When preparing the condensed interim financial statements, the Company relies on a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements.
Information about significant judgements, estimates and assumptions which have the greatest effect on the recognition and measurement of assets, liabilities, income and expenses were the same as those that applied to the last annual consolidated financial statements for the year ended 30 June 2014.
4.1 Eligibility to qualify as an investment entity
The Company has determined that it is an investment entity under the definition in IFRS 10 as it meets the following criteria:
(a) the Company has obtained funds from investors for the purpose of providing those investors with investment management services;
(b) the Company's business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and
(c) the performance of investments made by the Company are substantially measured and evaluated on a fair value basis.
The Company also meets the typical characteristics of an investment entity:
· it holds more than one investment;
· it has more than one investor;
· it has investors that are not its related parties; and
· it has ownership interests in the form of equity or similar interests.
As a consequence, the Company does not consolidate its subsidiaries and accounts for them at fair value through profit or loss. See Note 3.2 above for information regarding the impact of the change in accounting policy.
4.2 Fair value of subsidiaries and associates
As at 31 December 2014, 100% (30 June 2014: 100%) of the financial assets at fair value through profit and loss relate to the Company's investments in the subsidiaries and associates that have been fair valued in accordance with the policies set out above. The Company has investments in a number of subsidiaries and associates which were established to hold underlying investments. These investments include listed and unlisted securities, private equity and real estate assets. Where an active market exists (for example, for listed securities), the fair value of the subsidiary or associate reflects the asset value of the underlying holdings. Where no active market exists, valuation techniques as set out in Note 3.1 are used. The shares of the subsidiaries and associates are not publicly traded; return of capital to the Company can only be made by divesting the underlying investments of the subsidiaries and associates. As a result, the carrying value of the subsidiaries and associates may not be indicative of the value ultimately realised on divestment.
The fair value of the investments in subsidiaries and associates is primarily based on their net asset value. These subsidiaries and associates hold investments in real estate, listed and unlisted securities and private equities. Information about the significant judgements, estimates and assumptions that are used in the valuation of these investments is discussed below.
Valuation of listed and unlisted securities, private equities and real estate
The fair values of listed securities are based on quoted market prices at the close of trading on the reporting date. For unlisted securities which are traded in an active market, the fair value is the average quoted prices at the close of trading obtained from a minimum sample of three reputable securities companies at the reporting date. Other relevant measurement bases are used if broker quotes are not available or if better and more reliable information is available.
The fair value of financial assets that are not traded in an active market (for example, unlisted securities, private equities and real estate where market prices are not readily available) is determined by using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each reporting date. Independent valuations are also obtained from appropriately qualified independent valuation firms. The valuations may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.
A number of the Company's real estate investments are co-invested with VinaLand Limited ("VNL"), another fund managed by the Investment Manager. In most cases VNL holds a controlling stake in the joint venture company and therefore exerts control over the investment. As both funds are managed by the same Investment Manager, each fund's investment objectives for each property are generally the same. However, given VNL's recently established investment objective of disposing of a portion of its portfolio, the Company would potentially be put in a position where sales may be triggered earlier than ideally desired. The Board reviews all such decisions and under normal circumstances is not prepared to assume the development risk that would result from continuing to hold an investment which VNL is selling. The Company also holds a stake in VNL itself and supports the board of that company in its objective of disposing of a portion of its assets.
As at 31 December 2014 and 30 June 2014, the Company classifies its investments in subsidiaries and associates as Level 3 within the fair value hierarchy, because they are held by subsidiaries and associates which are not publicly traded, even when the underlying assets are readily realisable.
5 SEGMENT ANALYSIS
In identifying its operating segments, management follows the subsidiaries' sectors of investment which are based on internal management reporting information. The operating segments by investment portfolio include capital markets, real estate and hospitality, private equity and cash (including cash and cash equivalents, bonds, and short-term deposits) sectors.
Each of the operating segments are managed and monitored individually by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the underlying investment assets of the subsidiaries. Although IFRS 8 requires measurement of segmental profit or loss, the majority of expenses are common to all segments and, therefore, cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.
The majority of the liabilities are payables for general expenses; therefore, liabilities are not disclosed in the sector analysis.
Segment information can be analysed as follows:
Statement of income
|
|
Capital markets |
Real estate |
Hospitality |
Private equity |
Total |
|
|
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
|
|
|
|
|
|
|
|
Six months ended 31 December 2014 (unaudited) |
|
|
|
|
|
|
Net gain/(loss) on financial assets at fair value through profit or loss |
11,403 |
(5,035) |
4,746 |
5,982 |
17,096 |
|
General and administration expenses (Note 15) |
(13,737) |
(902) |
(409) |
(586) |
(15,634) |
|
Profit before tax |
───── (2,334) |
───── (5,937) |
───── 4,337 |
───── 5,396 |
───── 1,462 |
|
|
═════ |
═════ |
═════ |
═════ |
═════ |
|
Six months ended 31 December 2013 (restated) |
|
|
|
|
|
|
|
Net gain/(loss) on financial assets at fair value through profit or loss |
43,867 |
(3,423) |
117 |
145 |
40,706 |
|
|
General and administration expenses (Note 15) |
(5,036) |
(860) |
(525) |
(78) |
(6,499) |
|
|
Other income |
- |
150 |
- |
- |
150 |
|
|
Profit before tax |
───── 38,831 |
───── (4,133) |
───── (408) |
───── 67 |
───── 34,357 |
|
|
|
═════ |
═════ |
═════ |
═════ |
═════ |
|
5
Balance sheet
Assets
|
|
Capital markets |
Real estate |
Hospitality |
Private equity |
Cash |
Total |
|
|
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
|
As at 31 December 2014 (unaudited) |
|
|
|
|
|
|
|
Cash and cash equivalents |
- |
- |
- |
- |
940 |
940 |
|
Short-term receivables from a related party |
197 |
- |
- |
- |
- |
197 |
|
Financial assets at fair value through profit or loss |
513,292 |
106,683 |
73,372 |
51,161 |
- |
744,508 |
|
Prepayments for acquisitions of investment properties |
- |
6,250 |
- |
- |
- |
6,250 |
|
|
|
|
|
|
|
|
|
|
────── |
────── |
────── |
───── |
───── |
────── |
|
Total assets |
513,489 |
112,933 |
73,372 |
51,161 |
940 |
751,895 |
|
|
══════ |
══════ |
══════ |
═════ |
═════ |
══════ |
|
As at 30 June 2014 (restated) |
|
|
|
|
|
|
|
Cash and cash equivalents |
- |
- |
- |
- |
1,311 |
1,311 |
|
Short-term receivables from a related party |
331 |
- |
- |
- |
- |
331 |
|
Trade and other receivables |
100 |
- |
- |
- |
- |
100 |
|
Financial assets at fair value through profit or loss |
583,985 |
111,718 |
68,626 |
9,324 |
- |
773,653 |
|
Prepayments for acquisitions of investment properties |
- |
6,250 |
- |
- |
- |
6,250 |
|
|
────── |
────── |
────── |
───── |
───── |
────── |
|
Total assets |
584,416 |
117,968 |
68,626 |
9,324 |
1,311 |
781,645 |
|
|
══════ |
══════ |
══════ |
═════ |
═════ |
══════ |
6 INTERESTS IN SUBSIDIARIES AND ASSOCIATES
6.1 Subsidiaries
The Company had the following principal subsidiaries as at 31 December 2014:
|
|
|
As at |
|
|
|
|
|
31.12.2014 |
30.6.2014 |
|
|
Name
|
Country of incorporation
|
% of Company interest
|
% of Company interest
|
Nature of the business |
|
Vietnam Investment Property Holding Limited |
BVI |
100 |
100 |
Holding company for listed, unlisted securities and real estate |
|
Vietnam Investment Property Limited |
BVI |
100 |
100 |
Holding company for listed, and unlisted securities |
|
Vietnam Ventures Limited |
BVI |
100 |
100 |
Holding company for listed, unlisted securities and real estate |
|
Vietnam Investments Limited |
BVI |
100 |
100 |
Holding company for listed, unlisted securities and real estate |
|
Asia Value Investment Limited |
BVI |
100 |
100 |
Holding company for listed, and unlisted securities |
|
Vietnam Master Holding 2 Limited |
BVI |
100 |
100 |
Holding company for listed securities |
|
VOF Investment Limited |
BVI |
100 |
100 |
Holding company for listed, |
|
|
|
|
|
unlisted securities and real estate |
|
VOF PE Holding 5 Limited |
BVI |
100 |
100 |
Holding company for listed securities |
|
Visaka Holding Limited |
BVI |
100 |
100 |
Holding company for treasury |
|
|
|
|
|
shares |
|
Portal Global Limited |
BVI |
100 |
100 |
Holding company for listed securities |
|
Winstar Resources Limited |
BVI |
100 |
100 |
Holding company for listed securities |
|
Howard Holding Pte. Limited |
Singapore |
100 |
100 |
Holding company for private equity |
|
Fraser Investment Pte. Limited |
Singapore |
100 |
100 |
Holding company for listed securities |
|
SE Asia Master Holding 7 Pte Limited |
Singapore |
100 |
100 |
Holding company for private equity |
|
Alright Assets Limited |
Singapore |
100 |
100 |
Holding company for real estate |
|
VTC Espero Limited |
Singapore |
100 |
100 |
Holding company for real estate |
|
American Home Vietnam Co., Limited |
Vietnam |
100 |
100 |
Ceramic tiles |
|
Yen Viet Joint Stock Company |
Vietnam |
65 |
65 |
Birdnest products |
|
International Dairy Products Joint Stock Company ("IDP") |
Vietnam |
56 |
- |
Dairy products |
|
|
|
════ |
════ |
|
There is no legal restriction to the transfer of funds from the BVI or Singapore subsidiaries to the Company. Cash held in Vietnamese subsidiaries is subject to restrictions imposed by co-investors and the Vietnamese government and therefore it cannot be transferred out of Vietnam unless such restrictions are satisfied.
The Company has commitments under investment certificates it has received for real estate projects jointly invested with VinaLand Limited, a related party under common management, and other agreements it has entered into, to acquire and develop, or make additional investments in investment properties and leasehold land in Vietnam. Further investments in many of these arrangements are at the Company's discretion.
6.2 Associates
|
|
|
As at |
|
|
||
|
|
|
31.12.2014 |
30.6.2014 |
|
||
|
Name |
Country of incorporation |
% of Company interest |
% of Company interest |
Nature of the business |
||
|
Pacific Alliance Land Limited |
BVI |
25 |
25 |
Holding company for |
||
|
|
|
|
|
VinaSquare project |
||
|
Sunbird Group Limited |
BVI |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Pham Hung project |
||
|
VinaCapital Danang Resorts Limited |
BVI |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Danang Resorts project |
||
|
Vietnam Property Holdings Limited |
BVI |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Danang Golf project |
||
|
Prosper Big Investment Limited |
BVI |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Century 21 project |
||
|
VinaCapital Commercial Center |
Singapore |
12.75 |
12.75 |
Holding company for |
||
|
Private Limited |
|
|
|
Capital Square phase 1 |
||
|
Mega Assets Pte. Limited |
Singapore |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Capital Square phase 2 |
||
|
SIH Real Estate Pte. Limited |
Singapore |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Capital Square phase 3 |
||
|
VinaLand Eastern Limited |
Singapore |
25 |
25 |
Holding company for |
||
|
|
|
|
|
Phu Hoi City project |
||
|
|
|
════ |
════ |
|
||
|
|
|
|
|
|
|
|
6.3 Financial risks
The Company owns a number of subsidiaries for the purpose of holding investments in listed and unlisted securities, debt instruments, private equity and real estate. The Company, via these underlying investments, is subject to financial risks which are further disclosed in Note 22. The Investment Manager makes investment decisions after performing extensive due diligence on the underlying investments, their strategies, financial structure and the overall quality of management.
7 CASH AND CASH EQUIVALENTS
|
|
31 December 2014 |
30 June 2014 |
|
|
USD'000 |
USD'000 |
|
|
|
Restated
|
|
Cash in banks |
940 |
1,311 |
|
|
═════ |
═════ |
As at the balance sheet date, cash and cash equivalents are denominated in USD. Please refer to Note 9 for the balance of cash and cash equivalents held at the Company's subsidiaries.
8 FINANCIAL INSTRUMENTS BY CATEGORY
|
|
Loans and receivables |
Financial assets at fair value through profit or loss |
Total |
|
|
USD'000 |
USD'000 |
USD'000 |
|
|
|
|
|
|
As at 31 December 2014 (unaudited) |
|
|
|
|
Cash and cash equivalents |
940 |
- |
940 |
|
Short-term receivables from a related party |
197 |
- |
197 |
|
Financial assets at fair value through profit or loss |
- |
744,508 |
744,508 |
|
Total |
───── 1,137 ═════ |
────── 744,508 ══════ |
────── 745,645 ══════ |
|
|
|
|
|
|
Financial assets denominated in: |
|
|
|
|
- USD |
1,137 |
744,508 |
745,645 |
|
|
═════ |
══════
|
══════ |
|
As at 30 June 2014 (restated) |
|
|
|
|
Cash and cash equivalents |
1,311 |
- |
1,311 |
|
Short-term receivables from a related party |
331 |
- |
331 |
|
Trade and other receivables |
100 |
- |
100 |
|
Financial assets at fair value through profit or loss |
- |
773,653 |
773,653 |
|
Total |
───── 1,742 ═════ |
───── 773,653 ═════ |
─────── 775,395 ═══════ |
|
|
|
|
|
|
Financial assets denominated in: |
|
|
|
|
- USD |
1,742 |
773,653 |
775,395 |
|
|
══════ |
═══════ |
═══════ |
All financial liabilities are short term in nature and their carrying values approximate their fair values. There are no financial liabilities that must be accounted for at fair value through profit or loss (30 June 2014: nil).
9 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets at fair value through profit and loss comprise the Company's investments in subsidiaries and associates. The underlying assets and liabilities of the subsidiaries and associates carried at fair value are disclosed in the following table:
|
|
31 December 2014 |
30 June 2014 |
|
|
USD'000 |
USD'000 |
|
|
|
Restated |
|
In Vietnam |
|
|
|
Cash and cash equivalents |
74,413 |
19,795 |
|
Government bonds |
- |
19,241 |
|
Ordinary shares - listed |
381,072 |
423,563 |
|
Ordinary shares - unlisted and over-the-counter ("OTC") |
41,441 |
88,689 |
|
Private equity |
51,161 |
9,324 |
|
Hospitality |
63,143 |
67,148 |
|
Real estate projects |
103,139 |
111,718 |
|
Other assets, net of liabilities |
3,026 |
8,632 |
|
|
────── |
────── |
|
|
717,395 |
748,110 |
|
In countries other than Vietnam |
|
|
|
Ordinary shares - listed |
27,113 |
25,543 |
|
|
────── 27,113 ────── |
────── 25,543 ────── |
|
|
744,508 |
773,653 |
|
|
══════ |
══════ |
The sectors of the major underlying investments held by in the Company's subsidiaries are as follows:
|
31 December 2014 |
30 June 2014 |
|
|
|
USD'000 |
USD'000 |
|
|
|
Restated |
|
|
|
|
|
Consumer goods |
150,822 |
149,599 |
|
Construction |
107,342 |
101,599 |
|
Financial services |
51,329 |
54,542 |
|
Agriculture |
28,586 |
94,251 |
|
Energy, minerals and petroleum |
61,351 |
57,642 |
|
Pharmaceuticals |
28,415 |
28,886 |
|
Real estate |
169,058 |
166,236 |
|
Hospitality |
63,143 |
67,148 |
|
Government bonds |
- |
19,241 |
As at 31 December 2014, an underlying holding, Vietnam Dairy Products Joint Stock Company, within financial assets at fair value through profit or loss amounted to 10% of the net asset value of the Company (30 June 2014: 12%). There were no other holdings that had a value exceeding 10% of the net asset value of Company as at 31 December 2014 or 30 June 2014.
10 PREPAYMENTS FOR ACQUISITIONS OF INVESTMENT PROPERTIES
|
|
31 December 2014 |
30 June 2014 |
|
|
USD'000 |
USD'000 |
|
|
|
Restated
|
|
Historical costs |
8,986 |
8,986 |
|
Less: cumulative allowance for impairment losses |
(2,736) |
(2,736) |
|
|
──── |
──── |
|
|
6,250 |
6,250 |
|
|
════ |
════ |
There were no movements in the prepayments and allowance for impairment during the period (30 June 2014: none).
Prepayments are made by the Company to property vendors where the final transfer of the properties is pending the approval of the relevant authorities and/or subject to either the Company or the vendor completing certain performance conditions set out in agreements.
As at 31 December 2014, due to market conditions, impairment allowances of USD2.7 million (30 June 2014: USD2.7 million) have been taken against the prepayments for acquisitions of investments. The relevant recoverable amounts are fair values less costs to sell estimated by an independent professional qualified valuer who holds recognised relevant professional qualifications and has recent experience in the locations and categories of the properties for which the prepayments are made.
The valuations by independent valuation companies are prepared based upon direct comparison with sales of other similar properties in the area and the expected future discounted cash flows of each property using a yield that reflects the risks inherent therein. Discount rates applied vary from 15% to 22% (30 June 2014: 15% to 22%). If the sale prices of similar properties had increased/decreased, it is expected that the recoverable amounts of these prepayments would have moved up/down accordingly. On the other hand, if discount rates had risen/dropped, their recoverable amounts would have decreased/increased as a result.
It is the Company's view that all of its prepayments for acquisitions of investments are in Level 3 of the fair value hierarchy.
11 SHARE CAPITAL
|
|
31 December 2014 |
|
30 June 2014 |
||
|
|
Number of shares |
USD'000 |
|
Number of shares |
USD'000 |
|
|
|
|
|
|
|
|
Ordinary shares of USD0.01 each: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised |
500,000,000 |
5,000 |
|
500,000,000 |
5,000 |
|
|
════════ |
════ |
|
════════ |
════ |
|
Issued and fully paid |
324,610,259 |
3,246 |
|
324,610,259 |
3,246 |
|
|
════════ |
════ |
|
════════ |
════ |
12 TREASURY SHARES
|
|
31 December 2014 |
|
30 June 2014 |
||
|
|
Number of shares |
USD'000 |
|
Number of shares |
USD'000 |
|
|
|
|
|
|
|
|
Opening balance (1 July 2014/ |
|
|
|
|
|
|
1 July 2013) |
86,355,265 |
165,939 |
|
63,233,988 |
113,639 |
|
Shares repurchased during the period/year |
11,544,882 |
30,592 |
|
23,121,277 |
52,300 |
|
|
──────── |
───── |
|
──────── |
───── |
|
Closing balance |
97,900,147 |
196,531 |
|
86,355,265 |
165,939 |
|
|
════════ |
═════ |
|
════════ |
═════ |
During the period, the Company purchased 11,544,882 of its ordinary shares (year ended 30 June 2014: 23,121,277 shares) for total cash consideration of USD30.6 million (year ended 30 June 2014: USD52.3 million). The consideration was paid with cash from one of the Company's subsidiaries. All purchases had been fully settled by the balance sheet dates.
13 PAYABLES TO RELATED PARTIES
|
|
31 December 2014 |
30 June 2014 |
|
|
USD'000 |
USD'000 |
|
|
|
Restated
|
|
Management fees payable to the Investment Manager (Note 20) |
1,009 |
1,013 |
|
Incentive fees payable to the Investment Manager (Note 20) |
8,360 |
9,013 |
|
Other payables to related parties |
254 |
220 |
|
|
──── 9,623 ════ |
───── 10,246 ═════ |
All payables to related parties are short-term in nature. Therefore, their carrying values are considered a reasonable approximation of their fair values.
14 NET GAINS FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
|
|
Six months ended |
|
|
|
31 December 2014 |
31 December 2013 |
|
|
USD'000 |
USD'000 |
|
|
|
Restated |
|
Financial assets at fair value through profit or loss: |
|
|
|
- Gains from the realisation of financial assets, net |
114 |
- |
|
- Unrealised gains |
16,982 |
40,706 |
|
|
───── |
───── |
|
Total |
17,096 |
40,706 |
|
|
═════ |
═════ |
The above net gains on financial assets at fair value through profit or loss include dividend and interest income of USD8.4 million earned by the Company's subsidiaries during the period (period ended 31 December 2013: USD11.0 million).
15 GENERAL AND ADMINISTRATION EXPENSES
|
|
Six months ended |
|
|
|
31 December 2014 |
31 December 2013 |
|
|
USD'000 |
|
|
|
|
|
|
Investment management fees (Note 20(a)) |
6,007 |
5,722 |
|
Incentive fees (*) |
8,360 |
- |
|
Directors' fees |
236 |
232 |
|
Custodian, secretarial & administration fees |
175 |
153 |
|
Others |
856 |
392 |
|
|
───── 15,634 ═════ |
───── 6,499 ═════ |
(*) The structure of the incentive fee is set out in Note 20(b). As at 31 December 2014, the Company accrued an incentive fee of USD8.4 million based on the Company's performance up to that date. Any incentive fee will not crystallise until the Company's financial year end on 30 June 2015, therefore the accrued amount will change depending on the performance of the Company during the second half of the financial year.
16 INCOME TAX EXPENSE
The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, there are no income, state, corporation, capital gains or other taxes payable by the Company.
A number of subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in those countries. The income tax payable by these subsidiaries is included in their fair values as disclosed in the line item "Financial assets at fair value through profit or loss" on the balance sheet.
The relationship between the estimated income tax expense based on the applicable income tax rate of 0% and the tax expense actually recognised in the condensed interim statement of income can be reconciled as follows:
|
|
Six months ended |
|
|
|
31 December 2014 |
31 December 2013 |
|
|
USD'000
|
USD'000 Restated |
|
|
|
|
|
(Loss)/profit before tax |
1,462 ───── |
34,357 ───── |
|
Applicable tax rate |
0% |
0% |
|
Income tax |
───── - ═════ |
───── - ═════ |
|
There is no deferred income tax. |
|
|
17 EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
(a) Basic
Basic earnings per share is calculated by dividing the (loss)/profit from operations of the Company by the weighted average number of ordinary shares in issue during the six-month period excluding ordinary shares purchased by the Company and held as treasury shares (Note 12).
|
|
Six months ended |
|
|
|
31 December 2014 |
31 December 2013 |
|
|
USD'000 |
USD'000 Restated |
|
|
|
|
|
Profit for the period (USD'000) |
1,462 |
34,357 |
|
Weighted average number of ordinary shares in issue |
233,572,409 |
250,626,969 |
|
Basic earnings per share (USD per share) |
0.01 |
0.14 |
|
|
════════ |
════════ |
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has no category of potentially dilutive ordinary shares. Therefore, diluted earnings per share is equal to basic earnings per share.
(c) Net asset value per share
Net Asset Value ("NAV") per share is calculated by dividing the net asset value of the Company by the number of outstanding ordinary shares in issue as at the reporting date excluding ordinary shares purchased by the Company and held as treasury shares (Note 12). NAV is determined as total assets less total liabilities.
|
|
As at 31 December 2014 |
As at 30 June 2014 (Restated) |
|
|
|
|
|
Net asset value (USD'000) |
742,250 |
771,380 |
|
Number of outstanding ordinary shares on issue |
226,710,112 |
238,254,994 |
|
Net asset value per share (USD/share) |
3.27 ═════════ |
3.24 ═════════ |
18 SEASONALITY
The Company's management believes that the impact of seasonality on the condensed interim financial information is not material.
19 DIRECTORS REMUNERATION
The aggregate directors' fees for the six-month period amounted to USD204,944 (six months ended 31 December 2013: USD172,500), of which there was no outstanding amount payable at the reporting date (30 June 2014: nil).
The details of remuneration for each director are summarised below:
|
|
Six months ended |
|
|
|
31 December 2014 |
31 December 2013 |
|
|
USD |
USD |
|
|
|
|
|
Steven Bates |
47,500 |
47,500 |
|
Martin Adams |
40,000 |
40,000 |
|
Martin Glynn (*) |
32,444 |
40,000 |
|
Michael Gray |
45,000 |
45,000 |
|
Bich Thuy Dam |
40,000 |
- |
|
|
────── 204,944 ══════ |
────── 172,500 ══════ |
(*) resigned 27 November 2014
20 RELATED PARTIES
(a) Management fees
Under an amended and restated investment management agreement dated 24 June 2013 which became effective as of 1 July 2013 (the "Amended Management Agreement"), the Investment Manager receives a fee at an annual rate of 1.5% of the NAV, payable monthly in arrears.
Total management fees for the six-month period amounted to USD6.0 million (30 June 2014: USD5.7 million), with USD1 million (30 June 2014: USD1 million) in outstanding accrued fees due to the Investment Manager at the reporting date.
(b) Incentive fees
Prior to 1 July 2013 the Investment Manager was paid an incentive fee equal to 20% of the increase in the NAV of the Company over an 8% per annum hurdle rate, with a catch up.
Under the Amended Management Agreement dated 24 June 2013 and the latest amendment dated 15 October 2014, from 1 July 2013 the incentive fee was changed to be 15% of the increase in NAV per share over a hurdle rate of 8% per annum. A catch up is no longer applied. Furthermore, for the purposes of calculating incentive fees, the Company's net assets are segregated into a Direct Real Estate Portfolio and a Capital Markets Portfolio. A separate incentive fee is calculated for each portfolio so that for any balance sheet date it will be possible for an incentive fee to become payable in relation to one, both, or neither, portfolio depending upon the performance of each portfolio. However, the maximum incentive fee that can be paid in any given year in respect to a portfolio is 1.5% of the NAV of that portfolio at the balance sheet date. Any incentive fees earned in excess of the cap may be paid out in subsequent years providing that certain performance targets are met.
Total incentive fees for the six-month period amounted to USD8.4 million (31 Dec 2013 : nil), with USD8.4 million (30 June 2014: USD9 million) in outstanding accrued fees due to the Investment Manager at the reporting date.
(c) Other balances with related parties
|
|
31 December 2014 |
30 June 2014 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Receivables from the Investment Manager on management fees rebate |
197 |
331 |
|
|
|
|
|
Payables to the Investment Manager on expenses paid on behalf |
254 |
220 |
21 COMMITMENTS
The Company's real estate associates has a broad range of commitments under investment licences which it has received for real estate projects jointly invested with VinaLand Limited, a related party under common management, and other agreements it has entered into, to acquire and develop, or make additional investments in investment properties and leasehold land in Vietnam. Further investments in many of these arrangements are at the Company's discretion.
22 FINANCIAL RISK MANAGEMENT
(a) Financial risk factors
The Company has set up a number of subsidiaries as well as invested in some associates for the purpose of holding investments in listed and unlisted securities, debt instruments, private equity and real estate in Vietnam and overseas with the objective of achieving medium to long-term capital appreciation and providing investment income. The Company accounts for these subsidiaries and associates as financial assets at fair value through profit or loss. The fair values are therefore subject to a variety of financial risks: market risk (including currency risk, interest rate risk, and price risk), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potentially adverse effects on the Company's financial performance. The Company's risk management is coordinated by the Investment Manager who manages the distribution of the assets to achieve the investment objectives.
The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the annual consolidated financial statements of the Company and its subsidiaries as at 30 June 2014.
There have been no significant changes in the management of risk or in any risk management policies since the last balance sheet date.
Foreign exchange risk
The Company's subsidiaries' exposure to risk resulting from changes in currency exchange rates is moderate as, although transactions in Vietnam are settled in the VND, the value of the VND has in recent times been closely tied to that of the USD, the reporting currency.
Neither the Company nor any of its subsidiaries or associates hedges currency exposure, but cash may be held in either VND or USD. The Board and Investment Manager regularly review the costs and potential benefits of currency hedging. The Company did not enter into any currency hedges in the reporting period and it is considered unlikely that it will do so in the foreseeable future.
As at 31 December 2014 and 30 June 2014, the fair value of the Company's investments in subsidiaries and associates is exposed to foreign currency risk mainly because they hold financial assets and liabilities denominated in VND. As at the reporting date, had the VND weakened/strengthened by 5 per cent in relation to the USD, with all other variables held constant, the balance of financial assets held at fair value through profit or loss would have been lower/higher by USD33.7 million (30 June 2014: USD37.1 million).
Price risk
Price risk is the risk that the value of an instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer, or factors affecting all instruments traded in the market.
The Company's subsidiaries invest in listed and unlisted equity securities and are exposed to market price risk of these securities.
The majority of the Company's subsidiaries' equity investments are publicly traded on either of Vietnam's stock exchanges (HOSE or HNX).
All securities investments present a risk of loss of capital. This risk is managed through the careful selection of securities and other financial instruments within specified limits and by holding a diversified portfolio of listed and unlisted instruments. In addition, the performance of investments held by the Company is monitored by the Investment Manager on a monthly basis and reviewed by the Board of Directors on a quarterly basis.
If the prices of the securities had increased/decreased by 10 per cent, the Company's financial assets held at fair value through profit or loss would have been higher/lower by USD42.2 million (30 June 2014: USD51.2 million).
The Company's associates invest in a number of real estate projects. The fair values of the underlying properties have a direct impact on the fair values of these investment in associates. The Investment Manager closely monitors indicators that may affect property valuations. The Board of Directors is also highly involved through its quarterly review of these valuations.
If the fair values of real estate properties had gone up/down by 10%, the Company's financial assets at fair value would have been risen/dropped by USD10.6 million (30 June 2014: USD12.1 million).
Interest rate risk
The Company's subsidiaries' exposure to interest rate risk is related to interest bearing financial assets and financial liabilities. Cash and cash equivalents, and government bonds are subject to interest at fixed rates. They are exposed to fair value changes due to interest rate changes. The Company's subsidiaries had no significant financial liabilities with floating interest rates. As a result, the Company had limited exposure to cash flow and interest rate risk.
(b) Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
· Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
· Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and
· Level 3: Inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs).
There are no financial liabilities of the Company which were carried at fair value through profit or loss as at 30 June 2014 and 31 December 2014.
The level into which financial assets are classified is determined based on the lowest level of significant input to the fair value measurement.
Financial assets measured at fair value in the balance sheet are grouped into the following fair value hierarchy:
|
|
Level 3 |
Total |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
As at 31 December 2014 (unaudited) |
|
|
|
Financial assets at fair value through profit or loss |
744,508 |
744,508 |
|
|
────── 744,508 ══════ |
─────── 744,508 ═══════ |
|
As at 30 June 2014 (restated) |
|
|
|
Financial assets at fair value through profit or loss |
773,653 |
773,653 |
|
|
────── 773,653 ══════ |
─────── 773,653 ═══════ |
All of the Company's financial assets at fair value through profit or loss are classified as Level 3, because they represent the Company's interests in private entities which hold the Company's underlying investments. If these investments were held at the Company level, as at 31 December 2014, they would be presented as follows:
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
USD'000 |
USD'000 |
USD'000 |
USD'000 |
|
|
|
|
|
|
|
Cash and cash equivalents |
74,413 |
- |
- |
74,413 |
|
Ordinary shares - listed |
408,185 |
- |
- |
408,185 |
|
Ordinary shares - unlisted and OTC |
- |
38,763 |
2,678 |
41,441 |
|
Private equity |
- |
- |
51,161 |
51,161 |
|
Hospitality |
- |
- |
63,143 |
63,143 |
|
Real estate projects |
- |
7,401 |
95,738 |
103,139 |
|
Other assets, net of liabilities |
- |
- |
3,026 |
3,026 |
|
|
───── |
───── |
───── |
───── |
|
|
482,598 |
46,164 |
215,746 |
744,508 |
|
|
═════ |
═════ |
═════ |
═════ |
Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include actively traded equities, government bonds and private equity investments which have committed prices at the balance sheet date. The Company does not adjust the quoted price for these instruments.
Financial instruments which trade in markets that are not considered to be active but are valued based on quoted market prices and dealer quotations are classified within Level 2. These include investments in listed equities and over-the-counter ('OTC') equities. As Level 2 investments
include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Specific valuation techniques used to value the Company's underlying investments include:
· Quoted market prices or dealer quotes;
· Use of discounted cash flow technique to present value the estimated future cash flows;
· Other techniques, such as the latest market transaction price.
The fair value of the Company's investments and associates are estimated using approaches as described in Note 3.1. As observable prices are not available for these investments, the Company classifies these as Level 3 fair values.
Changes in Level 3 financial assets at fair value through profit or loss
|
|
31 December 2014 |
30 June 2014 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Opening balance (1 July 2014/1 July 2013) |
773,653 |
730,538 |
|
Realised gains |
114 |
- |
|
Unrealised |
16,982 |
119,070 |
|
Other reductions due to payments on behalf of the Company and its subsidiaries |
(46,241) |
(75,955) |
|
Closing balance
|
────── 744,508 ══════ |
────── 773,653 ═════ |
|
Total unrealised gains for the period/year included in: |
|
|
|
- Profit or loss |
16,982 |
119,070 |
|
- Other comprehensive income |
- |
- |
|
|
──── 16,982 ════ |
───── 119,070 ═════ |
This information is provided by RNS
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