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VinaLand Limited
Annual Report 2015
CONTENTS
Section 1 – Introduction
Financial Highlights
Chairman’s Statement
1
2
Section 2 – Investment Manager’s Report
Investment Environment
Portfolio Performance
Top Holdings
VinaCapital Management Team
4
6
11
22
Section 3 – Reports and Financial Statements
Board of Directors
Report of the Directors
Corporate Governance Statement
Directors’ Remuneration Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Financial Statements and Notes
24
26
36
42
43
44
45
Section 4 – Annual General Meeting
Notice of Annual General Meeting
129
Section 5 – Additional Information
Investing policy
Historical Financial Information
Overview and advisers
131
135
137
Front Cover – Duplex Azura Project.
VinaLand Limited
Annual Report 2015
Financial Highlights
Vietnam’s residential property market has shown some signs of improvement over the fiscal year, as economic conditions
remained positive and market confidence in the property market returned. As such VinaLand Limited’s (“VNL” or the
“Company”) project divestments and residential sales improved slightly from the previous year. The Company recorded a net
asset value (“NAV”) of USD391.2 million, or USD0.91 per share as at 30 June 2015, a decline of 0.7 percent from a net asset
value per share of USD0.92 a year before. VNL’s share price at the end of the fiscal year was USD0.52, a decline of 6.8 percent
from a share price of USD0.55 at the end of June 2014. The Fund’s share price to NAV discount widened slightly during the
year, reaching 43.2 percent as at 30 June 2015.
Performance summary
Number of assets
FY2015
% Change
FY2014
25
% Change
FY2013
30
34
NAV per share (USD)
0.91
-0.7
0.92
-1.3
0.93
Share price (USD)
0.52
-6.8
0.55
21.0
0.46
Discount
Cash used for share buybacks (USD million)
43.2%
16.0
39.50%
34.1
12.1
50.50%
161.8
4.6
VNL has completed ten full divestments and one partial divestment since the November 2012 Extraordinary General Meeting,
with a gross total sales value of USD110 million and net proceeds of approximately USD71 million, which were a combined
8.5 percent above NAV at the time each of the exits completed.
During the year ended 30 June 2015, VNL repurchased and cancelled 28.6 million ordinary shares. Since the onset of the share
buyback program, which commenced in October 2011, to 30 June 2015, the Company has cancelled a total of 69.8 million
ordinary shares, representing 13.97 percent of the total shares in issue prior to the commencement of the share buyback
program.
1
FINANCIAL
HIGHLIGHTS
Net asset value at
30 June 2015
$391.2m
NAV per share at
30 June 2015
$0.91
Decrease
-0.7%
VinaLand Limited
Annual Report 2015
Dear Shareholders,
Throughout this financial year and particularly since the beginning of 2015, the ongoing stability of Vietnam’s macroeconomic
environment, coupled with a significant improvement in liquidity within the banking system as well as growing confidence in the
property sector, has enabled the Vietnamese real estate market to commence a meaningful recovery. We expect this trend to
continue throughout the year. This positive recovery should provide a stable platform for VinaLand Limited (VNL) to expedite the
implementation of the divestment strategy started nearly three years ago, following its approval by shareholders at the EGM held
in November 2012.
This strategy consists of VNL not making any new investments and distributing all surplus cash to shareholders over a three-year
“cash return period”. Since that EGM and up to 30 June 2015, VNL completed ten full divestments and one partial divestment, with
a gross total sales value of USD110 million and net proceeds of approximately USD71 million, which were a combined 8.5 percent
above NAV at the times of the exits concerned. However, these achievements to date are still below the targets we set out to
accomplish during that EGM, primarily as a result of a much slower than expected recovery of Vietnam’s economy, especially with
regard to its real estate market. A combination of factors including the high cost of borrowing, low liquidity due to the country’s
large number of nonperforming loans (NPL’s) within the banking system and delays in project licensing, coupled with an overall
lack of confidence in the property sector, significantly reduced VNL’s ability to dispose of its projects, in particular the larger ones.
Additionally, delays in divesting of these projects have resulted in a higher proportion of net proceeds being diverted toward
payments of capital commitments and operating expenses. This has resulted in less funds being available for distribution to
shareholders as at 30 June 2015. The positive evolution in the real estate market witnessed in the second half of the last financial
year which ended on that date should allow VNL to speed up the closure of the sales of a number of its projects during VNL’s
current financial year.
Financial results summary
The financial results of VNL for the fiscal year ended 30 June 2015 show VNL’s audited NAV per share declined by 0.7 percent, yearon-year, from USD0.92 as at 30 June 2014 to USD0.91 as at 30 June 2015. The Company’s share price closed FY 2015 at USD0.52
per share, a decline of 6.8 percent from USD0.55 per share in FY 2014. As a result, VNL’s share price to NAV discount widened
slightly to 43.2 percent from 39.5 percent at the end of FY 2014.
During the financial year, VNL repurchased and cancelled 28.6 million ordinary shares, a 26.5 percent increase from the
22.6 million shares repurchased and cancelled in the previous fiscal year. As at 30 June 2015 the Company had cancelled
69.8 million ordinary shares, representing 13.97 percent of the total shares in issue prior to the commencement of the share
buyback program.
2
CHAIRMAN’S
STATEMENT
Michel Casselman
Chairman
“Throughout this financial
year and particularly since
the beginning of 2015,
the ongoing stability of
Vietnam’s macroeconomic
environment, coupled with
a significant improvement in
liquidity within the banking
system as well as growing
confidence in the property
sector, has enabled the
Vietnamese real estate
market to commence a
meaningful recovery.”
VinaLand Limited
Annual Report 2015
Corporate actions
In November 2014, the Company conducted its second Annual General Meeting. At the meeting three of the five standing
Directors stood and were voted by shareholders for reappointment. Additionally, the Board of Directors appointed Mr. Tran
Trong Kien as a new Independent Non-executive Director, effective 25 September 2015. Mr. Tran replaced Mr. Daniel McDonald,
who resigned from the VNL Board with effect from the same date. Mr. Tran’s experience in owning, developing and guiding both
property investments and commercial enterprises in Vietnam and the region over the last 20 years will greatly assist VNL as it seeks
to develop and realise its property portfolio.
Both the Board and the Manager have remained focused on the objectives set forth during this three-year cash return period;
however, the targets set in 2012 will not be achieved by November 2015. As promised at the last EGM in 2012, another EGM and
AGM will be convened in London later this year where shareholders can review the performance over the past three years and
vote upon a revised realization and distribution policy that will come into effect at the end of the current cash return period. This
revised realization and distribution policy will require a special resolution for how the Company is to continue to be voted upon at
this EGM and all shareholders are encouraged to participate in the vote on this important issue.
Michel Casselman
Chairman
VinaLand Limited
19 October 2015
3
VinaLand Limited
Annual Report 2015
4
INVESTMENT
MANAGER’S
REPORT
The financial year in review
During the financial year ended 30 June 2015, the Vietnam Index (VN Index) increased by
0.3 percent in USD terms after adjusting for the State Bank of Vietnam’s (SBV’s) official
currency devaluations over the financial year (once in January 2015 by 1 percent, and
a second time in May 2015 with a further 1 percent devaluation, raising the reference
rate from 21,458 to 21,673). Subsequent to the financial year, in August 2015 the SBV
devalued the Vietnam Dong (VND) again, this time by 1 percent while also widening the
VND trading band to +/-3 percent from +/-1 percent. The VND has depreciated nearly
5 percent so far this calendar year, but has nonetheless strengthened against many other
ASEAN currencies.
Currency devaluation and volatility have been key themes for the year, as the SBV
attempted to cope with negative impacts from international markets. The SBV’s decision
to officially adjust the currency’s reference rate by 3 percent this calendar year seems
warranted from a macroeconomic perspective, all the while limiting the scale of central
bank intervention in an attempt to preserve a foreign reserve of almost USD40 billion
(equivalent to 3 months of exports).
Nevertheless, the VND has been one of the more resilient currencies amidst widespread
emerging market currency depreciation, with regional export-oriented peers like
Thailand’s baht falling 8 percent, the Indonesian rupiah losing 12 percent and Malaysia’s
ringgit down by 17 percent against the USD this year respectively. In turn, competitive
devaluation has helped Vietnamese exporters compete against cheaper goods from
China and other regional peers.
The resilience of Vietnamese exports is also attributable to a spectacular shift in
the export structure, from traditional agricultural goods to more labour-intensive
manufacturing such as shoes and textiles, and capital-intensive manufacturing including
smart phones and electronic appliances. While Vietnam remains among the world’s top
five exporters of coffee, natural rubber and rice, it has rapidly climbed the ranks in the
export of higher valued-added manufactured goods. For example, Samsung Electronics
has committed over USD12 billion in foreign direct investment (FDI) to produce smart
phones, displays and appliances in the country. Microsoft Corporation announced in July
2014 that they would move their smart phone manufacturing operations to Vietnam
from China, and several manufacturers of Apple product components have indicated
that they intend to relocate to Vietnam as the cost of labour continues to rise in China.
Overall, FDI continues to increase, with registered FDI of USD19.3 billion as of October
year-to-date, and is forecast to exceed 2014 commitments.
INVESTMENT
ENVIRONMENT
Currency movement vs ASEAN currencies, on a relative basis, for the
past 36 months up to 30 September 2015.
160
150
140
130
Indonesian Rupiah
Thai Baht
Malaysian Ringgit
Indian Rupee
Philippine Peso
Singapore Dollar
Myanmar Kyat
Vietnam Dong
120
110
100
90
Oct ‘12
Mar ‘13
Aug ‘13
Jan ‘14
Jun ‘14
Nov ‘14
Apr ‘15
Sep ‘15
Relative movement of VND versus basket of South East Asian currencies 2012 – 2015, showing
the longer-term stability of the VND against regional export-oriented peers.
Source: Bloomberg.
VinaLand Limited
Annual Report 2015
Lower commodity prices, in particular oil and gas, have helped contain inflation to multiyear lows, a trend that is expected to continue for the remainder of the year. Coupled
with a more competitive currency, the reduction in commodity prices has been a boon
to Vietnamese exporters, with a small trade deficit reported after several years of record
trade surpluses. Domestic consumers have also benefited from lower prices at the fuel
pump and from cheaper imported goods from China, where manufacturers struggle to
keep utilization rates and employment steady in the face of rising labour costs. Consumer
confidence and private consumption growth continue to show strong signs of recovery,
thanks to ongoing FDI, rising discretionary income, low inflation and declining
energy costs.
However, lower oil prices have meant that the government has had to resort to other
measures to narrow the widening budget deficit. Vietnam is the 7th largest oil producer
in the Asia Pacific region, and oil revenues, which have in the past contributed to
20 percent of the state’s revenues, are currently at 39 percent of their yearly estimate as
of the first half of 2015. Fuelled by a progressive reduction in corporate income taxes, tax
revenue collection is well below estimates while the aggressive fiscal spending program
has not abated, and as a result the budget deficit is forecast to grow to almost 6 percent
of GDP by the end of 2015. Finally, the ambitious program of partially privatizing Stateowned enterprises has, until recently, stalled and failed to deliver the headline-grabbing
attention that would bring much needed foreign money to help ease the budget shortfall.
Overall, the combination of strong domestic demand, lower commodity prices, continued
fiscal spending, and strong credit growth has led to an improvement in overall economic
strength, with real GDP growth accelerating to 6.0 percent in 2014 after 2 years of
sub-par growth. This growth has continued through the first half of 2015, with real GDP
growing by 6.3 percent year-on-year, placing Vietnam amongst the best performing
emerging economies in South East Asia.
5
FDI committed and disbursed
Disbursements
70.0
Commitments
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F
FDI commitments and disbursements 2001 – 2015F, showing a steady increase in disbursements
over recent years. Source: Ministry of Planning and Investment.
Trade Balance and Export growth (year-on-year)
Trade Balance
5.0
Export (%)
0.7
0.0
40%
2.1
30%
0.0
20%
-5.0
-5.5
-4.6
-4.8
10%
-10.0
-9.8
-12.4
-12.4
0%
-12.6
-15.0
-10%
-17.5
-20.0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-20%
Trade balance and the percentage of exports, 2004 – 2014, showing a strong trade balance supported
by stable export performance in recent years. Source: General Department of Vietnam Customs.
VinaLand Limited
Annual Report 2015
6
INVESTMENT
MANAGER’S
REPORT
Real estate
Sector overview
The VND devaluation potentially exerts pressure on a higher interest rate. Nevertheless,
credit to the sector has begun to expand again after several years of contraction.
However, the impacts on the real estate market are expected to be modest, especially as
the property market is largely fuelled by domestic demand and dominated by domestic
supply from local developers. Policy initiatives like the relaxation of the foreign ownership
regulations and subsidized credit for the real estate sector are also helping to expand
the real estate demand pool as investors rotate away from gold and bank deposits, back
into real estate. Developers that have survived the downturn have emerged stronger and
more innovative, having reconfigured their capital structures and end-product offerings
to harness evolving consumer tastes, thereby further stimulating demand.
Optimism created by the new Housing Law and Real Estate Business Law, both effective
1 July 2015, as well as a greater availability of mortgages, resulted in a new wave of
condominium supply to the market. Although it remains to be seen whether the market
can absorb all of the new condominium units, the passage of these two laws has
established a transparent legal framework to help protect home buyers, and increase
the confidence of foreign investors (corporate and private) when purchasing residential
properties in Vietnam. As a result, the apartment market will become more competitive
as it seeks to absorb all of the new supply from these launches.
Condominium sector
Condominium market has seen the improvement over the last twelve months with more
launches and transactions, especially in the high-end and mid-end property segments.
According to CBRE Vietnam, numerous condominium projects were launched in the
first half of 2015, specifically 36 projects comprising 13,678 units in Ho Chi Minh and
37 projects with 10,017 units in Hanoi. The number of new condominiums launched in
Ho Chi Minh City and Hanoi rose 170 percent and 90 percent year-on-year respectively.
The average selling price of all segments increased between 5 percent and 10 percent
year-on-year in both Ho Chi Minh City and Hanoi. However, in the first half of 2015, the
absorption rate of Ho Chi Minh City was estimated to be 73 percent while Hanoi’s rate
was at 45 percent. There is no future supply located in the city centre due to limited
supply of development sites, permission to build residential projects is also difficult to
obtain. Therefore, future supply will be in non-CBD (non-Central Business District) areas
and located along the metro lines which will attract more buyers and investors.
PORTFOLIO
PERFORMANCE
GDP growth, mapped together with credit growth
GDP Growth (LHS)
Credit Growth (RHS)
10.0%
8.0%
60%
8.4% 8.2% 8.5%
7.8%
51.4%
7.3%
6.9% 7.1%
41.5%
6.0%
30.0% 5.3%
28.2%
21.4% 22.2%
0.0%
6.8%
5.9%
5.0%
4.0%
2.0%
6.2% 37.5%
19.2%
5.4%
6.0%
6.5%
27.7%
40%
20%
21.4%
10.9%
8.9%
12.5%
14.2% 15.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F
0%
GDP and credit growth 2001 – 2015F, both demonstrating stable rates of growth in recent years.
Source: General Statistics Office of Vietnam, Bloomberg
VinaLand Limited
Annual Report 2015
Landed property sector
The landed property market continues to demonstrate improvements with new project launches, helped by changes in
sales strategies from existing developers such as protracted repayment plans and additional amenities. According to Savills,
the number of transactions increased by 5 percent to 15 percent year-on-year, both in Ho Chi Minh City and Hanoi. A large
portion of recent buyers are end-users who are interested in locations with improving infrastructure, the landscape, available
amenities, in near completed projects or projects developed by high profile developers. Projects in Da Nang and Nha Trang
have experienced improved sales volume over the last four quarters, and this trend is expected to continue. There has been
a notable increase in the number villas with prices from USD250,000 – USD900,000 per unit, as against those priced at over
USD1,000,000. This demonstrates that developers are now focusing on a wider customer base where budgets for second/ third
homes are lower.
Office and Retail property sector
The average monthly rents of office and retail segments remained stable in Ho Chi Minh City while decreased approximately
3 percent – 10 percent in Hanoi over the last four quarters. Current occupancy rates for these segments improved slightly
year-on-year. Due to the limited availability of land in the CBD, both existing and future large retail and office centers will
decentralize to non-CBD location. Relocation and expansion from small and medium size tenancies (less than 1,000sqm) are
anticipated to drive market in 2015. New supply both in office and retail segments is expected to apply downward pressure
on net effective rentals for the next 12 months. New supply will come online hence landlords may soften their rents slightly in
an effort to reduce vacancy rate. Therefore, office and retail market will be more competitive. According to revised draft real
estate laws, foreign invested firms can sub-lease commercial properties that they are renting. Thus, the landlords have become
more open to long terms leases with sub-leasing rights permitted under the terms of the revised laws, effective in July 2015.
Market outlook
A recovery is underway in Vietnam’s real estate sector. However, oversupply in the condominium market may cause some
instability and low occupancy rates in the rental apartment market. Moreover, difficulties in implementing new regulations and
a lack of subsequent legal documents clarifying relevant procedures of these new regulations will pose a challenge for both
developers and buyers.
To ensure a sustainable recovery, it will require developers to follow a disciplined strategy concerning their investment horizon
and risk management, all the while selecting the right product to meet an ever more discerning domestic buyer. Developers
with access to sites near key infrastructure projects, particularly along corridors where rail transit systems are being built in
Hanoi and Ho Chi Minh City, and where major road and highway projects have been completed, will stand to benefit the most.
7
VinaLand Limited
Annual Report 2015
Net asset value and share price
The Company recorded a net asset value of USD391.2 million, or USD0.91 per share as at 30 June 2015, a decline of 0.7 percent
from a net asset value per share of USD0.92 a year ago. VNL’s share price at the end of the fiscal year was USD0.52, a decrease
of 6.8 percent from a share price of USD0.55 at the end of June 2014. The Fund’s share price to NAV discount is 43.2 percent as
at 30 June 2015 compared to 39.5 percent a year ago.
During the year ended 30 June 2015, VNL repurchased and cancelled 28.6 million ordinary shares. Since the onset of the share
buyback program, which commenced in October 2011, the Company has cancelled a total of 69.8 million ordinary shares,
representing 13.97 percent of the total shares in issue prior to the commencement of the share buyback program.
Residential sales and project development
During the fiscal year ending 30 June 2015, VNL has experienced significant improvement in residential sales performance with
more than 279 sales and purchase agreements secured, compared to 130 agreements signed last year.
VNL has little exposure to the condominium market with only two projects under development, the Ocean Apartments
(formally the Cham Condominiums) and the Azura Apartment Tower, both in Danang. The Ocean Apartments includes 46
modern-designed condominiums of 1-2 bedrooms ranging from 71 to 133 square meters in size. The development allows
owner’s access to all facilities within the award-winning Danang Beach Resort and connected golf course. Since the project’s relaunch in Q2 2014, numerous sales events have been undertaken over the past 12 month period, and by the end of Q2 2015,
nearly 85 percent of the building had been sold with only seven apartments still available for sale.
The Azura Apartment Tower project has seen a substantial increase in sales activity since the completion of an adjoining
retail mall that saw construction commencement late in Q4 2014 and its completion in early July 2015. During FY 2015, Azura
recorded positive selling momentum with 50 new sale contracts (source: list of SPAs in IFCA record). To date, VNL has sold
206 of 225 available units (including signed sale and purchase agreements). In Q4 2014, Azura was awarded the 5 Star award
for “Best Residential High-Rise development – Vietnam” at the 2014/15 Asia Pacific Property Awards. Future projects on the
Capital Square site are now being reviewed given that the local real estate market has strengthened.
8
VinaLand Limited
Annual Report 2015
In Q3 2014, the Ocean Villas received the “Highly Commended – Best Villa Development” award at the South East Asia
Property Awards. The beachfront enclave was also formerly recognized with a “Highly Commended – Residential development”
category at the 2014/15 Asia Pacific Property Awards in Q4 2014. The operating “Dunes Golf Course” at Danang Beach Resort
has also been recognized by being voted as “Vietnam’s Best Golf Course 2014” at the Vietnam Tourism Awards and the ”IAGTO
Diamond Award” for 2014. Additionally, VinaLiving, the lifestyle brand used on all VNL residential projects was recognized for
its development marketing for both Vietnam and the Asia Pacific region again in the latter parts of 2014. These awards will help
to support marketing of the Danang Beach Resort project as well as other developments in the portfolio.
In Q2 2015, project sales at Dai Phuoc Lotus increased resulting in approximately 215 sales and purchase agreements signed
out of 270 villas launched. 180 villas have now been handed over to buyers. All infrastructure works to Zone 5 are now
complete with some additional recreational facilities required to be developed in the latter parts of 2015 in order to secure a
sell-out of Parcel 5 within the next 12 to 18 months. VNL worked with its JV partner to revise the overall 1:500 master plan for
the site.
At the My Gia Township project in Nha Trang city, as infrastructure is being progressively completed, land lot sales have also
begun to improve. To date, more than 692 of the 733 land plots launched have been sold. The strategy is to proceed slowly
with development and sales in Parcel 2 and divest the remaining parcels to prospective investors. The Company will continue
to promote and leverage the VinaLiving brand to assist in selling its residential projects comprising land, condominiums, and
landed houses.
For projects under development and planning stages, VNL continued to make progress on completing statutory requirements
and obtaining necessary licenses to enhance the projects’ value for future divestment or development.
Project divestments
Since the Company’s extraordinary general meeting (EGM) in 2012 and up to 30 June 2015, VNL has completed ten full
divestments and one partial divestment, including the Nguyen Du office building in Hanoi, the Sheraton hotel in Nha Trang, the
Signature One condominium site and the Hao Khang residential site in Ho Chi Minh City, stake in Prodigy Limited owning a 102room operating hotel in Hanoi, stake in Vina Properties Limited owning a 278-room operating hotel in Ho Chi Minh City, stake
in hospitality investments including Movenpick Hanoi Hotel, the Marie Curie office/residential site in Ho Chi Minh City, stake in
Sai Gon Quy Nhon hotel in Binh Dinh, and its stake in the Vung Bau site in Phu Quoc; the partial divestment is the Capital Square
phase 1 commercial site. These ten full divestments and one partial divestment totaled a gross sale value of USD110 million
and brought in net proceeds of approximately USD71 million which was 8.5 percent above NAV at exit. In addition, these exits
substantially reduced debt in the consolidated balance sheet or VNL as well as removing some future funding commitments.
9
VinaLand Limited
Annual Report 2015
Debt financing
On 17 December 2013, VNL issued, through its wholly owned subsidiary VinaLand ZDP Limited, 15 million zero dividend
preference shares with a Gross Redemption Yield of 8 percent. The ZDP shares have an issue price of 100 pence and a final
capital entitle of 126 pence per ZDP share. The shares are listed on the London Stock Exchange plc (“LSE”) and are admitted to
a standard listing on the Official List and trading on the LSE’s main market for listed securities. The proceeds have been utilized
to assist in refinancing the Company’s project level debt facilities as they mature across its development portfolio, to fund
potential capital investments in its project companies (as necessary) and for general working capital purposes. This issue has
increased flexibility in financing and completion of some projects contributed additional working capital and diversified
funding sources.
VNL’s debt at the project level (bank debt) as at 30 June 2015 is 19.7 percent of NAV and debt at the fund level (ZDPs) was
7.2 percent of NAV. Throughout the financial year, efforts have been made to renegotiate with a number of local banks to
restructure existing loans and secure better terms including both extension of repayment terms and reduction of interest
rates. As an example, in December 2014, the Manager was successful in refinancing the loan for the My Gia Township
project including an interest rate reduction from 11.5 percent to 11.0 percent per annum as well as an extended schedule of
repayment. VNL also was successful in restructuring the loan for the Capital Square project, Phase 1, in March 2015, which
extended the schedule of repayment. The Manager is continuing to monitor the debt market to secure more favourable terms
and ensure sufficient funding for VNL’s projects (at the project level, not the Fund level) over the next twelve months and
beyond.
Strategy
Since the EGM on 21 November 2012, VNL has continued to follow the strategy of focusing on realization of assets and no
new investments will be made. Resources and efforts have been concentrated on proceeding with development of selected
residential projects to enable divestment through the sale of residential products (land plots, villas, and apartments) and full or
partial project divestments. For larger land projects, VNL will proceed with initial infrastructure where necessary and expedite
completion of statutory requirements to facilitate the splitting of land into wholesale parcels for divestment to
secondary developers.
10
VinaLand Limited
Annual Report 2015
Top Holdings at 30 June 2015
VNL
VOF
ownership ownership
Site area NAV (USD
(ha)
mil)
Projected
future
investments
Bank debt through 2015
(VNL portion, (VNL portion,
% of NAV
USD mil)¹
USD mil)²
Current
status
Investment
Location Sector
1
Century 21
South
Residential
75.%3
25.%3
30.1
80.0
18.5%
28.3
0.0
Planning
2
Danang Golf and
Beach Integrated
Development
Central
Residential
75.0%
25.0%
248.3
54.2
12.5%
11.5
0.0
Development
3
Dai Phuoc Lotus
South
Township
54.0%
18.0%
198.5
34.3
7.9%
0.3
0.0
Development
4
VinaSquare
South
Mixed Use
46.5%
15.5%
3.1
33.5
7.7%
0.0
0.7
Planning
5
Pavilion Square
South
Mixed Use
90.0%
0.0%
1.4
28.8
6.7%
27.5
10.8
Planning
6
Times Square Hanoi North
Mixed Use
65.0%
0.0%
4.0
27.0
6.2%
0.0
0.0
Planning
7
Aqua City
Township
40.0%
0.0%
250.2
23.2
5.4%
0.0
0.0
Planning
South
8
Trinity Park
South
Residential
75.0%
25.0%
33.7
20.3
4.7%
0.0
0.0
Planning
9
Green Park Estate
South
Mixed Use
62.9%
33.9%
15.7
17.9
4.1%
0.0
1.1
Planning
Central
Mixed Use
59.2%
19.7%
6.6
13.2
3.0%
2.3
6.8
Development
Total of top 10 investments
332.4
76.7%
69.8
19.4
Remaining investments
101.1
23.3%
7.4
2.2
Total portfolio
433.5
100.0%
77.2
21.6
10 Capital Square 4
1
Bank debt: VNL’s portion of current outstanding bank finance at the local investment (project) vehicle.
2
rojected future investments through to 2015: Projected remaining equity payments from VNL. These projections are subject to change should local authorities amend policies
P
relating to licencing approvals and capital contributions or should debt be utilized instead of capital or should an investment partner not participate. Some of the projected future
investments may not apply should VNL sell or choose not to proceed to develop the property.
3
Century 21: Economic interests of VNL and VOF in this project.
4
apital Square is broken down into three separate phases (excluding a partial divestment of phase 1). The ownership percentages of this project reflect the total NAV of three
C
phases, which are owned by Vietnam Opportunities Fund Limited and VinaLand Limited.
11
INVESTMENT
MANAGER’S
REPORT
TOP
HOLDINGS
VinaLand Limited
Annual Report 2015
Top Holdings
Century 21
Century 21 was acquired in 2006 because of its prime location, close to a new traffic corridor to the CBD. The Thu Thiem
tunnel which is part of the Ho Chi Minh City East-West Highway, running from the South West to the North East of the city,
opened in November 2011. The opening of the tunnel has made the site much more accessible to the city’s CBD. The project
site is 100 percent cleared. In Q4 2011, the Century 21 Nam Rach Chiec project received a 1:500 master planning parameters
approval and Investment Licence. The revised 1:500 master plan in-principal approval was received in Q2 2014 and VNL
received the detailed 1:500 master plan approval in Q3 2014. The Long Thanh Dau Giay Highway running in front of the site is
completed and is now open to the public. The 19km Metro Line No. 2 (An Suong – Thu Thiem), which is approximately 2-3 km
southwest of the site, broke ground and is expected to be operating by 2020. The completion of Long Thanh Dau Giay highway
and the potential section of Metro Line No.2 will significantly improve access.
VNL is working with a potential investor regarding divestment of the site. The surrounding District 2 area has seen
improvements to its infrastructure, which has created interest amongst both domestic and foreign investors.
Project summary
Sector
Residential and retail
Area
30ha; approved GFA 511,203 sqm
Location
District 2, Ho Chi Minh City
History
Acquired in June 2006
Site cleared and compensated in June 2008
Revised 1:500 master plan in-principal approval received in Q2 2014
Received detailed 1:500 master plan approval in Q3 2014
Investment rationale
A 30ha site located along new infrastructure corridor in a new desirable suburban area.
12
VinaLand Limited
Annual Report 2015
Top Holdings
Danang Golf and Beach Integrated Development
The Danang Golf and Beach Integrated Development project was acquired in mid 2006. Following
a partial divestment of a sub site, the project now comprises two parcels, a 28.5 ha beachfront and
a 220ha inland lot separated by the coastal highway. The project broke ground in January 2008
with construction of an 18-hole golf course, The Dunes, designed by golf legend Greg Norman.
The golf course and clubhouse opened in April 2010. A number of residential projects have been
successfully developed including The Ocean Villas, The Dune Residences and The Point Villa’s Phase
1. These initial residential phases are now sold out.
In Q2 2015, the project continued to see more activity with new launches and construction
progress. Following the successful launch of the first phase and market improvements, The Point
villa project (part of Danang Golf Course) had its official launch of Phase 2 in April 2015 and now
has 13 sales reservations out of 20 overall units. All sold villas of Phase 1 are under construction
and villa foundations for reservations in Phase 2 are being completed to enable SPA’s to be
executed. Progressive buyer handovers will commence at the end of Q4 2015 for Phase 1 homes.
The Ocean Apartment Block A (part of Danang Beach Resort) achieved practical completion on
30 June 2015 and handovers to buyers are scheduled to commence in July.
On 8 May 2015, The Danang Golf and Beach Integrated Development project received the international
award for “Best Golf Development in Vietnam” at the Asia Pacific Property Awards in Kuala Lumpur.
During H1 2015, overall macroeconomic factors and real estate sector continued to improve and there
is evidence that the number of investor enquiries is increasing.
Project summary
Sector
Residential (integrated resort residential)
Area
248.5 ha
Location
Danang, Central Vietnam
History
Acquired in June 2006, cleared site, under development
Investment licence received in December 2006
Ground breaking in January 2008
Dunes Golf course opened in April 2010
Beach resort parcel: 1:500 master plan received in June 2011, revised in December 2013
Golf course parcel: 1:500 revised master plan received in December 2012
A unique mixed used, seaside integrated resort with golf course well located along the
coastal road of Danang City, the third largest city in Vietnam.
13
VinaLand Limited
Annual Report 2015
Top Holdings
Dai Phuoc Lotus
Dai Phuoc Lotus Township was acquired due to its attractive location on an island in a future
suburban region adjacent to Ho Chi Minh City. The resort-style residential environment, with
transport by both road and boat available to Ho Chi Minh City, will attract second homebuyers as
well as young families.
The strategy is to develop the first of six zones of the 200ha site in conjunction with partial
wholesale divestment to co-investors. The first phase of development commenced with Zone
5, comprising 332 villas. Soft sales began in April 2010 with an official sales launch in April 2011
together with the opening of the show villas. The sports and recreation centre and the CBD
link road was completed and opened in Q4 2013 on schedule which resulted in the strongest
sales since the project launch. All infrastructure works to Zone 5 were completed including the
Prosperity Lake adjacent to the display villas.
The project also won the “Best Residential Development in Vietnam” award at the Asia Pacific
Property Awards in Kuala Lumpur on 8 May 2015. During the first six months of 2015, 214 sales
and purchase agreements has been signed out of 332 villas launched. 175 villas have been handed
over to buyers. The revision of the 1:500 Master Plan of Zone 4 was submitted to authorities
dated 5 May 2015 with approval targeted for August 2015. The master plans of other zones will be
revised for submission and approval from H2 2015 to 2016.
With the real estate market now improving and Government funded infrastructure continuing
to develop around the project it is envisaged that this project will begin to see improvement in
sales activity in 2016.
Project summary
Sector
Township (integrated residential)
Area
198.5ha, estimated GFA 1.2m sqm
Location
Dong Nai Province, near HCMC
History
Acquired in June 2007. Investment licence received in May 2007
Construction and sales of Zone 5 villas underway
Sports and recreation centre, CBD link road, all Zone 5 infrastructure completed
Working with partner to revise 1:500 master plans
The site lies in the fast-growing eastern region adjacent to HCMC and will benefit from the
completed transport infrastructure roll-out in Districts 2 and 9.
14
VinaLand Limited
Annual Report 2015
Top Holdings
VinaSquare
VinaSquare was acquired in May 2007 due to its prime location in Chinatown (District 5) of Ho Chi Minh City. The project is a
mixed-use residential, retail, hotel and serviced apartment development. The Investment licence was obtained in October 2008
and the 1:500 master plan was approved in October 2010. The demolition of the old factory buildings were completed in Q4
2011 and the site is fully cleared. The amended investment license was issued in Q2 2015 and it is expected that the Land Use
Right Certificate will be obtained by Q3 2015.
Discussions are ongoing with interested investors.
Project summary
Sector
Mixed-use (residential, retail, office and hotel)
Area
3.1ha; estimated GFA 278,748 sqm
Location
District 5, HCMC
History
Acquired in May 2007
Investment licence received in October 2008
1:500 master plan approved in October 2010
Revised investment license received in Q2 2015 and LURC expects to be received in Q3 2015
The project will serve HCMC’s Chinatown, a crowded commercial and residential area
surrounded by mainly low-rise buildings.
15
VinaLand Limited
Annual Report 2015
Top Holdings
Pavilion Square
Pavilion Square is a mid to high end ‘for sale’ freehold residential project with a retail centre located in the city centre of
District 1 of Ho Chi Minh City. The project was acquired in January 2007 and the investment licence was obtained in the same
year. The revised planning parameters with a smaller retail area were approved by the authorities in December 2012 and the
revised 1:500 master plan approval was received in Q4 2013. Site compensation is underway and approximately 76 percent is
completed, with the remainder expected to be finalised by Q4 2015. The clearance of the site has been delayed however it is
expected that progress will increase in H2 2015.
In conjunction with the expected completion of land compensation, the manager is working with a potential investor
regarding divestment of the site.
Project summary
Sector
Mixed-use (residential and retail)
Area
1.4ha; approved GFA 156,402 sqm
Location
District 1, HCMC
History
Acquired in January 2007
Investment licence received in 2007
Revised 1:500 master plan approval received in Q4 2013
Compensation 76% completed. Expected completion of compensation in Q4 2015.
The site is well-located for mid to high end residential towers with modern facilities
offering freehold residential units in District 1.
16
VinaLand Limited
Annual Report 2015
Top Holdings
Times Square Hanoi
Time Square is positioned in a strategic location with excellent exposure opposite the National Convention and Exhibition
Centre, which has hosted many national and regional events since opening in 2006. Additionally, the location is within a new
urban development in western Hanoi, often considered as the city’s future second CBD. Given this high-profile location, the
project has considerable potential as a future landmark development. However, obtaining licences and revising master plans
have been a challenge, which has led to delays in development. Due to recent changes in the master planning for the area
surrounding Times Square, a revised master plan is being sought. The proposed development comprises a retail podium with
office, hotel, serviced apartments and residential apartments. Licensing delays have pushed back the commencement and a
new strategy is now in place, which is to divest all or part of this land parcel to facilitate an early exit.
Project summary
Sector
Mixed-use (residential, retail, hotel and office)
Area
4.0ha, estimated GFA 308,510 sqm
Location
Pham Hung Road, My Dinh area – future second CBD
History
Acquired in Q1 2007
Investment licence received in May 2008 and final revised in July 2010
1:500 master plan approved in March 2010
1:500 revised master plan underway
A high profile site located in a strategic location in the heart of the city’s future second
CBD, opposite National Convention and Exhibition Centre.
17
VinaLand Limited
Annual Report 2015
Top Holdings
Aqua City
Aqua City was purchased in 2006 as a strategic acquisition along the North East corridor leading to the new Long Thanh
international airport in Dong Nai. The site is part of an emerging industrial park zone, which is surrounded by the Dong Nai
River, approximately 45 minutes from the centre of HCMC. Since acquisition VNL has been working with a local partner to
construct the main access roads to the site with further road work required. In February 2012, the project received its 1:500
master plan approval. The demerger work is continuing. The development master plan includes affordable housing, schools,
hotels, offices and shopping centres in addition to a marina, parks and waterways.
With the improvement in the real estate market in 2015 and increased deal activity in the adjacent District 9, it is envisaged
that the Aqua City project will attract more attention from local developers in 2016.
Project summary
Sector
Township (residential, retail, office and hotel)
Area
250.2 ha
Location
Dong Nai Province, bordering on District 9 of HCMC
History
Acquired in 2006
1:2000 master plan approved in December 2008
1:500 master plan approved in February 2012
The demerger work ongoing
A riverfront township bordering on District 9 of HCMC.
The project will provide affordable mass housing units in a modern living township to serve
the extended catchment of HCMC’s north east area.
18
VinaLand Limited
Annual Report 2015
Top Holdings
Trinity Park
Trinity Park was acquired in 2007 in order to serve the high demand in Ho Chi Minh City for mid-range housing. The project’s
planning follows the successful sales and exit from The Garland Villa project, a smaller VNL development also located in District 9.
The 1:500 master plan for the project was approved in May 2007.
With the improving real estate market and strong growth in residential sales in District 2 and District 9 of Ho Chi Minh City,
the VNL strategy is now under review with consideration given to commencing the development of infrastructure on this
project.
Project summary
Sector
Residential (including school)
Area
33.7ha, estimated GFA 343,058 sqm
Location
District 9, HCMC
History
Acquired in November 2007
1:500 master plan approved in May 2007
Site cleared and fully compensated
Discussion ongoing for site divestment
Sound long-term demand for mid-range, landed residential housing in District 9, following
the success of The Garland product.
19
VinaLand Limited
Annual Report 2015
Top Holdings
Green Park Estate
The Green Park Estate project site was acquired in 2006 given its strategic location in a densely populated suburb near Ho
Chi Minh City’s Tan Son Nhat International Airport and only 10km from the city’s CBD. This 15.7ha site has excellent exposure
with over 300 metres of frontage onto Truong Chinh Street, a major arterial road with a future Metro Rail Transit (MRT) route
running alongside. Currently the site is used for textile factories and warehouses. Site clearance and relocation work is in
progress to facilitate development or divestment.
The strategy is to divest the project upon completion of the site clearance and obtaining necessary authority approvals.
Project summary
Sector
Residential & commercial (proposed)
Area
15.7 ha
Location
Tan Phu District , HCMC
History
Acquired in Q1 2006
Currently used as textile factories and warehouses
Site clearance and relocation work in progress
Strategically located in a densely populated suburb near HCMC’s Tan Son Nhat
International Airport
20
VinaLand Limited
Annual Report 2015
Top Holdings
Capital Square
The project was acquired in 2006 given its central, river front location in the fast growing city of
Danang. The project comprises residential apartment towers, a 4/5 star hotel, serviced apartments,
a retail mall and other commercial uses and connecting public spaces. The project was partially
exited in 2008 via a co-investment with a European investor for a portion of Phase 1 (2.5ha). The
revised master plan of Phase 1, which comprised more residential areas was approved in August
2012, and the restructuring process to split the 9ha site into 3 separate investment licenses was
successfully completed in June 2012, allowing greater flexibility in development or divestment.
In 2009, the project broke ground on the first residential tower, Azura. The Azura Tower reached
completion in September 2012 and as a result has seen a marked increase in sales activity. As at 30 June
2015, VNL has signed sales and purchase agreements for approximately 80 percent of the tower.
Previously, VNL had divested the land portion of Phase 1, excluding the Azura Tower, to VinGroup
who is a well known local developer and retail mall specialist. VinGroup has now completed the
construction of a new shopping mall which opened officially on 30 June 2015. This retail center
will create an excellent adjacent amenity and act as a catalyst to drive residential demand for
VNL’s adjoining sites.
Project summary
Sector
Mixed-use (commercial and residential)
Area
6.6 ha
Location
Danang City, on the river side opposite City Centre
History
Acquired in Q3 2006
Investment licence received in July 2007
Phase 1 has total of 2.5ha which partially exited with a European investor in 2008. Revised
master plan of Phase 1 approved in August 2012
Azura residential apartment tower completed September 2012, and currently 78%
apartments sold.
A prime site located in the city centre of Danang City, with direct frontage to the Han River,
5 minutes drive to East Sea beach
21
VinaLand Limited
Annual Report 2015
Management Team
Don Lam
Chief Executive Officer, VinaCapital
Brook Taylor
Chief Operating Officer, VinaCapital
Don Lam, a founding partner of VinaCapital, has more
than 20 years of experience in Vietnam. He has overseen
VinaCapital’s growth from manager of a single USD10 million
fund in 2003 into a leading investment management and
real estate development firm in Southeast Asia, with a
diversified portfolio of USD1.5 billion in assets under
management. Before founding VinaCapital, Mr Lam was a
partner at PricewaterhouseCoopers (Vietnam), where he led
the corporate finance and management consulting practices
throughout the Indochina region. Additionally, Mr Lam set up
the VinaCapital Foundation whose mission is to empower the
children and youth of Vietnam by providing opportunities for
growth through health and education projects. He also is the
Vice-Chairman, Global Agenda Council on ASEAN for the World
Economic Forum. He has a degree in Commerce and Political
Science from the University of Toronto, and is a member of the
Institute of Chartered Accountants of Canada. He is a Certified
Public Accountant and holds a Securities License in Vietnam.
Brook Taylor has more than 20 years of management
experience, including eight years as a senior partner with
major accounting firms. Previously, Brook was deputy
managing partner of Deloitte in Vietnam and head of the
firm’s audit practice. He was also managing partner of Arthur
Andersen Vietnam and a senior audit partner at KPMG. Brook
has lived and worked in Vietnam since 1997. Brook’s expertise
spans a broad range of management and finance areas
including accounting, business planning, audit, corporate
finance, taxation, and IT systems risk management. He holds
an MBA from INSEAD, a B.A. in Commerce and Administration
from Victoria University of Wellington, New Zealand, and
is a member of the New Zealand Institute of Chartered
Accountants.
22
VINACAPITAL
MANAGEMENT
TEAM
VinaLand Limited
Annual Report 2015
David Blackhall
Managing Director,
VinaCapital
David Blackhall has more than 30 years’
experience in real estate, development,
design and construction with the last 20 years
in real estate fund and asset management.
David has worked in the Vietnam property
sector for the past 8 years, the majority of
this time with VinaCapital and holds the
positions of Managing Director VinaCapital
Real Estate, and Fund Manager for VinaLand
(VNL). Prior to relocating to South East Asia
in 2006, David worked in Sydney for 12
years with Deutsche Bank – RREEF Funds
Management Ltd, one of Australia’s largest
property fund managers. Earlier in his career,
experience included engineering design and
project management for large-scale power
generation projects in Australia. He holds
a Master’s Degree in Design Science from
the University of Sydney, Australia, as well
as qualifications in Business Real Estate
Management, Applied Science (Building)
and Civil Engineering, and is a Member of
the Royal Institution of Chartered Surveyors
(MRICS).
Management Team
Anthony House
Deputy Managing Director
of VinaCapital Real Estate
Anthony House has over 26 years’ experience
in both the real estate development and
construction management sectors, of
which the past eight years have been
spent working in Vietnam. Prior to joining
VinaCapital, he worked for Watpac Limited,
a leading publicly listed Australian company,
specializing in property development and
construction. Anthony’s development
experience encompasses a range of retail,
commercial office, low and high-rise
residential projects. Anthony holds a Post
Graduate Diploma in Project Management
and a Bachelor of Applied Science degree
in Construction Management, both from
the Queensland University of Technology,
Australia.
Oai Nguyen
Deputy Managing Director
of VinaCapital Real Estate
Oai Nguyen has 19 years’ experience in
real estate investment funds and asset
management. Oai had been with Indochina
Land, the second largest real estate
investment manager in Vietnam for 8 years
before he joined VinaCapital in July 2013.
At IndoChina Land, he was Chief Investment
Officer and subsequently Managing Director.
Prior to that, he spent 10 years with Lend
Lease Real Estate Investment in the US
where he was a Fund Controller for the
Value Enhancement Funds. Oai holds a
Bachelor Degree in Accounting from Georgia
State University and he is a Certified Public
Accountant in the United States.
23
VinaLand Limited
Annual Report 2015
Michel Casselman
Non-executive Chairman
(Independent)
Michel Joris Carline Casselman, who is resident
in Belgium, is the CEO of PMV. PMV is the
investment company of the Flemish region,
investing €880 million in early stage companies,
infrastructure and real estate across Flanders.
Before joining PMV he was a founding partner
of AeroManS, managing private equity
investments in aviation assets and served
as Partner and CFO at Leeward, a private
equity asset manager investing in SMEs in the
Benelux and northern France. Prior to that, he
worked for 13 years for Petercam SA, where
he started in 1998 as a financial analyst and
had several roles with the company. His last
position was as Director of Petercam Services
responsible for private equity investments. In
this role he managed or directed investments
in aviation and renewable energy, as well as
investments in listed private equity funds in
Asia (China, India and Vietnam). Mr Casselman
has over 20 years of experience, including
five years at a technology firm, now part of
Oracle, where he started as a consultant and
left as Director of Consulting Services. He
holds two Masters degrees, in Mechanical
Engineering and Financial Economics, from
the University of Leuven in Belgium.
Board of Directors
Nicholas Allen
Non-executive Director
(Independent)
Nicholas Charles Allen, who is resident in
Hong Kong, is an independent non-executive
director of CLP Holdings Ltd, Lenovo Group
Ltd, and Hysan Development Company Ltd.
He is a chairman or member of the audit
committee for all three companies. Mr Allen
joined Coopers & Lybrand in 1977, coming
to Hong Kong with that firm in 1983. In
1998 Coopers & Lybrand merged to form
PricewaterhouseCoopers, and Mr Allen
worked at PwC until his retirement in 2007.
During his 24 years with PwC in Hong Kong,
Mr Allen was the partner-in-charge of the
Consumer and Industrial Products Group,
the Corporate Finance and Recovery Practice
division, and the Hong Kong and China
Assurance Practice. He is a fellow of the
Chartered Accountants in England and Wales
and a member of the Hong Kong Institute of
Certified Public Accountants. Mr Allen has
a B.A. from Manchester University in the
United Kingdom.
Nicholas Brooke
(Independent)
Mr Brooke, who is resident in Hong Kong,
is the Chairman of Professional Property
Services Limited, a Hong Kong based real
estate consultancy that provides a select
range of advisory services across the Asia
Pacific Region. He is also the Hong Kong
Harbourfront Commission and was, until
2014, the Chairman of the Hong Kong
Science and Technology Parks Corporation.
Mr Brooke is a former President of the Royal
Institution of Chartered Surveyors and a
recognised authority on land administration
and planning matters. He also sits as a
Non-executive Director on the Boards of
a number of public companies including
Top Spring International, one of China’s
leading residential developers. Mr Brooke
was awarded the Silver Bauhinia Star in
2012 in recognition of his services to the
Hong Kong community. He holds a degree
in Estate Management and a Post Graduate
Diploma in Business Administration from the
University of London.
24
BOARD OF
DIRECTORS
VinaLand Limited
Annual Report 2015
Charles Isaac
(Independent)
Charles John Walter Isaac, who is resident
in Switzerland, is Managing Partner and
Fund Manager at B&I Capital AG which he
co-founded in 2007. B&I Capital AG manages
funds that invest in listed Asian real estate
securities. Previously, he was Senior Fund
Manager and member of Senior Management
at Swisscanto Asset Management, and at
Paribas Asia Equity (UK) Ltd. He has over 20
years experience in fund management and
real estate investment, and started his career
at the private client division at Merrill Lynch
in London. Mr Isaac is a CFA charter holder,
holds an MSc in Investment Management
from City University Business School, an
undergraduate degree in Psychology from the
University of Newcastle upon Tyne.
Board of Directors
Daniel McDonald
(Independent)
Daniel McDonald, who is resident in Australia,
served as a Director until 25 September
2015. Mr McDonald is currently with JP
Morgan. Previously he served in dual roles
as Head of Fund Management – Asia Pacific
Real Estate and Fund Manager – Asia Pacific
Property Fund at Aviva Investors (Singapore).
Prior to that, he served as the Director of
Investments and Business Development
Asia at Macquarie Goodman Asia (now
Goodman Asia) in Hong Kong, as well as the
Managing Director and Executive Director
of Industrial and Logistics Services at CBRE
in Shanghai. Currently based in Singapore,
Daniel has over 17 years experience in real
estate transactions and real estate fund
management across multiple asset classes
in major Asian markets. Mr McDonald holds
a Diploma of Business Management (Real
Estate) from Macleay College in Sydney,
Australia and a Certificate IV in Property
Services (Real Estate) from the Real Estate
Institute of New South Wales.
Tran Trong Kien
(Independent)
Tran Trong Kien, who is resident in Vietnam,
became a Director on 25 September 2015.
Mr Tran currently serves as the Chairman of
Thien Minh Group (TMG), which he founded
in 1994 as Buffalo Tours. With assets across
its three divisions of Travel, Hospitality
and Online, TMG is one of the region’s top
integrated tourism operators. Mr Tran brings
20 years of local and regional experience in
both property investments and commercial
enterprises to VinaLand. He has also applied
his entrepreneurial mind to financial
services as an independent board member
of the Asia Commercial Bank, and has been
involved in charitable work with the Pearl
S. Buck Foundation. Mr Tran is a qualified
Medical Doctor, has a Bachelor of Arts from
Hanoi Foreign Language University, and
holds an MBA from Hawaii University in
America.
25
VinaLand Limited
Annual Report 2015
The Board of Directors (“the Board”) submits its report together with the consolidated financial statements of VNL and its
subsidiaries (together “the Group”) for the year from 1 July 2014 to 30 June 2015 (“the year”).
VNL is incorporated in the Cayman Islands as a company with limited liability. The registered office of the Company is PO Box 309,
Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company’s shares are traded on the AIM market of the London
Stock Exchange. The Company respects the AIM governing laws and regulations, and has implemented and promoted the
guidelines and rules issued by the relevant regulatory authorities. Throughout the year ended 30 June 2015 and to the date of
this report, the Company complied with the AIM rules.
Principal activities
The Group’s primary objective is to focus on key growth segments within Vietnam’s emerging real estate market, namely
residential, office, retail, industrial and leisure projects in Vietnam to provide shareholders a potential capital growth, from
investing in a diversified portfolio of mainly property investments.
The principal activities of the subsidiaries are property investment and hospitality management.
Life of the Company
The Company was originally constituted for a term of seven years, at which point a resolution on the continuation of the
Company would be put to shareholders.
At an EGM held on 21 November 2012, the shareholders voted against the continuation of the Company as presently
constituted and in favour of an ordinary resolution that the Company be restructured. The terms of the ordinary resolution
established the foundation for changes to the Company’s investing policy, its distribution strategy, the Investment Management
Agreement and the remuneration of the Investment Manager, and its corporate governance framework. The Board also
confirmed that it intended to make no new investments and would distribute all surplus cash to shareholders over the
following three years (“the Cash Return Period”). Accordingly, during the year the Company has proceeded only with the
development of selected mixed use and residential projects to enable divestment through the sale of residential products (land
plots, villas, and apartments) and full or partial project divestments. For larger land projects, the Company has proceeded with
initial infrastructure work where necessary and expedited the completion of statutory requirements to facilitate the splitting of
land into wholesale parcels for divestment to secondary developers.
At the conclusion of the three year Cash Return Period in November 2015, shareholders will be given another opportunity to
reassess the Company’s strategy and vote on the way forward at an EGM that will be convened by the Company on the same
date and at the same venue as the AGM.
Details of the 2015 AGM are given later in this report on Page 129.
26
REPORT
OF THE
DIRECTORS
VinaLand Limited
Annual Report 2015
Co-investments
The Investment Manager may from time to time manage other funds which have a similar or different investment objective
and policy to that of the Company. Nevertheless, circumstances may arise where investment opportunities will be available to
the Company and which are also suitable for one or more of the other funds managed by the Investment Manager. Where a
conflict arises in respect of an investment opportunity, the Investment Manager will allocate the opportunity on a fair basis. In
such event, deals sourced by the investment teams serving the Company will normally be made on a pro rated basis between
the Company and the other funds served by the Investment Manager.
Performance
The Chairman’s Statement on pages 2 and 3 and the Investment Manager’s Report on pages 4 to 21 give details of the
Company’s activities, performance and position during the year.
The key performance indicators (“KPIs”) used to measure the progress of the Company during the year are as follows:
•
•
•
•
•
Net asset value (“NAV”)
The movement in the Company’s share price
Discount of the share price in relation to the NAV
Cash returned to shareholders since EGM
Distributed USD16 million to repurchase and cancel 28.6 million shares following the EGM held on 21 November 2012
Information relating to the KPIs can be found in the Financial Highlights on page 1.
Principal Risks and Uncertainties
The Board considers the following as the principal risks facing the Company. Information regarding the Company’s risk
management and internal control procedures is contained in the following sections and in the Corporate Governance
Statement and Financial Statements within this Annual Report.
The Company is exposed to a variety of risk factors. The Company’s overall risk management programme covers the broad
range of risks to which the Company is exposed. Risk management is coordinated by the Investment Manager who seeks to
manage risks to an acceptable level through the implementation and operation of effective controls and/or the transfer of risk
to other parties. The Board receives and reviews regular reports on all identified risks.
Real estate risks
The Company is subject to a broad range of real estate specific risks. These include, among other things: (i) the risks of owning
properties jointly with third-party partners where sole decision-making authority may be restricted; (ii) general real estate
investment considerations, such as the effect of local economic and other conditions on property values and ongoing cash
flows and the illiquidity of real estate investments; (iii) potential environmental liabilities and the risk of uninsured losses; (iv)
the availability or otherwise of financing for real estate development; (v) development risks associated with third parties and
government agencies honouring their commitments and (vi) legal issues which may arise as a result of challenges to the forms
of ownership common in the local market.
27
VinaLand Limited
Annual Report 2015
Many of the Company’s property holdings are co-invested with VinaCapital Vietnam Opportunity Fund (“VOF”), another fund
managed by the Investment Manager, and a large shareholder in the Company. In most cases the Company 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, although there is the
potential that the Board of VOF may object to the sale of a specific property investment and seek to influence the Company’s
decision through its various relationships with the Company.
Valuation risk
Given the inherent limitations of estimating the values of real estate holdings, it is likely that the actual proceeds from the sale
of such assets will be different from their estimated fair value at a given point in time. The Company seeks to ensure that such
investments are appropriately valued by obtaining valuations from appropriately qualified independent valuation firms and
ensuring that the Valuation Committee carefully reviews such valuation reports.
Also, due to the highly subjective nature of valuing properties in Vietnam, two independent valuation firms are used to value
each property on the same day. The Valuation Committee may choose to accept one of these valuations or may apply its own
judgement in making further adjustment to arrive at a valuation that it believes best reflects the current market value of the
asset. Property valuations are also updated each six months, given the likelihood of significant changes in value over the course
of each year.
Market illiquidity risk
From time-to-time for extended periods of time the Company’s property holdings may become illiquid as a result of the
absence of a reasonable number of active buyers in the market. As a consequence the Company’s is subject to price risk
resulting from this market illiquidity and may be required to sell investments at below their current carrying value in order to
provide funding to cover operating costs and other capital commitments. The Board and Investment Manager seek to minimise
this risk by ensuring that alternative sources of funding are available to meet the Company’s obligations through such periods.
Economic risks
Vietnam has experienced substantial and volatile rates of inflation in recent years. Also, from time to time in the recent past
there have been periods when a shortage of foreign currencies in the market has delayed the remittance of funds outside the
country. The Investment Manager seeks to manage such economic risks through the use and analysis of information provided
by the Investment Manager’s in-house economist and external sources, and by modifying the Company’s investment strategies
in response to such information.
Interest rate risk
The Company seeks to achieve a market rate of return on cash balances and to pay a reasonable market rate of interest on
loans received. As a result the Group is exposed to interest rate risk related to these positions. Cash holdings and loans are
typically subject to fixed interest rates, although as these are often short-term in nature, re-pricing can occur frequently.
The Investment Manager evaluates the Company’s exposure to interest rates each month with the objective of ensuring that
the rates of interest being earned and paid are appropriate for the risks the Company is exposed to through cash holdings and
loans. These exposures are reviewed at each Board meeting.
28
VinaLand Limited
Annual Report 2015
Funding risk
The Company has a commitment to fund ongoing operating costs and investment commitments. These obligations should be
funded through the divestment of property investments, however due to slow pace at which such divestments have been to
date the Company has typically maintained a relatively low level of short term cash-on-hand relative to its short and medium
term obligations. As a consequence there is an ongoing risk that the Company may run out of cash and therefore not be able
to meet its ongoing commitments. To address this risk the Board and Investment Manager have sought to obtain alternative
sources of funding such as obtaining loans and issuing debt instruments. The Investment Manager has also indicated that it
would be prepared to temporarily delay the settlement of a portion of monthly management fees if necessary.
Furthermore, several of the Company’s subsidiaries have considerable borrowings and do not generate sufficient income to
cover interest costs and maturing principal. To reduce the risk of foreclosure on such properties, the Investment Manager
works with the joint venture partners involved in each project to ensure that sufficient funding is available from each
shareholder or banks. None of these obligations have recourse to the Company through the provision of guarantees or other
forms of payment assurance.
Currency risk
The Company’s exposure to risk resulting from changes in foreign currency exchange rates is considered moderate by the Board
despite domestic transactions being settled in VND. The value of the VND has historically been closely linked to that of the USD,
the Group’s reporting currency. The Group has not entered into any hedging mechanism as the estimated costs of available
instruments outweigh their benefits.
On an ongoing basis the Investment Manager analyses the current economic environment and expected future conditions and
decides the optimal currency mix considering the risk of currency fluctuation, interest rate return differentials and transaction
costs. The Investment Manager updates the Board regularly and reports on any significant changes or further actions to be taken.
Political and legal risk
As with most emerging countries, investing in Vietnam involves certain considerations not usually associated with investments
in developed countries. These include political and legal risks which may restrict or impact investment opportunities. As a oneparty state, the political environment in Vietnam is relatively stable. However, changes within the government, major policy
shifts or lack of consensus between the government and powerful economic groups could lead to political instability which
would have an adverse effect on investors.
The legal and regulatory risks are higher in Vietnam than in many developed jurisdictions because there is still a considerable
degree of legislative uncertainty, inconsistency in interpreting the laws and regulations, and unpredictability in matters of
dispute resolution and the enforcement of arbitration awards. The Group seeks to manage these legal risks and others through the
use of the Investment Manager’s in-house legal team and external legal advisors, when appropriate.
Tax risks
The Company seeks to comply with the relevant tax jurisdictions in which it conducts its business. As an exempt company
incorporated in the Cayman Islands, the Company is not subject to income, state, corporation, capital gains or other taxes. Also,
a number of the Company’s subsidiaries are domiciled in the British Virgin Islands (BVI) and have a similar tax exempt status.
29
VinaLand Limited
Annual Report 2015
Those subsidiaries and associate companies incorporated in Singapore and Vietnam are subject to the respective tax laws of
those countries. These entities are the vehicles through which a number of the underlying investments are held.
The Investment Manager manages tax risks by obtaining appropriate professional advice before entering into binding
material commitments.
Manager risk
The Company has a high level of dependence on the Investment Manager which is tasked, under the Investment Management
Agreement, with carrying out most of the Company’s day to day activities. For this reason the Board actively reviews the
Investment Manager’s key policies with respect to the hiring and maintaining of suitable resources to manage the Company.
This risk is mitigated to some degree by the fact that a large team is dedicated to the management of the Company, but it is
inevitable that the Company is dependent on the services of certain key employees of the manager.
Ownership risk
Whenever possible the Investment Manager seeks to structure transactions through recognised and transparent legal
investment structures. However, from time to time in the past, there has been a need to structure investments using trust
arrangements whereby the legal title to certain investments may be held by a third party. These arrangements expose the
Group to the loss of the investment if the trustee was to renege on its obligations and no legitimate legal recourse was to
present itself.
Over the last three years the Investment Manager has made a concerted effort to unwind such arrangements so that the total
value of investments held under such structures is no longer material to the portfolio. Similar new arrangements will only be
entered into if absolutely necessary and would be subject to appropriate operational controls and legal documentation.
Discount risk
The shares of the Company trade at a price which may differ significantly from its net asset value (NAV). In recent years, the
shares have traded at a large discount to the Company’s NAV and the Board has sought to limit the discount by operating a
share buyback programme. There is no guarantee that this programme will be successful, although its operation at prices lower
than NAV will serve to enhance the NAV per share.
Distribution of Income
During the Cash Return Period the net proceeds of all portfolio realisations will be returned to shareholders at the Board’s
discretion having regard to requirements to invest further funds in existing projects within the Company’s property portfolio
to enhance or preserve exit values; the Company’s working capital requirements; and the cost and tax efficiency of individual
transactions and/or distributions.
Results and dividend
The results of the Group for the year ended 30 June 2015 and the state of its affairs as at that date are set out in the
consolidated financial statements on pages 45 to 128.
The Board of Directors does not recommend payment of a dividend for the year (year ended 30 June 2014: Nil).
30
VinaLand Limited
Annual Report 2015
Share buy-back programme
During the year, the Company continued its share buy-back programme as detailed in Note 16 to the financial statements.
As at 30 October 2015, being the latest practicable date prior to the publication of this report, 72.9 million shares had been
bought back. The total number of shares acquired represents 14.58 percent of the Company’s 499,967,622 shares in issue at
the start of the buy-back programme in October 2011. The total amount paid for these shares was 39.6 million.
Share Capital and Treasury Shares
At the year end, the Company had 430,132,220 ordinary shares in issue, of which none were held in treasury.
Investment Manager
The Company’s investments are managed by VinaCapital Investment Management Limited. The Investment Manager is
responsible for the day-to-day management of the Company’s investment portfolio including the acquisition, monitoring and
disposal of assets in line with the strategy and framework set out by the Board.
Following the shareholders’ vote in favour of the restructure of the Company at the EGM held on 21 November 2012, the
Company entered into an Amended and Restated Investment Management Agreement (“the Agreement”). The Agreement
restructured the Investment Manager’s fees to better align the interests of the Investment Manager with those of the
shareholders and also reflects certain legislative changes which have taken place since the Company’s admission to AIM. The
notice period for termination of the Agreement remains as six months.
Investment Manager’s Fees
The Investment Manager is entitled to receive from the Company a basic fee (“the Management Fee”) and, where applicable,
realisation fees (“the Realisation Fees”). The Investment Manager has no entitlement to future performance fees.
Under the new Agreement, the Management Fee is reduced from 2 percent per annum of the NAV of the Company to fixed
annual amounts for each year of the Cash Return Period. Total Management Fees paid during the year are disclosed in Note 38
to the consolidated financial statements.
The Investment Manager is entitled to receive Realisation Fees equal to the accrued but deferred performance fees, conditional
on distributions by the Company to shareholders. Except in certain limited circumstances, the Investment Manager will be
required to use 50 percent of each Realisation Fee it receives to make market purchases of the Company’s ordinary shares.
Further details are provided in the circular published on 23 October 2012.
31
VinaLand Limited
Annual Report 2015
Continuing Appointment of the Investment Manager
The Board keeps the performance of the Investment Manager under review. It is the opinion of the Directors that continuing
appointment of VinaCapital Investment Management Limited is in the best interests of shareholders as a whole. The reasons
for this are that the Investment Manager has one of the largest and best resourced real estate investment teams in the
Vietnamese market. The Investment Team is supported by a full infrastructure to allow it sufficient time to focus on investment
activities. The Investment Manager also operates a risk management and control environment with the goal of controlling risks
of investing in a less developed market.
Board of Directors
The Directors who served during the year and up to the date of this report are as follows:
Position
Date of appointment
Date of resignation
Nicholas Brooke
Director
13 January 2006
–
Nicholas Allen
Director
29 June 2010
–
Charles Isaac
Director
11 November 2011
–
Michel Casselman
Chairman
11 November 2011
–
Daniel McDonald
Director
19 February 2014
25 September 2015
Tran Trong Kien
Director
25 September 2015
–
The five current Directors are all independent non-executive directors. Mr Tran Trong Kien will stand for re-appointment.
Mr Brooke has served as a Director since 2006 so having served longer than nine years will retire and also stand for
re-appointment at the Company’s AGM to be scheduled to be held on 24 November 2015.
The biographies of the Directors in office as at the date of this report are shown on pages 24 and 25.
32
VinaLand Limited
Annual Report 2015
Directors’ interests in the Company
As at 30 June 2015, the interests of the directors in the shares, underlying shares and debentures of the Company are as follows:
Number of shares
direct holding
Percentage of outstanding issued capital
direct holding
243,000
0.06%
Nicholas Allen
95,627
0.02%
Charles Isaac
624,000
0.15%
1,270,500
0.30%
–
–
Nicholas Brooke
Michel Casselman
Daniel McDonald (resigned 25 September 2015)
On 29 July 2013, Mr Casselman notified the Company that a related individual had purchased 272,420 ordinary shares. As a
result of this transaction, Mr Casselman has a combined direct interest of 920,500 ordinary shares in the Company.
There have been no changes to any other Directors’ holdings between 30 June 2014 and the date of this report.
Mr McDonald resigned on 25 September 2015 and Mr Tran Trong Kien was appointed as Director on 25 September 2015.
Substantial Shareholdings
At 30 September 2015 Vinaland Limited had been officially notified of a significant holding in the Company by MIO Partners Inc
of 27,181,535 shares equating to 6.3 percent.
33
VinaLand Limited
Annual Report 2015
Annual General Meeting
As one of the enhancements to the Company’s corporate governance arrangements introduced by the Board following the
EGM in November 2012, an AGM will be held each year. The AGM will be held at 11:00 a.m. local time on 24 November 2015 at
the Institute of Directors, 116 Pall Mall, London SW1Y 5ED, United Kingdom.
Prior to the start of the AGM, the Company will give a presentation to shareholders at 10:00 a.m. in the same venue.
The Notice of Meeting is set out on pages 129 to 130.
The following notes provide an explanation of the resolutions being proposed by the Board.
Resolution 1 – Report and Accounts
The Directors are proposing an ordinary resolution to adopt the Company’s consolidated financial statements for the financial
year ended 30 June 2015.
Resolutions 2 and 3 – Re-appointment of Directors
VNL seeks to align its corporate governance with the UK Corporate Governance Code where appropriate. Code provision
B.7.1 specifies that all directors should be subject to election by shareholders at the first annual general meeting after their
appointment and that non-executive directors who have served longer than nine years should be subject to annual re-election.
Mr Tran Trong Kien was appointed to the Board in September 2015, accordingly being the first AGM since his appointment, he
will retire from office at the AGM and stand for re-appointment.
Nicholas Brooke has served as a Director since 2006; accordingly having served longer than nine years Mr Brooke will be
subject to annual re-appointment. He will retire at the AGM and stand for re-appointment.
Resolution 4 – Re-appointment of auditor
The Board is proposing the re-appointment of PricewaterhouseCoopers (Hong Kong) as the Group’s auditor for the 30 June
2015 financial year and to authorise the Directors to determine their remuneration.
The Board considers that the resolutions to be put to the meeting are in the best interests of the shareholders as a whole. The
Directors will be voting their shares in favour of the resolutions and unanimously recommend that the shareholders do so as well.
34
VinaLand Limited
Annual Report 2015
Auditor
The Group’s Auditor is PricewaterhouseCoopers (“PwC”). PwC was appointed in November 2011, following a tender process
and re-appointed in November 2014.
Corporate Governance
The Corporate Governance Statement on pages 36 to 41 forms part of the Report of the Directors.
Going Concern
After making appropriate enquiries, in light of the fact that the Company is able to direct sufficient assets and raise debt to
finance its continuing obligations, the Directors have a reasonable expectation that the Company has adequate financial
resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the
going concern basis in preparing the consolidated financial statements.
On behalf of the Board
Michel Casselman
Chairman
VinaLand Limited
19 October 2015
35
VinaLand Limited
Annual Report 2015
The Board is committed to attain and maintain a high standard of corporate governance, with the ultimate aim to protect
shareholders’ and other stakeholders’ interests.
The Company is listed on AIM and, as such, is not required to meet the same standards of corporate governance as applied
by companies listed on the Main Market. Nevertheless, the Board has considered the principles and recommendations of
the Association of Investment Companies’ Code of Corporate Governance (“AIC Code”) by reference to the AIC Corporate
Governance Guide for Investment Companies (“AIC Guide”). The AIC Code, as explained by the AIC Guide, addresses all the
principles set out in the UK Corporate Governance Code (“the UK Code”), as well as setting out additional principles and
recommendations on issues that are of specific relevance to investment companies. The Board considers that reporting against
the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Code), will
provide better information to shareholders. The AIC Code can be found on the AIC website at www.theaic.co.uk/aic-code-ofcorporate-governance.
The UK Code includes provisions relating to:
• The role of the chief executive;
• Executive directors’ remuneration; and
• The need for an internal audit function.
For the reasons set out in the AIC Guide and in the pre-amble to the AIC Code, and as explained in the UK Code the Board
considers these provisions are not relevant to the position of the Company, being an externally managed investment company.
In particular, all of the Company’s day-to-day management and administration functions are outsourced to third parties. The
Company has therefore not reported further in respect of these provisions.
City Code on Takeovers and Mergers (the “City Code”)
The Panel on Takeovers and Mergers supervises and regulates takeovers and other matters to which the City Code applies. The
City Code does not apply to the Company.
Board of Directors
The Board consists entirely of independent non-executive Directors.
36
CORPORATE
GOVERNANCE
STATEMENT
VinaLand Limited
Annual Report 2015
The Board meets at least four times a year and uses a structured agenda to ensure all key areas are reviewed, covering but not
limited to the review of the Company’s strategy, financial position and performance, the Investment Manager’s operations and
shareholder relations. During the year to 30 June 2015, the number of scheduled Board and Committee meetings attended by
each Director was as follows:
Board
Audit Committee
Michel Casselman
24(24)*
6(6)
Nicholas Allen
24(21)
6(5)*
Nicholas Brooke
24(24)
Charles Isaac
24(23)
Daniel McDonald
(resigned 25 September 2015)
24(19)
Valuation
Committee
Remuneration
and Nomination
Committee
Divestment
Committee
4(4)
4(4)
4(3)*
4(4)*
6(5)
12(11)
12(12)*
4(4)
4(1)
12(6)
* Denotes chairmanship of relevant Board or Committee.
First figure denotes number of meetings of Board or Committee concerned during 12 month period. Second figure (in brackets)
denotes number of meetings attended by Director concerned.
Mr McDonald resigned on 25 September 2015 and Mr Tran Trong Kien has been appointed Director on 25 September 2015.
Board responsibilities
The Board is responsible to shareholders for the determination and implementation of the Company’s investment policy, and
the direction and long-term performance of the Company and the entities it controls. The Board oversees the implementation
of a high standard of corporate governance with respect to the Company’s affairs, strategy, direction and the supervision of
the Investment Manager, as stipulated in the Investment Management Agreement (‘IMA’). The IMA documents the Investment
Manager’s responsibilities and authority to enter or exit investments, or enter into any commitments on behalf of the
Company. Under the agreement, the Board ensures the Investment Manager follows the Board’s strategic direction to achieve
the investment objectives in the identification, acquisition, management and disposal of investments and the determination of
any financing arrangements.
The Company’s Directors have direct access to the Company’s Nominated Adviser, lawyers, brokers and the Investment
Manager’s Legal Counsel and Head of Compliance.
Chairman and Senior Independent Director
The Chairman, Michel Casselman, is considered by his fellow independent Board members to be independent, to have no
conflicting relationships, and to have sufficient time to commit to the Company’s affairs as necessary. Given the size and nature
of the Board it is not considered appropriate to appoint a senior independent director, as recommended by the AIC Code.
37
VinaLand Limited
Annual Report 2015
Board independence and composition
The Board has reviewed the independent status of each individual Director and the Board as a whole. In accordance with the
AIC Code’s recommendation, a majority of the Board was independent of the Investment Manager throughout the year. As at
the date of this report, the entirety of the Board is independent.
The performance of the Board, the Committees and the individual Directors is evaluated annually by the Remuneration and
Nomination Committee (“the RNC”). The Chairman of the RNC coordinates the evaluation process by requesting each Director
to provide feedback in respect of the Board’s and the other Directors’ performance. The Chairman then collates the results,
reviews feedback with each Director and presents the findings to the RNC and the Board for consideration.
As a result of this evaluation exercise, the Board concluded that each Director has appropriate qualifications, industry
experience and expertise to guide the Company and believes that the Board as a whole has an appropriate balance of skills,
experience, and knowledge. The Directors’ biographies can be found on pages 24 and 25.
Appointment and tenure of Directors
The Board has introduced the policy that it will hold an AGM each year and that one third of its Directors will retire by rotation
and stand for re-appointment at that meeting.
Board committees
At year end, there were four Board committees in operation namely the three standing committees: the Audit Committee,
the Valuation Committee and the Remuneration and Nomination Committee, and a fourth ad-hoc committee, the Divestment
Committee established to monitor the current divestment programme on behalf of the Board. Each Committee was comprised
solely of independent Directors throughout the year. The chairmanship and membership of each Committee throughout the
year, and the number of meetings held during the year, is shown in the table on page 37. The terms of reference, which are
reviewed by each Committee annually, are available on the Company’s website: www.vinacapital.com/VNL.
Audit Committee
The Audit Committee met six times during the year. Its members are Mr Allen (Chairman), Mr Isaac and Mr Casselman.
The Committee is responsible for monitoring the process of production and ensuring the integrity of the Company’s
consolidated financial statements. The primary responsibilities of the Committee are: to oversee the relationship with the
auditor and make recommendations to the Board in relation to their re-appointment and to approve their remuneration
and terms of engagement; to assess the external auditor’s independence and objectivity and the effectiveness of the audit
process; to review the effectiveness of the internal audit function; to identify, assess, monitor and mitigate the risks associated
with the Company’s business; to monitor adherence to best practice in corporate governance; and to review the Company’s
whistleblowing arrangements and its procedures for detecting fraud and preventing bribery and corruption.
38
VinaLand Limited
Annual Report 2015
In discharging its responsibility to oversee the auditor’s independence, the Audit Committee considers whether any other
engagements provided to the auditor will have an effect on, or perception of, compromising the auditor’s independence and
objectivity. The performance of services outside of external audit must be specific and approved by the Audit Committee Chairman.
The Committee’s Chairman presents the Committee’s findings to the Board at each Board meeting.
Valuation Committee
The Valuation Committee met four times during the year. Its members are Mr Brooke (Chairman), Mr Allen and Mr McDonald.
The Committee’s primary goal is to ensure that the Company’s real estate projects are recorded at fair value. In doing so, the
Committee: approves and monitors valuation methodologies and the Company’s valuation guidelines; ensures that valuation
methods are regularly reviewed and documented; reviews the Investment Manager’s valuation process in each instance and
ensures that valuations are performed by appropriately qualified and authorised professionals or appointed external parties;
and considers and approves individual results of each revaluation exercise.
Reports on the work of the Committee are provided to the Board and, as and when appropriate, recommendations are made
for the Board’s approval in respect of amendments to the Company’s valuation guidelines.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee met four times during the year. Its members are Mr Allen (Chairman),
Mr Casselman and Mr Isaac.
The Committee fulfils all the duties of a Remuneration Committee, a Nomination Committee and a Management Engagement
Committee, as follows:
Remuneration
The Committee’s responsibilities include: setting the policy for the remuneration of the Company’s Chairman, the Audit
Committee Chairman and the Directors, reviewing the ongoing appropriateness and relevance of the remuneration policy;
determining the individual remuneration policy of each non-executive Director; agreeing the policy for authorising Directors’
expenses claims; and the selection and appointment of any remuneration consultants who advise the Committee.
Nomination
The Committee’s responsibilities include: reviewing the structure, size and composition of the Board (including the skills,
knowledge and experience contributed by the Directors) and making recommendations to the Board in respect of any changes;
succession planning for the Chairman and the Directors; reviewing the re-appointment of any Directors, having due regard
to their performance and contribution; and identifying and nominating for the approval of the Board candidates to fill Board
vacancies and preparing an appropriate role description.
39
VinaLand Limited
Annual Report 2015
Management Engagement
The Committee is responsible for assessing the performance of the Investment Manager’s obligations under the IMA and
considering any variation to the terms of the agreement. The Committee also reviews the performance of the nominated
adviser, company secretary, corporate brokers, custodian, administrator and registrar and any matters concerning their
respective agreements with the Company.
Board Evaluation
The Committee reviews at least once a year the performance of the Board and the Directors, with a view to ensuring that the
Board is operating effectively. If changes are considered necessary, a recommendation is made to the Board.
Divestment Committee
The Divestment Committee met twelve times during the year. It members are Mr Brooke (Chairman), Mr Casselman and
Mr McDonald who took over from Mr Allen during the year.
The Committee was established to provide independent oversight of the Investment Manager’s approach to divestment,
further to the change to the Company’s investment strategy in 2012. Specifically, the Committee: ensures that each divestment
is undertaken on a consistent, transparent and prudent basis; reviews and, if appropriate, recommends to the Board for
approval divestment proposals presented by the Investment Manager; advises on conflicts of interest that might arise in
respect of divestment transactions; advises the Board on divestment policy and strategy; reviews the implementation of
the overall divestment programme; considers the impact that disposals of investments will have on the current and future
portfolio; reviews and, if appropriate, recommends to the Board for approval follow-on investment proposals presented by the
Investment Manager.
Internal Controls and Risk Management
The Directors are responsible for the Company’s systems of risk management and internal control and for reviewing their
effectiveness.
The risk management process and systems of internal control are designed to manage rather than eliminate the risk of failure
to achieve the Company’s objectives. It should be recognised that such systems can only provide reasonable, not absolute,
assurance against material misstatement or loss.
40
VinaLand Limited
Annual Report 2015
The Investment Manager has implemented a risk management system covering the identification of risks, implementation of
controls, and monitoring and reporting of risks. The internal audit function has been outsourced to KPMG Vietnam, to ensure
that Investment Manager’s controls over the Company’s major risks are adequate, effective and independently monitored.
Risk management system
The Investment Manager’s Enterprise Risk Management (‘ERM’) framework provides a structured approach to managing risk
by establishing a risk management culture through education and training, formalised risk management procedures, defining
roles and responsibilities in respect of managing risk, and establishing reporting mechanisms to monitor the effectiveness of
the framework.
Internal audit
The Investment Manager appointed EY as its internal auditor for a term expiring on 30 October 2017. The internal audit
work was performed based on an internal audit plan reviewed by the Company’s Audit Committee. The internal auditor has
unrestricted access to the business and the Company’s Audit Committee. They performed audits of the control environment,
procedures, and internal controls in respect to the audit areas selected for review. The internal auditor presents its findings to
the Audit Committee. During the year no significant control gaps were reported.
Code of Conduct and Compliance
All employees of the Investment Manager must adhere to the Code of Conduct set out in the Investment Manager’s Compliance
manual. The Investment Manager has adopted a Code of Conduct based on the International Organisation of Securities
Commissions (“IOSCO”) International Code of Business Principles 1990, which serves as a model reference for regulators in
Vietnam. The manual also incorporates the necessary requirements of any applicable anti-bribery and corruption regulations.
All staff are required to sign an annual compliance attestation confirming compliance with the Code of Conduct and
Compliance manual, including their commitment to the fraud and whistleblower policies and procedures. Non-compliance will
result in disciplinary action.
Shareholder relations
The Board delegates the majority of its responsibilities in relation to engagement with investee companies to the Investment
Manager. The Board retains oversight of this process by monitoring the investor relations activities of the Investment Manager
and the shareholder profile. Dialogue with shareholders is given a high priority by the Directors, who are keen to maintain open
channels of communication. During the year, the Board and the Investment Manager held a number of meetings including the
annual Investors Conference held on 16 October 2014. At the EGM in 2012, the Board made a commitment to hold AGMs. The
first AGM was held on 28 November 2013 and the second was held on 28 November 2014. Shareholders are encouraged to
attend and vote at the third AGM to be held on 24 November 2015 and any shareholder wishing to lodge questions in advance
of the meeting is invited to do so by writing to [email protected].
41
VinaLand Limited
Annual Report 2015
Directors’ Remuneration Report
Policy on Directors’ Fees
The Board’s policy is that the remuneration of the independent non-executive Directors should reflect the experience of the
Board as a whole, and is determined with reference to comparable organisations and available market information each year.
Independent Directors’ Fees
Director’s fees are fixed and reviewed against available market information each year. The aggregate annual directors’ fees
amounted to USD267,856 (year ended 30 June 2014: USD199,425) of which there were no outstanding payables at the
reporting date (30 June 2015: nil). Directors’ fees must be determined within the limit for aggregate annual Directors’ fees
set out in Article 124 of the Company’s Articles of Association. This limit was last increased to USD300,000 during the AGM
in November 2013 to better reflect the amount of time that the Directors are required to dedicate and the level of their
responsibilities. At that time, the Board committed that the total remuneration paid to Directors would be kept to USD225,000
for a year before being increased to USD300,000 in the following year, which began at the end of November 2014.
Directors’ Emoluments for the Year
The Directors who served during the year received the following emoluments in the form of fees:
Year to
30 June 2015
USD
Year to
30 June 2014
USD
Charles Isaac
50,093
41,900
Daniel McDonald (resigned 25 September 2015)
50,673
16,400
Michel Casselman
59,658
41,900
Nicholas Allen
53,861
41,900
Nicholas Brooke
53,571
41,900
–
15,400
Stanley Chou (stepped down 10 January 2014)
Mr Tran Trong Kien was appointed as Director on 25 September 2015.
42
DIRECTORS’
REMUNERATION
REPORT
VinaLand Limited
Annual Report 2015
Statement of Directors’ Responsibilities
Board of Directors’ responsibility in respect of the consolidated financial statements
In preparing the consolidated financial statements, the Board of Directors is required to:
i. adopt appropriate accounting policies which are supported by reasonable and prudent judgements and estimates and
then apply them consistently;
ii. comply with the disclosure requirements of International Financial Reporting Standards as issued by the International
Accounting Standards Board (“IASB”) or, if there have been any departures in the interest of fair presentation, ensure that
these have been appropriately disclosed, explained and quantified in the consolidated financial statements;
iii. maintain adequate accounting records and an effective system of internal control;
iv. prepare the consolidated financial statements on a going concern basis unless it is inappropriate to assume that the
Group will continue its operations in the foreseeable future; and
v. control and direct effectively the Group in all material decisions affecting its operations and performance and ascertain
that such decisions and/or instructions have been properly reflected in the consolidated financial statements.
The Board of Directors is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Board of Directors confirms that the Group has complied with the above requirements in preparing the consolidated
financial statements.
Statement by the Board of Directors
In the opinion of the Board of Directors, the accompanying consolidated balance sheet, consolidated income statement,
consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of
cash flows, together with the notes thereto, have been properly prepared and give fair presentation of the financial position
of the Group as at 30 June 2015 and the results of its operations and cash flows for the year then ended in accordance with
International Financial Reporting Standards as issued by the IASB.
On behalf of the Board of Directors
Michel Casselman
Chairman
VinaLand Limited
19 October 2015
43
STATEMENT
OF DIRECTORS’
RESPONSIBILITIES
VinaLand Limited
Annual Report 2015
Independent Auditor’s Report
To the Board of Directors of VinaLand Limited
(Incorporated in the Cayman Islands with limited liability)
We have audited the consolidated financial statements of VinaLand Limited (“the Company”) and its subsidiaries set out on pages
45 to 128, which comprise the consolidated balance sheet as at 30 June 2015, and the consolidated statement of changes in
equity, the consolidated income statement, the consolidated statement of comprehensive income and the consolidated statement
of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Directors’ Responsibility for the Consolidated Financial Statements
The directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view in
accordance with International Financial Reporting Standards, and for such internal control as the directors determine is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated financial statements
that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Company and its
subsidiaries as at 30 June 2015, and of their financial performance and cash flows for the year then ended in accordance with
International Financial Reporting Standards.
Other Matters
This report, including the opinion, has been prepared for and only for you, as a body, in accordance with our agreed terms of
engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the
contents of this report.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong
19 October 2015
44
INDEPENDENT
AUDITOR’S
REPORT
VinaLand Limited
Annual Report 2015
ASSETS
Consolidated Balance Sheet
Note
30 June 2015
USD’000
30 June 2014
USD’000
Non-current
Investment properties
5
479,454
514,796
Property, plant and equipment
6
9,263
14,433
19
53
165,205
49,736
–
5
Intangible assets
Investments in associates
7
Prepayments for operating lease assets
Prepayments for acquisitions of investments
8
26,572
41,148
Trade and other receivables
11
–
63,646
4,296
1,369
6,572
7,820
Other non-current assets
1,395
1,496
Total non-current assets
692,776
694,502
Long-term investments
Deferred income tax assets
9
Current
Inventories
10
98,911
104,869
11
5,402
14,726
2,360
3,803
2,121
2,215
3,116
4,257
283
767
21,820
53,894
134,013
184,531
13,233
50,806
840,022
929,839
Tax receivables
Receivables from related parties
36
Short-term investments
Financial assets at fair value through profit or loss
Cash and cash equivalents (excluding bank overdrafts)
12
Total current assets
Assets classified as held for sale
14
Total assets
The notes on pages 54 to 128 are an integral part of these consolidated financial statements.
45
CONSOLIDATED
FINANCIAL
STATEMENTS
AND NOTES
VinaLand Limited
Annual Report 2015
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity shareholders of the parent
Share capital
Additional paid-in capital
Equity reserve
Revaluation reserve
Other reserves
Translation reserve
Accumulated losses
Consolidated Balance Sheet
Note
30 June 2014
USD’000
4,301
521,088
30,706
–
(57)
(83,209)
(81,638)
4,587
546,992
20,496
8,022
(1,804)
(92,570)
(65,589)
Non-controlling interests
391,191
182,821
420,134
182,372
Total equity
574,012
602,506
85,243
31,162
–
2,405
28,184
120,134
31,380
31,323
259
21,755
146,994
204,851
8,982
73,203
35,292
1,021
13,969
85,349
2,993
543
118,498
518
102,854
19,628
Total liabilities
266,010
327,333
Total equity and liabilities
840,022
929,839
0.91
0.92
LIABILITIES
Non-current
Borrowings and debts
Trade and other payables
Payables to related parties
Financial liabilities at fair value through profit or loss
Deferred income tax liabilities
15
16
30 June 2015
USD’000
17
18
19
36
20
21
Total non-current liabilities
Current
Tax payables
Total current liabilities
Liabilities classified as held for sale
Net assets per share attributable to equity shareholders of the parent
(USD per share)
18
22
36
14
32
46
VinaLand Limited
Annual Report 2015
Balance at 1 July 2013
Loss for the year
Currency translation
Revaluation gains on buildings
(Note 17)
Total comprehensive loss
Repurchase and cancellation of shares
(Notes 15,16)
Capital contributions in subsidiaries
Disposals of subsidiaries
Dividend distributions to noncontrolling interests
Acquisitions of non-controlling
interests in subsidiaries
Reversal of non-controlling interests
Balance at 30 June 2014
Consolidated Statement of Changes in Equity
47
Equity attributable to equity shareholders of the Company
Total equity
attributable
Revaluation
Other
Translation Accumulated
to owners of
reserve
reserves
reserve
losses
the Company
USD’000
USD’000
USD’000
USD’000
USD’000
Share
capital
USD’000
Additional
paid-in
capital
USD’000
Equity
reserve
USD’000
4,813
–
–
567,374
–
–
11,995
–
–
–
–
–
–
–
–
–
–
–
8,022
–
–
–
–
8,022
–
8,501
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(226)
–
–
(20,382)
–
–
(91,992)
–
(2,788)
–
(2,788)
(45,412)
(24,193)
–
–
(24,193)
–
–
–
–
–
–
–
–
–
–
–
–
(1,804)
–
–
2,210
–
4,016
4,587
546,992
20,496
8,022
(1,804)
(92,570)
(65,589)
446,778
(24,193)
(2,788)
Noncontrolling
interests
USD’000
204,044
(3,227)
(231)
Total
equity
USD’000
650,822
(27,420)
(3,019)
10,696
8,022
2,674
(18,959)
(784)
(19,743)
(12,107)
–
–
–
195
(14,601)
(12,107)
195
(14,601)
(54)
(54)
(202)
(6,226)
(2,006)
–
–
(1,804)
6,226
420,134
182,372
602,506
VinaLand Limited
Annual Report 2015
Balance at 1 July 2014
Loss for the year
Currency translation
Reclassification of currency translation
reserve on loss of control of a
subsidiary (Note 27)
reserves on disposal of subsidiaries
Total comprehensive loss
Repurchase and cancellation of shares
(Notes 15, 16)
Capital contributions in subsidiaries
Disposals of subsidiaries
Distributions to non-controlling
interests
Acquisitions of non-controlling
interests in subsidiaries
Balance at 30 June 2015
Consolidated Statement of Changes in Equity
48
Equity attributable to equity shareholders of the Company
Total equity
attributable
Revaluation
Other
Translation Accumulated
to owners of
reserve
reserves
reserve
losses
the Company
USD’000
USD’000
USD’000
USD’000
USD’000
Share
capital
USD’000
Additional
paid-in
capital
USD’000
Equity
reserve
USD’000
4,587
–
–
546,992
–
–
20,496
–
–
8,022
–
–
–
–
–
–
–
19,693
–
19,693
3,153
22,846
–
–
–
–
–
95
–
95
–
95
–
–
–
–
–
9,361
(22,267)
(12,906)
3,372
(9,534)
10,210
–
–
–
–
(8,022)
–
–
1,804
–
–
–
–
–
(6,218)
(15,980)
–
–
–
(6,044)
(4,113)
(15,980)
6,044
(4,113)
(4,729)
(4,729)
(125)
(182)
(286)
–
–
(25,904)
–
–
(1,804)
–
–
(92,570)
–
(10,427)
(65,589)
(22,267)
–
420,134
(22,267)
(10,427)
–
–
–
–
–
–
–
–
–
–
–
–
(57)
–
–
(57)
4,301
521,088
30,706
–
(57)
(83,209)
(81,638)
391,191
Noncontrolling
interests
USD’000
182,372
3,851
(3,632)
182,821
Total
equity
USD’000
602,506
(18,416)
(14,059)
574,012
VinaLand Limited
Annual Report 2015
Consolidated Income Statement
Year ended
Note
30 June 2015
USD’000
30 June 2014
USD’000
Revenue
23
20,057
41,125
Cost of sales
24
(18,557)
(31,868)
1,500
9,257
Gross profit
Net gain/(loss) on fair value adjustments of investment properties and
revaluations of property, plant and equipment
25
45,662
(5,698)
Selling and administration expenses
26
(18,937)
(25,887)
Net changes in fair value of financial assets and financial liabilities at
fair value through profit or loss
Reclassification of currency translation reserve on loss of control of
a subsidiary
142
27
(Loss)/gain on disposals of investments, net
248
(22,846)
–
(3,187)
197
Impairment of assets
28
Finance income
29
2,048
2,110
Finance expenses
30
(7,073)
(7,631)
Share of losses of associates
7
(926)
(5,867)
Other income
(7,680)
(1,129)
2,043
3,273
(1,095)
(1,319)
(10,349)
(32,446)
(8,067)
5,026
Net loss from operations
(18,416)
(27,420)
Attributable to equity shareholders of the parent
(22,267)
(24,193)
3,851
(3,227)
(18,416)
(27,420)
(0.05)
(0.05)
Other expenses
Net loss before income tax from operations
Income tax
31
Attributable to non-controlling interests
Net loss for the year
Loss per share – basic and diluted (USD per share)
32
49
VinaLand Limited
Annual Report 2015
Consolidated Statement of Comprehensive Income
Year ended
30 June 2015
USD’000
(18,416)
30 June 2014
USD’000
(27,420)
Other comprehensive loss
Items that may not be reclassified subsequently to profit or loss:
Revaluation gains on buildings (Note 17)
–
10,696
–
10,696
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Reclassification of currency translation reserve on disposal of subsidiaries
Reclassification of currency translation reserve on loss control of a subsidiary
(Note 27)
Other comprehensive income for the year
Total comprehensive loss for the year
Attributable to equity shareholders of the parent
Attributable to non-controlling interests
(14,059)
95
–
22,846
–
8,882
(3,019)
8,882
7,677
(9,534)
(19,743)
(12,906)
(18,959)
3,372
(9,534)
(3,019)
(784)
(19,743)
50
VinaLand Limited
Annual Report 2015
Consolidated Statement of Cash Flows
Year ended
Note
30 June 2015
USD’000
30 June 2014
USD’000
Operating activities
Loss before tax
(10,349)
(32,446)
1,171
4,855
Adjustments for:
Depreciation and amortisation
6
Net changes in fair value of financial assets and financial liabilities at
fair value through profit or loss
(142)
Net (gain)/loss on fair value adjustments of investment properties and
25
Loss on amortisation of realisation fees
30
Net loss on disposals of fixed assets and written-off account balances
Reclassification of currency translation reserve on loss control of
a subsidiary
27
Loss/(gain) on disposals of investments, net
(45,662)
(248)
5,698
920
–
371
118
22,846
–
3,187
(197)
28
7,680
1,129
7
926
5,867
Unrealised foreign exchange losses
30
1,028
384
Interest expense
30
5,017
Interest income
29
Net loss before changes in working capital
Change in trade receivables and other current assets
Change in inventories
Change in trade payables and other current liabilities
Income tax paid
Net cash outflow to operating activities
7,017
(787)
(1,994)
(13,794)
(9,817)
(1,839)
(20,732)
6,589
14,372
(13,642)
5,102
(48)
(569)
(22,734)
(11,644)
51
VinaLand Limited
Annual Report 2015
Year ended
Note
30 June 2015
USD’000
30 June 2014
USD’000
782
57
2,000
100
(continued)
Investing activities
Interest received
Dividends received
Purchases of investment properties, property, plant and equipment,
and other non-current assets
Proceeds from disposals of investments
Proceeds from disposals of assets/liabilities classified as held for sale
Proceeds from disposals of financial assets at fair value through profit
or loss
Net deposits in long-term investments
Net deposits in short-term investments
(11,495)
11,580
16,454
(14,979)
11,921
18,856
629
(2,503)
(2,927)
453
–
(46)
(1,369)
(1,260)
Net cash inflow from investing activities
13,030
15,223
Financing activities
Additional capital contributions from non-controlling interests
Ordinary shares acquired by the Company
Acquisition of non-controlling interests in subsidiary
Net proceeds from issuance of zero dividend preference shares
Loan proceeds from banks
Loan repayments to banks
Interest paid
Distributions to non-controlling interests
6,044
(15,980)
(182)
–
25,806
(22,144)
(11,103)
(4,729)
195
(12,107)
(461)
25,245
59,291
(24,705)
(13,098)
(54)
(22,288)
34,306
16
Net cash (outflow)/inflow to/from financing activities
52
VinaLand Limited
Annual Report 2015
Year ended
Note
30 June 2015
USD’000
30 June 2014
USD’000
(continued)
Net changes in cash and cash equivalents for the year
(31,992)
37,885
Cash and cash equivalents at the beginning of the year
53,894
16,496
Cash and cash equivalents classified as held for sale
(130)
(526)
Exchange differences on cash and cash equivalents
48
39
21,820
53,894
Cash and cash equivalents at the end of the year
12
53
VinaLand Limited
Annual Report 2015
1
Notes to the Consolidated Financial Statements
GENERAL INFORMATION
VinaLand Limited (“the Company”) is a limited liability company incorporated in the Cayman Islands. The registered
office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman
Islands. The Company’s primary objective is to focus on key growth segments within Vietnam’s emerging real estate
market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in
Asia. The Company is quoted on the AIM Market of the London Stock Exchange under the ticker symbol VNL.
At the Extraordinary General Meeting (“EGM”) held on 21 November 2012, the shareholders supported both
recommendations put forth by the Board regarding the continuation of the Company. As a result, the Special
Resolution which called for the continuation of the Company as presently constituted was not passed and the
Ordinary Resolution to restructure the Company was passed with over a two-thirds approval rate.
The Ordinary Resolution established the framework to restructure the Company including changes to the Company’s
investing policy, distribution strategy, the Investment Management Agreement and the remuneration of the
Investment Manager and its corporate governance framework. These changes are summarised as follows:
•
•
•
•
During the three-year period until 21 November 2015 (“the Cash Return Period”) the Company will make
no new investments, save that it can invest in existing projects within its existing portfolio of assets. The
Company will instead implement a realisation strategy whereby the Company’s existing assets will be
developed (if necessary) and/or divested in a controlled, orderly and timely manner.
Net proceeds of these realisations will be returned to shareholders, subject to the Board’s discretion and
consideration in respect of the Company’s working capital requirements, the need to invest in existing
projects, and the cost/tax efficiency of such transactions/distributions.
Once the Cash Return Period has ended, shareholders will be given the opportunity to reassess the strategy of
the Company through another continuation resolution.
The fees payable to the Investment Manager have been amended as discussed in Note 36 to these
consolidated financial statements.
The Company will organise no later than November 2015 a general meeting of shareholders to vote on the Company’s
strategy after that date. The Board of Directors and the Investment Manager are currently considering several
continuation proposals, one of which will be presented to shareholders for approval at the meeting.
The consolidated financial statements for the year ended 30 June 2015 were approved for issue by the Company’s
Board of Directors on 19 October 2015.
54
NOTES TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
VinaLand Limited
Annual Report 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1
Basis of preparation
The consolidated financial statements of the Group for the year ended 30 June 2015 comprise the Company and its
subsidiaries (together, the “Group”) and the Group’s interests in associates.
The consolidated financial statements of the Group have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The consolidated
financial statements have been prepared using the historical cost convention, as modified by the revaluation of
investment properties, property, plant and equipment, financial assets and financial liabilities at fair value through
profit or loss, the measurement bases of which are described in the accounting policies below.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are disclosed in Note 3.
2.2
Changes in accounting policy and disclosures
a)
New and amended standards adopted by the Group
Amendments to IAS 36, “Impairment of assets”
Amendments to IAS 36, “Impairment of assets”, require additional information about the fair value measurement
when the recoverable amount of impaired assets is based on fair value less costs of disposal.
Moreover, the amendments require an entity to disclose the discount rates that have been used in the current and
previous measurements if the recoverable amount of impaired assets based on fair value less costs of disposal was
measured using a present value technique.
Other new and/or amended standards including amendments to IAS 39 “Novation of derivatives and continuation of
hedge accounting” and IAS 19 (revised), “Employee Benefits” that become effective for financial periods starting on or
after January 2014, are determined to be irrelevant to the Group.
55
VinaLand Limited
Annual Report 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2
Changes in accounting policy and disclosures (continued)
b)
New standards, amendments and interpretations issued but not yet effective and not early adopted
At the date of authorisation of these consolidated financial statements, certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective, and have not been early adopted
by the Group.
The Board anticipates that all such pronouncements will be adopted in the Group’s accounting policies for the first
period beginning after the effective dates of these pronouncements. Information on new standards, amendments and
interpretations that are expected to be relevant to the Group’s consolidated financial statements is provided below.
Certain other new standards and interpretations have been issued but are not expected to have a material impact on
the Group’s consolidated financial statements.
IFRS 9, “Financial instruments”, addresses the classification, measurement and recognition of financial assets
and financial liabilities. IFRS 9 was completed in July 2014 and its effective for annual periods beginning on or
after 1 January 2018. It replaces the parts of IAS 39 that relate to the classification and measurement of financial
instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at
fair value and those measured at amortised cost. The determination is made at initial recognition. The classification
depends on the entity’s business model for managing its financial instruments and the contractual cash flow
characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The
main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change
due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement,
unless this creates an accounting mismatch. The Group is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9
no later than the accounting year ending 30 June 2019.
IFRS 15, “Revenue from contracts with customers”, was issued on 28 May 2015. It establishes a comprehensive
framework for determining when to recognise revenue and how much revenue to recognise. The core principle in that
framework is that an entity should recognise revenue upon the transfer of promised goods and services to a customer
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
and services. The Group is yet to assess IFRS 15’s full impact and intends to adopt the standard no later than the
accounting year ending 30 June 2018.
There are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact
on the Group.
56
VinaLand Limited
Annual Report 2015
2
2.3
Consolidation
a)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group is exposed to, 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. Subsidiaries are fully consolidated from the date on
which control is transferred to the group. They are deconsolidated from the date that control ceases.
The majority of the Group’s subsidiaries have a reporting date of 30 June. For those subsidiaries with a different
reporting date, the Group consolidates management information prepared for the year to 30 June.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis,
either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s
identifiable net assets. Acquisition- related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability
is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income.
Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for
within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of noncontrolling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than
the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Gain on bargain purchase is immediately allocated to the consolidated income statement as at the acquisition date.
Inter-company transactions, balances, income and expenses on transactions between the Group’s companies are
eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
57
VinaLand Limited
Annual Report 2015
2
2.3
Consolidation (continued)
b)
Changes in ownership interests in subsidiaries without change of control
Changes in ownership of interests in a subsidiary that do not result in loss of control of the subsidiary are accounted
for as equity transactions whereby the difference between the consideration paid and the proportionate change in
the parent entity’s interest in the carrying value of the subsidiary’s net assets is recorded in equity and attributable to
the owners. No adjustment is made to the carrying value of the subsidiary’s net assets as reported in the consolidated
financial statements.
c)
Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the
date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture
or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that
entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
d)
Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the
equity method of accounting, after initially being recognised at cost. Under the equity method, the carrying amount of
the investment is increased or decreased to recognise the Group’s share of the profit or loss of the investee after the
date of acquisition. The Group’s investments in associates include goodwill identified on acquisition.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
The Group’s share of post-acquisition profit or loss of an associate is recognised in the consolidated income statement,
and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive
income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses
in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group
does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf
of the associate.
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2.3
Consolidation (continued)
The Group determines at each reporting date whether there is any objective evidence that the investment in the
associates is impaired. If this is the case, the Group calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying value and recognises the amount as ‘share of profit/(loss) of
associates’ in the consolidated income statement.
Profits and losses resulting from upstream and downstream transactions between the Group and its associates are
recognised in the Group’s consolidated financial statements only to the extent of unrelated investors’ interests in the
associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Dilution gains and losses arising in investments in associates are recognised in the consolidated income statement.
2.4
Foreign currency translation
a)
Functional and presentation currency
The Group’s consolidated financial statements are presented in United States Dollars (“USD”) (“the presentation
currency”). The financial statements of each consolidated entity are initially prepared in the currency of the primary
economic environment in which the entity operates (“the functional currency”), which for most of the Group’s
investments is Vietnam Dong (“VND”). The financial statements prepared using VND are then translated into the
presentation currency of USD. USD is used as the presentation currency because it is the primary basis for the
measurement of the performance of the Group (specifically changes in the net asset value of the Group) and a large
proportion of significant transactions of the Group are denominated in USD.
b)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the consolidated income statement.
Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value are translated using the exchange rates at the date when fair value was determined.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit
or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary
financial assets, such as equities classified as available for sale, are included in other comprehensive income.
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2.4
Foreign currency translation (continued)
c)
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
(i)
(ii)
(iii)
2.5
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
income and expenses for each income statement are translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the rate on the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
Investment property
Investment properties are properties owned or held under finance leases to earn rentals or capital appreciation, or
both, or land held for a currently undetermined use. Property held under operating leases (including leasehold land)
that would otherwise meet the definition of investment property is classified as investment property on a property by
property basis. If a leased property does not meet this definition, it is recorded as an operating lease.
Property under construction or development for future use as investment property is treated as investment property
and is measured at fair value where the fair value of the investment property under construction or development for
future use can be reliably determined.
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2.5
Investment property (continued)
Investment properties are stated at fair value. At the end of each quarter of the financial year, the fair values of a
selection of investment properties are assessed by the Board such that the fair values of all investment properties
are assessed at least once each financial year. At the date of assessment, two independent valuation companies
with appropriately recognised professional qualifications and relevant experience in the location and category being
valued undertake a valuation of each property selected. The fair value is estimated by the independent valuation
companies assuming there is an agreement between a willing buyer and a willing seller in an arm’s length transaction
after proper marketing; wherein the parties have each acted knowledgeably, prudently and without compulsion. The
valuations by the 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 a property using a yield that reflects
the risks inherent therein. The estimated fair values provided by the independent valuation companies are used by the
Valuation Committee as the primary basis for estimating each property’s fair value. In addition to the reports of the
independent valuation companies the valuation committee considers information from other sources, including those
sources referred to in Note 3, before recommending each property’s estimated fair value to the Board for approval.
Discount rates from 14.5% to 22% are considered appropriate for properties in different locations.
In addition to the annual revaluation cycle, at the end of each quarter the Investment Manager reviews the entire
portfolio to determine if there are any material changes to investment properties or other indicators that might
mean that the value of an investment property has materially changed. Subject to the results of this review a more
detailed assessment of those properties may be performed. If there is an indication that an investment property’s
value has increased then the investment property will be included in the independent valuation program. If there
is an indication that an investment property’s value has declined then an assessment will be made in respect to
quantifying the fall in value. This involves either obtaining an independent valuation of the investment property or
determining the change in value of each property based on internal assessment. Based upon the analysis performed
by the Investment Manager or the independent valuation report, the Valuation Committee determines whether any
valuation adjustments should be recommended to the Board for approval.
Any gain or loss arising from a change in fair value of investment properties is recognised in the consolidated income
statement. Rental income from investment property is accounted for as described in the Note 2.26.
When an item of property, plant and equipment is transferred to investment property following a change in its use,
any differences arising at the date of transfer between the carrying amount of the item immediately prior to transfer
and its fair value is treated in the same way as a revaluation under IAS 16. Any resulting increase in the carrying
amount of the property is recognised in profit or loss to the extent that it reverses a previous impairment loss, with
remaining increase recognised in other comprehensive income and increase directly to equity in revaluation surplus.
Any resulting decrease in the carrying amount of the property is initially charged in other comprehensive income
against any previous recognised revaluation surplus, with any remaining decrease charged to profit or loss.
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2.5
Investment property (continued)
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, its fair value
at the date of reclassification becomes its cost for subsequent accounting purposes. Where an investment property
undergoes a change in use, evidenced by commencement of development with a view to sale, the property is
transferred to inventories. A property’s deemed cost for subsequent accounting as inventories is its fair value at the
date of change in use.
All costs directly associated with the purchase and construction of an investment property, and all subsequent capital
expenditures for the development, which qualify as acquisition costs, are capitalised.
Borrowing costs for property under construction or development are capitalised if they are directly attributable to
the acquisition, construction or production of that qualifying asset. Capitalisation of borrowing costs commences
when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred.
Capitalisation of borrowing costs continues until the assets are substantially ready for their intended use. If the
resulting carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised. The
capitalisation rate is arrived at by reference to the actual rate payable on borrowings for development purposes or,
with regard to that part of the development cost financed out of general funds, to the average rate.
2.6
Goodwill
Goodwill arises on the acquisition of subsidiaries, associates, and joint ventures and represents the excess of the cost
of acquisition of subsidiary companies and associates over the Group’s share of the fair value of their identifiable net
assets at the date of acquisition.
Goodwill is recognised at cost less any accumulated impairment losses. The carrying value of goodwill is subject to an
annual impairment review and whenever events or changes in circumstances indicate that it may not be recoverable.
An impairment charge will be recognised in the consolidated income statement when the results of such a review
indicate that the carrying value of goodwill is impaired.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity disposed of.
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2.7
Leases
Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified
as finance leases. Finance leases are capitalised at the leases’ commencement at the lower of the fair value of the
leased property and the present value of the minimum lease payments.
Leases which do not transfer substantially all the risks and rewards of ownership to the Group are classified as
operating leases, unless they are treated as investment properties as described in Note 2.5. Where the Group has
the use of an asset held under an operating lease, payments made under the lease are charged to the consolidated
income statement on a straight line basis over the term of the lease. Prepayments for operating leases represent
properties held under operating leases where a portion, or all, of the lease payments have been paid in advance, and
the properties cannot be classified as investment properties.
2.8
All property, plant and equipment, except buildings and leasehold land improvements, are stated at cost less
accumulated depreciation and impairment losses as set out in Note 2.14. The cost of self-constructed assets includes
the cost of materials, direct labour, overheads and the initial estimate of the costs of dismantling and removing the
items and restoring the site on which they are located.
Buildings and leasehold land improvements including golf course are revalued to fair value in accordance with the
methods and processes as set out in Note 2.5. Any surplus arising on the revaluation is recognised in a revaluation
reserve within equity, except to the extent that the surplus reverses a previous revaluation deficit on the building
charged to the consolidated income statement, in which case a credit to that extent is recognised in the consolidated
income statement. Any deficit on revaluation is charged in the consolidated income statement except to the extent
that it reverses a previous revaluation surplus on a building, in which case it is taken directly to the revaluation
reserve. Any revaluation surplus remaining in equity on disposal of the asset is transferred to retained earnings.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part
of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item
will flow to the Group and the cost of the item can be measured reliably. The carrying values of any parts replaced as a
result of such replacements are expensed at the time of replacement. All other costs associated with the maintenance
of property, plant and equipment are recognised in the consolidated income statement as incurred.
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2.8
Property, plant and equipment (continued)
Depreciation is charged to the consolidated income statement on a straight-line basis over the estimated useful lives
of property, plant and equipment, and major components that are accounted for separately. The estimated useful
lives are as follows:
Buildings and golf course
Machinery, plant and equipment
Furniture, fixtures and office equipment
Motor vehicles
33 to 50 years
4 to 20 years
3 to 5 years
5 to 10 years
Material residual value estimates and estimates of useful lives are reviewed at least annually, irrespective of whether
assets are revalued.
Assets held under finance leases which do not transfer title to the assets to the Group at the end of the leases are
depreciated over the shorter of the estimated useful lives shown above and the terms of the leases.
2.9
Intangible assets
Intangible assets represent software. Intangible assets acquired separately are measured initially at cost. The cost of
an intangible asset acquired in a business combination is the asset’s fair value at the date of acquisition. Following
initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated
impairment losses. The carrying values of the assets are reviewed annually for impairment.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment
whenever there is an indication that they may be impaired. The amortisation period and method are reviewed at least
at each financial year end. The estimated useful lives are as follows:
Software
2.10
5 years
Non-current assets (or disposal groups) and liabilities held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be
recovered principally through a sale transaction and a sale is considered highly probable at the reporting date. They
are presented separately in the consolidated balance sheet. They are measured at the lower of their carrying amounts
immediately prior to their classification as held for sale and their fair values less costs to sell. Assets held for sale are
not subject to depreciation or amortisation subsequent to their classification as held for sale.
Liabilities are classified as held for sale and presented as such in the consolidated balance sheet if they are directly
associated with a disposal group.
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2.11
Financial assets
a)
Classification
The Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and
receivables. The classification depends on the purpose for which the financial assets were acquired. Management
determines the classification of its financial assets at initial recognition.
(i)
Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading
or designated by management to be carried at fair value through profit or loss at inception. Financial assets at fair
value through profit or loss held by the Group include unlisted equity securities. Derivatives are also categorised
as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if
expected to be settled within 12 months; otherwise they are classified as non-current.
Embedded within the ZDP Shares, as disclosed in Note 2.22, are call options which give VinaLand ZDP Limited early
redemption rights. The Company does not consider the ZDP Shares and call options to be closely related. Therefore,
the call options have been separated from the preference shares and are accounted for as derivatives.
(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. They are included in current assets, except for maturities greater than 12 months after the end of
the reporting period, which are classified as non-current assets. The Group’s loans and receivables comprise ‘trade
and other receivables’ and ‘cash and cash equivalents’ in the consolidated balance sheet.
b)
Recognition and measurement
Purchases or sales of financial assets are recognised on the trade-date, being the date on which the Group commits to
purchase or sell the asset.
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair
value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair
value, and transaction costs are expensed in the consolidated income statement. Financial assets are derecognised
when the rights to receive cash flows from the investments have expired or have been transferred and the Group
has transferred substantially all risks and rewards of ownership. Loans and receivables are subsequently carried at
amortised cost using the effective interest method.
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2.11
Financial assets (continued)
b)
Recognition and measurement (continued)
Net changes in fair value of financial assets at fair value through profit or loss includes net unrealised gains in fair
value of financial assets and net gains from realisation of financial assets during the year.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’
category are presented in the consolidated income statement within ‘net changes in fair value of financial assets at
fair value through profit or loss’ in the period in which they arise.
2.12
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated balance sheet when there is
a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise
the asset and settle the liability simultaneously.
2.13
These represent prepayments made by the Group to vendors for land compensation and other related costs including
professional fees directly attributed to an investment property, where the final transfer of the property is pending
the approval of the relevant authorities and/or is subject to either the Group or the vendors completing certain
performance conditions. Such prepayments are measured initially at cost until such time as the approval is obtained
or conditions are met at which point they are transferred to the appropriate investment accounts.
2.14
The Group’s goodwill, operating lease prepayments, property, plant and equipment (except for buildings and
leasehold land improvements), intangible assets, trade and other receivables, prepayments for acquisitions of
investments, and interests in associates are subject to impairment testing.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and
some are tested at a cash-generating unit level. Goodwill in particular is allocated to those cash-generating units that
are expected to benefit from synergies of the related business combination and represent the lowest level within the
Group at which management controls the related cash flows.
Goodwill and intangible assets with indefinite lives are tested for impairment annually, while other assets are tested
when there is an indicator of impairment.
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2.14
Impairment of assets (continued)
An impairment loss is recognised as an expense immediately for the amount by which an asset’s carrying amount
exceeds its recoverable amount unless the relevant asset is carried at a revalued amount under the Group’s
accounting policy, in which case the impairment loss is treated as a revaluation decrease, but only to the extent of the
revaluation surplus for that same asset according to that policy. The recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell, and value in use.
2.15
Inventories
The Group’s inventories arise where there is a change in use of investment properties evidenced by the
commencement of development with a view to sale, and the properties are reclassified as inventories at their deemed
cost, which is the fair value at the date of reclassification. They are subsequently carried at the lower of cost and net
realisable value. Net realisable value is the estimated selling price in the ordinary course of business less costs to
complete redevelopment and selling expenses.
2.16
Trade receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course
of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer),
they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
2.17
Cash and cash equivalents
Cash and cash equivalents include cash in banks and on hand as well as short term highly liquid investments such as
money market instruments and bank deposits with original maturity terms of not more than three months.
2.18
Share capital
Ordinary shares are classified as equity. Share capital is determined using the nominal value of shares that have
been issued. Additional paid-in capital includes any premiums received on the initial issuance of the share capital.
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
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2.19
Ordinary shares acquired by the Company
Shares which are repurchased by the Company are cancelled and whilst the amount of the authorised share capital is
not affected, the issued share capital is reduced accordingly.
If the cost of purchasing ordinary shares is less than the net asset value attributable to the shares acquired, the
difference is transferred to the Company’s equity reserve. If the cost of purchasing ordinary shares is greater than the
net asset value of the shares, i) the amount of any equity reserve, additional paid-in capital account or fully paid share
capital of the Company, and ii) any amount representing unrealised profits of the Company for the time being standing
to the credit of any revaluation reserve maintained by the Company may be reduced by a sum not exceeding the
amount by which the repurchase payment exceeds the net asset value of the shares.
2.20
Revaluation reserve
The revaluation reserve arises from the revaluation of buildings and leasehold land improvements including hotels
and golf courses. The revaluation policy is consistent with the fair value policy as described in Note 3. Any increase in
the carrying amount arising on revaluation is recognised in profit or loss to the extent that it reverses a provision for
impairment loss, with any remaining increase recognised in other comprehensive income and shown as revaluation
reserve in shareholders’ equity. Decreases that offset previous increases of the same asset are charged to other
comprehensive income and debited against revaluation reserve directly in equity; all remaining decreases are charged
to the profit or loss.
2.21
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the
normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
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2.22
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is
recognised in the profit or loss over the period of the borrowings using the effective interest method.
On 17 December 2013, VinaLand ZDP Ltd., a wholly owned subsidiary of the Company, issued 15 million Zero Dividend
Preference Shares (“the ZDP Shares”), with a gross redemption yield of 8% after three years. The shares were
admitted to the standard listing segment of the Official List of the UK Listing Authority and trading on the London
Stock Exchange’s main market on 20 December 2013.
Each preference share has an issue price of £1 and a final capital entitlement of £1.26 at the end of its term. These
shares are classified as liabilities and measured at amortised cost using the effective interest method.
2.23
Borrowing costs
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.24
Current and deferred income tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated income
statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax assets and/or liabilities comprise claims from or obligations to fiscal authorities relating to the current
or prior reporting periods that are not yet settled at the reporting date. They are calculated according to the tax rates
and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year. All changes
to current tax assets or liabilities are recognised as a component of tax expense in the consolidated income statement.
Deferred income taxes are calculated using the liability method on temporary differences. This involves the
comparison of the carrying amounts of assets and liabilities in the consolidated financial statements with their
respective tax bases. In addition, tax losses available to be carried forward as well as other income tax credits to the
Group are assessed for recognition as deferred tax assets.
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2.24
Current and deferred income tax (continued)
However, deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset
or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax
on temporary differences associated with shares in subsidiaries and associates is not provided if reversal of these
temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable
future. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is
probable that they will be able to be offset against future taxable income.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted at the reporting date. Most
changes in deferred tax assets or liabilities are recognised as a component of tax expense in the consolidated income
statement. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that
is charged directly to other comprehensive income are charged or credited directly to other comprehensive income.
2.25
Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it
is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most
reliable evidence available at the reporting date, including the risks and uncertainties associated with the present
obligation and there is uncertainty about the timing or amount of the future expenditure require in settlement. Where
there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. Long-term provisions are discounted to their present values, where
the time value of money is material.
All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate of the
Group’s management.
The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent
liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future
events beyond the control of the Group or a present obligation that is not recognised because it is not probable
that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the rare
circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.
A contingent asset is a possible asset that arises from past events, whose existence will be confirmed by uncertain
future events beyond the control of the Group. The Group does not recognise contingent assets but discloses their
existence when inflows of economic benefits are probable, but not virtually certain.
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2.26
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable
for goods supplied, stated net of discounts, returns and value added taxes. The Group recognises revenue when the
amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity;
and when specific criteria have been met for each of the Group’s activities, as described below.
a)
Sale of goods and revenues from hotel operations and other related services
Revenue from sale of goods is recognised in the consolidated income statement when the significant risks and
rewards of ownership of goods have passed to the buyer. Revenue from hotel operations and other related services is
recognised as and when the services are provided.
b)
Sales of real estate
Deposits received from buyers to reserve rights to buy houses are recognised as a liability on the consolidated balance
sheet. These amounts are recorded as unearned revenue when the house’s foundation is completed and a sales and
purchase agreement is signed with the buyer. Unearned revenue is recorded as revenue when the construction is
completed and the house is handed over to the buyer.
Revenue on sales of apartments is recognised when the Company has transferred to the buyer the usual risks and
rewards of the ownership in a transaction that is in substance a sale and does not have a substantial continuing
involvement with the property.
c)
Rental income
Rental income from investment property is recognised in the consolidated income statement on a straight-line basis over
the term of the operating lease. Lease incentives granted are recognised as an integral part of the total rental income.
d)
Interest income
Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the Group
reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest
income on impaired loan and receivables is recognised using the original effective interest rate.
e)
Dividend income
Dividend income is recognised when the right to receive payment is established.
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2.27
Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial or operational decisions.
Enterprises and individuals that directly, or indirectly through one or more immediately, control, or are controlled
by, or under common control with, the Company, including holding Company, subsidiaries and fellow subsidiaries
are related parties of the Company. Associates and individuals owing directly, or indirectly, an interest in the voting
power of the Company that give them significant influence over the Company, key management personnel, including
directors and officers of the Company and the close members of the family. In considering each possible related party
relationship, attention is directed to the substance of the relationship, and not merely the legal form.
2.28
Realisation fee
In accordance with the Amended Management Agreement, the Investment Manager is entitled to receive a share
of any realisations of the Group, up to a total amount equalling the previously accrued performance fee payable.
The Investment Manager may receive its share of these realisations on a deal-by-deal basis throughout the Cash
Return Period. In accordance with the Amended Management Agreement, the amount of performance fees due to
the Investment Manager, is re-assessed at each reporting date, taking into account the future expected realisation
strategy of the Company. The change in performance fees due to the Investment Manager during the period is
included as “realisation fee (expense)/recovery” in the consolidated income statement and is further described in
Note 35 to these consolidated financial statements. An expense results from an increase in the realisation fee liability
to the Investment Manager, and a recovery of previously expensed realisation fees results from a decrease in the
realisation fee liability to the Investment Manager at the reporting date.
The realisation fee liability is initially recognised at fair value, and subsequently measured based on the realisable
value of the investments of the Group on which the realisation fee would be ultimately crystallised, which is
estimated using the fair values of those investments at the reporting date. Realisation fees are paid when the relevant
investments are sold and proceeds distributed to the Company’s shareholders.
2.29
Earnings per share and net asset value per share
The Group presents basic earnings per share (“EPS”) for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to the ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding
during the year to assume conversion of all dilutive potential ordinary shares.
Net asset value (“NAV”) per share is calculated by dividing the net asset value attributable to ordinary shareholders of
the Company by the number of outstanding ordinary shares as at the reporting date. NAV is determined as total assets
less total liabilities and non-controlling interests.
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2
2.30
Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates
certain derivatives as either:
a)
b)
c)
Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);
Hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast
transaction (cash flow hedge); or
Hedges of a net investment in a foreign operation (net investment hedge).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group
also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are
used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged
item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less
than 12 months. Trading derivatives are classified as a current asset or liability.
In the case of a derivative that qualifies for cash flow hedge, the effective portion of changes in its fair value is
recognised in other comprehensive income. The gain or loss is removed from equity and included in profit or loss in
the same period and periods during which the hedged items affects profit or loss. In the case of a derivatives that
qualifies for fair value hedge, the effective portion of changes in its fair value is recognised in the income statement,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedge risk.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged
item for which the effective interest method is used is amortised to profit or loss over the period to maturity.
2.31
Segment reporting
An operating segment is a component of the Group:
•
•
•
that engages in investment activities from which it may earn revenues and incur expenses;
whose operating results are based on internal management reporting information that is regularly reviewed
by the Investment Manager to make decisions about resources to be allocated to the segment and assess its
performance; and
for which discrete financial information is available.
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3
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
When preparing the consolidated financial statements, the Group undertakes a number of accounting judgements,
estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual
results may differ from the judgements, estimates and assumptions made by management, and may not equal the
estimated results. Information about significant judgements, estimates and assumptions that have the most significant
effect on recognition and measurement of assets, liabilities, income and expenses are discussed below.
3.1
Fair value of investment properties, buildings and leasehold land improvements
The investment properties, buildings and leasehold land improvements of the Group are stated at fair value in
accordance with accounting policies 2.5 and 2.8. The fair values of investment properties, buildings and leasehold land
improvements are based on valuations by independent professional valuers including CBRE, Savills, JLL, Colliers and
HVS. These valuations are based on certain assumptions which are subject to uncertainty and might materially differ
from the actual results. The estimated fair values provided by the independent professional valuers are used by the
Valuation Committee as the primary basis for estimating each property’s fair value for recommendation to the Board.
In making its judgement, the Valuation Committee considers information from a variety of sources including:
(i)
(ii)
(iii)
(iv)
(v)
current prices in an active market for properties of different nature, condition or location (or subject to
different lease or other contracts), adjusted to reflect those differences;
recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic
conditions since the dates of those transactions;
recent developments and changes in laws and regulations that might affect zoning and/or the Group’s
ability to exercise its rights in respect to properties and therefore fully realise the estimated values of
such properties;
discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of
external evidence such as current market rents and sales prices for similar properties in the same location and
condition, and using discount rates that reflect current market assessments of the uncertainty in the amount
and timing of the cash flows; and
recent compensation prices public by local authority at the province where the property is located.
As at 30 June 2015, if the discount rates used had been 1% higher/lower (30 June 2014: 1%), the total carrying values
of the Group’s investment properties and property, plant and equipment would have been USD15.8 million lower/
USD17.4 million higher (30 June 2014: USD22.9 million lower/USD24.5 million higher).
74
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3
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
3.2
a)
Impairment
The Group’s management determines the provision for impairment of trade and other receivables on a regular basis.
This estimate is based on the credit history of its customers and prevailing market conditions.
b)
The Group estimates the recoverable amounts of significant prepayments for acquisitions of investments either based
on management’s internal assessment or by engaging independent valuers in accordance with the valuation methods
and processes as set out in Notes 2.5 and 3.1.
c)
Other assets
The Group’s prepayments for acquisitions of investments, other assets and interests in associates are subject to
impairment testing in accordance with Note 2.14.
3.3
Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date. Management assesses that the
useful lives represent the expected utility of the assets to the Group. The carrying amounts are analysed in Notes 6
and 7.
3.4
Realisation fee
As of the date of the consolidated financial statements, management has assessed that the fair value of the realisation
fee liability under the restructured terms is USD28.2 million (30 June 2014: USD27.3 million). Payment of any realisation
fees is contingent on the Group realising their portfolio investments and making distributions to the shareholders
of the Company. Given that the Group expects to substantially achieve the divestment objectives approved by
shareholders it is reasonable to assume that the accrued realisation fees will be paid to the Investment Manager.
75
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4
SEGMENT ANALYSIS
In identifying its operating segments, management generally follows the Group’s sectors of investment which are
based on internal management reporting information for the Investment Manager’s management, monitoring of
investments and decision making. The operating segments by investment portfolio include commercial, residential
and office buildings, hospitality, mixed-use segments and cash and deposits.
The activities undertaken by the commercial segment include the development and operation of investment
properties. Apartments and villas properties which are developed for sale, land and office buildings are included in the
residential and office buildings segment. The hospitality segment includes the development and operation of hotels
and related services. The mixed-use segment includes multi-purpose projects. Strategic decisions are made on the
basis of segment operating results.
Each of the operating segments are managed and monitored separately by the Investment Manager as each requires
different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of
operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental 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.
There is no measure of segment liabilities regularly reported to the Investment Manager; therefore, liabilities are not
disclosed in the sector analyses.
76
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4
SEGMENT ANALYSIS (continued)
Segment information can be analysed as follows for the reporting years:
a)
Consolidated income statement
Year ended 30 June 2015
Commercial
USD’000
Residential
and office
buildings
USD’000
Hospitality
USD’000
Mixed
use
USD’000
–
–
–
–
Total
USD’000
20,057
(18,557)
Revenue
Cost of sales
–
–
20,057
(18,557)
Gross margin
Net gain/(loss) from disposal of investments
Other income
Finance income
Net gain/(loss) on fair value adjustments of
investment properties and revaluations of
property, plant and equipment
reserve on loss control of a subsidiary
Share of (losses)/profits of associates
–
–
–
1
1,500
782
653
1,119
–
2,656
(596)
57
–
(6,625)
1,986
871
1,500
(3,187)
2,043
2,048
99
13,918
872
30,773
45,662
–
(674)
–
(22,846)
(261)
(1,612)
–
59
(4,656)
–
(50)
(1,412)
(22,846)
(926)
(7,680)
(574)
(6,747)
(1,608)
25,543
16,614
Total (loss)/profit before unallocatable
expenses
Net changes in fair value of financial assets
and financial liabilities at fair value
through profit or loss
Other expenses
Finance expenses
142
(18,937)
(1,095)
(7,073)
Loss before tax
Income tax
(10,349)
(8,067)
(18,416)
77
VinaLand Limited
Annual Report 2015
4
a)
Consolidated income statement (continued)
Year ended 30 June 2014
Commercial
USD’000
Residential
and office
buildings
USD’000
Hospitality
USD’000
Mixed
use
USD’000
Total
USD’000
Revenue
Cost of sales
–
–
27,526
(23,793)
13,599
(8,075)
–
–
41,125
(31,868)
Gross margin
Net (loss)/gain from disposals
of investments
Other income
Finance income
Net gain/(loss) on fair value adjustments of
investment properties and revaluations
of property, plant and equipment
Net changes in fair value of financial
assets and financial liabilities at fair
value through profit or loss
Share of profits/(losses) of associates
Reversal of impairment/(impairment)
of assets
–
3,733
5,524
–
9,257
–
–
4
(448)
2,005
1,221
645
136
32
–
1,132
853
197
3,273
2,110
234
(19,360)
12,999
429
(5,698)
–
20
475
(4,950)
–
(392)
15
(545)
490
(5,867)
–
1,620
(259)
(2,490)
(1,129)
Total profit/(loss) before unallocatable
expenses
Net changes in fair value of financial assets
and financial liabilities at fair value
through profit or loss
Other expenses
Finance expenses
258
(15,704)
18,685
(606)
2,633
(242)
(25,887)
(1,319)
(7,631)
Loss before tax
Income tax
(32,446)
5,026
(27,420)
78
VinaLand Limited
Annual Report 2015
4
b)
Consolidated balance sheet
79
As at 30 June 2015
Commercial
USD’000
Residential
and office
buildings
USD’000
Hospitality
USD’000
Mixed
use
USD’000
Cash and
deposits
USD’000
Total
USD’000
4,500
291,866
–
183,088
–
479,454
–
1,322
7,323
618
–
9,263
Intangible assets
–
5
8
6
–
19
17,925
140,517
4,759
2,004
–
165,205
Prepayments for acquisitions of
investments
–
24,225
–
2,347
–
26,572
Inventories
–
85,395
–
13,516
–
98,911
–
–
–
–
21,820
21,820
31
6,692
854
2,306
–
9,883
Financial assets at fair value through
profit or loss (*)
–
–
–
271
–
271
–
–
–
–
3,116
3,116
–
–
–
–
4,296
4,296
–
12,382
–
851
–
13,233
Other assets
173
4,686
79
3,029
–
7,967
Total assets
22,629
567,090
13,023
208,036
29,232
840,010
–
15,771
3,221
92
–
19,084
Trade, tax and other receivables
Total assets include:
–A
ddition to non-current assets
(other than financial instruments
and deferred tax assets)
(*) The amount presented in this table does not include the fair value of the call options which give the Group the rights to early redeem the ZDP
shares. The Investment Manager does not manage the ZDP shares and call options under any particular segment.
VinaLand Limited
Annual Report 2015
4
b)
Consolidated balance sheet (continued)
80
As at 30 June 2014
Commercial
USD’000
Residential
and office
buildings
USD’000
Hospitality
USD’000
Mixed
use
USD’000
Cash and
deposits
USD’000
Total
USD’000
4,500
358,996
–
151,300
–
514,796
–
13,714
–
719
–
14,433
Intangible assets
–
42
–
11
–
53
18,599
24,336
4,746
2,055
–
49,736
Prepayments for acquisitions of
investments
–
23,875
12,341
4,932
–
41,148
Inventories
–
85,024
–
19,845
–
104,869
–
–
–
–
53,894
53,894
28
81,379
111
2,872
–
84,390
Financial assets at fair value through
profit or loss (*)
–
–
–
750
–
750
–
–
–
–
4,257
4,257
–
–
–
–
1,369
1,369
–
14,931
34,451
1,424
–
50,806
Other assets
186
5,913
–
3,222
–
9,321
Total assets
23,313
608,210
51,649
187,130
59,520
929,822
–
18,561
30
580
–
19,171
Trade, tax and other receivables
Total assets include:
– Addition to non-current assets
(other than financial instruments
and deferred tax assets)
(*) The amount presented in this table does not include the fair value of the call options which give the Group the rights to early redeem the
ZDP shares. The Investment Manager does not manage the ZDP shares and call options under any particular segment.
VinaLand Limited
Annual Report 2015
5
INVESTMENT PROPERTIES
30 June 2015
USD’000
30 June 2014
USD’000
514,796
514,587
Additions
15,519
18,163
Disposals
(13,100)
–
Deemed disposal (Note 7)
(73,084)
–
Opening balance
Transfers from prepayments to suppliers
Transfers to inventories (Note 10)
Transfers to non-current assets classified as held for sale (Note 14)
–
5,000
(2,483)
–
(12,080)
–
Transfers from prepayments for acquisitions of investments (Note 8)
13,514
Net gain/(loss) from fair value adjustments (Note 25)
48,960
(18,697)
–
Translation differences
(12,588)
(4,257)
Closing balance
479,454
514,796
The Group’s investment properties were revalued during the year by independent professionally qualified valuers who
hold recognised relevant professional qualifications and have recent experience in the locations and categories of the
investment properties valued.
Bank borrowings are secured by investment properties with a fair value of USD168.0 million (30 June 2014:
USD236.9 million). During the year, the Group capitalised borrowing costs amounting to USD4.9 million (year ended
30 June 2014: USD5.1 million) into investment properties.
At 30 June 2015, land use rights certificates have not been fully issued for certain portions of the Group’s investment
properties as final issuance is subject to the completion of a number of administrative steps required by local
authorities and/or the settlement of any outstanding land taxes. In the Investment Manager’s view, the lack of land
use rights certificates does not have any material impact on the existence and valuation of the investment properties
as land use rights over the land area for each project have been specifically granted under investment licences.
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or
change in circumstances that caused the transfer. All of the Group’s investment properties are in Level 3 of the fair
value hierarchy. There were no transfers between levels during the year (2014: none).
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5
82
INVESTMENT PROPERTIES (continued)
Information about fair value measurements using unobservable inputs (Level 3) is set out below:
As at 30 June 2015
Level 3 – Range of unobservable inputs
(probability-weighted average)
Segment
Valuation
technique
Residential and
office buildings (*)
Discounted
cash flows
Sensitivity on management’s estimates
Valuation
(USD’000)
Discount
rate
Cap
rate
Valuation
per square
metre
(USD)
218,284
18% –
21.5%
N/A
N/A
Sensitivities in sales price per
square metre
(USD’000)
Sensitivities in discount and cap rates
(USD’000)
Change in discount rate
-1%
0%
1%
223,602
Residential and
office buildings
Direct
comparison
73,582
N/A
N/A
2,440 –
6,499
Discounted
cash flow
99,980
14.5% –
17%
8.5%
73,582
83,292
N/A
-1%
0%
1%
Change
in
cap rate
Mixed use
Direct
comparison
83,108
N/A
N/A
618 –
1,348
Change in sales price per
square metre
-10%
0%
10%
71,978
Commercial
Direct
comparison
4,500
N/A
N/A
1,818
213,584
square metre
-10%
0%
10%
63,872
Mixed use
218,284
83,108
94,238
square metre
-10%
0%
10%
4,050
4,500
(*) The valuations of these investment properties assume that they will be developed and sold within a definite time period; therefore, no
capitalisation rates are used in such valuations.
4,950
-1%
123,468
110,759
99,107
0%
111,734
99,980
89,217
1%
102,431
91,452
81,375
VinaLand Limited
Annual Report 2015
5
83
INVESTMENT PROPERTIES (continued)
For the comparative balance sheet date:
Level 3 – Range of unobservable inputs
(probability-weighted average)
Segment
Valuation
technique
Residential and
office buildings (*)
Discounted
cash flows
Sensitivity on management’s estimates
Valuation
(USD’000)
Discount
rate
Cap
rate
Valuation
per square
metre
(USD)
198,729
18% –
22%
N/A
N/A
Sensitivities in sales price per
square metre
(USD’000)
(USD’000)
-1%
0%
1%
203,548
Residential and
office buildings
Direct
comparison
160,267
N/A
N/A
80 –
6,499
Discounted
cash flow
151,300
14.5% –
18%
8.5% –
13%
160,267
179,984
N/A
-1%
0%
1%
Change
in
cap rate
Commercial
Direct
comparison
4,500
N/A
N/A
1,818
193,923
square metre
-10%
0%
10%
140,550
Mixed use
198,729
square metre
-10%
0%
10%
4,050
4,500
(*) The valuations of these investment properties assume that they will be developed and sold within a definite time period; therefore, no
capitalisation rates are used in such valuations.
4,950
-1%
180,589
160,687
142,407
0%
170,672
151,300
133,510
1%
161,992
143,082
125,726
VinaLand Limited
Annual Report 2015
6
PROPERTY, PLANT AND EQUIPMENT
Buildings,
hotels and
golf courses
USD’000
Machinery,
plant and
equipment
USD’000
Furniture,
fixtures
and office
equipment
USD’000
Motor
vehicles
USD’000
Total
USD’000
Gross carrying amount
At 1 July 2014
Additions
Revaluation gains (Note 25)
Impairment charges
Disposals
Write-offs
16,409
106
872
(4,656)
–
–
(691)
642
90
–
–
–
(415)
(43)
734
4
–
–
(2)
(62)
4
701
570
–
–
(3)
(385)
(16)
18,486
770
872
(4,656)
(5)
(862)
(746)
At 30 June 2015
12,040
274
678
867
13,859
Depreciation
At 1 July 2014
Charge for the year
Disposals
Write-offs
(3,242)
(856)
–
–
61
(277)
(121)
–
267
26
(186)
(62)
1
40
(5)
(348)
(99)
–
188
17
(4,053)
(1,138)
1
495
99
At 30 June 2015
(4,037)
(105)
(212)
(242)
(4,596)
Carrying value
At 1 July 2014
13,167
365
548
353
14,433
8,003
169
466
625
9,263
At 30 June 2015
The Group’s golf course was revalued during the year by independent professionally qualified valuers who hold
recognised relevant professional qualifications and have recent experience in the locations and categories of the
property valued.
Total impairment charges to property, plant and equipment amounted to USD4.7 million during the year ended
30 June 2015 (the year ended 30 June 2014: nil).
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6
PROPERTY, PLANT AND EQUIPMENT (continued)
For the comparative year:
Gross carrying amount
At 1 July 2013
Additions
Revaluation gains (Notes 17, 25)
Transfers to assets reclassified as held
for sale (Note 15)
Disposals
Write-offs
At 30 June 2014
Depreciation
At 1 July 2013
Charge for the year
Transfers to assets reclassified as held
for sale (Note 14)
Disposals
Write-offs
Buildings,
hotels and
golf courses
USD’000
Machinery,
plant and
equipment
USD’000
Furniture,
fixtures
and office
equipment
USD’000
Motor
vehicles
USD’000
Total
USD’000
72,821
307
23,695
21,773
35
–
3,576
77
–
1,105
40
–
99,275
459
23,695
(75,607)
(3,936)
(631)
(240)
(17,270)
(3,188)
(251)
(457)
(2,271)
(430)
(206)
(12)
16,409
642
734
(352)
–
(82)
(10)
(95,500)
(7,554)
(1,170)
(719)
701
18,486
(26,913)
(2,848)
(14,118)
(901)
(2,209)
(367)
(632)
(118)
(43,872)
(4,234)
25,424
1,023
–
72
13,049
1,505
164
24
1,902
368
113
7
350
–
45
7
40,725
2,896
322
110
(348)
(4,053)
At 30 June 2014
(3,242)
Carrying value
At 1 July 2013
45,908
7,655
1,367
473
55,403
At 30 June 2014
13,167
365
548
353
14,433
(277)
(186)
85
VinaLand Limited
Annual Report 2015
6
86
PROPERTY, PLANT AND EQUIPMENT (continued)
Information about fair value measurements using significant unobservable inputs (Level 3) is set out as below:
Segment
Valuation
technique
Hospitality
Discounted
cash flows
Valuation
(USD’000)
Discount
rate
Cap
rate
5,371
18%
15%
(USD’000)
-1%
0%
1%
Change
in
cap rate
-1%
5,871
5,471
5,171
0%
5,671
5,371
5,071
1%
5,571
5,271
4,971
For the comparative balance sheet date:
Segment
Valuation
technique
Hospitality
Discounted
cash flows
Valuation
(USD’000)
Discount
rate
Cap
rate
5,049
18%
15%
(USD’000)
-1%
0%
1%
Change
in
cap rate
-1%
5,505
5,174
4,868
0%
5,378
5,049
4,761
1%
5,266
4,955
4,666
If the golf course was stated on the historical cost basis, the amount would be as follows:
30 June 2015
USD’000
30 June 2014
USD’000
Cost
16,236
16,541
Accumulated depreciation
(1,559)
(1,207)
Net book amount
14,677
15,334
VinaLand Limited
Annual Report 2015
7
SUBSIDIARIES AND ASSOCIATES
a)
Opening balance
Additions
Addition due to loss of control of a subsidiary
Dividends received
Closing balance
30 June 2015
USD’000
30 June 2014
USD’000
49,736
55,594
2,503
46
113,938
–
(46)
(37)
(926)
(5,867)
165,205
87
49,736
Particulars of material operating associates and their summarised financial information, extracted from their financial
statements as at 30 June 2015 and 30 June 2014, are as follows:
As at 30 June 2015
Assets
USD’000
Liabilities
USD’000
Revenue
USD’000
Loss
USD’000
Share of
losses to
the Group
USD’000
Property
294,207
61,679
–
–
–
Vietnam
Property
62,485
9,329
–
(522)
(261)
Vietnam
Property/
Hospitality
71,244
26,340
6,121
(990)
(665)
427,936
97,348
6,121
(1,512)
(926)
Incorporation
Principal
activity
The 21st Century International
Development Company Limited (*)
Vietnam
Aqua City Joint Stock Company
Other associates
(**)
Equity
interest
held
%
49
50
VinaLand Limited
Annual Report 2015
7
SUBSIDIARIES AND ASSOCIATES (continued)
a)
Investments in associates (continued)
88
As at 30 June 2014
Incorporation
Principal
activity
Aqua City Joint Stock Company (**)
Vietnam
Other associates
Vietnam
Loss
USD’000
Assets
USD’000
Liabilities
USD’000
Revenue
USD’000
Property
60,560
11,888
3
(9,901)
(4,950)
Property/
Hospitality
28,620
4,549
1,868
(1,855)
(917)
89,180
16,437
1,871
(11,756)
(5,867)
(*) The 21st Century International Development Company Limited (“Century 21”) became an associate of the Group on 30 June 2015. As at year
end, the Group’s share of Century 21’s net assets approximated the carrying value of the Group’s investment in this associate.
(**) The Group has a 50% equity interest in Aqua City Joint Stock Company but does not have the ability to use its voting interests to appoint a
majority of directors so does not and cannot control the boards of these companies. Therefore, management considers it appropriate to treat
these interests as investments in associates.
Reconciliation of summarised financial information for material associates
Aqua City Joint Stock Company
For the year ended 30 June
2015
USD’000
2014
USD’000
48,672
58,483
5,006
90
Summarised financial information
Opening net assets 30 June
Capital contribution during the year
Loss for the year
(522)
(9,901)
Total closing net assets
53,156
48,672
Ownership percentage
50%
50%
26,578
24,336
Net carrying value of the Group
Share of
losses to
the Group
USD’000
Equity
interest
held
%
50
VinaLand Limited
Annual Report 2015
7
b)
Principal subsidiaries
The Group had the following principal subsidiaries as at 30 June 2015 and 30 June 2014:
30 June 2015
Country of
incorporation
and place of
business
Name
The 21st Century International Development Company Limited
VinaCapital Hoi An Resort Limited
VinaCapital Danang Golf Course Limited
VinaCapital Danang Resort Limited
VinaCapital Commercial Center Limited (Vietnam) (**)
Mega Assets Company Limited (Vietnam)
SIH Real Este Limited Company (Vietnam)
Dien Phuoc Long Real Estate Company Limited
VinaCapital Phuoc Dien Co. Limited
Roxy Vietnam Co. Limited
Dong Binh Duong Urban Development Co. Limited
Nam Phat Villas and Hotel Company Limited
Orchid House Co. Limited
Vina Dai Phuoc Corporation Limited
Metropolis Hanoi Company Limited (***)
Viet Land Development Corporation Limited
Vinh Thai Urban Development Corporation Limited
Thang Long Property Company Limited
Hoang Phat Investment Joint Stock Company
AA VinaCapital Co. Limited
Vina Alliance Company Limited (**)
Phu Hoi City Company Limited
(*)
(*)
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
30 June 2014
Percentage
Percentage
interest interest held by
held by the non-controlling
Group
interest
–
100.0%
75.0%
75.0%
38.0%
75.0%
75.0%
100.0%
100.0%
75.0%
70.0%
100.0%
56.0%
54.0%
45.0%
90.0%
53.0%
65.0%
60.0%
80.0%
47.0%
53.0%
89
–
–
25.0%
25.0%
62.0%
25.0%
25.0%
–
–
25.0%
30.0%
–
44.0%
46.0%
55.0%
10.0%
47.0%
35.0%
40.0%
20.0%
54.0%
48.0%
Percentage
Percentage
interest interest held by
held by the non-controlling
Group
interest
75.0%
100.0%
75.0%
75.0%
38.0%
75.0%
75.0%
100.0%
100.0%
75.0%
70.0%
100.0%
56.0%
54.0%
45.0%
90.0%
53.0%
65.0%
60.0%
80.0%
47.0%
53.0%
During the year the Group’s interest in The 21st Century International Development Company Limited was reduced from 75% to 36.75%.
The Group’s control of the investee diminished during the year but it still retains significant influence over the investee, thus making it an
associate of the Group at the reporting date.
(**) At the reporting date, the Group has 38.2% and 46.5% equity interests in VinaCapital Commercial Center Limited (Vietnam) and Vina Alliance
Company Limited, respectively. Management considers these companies as subsidiaries as the Group has control through the majority voting
rights in these companies.
(***) At the reporting date, the Group has a 44.6% equity interest in Metropolis Hanoi Company Limited, but controls the subsidiary because it
still has the power to direct the activities of this company because it holds more than 50% of the shareholders’ voting rights. Therefore,
management considers this investee a subsidiary.
25.0%
–
25.0%
25.0%
62.0%
25.0%
25.0%
–
–
25.0%
30.0%
–
44.0%
46.0%
55.0%
10.0%
47.0%
35.0%
40.0%
20.0%
54.0%
48.0%
Nature of business
Property investment
Hospitality
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Property investment
Hospitality
Property investment
Hospitality
Hospitality
Property investment
Hospitality
Property investment
Property investment
Property investment
Hospitality
Property investment
Property investment
Property investment
VinaLand Limited
Annual Report 2015
7
b)
Principal subsidiaries (continued)
All subsidiaries are included in the consolidated financial statements. The proportion of the voting rights in the
subsidiary undertakings held directly by the Group does not differ from the proportion of ordinary shares held except
in the cases mentioned above. The Group does not hold any preference shares of subsidiaries included in the Group.
Disposal of Roxy Assets Limited
During the year the Group disposed of its 100% equity interest in Roxy Assets Limited for consideration of
USD15.9 million. This company owned the Movenpick Hanoi Hotel, a four-star hotel located in Hanoi, Vietnam, the net
assets of which included a building, electronic gaming licence, inventories, debts and working capital amounting to
USD13.3 million, including USD3.1 million attributable to non-controlling interests. The sale of this company resulted
in a gain of USD2.6 million which has been recognised in the consolidated income statement.
Disposal of Riverview Complex Danang Company Limited
During the year the Group disposed of its 90% interest in Riverview Complex Danang Company Limited, for total
consideration of USD7.6 million. The book value of the net assets at the disposal date was USD13.8 million, resulting
in a loss of USD6.2 million which was recognised in the consolidated income statement. The sale also resulted in
a change in the development rights of a neighbouring property belonging to the Group which resulted in a gain of
USD8.1 million.
Summarised financial information of subsidiaries with material non-controlling interests
The total value of non-controlling interests as at 30 June 2015 is USD182.8 million (30 June 2014: USD182.3 million),
allocated as below:
30 June 2015
USD’000
30 June 2014
USD’000
Prosper Big Investments Limited (“Prosper Big”)
29,412
25,984
VinaCapital Danang Golf Course Limited (“Danang Golf”)
12,785
13,279
Vina Dai Phuoc Corporation Limited (“Dai Phuoc Lotus”)
31,291
30,027
Vina Alliance Company Limited (“Vina Square”)
39,091
34,557
Others
70,242
78,525
182,821
182,372
90
VinaLand Limited
Annual Report 2015
7
b)
91
Set out below is the summarised financial information of each material subsidiary of the Group with non-controlling
interests. The information below is before inter-company eliminations.
Summarised balance sheets
Prosper Big
As at 30 June
2015
USD’000
2014
USD’000
Danang Golf
As at 30 June
2015
USD’000
2014
USD’000
Dai Phuoc Lotus
As at 30 June
2015
USD’000
Vina Square
As at 30 June
2014
USD’000
2015
USD’000
2014
USD’000
Current
17,600
43,035
39,082
24,004
26,998
Liabilities
Assets
(76,765)
17
(66,426)
(64,403)
(64,561)
(18,121)
(20,092)
(41,161)
113
(41,282)
185
Total current net (liabilities)/assets
(76,748)
(48,826)
(21,368)
(25,479)
5,883
6,906
(41,048)
(41,097)
113,939
123,017
78,631
84,174
63,074
58,712
(37,029)
(33,624)
(32,183)
(4)
–
109,398
85,988
45,007
51,991
63,070
32,650
37,162
23,639
26,512
68,953
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
(4,541)
99,026
85,639
(28,634)
(25,161)
58,712
70,392
60,478
65,618
29,344
19,381
VinaLand Limited
Annual Report 2015
7
b)
92
Summarised income statements
Prosper Big
Year ended 30 June
2015
USD’000
Revenue
–
2014
USD’000
–
Danang Golf
Year ended 30 June
2015
USD’000
2014
USD’000
Dai Phuoc Lotus
Year ended 30 June
2015
USD’000
2014
USD’000
Vina Square
Year ended 30 June
2015
USD’000
2014
USD’000
4,485
4,826
3,510
10,730
–
–
(2,867)
4,830
5,363
307
15,312
4,146
1,295
(1,748)
(1,033)
(78)
(4,059)
(3,254)
(1,572)
3,082
4,330
229
11,253
(773)
(1,301)
290
(1,406)
(487)
(1,290)
(4,512)
(4,027)
(2,873)
3,372
2,924
(258)
9,963
3,479
(1,128)
(1,007)
(718)
843
1,264
(202)
4,534
1,806
(Loss)/profit before income tax
(12,442)
(3,252)
Income tax (expense)/income
(2,073)
(2)
Post-tax (loss)/profit from continuing
operations
(14,515)
Other comprehensive income/(loss)
10,003
Total comprehensive (loss)/income
Total comprehensive (loss)/income
allocated to non-controlling interests
–
4,146
(667)
Summarised cash flow statements
Prosper Big
Year ended 30 June
2015
USD’000
Danang Golf
Year ended 30 June
Dai Phuoc Lotus
Year ended 30 June
2014
USD’000
2015
USD’000
2014
USD’000
2015
USD’000
2014
USD’000
2015
USD’000
2014
USD’000
1,743
1,503
2,305
11
199
(1,346)
(4,020)
(90)
(128)
1,352
8
–
(71)
71
Net cash flows from operating activities
(6,204)
6,180
975
Net cash flows from investing activities
(18,577)
(29,511)
(566)
Net cash flows from financing activities
37,476
24,181
1,340
80
49
Net increase/(decrease) in cash and
cash equivalents
12,695
850
1,749
1,193
206
The information above is before inter-company eliminations.
Vina Square
Year ended 30 June
(630)
(363)
VinaLand Limited
Annual Report 2015
8
PREPAYMENTS FOR ACQUISITIONS OF INVESTMENTS
30 June 2015
USD’000
30 June 2014
USD’000
57,713
74,509
Transfers to investment properties (Note 5)
(13,514)
Transfers to assets classified as held for sale (Note 14)
Allowance for impairment
–
–
(16,355)
44,199
58,154
(17,627)
(17,006)
26,572
41,148
Prepayments are made by the Group to property vendors where the final transfer of the property is pending
the approval of the relevant authorities and/or is subject to either the Group or the vendor completing certain
performance conditions set out in agreements.
As at 30 June 2015, due to market conditions impairment allowances of USD17.6 million (30 June 2014:
USD17.0 million) have been made against the prepayments for acquisitions of investments. The relevant recoverable
amounts are the fair values of the underlying properties less the costs to sell which have been estimated by
independent professional qualified valuers who hold recognised relevant professional qualifications and have recent
experience in the locations and categories of the properties upon which these prepayments have been made.
The valuations by the independent valuation companies are prepared using the direct comparison method. If the
sales prices of similar properties have increased/decreased, it is expected that the recoverable amounts of these
prepayments would have moved up/down accordingly.
93
VinaLand Limited
Annual Report 2015
8
PREPAYMENTS FOR ACQUISITIONS OF INVESTMENTS (continued)
Management’s view is that all of the Group’s prepayments for acquisitions of investments are in Level 3 of the fair
value hierarchy. Movements in the balance during the year were as follows:
Opening balance
Additions
30 June 2014
USD’000
41,148
65,681
293
898
Impairments (Note 28)
(622)
(626)
Written-off
(150)
–
Disposals
–
(8,096)
–
(16,355)
Translation reserve
9
30 June 2015
USD’000
(583)
(354)
Transfers to investment properties (Note 5)
(13,514)
–
Closing balance
26,572
41,148
30 June 2015
USD’000
30 June 2014
USD’000
7,820
6,037
(1,248)
2,168
DEFERRED INCOME TAX ASSETS
Opening balance
Net change in the year
(*)
–
(385)
Closing balance
6,572
7,820
Deferred income tax asset to be recovered after more than 12 months
6,417
7,698
155
122
6,572
7,820
Deferred income tax asset to be recovered within 12 months
(*) The net change mainly arose from changes for tax provisions on fair value adjustments of investment properties during the year.
Deferred income tax assets are the amounts of income taxes to be recovered in future periods in respect of temporary
differences between the carrying amounts of revalued assets and their tax bases.
94
VinaLand Limited
Annual Report 2015
9
DEFERRED INCOME TAX ASSETS (continued)
Deferred income tax assets relating to the accumulated tax losses as at 30 June 2015 of USD33.9 million (30 June 2014:
USD22.5 million) of the Group’s subsidiaries subject to corporate income tax in Vietnam have not been recognised due
to uncertainties as to the timing of their recoverability. Estimated tax losses available for offset against future taxable
income are as follows:
Year of expiration
2015
10
30 June 2015
USD’000
30 June 2014
USD’000
–
2,056
2016
4,472
4,808
2017
4,035
4,506
2018
5,945
6,030
2019
5,653
5,151
2020
13,809
–
33,914
22,551
30 June 2015
USD’000
30 June 2014
USD’000
104,869
121,510
Additions
8,124
5,663
Transfers from investment properties (Note 5)
2,483
–
INVENTORIES
Opening balance
Transfers to cost of sales
(13,048)
(22,173)
(1,115)
(131)
101,313
Write-down of inventories
104,869
(2,402)
98,911
–
104,869
During the year, the Group capitalised borrowing costs amounting to USD0.6 million (2014: USD1.8 million) into the
value of inventories.
95
VinaLand Limited
Annual Report 2015
10
INVENTORIES (continued)
Inventories which belong to VinaCapital Danang Resort Limited and Vinh Thai Urban Development Corporation
Limited with a total carrying value of USD37 million as at 30 June 2015 (30 June 2014: USD39 million) are pledged as
security for bank borrowings disclosed in Note 18.
11
TRADE AND OTHER RECEIVABLES
30 June 2015
USD’000
30 June 2014
USD’000
–
63,646
Current
Trade receivables
Receivable from non-controlling interests
Receivables from disposals of subsidiaries (*)
Interest receivables
Prepayments to suppliers
Short-term prepaid expenses
Advances for land compensation
Advances to employees
Other receivables
3,061
–
185
14
840
703
–
65
534
3,494
140
6,048
9
1,212
635
3,366
74
1,503
Allowance for impairment
5,402
–
16,481
(1,755)
5,402
14,726
Non-current
Receivables as compensation for property exchanged
(*) Receivables from disposals of subsidiaries represent the final settlements upon completion of the transfer of ownership of subsidiaries to the
buyers in accordance with the relevant sale and purchase agreements.
All trade and other receivables are short-term in nature and their carrying values, after allowances for impairment,
approximate their fair values at the date of the consolidated balance sheet.
96
VinaLand Limited
Annual Report 2015
11
TRADE AND OTHER RECEIVABLES (continued)
Movements in provision for impairment of trade receivables are as below:
30 June 2015
USD’000
Opening balance
Charges
Written-off
Closing balance
12
30 June 2014
USD’000
1,755
–
(1,755)
–
1,755
–
–
1,755
30 June 2015
USD’000
30 June 2014
USD’000
39
7,198
14,583
52
42,155
11,687
21,820
53,894
CASH AND CASH EQUIVALENTS
Cash on hand
Cash at banks
Cash equivalents
Cash equivalents include short-term highly liquid investments with original maturities of three months or less.
At 30 June 2015, cash and cash equivalents held at the Company level amounted to USD5.7 million (30 June 2014:
USD39.8 million). The remaining balance of cash and cash equivalents is held by subsidiaries in Vietnam. Cash held in
Vietnam is subject to restrictions imposed by co- investors and the Vietnamese government and therefore it cannot be
transferred out of Vietnam unless such restrictions are satisfied.
97
VinaLand Limited
Annual Report 2015
13
FINANCIAL INSTRUMENTS BY CATEGORY
As at 30 June 2015
Loans and
receivables
USD’000
Assets at fair
value through
profit or loss
USD’000
Total
USD’000
4,296
–
4,296
3,061
–
3,061
185
–
185
14
–
14
2,121
–
2,121
3,116
–
3,116
–
283
283
21,820
–
21,820
Total
34,613
283
34,896
Assets
Non-current:
Current:
Trade receivables
Receivables from disposals of subsidiaries
98
VinaLand Limited
Annual Report 2015
13
FINANCIAL INSTRUMENTS BY CATEGORY (continued)
As at 30 June 2015
Other financial
liabilities at
amortised cost
USD’000
Liabilities at fair
value through
profit or loss
USD’000
Total
USD’000
Bank borrowings and debts
85,243
–
85,243
31,162
–
31,162
–
2,405
2,405
8,982
–
8,982
35,292
–
35,292
1,016
–
1,016
16,693
–
16,693
Interest payables
478
–
478
Other accrued liabilities
651
–
651
3,049
–
3,049
182,566
2,405
184,971
Liabilities
Non-current:
Financial liabilities at fair value through profit or loss
Current:
Trade payables
Payables for property acquisitions and land compensation
Other payables
Total
99
VinaLand Limited
Annual Report 2015
13
As at 30 June 2014
Loans and
receivables
USD’000
Assets at fair
value through
profit or loss
USD’000
Total
USD’000
1,369
–
1,369
63,646
–
63,646
Assets
Non-current:
Compensation receivable for property exchanged
Current:
3,494
–
3,494
Receivables from non-controlling interests
140
–
140
6,048
–
6,048
9
–
9
2,215
–
2,215
4,257
–
4,257
–
767
767
53,894
–
53,894
135,072
767
135,839
Trade receivables
Total
100
VinaLand Limited
Annual Report 2015
13
As at 30 June 2014
Other financial
liabilities at
amortised cost
USD’000
Liabilities at fair
value through
profit or loss
USD’000
Total
USD’000
120,134
–
120,134
31,380
–
31,380
31,323
–
31,323
13,969
–
13,969
2,993
–
2,993
957
–
957
25,862
–
25,862
–
259
259
1,074
–
1,074
416
–
416
3,206
–
3,206
231,314
259
231,573
Liabilities
Non-current:
Current:
Trade payables
Financial liabilities at fair value through profit and loss
Interest payables
Other payables
Total
101
VinaLand Limited
Annual Report 2015
14
ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE
30 June 2015
Vinh Thai Parcel 4
Hoi An South
Riverview project
Attributable to
Assets
classified as
held for sale
USD’000
Liabilities
classified as
held for sale
USD’000
Net assets
classified as
held for sale
USD’000
NonEquity
controlling shareholders
interests of the parent
USD’000
USD’000
1,364
–
1,364
638
726
11,018
518
10,500
–
10,500
851
–
851
525
326
13,233
518
12,715
1,163
11,552
The assets and liabilities relating to the remaining 10% interest in Riverview Complex Danang Company Limited, 100%
of Hoi An South Investments Pte. Ltd. and Parcel 4 of Vinh Thai Urban Development Corporation Limited have been
presented as held for sale following the signing of relevant sale and purchase agreements.
102
VinaLand Limited
Annual Report 2015
14
ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE (continued)
Management’s view is that all of the Group’s assets and liabilities classified as held for sale are in Level 3 of the fair
value hierarchy. The major classes of assets and liabilities and their movements during the year are as follows:
30 June 2014
USD’000
Transfers in
USD’000
Disposal
USD’000
30 June 2015
USD’000
Available for sales financial assets
–
851
–
851
Investment properties (Note 5)
–
12,080
–
12,080
27,840
–
(27,840)
–
3,262
–
(3,262)
–
Prepayment for operating leases
233
–
(233)
–
Deferred income tax asset
385
–
(385)
–
93
–
(93)
–
Inventories
64
–
(64)
–
Property, plant and equipment (net of
accumulated depreciation)
Intangible assets (net of
accumulated amortisation)
2,048
172
(2,048)
172
16,355
–
(16,355)
–
526
130
(526)
130
50,806
13,233
(50,806)
13,233
15,203
–
(15,203)
–
–
17
4,425
760
(4,684)
501
19,628
777
(19,887)
518
31,178
12,456
(30,919)
12,715
Accruals and other current liabilities
Net assets classified as held for sale
–
17
103
VinaLand Limited
Annual Report 2015
14
ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE (continued)
For the comparative year:
30 June 2013
USD’000
Transfers in
USD’000
Disposal
USD’000
30 June 2014
USD’000
Property, plant and equipment (net of
accumulated depreciation)
–
54,775
(26,935)
27,840
Intangible assets (net of
accumulated amortisation)
–
10,302
(7,040)
3,262
Prepayment for operating leases
–
233
–
233
Deferred income tax assets
–
385
–
385
–
93
–
93
Inventories
–
466
(402)
64
–
2,439
(391)
2,048
Prepayments for acquisition of investments
–
16,355
–
2,786
(2,260)
526
–
87,834
(37,028)
50,806
–
18,439
(3,236)
15,203
–
7,501
(3,076)
4,425
–
25,940
(6,312)
19,628
–
61,894
(30,716)
31,178
–
16,355
Net assets classified as held for sale
104
VinaLand Limited
Annual Report 2015
15
SHARE CAPITAL
30 June 2015
30 June 2014
Number of
shares
USD’000
Number of
shares
USD’000
500,000,000
5,000
500,000,000
5,000
Opening balance
458,727,080
4,587
481,298,227
4,813
Shares purchased and cancelled
(28,594,860)
Closing balance
430,132,220
Authorised:
Ordinary shares of USD0.01 each
Issued and fully paid:
(286)
4,301
(22,571,147)
(226)
458,727,080
4,587
The Company considers investors holding more than a 10% beneficial interest in the ordinary shares of the Company
as major shareholders. As at 30 June 2015, there were two investors that held more than 10% of the ordinary shares
of the Company (30 June 2014: two).
During the year the Company purchased and cancelled 28,594,860 of its ordinary shares (30 June 2014: 22,571,147
shares) for a total cash consideration of USD15.9 million (30 June 2014: USD12.1 million) at an average cost of
USD0.59 per share (30 June 2014: USD0.54 per share). The difference between the cost of the shares repurchased and
their net asset value has been recorded in an equity reserve.
16
ADDITIONAL PAID-IN CAPITAL
Additional paid-in capital represents the excess of consideration received over the par value of shares issued.
30 June 2015
USD’000
30 June 2014
USD’000
Opening balance
546,992
567,374
Shares repurchased and cancelled
(25,904)
(20,382)
Closing balance
521,088
546,992
105
VinaLand Limited
Annual Report 2015
17
REVALUATION RESERVE
30 June 2015
USD’000
Opening balance
8,022
–
Revaluation gain on buildings
–
10,696
Transfer of share of revaluation gain attributable to non-controlling interests
–
(2,674)
Disposal of a subsidiary
18
30 June 2014
USD’000
(8,022)
–
–
8,022
30 June 2015
USD’000
30 June 2014
USD’000
62,251
102,521
779
1,980
25,951
26,298
(3,738)
(10,665)
85,243
120,134
BORROWINGS AND DEBTS
Long-term borrowings:
Bank borrowings
Loans from non-controlling interests
Zero dividend preference shares
Less:
Current portion of long-term borrowings and debts
Short-term borrowings:
Bank borrowings
4,025
3,304
1,219
–
Current portion of long-term borrowings
3,738
10,665
8,982
13,969
94,225
134,103
Total borrowings and debts
106
VinaLand Limited
Annual Report 2015
18
BORROWINGS AND DEBTS (continued)
(i)
Borrowings
Borrowings mature on a range of dates until May 2027 and bear average annual interest rates of 10.6% for amounts in
VND and 1.5% for amounts in USD (30 June 2014: 12% for amounts in VND and 1.5% for amounts in USD). USD0.6 million
of the Group’s borrowings bear fixed interest rates, while the remaining are subject to floating interest rates.
All bank borrowings are secured by specific investment properties and inventories of the Group (Notes 5 and 10).
During the year the Group capitalised borrowing costs amounting to USD5.5 million (2014: USD6.9 million) in qualifying
assets (Notes 5 and 10).
The maturities of the Group’s borrowings at the end of the reporting year are as follows:
30 June 2015
USD’000
30 June 2014
USD’000
6 months or less
5,232
5,332
6-12 months
3,750
8,637
1-5 years
48,332
93,836
Over 5 years
10,960
–
68,274
107,805
The fair value of current borrowings equals their carrying amounts, as the impact of discounting is not significant.
The fair value of long-term bank borrowings is USD59.3 million (30 June 2014: USD93.4 million). These are Level 2 fair
values which are estimated using the discounted cash flow method.
The Group’s borrowings are denominated in the following currencies:
30 June 2015
USD’000
30 June 2014
USD’000
VND
67,055
106,586
USD
1,219
1,219
68,274
107,805
During the year, the Group’s subsidiaries borrowed USD25.8 million (30 June 2014: USD59.3 million) from banks to
finance working capital and property development activities.
107
VinaLand Limited
Annual Report 2015
18
BORROWINGS AND DEBTS (continued)
(ii)
VinaLand ZDP Ltd., a subsidiary of the Company, issued 15 million zero dividend preference shares with a par value
of GBP1.00 per share on 17 December 2013. Upon issuance the ZDP shares had a three-year term and provided a
gross redemption yield of 8%. They were admitted to the standard listing segment of the Official List of the UK Listing
Authority and began trading on the London Stock Exchange’s main market on 20 December 2013.
The fair value of the ZDP shares as at 30 June 2015 is USD27 million (30 June 2014: USD26.3 million). This is a Level 1
fair value based on market quotes on 30 June 2015.
19
NON-CURRENT TRADE AND OTHER PAYABLES
The balance at 30 June 2015 includes VND535 billion, equivalent to USD24.6 million (30 June 2014: VND535 billion,
equivalent to USD25.1 million) due to a minority shareholder in a joint venture company representing the remaining
amount payable to reimburse land acquisition costs incurred by that shareholder. The balance will be paid within 12
months of the investee company obtaining a land use rights certificate under its name. Management believes that the
balance is non-current because although the certificate was issued in August 2015 settlement of the payable can be
delayed for at least 12 months.
20
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial liabilities at fair value through profit or loss represent the fair value of a cross currency swap designated as a
fair value hedge. As at 30 June 2015, the fair value of the hedging derivative was USD2.4 million.
The ineffective portion recognised in the profit or loss that arises from the fair value hedge amounts to a loss of
approximately USD1 thousand.
108
VinaLand Limited
Annual Report 2015
21
DEFERRED INCOME TAX LIABILITIES
Opening balance
30 June 2015
USD’000
30 June 2014
USD’000
21,755
27,594
Net reversal during the year from fair value adjustments of investment
properties and property, plant and equipment
6,429
(5,839)
Closing balance
6,429
21,755
Deferred income tax liabilities to be recovered after more than 12 months
16,269
20,693
Deferred income tax liabilities to be recovered within 12 months
11,915
1,062
28,184
21,755
Deferred income tax liabilities relate to income taxes for settlement in future periods in respect of temporary
differences between the carrying amounts of revalued assets and their tax bases.
22
TRADE AND OTHER PAYABLES
Trade payables
30 June 2015
USD’000
30 June 2014
USD’000
1,016
957
16,693
25,862
Compensation due to a co-investor upon disposal of an investment
4,170
–
Deposits from property buyers
5,293
20,195
41,853
33,639
Interest payable
478
1,074
651
416
3,049
3,206
73,203
85,349
Deposits from customers of residential projects
Other payables
All trade and other payables are short-term in nature. Their carrying values approximate their fair values as at the date
of the consolidated balance sheet.
109
VinaLand Limited
Annual Report 2015
23
REVENUE
Year ended
Sales of residential projects
Hospitality activities
24
30 June 2015
USD’000
30 June 2014
USD’000
20,057
27,526
–
13,599
20,057
41,125
COST OF SALES
Year ended
30 June 2015
USD’000
30 June 2014
USD’000
Residential projects
18,557
23,793
Hospitality activities
–
8,075
18,557
31,868
Cost of sales include raw materials and consumables used, construction costs, land costs, depreciation and
amortisation, staff costs, outside service costs and other expenses.
The analysis of cost of sales based on nature of expenses is as follows:
Year ended
30 June 2015
USD’000
30 June 2014
USD’000
Raw materials and consumable used
1,040
2,524
Construction costs
9,231
14,894
Land costs
1,893
3,723
Staff costs
Outside service costs
Other expenses
716
3,198
1,876
3,461
832
760
2,969
3,308
18,557
31,868
110
VinaLand Limited
Annual Report 2015
25
NET GAIN/(LOSS) ON FAIR VALUE ADJUSTMENTS OF INVESTMENT PROPERTIES AND REVALUATIONS OF
PROPERTY, PLANT AND EQUIPMENT
Year ended
30 June 2015
USD’000
30 June 2014
USD’000
99
234
By real estate sector:
– Commercial
– Residential and office buildings
13,918
– Mixed use
30,773
(19,360)
429
44,790
(18,697)
– Hospitality
872
Net gain/(loss) on fair value adjustments of investment properties and
26
12,999
45,662
(5,698)
SELLING AND ADMINISTRATION EXPENSES
Year ended
30 June 2015
USD’000
30 June 2014
USD’000
Management fees (Note 36)
6,995
7,841
Professional fees
5,268
4,744
–
1,152
(*)
Listing expenses
455
1,657
General and administration expenses (*)
3,599
5,361
Staff costs (*)
2,304
3,834
316
1,298
18,937
25,887
Others
(*)
(*)
(*) These expenses primarily relate to the operating activities of the Group’s subsidiaries. Note 33 contains further information in respect to ongoing
charges incurred by the Company.
111
VinaLand Limited
Annual Report 2015
27
RECLASSIFICATION OF CURRENCY TRANSLATION RESERVE ON LOSS OF CONTROL OF A SUBSIDIARY
This amount represents the cumulative amount of the exchange differences related to a Vietnamese subsidiary which
was reclassified from other comprehensive income to profit or loss when the Group lost control over the subsidiary
during the year.
28
IMPAIRMENT OF ASSETS
Year ended
30 June 2015
USD’000
Impairment/(reversal of impairment) of prepayments for acquisitions
of investments
622
(626)
Impairment of inventories
2,402
–
Impairment of property, plant and equipment
4,656
–
–
1,755
7,680
1,129
Impairment of trade and other receivables
29
30 June 2014
USD’000
FINANCE INCOME
Year ended
Interest income
Realised foreign exchange gains
Dividends
30 June 2015
USD’000
30 June 2014
USD’000
787
1,994
1,250
53
11
63
2,048
2,110
112
VinaLand Limited
Annual Report 2015
30
FINANCE EXPENSES
Year ended
30 June 2015
USD’000
30 June 2014
USD’000
108
169
Unrealised foreign exchange losses
1,028
384
Interest expense
5,017
7,017
920
–
–
61
7,073
7,631
Realised foreign exchange losses
Loss on amortisation of realisation fees
Others
31
INCOME TAX
VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there are no
income, corporation, capital gains or other taxes payable by the Company.
The majority of the Group’s subsidiaries are domiciled in the British Virgin Islands (“BVI”) and so have a tax exempt
status. A number of subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in
those countries.
On 19 June 2014, the Vietnamese National Assembly approved a new corporate income tax law. Under the new law,
the standard corporate income tax was reduced from 25% to 22% effective 1 January 2015. A further reduction in
tax rate to 20% will become effective on 1 January 2016. A provision of USD0.4 million has been made for corporate
income tax payable by the Vietnamese subsidiaries for the year (30 June 2014: USD0.5 million).
113
VinaLand Limited
Annual Report 2015
31
INCOME TAX (continued)
The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense
actually recognised in the consolidated income statement can be reconciled as follows:
Year ended
30 June 2015
USD’000
Group’s loss before tax
Group’s loss multiplied by applicable tax rate (0%)
Current income tax expenses for subsidiaries
Deferred income tax
(*)
Income tax
30 June 2014
USD’000
(10,349)
(32,446)
–
–
(390)
(462)
(7,677)
5,488
(8,067)
5,026
(*) This amount represents the net deferred income tax income/(expense) which arises from the gains and losses on fair value adjustments of
investment properties and property, plant and equipment and the reversal of deferred income tax assets and liabilities as a result of changes to
assumptions during the year.
32
LOSS AND NET ASSET VALUE PER SHARE
a)
Basic
Year ended
30 June 2015
USD’000
Loss attributable to owners of the Company from continuing and
total operations (USD’000)
Weighted average number of ordinary shares in issue
Basic loss per share from continuing and total operations (USD/share)
b)
(22,267)
30 June 2014
USD’000
(24,193)
438,845,326
477,090,363
(0.05)
(0.05)
Diluted
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. The Group has no category of potential dilutive ordinary
shares. Therefore, diluted loss per share is equal to basic loss per share.
114
VinaLand Limited
Annual Report 2015
32
LOSS AND NET ASSET VALUE PER SHARE (continued)
c)
Net asset value per share
Net asset value (USD’000)
Number of outstanding ordinary shares in issue
Net asset value per share (USD/share)
33
As at
30 June 2015
30 June 2014
391,191
420,134
430,132,220
458,727,080
0.91
0.92
TOTAL EXPENSES RATIO
For the year ended
30 June 2015
Total expenses ratio
Realisation fees
Total expenses ratio plus realisation fees
30 June 2014
2.56%
2.31%
–
–
2.56%
2.31%
The total expense ratio (“TER”) has been calculated in accordance with the Association of Investment Companies
(“AIC”) recommended methodology dated May 2012. It is the ratio of annualised ongoing charges over the average
undiluted net asset value during the year. The TER increase resulted from the decrease in average net asset value
during the year ended 30 June 2015.
The total expense ratio includes management fees, directors’ fees and expenses, recurring audit and tax services,
custody and fund administration services, fund accounting services, secretarial services, registrars’ fees, public
relations fees, insurance premiums, regulatory fees and similar charges.
115
VinaLand Limited
Annual Report 2015
34
COMMITMENTS
As at the balance sheet date, the Group was committed under lease agreements to paying the following future amounts:
30 June 2015
USD’000
30 June 2014
USD’000
Within one year
179
282
From two to five years
483
550
5,173
5,357
5,835
6,189
Over five years
As at 30 June 2015, the Group was also committed under construction agreements to pay USD18.2 million (30 June
2014: USD16.4 million) for future construction work of the Group’s properties held by subsidiaries.
The Company’s subsidiaries and associates have a broad range of commitments relating to investment projects
under agreements it has entered into and investment licences it has received. Further investment in any of these
arrangements is at the Group’s discretion. Management has estimated that, based on the development plan for each
project, approximately USD38.5 million (30 June 2014: USD29.9 million) will be used to fund these projects over the
next three years.
116
VinaLand Limited
Annual Report 2015
35
DIRECTORS’ FEES AND MANAGEMENT’S REMUNERATION
The aggregate annual directors’ fees amounted to USD267,857 (year ended 30 June 2014: USD199,425) of which
there were no outstanding payables at the reporting date (30 June 2014: nil).
The details of annual remuneration by director are summarised below:
Year ended
30 June 2015
USD’000
30 June 2014
USD’000
Charles Isaac
50.1
41.9
Daniel McDonald
50.7
16.4
Michel Casselman
59.7
41.9
Nicholas Allen
53.9
41.9
Nicholas Brooke
53.5
41.9
–
15.4
267.9
199.4
Stanley Chou
(*)
(*) Stanley Chou resigned on 10 January 2014.
117
VinaLand Limited
Annual Report 2015
36
RELATED PARTY TRANSACTIONS AND BALANCES
Management fees
The Group is managed by VinaCapital Investment Management Limited (the “Investment Manager”), an investment
management company incorporated in the Cayman Islands, under a management agreement effective 21 November
2012 (the “Amended Management Agreement”).
Under the Amended Investment Management Agreement the management fee from 21 November 2012 is now fixed
at USD8.25 million for the subsequent 12 months, USD7.5 million for the next 12 months and USD6.5 million for the
next 12 months.
Total management fees for the year amounted to USD6,994,521 (30 June 2014: USD7,841,096), with USD675,558
(30 June 2014: USD639,941) in outstanding accrued fees due to the Investment Manager at the date of the
consolidated balance sheet.
Performance fees
Under the Former Management Agreement prior to 21 November 2012, the Investment Manager was also entitled
to a performance fee equal to 20% of the annual increase in net asset value over the higher of realised returns over
an annualised hurdle rate of 8% (30 June 2012: hurdle rate 8%) and a high-water-mark. Under this arrangement, no
performance fee was charged for the year (30 June 2014: nil), but USD28,218,000 (30 June 2014: USD28,218,000) of
performance fees had been accrued as payable, which had been earned during prior years. On 21 November 2012,
under the Amended Management Agreement, the Investment Manager’s entitlement to the accrued performance fee
and any future performance fees under the Former Management Agreement were cancelled and a new realisation
fee, equivalent to the amount of accrued performance fees due and outstanding to the Investment Manager at
20 November 2012, was introduced.
Realisation fees
In accordance with the Amended Management Agreement, the Investment Manager is entitled to a realisation fee
of up to USD28,218,000 based upon the level of distributions made to shareholders from contracted divestments of
assets signed prior to 21 November 2015 . An amount of USD28,218,000 (30 June 2014: USD27,297,613) was accrued
as a liability for realisation fees payable to the Investment Manager as at 30 June 2015.
118
VinaLand Limited
Annual Report 2015
36
RELATED PARTY TRANSACTIONS AND BALANCES (continued)
Realisation fees (continued)
Details of payables to related parties at the date of the consolidated balance sheet are as below:
Relationship
Balances
VinaCapital Investment
Management Ltd.
Investment Manager
Realisation fees
VinaCapital Corporate Finance
Vietnam Ltd.
Affiliate of
Investment Manager Loan
30 June 2015 30 June 2014
USD’000
USD’000
Non-current:
Interest
–
27,298
–
2,347
–
1,678
–
31,323
28,218
–
676
640
1,141
1,394
Current:
VinaCapital Investment
Management Ltd.
Investment Manager
Realisation fees
Management fees
Development fees and
advances for real
estate projects
VinaCapital Vietnam Opportunity
Fund Limited (“VOF)
VinaCapital Corporate Finance
Vietnam Ltd.
Under common
management
Payments on behalf
959
959
Disposals of real
estate projects
–
–
Loans
–
–
Affiliate of
Investment Manager Loans
2,296
–
2,002
–
35,292
2,993
Interest
119
VinaLand Limited
Annual Report 2015
36
RELATED PARTY TRANSACTIONS AND BALANCES (continued)
Realisation fees (continued)
As at 30 June 2015 and 30 June 2014, receivables from related parties mainly relate to amounts due from VOF
pertaining to advances for jointly invested real estate projects.
The interests of the related parties in the shares, underlying shares and debentures of the Company are as follows:
As at
30 June 2015
30 June 2014
Number of shares
Vietnam Master Holding 2 Limited (*)
VinaCapital Group Limited
VinaCapital Investment Management Limited
36,216,326
36,216,326
993,333
993,333
79,250
79,250
(*) Vietnam Master Holding 2 Limited is a wholly-owned subsidiary of VOF.
37
FINANCIAL RISK MANAGEMENT
Financial risk factors
The Group invests in a diversified property portfolio in Vietnam with the objective to provide shareholders a potential
capital growth.
The Group is exposed to a variety of financial risks: market risk (including price risk, currency risk and interest rate
risk); credit risk; and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group’s
risk management is coordinated by its Investment Manager who manages the distribution of the assets to achieve the
investment objectives. The most significant financial risks to which the Group is exposed are described below.
Foreign exchange risk
The Group’s exposure to risk resulting from changes in foreign currency exchange rates is moderate as although
transactions in Vietnam are settled in the VND, the value of the VND has historically been closely linked to that of
the USD, the presentation currency. The value of real estate in Vietnam is based on pricing that is a combination of
VND, USD and gold. For this reason, a decline in the value of the VND against the USD does not necessarily mean
proportionately lower prices will be obtained in USD.
The Group converted the proceeds from the ZDP share issue from GBP to USD. The Group has entered into a cross
currency swap with a bank to hedge its future cash flows against fluctuations in the GBP/USD exchange rate.
120
VinaLand Limited
Annual Report 2015
37
FINANCIAL RISK MANAGEMENT (continued)
Foreign exchange risk (continued)
The Group has not entered into any other hedging mechanism as the estimated benefits of available instruments
outweigh their cost. On an ongoing basis the Investment Manager analyses the current economic environment and
expected future conditions and decides the optimal currency mix considering the risk of currency fluctuation, interest
rate return differentials and transaction costs. The Investment Manager updates the Board regularly and reports on
any significant changes for further actions to be taken.
The Group’s financial assets’ and liabilities’ exposures to risk of fluctuations in exchange rates at the reporting dates
are as follows:
Short-term exposure
30 June 2015
Financial assets
Financial liabilities
Net exposure
VND
(USD as
functional
currency)
USD’000
205
USD
(VND as
functional
currency)
USD’000
VND
(USD as
functional
currency)
USD’000
USD
(VND as
functional
currency)
USD’000
3,080
–
–
–
(10,205)
–
–
205
(7,125)
–
–
Short-term exposure
30 June 2014
Long-term exposure
VND
(USD as
functional
currency)
USD’000
USD
(VND as
functional
currency)
USD’000
Long-term exposure
VND
(USD as
functional
currency)
USD’000
USD
(VND as
functional
currency)
USD’000
Financial assets
11,380
3,175
–
–
(1,908)
(10,944)
–
–
Net exposure
9,472
(7,769)
–
–
121
VinaLand Limited
Annual Report 2015
37
Foreign exchange risk (continued)
The functional currency of the Company is the USD. The functional currencies of the Group’s subsidiaries in the BVI
and Singapore are the USD while those of its Vietnamese subsidiaries are the VND. The Group’s exposure to currency
risk arises from VND denominated balances at the BVI and Singapore levels and USD denominated balances at the
Vietnamese level.
At 30 June 2015, if the VND weakened/strengthened by 5% (30 June 2014: 5%), post-tax loss for the year would have
been USD0.4 million (30 June 2014: USD0.8 million) higher/lower.
Price risk sensitivity
Price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices, whether caused
by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market.
As the majority of the Group’s financial instruments are carried at fair value with fair value changes recognised in the
consolidated income statement, all changes in market conditions will directly affect net investment income.
The Group invests in real estate projects and is exposed to market price risk. If the prices of real estate had
increased/decreased by 10%, post-tax loss for the year would have been USD37.8 million lower/higher (30 June 2014:
USD41.4 million).
Cash flow and fair value interest rate sensitivity
The Group’s exposure to interest rate risk is related to interest bearing financial assets and financial liabilities. Cash
and cash equivalents, bank deposits and bonds are subject to interest at fixed rates.
The Group currently has all financial liabilities with floating interest rates which are disclosed in Note 19 to the
consolidated financial statements. This is the maximum exposure of the Group to cash flow interest rate risk.
At 30 June 2015, if interest rates had been 0.5% (30 June 2014: 0.5%) higher/lower with all other variables held
constant, post-tax loss for the year would have been USD0.26 million higher/lower (30 June 2014: post-tax loss for the
year would have been USD0.53 million lower/higher).
The Investment Manager is responsible for the Group’s cash flow planning and cash management, including
borrowings. While the Group’s subsidiaries may work directly with financial institutions to raise project financing,
the Investment Manager has the overall responsibility for relations with financial institutions and is kept informed or
involved in all financing activities.
The Investment Manager is involved from the early stage of the negotiation processes to ensure that the right
structure and strategy are set at the beginning of each project. The Investment Manager is also responsible for
ensuring the structure, pricing, financial ratios/covenants and other conditions are achievable and that repayment
obligations can be met.
122
VinaLand Limited
Annual Report 2015
37
Credit risk analysis
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Impairment provisions are
provided for losses that have been incurred by the Group at the reporting date.
The Investment Manager maintains a list of approved banks for holding deposits and set aggregate limits for
deposits or exposures to individual banks. While this list is formally reviewed at least monthly, it is updated to reflect
developments in the market on a timely basis as information becomes available.
The Group’s exposure to credit risk is limited to the carrying amounts of financial assets recognised at the reporting
date, analysis by credit quality is as follows:
Current and not impaired
Past due but not impaired, less than 6 months
Past due but not impaired, more than 6 months
Past due and impaired
Less: Allowance for impairment
Total
30 June 2015
USD’000
30 June 2014
USD’000
34,428
64,123
–
–
185
69,194
–
1,755
34,613
135,072
–
34,613
(1,755)
133,317
123
VinaLand Limited
Annual Report 2015
37
Credit risk analysis (continued)
30 June 2015
USD’000
30 June 2014
USD’000
4,296
1,369
3,116
4,257
21,820
53,894
Receivable from a related party
2,121
960
Trade receivables
3,061
3,494
14
9
–
140
34,428
64,123
–
63,646
185
4,293
Trade receivables
–
–
Receivables from trade receivable
–
1,255
185
69,194
–
1,755
–
1,755
–
(1,755)
Neither past due nor impaired:
Receivable from non-controlling interests
Past due but not impaired:
Compensations receivable for property exchanged
Past due but not impaired:
Trade receivables
Less: Allowance for impairment
Total trade and other receivables, net of provision for impairment
34,613
133,317
124
VinaLand Limited
Annual Report 2015
37
Credit risk analysis (continued)
As at 30 June 2015, the Group did not provide impairment for receivables from disposal of subsidiaries (30 June 2014:
USD1.8 million had been provided for receivables from disposal of subsidiaries that the Group expected to be uncollectible).
Cash and cash equivalents and short-term investments are held at international and local banks and financial
institutions which do not have histories of default.
The Group has no other significant concentrations of credit risk.
In accordance with the Group’s policy, the Investment Manager continuously monitors the Group’s credit position on a
monthly basis, identified either individually or by group, and incorporates this information into its credit controls.
The Investment Manager reconsiders the valuations of financial assets that are impaired or overdue at each reporting
date based on the payment status of the counterparties, recoverability of receivables, and prevailing market conditions.
Liquidity risk analysis
Liquidity risk is the risk that the Group will experience difficulty in either realising assets or otherwise raising sufficient
funds to satisfy commitments associated with investments and financial instruments. There is an inherent liquidity
risk associated with the Company’s primary business, being property investment. As a consequence, the value of the
majority of the Company’s investments cannot be realised as quickly as other investments such as cash or listed equities.
Furthermore, the development and realisation of the Company’s property investments will normally require access to
debt financing at a reasonable cost or shareholder loans from the Company’s surplus funds and its co-investors.
The Company seeks to minimise liquidity risk through:
•
•
•
Preparing and monitoring cash flow forecasts for each investment project and the Company;
Arranging financing to fund real estate developments as required; and
Providing ample lead times for the disposal of assets and realisation of cash.
125
VinaLand Limited
Annual Report 2015
37
Liquidity risk analysis (continued)
At year end, the Group’s financial liabilities have contractual maturities which are summarised follows:
Current
30 June 2015
Non-current
Within
6 months
USD’000
6 to
12 months
USD’000
From 1 to
5 years
USD’000
5,194
20,863
31,162
–
Short-term borrowings
5,284
3,956
–
–
35,292
–
–
–
Long-term borrowings and debts
–
–
65,481
18,373
–
–
32,074
–
–
–
923
–
45,770
24,819
129,640
18,373
Payables to related parties (*)
Current
30 June 2014
Over
5 years
USD’000
Non-current
Within
6 months
USD’000
6 to
12 months
USD’000
From 1 to
5 years
USD’000
Over
5 years
USD’000
5,653
25,862
31,548
–
Short-term borrowings
5,333
8,637
–
–
Payables to related parties (*)
2,993
–
31,323
–
Long-term borrowings and debts
–
–
108,982
–
–
–
32,074
–
–
–
2,147
–
13,979
34,499
206,074
–
(*) Payables to related parties are primarily shareholder loans from related parties to jointly owned subsidiaries. These loans are not repayable until
the respective subsidiaries have sufficient cash to repay these obligations.
The above contractual maturities reflect the gross cash flows, which may differ from the carrying value of the liabilities
at year end.
126
VinaLand Limited
Annual Report 2015
37
Capital management
The Group’s capital management objectives are:
•
•
•
To ensure the Group’s ability to continue as a going concern;
To provide investors with an attractive level of investment income; and
To preserve a potential capital growth level.
The Group considers the capital to be managed as equal to the net assets attributable to the equity shareholders
of the parent. The Group is not subject to any externally imposed capital requirements. The Group has engaged the
Investment Manager to allocate the net assets in such a way so as to generate a reasonable investment returns for its
shareholders and to ensure that there is sufficient funding available for the Company to continue as a going concern.
Capital as at year end is summarised as follows:
Net assets attributable to the equity shareholders of the parent
30 June 2015
USD’000
30 June 2014
USD’000
391,191
420,134
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The difference 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).
The level within which the financial asset is classified is determined based on the lowest level of significant input to
the fair value measurement.
127
VinaLand Limited
Annual Report 2015
37
Fair value estimation (continued)
The financial assets and financial liabilities measured at fair value in the consolidated balance sheet are grouped into
the fair value hierarchy as follows:
30 June 2015
Level 1
USD’000
Level 2
USD’000
Level 3
USD’000
Total
USD’000
Financial assets held at fair value through profit or loss
– Ordinary shares – unlisted
–
271
–
271
– Derivatives
–
12
–
12
– Derivatives
30 June 2014
–
Level 1
USD’000
(2,405)
Level 2
USD’000
–
Level 3
USD’000
(2,405)
Total
USD’000
Financial assets held at fair value through profit or loss
– Ordinary shares – unlisted
–
750
–
750
– Derivatives
–
17
–
17
–
(259)
–
(259)
– Derivatives
There were no significant transfers between levels during the year.
128
VinaLand Limited
Annual Report 2015
Notice of 2015 Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the Institute of Directors, 116 Pall
Mall, London, SW1Y 5ED, United Kingdom, on 24 November 2015, at 11:00 a.m. for the purpose of considering and, if thought
fit, passing the following resolutions all of which will be proposed as ordinary resolutions:
Resolution 1 – ordinary resolution To receive and adopt the financial statements for the year ended 30 June 2015, with
the reports of the Directors and Auditors thereon.
Resolution 2 – ordinary resolution
To re-appoint Mr Tran Trong Kien as a Director of the Company.
To re-appoint Mr Nicholas Brooke as a Director of the Company.
T o re-appoint PricewaterhouseCoopers (Hong Kong) as independent auditor to the
Company and to authorise the Directors to determine their remuneration.
Dated: 30 October 2015
By Order of the Board
Registered Office:
PO Box 309
Ugland House
Grand Cayman
KY1-1104
Cayman Islands
Standard Chartered Bank
Level 3
7, Changi Business Park Crescent
Singapore 48602
Administrator’s delegate
129
NOTICE OF
2015 ANNUAL
GENERAL
MEETING
VinaLand Limited
Annual Report 2015
NOTES:
Notice of 2015 Annual General Meeting
1.
Shareholder entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend
A
and vote instead of him or her. A proxy need not be a member of the Company. A Form of Proxy is enclosed
with this notice. Completion and return of the Form of Proxy will not preclude Shareholders from attending or
voting at the meeting, if they so wish.
2.
T o be valid, the Form of Proxy, together with the power of attorney or other authority, if any, under which it is
executed (or a notarially certified copy of such power of attorney) must be deposited with:
Level 3
7, Changi Business Park Crescent
Singapore 48602
Attn: Securities Services – Fund Services
or
By facsimile:
+ (65) 6305 1760
Attn: Securities Services – Fund Services
By no later than 5:00 p.m. (Singapore time) on 20 November 2015
3.
holder of Ordinary Shares (or the beneficial title thereto) must first have his or her name entered on the
A
Register (or where Ordinary Shares are held in Euroclear or Clearstream otherwise be beneficially entitled to
such Ordinary Shares by) not later than 5:00 p.m. (Singapore time) on 20 November 2015. Changes to entries
in that Register after that time shall be disregarded in determining the rights of any holders to attend and
vote at such meeting (or to provide voting instructions to the relevant Euroclear or Clearstream nominee).
4.
S hareholders who wish to attend the AGM in person should follow normal Euroclear and/or Clearstream
procedures.
130
VinaLand Limited
Annual Report 2015
Investing policy
Investment objectives
VNL is a closed-end investment company incorporated in the Cayman Islands with the primary objective of achieving medium
to long-term (3-5 years) capital appreciation and providing an attractive level of income, dividends and other distributions
through investment in listed and unlisted companies, debt, private equity, real estate and other investment opportunities in
Vietnam (primarily) and surrounding Asian countries Cambodia, Laos and Southern China.
Investment Manager
VNL is managed by VCIM, a Cayman Islands company. VCIM was established in 2008 and manages a number of listed and
unlisted investment companies.
Investing policy
The Company will adhere to the following investment policies which were set out in the admission document at the time
of listing on the Alternative Investment Market of the London Stock Exchange. While this policy remains valid today, at the
EGM held on 21 November 2012, shareholders voted for the Company to cease investments and to begin to return funds to
shareholders for an initial term of three years. At the end of this term, shareholders will have an opportunity to review the
Company’s strategy again and determine how it should be implemented going forward.
Type of investment
Investments will be made in comparatively undervalued assets with the potential for value enhancement and realisation,
for instance in listed and OTC securities, expansion capital for early and mid-stage companies, listed funds, distressed assets,
NPL portfolios and Vietnamese assets of distressed overseas investors. The Company will engage in all forms of investment as
allowed under the laws of each jurisdiction in which it operates, including but not limited to, listed and non-listed equity, debt,
convertible loans, other assets, and other instruments and structures that may be suitable to allow participation in selected
investment opportunities.
Geographical focus
At least 70 percent of the Company’s gross assets will be invested in Vietnam or related to entities in other countries having
substantial assets, liabilities, operations, revenues or income derived from Vietnam. Up to a maximum of 30 percent of the
gross assets of the Company may also be invested in neighbouring Asian countries (namely China, Cambodia and Laos), should
the Directors consider that such investments offer potentially attractive returns or portfolio diversification.
Sector focus
Investment will primarily be made in key growth sectors of the economy as Vietnam modernises and domestic consumer
demand develops with rising income levels, including retail and consumer goods, financial services, property and construction
materials. The secondary focus will be on other expanding sectors such as tourism, manufacturing, infrastructure and export
sectors where Vietnam has a comparative advantage.
131
INVESTING
POLICY
VinaLand Limited
Annual Report 2015
Investing policy
Investment criteria
Key investment criteria will include:
• For investment in growth businesses, full use will be made of the established stock selection and analytical skills of the
Investment Manager and its advisers and the broad experience of the Directors to select enterprises which, in their
opinion, have sound products and good growth prospects.
• The Company will seek to identify businesses with a record of profit growth, with strong and motivated management
teams who have adopted proven business models and which have the realistic potential of exit through trade sale, listing
in Vietnam or in another country.
• The Investment Manager will utilise its extensive sourcing capabilities in real estate investment and expertise in property
development to selectively invest in projects to capitalise on ongoing demand/supply imbalances in the property sector.
• The Directors in conjunction with the Investment Manager will also aim to achieve a balance in its exposure to different sectors.
Furthermore, no single investment may at the time of investment exceed 20 percent of the NAV of the Company.
It is the intention of the Company to be active in the development of a thoroughly researched and carefully selected portfolio
of investments. The Directors intend that the portfolio will be developed in such a way as to take, where practicable, relatively
large stakes in those enterprises which have met the Investment Manager’s criteria.
Exit strategy
The Company is a publicly listed investment company on the London Stock Exchange’s AIM Market. Investors are free to
purchase and sell shares whenever they please. Concerning portfolio investments, the Company will aim to realise individual
investments when the Board believes the realisation would be in the best interests of the Company, ideally within a five-year
time frame.
Cross holdings
The Company may from time to time invest in listed shares of other closed-ended funds focused on Vietnam by selectively
acquiring shares of such funds where the shares are currently trading at prices below the intrinsic value of the funds’
underlying assets. This includes among others, shares in VNL (AIM: VNL) and Vietnam Infrastructure Limited (AIM: VNI), closedended investment companies admitted to trading on the AIM market of the London Stock Exchange plc and also managed
by VCIM. In such cases, VOF will enter into irrevocable arrangements with an independent third party broker to specifically
purchase on its behalf and within certain pre-set parameters, ordinary shares in VNL and VNI. VOF intends to acquire and
hold shares of VNL and VNI via such arrangements on a rolling basis. Furthermore, only the Independent Directors of the VOF
Board shall be authorised to provide instructions to the Independent Broker and to vote on behalf of VOF at any VNL and VNI
shareholder meetings. VOF may waive its right of first refusal to take up to a 25 percent direct stake in new VNL projects. In
addition, VCIM rebates to VOF the management fees earned that correspond to the portion of VOF’s holding in VNL and VNI.
132
VinaLand Limited
Annual Report 2015
Investing policy
Leverage
The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking,
property and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such
securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.
Other information
The Company will adhere to the above investment policies, in the absence of unforeseen circumstances, unless these are
changed by a shareholders’ resolution. Such changes may be prompted by changes in Government policies or economic
conditions which change or introduce additional investment opportunities.
Cash pending investment, reinvestment or distribution will be placed in bank deposits, bonds or treasury securities, for the
purpose of protecting the capital value of the Company’s cash assets.
In order to hedge against interest rate risks or currency risk, the Company may also enter into forward interest rate
agreements, forward currency agreements, interest rates and bond futures contracts and interest rate swaps and purchase and
write (sell) put or call options on interest rates and put or call options on futures on interest rates.
Valuation policy
The NAV per share is calculated (and rounded to two decimal places), in US dollars by the Administrator (or such other person
as the Directors may appoint for such purpose from time to time) on a monthly basis (or at such other times as the Investment
Manager may determine but in any event at least quarterly). The NAV shall be the value of all assets of the Company less the
liabilities of the Company determined in accordance with the valuation guidelines adopted by the Directors from time to time.
Under current valuation guidelines adopted by the Directors, such values shall be determined as follows:
The value of any cash in hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends
and interest declared or accrued as aforesaid and not yet, received shall be deemed to be the full amount thereof, unless in
any case the Directors shall have determined that the same is unlikely to be paid or received in full, in which case the value
thereof shall be arrived at after making such discount as the Directors may consider appropriate in such case to reflect the true
value thereof;
The value of securities which are quoted or dealt in on any stock exchange (including any securities traded on an “over the
counter market”) shall be based on the last traded prices on such stock exchange, or if there is more than one stock exchange
on which the securities are traded or admitted for trading, that which is normally the principal stock exchange for such security,
provided that any such securities which are not freely transferable, or which are not regularly traded, or which for any other
reason are subject to limited marketability, shall be valued at a discount (the amount of such discount being determined by the
Directors in their absolute discretion or in a manner so approved by the Directors);
133
VinaLand Limited
Annual Report 2015
Investing policy
As regards unquoted securities:
• Unquoted investments will initially be valued at cost price, which will include any expenses relating to their acquisition;
• A revaluation of unquoted investments to a value in excess of or below cost may be made in the circumstances provided
by and in accordance with the guidelines issued by the British Investment Fund Association or any successor body;
• All other assets and liabilities shall be valued at their respective fair values as determined in good faith by the Directors
and in accordance with generally accepted valuation principles and procedures;
Any value other than in USD translated at any officially set exchange rate or appropriate spot market rate as the Directors
deem appropriate in the circumstances having regard, inter alia, to any premium or discount which may be relevant and to
costs of exchange. If the Directors consider that any of the above bases of valuation are inappropriate in any particular case
or generally, they may adopt such other valuation or valuation procedure as they consider is reasonable in the circumstances
provided that such other valuation or valuation procedure has been approved by the Company’s auditors. The Directors may
delegate to the Investment Manager any of their discretions under the valuation guidelines.
134
VinaLand Limited
Annual Report 2015
Years ended 30 June
Historical financial information
2009
2010 (*)
2011(*)
143,293
154,278
2012
2013
2014
2015
32,940
34,218
(98,304) (102,896)
(65,386)
(44,567)
(141,000) (131,608)
(32,446)
(10,349)
5,026
(8,067)
(27,420)
(18,416)
Statement of Income (USD’000)
Total income from ordinary activities
Total expenses from ordinary activities
Operating profit before income tax
(157,130)
(58,057)
(64,650) (110,434)
(42,696)
(28,712)
(215,187)
78,643
43,844
13,564
(11,190)
(3,354)
Profit for the year
(201,623)
67,453
40,490
Minority interests
72,194
17,754
25,747
(50,585)
(26,296)
(3,227)
3,851
(129,429)
49,699
14,743
(98,889)
(90,137)
(24,193)
(22,267)
929,344
929,839
840,022
Income tax expense
Profit attributable to ordinary equity holders
(8,474)
15,175
(149,474) (116,433)
Statement of financial position (USD’000)
Total assets
Total liabilities
Net assets
1,097,051 1,260,218 1,318,847 1,134,262
(436,522) (587,523) (655,508) (587,914) (482,566) (509,705) (448,831)
660,529
672,695
663,339
546,348
446,778
420,134
391,191
(0.26)
0.10
0.03
(0.20)
(0.19)
(0.05)
(0.05)
0.68
0.77
0.77
0.48
0.46
0.55
0.52
Share information
Basic earnings per share (cents per share)
Share price as 30 June
Ordinary share capital (thousand shares)
499,968
499,968
499,968
493,488
481,298
458,727
430,132
Market capitalization at 30 June (USD’000)
339,978
384,975
384,975
236,874
221,397
252,300
223,669
1.32
1.35
1.33
1.11
0.93
0.92
0.91
(25.90%)
9.90%
2.90%
(16.80%)
(15.43%)
(4.23%)
(4.00%)
2.31%
2.36%
2.00%
2.39%
2.15%
2.31%
2.56%
Net asset value per ordinary share (USD)
Ratio
Return on average ordinary shareholder’s funds
Total expense ratio (% of NAV)
(*) Restatement of 30 June 2010 and 30 June 2011 figures, please refer to note 2.30 of the consolidated financial statements for the year ended 30 June 2012
for reference.
135
HISTORICAL
FINANCIAL
INFORMATION
VinaLand Limited
Annual Report 2015
Notes
136
VinaLand Limited
Annual
Report 2015
OVERVIEW
AND
ADVISERS
137
VinaLand Limited (“VNL”) is a closed-end fund trading on the AIM Market of the London Stock Exchange.
Fund launch
22 March 2006, new three year term commenced 21 November 2012
Term of fund
Originally seven years, but now subject to shareholder vote for continuation every
three years
Fund domicile
Cayman Islands
Legal form
Exempted company limited by shares
Investment manager
VinaCapital Investment Management Ltd
Structure
Single class of ordinary shares trading on the AIM market of the London Stock
Exchange plc.
Lawyers
Wragge Lawrence Graham & Co LLP
Maples and Calder (Cayman Islands)
Base and incentive fee
The base fee is fixed at USD8.25 million per annum until 22 November 2013,
reducing each year thereafter until 22 November 2015. No incentive fees, but the
recovery of the accrued incentive fee is linked to distributions to shareholders.
Investment policy
The Fund is now in a cash return period and will not make any investments, except
where funds are required for existing projects. The Fund will seek to realise assets
in the existing portfolio and continue with the development of selected projects to
maximize value.
Investment objective by geography
All existing investments are located in Vietnam. There will be no new investments
during the current cash return period.
Auditor
PricewaterhouseCoopers (Hong Kong)
Registered office PO Box 309, Ugland House, Grand Cayman, KY1 1104,
Cayman Islands
Nominated adviser (Nomad)
Grant Thornton UK LLP
Website www.vinacapital.com/vnl
Contact [email protected]
Custodian and Administrator
Brokers
Edmond de Rothschild Securities (Bloomberg: LCFR)
Numis Securities (Bloomberg: NUMI)
Ho Chi Minh City
17th Floor, Sun Wah Tower
115 Nguyen Hue Blvd., District 1
Ho Chi Minh City, Vietnam
Phone: +84-8 3821 9930
Fax: +84-8 3821 9921
Hanoi
5th Floor, Sun City Building
13 Hai Ba Trung Street,
Hoan Kiem Dist., Hanoi, Vietnam
Phone: +84-4 3936 4630
Fax: +84-4 3936 4629
Singapore
6 Temasek Boulevard
42-01 Suntec Tower 4
Singapore 038986
Phone: +65 6332 9081
Fax: +65 6333 9081

PDF, 1441.35kB - VinaLand Limited

Transcription

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