REG - Aseana Prop Ltd - Final Results <Origin Href="QuoteRef">ASPL.L</Origin> - Part 2
15/07/2015 14:54
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2014
2014 2013
Continuing activities Notes US$'000 US$'000
Revenue 3 85,102 29,269
Cost of sales 5 (51,821) (22,768)
Gross profit 33,281 6,501
Other income 6 27,369 16,122
Administrative expenses (1,193) (1,622)
Foreign exchange gain/ (loss) 7 716 (1,105)
Management fees 8 (3,344) (3,762)
Marketing expenses (823) (1,953)
Other operating expenses (32,715) (23,635)
Operating profit/ (loss) 23,291 (9,454)
Finance income 577 424
Finance costs (13,760) (9,766)
Net finance costs 9 (13,183) (9,342)
Gain on disposal of investment in associate 14 5,641 -
Share of loss of equity-accounted associate, net of tax 14 (335) -
Net profit/ (loss) before taxation 10 15,414 (18,796)
Taxation 11 (9,387) (2,854)
Profit/ (loss) for the year 6,027 (21,650)
Other comprehensive income/ (expense), net of tax
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation differences for foreign operations (7,388) (6,220)
Increase in fair value of available-for-sale investments 15 125 126
Total other comprehensive expense for the year 12 (7,263) (6,094)
Total comprehensive loss for the year (1,236) (27,744)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 DECEMBER 2014(cont'd)
2014 2013
Continuing activities Notes US$'000 US$'000
Profit/ (loss) attributable to:
Equity holders of the parent 9,091 (19,006)
Non-controlling interests (3,064) (2,644)
Total 6,027 (21,650)
Total comprehensive loss attributable to:
Equity holders of the parent 2,074 (24,971)
Non-controlling interests (3,310) (2,773)
Total (1,236) (27,744)
Earnings/ (loss) per share
Basic and diluted (US cents) 13 4.29 (8.96)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 DECEMBER 2014
Notes 2014US$'000 2013US$'000
Non-current assets
Property, plant and equipment 1,018 1,146
Investment in an associate 14 - 2,252
Available-for-sale investments 15 12,822 12,697
Intangible assets 16 8,798 13,525
Deferred tax assets 17 1,683 595
Total non-current assets 24,321 30,215
Current assets
Inventories 18 381,778 428,609
Held-for-trading financial instrument 19 4,041 375
Trade and other receivables 8,359 9,654
Prepayments 337 258
Amount due from an associate 20 - 853
Current tax assets 513 233
Cash and cash equivalents 26,011 24,585
Total current assets 421,039 464,567
TOTAL ASSETS 445,360 494,782
Equity
Share capital 21 10,601 10,601
Share premium 22 218,926 218,926
Capital redemption reserve 23 1,899 1,899
Translation reserve (10,247) (3,105)
Fair value reserve 251 126
Accumulated losses (60,932) (69,876)
Shareholders' equity 160,498 158,571
Non-controlling interests 10,187 11,429
Total equity 170,685 170,000
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 DECEMBER 2014(cont'd)
Notes 2014US$'000 2013US$'000
Non-current liabilities
Amount due to non-controlling interests 24 1,120 1,440
Loans and borrowings 25 53,364 49,309
Medium term notes 26 84,993 140,877
Total non-current liabilities 139,477 191,626
Current liabilities
Trade and other payables 40,510 83,640
Amount due to non-controlling interests 24 10,222 9,008
Loans and borrowings 25 19,274 25,466
Medium term notes 26 60,237 13,739
Current tax liabilities 4,955 1,303
Total current liabilities 135,198 133,156
Total liabilities 274,675 324,782
TOTAL EQUITYAND LIABILITIES 445,360 494,782
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 december 2014
Share CapitalUS$'000 Share PremiumUS$'000 Capital Redemption ReserveUS$'000 Translation ReserveUS$'000 Fair ValueReserveUS$'000 Accumulated LossesUS$'000 Total Equity Attributable to Equity Holders of the ParentUS$'000 Non- Controlling InterestsUS$'000 Total EquityUS$'000
1 January 2013 10,626 218,926 1,874 2,986 - (50,828) 183,584 13,063 196,647
Changes in ownership interests in subsidiaries (Note 29) - - - - - (42) (42) 42 -
Non-controlling interests contribution - - - - - - - 1,097 1,097
Loss for the year - - - - - (19,006) (19,006) (2,644) (21,650)
Total other comprehensive expense - - - (6,091) 126 - (5,965) (129) (6,094)
Total comprehensive lossCancellation of shares -(25) -- -25 (6,091)- 126- (19,006)- (24,971)- (2,773)- (27,744)-
At 31 December 2013/ 1 January 2014 10,601 218,926 1,899 (3,105) 126 (69,876) 158,571 11,429 170,000
Changes in ownership interests in subsidiaries (Note 29) - - - - - (147) (147) 147 -
Non-controlling interests contribution - - - - - - - 1,921 1,921
Profit for the year - - - - - 9,091 9,091 (3,064) 6,027
Total other comprehensive expense - - - (7,142) 125 - (7,017) (246) (7,263)
Total comprehensive loss - - - (7,142) 125 9,091 2,074 (3,310) (1,236)
Shareholders' equity at 31 December 2014 10,601 218,926 1,899 (10,247) 251 (60,932) 160,498 10,187 170,685
CONSOLIDATED Statement OF Cash FlowS
For the year ended 31 december 2014
2014 2013
s US$'000 US$'000
Cash Flows from Operating Activities
Net profit/( loss) before taxation 15,414 (18,796)
Finance income (577) (424)
Finance costs 13,760 9,766
Unrealised foreign exchange (gain)/ loss (291) 1,065
Impairment of goodwill 4,727 320
Depreciation of property, plant and equipment 122 114
Gain on disposal of investment in an associate (5,641) -
Gain on disposal of property, plant and equipment (3) -
Property, plant and equipment written off - 7
Share of loss of equity-accounted associate, net of tax 335 -
Fair value gain on amount due to non-controlling interests (320) -
Fair value (gain)/loss on held-for-trading financial instrument (39) 5
Operating profit/(loss) before changes in working capital 27,487 (7,943)
Changes in working capital:
Decrease/ (increase) in inventories 29,437 (96,690)
Decrease in trade and other receivables and prepayments 647 2,063
(Decrease)/ increase in trade and other payables (40,615) 28,884
Cash generated from/ (used in) operations 16,956 (73,686)
Interest paid (13,760) (9,766)
Tax paid (6,679) (4,029)
Net cash used in operating activities (3,483) (87,481)
Cash Flows from Investing Activities
Repayment from/(advances to) associate 853 (630)
Proceeds from disposal of investment in an associate 5,306 -
Proceeds from disposal of property, plant and equipment 12 -
(Purchase of)/disposal of held-for-trading financial instrument (3,651) 899
Purchase of property, plant and equipment (20) (154)
Finance income received 577 424
Net cash generated from investing activities 3,077 539
CONSOLIDATED Statement OF Cash FlowS
For the year ended 31 december 2014 (cont'd)
2014 2013
US$'000 US$'000
Cash Flows from Financing Activities
Advances from non-controlling interests 1,635 1,081
Issuance of ordinary shares of subsidiaries to non-controlling interests 1,921 1,097
Repayment of loans and borrowings (16,858) (17,341)
Drawdown of loans and borrowings 17,108 110,860
Decrease in pledged deposits placed in licensed banks - 77
Net cash generated from financing activities 3,806 95,774
Net changes in cash and cash equivalents during the year 3,400 8,832
Effect of changes in exchange rates (1,355) (248)
Cash and cash equivalents at the beginning of the year 14,166 5,582
Cash and cash equivalents at the end of the year 16,211 14,166
Cash and Cash Equivalents
Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated
statement of financial position amounts:
Cash and bank balances 12,057 11,498
Short term bank deposits 13,954 13,087
26,011 24,585
Less: Deposits pledged (9,800) (10,419)
Cash and cash equivalents 16,211 14,166
In the previous financial year, the Group acquired property, plant and equipment with an aggregate cost of US$194,000 of
which US$40,000 was acquired by means of finance leases.
During the financial year, US$1,921,000 (2013: US$1,097,000) of ordinary shares of subsidiaries were issued to
non-controlling shareholders, which was satisfied via cash consideration.
Notes to the Financial Statements
1 General Information
The principal activities of the Group and the Company are acquisition, development and redevelopment of upscale
residential, commercial, hospitality and healthcare projects in the major cities of Malaysia and Vietnam. The Group
typically invests in development projects at the pre-construction stage and may also selectively invest in projects in
construction and newly completed projects with potential capital appreciation.
2 BASIS OF PREPARATION
2.1 Statement of compliance and going concern
The Group and the Company financial statements have been prepared in accordance with International Financial Reporting
Standards ("IFRS"), and IFRIC interpretations issued, and effective, or issued and early adopted, at the date of these
financial statements.
The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses
during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from those estimates. The Board has reviewed the accounting policies set out
below and considers them to be the most appropriate to the Group's business activities.
The financial statements have been prepared on the historical cost basis except for available-for-sale investments and
held-for-trading financial instruments which are measured at fair value and on the assumption that the Group and the
Company are going concerns.
The Group has prepared and considered prospective financial information based on assumptions and events that may occur for
at least 12 months from the date of approval of the financial statements and the possible actions to be taken by the Group.
Prospective financial information includes the Group's profit and cash flow forecasts for the ongoing projects. In
preparing the cash flow forecasts, the Directors have considered the availability of cash and held-for-trading financial
instruments, along with the adequacy of bank loans and medium term notes and refinancing of these medium term notes (as
described in Notes 25 and 26).
The Directors expect to fully "roll-over" the medium term notes which are due to expire in the next 12 months, as the notes
are rated AAA (a highly sought after investment in Malaysia) and are guaranteed by three completed inventories of the Group
with carrying amount of US$170.54 million as at 31 December 2014. Included in the terms of the medium term notes programme
is an option for the Group to refinance the notes as provided on the onset of the programme. The option is available until
2021. The forecasts incorporate current payables, committed expenditure and other future expected expenditure, along with
substantial sales of completed inventories, in addition to the disposal of certain land held for property development and
available-for-sale investments. In the event that the Group disposes any of the three completed inventories that guaranteed
the medium term notes, the proceeds from the disposal will reduce the amount of notes the Group seeks to "roll-over".
Based on these forecasts, cash resources and existing credit facilities, the Directors consider that the Group and the
Company have adequate resources to continue in business for the foreseeable future. For this reason, the Directors continue
to adopt going concern basis in preparing the financial statements.
The Group and the Company have not applied the following new/revised accounting standards that have been issued by
International Accounting Standards Board but are not yet effective.
New/Revised International Financial Reporting Standards Issued/ Revised Effective Date
IFRS 1 First-time Adoption of International Financial Reporting Standards Amendments resulting from Annual Improvements 2011-2013 Cycle (meaning of effective IFRSs) December 2013 Annual periods beginning on or after 1 July 2014
IFRS 2 Share-based payment Amendments resulting from Annual Improvements 2010-2012 Cycle (definition of "vesting condition") December 2013 Annual periods beginning on or after 1 July 2014
IFRS 3 Business Combinations Amendments resulting from Annual Improvements 2010-2012 Cycle (accounting for contingent consideration) December 2013 Annual periods beginning on or after 1 July 2014
IFRS 3 Business Combinations Amendments resulting from Annual Improvements 2011-2013 Cycle (scope exception for joint ventures) December 2013 Annual periods beginning on or after 1 July 2014
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments resulting from September 2014 Annual Improvements to IFRSs September 2014 Annual periods beginning on or after 1 January 2016
IFRS 7 Financial Instruments: Disclosures Amendments resulting from September 2014 Annual Improvements to IFRSs September 2014 Annual periods beginning on or after 1 January 2016
IFRS 8 Operating Segments Amendments resulting from Annual Improvements 2010-2012 Cycle (aggregation of segments, reconciliation of segment assets) December 2013 Annual periods beginning on or after 1 July 2014
IFRS 9 Financial Instruments Finalised version, incorporating requirements for classification and measurement, impairment, general hedge accounting and derecognition July 2014 Effective for annual periods beginning on or after 1 January 2018
IFRS 10 Consolidated Financial Statements Amendments regarding the sale or contribution of assets between an investor and its associate or joint venture September 2014 Annual periods beginning on or after 1 January 2016
IFRS 11 Joint Arrangements Amendments regarding the accounting for acquisitions of an interest in a joint operation May 2014 Annual periods beginning on or after 1 January 2016
IFRS 13 Fair Value Measurement Amendments resulting from Annual Improvements 2011-2013 Cycle (scope of the portfolio exception in paragraph 52) December 2013 Annual periods beginning on or after 1 July 2014
IFRS 15 Revenue from Contracts with Customers Original issue May 2014 Applies to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2017
IAS 1 Presentation of Financial Statements Amendments resulting from the disclosure initiative December 2014 Annual periods beginning on or after 1 January 2016
IAS 16 Property, Plant and Equipment Amendments resulting from Annual Improvements 2010-2012 Cycle (proportionate restatement of accumulated depreciation on revaluation) December 2013 Annual periods beginning on or after 1 July 2014
IAS 16 Property, Plant and Equipment Amendments regarding the clarification of acceptable methods of depreciation and amortisation May 2014 Annual periods beginning on or after 1 January 2016
IAS 19 Employee Benefits Amendments to clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to period of service November 2013 Annual periods beginning on or after 1 July 2014
IAS 19 Employee Benefits Amendments resulting from September 2014 Annual Improvements to IFRSs September 2014 Annual periods beginning on or after 1 January 2016
IAS 24 Related Party Disclosures Amendments resulting from Annual Improvements 2010-2012 Cycle (management entities) December 2013 Annual periods beginning on or after 1 July 2014
IAS 27 Separate Financial Statements (as amended in 2011) Amendments reinstating the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity's separate financial statements August 2014 Annual periods beginning on or after 1 January 2016
IAS 28 Investments in Associates and Joint Ventures Amendments regarding the sale or contribution of assets between an investor and its associate or joint venture September 2014 Annual periods beginning on or after 1 January 2016
IAS 28 Investments in Associates and Joint Ventures Amendments regarding the application of the consolidation exception December 2014 Annual periods beginning on or after 1 January 2016
IAS 38 Intangible Assets Amendments resulting from Annual Improvements 2010-2012 Cycle (proportionate restatement of accumulated depreciation on revaluation) December 2013 Annual periods beginning on or after 1 July 2014
IAS 38 Intangible Assets Amendments regarding the clarification of acceptable methods of depreciation and amortisation May 2014 Annual periods beginning on or after 1 January 2016
IAS 40 Investment Property Amendments resulting from Annual Improvements 2011-2013 Cycle (inter-relationship between IFRS 3 and IAS 40) December 2013 Annual periods beginning on or after 1 July 2014
The Directors anticipate that the adoption of the above standards, amendments and interpretations in future periods will
have no material impact on the financial information of the Group or Company except as mentioned below.
(a) IFRS 9, Financial instruments
IFRS 9, which becomes mandatory for the Group's 2018 Consolidation Financial Statements, could change the classification
and measurement of financial assets. The Directors are currently determining the impact of IFRS 9.
(b) IFRS 15, Revenue from contracts with customers
IFRS 15 replaces the guidance in IFRS 11, Construction Contracts, IFRS 18, Revenue, IC Interpretation 13, Customer Loyalty
Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfer of Assets from
Customers and IC Interpretation 131, Revenue - Barter Transactions Involving Advertising Services.
The Directors are currently determining the impact of IFRS 15.
3 revenue AND SEGmeNTAL information
The gross revenue represents the sales value of development properties where the effective control of ownership of the
properties is transferred to the purchasers when the completion certificate or occupancy permit has been issued.
The Company is an investment holding company and has no operating revenue. The Group's operating revenue for the year was
mainly attributable to the sale of completed units in Malaysia and land held for property development in Vietnam.
3.1 Revenue recognised during the year as follows:
2014 2013
US$'000 US$'000
Sale of completed units 55,762 29,269
Sale of land held for property development 29,340 -
85,102 29,269
3.2 Segmental Information
The Group's assets and business activities are managed by Ireka Development Management Sdn. Bhd. ("IDM") as the Development
Manager under a management agreement dated 27 March 2007.
Segmental information represents the level at which financial information is reported to the Executive Management of IDM,
being the chief operating decision maker as defined in IFRS 8. The Executive Management consists of the Chief Executive
Officer, the Chief Financial Officer, Chief Operating Officer and Chief Investment Officer of IDM. The management
determines the operating segments based on reports reviewed and used by the Executive Management for strategic decision
making and resource allocation. For management purposes, the Group is organised into project units.
The Group's reportable operating segments are as follows:
(i) Investment Holding Companies - investing activities;
(ii) Ireka Land Sdn. Bhd. - develops Tiffani by i-ZEN;
(iii) ICSD Ventures Sdn. Bhd. - owns and operates Harbour Mall Sandakan and Four Points by Sheraton Sandakan Hotel;
(iv) Amatir Resources Sdn. Bhd. - develops SENI Mont' Kiara;
(v) Iringan Flora Sdn. Bhd. - owns and operates Aloft Kuala Lumpur Sentral Hotel;
(vi) Urban DNA Sdn. Bhd.- develops The RuMa Hotel and Residences; and
(vii) Hoa Lam-Shangri-La Healthcare Group - master developer of International Healthcare Park; owns and operates City
International Hospital.
Other non-reportable segments comprise the Group's other development projects. None of these segments meets any of the
quantitative thresholds for determining reportable segments in 2014 and 2013.
Information regarding the operations of each reportable segment is included below. The Executive Management monitors the
operating results of each segment for the purpose of performance assessments and making decisions on resource allocation.
Performance is based on segment gross profit/(loss) and profit/ (loss) before taxation, which the Executive Management
believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets and
liabilities are presented inclusive of inter-segment balances and inter-segment pricing is determined on an arm's length
basis.
The Group's revenue generating development projects are in Malaysia and Vietnam.
3.3 Analysis of the group's reportable operating segments is as follows:-
Operating Segments - ended 31 December 2014
Investment Holding Companies Ireka Land Sdn. Bhd. ICSD Ventures Sdn. Bhd. Amatir Resources Sdn. Bhd. Iringan Flora Sdn. Bhd. UrbanDNASdn. Bhd. Hoa Lam-Shangri-La Healthcare Group Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Segment profit/ (loss) before taxation 3,100 99 (5,436) 16,607 569 (1,474) 1,366 14,831
Included in the measure of segment profit/ (loss) are:
Revenue - 4,839 - 50,923 - - 29,340 85,102
Revenue from hotel operations - - 4,323 - 18,171 - - 22,494
Revenue from mall operations - - 1,027 - - - - 1,027
Revenue from hospital operations - - - - - - 2,525 2,525
Cost of acquisition written down # - (150) - (8,329) - - - (8,479)
Impairment of goodwill - - - (451) - - (4,276) (4,727)
Marketing expenses - - - (266) - (557) - (823)
Expenses from hotel operations - - (4,507) - (12,499) - - (17,006)
Expenses from mall operations - - (1,789) - - - - (1,789)
Expenses from hospital operations - - - - - - (9,702) (9,702)
Depreciation of property, plant and equipment - - (10) - (9) - (99) (118)
Finance costs - - (4,328) - (4,906) - (4,526) (13,760)
Finance income 24 11 312 115 20 14 81 577
Segment assets 19,471 5,150 100,570 45,938 76,447 58,587 101,643 407,806
Included in the measure of segment assets are:
Addition to non-current assets other than financial instruments and deferred tax assets - - - - - 1 19 20
# Cost of acquisition relates to the fair value adjustment in relation to the inventories upon the acquisition of certain
subsidiaries of the Group. The cost of acquisition written down is charged to profit or loss as part of cost of sales upon
the sales of these inventories.
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Profit or loss US$'000
Total profit for reportable segments 14,831
Other non-reportable segments 587
Depreciation (4)
Consolidated profit before taxation 15,414
Operating Segments - ended 31 December 2013
Investment Holding Companies Ireka Land Sdn. Bhd. ICSD Ventures Sdn. Bhd. Amatir Resources Sdn. Bhd. Iringan Flora Sdn. Bhd. UrbanDNASdn. Bhd. Hoa Lam-Shangri-La Healthcare Group Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Segment profit/ (loss) before taxation (2,217) (323) (5,927) 4,169 (4,382) (2,126) (7,559) (18,365)
Included in the measure of segment profit/ (loss) are:
Revenue - 1,278 433 27,558 - - - 29,269
Revenue from hotel operations - - 3,409 - 10,089 - - 13,498
Revenue from mall olperations - - 954 - - - - 954
Revenue from hospital operations - - - - - - 179 179
Cost of acquisition written down # -- (33) (68) (5,918) - - - (6,019)
Impairment of goodwill - - - (320) - - - (320)
Marketing expenses - - - (711) - (1,242) - (1,953)
Expenses from hotel operations - - (3,833) - (10,112) - - (13,945)
Expenses from mall operations - - (1,659) - - - - (1,659)
Expenses from hospital operations - - - - - - (4,538) (4,538)
Depreciation of property, plant and equipment - - (2) (10) (1) (7) - (91) (111)
Finance costs - - (4,464) (252) (3,841) - (1,209) (9,766)
Finance income 7 4 301 28 44 13 27 424
Segment assets 18,273 9,703 105,954 81,743 79,231 49,696 110,545 455,145
Included in the measure of segment assets are:
Addition to non-current assets other than financial instruments and deferred tax assets - - 5 - 44 - 145 194
# Cost of acquisition relates to the fair value adjustment in relation to the inventories upon the acquisition of certain
subsidiaries of the Group. The cost of acquisition written down is charged to profit or loss as part of cost of sales upon
the sales of these inventories.
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Profit or loss US$'000
Total profit or loss for reportable segments (18,365)
Other non-reportable segments (428)
Depreciation (3)
Consolidated loss before taxation (18,796)
2014US$'000 Revenue Depreciation Finance costs Finance income Segment assets Addition to non-current assets
Total reportable segment 85,102 (118) (13,760) 577 407,806 20
Other non-reportable segments - (4) - - 37,554 -
Consolidated total 85,102 (122) (13,760) 577 445,360 20
2013US$'000 Revenue Depreciation Finance costs Finance income Segment assets Addition to non-current assets
Total reportable segment 29,269 (111) (9,766) 424 455,145 194
Other non-reportable segments - (3) - - 39,637 -
Consolidated total 29,269 (114) (9,766) 424 494,782 194
Geographical Information - ended 31 December 2014
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
Revenue 55,762 29,340 85,102
Non-current assets 4,104 20,217 24,321
Major customer exceeded 10% of the Group's total revenues is as follows:
Revenue
US$'000 2014 2013 Segments
AEON Vietnam Co. Ltd. 22,991 - Hoa Lam-Shangri-La Healthcare Group
Geographical Information - ended 31 December 2013
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
Revenue 29,269 - 29,269
Non-current assets 5,741 24,474 30,215
In 2013, no single customer exceeded 10% of the Group's total revenue.
4 SEASONALITY
The Group's business operations are not materially affected by seasonal factors for the period under review.
5 Cost of Sales
2014 2013
US$'000 US$'000
Direct costs attributable to:Completed units 36,856 22,448
Land held for property development 10,238 -
Impairment of intangible assets (Note 16) 4,727 320
51,821 22,768
6 Other Income
2014 2013
US$'000 US$'000
Dividend income 409 15
Fair value gain on held-for-trading financial instrument 39 -
Gain on disposal of property, plant and equipment 3 -
Investment income - 92
Late payment interest income 52 9
Novation fee (a) - 641
Rental income 196 209
Revenue from hotel operations (b) 22,494 13,498
Revenue from mall operations (c) 1,027 954
Revenue from hospital operations (d) 2,525 179
Sundry income 624 525
27,369 16,122
(a) Novation fee
The amount relates to income receivable from a third party for assigning the rights, title, interests, benefits and
obligation and/or liabilities under a Sales and Purchase Agreement for acquisition of carpark bays in Nu Towers by a
subsidiary of the Group.
(b) Revenue from hotel operations
The revenue relates to the operations of two hotels - Four Points by Sheraton Sandakan Hotel and Aloft Kuala Lumpur Sentral
Hotel which are owned by subsidiaries of the Company, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. respectively. The
revenue earned from hotel operations is included in other income in line with management's intention to dispose of the
hotels.
(c) Revenue from mall operations
The revenue relates to operation of Harbour Mall Sandakan which is owned by a subsidiary of the Company, ICSD Ventures Sdn.
Bhd.. The revenue earned from mall operations is included in other income in line with management's intention to dispose of
the mall.
(d) Revenue from hospital operations
The revenue relates to operation of City International Hospital which is owned by a subsidiary of the Company, City
International Hospital Company Limited. The revenue earned from hospital operations is included in other income in line
with management's intention to dispose of the hospital.
7 Foreign exchange GaiN/ (LOSS)
2014 2013
US$'000 US$'000
Foreign exchange gain/ (loss) comprises:
Realised foreign exchange gain/ (loss) 425 (40)
Unrealised foreign exchange gain/ (loss) 291 (1,065)
716 (1,105)
8 Management Fees
2014 2013
US$'000 US$'000
Management fees 3,344 3,762
The management fees payable to the Development Manager are based on 2% per annum of the Group's net asset value calculated
on the last business day of June and December of each calendar year and payable quarterly in advance. The management fees
were allocated to the subsidiaries and Company based on where the service was provided.
In addition to the annual management fee, the Development Manager is entitled to a performance fee calculated at 20% of the
out performance net asset value over a total compounded return hurdle rate of 10% per annum. No performance fee has been
paid or accrued during the year (2013: US$ Nil).
9 Finance (Costs)/ INCOME
2014 2013
US$'000 US$'000
Interest income from banks 577 424
Agency fees (104) (25)
Annual trustees monitoring fee (5) (7)
Bank guarantee commission - (4)
Interest on bank loans (4,526) (1,460)
Interest on financial liabilities at amortised cost (2) (1)
Interest on medium term notes (9,123) (8,269)
(13,183) (9,342)
10 net PROFIT/ (Loss) BEFORE TAXATION
2014 2013
US$'000 US$'000
Net profit/ (loss) before taxation is stated after charging/(crediting):
· Auditor's remuneration
- current year 244 238
- under provision in prior year - 2
· Directors' fees 317 317
· Depreciation of property, plant and equipment 122 114
· Expenses of hotel operations 17,006 13,945
· Expenses of mall operations 1,789 1,659
· Expenses of hospital operations 9,702 4,538
· Fair value (gain)/ loss on held-for-trading financial
instrument (39) 5
· Unrealised foreign exchange (gain)/loss (291) 1,065
· Realised foreign exchange (gain)/loss (425) 40
· Impairment of goodwill 4,727 320
· Gain on disposal of property, plant and equipment (3) -
· Property, plant and equipment written off - 7
· Tax services 25 11
11 TAXATION
2014 2013
US$'000 US$'000
Current tax expense 10,587 3,470
Deferred tax credit (1,200) (616)
Total tax expense for the year 9,387 2,854
The numerical reconciliation between the income tax expenses and the product of accounting results multiplied by the
applicable tax rate is computed as follows:
2014 2013
US$'000 US$'000
Accounting profit/ (loss) 15,414 (18,796)
Income tax at a rate of 25% 3,853 (4,699)
Add :
Tax effect of expenses not deductible in determining taxable profit 2,063 4,989
Movement of unrecognised deferred tax benefits 2,621 1,833
Tax effect of different tax rates in subsidiaries 1,784 960
Less :
Tax effect of income not taxable in determining taxable
Profit (1,415) (377)
Under provision in respect of prior years 481 148
Total tax expense for the year 9,387 2,854
The applicable corporate tax rate in Malaysia is 25%.
The Company is treated as a tax resident of Jersey for the purpose of Jersey tax laws and is subject to a tax rate of 0%.
The applicable corporate tax rate in Singapore and Vietnam is 17% and 22% respectively.
A subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd Liability Co is granted preferential corporate tax rate of 10%
for the results of the hospital operations. The preferential income tax is given by the government of Vietnam due to the
subsidiary's involvement in the healthcare and education industries.
A Goods and Services Tax was introduced
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