REG - Aseana Prop Ltd - Final Results <Origin Href="QuoteRef">ASPL.L</Origin> - Part 3
27/04/2016 07:06
- Part 3: For the preceding part double click ID:nRSa4306Wb
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 the 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 the 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 (LOSS)/ GAIN
2015 2014
US$'000 US$'000
Foreign exchange (loss)/ gain comprises:
Realised foreign exchange (loss)/ gain (371) 425
Unrealised foreign exchange (loss)/ gain (2,544) 291
(2,915) 716
8 Management Fees
2015 2014
US$'000 US$'000
Management fees 3,115 3,344
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 (2014: US$ Nil).
9 Finance (Costs)/ INCOME
2015 2014
US$'000 US$'000
Interest income from banks 355 577
Agency fees (83) (104)
Annual trustees monitoring fee - (5)
Bank guarantee commission (49) -
Interest on bank loans (3,214) (4,526)
Interest on financial liabilities at amortised cost (2) (2)
Interest on medium term notes (7,683) (9,123)
(10,676) (13,183)
10 net (Loss)/ PROFIT BEFORE TAXATION
2015 2014
US$'000 US$'000
Net(loss)/ profit before taxation is stated after charging/(crediting):
*
Auditors remuneration
- current year 226 244
* 317 317
Directors' fees
* 105 122
Depreciation of property, plant and equipment
* 16,607 17,006
Expenses of hotel operations
* 1,401 1,789
Expenses of mall operations
* 11,110 9,702
Expenses of hospital operations
* 320 (320)
Fair value loss/ (gain) on amount due to non- controlling interests
* -- (39)-
Fair value gain on held-for-trading financial instrument
*
Impairment of amount due from subsidiary
* - -
Impairment of investment in subsidiary
* 2,544 (291)
Unrealised foreign exchange loss/ (gain)
* 371 (425)
Realised foreign exchange loss/ (gain)
* 1,565 4,727
Impairment of goodwill
* (806) -
Gain on disposal of available-for-sale investments
* -(675)15 (3)-25
Gain on disposal of property, plant and equipment
*
Gain on disposal of a subsidiary
*
Tax services
11 TAXATION
2015 2014
US$'000 US$'000
Current tax expense - Current year 1,468 9,008
- Prior year (227) 1,579
Deferred tax expense/ (credit) - Current year 678 654
- Prior year (641) (1,854)
Total tax expense for the year 1,278 9,387
The numerical reconciliation between the income tax expenses and the product of accounting results multiplied by the
applicable tax rate is computed as follows:
2015 2014
US$'000 US$'000
Net (loss)/ profit before taxation (20,652) 15,414
Income tax at a rate of 25% (5,163) 3,853
Add :
Tax effect of expenses not deductible in determining taxable profit 3,689 2,819
Current year losses and other tax benefits for which no deferred tax asset was recognised 2,449 2,621
Tax effect of different tax rates in subsidiaries 2,703 1,784
Less :
Tax effect of income not taxable in determining taxable profit (1,532) (1,415)
(Over)/ under provision in respect of prior years (868) (275)
Total tax expense for the year 1,278 9,387
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 rates in Singapore and Vietnam are 17% and 22% respectively.
A subsidiary of the Group, City International Hospital Co Ltd 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 industry.
A Goods and Services Tax was introduced in Jersey in May 2008. The Company has been registered as an International Services
Entity so it does not have to charge or pay local GST. The cost for this registration is £200 per annum.
The Directors intend to conduct the Group's affairs such that the central management and control is not exercised in the
United Kingdom and so that neither the Company nor any of its subsidiaries carries on any trade in the United Kingdom. The
Company and its subsidiaries will thus not be residents in the United Kingdom for taxation purposes. On this basis, they
will not be liable for United Kingdom taxation on their income and gains other than income derived from a United Kingdom
source.
12 OTHER COMPRENHENSIVE EXPENSE
Items that are or may be reclassified subsequently to profit or loss, net of tax 2015US$'000 2014US$'000
Foreign currency translation differences for foreign operation
Loss arising during the year (15,374) (7,388)
Reclassification to profit or loss on disposal of subsidiary (546) -
(15,920) (7,388)
Fair value of available-for-sale investment
Gain arising during the year 2,680 125
Reclassification adjustments for gain on disposal included
in profit or loss (490) -
2,190 125
(13,730) (7,263)
13 (LOSS)/ EARNINGS Per Share
Basic and diluted (loss)/ earnings per ordinary share
The calculation of basic and diluted (loss)/ earnings per ordinary share for the year ended 31 December 2015 was based on
the (loss)/ profit attributable to equity holders of the parent and a weighted average number of ordinary shares
outstanding, calculated as below:
2015US$'000 2014US$'000
(Loss)/ profit attributable to equity holders of the parent (15,784) 9,091
Weighted average number of shares 212,025 212,025
(Loss)/ earnings per shareBasic and diluted (US cents) (7.44) 4.29
14 Investment in AN Associate
2015 2014
US$'000 US$'000
At cost - unquoted shares - 611
Share of post-acquisition reserve - 1,306
Disposal of associate - (1,917)
At 31 December - -
The Company, via a wholly-owned subsidiary ASPL M3A Limited, had a 40% equity interest in a company known as Excellent
Bonanza Sdn. Bhd. ("EBSB"), a company incorporated in Malaysia, which is a vehicle set up to undertake a commercial
development in Kuala Lumpur, Malaysia.
In the previous financial year, the Group entered into a Sale and Purchase Agreement on 20 June 2014 to dispose of ASPL M3A
Limited's interest in EBSB. The sale consideration was US$5,306,000.
The condition precedent for the completion of the disposal of EBSB was met on 20 August 2014, when the transfer of shares
was effected and payment of the sale proceeds were received.
The Group recognised a gain on disposal of US$5,641,000 from the sale of the associate. The details are as follows:
2014
US$`000
Sales consideration 5,306
Carrying value of associate as at 20 August 2014 (1,917)
Realisation of previously unrealised profit in relation to sale of Aloft Kuala Lumpur Sentral Hotel 2,252
Gain on disposal 5,641
2,252
Gain on disposal
5,641
The unrealised profit of US$2,252,000 in relation to the sale of Aloft Kuala Lumpur Sentral Hotel to a subsidiary of the
Group was realised as EBSB is no longer an associate of the Group.
15 Available-for-Sale Investments
The available-for-sale investments represent the investment in shares of Nam Long Investment Corporation ("Nam Long") which the Group acquired over four tranches in 2008 and 2009.
2015 Quoted SharesUS$'000
1 January - fair value 12,822
Disposal (4,553)
Exchange adjustments (542)
Recognised in other comprehensive income 2,190
At 31 December - fair value 9,917
2014 Quoted SharesUS$'000
1 January - fair value 12,697
Recognised in other comprehensive income 125
At 31 December - fair value 12,822
During the financial year, the Group disposed of 5,800,000 number of shares in Nam Long for a consideration of US$5,359,000
at a market price of US$0.92 per share. The Group recognised a gain on disposal of US$806,000.
At 31 December 2015, an increase in fair value of US$2.19 million (2014: US$0.125 million) has been recognised in other
comprehensive income. The Directors have considered various prevailing factors at year end, including the economic and
market conditions of Vietnam in assessing the fair value of the investment.
16 Intangible Assets
Licence Contracts and Related Relationships Goodwill Total
US$'000 US$'000 US$'000
Cost
At 1 January 2014 / 31 December 2014 / 31 December 2015 10,695 6,479 17,174
Accumulated impairment losses
At 1 January 2014 - 3,649 3,649
Impairment loss 4,276 451 4,727
At 31 December 2014 / 1 January 2015 4,276 4,100 8,376
Impairment loss - 1,565 1,565
At 31 December 2015 4,276 5,665 9,941
Carrying amounts
At 31 December 2014 6,419 2,379 8,798
At 31 December 2015 6,419 814 7,233
The licence contracts and related relationships represents the rights to develop the International Healthcare Park. Other
than Phase 1 of City International Hospital, the rest of the projects have not commenced development. In 2014, the Group
sold its undeveloped land in International Healthcare Park consisted of Lot D1, PT1, BV5 and BV6 to third party
purchasers.
For the purpose of impairment testing, goodwill and licence contracts and related relationships are allocated to the
Group's operating divisions which represent the lowest level within the Group at which the goodwill and licence contracts
and related relationships are monitored for internal management purposes.
The aggregate carrying amounts of intangible assets allocated to each unit are as follows:
2015US$'000 2014US$'000
Licence contracts and related relationships
International Healthcare Park 6,419 6,419
Goodwill
SENI Mont' Kiara 264 432
Sandakan Harbour Square 550 1,947
814 2,379
The recoverable amount of licence contracts and related relationships has been tested based on the fair value less cost to
sell of the Land Use Rights ("LUR") owned by the subsidiaries. The key assumption used is the expected market value of the
LUR. The Group believes that any reasonably possible changes in the above key assumptions applied is not likely to
materially cause the recoverable amount to be lower than its carrying amounts.
Impairment losses of US$1,397,000 (2014: US$Nil), US$168,000 (2014: US$451,000) and US$Nil (2014: US$4,276,000) in relation
to the Four Points by Sheraton Sandakan Hotel, SENI Mont' Kiara and International Healthcare Park projects have been
recognised as the recoverable amount of the cash generating units, estimated based on fair value less costs to sell is
below their carrying amounts.
The recoverable amount of goodwill has been tested by reference to underlying profitability of the developments using
discounted cash flow projections.
Impairment losses - Four Points by Sheraton Sandakan Hotel ("FPSS")
The recoverable amount of FPSS was based on the valuation by an external, independent valuer with appropriate recognised
professional qualification. The carrying amount of FPSS including the attached goodwill was determined to be higher than
its recoverable amount of US$40,949,000 and impairment losses of US$1,397,000 and US$3,200,000 in relation to the goodwill
and inventory amounts were recognised. The impairment losses were included in cost of sales.
The valuation of FPSS was determined by discounting the future cash flows expected to be generated from the continuing
operations of FPSS and was based on the following key assumptions:
(1) Cash flows were projected based on past experience, actual operating results in 2015 and the 10 years budget of FPSS
adjusted by the valuer;
(2) Cash flows for a further 76 years were based on an optimum occupancy level of 78% in 2026 onwards;
(3) Projected gross margin reflects the average historical gross margin, adjusted for projected market and economic
conditions and internal resources efficiency; and
(4) Pre-tax discount rate of 9% was applied in discounting the cash flows. The discount rate takes into the prevailing
trend of the hotel industry in Malaysia.
Sensitivity analysis
The above estimates are particularly sensitive in an increase/(decrease) of the discount rate used. A 1% point
increase/(decrease) in the discount rate used would have (decreased)/ increased the recoverable amount by approximately
(US$5,598,000)/US$5,598,000.
17 Deferred Tax Assets
2015US$'000 2014US$'000
At 1 January 1,683 595
Exchange adjustments (309) (112)
Deferred tax credit relating to origination and reversal of temporary differences during the year (37) 1,200
At 31 December 1,337 1,683
The deferred tax assets comprise:
2015US$'000 2014US$'000
Taxable temporary differences between accounting profit and taxable profit of property development units sold 1,337 1,683
At 31 December 1,337 1,683
Deferred tax assets have not been recognised in respect of unused tax losses of US$55,000,000(2014: US$35,288,000) and
other tax benefits which includes temporary differences between net carrying amount and tax written down value of property,
plant and equipment, accrual of construction costs and other deductible temporary differences of US$3,100,000(2014:
US$3,462,000) which are available for offset against future taxable profits. Deferred tax assets have not been recognised
due to the uncertainty of the recovery of the losses.
18 INVENTORIES
2015 2014
Note US$'000 US$'000
Land held for property development (a) 23,223 40,560
Work-in-progress (b) 53,182 55,332
Stock of completed units, at cost 230,436 285,234
Consumables 487 652
At 31 December 307,328 381,778
(a) Land held for property development
2015 2014
US$'000 US$'000
At 1 January 40,560 24,403
Add :
Exchange adjustments (3,466) (849)
Additions 451 2,710
Transfer from work-in-progress - 24,534
Disposal of subsidiary (Note 28) (14,322) -
23,223 50,798
Less: Costs recognised as expenses in the statement of comprehensive income during the year - (10,238)
At 31 December 23,223 40,560
(b) Work-in-progress
2015 2014
US$'000 US$'000
At 1 January 55,332 73,134
Add :
Exchange adjustments (10,273) (3,464)
Work-in-progress incurred during the year 8,123 10,196
Transfer to land held for property development # - (24,534)
At 31 December 53,182 55,332
The above amounts included borrowing cost capitalised at interest rate ranging from 5.50% to 10.00% per annum (2014: 7.53%
to 12.62% per annum) of US$1,670,000 during the financial year (2014: US$1,799,000).
# The land was reclassified as land held for property development from work-in-progress in line with the Group's intention
to dispose of the land held.
19 held-for-trading financial instrument
In the previous financial year, the financial asset represents a placement in money market fund ("Fund"), which was held as
a trading instrument. The market value and the market price per unit of the Fund at 31 December 2014 were US$4,041,000 and
US$0.29 respectively.
The Fund is permitted under the Deed to invest in the following:
(i) Bank deposits;
(ii) Money market instruments such as treasury bills, bankers' acceptance, negotiable certificates of deposits, Bank
Negara Malaysia bills, Bank Negara Malaysia negotiable notes, Negotiable Instruments of Deposit and Negotiable Islamic
Debt Certificate with maturities not exceeding one (1) year; and
(iii) Malaysian Government Securities and/or securities guaranteed by the Government of Malaysia and/or notes/securities
issued by Bank Negara Malaysia with maturity not exceeding two (2) years.
20 Share Capital
Number of shares2015 '000 Amount2015US$'000 Number of shares2014 '000 Amount2014US$'000
Authorised Share Capital
Ordinary shares of US$0.05 each 2,000,000 100,000 2,000,000 100,000
Management shares of US$0.05 each - * - * - -
2,000,000 100,000 2,000,000 100,000
Issued Share Capital
Ordinary shares of US$0.05 each 212,025 10,601 212,025 10,601
Management shares of US$0.05 each - # - # - -
212,025 10,601 212,025 10,601
*represents 10 management shares at US$0.05 each
# represents 2 management shares at US$0.05 each
On 27 August 2015, the shareholders of the Company approved the creation and issuance of management shares by the Company
as well as a compulsory redemption mechanism that was proposed by the Board.
The Company increased its authorised share capital from US$100,000,000 to US$100,000,000.50 by the creation of 10
management shares of US$0.05 each for cash.
The Company also increased its issued and paid-up share capital from US$212,025,000 to US$212,025,000.10 by way of an
allotment of 2 new management shares of US$0.05 each at par via cash consideration.
In accordance with the compulsory redemption scheme, the Company's ordinary shares were converted into redeemable ordinary
shares.
The ordinary shares and the management shares shall have attached thereto the rights and privileges, and shall be subjected
to the limitations and restrictions, as are set out below:
(a) Distribution of dividend:
(i) The ordinary shares carry the right to receive all the profits of the Company available for distribution by way of
interim or final dividend at such times as the directors may determine from time to time; and
(ii) The management shares carry no right to receive dividends out of any profits of the Company.
(b) Winding-up or return of capital:
(i) The holders of the management shares shall be paid an amount equal to the paid-up capital on such management shares;
and
(ii) Subsequent to the payment to holders of the management shares, the holders of the ordinary shares shall be repaid
the surplus assets of the Company available for distribution.
(c) Voting rights:
(i) The holders of the ordinary shares and management shares shall have the right to receive notice of and to attend and
vote at general meetings of the Company; and
(ii) Each holder of ordinary shares and management shares being present in person or by a duly authorised representative
(if a corporation) at a meeting shall upon a show of hands have one vote and upon a poll each such holder present in person
or by proxy or by a duly authorised representative (if a corporation) shall have one vote in respect of every full paid
share held by him.
21 Share Premium
Share premium represents the excess of proceeds raised on the issuance of shares over the nominal value of those shares.
The costs incurred in issuing shares were deducted from the share premium.
2015US$'000 2014US$'000
At 1 January/31 December 218,926 218,926
22 CAPITAL REDEMPTION RESERVE
The capital redemption reserve was incurred after the Company cancelled its 37,475,000 and 500,000 ordinary shares of
US$0.05 per share in 2009 and 2013 respectively.
23 AMOUNT DUE TO NON-CONTROLLING INTERESTS
2015 2014
US$'000 US$'000
Non-current
Minority Shareholders of Shangri-La Healthcare Investment Pte Ltd:
- Tran Thi Lam - 415
- Econ Medicare Centre Holdings Pte Ltd - 491
- Value Energy Sdn. Bhd. - 147
- ThangShieu Han - 56
- Nguyen QuangDuc - 11
- 1,120
Current
Minority Shareholder of Bumiraya Impian Sdn. Bhd.:
- Global Evergroup Sdn. Bhd. 1,155 1,418
Minority Shareholders of Hoa Lam Services Co Ltd:
- Tran Thi Lam 1,727 1,725
- Tri Hanh Consultancy Co Ltd 3,257 2,510
- Hoa Lam Development Investment Joint Stock Company 244 188
- Duong Ngoc Hoa 163 126
Minority Shareholder of The RuMa Hotel KL Sdn. Bhd.:
- Ireka Corporation Berhad 1 -
Minority Shareholder of Urban DNA Sdn. Bhd.:
- Ireka Corporation Berhad 3,467 4,255
10,014 10,222
10,014 11,342
The current amount due to non-controlling interests amounting to US$10,014,000 (2014: US$10,222,000) is unsecured, interest
free and repayable on demand.
During the financial year, amount due to non-controlling interests amounting to US$1,440,000 was capitalised as share
capital of Shangri-La Healthcare Investment Pte Ltd.
In 2014, the non-current amount due to non-controlling interests amounting to US$1,120,000 was unsecured, interest free and
shall only be repayable to the respective minority shareholders if the minority shareholders cease to be a shareholder in
Shangri-La Healthcare Investment Pte Ltd.
24 Loans AND BORROWINGS
2015 2014
US$'000 US$'000
Non-current
Bank loans 55,813 53,338
Finance lease liabilities 10 26
55,823 53,364
Current
Bank loans 13,489 19,262
Finance lease liabilities 11 12
13,500 19,274
69,323 72,638
The effective interest rates on the bank loans and finance lease arrangement for the year ranged from5.25% to 12.50% (2014:
5.25% to 17.70%) per annum and 2.50% to 3.50% (2014: 2.50% to 3.50%) per annum respectively.
Borrowings are denominated in Ringgit Malaysia, United State Dollars and Vietnam Dong.
Bank loans are repayable by monthly, quarterly or semi-annually instalments.
Bank loans are secured by land held for property development, work-in-progress, operating assets of the Group, pledged
deposits and some by the corporate guarantee of the Company.
Finance lease liabilities are payable as follows:
Future minimum lease payment 2015 Interest 2015 Present value of minimum lease payment 2015 Future minimum lease payment 2014 Interest 2014 Present value of minimum lease payment 2014
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Within one year 12 1 11 15 3 12
Between one and five years 12 2 10 30 4 26
24 3 21 45 7 38
25 MEDIUM TERM NOTES
2015US$'000 2014US$'000
Outstanding medium term notes 119,711 147,004
Net transaction costs (1,191) (1,774)
Less:
Repayment due within twelve months * (108,190) (60,237)
Repayment due after twelve months 10,330 84,993
* Includes net transaction costs in relation to medium term notes due within twelve months of US$1.04 million (2014:
US$1.25 million).
The medium term notes ("MTN") were issued pursuant to a programme with a tenure of ten (10) years from the first issue date
of the notes. The MTN were issued by a subsidiary, to fund two development projects known as Sandakan Harbour Square and
Aloft Kuala Lumpur Sentral Hotel in Malaysia. US$57.06 million (RM245.00 million) was drawn down in 2011 for Sandakan
Harbour Square. US$3.49 million (RM15.00 million) was drawn down in 2012 for Aloft Kuala Lumpur Sentral Hotel and the
remaining US$59.16 million (RM254 million) in 2013. The Group secured a rollover of MTN amounting US$3.49 million (RM15
million) and US$46.58 million (RM200 million) which were due for repayment on 1 October 2015 and 8 December 2015 to be
repaid on 30 September 2016 and 7 December 2016 respectively. Subsequent to year end, the Group secured a rollover of MTN
amounting US$5.82 million (RM25 million) and US$53.33 million (RM229 million) which were due for repayment on 29 January
2016 and 8 April 2016 to be repaid on 31 January 2017 and 10 April 2017 respectively.
No repayments were made in the current financial year.
The weighted average interest rate of the MTN was 5.88% per annum at the statement of financial position date. The
effective interest rates of the MTN and their outstanding amounts are as follows:
Maturity Dates Interest rate % per annum US$'000
Series 1 Tranche FG 003 8 December 2017 5.90 5,823
Series 1 Tranche BG 003 8 December 2017 5.85 4,658
Series 1 Tranche FG 004 7 December 2016 6.25 10,480
Series 1 Tranche BG 004 7 December 2016 6.15 6,987
Series 2 Tranche FG 002 7 December 2016 6.25 16,303
Series 2 Tranche BG 002 7 December 2016 6.15 12,809
Series 3 Tranche FG 004 30 September 2016 6.03 2,329
Series 3 Tranche BG 004 30 September 2016 6.00 1,165
Series 3 Tranche FG 002 29 January 2016 5.50 3,494
Series 3 Tranche BG 002 29 January 2016 5.45 2,329
Series 3 Tranche FG 003 8 April 2016 5.65 30,044
Series 3 Tranche BG 003 8 April 2016 5.58 23,290
119,711
The medium term notes are secured by way of:
(i) bank guarantee from two financial institutions in respect of the BG Tranches;
(ii) financial guarantee insurance policy from Danajamin Nasional Berhad in respect to the FG Tranches;
(iii) a first fixed and floating charge over the present and future assets and properties of Silver Sparrow Berhad,
ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. by way of a debenture;
(iv) a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.'s assets and land;
(v) assignment of all Iringan Flora Sdn. Bhd.'s present and future rights, title, interest and benefits in and under
the Sale and Purchase Agreement to purchase the Aloft Kuala Lumpur Sentral Hotel from Excellent Bonanza Sdn. Bhd.;
(vi) first fixed land charge over the Aloft Kuala Lumpur Sentral Hotel and the Aloft Kuala Lumpur Sentral Hotel's
Land (to be executed upon construction completion);
(vii) a corporate guarantee by Aseana Properties Limited;
(viii) letter of undertaking from Aseana Properties Limited to provide financial and other forms of support to ICSD
Ventures Sdn. Bhd. to finance any cost overruns associated with the development of the Sandakan Harbour Square;
(ix) assignment of all its present and future rights, interest and benefits under the ICSD Ventures Sdn. Bhd.'s and
Iringan Flora Sdn. Bhd.'s Put Option Agreements and the proceeds from the Harbour Mall Sandakan, Four Points by Sheraton
Sandakan Hotel and Aloft Kuala Lumpur Sentra lHotel;
(x) assignment over the disbursement account, revenue account, operating account, sale proceed account, debt service
reserve account and sinking fund account of Silver Sparrow Berhad; revenue account of ICSD Venture Sdn. Bhd. and escrow
account of Ireka Land Sdn. Bhd.;
(xi) assignment of all ICSD Ventures Sdn. Bhd.'s and Iringan Flora Sdn. Bhd.'s present and future rights, title,
interest and benefits in and under the insurance policies; and
(xii) a first legal charge over all the shares of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora
Sdn. Bhd. and any dividends, distributions and entitlements.
26 PURCHASE OF OWN SHARES AND CANCELLATION OF SHARES
The shareholders of the Company, by a special resolution passed in a general meeting held on 22 June 2015, approved the
Company's plan to repurchase its own shares.
There was no repurchase of issued share capital in the current financial year.
Cancellation of treasury shares
The shares repurchased in the prior year were cancelled and an amount equivalent to their nominal value was transferred to
the capital redemption reserve in accordance with the requirement of Section 61 of the Companies (Jersey) Law 1991. The
transfer to capital redemption reserve and the premium paid on the shares repurchased were made out of the share premium.
27 Related Party Transactions
Transactions between the Group and the Company with Ireka Corporation Berhad ("ICB") and its group of companies are
classified as related party transactions based on ICB's 23.07% shareholding in the Company.
Related parties also include key management personnel defined as those persons having authority and responsibility for
planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel
includes all the Directors of the Group, and certain members of senior management of the Group.
2015US$'000 2014US$'000
ICB Group of CompaniesAccounting and financial reporting services fee charged by an ICB subsidiary 50 53
Advance payment to the contractors of an ICB subsidiary 833 1,430
Construction progress claims charged by an ICB subsidiary 6,423 13,912
Acquisition of SENI Mont' Kiara units by an ICB subsidiary 2,008 -
Management fees charged by an ICB subsidiary 3,115 3,344
Marketing commission charged by an ICB subsidiary 281 1,226
Project staff costs reimbursed to an ICB subsidiary 289 544
Rental expenses charged by an ICB subsidiary 4 31
Rental expenses paid on behalf of ICB 512 588
Secretarial and administrative services fee charged by an ICB subsidiary 50 53
Key management personnel
Remuneration of key management personnel - Directors' fees 317 317
Remuneration of key management personnel - Salaries 49 49
Transactions between the Group with other significant related parties are as follows:
2015 2014
US$'000 US$'000
Non-controlling interests
Advances - non-interest bearing (Note 23) 1,067 1,635
Capitalisation of amount due to non- 1,440 -
controlling interests as share capital
The above transactions have been entered into in the normal course of business and have been established under negotiated
terms.
The outstanding amounts due from/ (to) ICB and its group of companies as at 31 December 2015 and 31 December 2014 are as
follows:
Note 2015US$'000 2014US$'000
Amount due from an ICB subsidiary for advance payment to its contractors (ii) 1,997 1,430
Amount due to an ICB subsidiary for construction progress claims charged (i) (38) (891)
Amount due from an ICB subsidiary for acquisition of SENI Mont' Kiara units (i) 1,840 -
Amount due from an ICB subsidiary for management fees (ii) 25 -
Amount due to an ICB subsidiary for marketing commissions (ii) (43) (34)
Amount due to an ICB subsidiary for reimbursement of project staff costs (ii) (24) (60)
Amount due to an ICB subsidiary for rental expenses (ii) (3) (2)
Amount due from ICB for rental expenses paid on behalf (ii) 1,415 1,162
(i) These amounts are trade in nature and subject to normal trade terms.
(ii) These amounts are non-trade in nature and are unsecured, interest-free and repayable on demand.
The outstanding amounts due from/ (to) the other significant related parties as at 31 December 2015 and 31 December 2014
are as follows:
2015 2014
US$'000 US$'000
Non-controlling interests
Advances - non-interest bearing (Note 23) (10,014) (11,342)
Transactions between the parent company and its subsidiaries are eliminated in these consolidated financial statements.
28 Business COMBINATION
Change in equity interest in subsidiaries
During the financial year, the Group increased its equity interest in Shangri-La Healthcare Investment Pte Ltd ("SHIPL")
from 75.38% to 79.76% (2014: 74.11% to 75.38%) arising from an issue of new shares in the subsidiary for cash consideration
of US$5.3 million and capitalisation of loan from ASPL V7 Limited amounting to US$9.6 million. Consequently, the Group's
effective equity interest in Hoa Lam - Shangri-La Healthcare Ltd Liability Co, City International Hospital Co Ltd, Hoa Lam
- Shangri-La 3 Ltd Liability Co and Morningstar International Preschool Ltd Liability Co (Formerly known as Hoa Lam -
Shangri-La 4 Ltd Liability Co), subsidiaries of SHIPL, increased to 71.13% (2014:68.07%).
The Group recognised an increase in non-controlling interests of US$585,000 (2014: US$147,000) and an increase in
accumulated losses of US$585,000 (2014: US$147,000) resulting from the increase in equity interest in the above
subsidiaries. The transaction was accounted for using the purchase method of accounting.
Disposal of a subsidiary
The Group entered into an agreement with Nam Long Investment Corporation and Nam Khang Construction Investment Development
One Member Ltd Liability Co on 10 September 2015 to dispose of ASPL PLB Limited's 55% equity interest in ASPL PLB-Nam Long
Ltd Liability Co, a subsidiary of the Group for a consideration of US$8,227,000 (VND185,165,679,414) and repayment of the
shareholder's loan of US$1,000,000 (VND20,732,443,120). The shareholder's loan was an interest free advance provided by the
Group to ASPL PLB-Nam Long Ltd Liability Co in previous financial years for working capital purposes. The shareholder's
loan was undertaken by the buyer as part of the disposal arrangement.
The condition precedent for the completion of the disposal of ASPL PLB-Nam Long Ltd Liability Co was met on 10 December
2015 when the transfer of shares was effected.
The disposal of ASPL PLB-Nam Long Ltd Liability Co has no significant impact on the results of the Group other than the
gain on disposal of US$675,000 recognised during the year.
The details of the gain/ (loss) are as follows:
Analysis of assets and liabilities over which control was lost:
2015
Notes US$'000
Current assets
Inventories - Land held for property development 18 14,322
Trade and other receivables 38
Cash and cash equivalents 1,663
Current liabilities
Trade and other payables (2,856)
Net assets disposed of 13,167
Gain on disposal of a subsidiary
Consideration receivable 8,227
Incidental expenses (310)
Net consideration receivable 7,917
Net assets disposed of (13,167)
Non-controlling interests 5,925
Gain on disposal 675
Net cash outflow on disposal of a subsidiary
Consideration received * 1,517
Cash and cash equivalent disposed of (1,663)
(146)
* Out of the total consideration receivable of US$7,917,000, US$1,517,000 has been received as at the financial year end.
The remaining outstanding consideration receivable of US$6,400,000 was received on 13 January 2016.
In the previous financial year, the Group disposed of its entire interests in Hoa Lam-Shangri-La 2 Ltd Liability Co, a
subsidiary of the Group for a consideration of US$500,000 (VND10.50 billion). The disposal of Hoa Lam-Shangri-La 2 Ltd
Liability Co had no significant impact on the results of the Group.
29 DIVIDEND
The Company has not paid or declared any dividends during the financial year ended 31 December 2015.
30 cOMMITMENTS AND Contingencies
The Group and Company do not have any contingencies at the statement of financial position date except as follows:
Debt service reserve account
Under the medium term notes programme of up to US$119.71 million, Silver Sparrow Berhad ("SSB") had opened a Ringgit
Malaysia debt service reserve account ("DSRA") and shall ensure that an amount equivalent to RM30.0 million (US$6.99
million) (the "Minimum Deposit") be maintained in the DSRA at all times. In the event the funds in the DSRA falls below
the Minimum Deposit, SSB shall within five (5) Business Days from the date of receipt of written notice from the facility
agent or upon SSB becoming aware of the shortfall, whichever is earlier, deposit such sums of money into the DSRA to ensure
the Minimum Deposit is maintained.
31 event after statement of financial position date
Subsequent to year end, the Group entered into a sale and purchase agreement to dispose of the Aloft Kuala Lumpur Sentral
Hotel ("Aloft Hotel") to Prosper Group Holdings Limited ("Prosper Group"). The gross transaction value for the purchase of
the entire issued share capital of ASPL M3B Limited and Iringan Flora Sdn. Bhd. (the "Aloft Companies")is approximately
US$104.60 million (RM418.70 million).
The transaction, which is expected to be completed in Quarter 3, 2016, is conditional upon the satisfactory completion of a
due diligence review by Prosper Group, and certain consents being obtained from Starwood Asia Pacific Hotels & Resorts Pte
Ltd, the operator of the Aloft Hotel, and consents from the Company's financiers for the Aloft Hotel.
32 REPORT CIRCULATION
Copies of the Annual Report and Financial Statements will be sent to shareholders for approval at the Annual General
Meeting ("AGM") to be held in June 2016.
Principal Risks and Uncertainties
The Group's business is property development in Malaysia and Vietnam. Its principal risks are therefore related to the
property market in these countries in general, and also the particular circumstances of the property development projects
it is undertaking. More detailed explanations of these risks and the way they are managed are contained under the heading
of Financial and Capital Risk Management Objectives and Policies in the Annual Report.
Other risks faced by the Group in Malaysia and Vietnam include the following:
Economic Inflation, economic recessions and movements in interest rates could affect property development activities.
Strategic Incorrect strategy, including sector and geographical allocations and use of gearing, could lead to poor returns for shareholders.
Regulatory Breach of regulatory rules could lead to suspension of the Company's Stock Exchange listing and financial penalties.
Law and regulations Changes in laws and regulations relating to planning, land use, development standards and ownership of land could have adverse effects on the business and returns for the shareholders.
Tax regimes Changes in the tax regimes could affect the tax treatment of the Company and/or its subsidiaries in these jurisdictions.
Management and control Changes that cause the management and control of the Company to be exercised in the United Kingdom could lead to the Company becoming liable to United Kingdom taxation on income and capital gains.
Operational Failure of the Development Managers accounting system and disruption to the Development Manager's business, or that of a third party service providers, could lead to an inability to provide accurate reporting and monitoring leading to a loss of shareholders' confidence.
Financial Inadequate controls by the Development Manager or third party service providers could lead to misappropriation of assets. Inappropriate accounting policies or failure to comply with accounting standards could lead to misreporting or breaches of regulations or a qualified audit report.
Going Concern Failure of property development projects due to poor sales and collection, construction delay, inability to secure financing from banks may result in inadequate financial resources to continue operational existence and to meet financial liabilities and commitments.
The Board seeks to mitigate and manage these risks through continual review, policy setting and enforcement of contractual
rights and obligations. It also regularly monitors the economic and investment environment in countries that it operates in
and the management of the Group's property development portfolio. Details of the Group's internal controls are described in
the Annual Report.
RESPONSIBILITY STATEMENT
The Directors of the Group and the Company confirm that to the best of their knowledge that:
(a) the consolidated financial statement have been prepared in accordance with International Financial Reporting
Standards, including International Accounting Standards and Interpretations adopted by the International Accounting
Standards Board; and
(b) the sections of this Report, including the Chairman's Statement, Development Manager's Review, Financial Review
and Principal Risks and Uncertainties, which constitute the management report include a fair review of all
- More to follow, for following part double click ID:nRSa4306WdRecent news on Aseana Properties
See all newsREG - Aseana Prop Ltd - Extension of Medium Term Notes Repayment Date
AnnouncementREG - Aseana Prop Ltd - Result of AGM and GM
AnnouncementREG - Official List Aseana Prop Ltd - Restoration - Aseana Properties Limited
AnnouncementREG - Aseana Prop Ltd - Lifting of Suspension
AnnouncementREG - Aseana Prop Ltd - Posting of 2024 Annual Report, Notice of AGM & GM
Announcement