REG - Aseana Prop Ltd - Half Yearly Report <Origin Href="QuoteRef">ASPL.L</Origin> - Part 1

Aseana PropertiesAnnouncement

29/10/2014 15:27

RNS Number : 0601Q
Aseana Properties Limited
27 August 2014
27 August 2014
Aseana Properties Limited
("Aseana" or the "Company")
Half-Year Results for the Six Months Ended 30 June 2014
Aseana Properties Limited (LSE: ASPL), a property developer investing in Malaysia and Vietnam, listed on the Main Market of the London Stock Exchange, announces its half-year results for the six-month period ended 30 June 2014.
Operational highlights:
 SENI Mont' Kiara won the World Silver Award at The International Real Estate Federation ("FIABCI") World Prix d'Excellence Awards 2014 in the residential (High Rise) category. Sale of properties at SENI Mont' Kiara is progressing well achieving 91% sales to date, compared to 88% recorded in April 2014. A further 6% is reserved with deposit paid.
 The RuMa Hotel and Residences ("The RuMa") achieved 43% sales based on sales and purchase agreement signed, with a further 8% reserved with deposit paid. 
 The Aloft Kuala Lumpur Sentral Hotel's ("Aloft") average occupancy rate stood at 68% for the six-month period ended 30 June 2014, while Four Points by Sheraton Sandakan Hotel's ("FPSS") was at 42%.
 Aseana entered into a share sale agreement with Malaysian Resources Corporation Berhad ("MRCB") to dispose of its 40% stake in Excellent Bonanza Sdn. Bhd. ("EBSB") for a cash consideration of RM20.0 million (US$6.2 million). EBSB is the developer of the Kuala Lumpur Sentral Office Towers and Hotel project ("KL Sentral Project"). The transaction was completed on 19 August 2014. 
 A plot of land measuring 4.7 hectares (11 acres) at the International Hi-Tech Healthcare Park ("IHTHP") was sold and development rights transferred to AEON Vietnam Co. Ltd. ("AEON Vietnam"). The transaction was completed on 1 August 2014. 
Financial highlights:
 Unaudited revenue of US$31.49 million for the six-month period ended 30 June 2014 (30 June 2013 (unaudited): US$10.22 million)
 Unaudited loss before tax for the six-month period ended 30 June 2014 of US$4.76 million (30 June 2013 (unaudited): loss of US$13.73 million)
 Unaudited loss after tax for the six-month period ended 30 June 2014 of US$7.66 million (30 June 2013 (unaudited): loss of US$14.44 million)
 Unaudited consolidated comprehensive loss of US$6.66 million for the six months period ended 30 June 2014 (30 June 2013 (unaudited): loss of US$13.57 million)
 Unaudited net asset value of US$154.63 million at 30 June 2014 (31 December 2013 (audited): US$158.57 million) or US$0.729 per share* (31 December 2013 (audited): US$0.748 per share) 
 Unaudited realisable net asset value of US$270.82 million at 30 June 2014 (31 December 2013 (unaudited): US$266.04 million) or US$1.277 per share* (31 December 2013 (unaudited): US$1.255 per share) 
* NAV per share and RNAV per share as at 30 June 2014 are calculated based on 212,025,000 voting shares (31 December 2013: 212,025,000 voting shares).
Commenting on the results, Mohammed Azlan Hashim, Chairman of Aseana, said: 
"We are pleased that the results for the first half of 2014 have improved significantly compared to the corresponding period in 2013, despite challenges in the property markets in both Malaysia and Vietnam. The Group will continue to pursue an opportunistic yet cautious approach in managing and realising cash flows from its projects. As we move into the second half of 2014, the Group will continue to focus on improving the operation and performance of its key operating assets."
The Group has also published its Quarterly Investment Update (including updates on projects and RNAV figures) for the period to 30 June 2014, which can be obtained on its website at www.aseanaproperties.com/quarterly.htm. 
For further information:
Aseana Properties Limited
Tel: 603 6411 6388
Chan Chee Kian
Email: cheekian.chan@ireka.com.my


N+1 Singer
Tel: 020 7496 3000
James Maxwell (Corporate Finance)
/Sam Greatrex (Sales) 
Email: james.maxwell@n1singer.com 
/sam.greatrex@n1singer.com


Tavistock Communications
Tel: 020 7920 3150
Jeremy Carey / Faye Walters
Email: jcarey@tavistock.co.uk


Notes to Editors:
London-listed Aseana Properties Limited (LSE: ASPL) is a property developer investing in Malaysia and Vietnam.
Ireka Development Management Sdn Bhd ("IDM") is the exclusive Development Manager for Aseana. It is a wholly-owned subsidiary of Ireka Corporation Berhad, a company listed on the Bursa Malaysia since 1993, which has over 45 years' experience in construction and property development. IDM is responsible for the day-to-day management of Aseana's property portfolio and the introduction and facilitation of new investment opportunities.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report on the half-year results for Aseana Properties Limited ("Aseana") and its group of companies ("the Group") for the six months ended 30 June 2014. 
In the year to date, the global economy has shown signs of recovery though political unrest in Ukraine and the Middle East pose notable challenges. Investment remains subdued amid the uneven economic growth in the United States of America and Europe. China's growth has also been curtailed amid by its government's reform policies. Closer to home, the Malaysian economy has proven resilient despite these global economic headwinds. Over the medium term, however, there are important long-standing structural issues such as the high levels of household debt which increased to 86.8% of its Gross Domestic Product ("GDP") as at the end of 2013, among the highest in Asia. The Central Bank of Malaysia recently announced a hike in Overnight Policy Rate ("OPR") by 25 basis points to 3.25%, the first rise in three years, to mitigate the risk of broader economic and financial imbalances that could undermine the growth prospects of the Malaysian economy.
The Vietnamese economy has resumed its path of gradual recovery in the first half of 2014. GDP expanded 5.18% during the first six month of the year and the Central Bank of Vietnam has recently devalued the Vietnamese Dong by 1% to boost exports following the domestic disturbances back in May triggered by the territorial dispute with China. Vietnam's total Foreign Direct Investment ("FDI") disbursement reached US$5.75 billion in the first half of 2014, an increase of 0.9% y-o-y. 
Results
For the six months ended 30 June 2014, Aseana and its group of companies (the "Group") recorded unaudited revenue of US$31.49 million (H1 2013 (unaudited): US$10.22 million), which was mainly attributable to the sale of completed units in SENI Mont' Kiara and Tiffani. No revenue was recognised for The RuMa, in accordance with IFRIC 15 - Agreements for Construction of Real Estate which prescribes that revenue be recognised only when the properties are completed and occupancy permits are issued. 
The Group recorded an unaudited loss before tax for the period of US$4.76 million (H1 2013 (unaudited): loss of US$13.73 million), predominantly due to operating losses and financing costs of Four Points by Sheraton Sandakan Hotel and Harbour Mall Sandakan totaling US$2.74 million, together with an operating loss and financing cost of City International Hospital of US$4.91 million. 
The Group's unaudited loss after tax for the six-months ended 30 June 2014 stood at US$7.66 million (30 June 2013 (unaudited): loss of US$14.44 million). Other comprehensive income include a foreign currency translation gain of US$0.98 million (30 June 2013 (unaudited): loss of US$3.50 million) which was attributable to the strengthening of the Ringgit against the US dollars. This resulted in an unaudited consolidated comprehensive loss for the period of US$6.66 million (30 June 2013 (unaudited): loss of US$13.57 million).
Unaudited net asset value for the Group for the period under review decreased to US$154.63 million (31 December 2013 (audited): US$158.57 million) or US$0.729 per share (31 December 2013: US$0.748 per share) due to losses incurred for the period. However, unaudited realisable net asset value improved to US$270.82 million as at 30 June 2014 (31 December 2013 (unaudited): US$266.04 million) or US$1.277 per share (31 December 2013 (unaudited): US$1.255 per share) mainly due to the improved market values of IHTHP lands based on the latest market valuation exercise.
Review of Activities and Property Portfolio
Sales status (based on Sales and Purchase agreements signed):
Projects
% sales as at 
31 July 2014
% sales as at 
December 2013



Tiffani by i-ZEN
99%
98%
SENI Mont' Kiara


- Proceeds received
87%
80%
- Pending completion
4%
4%
The RuMa Hotel and Residences
43%
38%
Malaysia
SENI Mont' Kiara won the prestigious Silver prize in the FIABCI (World Chapter) Prix D' Excellence Award 2014 for the High Rise Residential Category, in May 2014. In line with this achievement, sales recorded for SENI Mont' Kiara increased to 91%, compared to 88% previously. A further 6% is reserved with deposit paid.
The recent cooling measures imposed by the Malaysian Government have affected the sales performance at The RuMa Hotel and Residences. Sale of units at The RuMa inched up marginally to 43% based on sales and purchase agreements signed, with a further 8% being reserved with deposit paid. The Manager has planned numerous sales events and initiatives over the next few months and will continue to explore all opportunities to drive sales. Meanwhile, construction of the main building is in progress and completion is targeted for 2017.
The 482-room Aloft Kuala Lumpur Sentral Hotel ("Aloft"), managed and operated by Starwood Asia Pacific Hotels Resort Pte. Ltd, has achieved an average occupancy rate of 68% for the six-months ended 30 June 2014. 
Aseana has entered into a share sale agreement with Malaysian Resources Corporation Berhad ("MRCB") to dispose of its 40% stake in Excellent Bonanza Sdn. Bhd. ("EBSB") for a cash consideration of RM20 million (US$6.21 million). The transaction was completed on 19 August 2014. Aseana is expected to record a gain of approximately RM16.4 million (US$5.1 million) from the disposal of 40% stake in EBSB. EBSB, a joint venture company between MRCB and Aseana, is the developer of the Kuala Lumpur Sentral Office Towers and Hotel project. The disposal represents an early exit and realisation of profits from the project which was originally planned for December 2015.
Sabah's tourism continues to be adversely impacted by the disappearance of flight MH370 in March 2014 and also the recent flight MH17 tragedy, along with the several kidnapping cases of both tourists and locals, off the east coast of Sabah, over the last few months. In Sandakan, the business environment remains uncertain. Travel advisory notices were issued for the coastal areas of eastern Sabah by countries such as the United States of America, United Kingdom, Canada, Australia and New Zealand. The Malaysian Government has imposed night time curfews along the coastline of eastern Sabah as a new security measure. Average occupancy rate at the Four Points by Sheraton Sandakan Hotel ("FPSS") stood at 42% for the six-months ended 30 June 2014. The Management of FPSS continues to look at ways to improve efficiency of the hotel operation and to work with relevant authorities to increase tourist arrivals to Sandakan. The Harbour Mall Sandakan is similarly affected and tenancy rate has remained at 47.0% as at July 2014.
Moving forward, Aseana will focus on the operation and performance of its key operating assets. The Company will also continue its efforts to dispose of the remaining units at SENI Mont' Kiara and Tiffani as well as to drive new sales for The RuMa.
Vietnam
As at 3 August 2014, The City International Hospital ("CIH") registered inpatient days of 1,459 days with average revenue per inpatient admission of US$2,014. Outpatient visits as at 3 August 2014 stood at 5,144 visits with average revenue per visit of US$82. Whilst the average revenues per patient are within the expected range, the volume of patients has fallen short of expectations. The Manager is working closely with the operator of CIH to improve performance through targeted sales and marketing campaign, and introduction of new service lines offered by CIH.
Aseana, through its 67%-owned subsidiary, Hoa Lam Shangri-La 3 Limited Liability Company ("HLSL3"), has entered into an agreement with AEON Vietnam Co., Ltd. ("AEON Vietnam") to develop a retail mall at the International Hi-Tech Healthcare Park ("IHTHP"). AEON Vietnam is a subsidiary of AEON Co., Ltd. based in Japan, one of the world's largest retailing groups with over 18,000 stores across Japan and Asia. The transaction involves the disposal of a 4.7 hectares (11 acres) plot of land at IHTHP and also the transfer of the development rights to AEON Vietnam. AEON Vietnam has on 21 June 2014, been awarded the Investment Certificate for the development, and on 1 August 2014 successfully transferred the development rights to AEON Vietnam. HLSL 3 will receive a net cash consideration of approximately US$23 million from the transaction. To date, 95% of the consideration has been received and the remaining 5% will be disbursed by AEON Vietnam upon completion of certain road infrastructure for the plot of land, expected in Q4 2014. From the cash proceeds received by HLSL3, US$14.6 million was used to repay bank borrowings of IHTHP, with the remaining proceeds being used for payment of infrastructure costs for the land, Corporate Income Tax and working capital of the project.
The Vietnam Stock Index ("VN Index") has recovered following a gradual decline between the end of March 2014 and the beginning of August 2014, reflecting a more positive economic outlook for Vietnam. At the date of this publication, Nam Long shares closed at VND18,600 per share, improving from VND17,400 per share as at 30 June 2014.
MOHAMMED AZLAN HASHIM
Chairman
26 August 2014
DEVELOPMENT MANAGER'S REVIEW
Malaysia Economic Update 
The Malaysian economy recorded a strong growth of 6.4% in the first half of 2014, underpinned mainly by a surge in exports and aided by low base effect. However, there are indications that growth will taper moving into the second half of 2014. This reflects the impact of the fiscal and monetary policy adjustments by the Government such as the on-going subsidy rationalisation and the upcoming Goods and Services Tax ("GST"). Although these measures by the Government will undeniably dampen the domestic demand especially consumer spending and Government expenditures, GDP growth is expected to remain resilient. Malaysia continues to build on its competitive position in electronics, automotive and machinery manufacturing industries to move up the value chain into high-technology and skill-intensive segments. AT Kearney has ranked Malaysia 15th in its list of 2014 Foreign Direct Investment Confidence Index, compared to being in the 25th position in previous year.
Fitch Ratings has also reaffirmed Malaysia's sovereign ratings at "A-" accompanied by cautious commentary on the credit weakness in public finances relative to other "A" range peers. This remains a source of downward pressure on the ratings for Malaysia. There are concerns over the Malaysian Government's lack of progress on structural budgetary reform and with the rising interest rates which could impair household debt servicing capacity, the outlook for Malaysia's long term default rating remains at "negative". 
In July 2014, the central bank of Malaysia raised the overnight policy rate ("OPR") by 25 basis points to 3.25%, the first increase in three years, with the expectations that Malaysia's overall economic growth momentum will be sustained. Amid the high and rising household debt to GDP ratio, this increase will add to consumers' costs of living and also reduce purchasing powers. 
Prior to the announcement of the OPR hike, the Ringgit had hit an eight-month high against the US dollar, reflecting renewed investor confidence in the currency and making it the second best-performing currency among the other Asean countries such as Thailand, Indonesia, Singapore and Philippines.
The Consumer Sentiment Index and the Business Conditions Index issued by the Malaysian Institute of Economic Research ("MIER") for the second quarter of 2014 continue to move in tandem for four consecutive quarters, reflecting synchronisation in both consumer and business sentiments. The Consumer Sentiment Index rose 3.3 points to pass the 100-point benchmark to settle at 100.1 points (Q1 2014: 96.8 points). This indicates neutral consumer sentiment towards the outlook for employment. The Business Conditions Index rose to 113.0 points (Q1 2014: 103.1 points) contributed by increased sales in the manufacturing sector, strong domestic and export orders and higher investment in new plant and equipment.
Overview of Property Market in Klang Valley, Malaysia
Offices
 1 new office building was completed in Q2 2014, increasing the total supply of office space in the Klang Valley to 106.1 million sq.ft. Overall occupancy increased to 81% (Q1 2014: 80%).
 Market rentals and prices remained stable, while rental yield remained between 6% and 8%.
 En-bloc transaction during the quarter: (i) Platinum Sentral (Prime A 5 blocks of 4 to 7 stories) located in Kuala Lumpur Sentral was sold at RM1,576 psf (US$ 482 psf). 
 Occupancy rates are expected to remain around 80% as some developers are likely to defer their project completion dates. A total of 2.57 million sq.ft. is scheduled to be completed by end 2014.
Retail
 Market prices and market rentals for retail centres in Klang Valley were generally stable.
 Retail transactions in Q2 2014: (i) Pandan Safari Lagoon (63 units of retail lots, 2 level of car parks and roof top of the retail centre) were acquired by CHN Commodity Trade Centre Sdn Bhd for RM147 psf (US$45 psf) or total purchase consideration of RM50 million (US$15.31 million).
 Average occupancy rate in Klang Valley remained stable at 84% in Q2 2014.
Residential
 27 projects with 7,381 units condominium in Klang Valley were completed in Q2 2014. 
 26 projects with 9,294 units were launched in Q2 2014.
 Market prices and market rental rates remained stable in Q2 2014.
 Selected new launches: (i) Expressionz Professional Suites - Blocks A&B (447 units), launched in Mar 2014 with an average price of RM1,300 psf (US$398 psf) achieved 70% take-up rate; (ii) Residensi 22 Mont Kiara - Block B (270 units), launched in April 2014 with an average price of RM850 psf (US$260 psf) is 50% sold.
Hospitality
 In Q2 2014, average daily room rate for International class hotels in the Klang Valley (within Kuala Lumpur City) and Business class hotels increased y-o-y by 7.1% and 2.5% respectively.
 Average occupancy rates for International class hotels in Klang Valley increased to 73.3% as at April 2014, whilst average occupancy rates for Business class hotels increased to 66.0% compared to the same period in 2013.
 9.3 million tourists visited Malaysia in first 4 months of 2014, an increase of 9.9% compared to Q2 2013.
 Tourism into Sabah has been adversely affected by recent kidnapping cases and the loss of Flights MH370 and MH17.
Source: Bank Negara Malaysia website, Jones Lang Wootton Q2 report, MIER, various publications
Exchange rate - 30 June 2014: US$1:RM3.2113
Vietnam Economic Update
The Vietnamese economy picked up in the first half of 2014, with growth of 5.2% following interest rate cuts by the central bank alongside rising foreign investment and strong exports growth. The World Bank forecasted Vietnam's 2014 GDP growth to be at 5.4% while Vietnam's National Financial Supervisory Committee ("NFSC") expects stronger growth of 5.7% to 5.8%. The central bank of Vietnam has also devalued the Vietnamese dong by 1% to help boost exports following the unrest in May triggered by the anti-Chinese protests and also to create stability for the foreign exchange market. 
On the back of continued macro-economic stability, Standard & Poor ("S&P"), a global ratings firm has retained its BB long term and B short term sovereign credit ratings on the country. Furthermore, Moody's Investors Service upgraded Vietnam's credit rating by raising the Government bond ratings from B2 to B1 with a stable outlook and also raised the long term foreign currency bond ceiling from B1 to Ba2 as well as its long term foreign currency deposit ceiling from B3 to B2.
Vietnam's June 2014 CPI grew at the slowest pace in 13 years, with a growth of 1.38% as compared to December 2013 and edged up by 4.98% compared to the same period last year, indicating subdued consumer sentiments. 
Foreign investment plays an important role in bolstering the growth of many sectors. According to the Ministry of Planning and Investment of Vietnam, statistics showed that the country attracted US$6.85 billion in foreign direct investment ("FDI") in the first half of 2014, including newly registered funds and extra capital from operational projects. The total amount of FDI for the property sector reached US$692.3 million, a 65% increase year on year. This shows that Vietnam's property sector is once again attractive to foreign investors. With the implementation of the new Land Law with effect from 1 July 2014, foreign real estate investors are now allowed to be allocated lands for the purpose of construction of residential housing projects for sale or lease by the Government of Vietnam. Previously, investors were only able to lease those lands from the Government. 
Although foreign tourist arrivals to Vietnam in the first six months of the year increased by 21.2% to over 4.3 million, political and safety concerns will remain issues for tourism in the second half of 2014, especially for the hotels and resorts industry following the East Sea tension between China and Vietnam in May. 
Overview of Property Market in Vietnam
Offices
 1 Grade B and 2 Grade C office buildings entered the market increasing the total supply to 1.43mil sqm by 2% q-o-q and 6% y-o-y.
 Overall occupancy rate decreased by 1% q-o-q but up by 2% y-o-y to 89%. The decrease is due to soft performance in Grade B office buildings.
 Average rental rates decreased by 1% q-o-q but up by 3% y-o-y, mainly due to decrease in Grade B and Grade C office buildings average rent.
 Total office take-up decreased by 56% q-o-q and 46% y-o-y, lowest compared to the 3 preceding years. Grade C office buildings which accounted for 76% of total take-up remained a preferred choice by tenants. 
Retail
 Retail stock increased by 2.1% q-o-q and 11.7% y-o-y contributed by the entrance of a shopping centre (Saigon Mall, Go Vap District), 2 retail podiums (Saigon Airport Plaza, Tan Binh District and Sunrise City - Phase 1, District 7).
 Average rent in Q2 2014 stood at US$60 psm per month, a decline of 1% q-o-q while average occupancy stood at 87% with an increase of 2.1% q-o-q.
 HCMC's retail sales for the first 6 months of 2014 was estimated at US$14.8 billion, increased by 7.7% y-o-y without inflation. However, the growth rate remained low compared to 2013 (8.1%) and 2012 (8.9%).
Residential
 11 new apartment projects and new phases of 8 existing apartment projects were launched in Q2 2014. Total stock decreased by 2.6% q-o-q and 0.4% y-o-y as several projects were put on hold.
 Overall apartments' absorption rate was at 17%, an increase of 7% q-o-q and 9% y-o-y. 
 1 new townhouse project (38 units), 1 new phase of an existing townhouse project (100 units) and 1 villa project (48 units), were launched in Q2 2014, increasing the supply of villa/townhouse by 6% q-o-q and 9% y-o-y. 3 new projects with 335 land plots launched in Q2 2014 increased land plot supply by 144% y-o-y but reduced by 11% q-o-q. 
 Villa/townhouse market's absorption rate increased by 36% q-o-q while the absorption rate for land plot increased by 25% q-o-q.
Hospitality
 1 new 3-star hotel (85 rooms) entered the market, 1 3-star hotel reopened (86 rooms) while 1 3-star hotel (61 rooms) was closed for renovation during Q2 2014, increasing the stock by 1% q-o-q and 8% y-o-y.
 Average occupancy rate stood at 61%, a decline of 13% q-o-q and 1% y-o-y, while average room rate decreased by 9% q-o-q and 4% y-o-y to US$81 per room per night. The decline in average room rate is seasonal and reflects the tourism low season.
 2 new serviced apartments (32 units) and 1 existing project (9 units) entered the market in Q2 2014. Average occupancy rate remained stable at 82%, an increase of 3% y-o-y.
Source: General Statistics Office of Vietnam, Savills, CBRE, various publications
Exchange rate - 30 June 2014: US$1:VND21,315
LAI VOON HON
President / Chief Executive Officer
Ireka Development Management Sdn. Bhd.
Development Manager
26 August 2014
PROPERTY PORTFOLIO AS AT 30 JUNE 2014
Project
Type
Effective Ownership
Approx. Gross
Floor Area
(sq m)
Approx. Land Area
(sq m) 
Actual/Scheduled
completion
Completed projects
Tiffani by i-ZEN
Kuala Lumpur, Malaysia
Luxury condominiums
100.0%
81,000
15,000
Completed August 2009
1 Mont' Kiara by i-ZEN 
Kuala Lumpur, Malaysia
Office suites, office tower and retail mall
100.0%
96,000
14,000
Completed in November 2010
SENI Mont' Kiara 
Kuala Lumpur, Malaysia
Luxury condominiums
100.0%
225,000
36,000
Phase 1: Completed April 2011
Phase 2: Completed October 2011
Sandakan Harbour Square
Sandakan, Sabah, Malaysia
Retail lots, hotel and retail mall
100.0%
126,000
48,000
Retail lots Completed 2009
Retail mall: Completed March 2012
Hotel: Completed May 2012
Kuala Lumpur Sentral Office Towers & Hotel
Kuala Lumpur, Malaysia
Office towers and a business hotel
40.0%
107,000
8,000
Office Towers: Completed December 2012
Hotel: January 2013
AloftKuala Lumpur Sentral hotel
Kuala Lumpur, Malaysia
Business-class hotel (a Starwood Hotel)
100.0%
28,000
5,000
Completed in January 2013
Phase 1: City International Hospital, International Hi-tech Healthcare Park, 
Ho Chi Minh City, Vietnam
Private general hospital
67.2%
48,000
25,000
Completed in March 2013
Projects under development
The RuMa Hotel and Residences Kuala Lumpur, Malaysia
Luxury residential tower and boutique hotel
70.0%
40,000
4,000
First quarter of 2017
Listed equity investment
Listed equity investment in Nam Long Investment Corporation, 
an established developer in Ho Chi Minh City, Vietnam
Listed equity investment 
12.9%
n/a
n/a
n/a
Pipeline projects
Waterside Estates,
Ho Chi Minh City, Vietnam
Villas and high-rise apartments
55.0%
94,000
57,000
n/a
Other developments in International Hi-tech Healthcare Park, 
Ho Chi Minh City, Vietnam
Commercial and residential development with healthcare theme
67.2%
972,000
351,000
n/a
Kota Kinabalu seafront resort & residences
Kota Kinabalu, Sabah, Malaysia
(i) Boutique resort hotel resort villas
(ii) Resort homes
100.0%
80.0%
n/a
327,000
n/a
*Shareholding as at 31 December 2013
n/a: Not available / not applicable
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS ENDED 30 JUNE 2014






Unaudited
Unaudited
Audited


Six months
Six months
Year


ended 
30 June
ended 
30 June
ended 
31 December


2014
2013
2013
Continuing activities
Notes
US$'000
US$'000
US$'000
Revenue

31,494
10,222
 29,269
Cost of sales
5
(24,953)
(8,379)
 (22,768)
Gross profit

6,541
1,843
 6,501
Other income

13,349
4,573
 16,122
Administrative expenses

(366)
(872)
 (1,622)
Foreign exchange loss
6
(9)
(443)
 (1,105)
Management fees

(1,653)
(1,821)
 (3,762)
Marketing expenses

(591)
(1,328)
 (1,953)
Other operating expenses

(16,265)
(8,978)
 (23,635)
Operating profit/(loss)

1,006
(7,026)
 (9,454)
Finance income

227
208
 424
Finance costs

(5,760)
(3,884)
 (9,766)
Net finance costs

(5,533)
(3,676)
 (9,342)
Share of loss of associate, net of tax

(229)
(3,029)
 -
Net loss before taxation

(4,756)
(13,731)
 (18,796)
Taxation
7
(2,906)
(705)
 (2,854)
Loss for the period/year

(7,662)
(14,436)
 (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

977
 (3,498)
 (6,220)
Increase in fair value of available-for-sale investments

26
4,361 
 
 126
Total other comprehensive 




 income/(expense) for the




 period/year

1,003
 863
 (6,094)
Total comprehensive 




 loss for the 



 period/year
(6,659)
 (13,573)
 (27,744)
Loss attributable to:
Equity holders of the parent
Non-controlling interests
(5,198)
(2,464)
 (13,776)
(660)
 
 (19,006)
 (2,644)
Total
(7,662) 
 (14,436)
 (21,650)
Total comprehensive 



 loss attributable to: 




Equity holders of the parent

(3,939) 
 (12,661)
 (24,971)
Non-controlling interests

(2,720) 
 (912)
 (2,773)
Total

(6,659)
 (13,573)
 (27,744)
Loss per share 
Basic and diluted (US cents) 
8
(2.45) 
 (6.50)
 (8.96)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014

Notes
Unaudited
Unaudited
Audited
As at 
30 June
As at 
30 June
As at 
31 December
2014
2013
2013
US$'000
US$'000
US$'000
Non-current assets




Property, plant and equipment

1,091
1,126
1,146
Investment in an associate

2,023
-
2,252
Available-for-sale investments

12,723
16,932
12,697
Intangible assets

13,208
13,738
13,525
Deferred tax assets

682
-
595
Total non-current assets

29,727
31,796
30,215
Current assets




Inventories

416,597
426,284
428,609
Held-for-trading financial instrument

388
383
375
Trade and other receivables

14,651
10,747
9,912
Amount due from an associate

943
-
853
Current tax assets

127
251
233
Cash and cash equivalents

26,911
19,745
24,585
Total current assets

459,617
457,410
464,567
TOTAL ASSETS

489,344
489,206
494,782
Equity




Share capital

10,601
10,626
10,601
Share premium

218,926
218,926
218,926
Capital redemption reserve

1,899
1,874
1,899
Translation reserve
(1,872)
(260)
 (3,105)
Fair value reserve

152
4,361
126
Accumulated losses
(75,074)
(64,604)
(69,876)
Shareholders' equity

154,632
170,923
158,571
Non-controlling interests

9,271
12,321
11,429
Total equity

163,903
183,244
170,000
Non-current liabilities




Amount due to non-controlling interests

1,085
-
1,440
Loans and borrowings
9
68,972
51,094
49,309
Medium term notes
10
143,333
159,312
140,877
Total non-current liabilities

213,390
210,406
191,626
Current liabilities




Trade and other payables

79,474
56,527
83,640
Amount due to an associate

-
557
-
Amount due to non-controlling interests

9,587
10,177
9,008
Loans and borrowings
9
6,934
26,677
25,466
Medium term notes
10
14,013
-
13,739
Current tax liabilities

2,043
1,618
1,303
Total current liabilities

112,051
95,556
133,156
Total liabilities

325,441
305,962
324,782
TOTAL EQUITY AND LIABILITIES

489,344
 489,206
 494,782

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2014 - UNAUDITED
Share Capital
US$'000
Share Premium
US$'000
Capital Redemption Reserve
US$'000
Translation Reserve US$'000
Fair Value Reserve
US$'000
Accumulated Losses 
US$'000
Total Equity Attributable to Equity Holders of the Parent
US$'000
Non- Controlling Interests
US$'000
Total Equity
US$'000
At 1 January 2014
10,601 
218,926
1,899
(3,105)
126
(69,876)
158,571
11,429
170,000
Non-controlling interests contribution
-
-
-
-
-
-
-
562
562
Loss for the period
-
-
-
-
-
(5,198)
(5,198)
(2,464)
(7,662)
Total other comprehensive income
-
-
-
1,233
26
-
1,259
(256)
1,003
Total comprehensive loss
-
-
-
1,233
26
(5,198)
(3,939)
(2,720)
(6,659)
Shareholders' equity at 30 June 2014
10,601
218,926
1,899
(1,872)
152
(75,074)
154,632
9,271
163,903
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2013 - UNAUDITED
Share Capital
US$'000
Share Premium
US$'000
Capital Redemption Reserve
US$'000
Translation Reserve US$'000
Fair Value Reserve
US$'000
Accumulated Losses 
US$'000
Total Equity Attributable to Equity Holders of the Parent
US$'000
Non- Controlling Interests
US$'000
Total Equity
US$'000
At 1 January 2013
10,626 
218,926
1,874
2,986
-
(50,828)
183,584
13,063
196,647
Non-controlling interests contribution
-
-
-
-
-
-
-
170
170
Loss for the period
-
-
-
-
-
(13,776)
(13,776)
(660)
(14,436)
Total other comprehensive income
-
-
-
(3,246)
4,361
-
1,115
(252)
863
Total comprehensive loss
-
-
-
(3,246)
4,361
(13,776)
(12,661)
(912)
(13,573)
Shareholders' equity at 30 June 2013
10,626
218,926
1,874
(260)
4,361
(64,604)
170,923
12,321
183,244


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013 - AUDITED
Share Capital
US$'000
Share Premium
US$'000
Capital Redemption Reserve
US$'000
Translation Reserve
US$'000
Fair Value Reserve US$'000
Accumulated Losses
US$'000
Total Equity Attributable to Equity Holders of the Parent
US$'000
Non- Controlling Interests
US$'000
Total Equity
US$'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 
-
-
-
-
-
(42)
(42)
42
-
Non-controlling interests contribution
-
-
-
-
-
-
-
1,097
1,097
Loss of the year
-
-
-
-
-
(19,006)
(19,006)
(2,644)
(21,650)
Total other comprehensive expense
-
-
-
(6,091)
126
-
(5,965)
(129)
(6,094)
Total comprehensive loss 
-
-
-
(6,091)
126
(19,006)
(24,971)
(2,773)
(27,744)
Cancellation of shares 
(25)
-
25
-
-
-
-
-
-
Shareholders' equity at 31 December 2013 
10,601
218,926
1,899
(3,105)
126
(69,876)
158,571
11,429
170,000
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED 30 JUNE 2014

Unaudited
Unaudited
Audited

Six months
Six months
Year 

ended 
30 June
ended 
30 June
ended 
31 December

2014
2013
2013

US$'000
US$'000
US$'000
Cash Flows from Operating Activities



Net loss before taxation
(4,756)
(13,731)
(18,796)
Finance income
(227)
(208)
(424)
Finance costs
5,760
3,884
 9,766
Share of losses of associates, net of tax
229
3,029
 - 
Unrealised foreign exchange loss
1
378
1,065
Impairment of goodwill
317
107
 320
Depreciation of property, plant and equipment
59
61
 114
Property, plant and equipment written off
-
-
 7
Fair value (gain)/ loss on held-for-trading financial instrument
(1)
5
 5
Operating profit/ (loss) before working capital changes
1,382
(6,475)
 (7,943)
Changes in working capital:



Decrease/ (increase) in inventories
16,711
(85,533)
 (96,690)
(Increase)/ decrease in receivables
(4,597)
1,978
 2,063
(Decrease)/ increase in payables
(5,497)
2,498
 28,884
Cash generated from/ (used in) operations
7,999
(87,532)
(73,686)
Interest paid
(5,760)
(5,141)
(9,766)
Tax paid
(2,197)
(1,124)
(4,029)
Net cash generated from/ (used in) operating activities
42
(93,797)
 
(87,481)




Cash Flows From Investing Activities



Advances from non-controlling interests
486
370
1,081
Issuance of ordinary shares of subsidiaries to non-
 controlling interests 
562
170
1,097
(Advances to)/ repayment from associate
(88)
239
(630)
Disposal of held-for-trading financial instrument
-
982
899
Purchase of property, plant and equipment 
(13)
(50)
(154)
Finance income received
227
208
424
Net cash generated from investing activities
1,174
1,919
 2,717



Consolidated Statement of Cash Flows (CONT'D)
SIX MONTHS ENDED 30 JUNE 2014

Unaudited
Six months
ended 
30 June
Unaudited
Six months
ended 
30 June
Audited
Year
ended 
31 December

2014
2013
2013

US$'000
US$'000
US$'000
Cash Flows From Financing Activities



Repayment of loans and borrowings and medium term notes
(6,212)
(5,111)
 
 (17,341)
Drawdown of loans and borrowings and medium term notes
7,075
101,243
 
 110,860
(Increase)/ decrease in pledged deposits placed in licensed banks 
(30)
-
77
Net cash generated from financing activities
833
96,132
 93,596
Net changes in cash and cash equivalents during the period/year
2,049
4,254
 8,832
Effect of changes in exchange rates
247
(845)
 (248)
Cash and cash equivalents at the beginning of the period/year 
14,166
5,582
5,582
Cash and cash equivalents at the end of the period/year
16,462
8,991
 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 
8,125
6,345
 11,498
Short term bank deposits
18,786
13,400
13,087

26,911
19,745
24,585
Less: Deposits pledged
(10,449)
(10,754)
(10,419)
Cash and cash equivalents
16,462
8,991
14,166
 
During the financial period/year, the Group acquired property, plant and equipment with an aggregate cost of US$13,000 (30 June 2013: US$91,000; 31 December 2013: US$194,000) of which US$Nil (30 June 2013: US$41,005; 31 December 2013: US$40,000) was acquired by means of finance leases. 
During the financial period/year, US$562,000 (30 June 2013: US$170,000; 31 December 2013: US$1,097,000) of ordinary shares of subsidiaries were issued to non-controlling shareholders, of which US$562,000 (30 June 2013: US$170,000; 31 December 2013: US$1,097,000) was satisfied via cash consideration. 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2014
1 General Information
The principal activities of the Group are acquisition, development and redevelopment of upscale residential, commercial, hospitality and healthcare projects in the major cities of Malaysia and Vietnam. The Group typically invests in development projects at the pre-construction stage and may also selectively invests in projects in construction and newly completed projects with potential capital appreciation.
 
2 Summary of Significant Accounting Policies
  2.1 Basis of Preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2014 has been prepared in accordance with IAS 34, Interim Financial Reporting. 
The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2013 which has been prepared in accordance with IFRS. 
Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual earnings.
The interim results have not been audited nor reviewed and do not constitute statutory 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 accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2013 as described in those annual financial statements.
The interim report and financial statements were approved by the Board of Directors on 26 August 2014.
 
3 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. 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 and 1 Mont' Kiara 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; and
(vi) Hoa Lam-Shangri-La Healthcare Group - owns and develops City International Hospital and Hi-Tech 
 Healthcare Park.
Other non-reportable segments comprise the Group's new 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 currently only in Malaysia since development activities in Vietnam are still at early stages of development and operation.
Operating Segments - ended 30 June 2014 - Unaudited

Investment Holding Companies
Ireka Land
Sdn. Bhd.
ICSD Ventures Sdn. Bhd.
Amatir Resources Sdn. Bhd.
Iringan Flora Sdn. Bhd.
Hoa Lam-Shangri-La Healthcare Group
Total

US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Segment (loss)/profit before taxation
(694)
415
(2,929)
4,939
(245)
(5,418)
(3,932)
Included in the measure of segment (loss)/profit are:






Revenue
-
4,069
-
27,425
-
-
31,494
Cost of acquisition written down
-
(110)
-
(5,844)
-
-
(5,954)
Goodwill impairment
-
-
-
(317)
-
-
(317)
Marketing expenses
-
-
-
(226)
-
-
(226)
Depreciation of 
 property, plant
 and equipment
 -
-
(5)
-
(4)
(48)
(57)
Finance costs
-
-
(2,130)
-
(2,469)
(1,161)
(5,760)
Finance income
2
7
152
34
12
17
224








Segment assets
16,911
4,687
107,704
67,744
81,327
117,201
395,574
Included in the measure of segment assets are:







Addition to non-current assets other than financial instruments and deferred tax assets
-
-
12
-
-
-
12
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Statement of comprehensive income
US$'000
Total loss for reportable segments
 (3,932)
Other non-reportable segments
(825)
Depreciation
(2)
Finance income
 3
Consolidated loss before taxation
(4,756)
 
Operating Segments - ended 30 June 2013 - Unaudited

Investment Holding Companies
Ireka Land
Sdn. Bhd.
ICSD Ventures Sdn. Bhd.
Amatir Resources Sdn. Bhd.
Iringan Flora 
Sdn. Bhd.
Hoa Lam-Shangri-La Healthcare Group
Total

US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Segment (loss)/profit before taxation
(4,731)
(121)
(2,954)
93
(3,000)
(1,569)
(12,282)
Included in the measure of segment (loss)/profit are:






Revenue
-
436
401
9,385
-
-
10,222
Cost of acquisition written down
-
(8)
(68)
(1,976)
-
-
(2,052)
Goodwill impairment
-
-
-
(107)
-
-
(107)
Marketing expenses
-
-
-
(437)
-
-
(437)
Depreciation of 
 property, plant
 and equipment
 -
 (2)
(5)
(1)
(3)
(49)
(60)
Finance costs
-
-
(2,240)
(201)
(1,310)
(133)
(3,884)
Finance income
2
2
150
11
26
14
205








Segment assets
17,254
10,364
109,177
92,062
81,692
94,167
404,716
Included in the measure of segment assets are:






Addition to non-current assets other than financial instruments and deferred tax assets
-
-
6
-
62
23
91
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items
Statement of comprehensive income
US$'000
Total loss for reportable segments
 (12,282)
Other non-reportable segments
(1,451)
Depreciation
(1)
Finance income
 3
Consolidated loss before taxation
(13,731)
Operating Segments - ended 31 December 2013 - Audited

Investment Holding Companies 
Ireka Land Sdn. Bhd.
ICSD Ventures Sdn. Bhd.
Amatir Resources Sdn. Bhd.
Iringan Flora Sdn. Bhd.
Hoa Lam-Shangri-La Healthcare Group
Total

US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Segment (loss)/ profit before 
 taxation
(2,217)
(323)
(5,927)
4,169
(4,382)
(7,559)
(16,239)
Included in the measure of segment (loss)/profit are:







Revenue
-
1,278
433
27,558
-
-
29,269
Cost of acquisition
 written down
-
(33)
(68)
(5,918)
-
-
(6,019)
Goodwill
 impairment 
-
-
-
(320)
-
-
(320)
Marketing expenses
-
-
-
(711)
-
-
(711)
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
27
411








Segment assets
18,273
9,703
105,954
81,743
79,231
110,545
405,449
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
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items


Statement of comprehensive income
US$'000
Total loss for reportable segments
(16,239)
Other non-reportable segments
(2,567)
Depreciation
(3)
Finance income
13
Consolidated loss before taxation
(18,796)
30 June 2014 - Unaudited
US$'000
Revenue
Depreciation
Finance costs
Finance income
Segment assets
Addition to non-current assets
Total reportable segment
31,494
(57)
(5,760)
224
395,574
12
Other non-reportable segments
-
(2)
-
3
93,770*
1
Consolidated total
31,494
(59)
(5,760)
227
489,344
13
 
30 June 2013 - Unaudited
US$'000
Revenue
Depreciation
Finance costs
Finance income
Segment assets
Addition to non-current assets
Total reportable segment
10,222
(60)
(3,884)
205
404,716
91
Other non-reportable segments
-
(1)
-
3
84,490*
-
Consolidated total
10,222
(61)
(3,884)
208
489,206
91
 
31 December 2013 - Audited
US$'000
Revenue
Depreciation
Finance costs
Finance income
Segment assets
Addition to non-current assets
Total reportable segment
29,269
(111)
(9,766)
411
405,449
194
Other non-reportable segments
-
(3)
-
13
89,333*
-
Consolidated total
29,269
(114)
(9,766)
424
494,782
194
 
* Included in segment asset for other non-reportable segments is US$53,675,000 (30 June 2013: US$42,449,000; 31 December 2013: S$49,696,000) in relation to assets of Urban DNA Sdn. Bhd..
Geographical Information - ended 30 June 2014 - Unaudited

Malaysia
Vietnam
Consolidated

US$'000
US$'000
US$'000
Revenue 
31,494
-
31,494
Non-current assets
5,288
24,439
29,727
For the financial period ended 30 June 2014, no single customer exceeded 10% of the Group's total revenue. 
Geographical Information - ended 30 June 2013 - Unaudited

Malaysia
Vietnam
Consolidated

US$'000
US$'000
US$'000
Revenue 
10,222
-
10,222
Non-current assets
3,138
28,658
31,796
For the financial period ended 30 June 2013, no single customer exceeded 10% of the Group's total revenue. 
Geographical Information - ended 31 December 2013 - Audited

Malaysia
Vietnam
Consolidated

US$'000
US$'000
US$'000
Revenue 
 29,269
-
29,269
Non-current assets
5,741
24,474
30,215
For the financial year ended 31 December 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

Unaudited
Unaudited
Audited

Six months
Six months
Year
ended 
30 June
ended 
30 June
ended 
31 December
2014
2013
2013
US$'000
US$'000
US$'000
Direct costs attributable to property development
24,953
8,379
22,768
6 Foreign exchange loss 

Unaudited
Unaudited
Audited

Six months
Six months
Year
ended 
30 June
ended 
30 June
ended 
31 December
2014
2013
2013
US$'000
US$'000
US$'000
Foreign exchange loss comprises:



Realised foreign exchange loss
(8)
(65)
 (40)
Unrealised foreign exchange loss
(1)
(378)
 (1,065)
(9)
(443) 
 (1,105)
7 Taxation 

Unaudited
Unaudited
Audited

Six months
Six months
Year

ended 
30 June
ended 
30 June
 ended 
31 December

2014
2013
2013

US$'000
US$'000
US$'000
Current tax expense
2,980
705
3,470
Deferred tax credit
(74)
-
(616)
Total tax expense for the period/year
2,906
705
2,854
The numerical reconciliation between the income tax expense and the product of accounting results multiplied by the applicable tax rate is computed as follows:

Unaudited
Unaudited
Audited

Six months
Six months
Year

ended 
30 June
ended 
30 June
Ended 
31 December

2014
2013
2013

US$'000
US$'000
US$'000
Net loss before taxation
(4,756)
(13,731)
(18,796)
Income tax at a rate of 25%*
(1,189)
(3,433)
(4,699)




Add :



Tax effect of expenses not deductible in determining taxable profit
1,596
2,437
4,989
Movement of unrecognised deferred tax benefits
1,673
1,773
1,833
Tax effect of different tax rates in subsidiaries**
1,027
108
960
Less :



Tax effect of income not taxable in determining taxable profit
(201)
(183)
(377)
Under provision
-
3
148
Total tax expense for the period/year
2,906
705
2,854
*  The applicable corporate tax rate in Malaysia and Vietnam is 25%.
**  The applicable corporate tax rate in Singapore is 17%. A subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd Liability Co is granted a preferential corporate tax rate of 10% for its profit/(loss) arising from hospital income. The preferential income tax rate is given by the government of Vietnam due to the subsidiary's involvement in the healthcare and education industries.
 
The Company is treated as a tax resident of Jersey for the purpose of tax laws and is subject to a tax rate of 0%. 
A Goods and Services Tax was introduced in Jersey in May 2008. TheCompany has been registered as an International Services Entity so that 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.
8 LOSS Per Share
Basic and diluted loss per ordinary share
The calculation of basic and diluted loss per ordinary share for the period/year ended was based on the loss attributable to equity holders of the parent and a weighted average number of ordinary shares outstanding, calculated as below:

Unaudited
Unaudited
Audited

 Six months
Six months
Year

ended 
30 June
ended 
30 June
ended 
31 December

2014
2013
2013

US$'000
US$'000
US$'000
Loss attributable to equity holders of the parent 
(5,198)
(13,776)
(19,006)
Weighted average number of shares
212,025
212,025
212,025
Loss per share



Basic and diluted (US cents) 
(2.45)
(6.50)
(8.96)
9 Loans and Borrowings
Unaudited
Unaudited
Audited


As at 
30 June
As at 
30 June
As at 
31 December
2014
2013
2013
Group
US$'000
US$'000
US$'000





Non-current




Bank loans

68,936
51,040
49,267
Finance lease liabilities

36
54
42


68,972
51,094
49,309
Current




Bank loans

6,920
26,666
25,452
Finance lease liabilities

14
11
14


6,934
26,677
25,466


75,906
77,771
74,775
The effective interest rates on the bank loans and hire purchase arrangement for the period ranged from 5.25% to 14.90% (30 June 2013: 5.20% to 23.00%; 31 December 2013: 5.25% to 17.70%) per annum and 2.50% (30 June 2013: 2.50%; 31 December 2013: 2.50% to 3.50%) per annum respectively. 
Borrowings are denominated in Ringgit Malaysia, United States Dollars and Vietnam Dong. 
Bank loans are repayable by monthly, quarterly or semi-annually instalments. 
Bank loans are secured by land held for property development, work-in-progress, operating assets of the Group, pledged deposits and some by the corporate guarantee of the Company.
 
Finance lease liabilities are payable as follows:
Group - Unaudited
Future minimum lease payment 
30 June 
2014 US$'000
Interest 
30 June
2014 US$'000
Present value of minimum lease payment 30 June
2014 
US$'000
Within one year
16
2
14
Between one and five years
42
6
36

58
8
50
Group - Unaudited
Future minimum lease payment 
30 June 
2013 US$'000
Interest 
30 June
2013 US$'000
Present value of minimum lease payment 30 June
2013 
US$'000
Within one year
13
2
11
Between one and five years
62
8
54

75
10
65
Group - Audited
Future minimum lease payment 
31 December 
2013 US$'000
Interest 
31 December
2013 
US$'000
Present value of minimum lease payment 31 December
2013 
US$'000
Within one year
16
2
14
Between one and five years
49
7
42

65
9
56
10 Medium Term Notes
Unaudited
Unaudited
Audited
As at 
As at 
As at 
30 June
30 June
31 December
2014
2013
2013
US$'000
US$'000
US$'000
Outstanding medium term notes
160,060
162,630
156,924
Net transaction costs
(2,714)
(3,318)
(2,308)
Less:
Repayment due within twelve months
(14,013)
-
(13,739)
Repayment due after twelve months
143,333
159,312
140,877
The medium term notes ("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$76.3 million were drawn down in 2011 for Sandakan Harbour Square. US$4.7 million were drawn down in 2012 for Aloft Kuala Lumpur Sentral Hotel and the remaining US$79.1 million in 2013. The weighted average interest rate of the MTN was 5.51% per annum at the statement of the financial position date. The effective interest rates of the medium term notes and their outstanding amounts are as follows:

Maturity Dates
Interest rate % per annum
US$'000
Series 1 Tranche FG 001
8 December 2014
5.38
7,785
Series 1 Tranche BG 001
8 December 2014
5.33
6,228
Series 1 Tranche FG 002
8 December 2015
5.46
14,013
Series 1 Tranche BG 002
8 December 2015
5.41
9,342
Series 2 Tranche FG 001
8 December 2015
5.46
21,798
Series 2 Tranche BG 001
8 December 2015
5.41
17,127
Series 3 Tranche FG001
1 October 2015
5.40
3,114
Series 3 Tranche BG001
1 October 2015
5.35
1,557
Series 3 Tranche FG002
29 January 2016
5.50
4,671
Series 3 Tranche BG002
29 January 2016
5.45
3,114
Series 3 Tranche FG003
8 April 2016
5.65
40,171
Series 3 Tranche BG003
8 April 2016
5.58
31,140
160,060
 
The medium term notes are secured by way of:
(i) bank guarantee from two financial institutions in respect of the BG Tranches;
(ii) financial guarantee insurance policy from Danajamin Nasional Berhad in respect to the FG Tranches;
(iii) a first fixed and floating charge over the present and future assets and properties of Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. by way of a debenture;
(iv) a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.'s assets and land;
(v) assignment of all Iringan Flora Sdn. Bhd.'s present and future rights, title, interest and benefits in and under the Sales and Purchase Agreement to purchase the Aloft Kuala Lumpur Sentral Hotel from Excellent Bonanza Sdn. Bhd.;
(vi) first fixed land charge over the Aloft Kuala Lumpur Sentral Hotel and the Aloft Kuala Lumpur Sentral Hotel's land (to be executed upon construction completion);
(vii) a corporate guarantee by Aseana Properties Limited;
(viii) letter of undertaking from Aseana Properties Limited to provide financial and other forms of support to ICSD Ventures Sdn. Bhd. to finance any cost overruns associated with the development of the Sandakan Harbour Square;
(ix) assignment of all its present and future rights, interest and benefits under the ICSD Ventures Sdn. Bhd.'s and Iringan Flora Sdn. Bhd.'s Put Option Agreements and the proceeds from the Harbour Mall Sandakan, Four Points by Sheraton Sandakan Hotel and Aloft Kuala Lumpur Sentral Hotel;
(x) assignment over the disbursement account, revenue account, operating account, sales proceed account, debt service reserve account and sinking fund account of Silver Sparrow Berhad; revenue account of ICSD Ventures Sdn. Bhd. and escrow account of Ireka Land Sdn. Bhd.; 
(xi) assignment of all ICSD Ventures Sdn. Bhd.'s and Iringan Flora Sdn. Bhd.'s present and future rights, title, interest and benefits in and under the insurance policies; and
(xii) a first legal charge over all the shares of the Silver Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. and any dividends, distributions and entitlements.


11 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. 
Unaudited
Unaudited
Audited
Six months
Six months
Year
ended 
30 June
ended 
30 June
ended 
31 December
2014
2013
2013
US$'000
US$'000
US$'000
 Accounting and financial reporting services fee charged by an ICB subsidiary
27
27
53
Construction progress claims charged by an ICB subsidiary
9,036
9,341
11,035
Management fees charged by an ICB subsidiary
1,653
1,821
3,762
Marketing commission charged by an ICB subsidiary
825
121
330
Project management fee for interior fit out works charged by an ICB subsidiary
-
62
90
 Project staff costs reimbursed to an ICB subsidiary
397
309
682
Remuneration of key management personnel 
- Salaries 
21
20
40
Sales and administration fee charged by an ICB subsidiary
-
51
50
Secretarial and administrative services fee charged by an ICB subsidiary
27
27
53
Transactions between the Group with other significant related parties are as follows: 
Unaudited
Unaudited
Audited
Six months
Six months
Year
ended 
30 June
ended 
30 June
ended 
31 December
2014
2013
2013
US$'000
US$'000
US$'000
Non-controlling interests
Advances - non-interest bearing
486
370
1,081
Associate - Excellent Bonanza Sdn. Bhd. 



Advances - non-interest bearing
(88)
239
630
Settlement of purchase consideration of Aloft Kuala Lumpur Sentral Hotel
-
-
63,867
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 30 June 2014, 30 June 2013 and 31 December 2013 are as follows:

Unaudited As at 
30 June 2014
US$'000
Unaudited As at 
30 June 2013
US$'000
Audited 
As at 
31 December 2013
US$'000
Amount due to an ICB subsidiary for accounting and financial reporting services fee
27
27
53
Amount due to an ICB subsidiary for construction progress claims charged net of LAD's recoverable of US$4,359,600 (30 June 2013:US$4,429,600; 31 December 2013: US$6,046,000)
523
3,701
965
Amount due to an ICB subsidiary for management fees 
280
3,097
2,343
Amount due to an ICB subsidiary for project management fee for interior fit out works
-
10
-
Amount due to ICB subsidiary for reimbursement of project staff costs 
55
496
488
Amount due to an ICB subsidiary for marketing commissions
725
54
151
Amount due to an ICB subsidiary for sale and administration fee
-
50
9
Amount due to an ICB subsidiary for secretarial and administrative services fee
27
53
80
Unaudited
Unaudited
Audited
As at 
30 June
As at 
30 June
As at 
31 December
2014
2013
2013
US$'000
US$'000
US$'000
Non-controlling interests
Advances - non-interest bearing
(10,672)
(10,177)
(10,448)
Associate - Excellent Bonanza Sdn. Bhd. 
Advances - non-interest bearing
943
(557)
853
12 Dividends
The Company has not paid or declared any dividends during the financial period ended 30 June 2014.
13 Events after the Statement of Financial Position Date
 
There were no material adjusting events after the statement of financial position date ended 30 June 2014 that have not been reflected in the interim consolidated financial statements.
14 Interim Statement
Copies of this interim statement are available on the Company's website www.aseanaproperties.com or from the Company's registered office at 12 Castle Street, St. Helier, Jersey, JE2 3RT, Channel Islands.
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.
 Economic
 Strategic
 Regulatory
 Law and regulations
 Tax regimes
 Management and control
 Operational
 Financial
 Going concern
For greater detail, please refer to page 18 of the Company's Annual Report for 2013, a copy of which is available on the Company's website www.aseanaproperties.com.
RESPONSIBILITY STATEMENT
The Directors of the Company confirm that to the best of their knowledge that:
a)  The condensed consolidated financial statements have been prepared in accordance with IAS 34 (Interim Financial Reporting);
b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c) The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).
On behalf of the Board
Mohammed Azlan Hashim Christopher Henry Lovell
Director Director
26 August 2014

This information is provided by RNS
The company news service from the London Stock Exchange
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