Thiet ke Bao cao thuong nien -Vina 2010 (vnl)

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  • 1. VinaLand LimitedAnnual Report 2010
  • 2. 2 VNL Annual Report 2010 Contents VinaLand Limited (VNL) Annual Report 2010 Section 1 Introduction VinaCapital introduction 03 Financial highlights 04 Performance highlights 05 Chairman’s statement 06 Section 2 Manager’s report Management team 08 Real estate investment environment 11 Portfolio performance 16 Featured investments 24 Section 3 Financial statements and reports Board of Directors 28 Report of the Board of Directors 30 Governance report 32 Independent Auditors’ report 36 Consolidated financial statements and notes 38 Section 4 Annex Investing policy 89 Historical financial information 93 VNL overview and details 95
  • 3. VNL Annual Report 2010 3Taking Vietnam to VinaCapital is an asset management group inspired by the energy, creativity and entrepreneurial spirit of the people the world of Vietnam. Formed in 2003, VinaCapital manages USD1.8 billion across all asset classes - listed and private equities, fixed income, infrastructure and real estate. VinaCapital’s growth is driven by the most experienced asset and fund management teams in Vietnam. VNL USD682 million net assets under management. Vietnam’s largest real estate investment and development fund. VNL has the deepest residential sector pipeline of any foreign real estate fund or developer in Vietnam, alongside the top portfolio of operating hotels and landmark mixed-use projects across all major cities.
  • 4. 4 VNL Annual Report 2010 Financial highlights Revenue (USD’000) FY2010 17,277 FY2009 28,014 change % -38% USD1.36 Gross profit 7,042 12,303 -43% NAV per share Operating profit 102,152 (217,082) 147% Net profits 75,992 (201,623) 138% Earnings per share (USD) 0.10 (0.26) 139% NAV per share (USD) 1.36 1.32 3.2% 40.2% NAV gain since inception VNL’s stable FY2010 financial The top performing Vietnam fund over the past three years according to LCF Edmond de performance was due to strong Rothschild Securities. results in the launch and sale of residential units, and success in obtaining project financing.
  • 5. VNL Annual Report 2010 5Performance highlights FY2010 FY2009 VNL’s primary driverResidential projects with active sales 7 4 of investment returnsNew units offered to market 663 413 during FY2010 was inTotal residential sales commitmentsand reservations (USDm) 115.7m 65.7m the sales of residential villas and apartmentsDanang Beach Resort (Ocean Villas and Cham Condominiums), World to end-users.Trade Center Danang (The Azura), The Garland and Dai Phuoc Lotus allhad sales launches during FY2010.VNL’s USD115.7 million in residential unit sales commitments andreservations during FY2010 represents early returns on the largestpipeline of residential development projects in Vietnam.
  • 6. 6 VNL Annual Report 2010 Chairman’s statement “Investors clearly remain Dear Shareholders, We are pleased to present the annual report concerned about macro of VinaLand Limited (AIM: VNL) for the year ended 30 June 2010. issues affecting Vietnam, and Vietnam’s real estate market during the they want greater clarity on financial year saw strong performance in the low and mid-range residential sector, and a performance and the ability much-improved hospitality sector, again with the best performance seen in the mid-range of of the investment manager to the market. realise proceeds and return The pace of foreign investment into Vietnam’s property sector was slower than the previous value to shareholders.” year, with Vietnam appearing to miss out on the increased investment into emerging markets around the world. Despite Vietnam’s rapid economic growth, reaching 6.5 percent year-on-year over the first half of 2010, foreign exchange and inflation concerns kept many investors on the sidelines. In the real estate market, oversupply in the office sector persisted, and retail investment remained slow as large foreign retailers continued a cautious approach to entering a market where site access and branch expansion remain difficult.
  • 7. VNL Annual Report 2010 7VNL’s strategy, however, saw the fund The VNL Board was further strengthened This distribution policy, in addition to othersuccessfully avoid underperforming sectors. at the end of the year by the addition of measures announced at the time, aims toVNL at the end of June 2010 had an NAV of independent director Nicholas Allen, who reduce the share price discount while stillUSD682 million, or USD1.36 per share, an brings valuable accounting expertise to the leaving VNL with the ability to invest in newincrease of 3.2 percent from the end Board, built on his previous experience with projects. The Board believes this policy is in theof June 2009, when VNL had an NAV of PriceWaterhouseCoopers and his participation best interests of the shareholders - particularlyUSD660 million, or USD1.32 per share. in the audit committees of listed companies as it will offer the investment manager theThe four cent NAV per share gain in FY2010 CLP Holdings Ltd, Lenovo Group Ltd, and Hysan opportunity to continue to demonstrateis a positive turn-around from the 29 cent Development Company Ltd. the value of the fund’s holdings, as moreNAV per share loss the previous year. projects move to the development and sales/ Despite the wide-ranging progress VNL divestment phases. On 10 December 2010,The reason for the turn-around is primarily recorded during FY2010, the company’s shareholders voted at an EGM to allow VNL todue to progress with the development and share price continued to trade at a significant buy back and tender for shares, a decision thatsales of several key residential holdings in discount to net asset value. Investors clearly allows the distribution policy to proceed.the portfolio. During the year, VNL brought remain concerned about macro issues affectinga total of 663 residential units to market, Vietnam, and they want greater clarity on The Board welcomes shareholder feedback,with residential sales commitments and performance and the ability of the investment and we hope to be in touch with many of youreservations totalling USD115.7 million. manager to realise proceeds and return value over the coming year. Thank you for your to shareholders. continued support.Another performance highlight is thesuccess in obtaining project financing, with Recognising this, the Board announced on 28a total of USD197 million in non-recourse October 2010 that VNL would distribute 50construction loans now secured. There were percent of cash generated from divestments,five construction starts during the year. In the after providing for future investmenthotel portfolio, the Sheraton Nha Trang Hotel commitments, as a semi-annual tender for Nicholas Brookeand Spa opened near the end of the year, and the repurchase of shares at NAV. The first Chairmanthe Movenpick Hotel Saigon re-opened after a distribution will occur following finalisation of VinaLand Limitedcomplete renovation in August 2010. the 30 December 2010 interim results. 17 December 2010
  • 8. 8 VNL Annual Report 2010 Management team 1 Don Lam Chief Executive Officer Don Lam founded VinaCapital in 2003 alongside partners Horst F. Geicke (Group chairman) and Chris Gradel. Don has over 15 years experience in Vietnam, working previously at PricewaterhouseCoopers, Deutsche Bank, and Coopers & Lybrand. Don is one of Vietnam’s most internationally recognised business leaders, having brought over USD1.5 billion in 5 4 foreign indirect investment into the 2 3 1 country since 2003. Don is an active member and regular speaker at the (Left to right: Mr. Brook Taylor; Mr. Anthony House; Mr. David Blackhall; Mr. David Henry; Mr. Don Lam) World Economic Forum and other leading international conferences and events. He has a degree in VNL’s management team have a combined 75 years of Commerce and Political Science from real estate investment and development experience. the University of Toronto, and is a member of the Institute of Chartered They manage Vietnam’s most comprehensive portfolio Accountants of Canada. He is a of direct real estate assets, including complex township Certified Public Accountant and holds a Securities Licence in Vietnam. and landmark mixed-use developments that span Vietnam’s major cities.
  • 9. VNL Annual Report 2010 92 Brook Taylor 3 David Henry 4 David Blackhall 5 Anthony House Chief Operating Officer Managing Director Deputy Managing Director Deputy Managing Director Real Estate Asset Management Development Brook Taylor has almost 20 years David Henry has over 30 years David Blackhall has 28 years Anthony House has over 23 of management experience, experience in real estate experience in the property, design years experience in both the including eight years in Vietnam development. Previously was and construction sectors, with real estate development and as a senior partner with major Director of Springfield Land Corp. the last 19 years in real estate construction management sectors, accounting firms. Previously, Brook Pty Ltd, a member of MUR Group, fund and asset management. of which the past three years was deputy managing partner of where he led development of He worked for 12 years with were spent working in Vietnam. Deloitte in Vietnam and head of the 2,860ha Greater Springfield Deutsche Bank - RREEF Funds Prior to joining VinaCapital, he the firm’s audit practice. He was township. He was executive board Management Ltd, one of worked for Watpac Limited, a also managing partner of Andersen member of MUR Group for past Australia’s largest property fund leading publicly listed Australian Vietnam and a senior audit partner 16 years. His professional experience managers. Prior to this he was company, specialising in property at KPMG. Brook has expertise includes ten years with Australia’s involved in engineering design and development and construction. spanning financial audits, internal Lend Lease Group, developing management of large-scale civil Mr. House’s development audits, corporate finance, taxation, projects in Sydney, Brisbane and and structural power generation experience encompasses a business planning and IT systems the Gold Coast. He worked on projects in Australia. David has range of retail, commercial risk management. He has a B.A. Riverside Centre Brisbane, the five years property industry office and high-rise residential in Commerce and Administration Anchorage Tweed Heads, State Bank experience in Hanoi and Ho Chi projects. Mr. House holds a Post from Victoria University of Martin Place Sydney, QE 2 Hospital Minh City, Vietnam. He holds a Graduate Diploma in Project Wellington, New Zealand, and is Brisbane, Holiday Inn Cairns, and Masters Degree in Design Science Management and a Bachelor a member of the New Zealand Times Square Brisbane. David from the University of Sydney, of Applied Science degree in Institute of Chartered Accountants. graduated with a first class honours Australia and is a Member of the Construction Management, both Bachelor of Building degree from the Royal Institution of Chartered from the Queensland University of University of New South Wales, and Surveyors (MRICS). Technology, Australia. holds an AMDP (GSD Harvard).
  • 10. 10 VNL Annual Report 2010
  • 11. VNL Annual Report 2010 11 Real estate investment environment EconomyVietnam’s Vietnam’s GDP grew by 5.3 percent in 2009, making it one of the world’s fastest growing economies during a year of financial crisis inurbanisation trend Europe and America. Resilient domestic consumption and effective government stimulus policies helped Vietnam weather the storm,and the rise of a while inflation fell to 6.5 percent from 23 percent in 2008.middle-class keen on The pace of economic growth in Vietnam remained stable in the first half of 2010, even as the government moved to curb inflation andmodern living space the global economic recovery lost momentum. Monetary policy was tightened in late 2009 and credit growth subsequently fell towill fuel demand for 10.5 percent over the first half of 2010. Nonetheless, GDP growth remained healthy at 6.2 percent annualised for H1 2010. With inflation remaining moderate at under nine percent year-on-year, Vietnam’saffordable, high-quality economy has proven resilient and analysts forecast GDP growth of seven percent or higher in 2011. The trade deficit is less than 10 percent ofhousing for years to exports, but currency stability remains a concern. The Vietnam dong was devalued by 2.1 percent in August 2010, a move that aimed to forestallcome. foreign exchange pressure for the remainder of the year. Real estate market snapshot Residential sector Strong demand in the mid-range of the market, with supply dependent on domestic developers’ access to construction financing. Office sector Rents continue to soften across all grades due to oversupply. Retail sector Significant potential as both international and domestic retailers keen to meet growing demand. Hospitality sector Visitor numbers recovering, outlook is strong given prospects of Vietnam tourism industry.
  • 12. 12 VNL Annual Report 2010 Residential Office The strength of Vietnam’s residential market is a key indicator of domestic Vietnam’s office market saw substantial new supply come online during the demand. Construction and sales activity saw a marked turnaround from 2008, slowdown caused by the global financial crisis. Although absorption rates have when projects were postponed or stalled due to the economic slowdown and started to recover, oversupply across all office grades will continue for the the retreat of some international developers. Over the first half of 2010, the next several years. In 2011, Ho Chi Minh City and Hanoi will see a combined total number of condominiums in Ho Chi Minh City and Hanoi had increased 500,000sq.m of additional office supply come on line which equates to about 48 percent over the same point a year prior. Ho Chi Minh City saw the addition 40% of total current stock. This is well in excess of the annual absorption rate of of some 10,000 units, still below the estimated yearly demand for 40,000 200,000sq.m for both markets alone. The office market is likely to experience new households. The UN ranked Vietnam second in urban population growth further challenges ahead as the market moves into a period of over-supply among Southeast Asian countries over the past five years, with an urbanisation creating weakened demand that will have downward pressure on rents. rate of 3.26 percent. Vietnam’s Ministry of Construction says the country needs By the end of Q2 2010, Vietnam’s office market was affected by the impact over 15 million sq.m of new housing each year to accommodate new urban stemming from the global financial crisis and the amount of A to C Grade office dwellers. Together with income growth and the rise of a middle-class keen buildings being developed. The market remains in favor of tenants where on modern living space, Vietnam’s urbanisation trend will fuel demand for quality long-term tenancies have been negotiated for lower rents and rent affordable and high-quality housing for years to come. incentives have been provided by most local office landlords. Ho Chi Minh City Buying patterns are changing, with end-users now predominant. Developers vacancy rates continued to increase across all grades. At Q2 2010, A Grade are shifting from luxury and high-end products to more affordable and average rent in Ho Chi Minh City and Hanoi was USD37.5 and USD39.6 per mid-range residences. CB Richard Ellis reports that 95 percent of new launches square meter respectively, showing drops of 47 percent and 26 percent from in Ho Chi Minh City in 2009 were mid-range and affordable projects, versus the peak in 2008. only 60 percent in 2008. High-end projects have struggled to sell, while sales figures have been solid across the lower grades. It is evident that the market Net Absorption, HCM City has shifted to the growing demand among average Vietnamese for affordable, Vacancy rate, HCM City quality housing. Net Absorption, Hanoi Vacancy rate, Hanoi Asking prices of residential apartments in HCM City, Q2 2010 Net absorption and vacancy rates, HCM City USD/sq.m Net absorption (NLA sq.m) Vacancy rate (%) 6,000 Affordable 80,000 20 Mid-end 70,000 5,000 High-end Luxury 60,000 15 4,000 50,000 3,000 40,000 10 2,000 30,000 20,000 5 1,000 10,000 0 0 0 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2
  • 13. VNL Annual Report 2010 13Retail HospitalityVietnam’s retail market continues to offer excellent prospects, although The hospitality sector was heavily affected by the global financial crisis,the lack of suitable retail premises has slowed the arrival of international with declines in occupancy and average room rates starting in mid-2008.chains, and put upward pressure on retail rents. The slower than expected Over the first half of 2010, the market began to recover, as occupancy ratesroll-out of foreign brands is one reason Vietnam slipped from first place in at three, four and five-star hotels increased by 9.0, 23.3 and 14.5 percent,A.T Kearney’s 2008 Global Retail Development Index, to eleventh place in year-on-year, respectively. Vietnam welcomed 2.5 million international2010. The Index tracks the retail investment attractiveness of 30 emerging guests in the first six months of 2010, a 32.6 percent year-on-year Visits from China increased by 92.5 percent. The Vietnam National Administration of Tourism forecasts 4.5 million total visitors in 2010,The fundamentals of the market remain strong, however. Over the first half a 20 percent increase over 2009.of 2010, retail sales saw a real growth rate of 16.4 percent year-on-year,eight percent higher than the same period in 2009. The mid- to long-term Despite the recovery in international arrivals and domestic travel, however,outlook for this sector is very positive, given the large, young population additional supply will continue to put pressure on occupancy and roomand rising disposable incomes, coupled with a low base of modern rates. In fact, average room rates in HCM City for three, four and five-starshopping facilities. Demand for prime retail space remains high, with many hotels fell by 25.0, 7.9 and 10.1 percent year-on-year, respectively, over theinternational retailers keen to either enter the market or to expand their first half of 2010. Over the long term, however, the outlook remains strongcurrent portfolios. Domestic retailers are also expanding their operations as Vietnam increasingly becomes a major travel destination for tourists fromto capitalise on the growing market. Fashion, lifestyle and F&B retailers around the world.continue to lead the way, as expected in an emerging market. CBD rentshave risen as a result of the limited supply of prime shopping destinationsin the inner city areas of Ho Chi Minh City and Hanoi. In these two cities,CBD retail rents have increased from USD76 to USD123 per sq.m per month,while average rents in outlying areas have declined slightly.Retail rates in select Asian citiesUSD/sq.m35030025020015010050 0 HCM City Hanoi Bangkok Manila Kuala Lumpur Singapore
  • 14. 14 VNL Annual Report 2010 Outlook The office sector will continue to struggle in the short term, and developers would be wise to secure anchor tenants before starting new projects. The short-term prospects for the hospitality market are also challenging, although longer term the market potential remains strong, with Vietnam expected to be among the world’s top ten tourism destinations in the coming decade. Retail facilities are expected to see substantial growth and development in the coming years, and the residential sector will remain in focus as developers compete to offer compelling mid-range offerings that blend affordability and high quality. Vietnam’s expected high economic growth rate and political stability will sustain it as one of Asia’s best long-term real estate investment opportunities.
  • 15. VNL Annual Report 2010 15
  • 16. 16 VNL Annual Report 2010 Portfolio performance VNL has the VinaLand Limited (VNL) during the year ending 30 June 2010 made significant progress with distributed to investors in the form of a tender for shares. It is anticipated that this policy will largest residential the development of several top holdings in its greatly reduce the discount during FY2011. portfolio, particularly residential resort and township developments. The sales of villas and VNL also continued to benefit from the strong project pipeline apartments recorded during the year were an extremely positive indicator of the fund’s ongoing demand for newly built residential housing, a hallmark of Vietnam’s growing middle of any domestic investment and return prospects over the coming years. class and rising urbanisation. This long-term trend plays perfectly into VNL’s investment or foreign real strategy, which has focused on acquiring VNL at the end of June 2010 had an NAV of township sites in prime suburban locations, USD682 million, or USD1.36 per share. This was along with select city-centre locations for estate developer an increase of 3.2 percent from the end of June 2009, when VNL had an NAV of USD660 million, high-end, mixed-use developments. Many of these sites are already under construction. in Vietnam. or USD1.32 per share. The share price at the end of June 2010 was USD0.77, up 11.6 percent from VNL is positioned to bring over 10,000 villas and townhouses, and an equal number of apartment USD0.69 at the end of June 2009. Despite this units, to market over the next five years. No improvement, the discount at 30 June remained foreign or domestic real estate developer or significant at 43.4 percent, a disappointing result fund has a residential pipeline that compares. given the comparatively strong performance of the fund over the year. Financing the construction of the residential and mixed-use assets will be an important driver The discount first emerged in mid-2008, and has of progress for the fund. At 30 June 2010, VNL persisted until now. Addressing the discount and had secured USD197 million in project financing increasing shareholder value is the manager’s from domestic banks, with several more loan top concern, and an announcement related to agreements in the final stages of negotiation. the fund’s distribution policy was issued after VNL is supported by an in-house development the period ended, in late October 2010. The team that has a strong project delivery track policy will see 50 percent of cash generated record, boding well for further rounds of from divestments, after taxes and expenses, financing applications.
  • 17. VNL Annual Report 2010 17Beyond the residential market, VNL is also 25-26 assets in the portfolio, and proceed with (which consists of staged payments). The VNLwell-positioned in other sectors. The fund development on all these assets. strategy is to divest mature projects, developholds eight retail assets spread across Hanoi, and sell residential holdings, and move forwardDanang, Nha Trang and Ho Chi Minh City, and FY2010 saw four construction starts, and with retail and office projects only when anchornegotiations with anchor tenants are underway FY2011 will see construction commence on five tenant leases are in place. The assets VNL holdsat four of these projects. It is expected that additional assets, including Times Square Hanoi, are perfect for this strategy, and the fund moves2011 will see construction commence at four Norman Estates at the Danang Beach Resort, into 2011 with solid growth prospects.of these projects. and VinaSquare Tower, HUD, and Thang Loi in Ho Chi Minh City. Performance summaryIn hospitality, VNL continues to hold Vietnam’stop portfolio of operating hotels. The year VNL during the year benefited from the FY2010 FY2009saw the opening of the Sheraton Nha Trang establishment of VinaProjects, a project and NAV p.s. 1.36 1.32Hotel and Spa, the first five-star international construction management joint venture with inProjects of Hong Kong. VinaProjects will Change on previous year 3.2% (18%)flag along Vietnam’s coast. Shortly after the further strengthen project delivery, providing Share price 0.77 0.69financial year ended, the Movenpick HotelSaigon re-opened after a substantial renovation. the most cost-effective support for VinaCapital’s Change on previous year 11.6% (43.4%)The hospitality market in Vietnam continues to in-house real estate development team. Premium/(discount) to NAV 43.4% 47.7%recover after the 2008-09 slowdown, with Outlook Number of projects 38 472010 revenue and gross operating profit of Vietnam’s macro economy is expected to bethe VNL-owned hotels up an estimated 28.5 stable in the second half of 2010, with GDP Portfolio by geographic region (% NAV)and 27.7 percent, respectively, over 2009. growth topping seven percent in 2011. FY2010 FY2009VNL has now divested full or partial stakes in Liquidity should gradually increase as the cost of debt declines, which will support the real Hanoi 13% 19%13 projects, generating total proceeds ofUSD324.7 million on acquisition costs of estate market in general. VNL has a pipeline Central Vietnam 25% 25%USD163.6 million. VNL exited several mature that includes over 4,000 new residential HCM City and region 62% 56%assets in FY2010, and will look to dispose or find units to bring to market in 2011, most beingco-investors on an estimated eight additional mid-range offerings. These holdings dependassets in 2011-12. The business plan, agreed by less on acquiring financing, as construction isthe VNL Board of Directors, is to hold typically financed via the end-user sales process
  • 18. 18 VNL Annual Report 2010 VNL Portfolio by sector (end June 2010) 100% Township/large-scale 37% 31% Township/large-scale 16% Mixed use/retail Mixed use/retail 18% 24% Residential Residential 24% 6% Office Office 5% Hospitality 16% 23% Hospitality USD682 million USD660 million FY2010 FY2009 NAV vs share price performance 2.0 1.5 1.36 NAV per share 1.0 0.77 Share price 0.5 0.0 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10
  • 19. VNL Annual Report 2010 19Development progress Construction in Completion in 2009-2010 Construction in 2010 2011 (estimate)Projects Location Refurbishment Construction On-going Start StartMovenpick Hotel Hanoi Hanoi 2009Movenpick Hotel Saigon HCM City 2010Mercure La Gare Hanoi Hotel Hanoi 2009Sheraton Nha Trang Hotel and Spa Nha Trang 2010Ocean Villas (Danang Beach Resort) DanangThe Garland HCM CityAzura (Danang WTC) DanangThe Dunes Residences (Danang Beach Resort) DanangThe Ceana Hoi An Hoi AnDai Phuoc Lotus Township HCM CityMy Gia Township Nha TrangVinaSquare Tower HCM CityGreen Park Estate (Thang Loi) HCM CityHUD HCM CityTimes Square Hanoi HanoiNorman Estates (Danang Beach Resort) Danang
  • 20. 20 VNL Annual Report 2010 Project capital structure Debt to equity ratio of VNL projects Debt to equity ratio (% debt) Danang Beach Resort 37% WTC Danang 17% My Gia Nha Trang 28% The Garland 67% Long Truong 70% Hospitality portfolio 66%* VNL carries no debt at the fund level, and project level debt is Top ten holdings at 30 June 2010 conservative.  NAV % The highest level of debt is in the operating hotels, where the  Danang Beach Resort 10.0% Movenpick Hanoi and Saigon hotels were recently renovated, and  Century 21 9.5% the four-star Mercure Hanoi La Gare and five-star Sheraton Nha  Dai Phuoc Lotus Township 9.0% Trang Hotel and Spa completed construction and opened in 2009  Pavilion Square 7.0% and 2010, respectively.  My Gia Nha Trang 6.0% * Total 14 assets, including five operating hotels.  VinaSquare Tower 5.0%  Times Square Hanoi 4.3%  Aqua City (Long Hung) 4.0%  Fideco Binh Duong 3.5%  Mövenpick Hotel Saigon 3.0%
  • 21. VNL Annual Report 2010 21 Top holdings by regionHanoi Hanoi Type Status Times Square Hanoi Mixed use Investment licence Movenpick Hotel Hanoi Hospitality Operating asset Mercure La Gare Hanoi Hotel Hospitality Operating asset Danang Type Status World Trade Center Danang Mixed use Sales underway Danang Beach Resort Township Sales underway Danang Ceana Hoi An Villas and Hotel Mixed use Under construction Nha Trang Type Status Sheraton Nha Trang Hotel and Spa Hospitality Operating asset Nha Trang My Gia Nha Trang Township Sales underway Ho Chi Minh Type Status Dai Phuoc Lotus Township Sales underway Century 21 Residential Under construction Ho Chi Minh VinaSquare Tower Mixed use Investment licence Pavilion Square Mixed use Investment licence The Garland Villas Residential Sales underway Movenpick Hotel Saigon Hospitality Operating asset
  • 22. 22 VNL Annual Report 2010 VNL owns five operating hotels and has reached the construction and sales phase on numerous residential sites in central Vietnam and the Ho Chi Minh City region.
  • 23. VNL Annual Report 2010 23
  • 24. 24 VNL Annual Report 2010 Featured investments My Gia Nha Trang Movenpick Hotel Saigon My Gia is a 158-hectare township site strategically positioned between The Movenpick Hotel Saigon re-opened in August 2010 after a the mountains and the famous beaches of Nha Trang, one of the most complete renovation that included a redesign of the lobby and popular coastal tourist destinations in central Vietnam. The township 278 guestrooms, five new interiors for the hotel’s restaurants, will offer a complete community of luxury villas, townhouses, a semi-open bar near the third floor pool, and a new rear entrance apartments, hospital, international school, retail centre and framed by a massive Cay Da (Banyan) tree. The renovation follows entertainment facilities. A display village is now under construction. VNL’s strategy of acquiring under-performing hotel assets in prime Phase 1 and 2 sales of land lots launched in November 2010, locations and renovating and re-branding them under international with 80 percent of the 1,400 land lots available reserved for sale. flags. VNL holds a 52.5 percent stake in the Movenpick Hotel Saigon. VNL holds a 53.25 percent stake in My Gia Nha Trang. Type Mixed-use township. Type Five-star hotel. Location Nha Trang, central Vietnam. Location Ho Chi Minh City (near Tan Son Nhat airport). Details 88ha of residential lots, plus school, hospital, Details 278 keys; five food and beverage outlets, retail, sports and recreation facilities and five function rooms, swimming pool, fitness centre, administrative offices. spa and e-gaming club. Status Sale of cleared land lots underway. Status Operating asset, newly renovated.
  • 25. VNL Annual Report 2010 25Ceana Villas and Hotel Danang Beach ResortThe Ceana Villas and boutique hotel project is a 100% VNL-owned The 260-hectare Danang Beach Resort is Vietnam’s first truly integratedasset on an 8.6ha site on the beach in Hoi An, central Vietnam. luxury beachfront resort. The resort has pioneered the second-home marketThe revised master plan comprises an 82-key boutique hotel and in Vietnam, with sales of The Ocean Villas, the first residential component,31 villas for sale. Each of the three- to five-bedroom villas, including successfully launched to entirely domestic buyers. The Dunes golf course,eight beachfront units, will be serviced by the hotel operator. designed by golf legend Greg Norman, is now open for play and garneringPreliminary site infrastructure is completed and construction of the praise as Vietnam’s top championship-level course. Upcoming residentialvilla foundations is now underway. Marketing efforts will begin once components to launch in 2011 include the Norman Estates and Dunesfoundations are complete and target buyers looking to pre-purchase Residences. The Danang Beach Resort, when fully complete, will set thevillas off-plan. Loan negotiations are underway with two banks for standard for Vietnam’s fast-growing hospitality industry. At 30 Septembercomplete financing of the villas and hotel construction. 2010, total villa and condominium sales and reservations at the Danang Beach Resort stood at USD68 million. VNL holds a 75 percent stake in the Danang Beach Resort, with VOF holding 25 percent.Type Mixed-use residential and hospitality. Type Mixed-use integrated resort.Location Hoi An, central Vietnam. Location Danang, central Vietnam.Details 31 villas for sale; 82-key boutique hotel. Details Phase 1 components include: The Dunes Golf CourseStatus Villa foundations under construction, marketing (18-hole championship course, now open); 115 detached villas and sales to begin in early 2011. (The Ocean Villas); 132 beach condominiums (The Cham); 15 detached golf course villas (The Dunes Residences); 37 branded golf course and oceanfront villas (The Norman Estates); Five-star hotel; The Ocean Villa beach club. Status Under construction, with the first golf course operational and over 80 villas built and handed over to owners.
  • 26. 26 VNL Annual Report 2010 Dai Phuoc Lotus Green Park Estate (Thang Loi) Dai Phuoc Lotus is a unique resort-style township project covering The Green Park Estate project (formerly called Thang Loi) development 200 hectares on an island of 400 hectares in a branch of the Saigon in Ho Chi Minh City is a 26.7 hectare site on a major road link to River. The island township is located in Dong Nai Province, between the Cambodian border and the TransAsia Expressway. The project Ho Chi Minh City and the future Long Thanh International Airport. enjoys a high land value as it is located along a planned MRT line Construction of several model villas is underway. A total of 332 villas that will connect the site to the central business district. In addition have been launched to date, with 233 sales contracts and reservations to residential villas and apartments, warehouse retail will supply signed as of 30 September 2010. VNL holds a 54 percent stake in neighbouring townships, the city centre and even Cambodia. Green Dai Phuoc Lotus. Park Estate will be also be a major destination for recreation, as areas under aviation height constraints will be used for sport facilities and parks. The residential sections of the development will comprise 1,250 units, with construction of villas to start in Q4 2011, and construction of the retail components to begin by Q3 2012. VNL holds a 49 percent stake in Green Park Estate. Type Mixed-use. Type Mixed-use township. Location Ho Chi Minh City. Location Dong Nai Province, near Ho Chi Minh City. Details 26.7ha plot with total approved GFA of 342,377sq.m. Details 200ha comprising residences, retail, golf course, Status Investment licence received, 1:500 master schools, medical facilities, hotels, parkland plan submitted. and sports facilities. Status Sales underway for Phase 1 villas, covering 20ha.
  • 27. VNL Annual Report 2010 27Times Square Hanoi Mercure Hanoi La GareTimes Square is a landmark four-hectare mixed-use project in the The Mercure Hanoi La Gare opened in September 2009 afternew suburban area of My Dinh, in western Hanoi. The site is in a a complete top-to-bottom renovation and rebranding underprime location next to Hanoi’s most popular retail hypermarket, Accor’s well-regarded four-star boutique flag. The acquisition of thisBig C, and across from the National Convention Centre. Times Square city-centre property followed VNL’s strategy of targeting domestichas a distinctive integrated retail podium and high-rise office, hotel business travel and mid-range tourism - which proved timely givenand serviced apartment components. Preparatory work on the site is the travel downtrend that took hold in 2008. The Mercure hasunderway, with the first phase comprising a 30,300sq.m GFA office garnered strong operating results since opening, with occupancytower, 20,000sq.m GLA retail podium, and 33,200sq.m GFA serviced and room rates above the average for four-star hotels in Hanoi.apartment. VNL holds a 65 percent stake in this project. VNL holds a 100 percent stake in the Mercure Hanoi La Gare.Type Mixed-use urban landmark. Type Four-star boutique hotel.Location My Dinh, Hanoi. Location Hanoi CBD.Details 40,000sq.m land area, with total approved GFA Details 102 keys; food and beverage outlets, conference of 351,140sq.m comprised of retail, office, hotel room and fitness centre. and serviced apartment components. Status Operating asset, with 68.8% occupancy and USD70.7 Status Investment licence received, construction to average room rate for 2010 to September. start Q1 2011.
  • 28. 28 VNL Annual Report 2010 Board of Directors Nicholas Brooke Horst F. Geicke Don Lam Chairman Director Director Mr. Brooke is the Chairman of Professional Property Horst F. Geicke is one of VinaCapital Group’s Don Lam is a founding partner of VinaCapital Services Limited, a Hong Kong-based real estate three founding partners. He has resided in Group, with over 15 years experience in consultancy that provides a select range of advisory Asia for almost 30 years and has over 25 years Vietnam. He has overseen the Group’s growth services across the Asia Pacific Region. Mr. Brooke of operating and investing experience in the from manager of a single USD10 million fund is a former President of the Royal Institution of region, having made several financial and in 2003 into a full-featured investment firm Chartered Surveyors and was the first overseas strategic investments in Vietnam, including the managing numerous listed and unlisted funds, surveyor to be accorded that honour. Mr. Brooke is establishment of a manufacturing plant for his and offering a complete range of corporate a recognised authority on land administration and family business. Mr. Geicke also co-founded finance and real estate advisory services. Before planning matters and has provided advice in these Pacific Alliance Group, a fund management group founding VinaCapital, Mr. Lam was a partner areas to several Asian governments as well as the US in Hong Kong. Mr. Geicke is the President of the at PricewaterhouseCoopers (Vietnam), where State Department. He is also a Justice of the Peace, European Chamber of Commerce in Hong Kong he led the Corporate Finance and Management and a former Deputy Chairman of the Hong Kong and was previously the President of the German Consulting practices throughout the Indochina Town Planning Board and a former member of the Chamber of Commerce in Hong Kong. He is the region. Mr. Lam has also held management Hong Kong Housing Authority. Mr. Brooke also sits as chairman or board member of numerous public positions at Deutsche Bank and Coopers & a Non-executive Director on the Boards of a number and private companies. Mr. Geicke has a Masters Lybrand in Vietnam and Canada. He has a degree of public companies including Shanghai Forte Land degree in Economics and Business Law from the in Commerce and Political Science from the Company Limited, one of China’s largest residential University of Hamburg, Germany. University of Toronto, and is a member of the developers and Majid Al Futtaim Investments, one Institute of Chartered Accountants of Canada. of Middle East’s leading shopping centre developers. He is a Certified Public Accountant and holds a Mr. Brooke has a degree in Estate Management and Securities Licence in Vietnam. a Post Graduate Diploma in Business Administration from the University of London.
  • 29. VNL Annual Report 2010 29Robert A. E. Gordon Michael Arnold Nicholas AllenDirector Director DirectorRobert Gordon was British Ambassador to Mr. Arnold is a senior executive with over forty Nicholas Charles Allen is an independentVietnam from 2003-2007 and to Burma years experience in the property industry, including non-executive director of CLP Holdings Ltd, Lenovofrom 1995-1999. He was head of the Foreign over thirty years in Asia. He retired as an Executive Group Ltd, and Hysan Development Company Ltd.and Commonwealth Office’s Southeast Asia Director of Hongkong Land in 2002 and is currently He is chairman or member of the audit committeeDepartment in London from 1999-2003. He joined Managing Director of Arnco Ltd, which provides for all three companies. Mr. Allen joined Coopers &the British Diplomatic Service in 1973 and served an advisory service to the property industry in Asia Lybrand in 1977, coming to Hong Kong with that firmin Poland, Chile and France. After retiring from the and the Middle East. Mr. Arnold sits on the boards in 1983. In 1998 Coopers & Lybrand merged to formFCO in April 2008, he now advises a number of of a number of companies including The Link, as PricewaterhouseCoopers, and Mr. Allen workedcompanies and organisations on issues concerning an Independent Non Executive Director, and The at PwC until his retirement in 2007. During his 24Southeast Asia. He also provides expert advice to Business Environment Council, as a Non Executive years with PwC in Hong Kong, Mr. Allen was theseveral UK law firms, as well as lecturing at the Director. During his career with Hongkong Land, partner-in-charge of the Consumer and IndustrialUniversity of Strasbourg. Mr. Gordon was Mr. Arnold was responsible for all project Products Group, the Corporate Finance and Recoveryawarded an OBE in 1983 and a CMG in 1999. developments in Hong Kong and Asia, spanning Practice division, and the Hong Kong and ChinaHe was born in Trieste, Italy and educated at from Australia to Southeast Asia and China. Assurance Practice. He is a fellow of the CharteredKing’s School Canterbury and graduated from Mr. Arnold is a Fellow of the Hong Kong Institute Accountants in England and Wales and a memberMagdalene College, Oxford in 1973 with a BA of Surveyors and an Associate of the Royal Institute of the Hong Kong Institute of Certified Public(later MA) in Modern Languages. of Chartered Surveyors. Accountants. Mr. Allen has a B.A. from Manchester University in the United Kingdom.
  • 30. 30 VNL Annual Report 2010 Report of the Board of Directors The Board of Directors submits its report together The Board of Directors do not recommend with the consolidated financial statements the payment of dividend for the year ended of VinaLand Limited (“the Company”) and its 30 June 2010 (30 June 2009: USD nil). subsidiaries (together “the Group”) for the year ended 30 June 2010 (“the year”). Board of Directors The members of the Board of Directors of the The Group Company during the year and to the date of this VinaLand Limited is incorporated in the Cayman report are as follows: Islands as a company with limited liability. The registered office of the Company is PO Box 309GT, Name Position Appointed on Ugland House, South Church Street, George Town, Nicholas Brooke Chairman 13 January 2006 Grand Cayman, Cayman Islands. Horst Geicke Director 31 August 2005 Don Lam Director 13 January 2006 Particulars of the Group’s principal subsidiaries and associates are set out in Note 7 and Note 13. Robert Gordon Director 16 February 2009 Michael Arnold Director 17 March 2009 Principal activities Nicholas Allen Director 29 June 2010 The Company’s primary objective is to focus on key growth segments within Vietnam’s emerging real estate market, namely residential, office, On 12 March 2010 Mr. Nicholas Brooke replaced retail, industrial and leisure projects in Vietnam Mr. Horst Geicke as Chairman of the Board of and the surrounding countries in Asia to provide Directors. shareholders with an attractive level of income Auditors and capital growth, from investing in a diversified The Group’s auditors, Grant Thornton Cayman portfolio of mainly property investments. Islands, with the assistance of Grant Thornton The principal activities of the subsidiaries are Vietnam Ltd., have expressed their willingness property investment and hospitality management. to accept reappointment. Results and dividend Subsequent events after the reporting date The results of the Group for the year ended Other than the matter outlined in Note 20, there 30 June 2010 and the state of its affairs as at were no material events after the reporting date that date are set out in the consolidated financial that has a bearing on the understanding of these statements on pages 38 to 88. consolidated financial statements.
  • 31. VNL Annual Report 2010 31Directors’ interest in the Company view of the financial position of the Group as at The Board of Directors is also responsible forAs at 30 June 2010, the interests of the directors 30 June 2010 and of the results of its operations safeguarding the assets of the Group and hencein the shares, underlying shares and debentures of and its cash flows for the year ended on that for taking reasonable steps for the prevention andthe Company are as follows: date. When preparing the consolidated financial detection of fraud and other irregularities. statements, the Board of Directors is required to: The Board of Directors confirms that the Group No. of shares Approximate i. adopt appropriate accounting policies which has complied with the above requirements in % of direct are supported by reasonable and prudent preparing the consolidated financial statements. and indirect judgements and estimates and then apply Direct Indirect holding Statement by the Board of Directors them consistently;Horst Geicke 2,750,000 184,979 0.59% ii. comply with the disclosure requirements of In the opinion of the Board of Directors, theDon Lam 2,457,250 122,649 0.52% International Financial Reporting Standards accompanying Consolidated Statement of Financial or, if there have been any departures in the Position, Consolidated Statement of ChangesNicholas Brooke 150,000 - 0.03% in Equity, Consolidated Statement of Income, interest of true and fair presentation, ensureSubsequent to the reporting date, Mr. Michael that these have been appropriately disclosed, Consolidated Statement of ComprehensiveArnold and Mr. Nicholas Allen purchased 64,500 explained and quantified in the consolidated Income, Consolidated Statement of Cash Flows,and 95,627 ordinary shares bringing their total financial statements; together with the notes thereto, have beenshareholdings to 0.01% and 0.02% respectively. properly drawn up and give a true and fair view of iii. maintain adequate accounting records and an the financial position of the Group as at 30 June effective system of internal control; 2010 and the results of its operations and its cashSubsequent to the reporting date, the InvestmentManager of the Group, VinaCapital Investment iv. prepare the consolidated financial statements flows for the year then ended in accordance withManagement Limited, purchased 660,000 shares on a going concern basis unless it is International Financial Reporting Standards.on the open market representing 0.13% interest inappropriate to assume that the Group willin the Group. As Mr. Don Lam and Mr. Horst continue its operations in the foreseeable On behalf of the Board of DirectorsGeicke are shareholders in this company, future; andtheir shareholdings consequently increased v. control and direct effectively the Group into 0.56% and 0.65% respectively. all material decisions affecting its operations and performance and ascertain that suchBoard of Directors’ responsibility in respect of decisions and/or instructions have been Nicholas Brookethe consolidated financial statements properly reflected in the consolidated financial ChairmanThe Board of Directors is responsible for ensuring statements. Hong Kong, SAR Chinathat the consolidated financial statements are 17 December 2010properly drawn up so as to give a true and fair
  • 32. 32 VNL Annual Report 2010 Governance report VNL 2010 Corporate Governance Report The members of the Board of Directors On behalf of the Board, I am pleased to report At the date of this report, the Board is comprised of four independent non-executive on the activities of the Board and its Committees Directors, including the Chairman, and two non-independent Directors. This is in during the 2010 financial year. VinaLand Limited line with the Combined Code recommendations that at least half the Board are (’VNL’ or ‘the Company’) is a Cayman Island independent non-executive Directors. The independent non-executive Directors have company established in 2006 and traded on the all declared that they were, and continue to be, independent from the Company, the AIM Market of the London Stock Exchange. manager and any of its managed vehicles. The Board is committed to meeting the highest At the end of the financial year, the annual aggregate director fees amounted to standards of corporate governance. The ultimate USD120,000. aim of the corporate governance programme is to protect shareholders’ and other stakeholders. Current Board Members Independence to the Exec/Non-exec Director In order to achieve this, the Company has created Company a clear and effective structure for responsibility Nicholas Brooke Yes Non-executive and governance. Robert Gordon Yes Non-executive The responsibility of the Board and its committees Michael Arnold Yes Non-executive is set out in Part 2 of the Company’s Articles of Nicholas Allen Yes Non-executive Association. Over time, these responsibilities have Don Lam No* Non-executive been further refined and clarified, as presented in Horst Geicke No** Non-executive this report. * Mr. Don Lam is an executive of the Manager, VinaCapital Investment Management Ltd and a director of Compliance to AIM Rules and Corporate Governance VinaCapital Group Ltd best practice ** Mr. Horst Geicke is the Chairman of VinaCapital Group Ltd The Company complied with the AIM rules and regulations. Furthermore the Company uses as guidelines other relevant best practice corporate governance frameworks, such as the UK Combined Code on Corporate Governance (‘the Combined Code’) and the Association of Investment Companies Code of Corporate Governance (‘the AIC Code’), which adapts the Combined Code specifically for investment companies.
  • 33. VNL Annual Report 2010 33Organisation of corporate governance Shareholders Audit committee Investment committee The Board provides strategic direction and has an oversight Board of Directors role over the investment manager Nomination/Remuneration/ to ensure that shareholder Valuation committee Management evaluation committee returns are maximised. Investment teams Reporting and accounting The investment manager executes Corporate Investment manager Treasury the Board’s strategic direction communications/ within the agreed framework of Investor relations reward, incentive and control. Legal Risk and compliance Reporting and accounting The investment manager cascades Business development Operating unit down and apply the framework to Country, branch office all investment vehicles. Risk
  • 34. 34 VNL Annual Report 2010 The responsibility of the Board of Directors The Board is responsible for managing the Company on behalf of its shareholders. In order to create and deliver sustainable shareholder value, the Board established the objectives and policies of the Company, and ensured throughout the year that the overall strategic direction was delivered within the agreed framework of reward, incentive and control. Certain responsibilities of the Board are delegated to Board Committees to assist the Board in carrying out its functions and to ensure independent oversight of internal control and risk management. Each Board committee’s terms of reference endeavoured to follow the model terms of reference from the Institute of Chartered Secretaries and Administrators (ICSA). The committee’s terms of reference set out the committee administration requirements, duties and responsibilities of specific areas. The Committee Chairman reports to the Board on matters discussed and any proposals requiring decision making. The Board has held four scheduled Board meetings during the year, and used a structured agenda to ensure all key areas are reviewed over the course of the year. Summary of the members’ attendance and fees paid are shown below. Attendance (2) Current Audit Valuation RNME Board AC VC RNME Total Board Member Elected Board Committee Committee Committee meetings meetings meetings meetings Fee Position (AC) (VC) (RNME) (4) (4) (4) (1) USD Nicholas Brooke 2006 Chairman Member Member Member 4/4 4/4 4/4 2/2 40,000 Robert Gordon 2009 Member Member - Chairman 4/4 4/4 - 2/2 40,000 Michael Arnold 2009 Member - Chairman Member 4/4 - 4/4 2/2 40,000 Nicholas Allen(1) 2010 - Chairman - Member 1/1 1/1 - 1/1 - Don Lam 2006 Member - - - 4/4 - - - - Horst Geicke 2006 Member - - - 4/4 - - - - Total 120,000 (1) Nicholas Allen was appointed to the Board and Committees in June 2010. (2) Attendances of Board and Committee are from July 2009 to June 2010.
  • 35. VNL Annual Report 2010 35Board Delegated Committees • Determined and agreed the framework for the day-to-day management of the Company’s the remuneration of the Board and Committee investment portfolio including the acquisition,Audit Committee members; monitoring and disposal of assets in line withThe committee monitored the effectiveness of the strategy adopted by the Board. For furtherinternal controls, internal audit activities, the risk • Reviewed the structure, size and composition information of the investment manager pleasemanagement system and financial reporting. (skill, knowledge and experience) of the Board refer to the AIM admission document.The committee’s terms of reference are based and recommended changes if necessary;on The Smith Guidance recommended in the Internal Controls and Risk Management • Evaluated the performance of the Company’sCode. The committee was also kept informed In 2009, the Board endeavoured to adopt The key third-party service providers, this includingof the annual audit and bi-annual review of the Turnbull Guidance as recommended by the Code the investment manager, nominated advisor,Company’s financial statements. It assessed the for internal controls and risk management. Thus company secretary, corporate broker, custodianexternal auditor’s independence and approved the internal audit function was introduced to and administrator;any non-audit services provided by the external the Company in the third quarter of 2009, asauditor. The committee also evaluated the • Reviewed and evaluated the Committee’s own the Board and investment manager sought toperformance of both the internal and external performance, duties and responsibilities and strengthen the internal control process to meetauditors following each audit cycle. At each Board concluded that it and its members are effective. the Company’s needs. The Board appointedmeeting, the committee’s Chairman presented the PricewaterhouseCoopers (PwC) Vietnam as the The committee’s Chairman reported thecommittee’s findings and proposals to the Board. internal auditor at the time. The internal audit committee’s findings and proposals to the BoardThe committee met four times during the year work was performed based on an internal audit for approval.(three times in person and once by telephone call). plan determined and in agreement with the Audit Investment Committee Committee. The internal auditor participated in allValuation Committee The committee met many times during the year audit committee meetings. The audit committeeThe committee ensured the investment manager to consider and approve real estate projects that has decided to continue to outsource the internalvaluation process and policies are consistent, the Investment Manager felt were suitable for audit function and to reappoint PwC as the internaltransparent and valuation results are determined investment by VNL. The committee is comprised auditor for 2011.on an appropriate basis. The committee of individuals with financial and businessChairman presented the committee’s findings and Sincerely, backgrounds combined with extensive hands-onrecommendations to the Board for final decisions on local experience. The current committee membersall valuations. The committee met four times during include Nicholas Brooke, Horst Geicke, Don Lamthe year. and David Henry. ___________________________________________Remuneration/ Nomination/ Management Investment Manager Nicholas BrookeEngagement/ Evaluation Committee VNL has given VinaCapital, the investment ChairmanThe committee met twice during the year and manager, overall responsibility for conducting VinaLand Limitedperformed multiple roles. The committee:
  • 36. 36 VNL Annual Report 2010 Independent Auditors’ report To the Shareholders of VinaLand Limited Auditors’ responsibility statements in order to design audit procedures Our responsibility is to express an opinion on that are appropriate in the circumstances, but not Introduction for the purpose of expressing an opinion on the these consolidated financial statements based on We have audited the accompanying consolidated our audit. We conducted our audit in accordance effectiveness of the entity’s internal control. An financial statements of VinaLand Limited and its with International Standards on Auditing. Those audit also includes evaluating the appropriateness subsidiaries (“the Group”) which are comprised of standards require that we comply with ethical of accounting policies used and the reasonableness the Consolidated Statement of Financial Position as requirements and plan and perform the audit to of accounting estimates made by management, as of 30 June 2010, and the Consolidated Statement obtain reasonable assurance that the consolidated well as evaluating the overall presentation of the of Changes in Equity, Consolidated Statement of financial statements are free from material financial statements. Income, Consolidated Statement of Comprehensive misstatement. Income and Consolidated Statement of Cash We believe that the audit evidence we have Flows for the year then ended, and a summary This report, including the opinion, has been obtained is sufficient and appropriate to provide of significant accounting policies and other prepared for and only for the shareholders. We a basis for our audit opinion. explanatory notes from page 38 to page 88. do not, in giving this opinion, accept or assume Opinion responsibility for any other purpose or to any other Management’s responsibility for the consolidated In our opinion, the consolidated financial person to whom this report is shown or into whose financial statements statements give a true and fair view of the financial hands it may come save where expressly agreed by Management is responsible for the preparation position of VinaLand Limited and its subsidiaries our prior consent in writing. and fair presentation of these consolidated as of 30 June 2010, and of its financial performance financial statements in accordance with Basis of opinion and its cash flows for the year then ended in International Financial Reporting Standards. This An audit involves performing procedures to obtain accordance with International Financial Reporting responsibility includes: designing, implementing audit evidence about the amounts and disclosures Standards. and maintaining internal controls relevant to the in the financial statements. The procedures selected preparation and fair presentation of consolidated depend upon the auditor’s judgment, including the financial statements that are free from material assessment of the risks of material misstatement of misstatement, whether due to fraud or error; the financial statements, whether due to fraud or selecting and applying appropriate accounting error. In making those risk assessments, the auditor GRANT THORNTON policies; and making accounting estimates that are considers internal controls relevant to the entity’s Grand Cayman, Cayman Islands reasonable in the circumstances. preparation and fair presentation of the financial 17 December 2010
  • 37. VNL Annual Report 2010 37
  • 38. 38 VNL Annual Report 2010 Consolidated statement of financial position Note 30 June 2010 30 June 2009 USD’000 USD’000 (Reclassified) ASSETS Non-current Investment properties 9 620,650 446,614 Properties developed for sales 10 80,057 - Property, plant and equipment 11 111,569 78,908 Intangible assets 12 13,400 12,091 Investments in associates 13 71,789 104,764 Goodwill 7 3,923 - Prepayments for operating lease assets 14 41,595 53,041 Prepayments for acquisitions of investments 15 52,208 66,097 Other long-term financial assets 16 9,980 1,112 Deferred tax assets 17 18,268 5,024 Non-current assets 1,023,439 767,651 Current Inventories 712 146 Trade and other receivables 18 112,637 109,901 Receivables from related parties 19 4,389 2,572 Short-term investments 20 15,215 34,888 Financial assets at fair value through Statement of Income 21 32,796 46,298 Cash and cash equivalents 22 79,979 50,274 Current assets 245,728 244,079 Assets classified as held for sale 24 - 85,321 Total assets 1,269,167 1,097,051 The accompanying notes are an integral part of these statements.
  • 39. VNL Annual Report 2010 39Consolidated statement of financial position (cont.) Note 30 June 2010 30 June 2009 USD’000 USD’000 (Reclassified)EQUITY AND LIABILITIESEQUITYEquity attributable to shareholders of the parentShare capital 25 4,999 4,999Additional paid-in capital 26 588,870 588,870Revaluation reserve 27 3,483 10,799Translation reserve (29,733) (16,147)Retained earnings 114,025 72,008 681,644 660,529Non-controlling interests 224,269 166,445Total equity 905,913 826,974LIABILITIESNon-currentLong-term borrowings and debts 28 70,995 21,841Long-term payables to related parties 31 76,856 65,018Deferred tax liabilities 29 50,823 19,367Other liabilities 879 912Non-current liabilities 199,553 107,138CurrentShort-term borrowings and debts 28 21,090 20,584Trade and other payables 30 116,466 74,354Payables to related parties 31 26,145 49,943Current liabilities 163,701 144,881Liabilities included in disposal group held for sale 24 - 18,058Total liabilities 363,254 270,077Total equity and liabilities 1,269,167 1,097,051Net assets per share attributable to shareholders of the parent 40 1.36 1.32The accompanying notes are an integral part of these statements.
  • 40. 40 VNL Annual Report 2010 Consolidated statement of changes in equity Non-controlling Equity attributable to shareholders of the parent Total equity interests Additional Revaluation Translation Retained Share capital paid-in reserve reserve earnings capital USD‘000 USD‘000 USD‘000 USD’000 USD’000 USD‘000 USD‘000 1 July 2008 4,999 588,870 13,844 (4,623) 201,437 219,868 1,024,395 Currency translation - - - (11,524) - (6,129) (17,653) Revaluation losses on buildings (Note 27) - - (3,045) - - (2,544) (5,589) Total other comprehensive income - - (3,045) (11,524) - (8,673) (23,242) Losses for the year ended 30 June 2009 - - - - (129,429) (72,194) (201,623) Total comprehensive income - - (3,045) (11,524) (129,429) (80,867) (224,865) Acquisitions of subsidiaries - - - - - 12,553 12,553 Capital contributions in subsidiaries - - - - - 15,935 15,935 Dividend distributions to non-controlling interests - - - - - (1,044) (1,044) 30 June 2009 4,999 588,870 10,799 (16,147) 72,008 166,445 826,974 1 July 2009 4,999 588,870 10,799 (16,147) 72,008 166,445 826,974 Currency translation - - - (13,586) - (13,081) (26,668) Gains on acquisition of non-controlling interests - - - - 1,683 - 1,683 Revaluation gains on buildings (Note 27) - - 439 - - 1,387 1,826 Total other comprehensive income - - 439 (13,586) 1,683 (11,694) (23,158) Profits for the year ended 30 June 2010 - - - - 48,451 27,541 75,992 Total comprehensive income - - 439 (13,586) 50,134 15,847 52,834 Acquisitions of subsidiaries - - - - - 44,119 44,119 Capital contributions in subsidiaries - - - - - 37,298 37,298 Acquisitions of non-controlling interests - - - - - (18,133) (18,133) Disposals of subsidiaries (Note 27) - - (7,755) - (8,117) (20,685) (36,557) Dividend distributions to non-controlling interests - - - - - (622) (622) 30 June 2010 4,999 588,870 3,483 (29,733) 114,025 224,269 905,913 The accompanying notes are an integral part of these statements.
  • 41. VNL Annual Report 2010 41Consolidated statement of income Year ended Year ended Note 30 June 2010 30 June 2009 USD’000 USD’000Revenue 17,277 28,014Cost of sales 32 (10,235) (15,711)Gross profit 7,042 12,303Net gains/(losses) on fair value adjustments of investment properties 33 95,487 (153,544)Operating, selling and administration expenses 32 (46,171) (35,611)Other net changes in fair value of financial assets at fair value through Statement of Income 34 7,695 (4,754)Other income 35 45,809 2,591Other expenses 36 (7,710) (38,067)Operating profit/(loss) from continuing operations 102,152 (217,082)Finance income 37 6,860 11,972Finance expenses 38 (8,244) (6,735)Finance (expenses)/income - net (1,384) 5,237Share of losses of associates 13 (9,609) (3,342) (10,993) 1,895Profit/(loss) from continuing operations before tax 91,159 (215,187)Tax (expense)/income 39 (15,167) 13,564Net profit/(loss) for the year from continuing and total operations 75,992 (201,623)Attributable to equity shareholders of the parent 48,451 (129,429)Attributable to non-controlling interests 27,541 (72,194) 75,992 (201,623)Earnings per share - basic and diluted (USD per share) 40 0.10 (0.26)The accompanying notes are an integral part of these statements.
  • 42. 42 VNL Annual Report 2010 Consolidated statement of comprehensive income Year ended Year ended 30 June 2010 30 June 2009 USD’000 USD’000 Profit/(loss) for the year 75,992 (201,623) Other comprehensive income/(losses) Gain/(loss) on revaluation of buildings in the year 1,826 (5,589) Gains on acquisitions of non-controlling interests 1,683 - Exchange differences on translating foreign operations (26,668) (17,653) Other comprehensive income/(losses) for the year (23,158) (23,242) Total comprehensive income/(losses) for the year 52,834 (224,865) Attributable to equity shareholders of the parent 36,987 (143,998) Attributable to non-controlling interests 15,847 (80,867) 52,834 (224,865) The accompanying notes are an integral part of these statements.
  • 43. VNL Annual Report 2010 43Consolidated statement of cash flows Note 30 June 2010 30 June 2009 USD’000 USD’000Operating activitiesNet profit/(loss) for the year before tax 91,159 (215,187)Adjustments 41 (92,186) 198,636Net losses before changes in working capital (1,027) (16,551)Change in trade and other assets (38,972) 48,906Change in inventory (566) 131Change in trade and other liabilities 37,958 15,432Cash and cash equivalents classified as held for sale assets - (19,858)Corporate income tax paid (1,224) (1,352)Cash flow from operating activities (3,831) 26,708Investing activitiesInterest received 6,877 7,420Purchases of investment property, plant, equipment, and other non-current assets (151,948) (80,023)Acquisitions of subsidiaries, net of cash 7 (18,524) (7,189)Proceeds from disposals of investments 41,438 5,132Deposits for acquisitions of investments (12,262) (11,664)Proceeds from disposals of held for sale assets/liabilities and financial assets 30,600 10,873Investments in associates (3,768) (61,962)Acquisitions of long-term assets (210) (5,774)Net proceeds from short-term investments 27,405 22,139Net cash receipts from related parties for real estate projects 27,113 16,072Cash flow from investing activities (53,279) (104,976)The accompanying notes are an integral part of these statements.
  • 44. 44 VNL Annual Report 2010 Consolidated statement of cash flows (cont.) Note 30 June 2010 30 June 2009 USD’000 USD’000 Financing activities Additional capital contributions from minority shareholders 37,298 15,935 Loan proceeds from banks 76,866 42,305 Loan repayments to banks (26,449) (8,488) Dividends paid to non-controlling shareholders (622) (1,044) Loans proceeds from non-controlling shareholders - 1,481 Loan repayments to non-controlling shareholders (278) - Interest paid - (2,453) Cash flow from financing activities 86,815 47,736 Net change in cash and cash equivalents 29,705 (30,532) Cash and cash equivalents at the beginning of the year 50,274 80,806 Cash and cash equivalents at end of the year 22 79,979 50,274 The accompanying notes are an integral part of these statements.
  • 45. VNL Annual Report 2010 45Notes to the consolidated financial statements1. General information • IAS 1 Presentation of Financial Statements (Revised 2007)VinaLand Limited is a limited liability companyincorporated in the Cayman Islands. The registered • IFRS 8 Operating Segmentsoffice of the Company is PO Box 309GT, Ugland • IFRS 3 Business Combinations (Revised 2008)House, South Church Street, George Town, GrandCayman, Cayman Islands. The Company’s primary • IAS 27 Consolidated and Separate Financialobjective is to focus on key growth segments within Statements (Revised 2008)Vietnam’s emerging real estate market, namely • Amendments to IFRS 7 Financial Instruments:residential, office, retail, industrial and leisure Disclosures - improving disclosures aboutprojects in Vietnam and the surrounding countries in financial instruments.Asia. The Company is listed on the AIM Market of theLondon Stock Exchange under the ticker symbol VNL. 2.2.2 Adoptions of revised and amended standards IAS1 Presentation of Financial StatementsThe consolidated financial statements for the year (Revised 2007)ended 30 June 2010 were authorised for issue by the The adoption of IAS 1 (Revised 2007) made certainBoard of Directors on 17 December 2010. changes to the format and titles of the primary financial statements and to the presentation of2. Statement of compliance with IFRS and some items within these statements. It also gaveadoption of new and amended standards and rise to additional disclosures. The measurement andinterpretations recognition of the Group’s assets, liabilities, income2.1 Statement of compliance with IFRS and expenses were unchanged. However, someThe consolidated financial statements of the Group items that were recognised directly in equity werehave been prepared in accordance with International subsequently recognised directly in the ConsolidatedFinancial Reporting Standards (IFRS) as issued by the Statement of Comprehensive Income, for exampleInternational Accounting Standards Board (IASB). revaluations of property, plant and equipment and exchange differences on translation of foreign2.2 Changes in accounting policies operations. IAS 1 changed the presentation of2.2.1 Overall considerations changes in owner’s equity and introduced aThe Group has adopted the following new “Statement of Comprehensive Income”.interpretations, revisions and amendments to IFRS IAS 1 (Revised 2007) requires an additionalissued by the International Accounting Standards comparative statement of financial position to beBoard, which are relevant to and effective for the presented whenever an accounting policy is appliedGroup’s financial statements for the annual period retrospectively. This applies in the current year asbeginning 1 July 2009: IAS 1 (Revised 2007) is applied for the first time, and application is retrospective.
  • 46. 46 VNL Annual Report 2010 The comparative statement of financial position is share of the acquiree’s net assets. All payments to The revaluation surpluses of disposed subsidiaries unchanged from when it was previously reported. As purchase a business are recorded at fair value at the previously recognised in equity are transferred this is the case for the previously reported statement acquisition date. Some changes in the fair value of directly to retained earnings when control is lost. of financial position as at 30 June 2009 the additional contingent consideration that the Group recognises The Group applied IAS 27 (Revised 2008) prospectively comparative statement of comprehensive income after the acquisition date may be the result of to transactions with non-controlling interests and is not required as they are not expected to have additional information that the Group obtained disposals of subsidiaries from 1 July 2009. a material impact on the Group’s Consolidated after the date about facts and circumstances that Statement of Financial Position. existed at the acquisition date. Where the changes Adoption of IFRS 7 Financial Instruments: Disclosure - in fair value of the contingent consideration are improving disclosures about financial instruments IFRS 8 Operating Segments not measurement period adjustments, contingent The amendment requires enhanced disclosures This standard has been applied retrospectively. consideration classified as equity is not re-measured, about fair value measurement and liquidity risk. The adoption of IFRS 8 has not affected the identified contingent consideration classified as an asset In particular, the amendment requires disclosure operating segments for the Group. However, or liability which is a financial instrument within of fair value measurement by level of a fair value reported segment results are based on internal the scope of IAS 39 is measured at fair value with measurement hierarchy to be disclosed in the management reporting information that is regularly gains and losses recognized either in profit or loss consolidated financial statements. As the changes in reviewed by the Investment Manager. In the in other comprehensive income according to the accounting policy only result in additional disclosures, previous annual consolidated financial statements, requirements of IAS 39 and contingent consideration there is no impact on the historic, current or future segments were identified by reference to the way classified as an asset or a liability outside the scope earnings per share ratio. the Investment Manager manages and monitors of IAS 39 is accounted for in accordance with the risks and returns of the Group. As the change IAS 37 or other IFRSs as appropriate. The Group 2.2.3 Standards, amendments and interpretations to in accounting policy only results in additional have applied IFRS 3 (Revised 2008) prospectively existing standards that are not yet effective and have disclosures, there is no impact on the historic, to all business combinations from 1 July 2009. not been adopted early by the Group current or future earnings per share ratio. At the date of authorisation of these financial IAS 27 Consolidated and Separate Financial IFRS 3 Business Combinations (Revised 2008) Statements (Revised 2008) statements, certain new standards, amendments and interpretations to existing standards have been The standard is applicable for business combinations The revised standard introduced changes in published but are not yet effective, and have not occurring in reporting periods beginning on or after accounting for additional acquisition interests been adopted early by the Group. 1 July 2009 and has been applied prospectively. The in subsidiaries. Where the Group increases and new standard introduced changes to the accounting decreases its interest in subsidiaries but there is Management anticipates that all of the requirements for business combinations, but still no change in control, the effects of all transactions pronouncements will be adopted in the Group’s requires use the purchase method with some of between the Group with non-controlling interests accounting policies for the first period beginning significant changes. For example, all acquisition no longer result in goodwill or any gains or losses, after the effective date of the pronouncement. related costs are expensed in the period in which but are recorded in equity. When control is lost, Information on new standards, amendments and the costs are incurred rather than included in any remaining interest in the entity is re-measured interpretations that are expected to be relevant to the cost of investment. There is a choice on an to fair value, and a gain or loss is recognised in the the Group’s financial statements is provided below. acquisition by acquisition basis to measure the Consolidated Statement of Income. Certain other new standards and interpretations non-controlling interest in the acquiree at fair value have been issued but are not expected to have a or at the non-controlling interest’s proportionate material impact on the Group’s financial statements.
  • 47. VNL Annual Report 2010 47IAS 24 Related Party Disclosures (effective from a Company have control or joint control over standards to be effective for annual periods1 January 2011) other entities, disclosures are required in both beginning 1 January 2013. IFRS 9 is the first part ofThe IASB issued a revised version of IAS 24 Related the financial statements of the Company and the Phase 1 of this project. The main phases are:Party Disclosures (IAS 24 (2009)) on 4 November financial statements of the other entities; • Phase 1: Classification and Measurement2009 which supersedes IAS 24 (2003). • In any circumstances where a Company has joint control over a second entity, and joint control or • Phase 2: Impairment methodologyThe changes introduced by IAS 24 (2009) relatemainly to the related party disclosure requirements significant influence over a third entity, then the • Phase 3: Hedge accountingfor government-related entities and the definition second and third entities are regarded as being related to each other. In addition, a separate IASB project team is dealingof a related party. with derecognition. In addition, other amendments have been made toIn respect of definition of a related party, the the definition of a related party which clarify that: IFRIC 19 Extinguishing Financial Liabilities with Equityamendments have been made in order to clarify its Instruments (effective from 1 July 2010)meaning and to eliminate previous inconsistencies. • References to an associate and a joint venture This interpretation clarifies the requirementsThe changes include: include their subsidiaries; and of International Financial Reporting Standards• It has been clarified that, where a Company has • Two entities are not related parties by virtue of (IFRSs) when the Group negotiates the terms of a a subsidiary and an associate, for the purposes a member of key management personnel of one financial liability with its creditor and the creditor of the associate’s separate or individual financial entity having significant influence over another agrees to accept the Group’s shares or other equity statements, the subsidiary is regarded as a entity. instruments to settle the financial liability fully or related party of the associate as well as the partially. IFRIC 19 clarifies that: The definition of a ‘close member of the family’ has Company itself; also been amended to state that these ‘include’ a • equity instruments issued to a creditor are• The definition of a related party has been person’s spouse or domestic partner and children, part of the consideration paid to extinguish the amended such that in the circumstances in rather than ‘may include’. The Group selects to adopt financial liability. the bullet point above, for the purposes of the IAS 24 from the effective date of the standard. • equity instruments issued are measured at their subsidiary’s separate or individual financial fair value. If the fair value cannot be reliably Management have yet to assess the impact that statements, the associate is a related party; measured, the equity instruments should be this amendment is likely to have on the financial• An inconsistency has been removed in order that, statements of the Group. However, they do not measured to reflect the fair value of the financial when considering investments held by individuals expect to implement the amendments until all liability extinguished. rather than entities, two associates are not chapters of the IAS 39 replacement have been • the difference between carrying amount of regarded as being related parties simply because published and they can comprehensively assess the the financial liability extinguished and the one person has significant influence over one impact of all changes. initial measurement amount of the equity entity, and a close family member of that person measurements issued is included in the has significant influence over another entity; IFRS 9 Financial Instruments (effective from 1 January 2013) statement of income for the year.• The criteria for investments held by key The IASB aims to rewrite IAS 39 Financial The Group adopt IFRIC 19 from the effective date of management personnel have been changed, so Instruments: Recognition and Measurement in its the standard. that where the key management personnel of entirety by the end of 2010, with the replacement
  • 48. 48 VNL Annual Report 2010 Management have yet to assess the impact that Disclosure, IAS 1 Presentation of Financial IAS 1 Presentation of Financial Statements is this amendment is likely to have on the financial Statements, IAS 21 The Effects of Changes in effective for the periods beginning on or after statements of the Group. However, they do not Foreign Exchange Rates, and IAS 28 Investments in 1 January 2011 therefore will be disclosed in the expect to implement the amendments until all Associates will be relevant to the Group’s accounting accounting policies of the Group’s subsequent chapters of the IAS 39 replacement have been policies. However preliminary assessments indicate financial statements. This clarifies that entities published and they can comprehensively assess the the effect on the Group’s consolidated financial may present the required reconciliations for each impact of all changes. statements will not be significant. component of other comprehensive income either in the Consolidated Statement of Changes in Equity Annual Improvements 2009 IFRS 3 Business Combinations is effective for the or in the notes to financial statements. The IASB has issued Improvements for International periods beginning on or after 1 July 2010 therefore Financial Reporting Standards 2009. Most of these will apply to subsequent financial statements. In IAS 21 The Effects of Changes in Foreign Exchange amendments become effective in annual periods respect of transition requirements for contingent Rates and IAS 28 Investments in Associates are beginning on or after 1 July 2009 or 1 January consideration from a business combination that effective for the periods beginning on or after 1 July 2010. The Group expects the amendments to IAS occurred before the effective date of the revised 2010 therefore will apply to the Group’s subsequent 17 Leases to be relevant to the Group’s accounting IFRS, the improvements clarify that contingent amendments arising from the IAS 27 (Revised 2008) policies. This standard is effective for periods consideration balances arising from business amendments prospectively, to be consistent with the beginning on or after 1 January 2010 therefore combinations that occurred before an entity’s date related IAS 27 transition requirement. will apply to the Group’s subsequent consolidated of adoption of IFRS 3 (Revised 2008) shall not be financial statements. Prior to the amendment adjusted on the adoption date. Guidance is also 3. Summary of significant accounting policies IAS 17 generally required a lease of land to be provided on the subsequent accounting for such contingent balances. In respect of measurement 3.1 Presentation of consolidated financial statements classified as an operating lease. The amendment now requires that leases of land are classified of non-controlling interest (“NCI”), the choice The consolidated financial statements are presented as finance lease or operating lease applying the of measuring NCI either at fair value of at the in United States Dollars (USD) and all values are general principles of IAS 17. The Group will need proportionate share in the recognised amounts of rounded to the nearest thousand (’000) unless to reassess the classification of the land elements an acquiree’s identifiable assets, is now limited to otherwise indicated. of its unexpired leases for the effective period on NCI that are present ownership instruments and entitle their holders to a proportionate share of the The significant accounting policies that have been the basis of information existing at the inception of acquiree’s net assets in the event of liquidation. This used in the preparation of these consolidated those leases. Any newly classified finance leases are clarifies that all other components of NCI shall be financial statements are summarised below. These recognised retrospectively. Preliminary assessments measured at their acquisition date fair values, unless policies have been consistently applied to all the indicate that the effect on the Group’s financial another measurement basis is required by IFRS. years presented unless otherwise stated. statements will not be significant. IFRS 7 Financial instruments: Disclosure is effective The consolidated financial statements have been Annual Improvement 2010 for the periods beginning on or after 1 January 2011 prepared using the historical cost convention, as The IASB has issued Improvements for International modified by the revaluation of investment property, Financial Reporting Standards 2010. These therefore will be disclosed in the accounting policies of the Group’s subsequent financial statements. This leasehold land and certain financial assets and amendments become effective for annual periods financial liabilities, the measurement bases of which beginning on or after 1 July 2010 or 1 January 2011. clarifies the disclosure requirement of the standards to remove inconsistencies, duplicative disclosure are described in the accounting policies below. The Group expects that the amendments to IFRS 3 Business Combinations, IFRS 7 Financial instruments: requirements and specific disclosures that may be misleading.
  • 49. VNL Annual Report 2010 49The preparation of consolidated financial statements whether or not they were recorded in the financial A non-controlling interest represents the portionin accordance with IFRS requires the use of certain statements of the subsidiary prior to acquisition. of the profit or loss and net assets of a subsidiaryaccounting estimates and assumptions. Although On initial recognition, the assets and liabilities of attributable to an equity interest that is not ownedthese estimates are based on management’s best the subsidiary are included in the consolidated by the Group. It is based upon the minority’s shareknowledge of current events and actions, actual reporting at their revalued amounts, which are also of post-acquisition fair values of the subsidiary’sresults may ultimately differ from those estimates. used as the basis for subsequent measurement in identifiable assets and liabilities. Profit or loss andThe areas involving a higher degree of judgment accordance with the Group’s accounting policies. each component of other comprehensive incomeor complexity, or areas where assumptions and Goodwill represents the excess of acquisition cost are attributed to the owners of the parent and toestimates are significant to the consolidated over the fair value of the Group’s share of the the non-controlling interests. Total comprehensivefinancial statements, are disclosed in Note 4 to the identifiable net assets of the acquired subsidiary at income is attributed to the owners of the parent andconsolidated financial statements. the date of acquisition. Gain on bargain purchase is to the non-controlling interests even if this results in immediately allocated to the statement of income as the non-controlling interests having a deficit balance.3.2 Basis of consolidation at the acquisition date. All acquisition related costsThe consolidated financial statements of the Group are expensed in the period in which the costs are Changes in ownership interests in a subsidiary thatfor the year ended 30 June 2010 comprise the incurred and not included in the cost of investment. do not result in gaining or losing control of theCompany and its subsidiaries (together referred to as All payments to purchase a business are recorded subsidiary are accounted for as equity transactionsthe “Group”) and the Group’s interests in associates. at fair value at the acquisition date. Some changes whereby the difference between the consideration in the fair value of contingent consideration that paid and the proportionate change in the parent3.3 Subsidiaries the Group recognises after the acquisition date entity’s interest in the carrying value of theSubsidiaries are all entities over which the Group may be the result of additional information that subsidiary’s net assets is recorded directly in thehas the power to control the financial and operating after that date, about facts and circumstances that equity and attributable to the owners. No adjustmentpolicies so as to obtain benefits from their activities. existed at the acquisition date. Where the changes is made to the carrying value of the subsidiary’sIn assessing control, potential voting rights that in fair value of the contingent consideration are net assets as reported in the consolidated financialpresently are exercisable or convertible, along with not measurement period adjustments, contingent statements.contractual arrangements, are taken into account. consideration classified as equity is not re-measured.Subsidiaries are fully consolidated from the date 3.4 Associate entities Contingent consideration classified as an asset oron which control is transferred to the Group. They a liability which is a financial instrument within the Associates are those entities over which the Groupare excluded from consolidation from the date that scope of IAS 39 is measured at fair value with gains is able to exert significant influence, generallythe control ceases. The majority of the Group’s and losses recognised either in the Statement of accompanying a shareholding of between 20%subsidiaries have a reporting date of 30 June. For Income or in other Comprehensive Income according to 50% of voting rights, but which are neitherthose subsidiaries with a different reporting date the subsidiaries nor investments in joint ventures. In to the requirements of IAS 39 and contingentGroup consolidate management information which is consideration classified as an asset or a liability the consolidated financial statements, investmentssubject to audit for the period to 30 June. outside the scope of IAS 39 is accounted for in in associates are initially recorded at cost and accordance with IAS 37 or other IFRSs as appropriate. subsequently accounted for using the equity method.In addition, acquired subsidiaries are subject toapplication of the purchase method. This involves All inter-company balances and significant Under the equity method, the Group’s interest in anthe revaluation at fair value of all identifiable assets inter-company transactions and resulting unrealised associate is carried at cost and the carrying amountand liabilities, including contingent liabilities of the is then increased or decreased to recognise the profits or losses (unless losses provide evidence ofsubsidiary, at the acquisition date, regardless of impairment) are eliminated on consolidation. Group’s share of the profit or loss of the associate after the date of acquisition plus any changes in
  • 50. 50 VNL Annual Report 2010 the associate’s other comprehensive income less goodwill. The cost of acquisition is measured at the measurement of the performance of the Group any identified impairment loss, unless it is classified aggregate of the fair values, at the date of exchange, (specifically changes in the Net Asset Value of as held for sale or included in a disposal group of assets given, liabilities incurred or assumed, and the Group) and a large proportion of significant that is classified as held for sale. The consolidated equity instruments issued by the Group, plus any transactions of the Group are denominated in USD. Statement of Income includes the Group’s share of costs directly attributable to the investment. the post-acquisition, post-tax results of the associate 3.6 Foreign currency translation entity for the year, including any impairment loss Goodwill is included within the carrying amount of In the individual financial statements of entities, on goodwill relating to the investment in associate an investment and is assessed for impairment as transactions arising in currencies other than the recognised for the year. part of the investment. After the application of the functional currency of the individual entity are equity method, the Group determines whether it is translated at exchange rates in effect on the All subsequent changes to the Group’s share of interest necessary to recognise an additional impairment loss transaction dates. Monetary assets and liabilities in the equity of the associate are recognised in the on the Group’s investments in its associates. denominated in currencies other than the functional carrying amount of the investment. Changes resulting currency of the individual entity are translated at from the profit or loss generated by the associate are At each reporting date, the Group determines the exchange rates in effect at the reporting date. reported within “Share of profits/(losses) of associates” whether there is any objective evidence that an Translation gains and losses and expenses relating to in the Consolidated Statement of Income. These investment in an associate is impaired. If such foreign exchange transactions are recognised in the changes include subsequent depreciation, amortisation indications are identified, the Group calculates consolidated Statement of Income. or impairment of the fair value adjustments of assets the amount of impairment as being the difference and liabilities. between the recoverable amount of the associate Non-monetary items measured at historical cost are and its respective carrying amount. translated using the exchange rates at the date of the Adjustments to the carrying value of the associate transaction (not retranslated at the reporting date). are necessary for changes in the associate’s Unrealised gains on transactions between the Group Non-monetary items measured at fair value are other comprehensive income that have not been and its associates are eliminated to the extent of the translated using the exchange rates at the date when recognised in their Statement of Income, primarily Group’s interest in an associate. Unrealised losses fair value was determined. those arising on the revaluation of plant, property are also eliminated unless the transaction provides and equipment. The Group’s share of such changes evidence of an impairment of the asset transferred. In the consolidated financial statements all individual are recognised directly in the Statement of financial statements of subsidiaries, where the 3.5 Functional and presentation currency Comprehensive Income. functional currency is different from the Group’s The consolidated financial statements are presented presentation currency, are converted into USD. When the Group’s share of losses in an associate in United States Dollars (USD) (“the presentation Assets and liabilities are translated into USD at equals or exceeds its interest in the associate, the currency”). The financial statements of each the closing rate of the reporting date. Income and Group does not recognise further losses, unless it has consolidated entity are initially prepared in the expenses are translated using the exchange rates legal or constructive obligations, or made payments, currency of the primary economic environment in at the dates of the transactions. Where the average on behalf of the associate. which the entity operates which may be Vietnamese rates approximate the exchange rates at the dates Dong or USD (“the functional currency”). The of the transactions, income and expenses are Any excess of the cost of acquisition over the Group’s financial statements prepared using Vietnamese translated into the Group’s presentation currency at share of the net fair value of the identifiable assets, Dong are then translated into the presentation the average rates. Any differences arising from this liabilities and contingent liabilities of an associate currency of USD. USD is used as the presentation translation are recognised in other comprehensive recognised at the date of acquisition is recognised as currency because it is the primary basis for the income.
  • 51. VNL Annual Report 2010 513.7 Revenue recognition on a straight-line basis over the term of the lease. classified as investment property on a property bySale of goods and revenues from hotel operations Lease incentives received are recognised in the property basis. If a leased property does not meet thisand other related services Statement of Income as an integral part of the total definition it is recorded as an operating lease.Revenue from sale of goods is recognised in the lease expense. The property under construction or developmentConsolidated Statement of Income when the 3.9 Goodwill for future use as investment property is treated assignificant risks and rewards of ownership of goods investment property and is measured at fair value Goodwill represents the excess of the cost ofhave passed to the buyer. Revenue from hotel where the fair value of the investment property acquisition of subsidiary companies and associatedoperations and other related services is recognised under construction or development for future use companies over the Group’s share of the fair value ofas and when the services are provided. is reliably determined. their identifiable net assets at the date of acquisition.Rental income Investment properties are stated at fair value. Goodwill is recognised at cost less any accumulatedRental income from investment property is Two independent valuation companies with impairment losses. The carrying value of goodwillrecognised in the consolidated Statement of Income appropriately recognised professional qualifications is subject to an annual impairment review andon a straight-line basis over the term of the operating and recent experience in the location and category whenever events or changes in circumstanceslease. Lease incentives granted are recognised as an being valued undertake a valuation of every indicate that it may not be recoverable. Anintegral part of the total rental income. property each year. On the valuation date the fair impairment charge will be recognised in theInterest income Statement of Income when the results of such a value is estimated assuming there is an agreementInterest income is recognised on an accrual and review indicate that the carrying value of goodwill is between a willing buyer and a willing seller in aneffective yield basis. impaired (see accounting policy 3.16). arm’s length transaction after proper marketing; wherein the parties have each acted knowledgeably,Dividend income Negative goodwill represents the excess of the prudently and without compulsion. The valuationsDividend income is recorded when the Group’s right Group’s interest in the fair value of identifiable net are prepared based upon direct comparison withto receive the dividend is established. assets and liabilities, and contingent liabilities over sales of other similar properties in the area and the costs of acquisition. It is recognised directly in the expected future discounted cash flows of a property3.8 Expense recognition Statement of Income at the date of acquisition. using a yield that reflects the risks inherent therein.Borrowing costs Valuations are reviewed by the Valuation CommitteeBorrowing costs, comprising interest and related Gains and losses on disposal of an entity include the and approved by the Board of Directors. Discountcosts, are recognised as an expense in the period in carrying amount of goodwill relating to the entity rates from 10% to 16% are considered appropriatewhich they are incurred, except for borrowing costs disposed of. for properties in different locations. Where therelating to qualifying assets that need a substantial 3.10 Investment properties Valuation Committee consider the discount rateperiod of time to get ready for their intended use or applied by the independent valuers to be too low Investment properties are properties owned orsale to the extent that they are directly attributable or if there are factors that the external independent held under finance lease to earn rentals or capitalto the acquisition, production or construction of valuers have not considered in their determination appreciation, or both, or held for a currentlysuch assets. of a property’s fair value, they will adjust the undetermined use. Property held under operating discount rate upwards in the discounted cash flowOperating lease payments leases (including leasehold land) that would otherwise projections, thereby decreasing the property’s netPayments made under operating leases are meet the definition of investment property is present valuation.recognised in the consolidated Statement of Income
  • 52. 52 VNL Annual Report 2010 Any gain or loss arising from a change in fair value reference to the actual rate payable on borrowings If an investment property is reclassified as property, is recognised in the Statement of Income. Rental for development purposes or, with regard to that plant and equipment its fair value at the date income from investment property is accounted for as part of the development cost financed out of general of reclassification becomes its deemed cost for described in the accounting policy 3.7. funds, to the average rate. subsequent accounting. When an item of property, plant and equipment 3.11 Property developed for sales Where parts of an item of property, plant and is transferred to investment property following a Property that is being constructed or developed for equipment have different useful lives, they are change in its use, any differences arising at the date sales is classified as investment property developed accounted for as separate items of property, plant of transfer between the carrying amount of the item for sales until construction or development is and equipment. immediately prior to transfer and its fair value is complete, at which time it is reclassified and recognised directly in other comprehensive income Subsequent expenditure subsequently accounted for as inventory. if it is a gain. Upon disposal of the item the gain is The Group recognises in the carrying amount of transferred to retained earnings. Any loss arising in 3.12 Property, plant and equipment an item of property, plant and equipment the cost this manner is recognised in the Statement of Income Owned assets of replacing part of such an item when that cost is immediately. All property, plant and equipment, except buildings incurred if it is probable that the future economic and leasehold land improvements, are stated at benefits embodied with the item will flow to the Property where more than 10% of the property cost less accumulated depreciation and impairment Group and the cost of the item can be measured is occupied by the Group for the production or losses (see accounting policy 3.16). The cost of reliably. The carrying values of any parts replaced as a supply of goods and services, or for administration self-constructed assets includes the cost of materials, result of such replacements are expensed at the time purposes, is accounted for as property, plant and direct labour, overheads and the initial estimate of of replacement. All other costs associated with the equipment (see accounting policy 3.2). the costs of dismantling and removing the items and maintenance of property, plant and equipment are restoring the site on which they are located. recognised in the Statement of Income as incurred. All costs directly associated with the purchase and construction of an investment property, Buildings and leasehold land improvements including Depreciation and all subsequent capital expenditures for the hotels and golf courses are revalued to fair value in Depreciation is charged to the Statement of Income development qualifying as acquisition costs are accordance with the methods set out in accounting on a straight-line basis over the estimated useful capitalised. policy 3.10. Any surplus arising on the revaluation lives of property, plant and equipment, and major is recognised in a revaluation reserve within equity, components that are accounted for separately. The Borrowing costs for property under construction estimated useful lives are as follows: or development are capitalised if they are directly except to the extent that the surplus reverses a attributable to the acquisition, construction or previous revaluation deficit on the building charged Buildings, hotels and golf courses 26 to 45 years production of that qualifying asset. Capitalisation to the Consolidated Statement of Income, in which Machinery and equipment 4 to 12 years of borrowing costs commences when the case a credit to that extent is recognised in the Furniture and fixtures 3 to 10 years activities to prepare the asset are in progress and consolidated Statement of Income. Any deficit on Motor vehicles 3 to 8 years expenditures and borrowing costs are being incurred. revaluation is charged in the consolidated Statement Capitalisation of borrowing costs continues until of Income except to the extent that it reverses a Material residual value estimates and estimates the assets are substantially ready for their intended previous revaluation surplus on a building, in which of useful lives are reviewed at least annually, use. If the resulting carrying amount of the asset case it is taken directly to the revaluation reserve. Any irrespective of whether assets are revalued. exceeds its recoverable amount, an impairment loss revaluation surplus remaining in equity on disposal of the asset is transferred to retained earnings. Assets held under finance leases which do not is recognised. The capitalisation rate is arrived at by transfer title to the assets to the Group at the end
  • 53. VNL Annual Report 2010 53of the lease are depreciated over the shorter of the 3.14 Leases Derecognition of financial assets occurs when theestimated useful lives shown above and the term of Leases under the terms of which the Group assumes rights to receive cash flows from the investmentsthe lease. substantially all the risks and rewards of ownership expires or are transferred and substantially all of are classified as finance leases and stated at an the risks and rewards of ownership have been3.13 Intangible assets transferred. At each reporting date, financial assets amount equal to the lower of its fair value and theIntangible assets comprise software and hotel present value of the minimum lease payments at are reviewed to assess whether there is objectivegaming licences. Intangible assets acquired inception of the lease, less accumulated depreciation evidence of impairment. If any such evidence exists,separately are measured initially at cost. The cost of and impairment losses. any impairment loss is determined and recognisedintangible assets acquired in a business combination based on the classification of the financial their fair value as at the date of acquisition. Leases which do not transfer substantially all theFollowing initial acquisition, intangible assets are risks and rewards of ownership to the Group are The Group’s financial assets consist primarily ofmeasured at cost less any accumulated amortisation classified as operating leases. Where the Group has unlisted equities, loans and receivables.and accumulated impairment losses, except for hotel the use of an asset held under an operating lease, Loans and receivablesgaming licences. The carrying value of the assets is payments made under the lease are charged to the All loans and receivables, except trustee loans,reviewed annually for impairment. Statement of Income on a straight line basis over the are non-derivative financial assets with fixed or term of the lease. Prepayments for operating leasesHotel gaming licences are revalued to fair value in determinable payments that are not quoted in an represent property held under operating leasesaccordance with the methods set out in accounting active market. After initial recognition these are where a portion, or all, of the lease payments havepolicy 3.10. Any surplus arising on the revaluation measured at amortised cost using the effective been paid in advance, and the properties cannot beis recognised in a revaluation reserve within equity, interest method, less provision for impairment. classified as an investment property.except to the extent that the surplus reverses a Any change in their value is recognised in theprevious revaluation deficit on the licence charged 3.15 Financial assets Statement of Income. Discounting, however,to the Consolidated Statement of Income, in which Financial assets are divided into the following is omitted where the effect of discounting iscase a credit to that extent is recognised in the categories: loans and receivables, financial assets immaterial. The Group’s cash and cash equivalents,consolidated Statement of Income. Any deficit on at fair value through the Statement of Income. trade and most other receivables fall into thisrevaluation is charged in the consolidated Statement category of financial instruments.of Income except to the extent that it reverses a Management determines the classification of its financial assets at initial recognition depending Significant receivables are considered for impairmentprevious revaluation surplus on a licence, in which on the purpose for which the financial assets when they are overdue or when other objectivecase it is taken directly to the revaluation reserve. were acquired. Where allowed and appropriate evidence is received that a specific counterparty willIntangible assets with finite useful lives are amortised management re-evaluates this designation at each default. Receivables that are not considered to beover the estimated useful lives and assessed for reporting date. The designation of financial assets individually impaired are reviewed for impairmentimpairment whenever there is an indication that the is based on the investment strategy set out in the in groups, which are determined by reference to theintangible asset may be impaired. The amortisation Group’s Admission Document to the London Stock industry and other available features of shared creditperiod and the amortisation method are reviewed at Exchange’s Alternative Investment Market, dated risk characteristics. The percentage of the writeleast at each financial year-end. The estimated useful 16 March 2006. down is then based on recent historical counterpartylives are as follows: default rates for each identified group. Impairment All financial assets are recognised when, and only of trade and other receivables are presented withinGaming licences 16 to 30 years when, the Group becomes a party to the contractual “other expenses”.Software 3 to 5 years provisions of the instrument.
  • 54. 54 VNL Annual Report 2010 Financial assets at fair value through Statement units that are expected to benefit from synergies of are presented within Prepayments for acquisitions of Income the related business combination and represent the of investments in the Consolidated Statement of Financial assets at fair value through Statement lowest level within the Group at which management Financial Position. of Income include financial assets that are either controls the related cash flows. classified as held for trading or are designated by the 3.18 Income taxes entity to be carried at fair value through Statement Goodwill and intangible assets with an indefinite Current income tax assets and/or liabilities comprise of Income upon initial recognition. Financial assets at life are tested for impairment annually, while other those obligations to, or claims from, fiscal authorities fair value through Statement of Income held by the assets are tested when there is an indicator of relating to the current or prior reporting periods that Group include unlisted securities and trustee loans. impairment. are unpaid at the reporting date. They are calculated Purchase or sale of financial assets is recognised according to the tax rates and tax laws applicable An impairment loss is recognised in profit or loss using trade date accounting. The trade date is the to the fiscal periods to which they relate based on immediately for the amount by which the asset’s date that an entity commits itself to purchase or sell the taxable profit for the year. Current and deferred carrying amount exceeds its recoverable amount an asset. tax shall be recognised as income or expense and unless the relevant asset is carried at a revalued included in profit or loss for the year. Current tax and Trustee loans are loans provided to banks and other amount under the Group’s accounting policy. An deferred tax shall be charged or credited directly to parties where the Group receives interest and impairment loss on a revalued asset is treated as a equity if the tax relates to items that are credited or other income on the loans calculated based on the revaluation decrease, but only to the extent of the charged, in the same or a different period, directly proceeds from the sales of specific assets held by the revaluation surplus for that same asset. Further to equity, and if the tax relates to items recognised counterparties. Fair value is determined based on the impairment losses are recognised in profit or loss. in other comprehensive income, it is recognised in expected future discounted cash flows from each loan. The recoverable amount is the higher of fair value, other comprehensive income. reflecting market conditions less costs to sell, and Net changes in fair value of financial assets at fair value in use. In assessing value in use, the estimated Deferred income taxes are calculated using the value through Statement of Income include net future cash flows are discounted to their present liability method on temporary differences. This unrealised gains in fair value of financial assets and value using a pre-tax discount rate that reflects involves the comparison of the carrying amounts net gains from realisation of financial assets during current market assessments of the time value of of assets and liabilities in the consolidated financial the year. money and the risks specific to the assets. statements with their respective tax bases. In addition, tax losses available to be carried forward 3.16 Impairment of assets 3.17 Prepayments for acquisitions of investments as well as other income tax credits to the Group The Group’s goodwill, operating lease prepayments, Prepayments for acquisition of investments are are assessed for recognition as deferred tax assets. property, plant and equipment, intangible assets initially measured at cost until such times as approval However, deferred tax is not provided on the initial and interests in associates are subject to impairment is obtained or the conditions are met, at which point recognition of goodwill, or on the initial recognition testing. they are transferred to investment properties and of an asset or liability unless the related transaction accounted for accordingly. Such payments are made is business combination or affects tax or accounting For the purpose of assessing impairment, to vendors for land clearance and other related costs, profit. Deferred tax on temporary differences assets are grouped at the lowest levels for which professional fees directly attributed to the projects associated with shares in subsidiaries and associates there are separately identifiable cash flows where the final transfer of the property is pending is not provided if reversal of these temporary (cash-generating units). As a result, some assets the approval of the relevant authorities and/or is differences can be controlled by the Group and are tested individually for impairment and some subject to either the Group or the vendor completing it is probable that reversal will not occur in the are tested at cash-generating unit level. Goodwill certain performance conditions. The prepayments foreseeable future. in particular is allocated to those cash-generating
  • 55. VNL Annual Report 2010 55Deferred tax liabilities are always provided for or disposal group is classified as “held for sale” and Changes in ownership interests in a subsidiary thatin full. Deferred tax assets are recognised to the presented separately in the consolidated financial do not result in gaining or losing control of theextent that it is probable that they will be able to statements in accordance to IFRS 5 “Non-current subsidiary are accounted for as equity transactionsbe offset against future taxable income. However, assets held for sale and discontinued operations”. and recorded in the Consolidated Statement ofthe deferred income tax is not accounted for if it Changes in Equity.arises from initial recognition of an asset or liability Liabilities are classified as “held for sale” andin a transaction other than a business combination presented as such in the consolidated reporting if 3.22 Financial liabilitiesthat at the time of the transaction affects neither they are directly associated with a disposal group. The Group’s financial liabilities include trade andaccounting nor taxable profit or loss. other payables, borrowings and other liabilities. Assets classified as “held for sale” are measured atDeferred tax assets and liabilities are calculated, the lower of their carrying amounts immediately Financial liabilities are recognised when the Groupwithout discounting, at tax rates that are expected prior to their classification as held for sale and their becomes a party to the contractual agreementsto apply to their respective period of realisation, fair values less costs to sell. However, some “held of the instrument. All interest related charges areprovided they are enacted or substantively enacted for sale” assets such as financial assets or deferred recognised as an expense in finance costs in theat the reporting date. Most changes in deferred tax tax assets, continue to be measured in accordance Statement of Income.assets or liabilities are recognised as a component of with the Group’s accounting policy for those assets. No assets classified as “held for sale” are subject to Trade payables are recognised initially at their fairtax expense in the Statement of Income. Only changes depreciation or amortisation, subsequent to their value and subsequently measured at amortised cost,in deferred tax assets or liabilities that relate to a classification as “held for sale”. using the effective interest rate method.change in value of assets or liabilities that is chargeddirectly to other comprehensive income are charged 3.21 Equity Borrowings are raised for support of long-termor credited directly to other comprehensive income. funding of the Group’s investments and are Share capital is determined using the nominal value of shares that have been issued. Additional paid-in recognised at fair value plus direct transaction costs3.19 Cash and cash equivalents capital includes any premiums received on the initial on initial recognition and thereafter at amortisedCash and cash equivalents include cash at banks cost under the effective interest rate method.and in hand as well as short-term highly liquid issuance of the share capital. Any transaction costsinvestments such as money market instruments and associated with the issuing of shares are deducted A financial liability is derecognised when thebank deposits with an original maturity term of not from additional paid-in capital, net of any related obligation under the liability is discharged ormore than three months. income tax benefits. cancelled or expires.3.20 Non-current assets and liabilities classified as Revaluation reserve represents the surplus arising on 3.23 Provisions, contingent liabilities andheld for sale the revaluation of the Group’s owned buildings which contingent assets are classified under property, plant and equipment.When the Group intends to sell a non-current asset Provisions are recognised when present obligationsor a group of assets (a disposal group), if the carrying Currency translation differences on net investment will probably lead to an outflow of economicamount will principally be recovered through the in foreign operations are included in the translation resources from the Group that can be reliablysale; they are available for immediate sale in their reserve. estimated. A present obligation arises from thepresent condition subject only to terms that are presence of a legal or constructive obligation thatusual and customary for sale of such assets and sale Retained earnings include all current and prior period has resulted from past events. Provisions are notis highly probable at the reporting date, the asset results as disclosed in the Consolidated Statement of recognised for future operating losses. Changes in Equity.
  • 56. 56 VNL Annual Report 2010 3.24 Provisions, contingent liabilities and 3.25 Related parties contingent assets (cont.) Parties are considered to be related if one party Provisions are measured at the estimated has the ability to control the other party or exercise expenditure required to settle the present obligation, significant influence over the other party in making based on the most reliable evidence available at the financial or operational decisions. Parties are reporting date, including the risks and uncertainties considered to be related to the Group if: associated with the present obligation and where there is uncertainty about the timing or amount 1. directly or indirectly, a party controls, is of the future expenditure require in settlement. controlled by, or is under common control with Where there are a number of similar obligations, the Group; has an interest in the Group that gives the likelihood that an outflow will be required in it significant influence over the Group; or has settlement is determined by considering the class joint control over the Group; of obligations as a whole. Long-term provisions are 2. a party is a jointly-controlled entity; discounted to their present values, where the time value of money is material. 3. a party is an associate; 4. a party is a member of the key management All provisions are reviewed at each reporting date personnel of the Group; or and adjusted to reflect the current best estimate of Group’s management. 5. a party is a close family member of the above categories. The Group does not recognise a contingent liability but discloses its existence in the financial statements. 3.26 Earnings per share and net asset value per share A contingent liability is a possible obligation that The Group presents basic earnings per share (EPS) arises from past events whose existence will be for its ordinary shares. Basic EPS is calculated by confirmed by uncertain future events beyond the dividing the profit or loss attributable to the ordinary control of the Group or a present obligation that is shareholders by the weighted average number of not recognised because it is not probable that an ordinary shares outstanding during the year. outflow of resources will be required to settle the Net asset value (NAV) per share is calculated by obligation. A contingent liability also arises in the rare dividing the net asset value attributable to ordinary circumstance where there is a liability that cannot be shareholders of the Company by the number of recognised because it cannot be measured reliably. outstanding ordinary shares as at the reporting date. A contingent asset is a possible asset that arises Net asset value is determined as total assets less from past events that’s existence will be confirmed total liabilities and non-controlling interests. by uncertain future events beyond the control of 3.27 Segment reporting the Group. The Group does not recognise contingent An operating segment is a component of the Group: assets but discloses their existence when inflows of economic benefits are probable, but not virtually certain.
  • 57. VNL Annual Report 2010 571. that engages in investment activities from which In making its judgement, the Valuation Committee Trade and other receivables it may earn revenues and incur expenses; considers information from a variety of sources, The Group’s management determines the provision for including: impairment of trade and other receivables on a regular2. whose operating results are based on internal basis. This estimate is based on the credit history of its management reporting information that is (i) current prices in an active market for properties customers and prevailing market conditions. regularly reviewed by the Investment Manager to of different nature, condition or location (or make decisions about resources to be allocated subject to different lease or other contracts), Other assets to the segment and assess its performance; and adjusted to reflect those differences; The Group’s goodwill, intangible assets, operating3. for which discrete financial information is available. lease prepayments, other assets and interests (ii) recent prices of similar properties in less active in associates is subject to impairment testing in4. Critical accounting estimates and judgements markets, with adjustments to reflect any changes accordance with the accounting policy 3.16. in economic conditions since the date of theWhen preparing the consolidated financial transactions that occurred at those prices; Business combinationsstatements, management undertakes a number (iii) recent developments and changes in laws and On initial recognition, the assets and liabilities of theof judgements, estimates and assumptions about regulations that might affect zoning and/or the acquired business are included in the consolidatedrecognition and measurement of assets, liabilities, Group’s ability to exercise its rights in respect statement of financial position at their fair values.income and expenses. The actual results may differ to properties and therefore fully realise the In measuring fair value management uses estimatesfrom the judgements, estimates and assumptions estimated values of such properties; and about future cash flows and discount rates ormade by management, and may not equal the independent valuation for investment propertiesestimated results. Information about significant (iv) discounted cash flow projections based on and buildings.judgements, estimates and assumptions that have reliable estimates of future cash flows, derivedthe most significant effect on recognition and from the terms of external evidence such as Useful lives of depreciable assetsmeasurement of assets, liabilities, income and current market rents and sales prices for similar Management reviews useful lives of depreciableexpenses are discussed below: properties in the same location and condition, assets at each reporting date. Management assesses and using discount rates that reflect current that the useful lives represent the expected utility ofFair value of investment properties, leasehold land, market assessments of the uncertainty in the the assets to the Group. The carrying amounts arehotels and golf courses amount and timing of the cash flows. analysed in Note 11 and Note 12.The investment properties, leasehold land, hotelsand golf courses of the Group are stated at fair Impairment 5. Comparative figuresvalue in accordance with accounting policies 3.10 Investment properties, leasehold land, hotels andand 3.11. The fair values of investment properties, golf courses The figures for the year ended 30 June 2009, whichleasehold land and buildings have been determined Whenever there is an indication of impairment of an are included in this year’s financial statementsby independent professional valuers including: CB investment property, leasehold land and buildings for comparative purpose, have been reclassifiedRichard Ellis, Savills, Jones Lang LaSalle, Colliers, the Valuation Committee and management will to conform to the current year presentation.Sallmanns and HVS. These valuations are based on assess the need for an impairment adjustment. The reclassifications did not have any effect oncertain assumptions, which are subject to uncertainty The estimation of impairment adjustments is based the Company’s net worth as at 30 June 2009 orand might materially differ from the actual results. on the same principles used to adjust the periodic Statement of Income for the year. Details of the independent valuations mentioned above. reclassifications and the effect on related items on the financial statements are as follows:
  • 58. 58 VNL Annual Report 2010 Statement of financial position as at 30 June 2009 (extracted): 6. Segment reporting In identifying its operating segments, management As previously generally follows the Group’s sectors of investment reported Reclassifications Restated which are based on internal management reporting USD‘000 USD‘000 USD‘000 information for the Investment Manager’s ASSETS management, monitoring of investments and Non-current assets decision making. The operating segment by Investment properties 489,068 (42,454) 446,614 investment portfolio include Commercial, Property, plant and equipment 72,161 6,747 78,908 Undetermined use, Hospitality, Mixed-use and Cash and short-term investments. Prepayments for operating lease assets 17,334 35,707 53,041 Deferred tax assets 286 4,738 5,024 The activities undertaken by the Commercial 578,849 4,738 583,587 segment includes the development and operation of investment properties. Investment, construction and sales of residential properties such as apartments RESOURCES and villas are included in the Undetermined use Liabilities segment. The Hospitality segment includes the Non-current liabilities development and operation of hotels and other Deferred tax liabilities 14,629 4,738 19,367 related services. Remaining investments are included 14,629 4,738 19,367 in the Mixed-use segment. Strategic decisions are made on the basis of segment operating results. Each of the operating segments are managed and monitored separately by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental Statement of Income, the majority of expenses are common to all segments and therefore cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment Statement of Income. Segment information can be analysed as follows for the reporting periods under review:
  • 59. VNL Annual Report 2010 59Consolidated Statement of Income Year ended 30 June 2010 Undetermined Commercial use Hospitality Mixed use Total USD‘000 USD‘000 USD‘000 USD’000 USD’000Revenue - - 17,125 152 17,277Other income - 31,677 1,760 12,372 45,809Finance income 16 3,338 919 2,587 6,860Net gain/(loss) on fair value adjustments of investment properties (1,051) 60,594 (2,813) 38,757 95,487Net changes in fair value of financial assets at fair value through Statement of Income - 7,695 - - 7,695Share of profit/(losses) of associates (3,305) (5,913) (391) - (9,609)Total (4,340) 97,391 16,600 53,868 163,519Cost of sales (10,235)Operating, selling and administration expenses (46,171)Other expenses (7,710)Finance expenses (8,244)Profit/(loss) before tax 91,159Income tax (expenses)/income (15,167)Net profit/(loss) for the year 75,992
  • 60. 60 VNL Annual Report 2010 For the comparative year: Year ended 30 June 2009 Undetermined Commercial use Hospitality Mixed use Total USD‘000 USD‘000 USD‘000 USD’000 USD’000 Revenue - 537 27,477 - 28,014 Other income - 2,503 88 - 2,591 Finance income 16 6,973 1,535 3,448 11,972 Net gain/(loss) on fair value adjustments of investment properties 1,781 (56,613) (21,486) (77,226) (153,544) Net changes in fair value of financial assets at fair value through Statement of Income - 1,084 - (5,838) (4,754) Share of profits/(losses) of associates 6,803 (12,920) (2,366) 5,141 (3,342) Total 8,600 (58,436) 5,248 (74,475) (119,063) Cost of sales (15,711) Operating, selling and administration expenses (35,611) Other expenses (38,067) Finance expenses (6,735) Profit/(loss) before tax (215,187) Income tax (expense)/income 13,564 Net profit/(loss) for the year (201,623)
  • 61. VNL Annual Report 2010 61Consolidated statement of financial position As at 30 June 2010 Undetermined Cash and short-term Commercial use Hospitality Mixed use investments Total USD‘000 USD‘000 USD‘000 USD‘000 USD‘000 USD‘000Investment properties 7,852 381,450 51,444 179,904 - 620,650Investment properties developed for sales - 29,185 44,336 6,536 - 80,057Property, plant and equipment 23 114 97,401 14,031 - 111,569Goodwill and intangible assets 1 3,925 13,301 96 - 17,323Cash and cash equivalents - - - - 79,979 79,979Trade and other receivables 578 86,224 18,401 7,434 - 112,637Investment in associates 14,153 51,701 5,935 - - 71,789Prepayments for acquisitions of investments 20 41,966 6,498 3,724 - 52,208Financial assets at fair value through Statement of Income - 13,859 - 18,937 - 32,796Short-term investments - - - - 15,215 15,215Other assets 412 17,633 13,469 43,430 - 74,944Total assets 23,039 626,057 250,785 274,092 95,194 1,269,167
  • 62. 62 VNL Annual Report 2010 For the comparative year end (reclassified): As at 30 June 2009 Undetermined Cash and short-term Commercial use Hospitality Mixed use investments Total USD‘000 USD‘000 USD‘000 USD‘000 USD‘000 USD‘000 Investment properties 12,136 288,278 70,182 76,018 - 446,614 Property, plant and equipment 34 187 71,871 6,816 - 78,908 Goodwill and intangible assets 1 4 12,079 7 - 12,091 Cash and cash equivalents - - - - 50,274 50,274 Trade and other receivables 504 83,399 21,421 4,577 - 109,901 Investment in associates 17,458 53,846 6,327 27,133 - 104,764 Prepayments for acquisitions of investments 20 36,763 1,196 28,118 - 66,097 Financial assets at fair value through Statement of Income - 7,588 - 38,710 - 46,298 Short-term investments - - - - 34,888 34,888 Assets and disposal group classified as held for sale - - 85,321 - - 85,321 Other assets 34 6,722 15,987 39,152 - 61,895 Total assets 30,187 476,787 284,384 220,531 85,162 1,097,051 The Group’s revenues, investment income and its non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax assets and post-employment benefit assets) are attributable to the following geographic areas: Year ended 30 June 2010 Year ended 30 June 2009 Revenue and income Non-current assets Revenue and income Non-current assets USD’000 USD’000 USD’000 USD’000 Vietnam 126,622 787,214 (119,433) 590,654 Other countries 65 - 24 - Total 126,687 787,214 (119,409) 590,654 Revenues and investment income include operating revenue, finance income, net gains/(losses) on fair value adjustments of investment properties and financial assets at fair value through Statement of Income. These have been identified on the basis of the operation and investment location. Non-current assets are allocated based on their physical location.
  • 63. VNL Annual Report 2010 637. SubsidiariesAdditional acquisition of Vina Alliance Company Limited Disposal of 85% in Golden Gain Vietnam LimitedAt 30 June 2009, the Group held 49% equity interest During the year, the Group disposed of an 85% equityin Vina Alliance Company Limited, a subsidiary interest in Golden Gain Vietnam Limited for USD36.4incorporated in Vietnam. The principal activity of this million. The book value of the net assets as the disposalcompany is to build and sell an office building and retail date was USD24.5 million resulting in a gain on disposalcentre. In October 2009, the Group acquired a further which has been recognised in the Statement of Financial13% equity interest for consideration of USD7.2 million Performance. The remaining stake of 15% was valued inwhich was settled in cash and brings the Group’s total line with the Sale and Purchase Agreement at the date ofinterest in the project to 62% at the reporting date. losing control after the reporting date (Note 21).The Group’s share of the fair value of the assets acquiredwas USD12.2 million resulting in negative goodwill Additional acquisition of Vinh Thai Urban Developmentof USD5.0 million which has been recognised in the CorporationStatement of Income (Note 35). The company has not At 30 June 2009 the Group held 51% equity interest ofyet started operation. Vinh Thai Urban Development Corporation, a subsidiary incorporated in Vietnam. The principal activity of thisAcquisition of Phu Hoi City Company Limited company is to build and operate a large scale township. InThe Group previously made a deposit of USD9 million January 2010, the Group acquired a further 2.25% equityin respect of this project which was classified as a interest for USD2.8 million which was settled in cash andPrepayment for acquisition of investments at 30 June brings the Group’s total interest in the project to 53.25%.2009. In addition to the 22.5% interest in the project The difference of USD0.2 million between the percentageheld by the Group through the investment licence, change in non-controlling interests and the considerationin September 2009 the Group acquired a further paid has been recognised directly in equity and attributed30% interest from a local partner. An amount of to the owners of the Group.USD5.1 million was reclassified from Prepayment foracquisition of investments as part of the consideration Additional acquisition of Viet Land Development Corporationof USD16.0 million. The Group’s share of the fair value At 30 June 2009, the Group held 60% equity interestof the assets acquired was USD12.1 million resulting in of Viet Land Development Corporation, a subsidiarygoodwill of USD3.9 million which has been recognised incorporated in Vietnam. The principal activity of thisin the Statement of Financial Position. The two key company is to build and operate a residential building. Infactors which support recognition of goodwill are the January 2010, the Group acquired a further 30% equityvalue added in granting of the investment licence and interest for USD13.5 million. Of the consideration amount,master plan approval by the local authorities. As a USD11.0 million has been accrued at the reportingresult, the Group’s total interest in the project is 52.5% date and is included in Trade and other payables in theat the reporting date. The company has not yet started Statement of Financial Position (Note 30). The differenceoperation. between the percentage change in non-controlling interest of USD16.6 million and the consideration paid of USD3.1 million has been recognised directly in equity and attributed to the owners of the Group.
  • 64. 64 VNL Annual Report 2010 Particulars of principal subsidiaries of the Group as of 30 June 2010 are as follows: Share capital Percentage Place of incorporation/ (USD/ interest held by Principal Name operations USD equivalents) the Group activities Onshine Investments Limited BVI 1 100% Property investment Vietnam Property Holdings Limited BVI 100 75% Property investment Prosper Big Investment Limited BVI 50,000 75% Property investment VinaCapital Danang Resorts Limited BVI 4 75% Property investment VinaCapital Commercial Center Limited - Class A Shares BVI 28,094,769 38.25% Property investment VinaCapital Commercial Center Limited - Class B Shares BVI 1,623,702 75% Property investment Bates Assets Limited BVI 4 100% Property investment Proforma Asia Limited BVI 4 100% Property investment Cypress Assets Limited BVI 10,000 77% Property investment Roxy Assets Limited BVI 4 75% Property investment VinaCapital Hoi An Resort Limited Vietnam 5,900,000 80% Hospitality VinaCapital Danang Golf Course Limited Vietnam 18,083,192 75% Property investment Maplecity Investments Limited BVI 4 75% Property investment Henry Enterprise Group Limited BVI 11,460,100 61.5% Property investment VinaCapital Danang Resort Limited Vietnam 13,502,000 75% Property investment VinaCapital Commercial Center Limited (Vietnam) – Class A Shares Vietnam 27,428,535 38.25% Property investment VinaCapital Commercial Center Limited (Vietnam) – Class B Shares Vietnam - 75% Property investment Tungshing International Investment Limited BVI 1,915,345 100% Property investment International Consultant Company Limited Vietnam 1,237,241 100% Property investment Dien Phuoc Long Real Estate Company Limited Vietnam 2,474,482 100% Property investment VinaCapital Phuoc Dien Co. Limited Vietnam 2,827,500 100% Property investment VinaCapital Long Dien Co. Limited Vietnam 3,142,375 100% Property investment East Ocean Real Estate and Tourism Joint Stock Company Vietnam 22,439,160 62.55% Hospitality Vina Properties (Singapore) Pte. Limited Singapore 1 75% Property investment 21st Century International Development Company Inc. Vietnam 35,369,206 61.5% Property investment Roxy Vietnam Co. Limited Vietnam 6,748,923 55.6% Hospitality Top Star International Limited Hong Kong 13 75% Hospitality
  • 65. VNL Annual Report 2010 65Particulars of principal subsidiaries of the Group as of 30 June 2010 (cont.) Share capital Percentage Place of incorporation/ (USD/ interest held by PrincipalName operations USD equivalents) the Group activitiesA-1 International (Vietnam) Corporation Limited Vietnam 16,700,000 52.5% HospitalityDong Binh Duong Urban Development Co. Limited Vietnam 7,324,043 70% Property investmentNam Phat Villas and Hotel Company Limited Vietnam 2,337,516 100% Hospitality(formerly known as Ha Trading Co. Limited)Orchid House Co. Limited Vietnam 565,206 55.56% HospitalityVina Dai Phuoc Corporation Limited Vietnam 73,046,074 54% Property investmentProdigy Pacific Vietnam Co. Limited Vietnam 1,500,000 100% Property investmentPavia Properties Limited BVI 1,896,462 100% Property investmentNguyen Du Joint Venture Company Vietnam 2,324,834 65% HospitalitySIH Investment Limited Singapore 8,379,168 63.75% Property investmentSAS Hanoi Royal Hotel Limited (*) Vietnam 12,000,000 44.63% HospitalityViet Land Development Corporation Limited Vietnam 2,500,000 90% Property investmentVinaLand Espero Limited BVI 100 75% Property investmentVinh Thai Urban Development Corporation Limited Vietnam 37,348,756 53.25% Property investmentThang Long Property Company Limited Vietnam 4,908,979 65% Property investmentHoang Phat Investment Joint Stock Company Vietnam 2,985,075 60% HospitalityAA VinaCapital Co. Limited Vietnam 8,102,160 80% Property investmentVina Alliance Company Limited Vietnam 38,006,734 62% Property investmentPhu Hoi City Company Limited Vietnam 43,651,074 52.5% Property investment(*) At the reporting date, the Group has a 44.63% equity interest in SAS Hanoi Royal Hotel Ltd., but it has control through the majority voting rights in this company. Therefore, the Group’s management considers this company as a subsidiary holding.
  • 66. 66 VNL Annual Report 2010 8 Net cash for acquisitions of subsidiaries 9. Investment properties 30 June 2010 30 June 2009 30 June 2010 30 June 2009 USD’000 USD’000 USD’000 USD’000 Cash payments for acquisitions of subsidiaries: (Reclassified) Vina Alliance Company Limited 7,181 - Opening balance 446,614 579,356 Phu Hoi City Company Limited 5,443 - Acquisitions of subsidiaries 84,097 41,074 Vinh Thai Urban Development Corporation Additions during the year 79,133 31,166 2,800 - Limited Net gains/(losses) on fair value adjustments of Vietland Development Corporation Limited 13,500 - investment SIH Investment Limited 600 - properties (Note 33) 95,487 (153,544) Vindemia Property Limited - 24,767 Disposals of investment properties (23,052) (4,332) Hoang Phat Investment Joint Stock Company - 5,250 Transferred from prepayments for operating lease 5,391 2,589 Cam Ranh Tourism Development Corporation assets (Note 14) - 1,817 Transferred from prepayments for acquisition of Limited 27,134 - 29,524 31,834 investment (Note 13) Less: Transferred to investment properties developed for (80,057) - sales (Note 10) Cash and cash equivalents at the date of - (43) Transferred to prepayments for acquisition of acquisition - (35,707) investment (*) (Note 14) Cost of acquisitions settled in prior years (13,618) Transferred to property, plant and equipment (*) - (6,747) Acquisition costs not yet settled (11,000) (10,984) Translation differences (14,097) (7,241) 18,524 7,189 Closing balance (**) 620,650 446,614 (*) The amounts represent the reclassifications of properties at subsidiary to conform to current year representation. (**) The Group and the local partner have agreed to swap their interests in the Binh Trung Tay and Nam Rach Chiec sites, which belong to 21st Century International Development Company Inc. (Century 21 Project). After the swap, the Group will control the Nam Rach Chiec site but have no interest in the Binh Trung Tay site. Nam Rach Chiec is a 30.11 hectares residential and commercial development located near the future Long Thanh – Dau Giay highway in district 2, Ho Chi Minh City. Binh Trung Tay is a 12.52 hectares residential development, located near the Diamond Island, Binh Khanh township and other residential areas. As at 30 June 2010, the Group used the fair value of 100% of Nam Rach Chiec to value its interest in the Century 21 Project.
  • 67. VNL Annual Report 2010 6710. Properties developed for sales 30 June 2010 30 June 2009 USD’000 USD’000Opening balance - -Transferred from investment properties (Note 9) (*) 80,057 -Closing balance 80,057 -(*) The amount represents the value of investments properties held by subsidiaries of the Group being developed for sales.11. Property, plant and equipment Buildings, hotels Machinery and Furniture and Construction and golf courses equipment fixtures Motor vehicles in progress Total USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Gross carrying amount 1 July 2009 70,743 14,866 2,016 892 51,323 139,840 Additions 72 1,869 186 814 34,602 37,543 Reclassifications 32,563 9,613 708 2 (42,886) - Disposals and written-off (3) (2,356) (507) (23) - (2,889) Revaluation gains 903 - - - 4,356 5,259 Translation differences - (2) (13) (13) (2,569) (2,597) 30 June 2010 104,278 23,990 2,390 1,672 44,826 177,156 Depreciation and impairment 1 July 2009 (26,129) (8,709) (776) (273) (25,045) (60,932) Charge for the year (2,361) (1,746) (421) (153) - (4,681) Disposals and written-off 29 2,027 486 2 - 2,544 Asset impairments (2,523) - - - - (2,523) Translation differences - - 5 - - 5 30 June 2010 (30,984) (8,428) (706) (424) (25,045) (65,587) Carrying amount 1 July 2009 44,614 6,157 1,240 619 26,278 78,908 Carrying amount 30 June 2010 73,294 15,562 1,684 1,248 19,781 111,569Buildings which belong to East Ocean Real Estate and Tourism Joint Stock Company with a carrying value of USD29.0 million as at 30 June 2010 (30 June 2009:USD14.8 million) are pledged as security for bank borrowings disclosed in Note 28.Buildings, equipment and construction in progress, which belong to Roxy Vietnam Co. Ltd. with a carrying value of USD16.0 million as at 30 June 2010 (30 June 2009:USD19.9 million), are pledged as security for bank borrowings disclosed in Note 28.
  • 68. 68 VNL Annual Report 2010 11. Property, plant and equipment (cont.) Prior year comparatives: Buildings, hotels Machinery Furniture Motor Construction and golf courses and equipment and fixtures vehicles in progress Total USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 (Reclassified) Gross carrying amount 1 July 2008 137,808 17,858 1,875 1,385 17,550 176,476 Additions 4,029 5,857 1,197 115 36,717 47,915 Classified as held for sale (70,668) (9,564) (8) - (718) (80,958) Property exchanged (Note 18) - - - - (8,592) (8,592) Reclassifications (*) 209 551 (10) (551) 6,538 6,737 Disposals (635) 165 (1,026) (52) 593 (955) Translation differences - (1) (12) (5) (765) (783) 30 June 2009 70,743 14,866 2,016 892 51,323 139,840 Depreciation and impairment 1 July 2008 (24,796) (14,726) (1,623) (225) - (41,370) Charge for the year (3,673) (2,167) (107) (103) - (6,050) Asset impairments (10,868) - - - (25,045) (35,913) Classified as held for sale 12,996 7,631 4 - - 20,631 Reclassifications - (50) 23 27 - - Disposals 212 603 924 27 - 1,766 Translation differences - - 3 1 - 4 30 June 2009 (26,129) (8,709) (776) (273) (25,045) (60,932) Carrying amount 1 July 2008 113,012 3,132 252 1,160 17,550 135,106 Carrying amount 30 June 2009 44,614 6,157 1,240 619 26,278 78,908 (*) The amount included USD6.7 million reclassified from investment property relating to construction in progress and buildings at subsidiary to conform to current year presentation.
  • 69. VNL Annual Report 2010 69If the cost model had been used, the carrying amount of buildings would be as follows: USD’000 (Reclassified)Buildings at 30 June 2010 At cost 132,512 Accumulated depreciation (13,345) Net carrying amount 119,167Buildings at 30 June 2009 At cost 79,673 Accumulated depreciation (11,739) Net carrying amount 67,93412. Intangible assets Gaming licences Software Total USD’000 USD’000 USD’000 Gross carrying amount 1 July 2009 12,700 239 12,939 Additions - 182 182 Revaluation gains 1,750 - 1,750 Reclassifications - 87 87 Translation differences - (8) (8) 30 June 2010 14,450 500 14,950 Amortisation and impairment 1 July 2009 (796) (52) (848) Charge for the year (653) (49) (702) 30 June 2010 (1,449) (101) (1,550) Carrying amount 1 July 2009 11,904 187 12,091 Carrying amount 30 June 2010 13,001 399 13,400
  • 70. 70 VNL Annual Report 2010 Prior year comparatives: Gaming licences Software Total USD’000 USD’000 USD’000 Gross carrying amount 1 July 2008 6,802 8 6,810 Additions - 223 223 Revaluation gains 5,898 - 5,898 Reclassifications - 10 10 Translation differences - (2) (2) 30 June 2009 12,700 239 12,939 Amortisation and impairment 1 July 2008 (388) (1) (389) Charge for the year (408) (51) (459) 30 June 2009 (796) (52) (848) Carrying amount 1 July 2008 6,414 7 6,421 Carrying amount 30 June 2009 11,904 187 12,091 13. Investments in associates 30 June 2010 30 June 2009 USD’000 USD’000 Opening balance 104,764 26,270 Additions during the year, net 3,768 61,962 Transferred to subsidiary (Note 7) (*) (27,134) - Transferred from prepayments for acquisitions of investments (Note 15) - 19,874 Share of associates’ losses (9,609) (3,342) Closing balance 71,789 104,764 (*) The amount represents the carrying value of the investment in the equity interest of 49% in Vina Alliance Company Limited.
  • 71. VNL Annual Report 2010 7113. Investments in associates (cont.)Particulars of operating associates and their summarised financial information, extracted from their financial statements as at 30 June 2010 are as follows: Share of Equity Principal (losses)/profit to Incorporation interest held activity Assets Liabilities Revenue Profit/(loss) the Group % USD’000 USD’000 USD’000 USD’000 USD’000 Long An S.E.A Industrial Park Development Co. Ltd. (*) Vietnam 11.25 Property 7,469 3,318 - (250) (50) Aqua City Joint Stock Company (**) Vietnam 50 Property 55,763 579 102 (11,732) (5,866) Thang Loi Land Joint Stock Company Vietnam 49 Property 12,157 705 171 6 3 Romana Resort and Spa JSC (**) Vietnam 50 Hospitality 4,909 2,193 1,485 (782) (391) Savico-Vinaland Co. Ltd. Vietnam 49.5 Property 17,569 476 71 (6,675) (3,305) 97,867 7,271 1,829 (19,433) (9,609) (*) At 30 June 2009, the Group held 18% equity interest in Long An S.E.A Industrial Park Development Co. Ltd. which was changed from a limited company to a joint stock company – Long An Industrial Park Joint Stock Company during the year. At the same time a local partner became a shareholder in this company. This resulted in the dilution of the Group’s interest from 18% to 11.25%. However, the Group still has significant influence since it has power to participate in the financial and operating policies of this company, therefore it is considered appropriate to treat this interest as an associate holding. (**) The Group has a 50% equity interest in Aqua City Joint Stock Company and Romana Resort and Spa JSC but does not have control or joint control due to its limited representation on the Boards. Therefore it is considered appropriate to treat these interests as associate holdings.14. Prepayments for operating lease assets 30 June 2010 30 June 2009 USD’000 USD’000 (Reclassified)Opening balance 53,041 19,635Acquisitions of subsidiaries - 9,083Additions during the year 210 5,774Charge for the year (2,417) (2,270)Transferred to investment properties (Note 9) (5,391) (2,589)Transferred from investment properties (Note 9) - 35,707Classified as held for sale - (4,474)Impairment of leasehold land (1,688) (5,431)Leasehold land exchanged (Note 18) (1,335) (2,130)Translation differences (825) (264)Closing balance 41,595 53,041Prepayments for operating leases relates to leasehold land occupied by subsidiaries of the Group. Leasehold land held by Roxy Vietnam Co. Ltd. with a carrying value ofUSD1.6 million as at 30 June 2010 (30 June 2009: USD1.9 million) is pledged as security for bank borrowing disclosed in Note 28.Leasehold land held by East Ocean Real Estate and Tourism Joint Stock Company with a carrying value of USD2.5 million as at 30 June 2010 (30 June 2009: USD3.8 million)is pledged as security for bank borrowing disclosed in Note 28.
  • 72. 72 VNL Annual Report 2010 15. Prepayments for acquisitions of investments 17. Deferred tax assets 30 June 2010 30 June 2009 30 June 2010 30 June 2009 USD’000 USD’000 USD’000 USD’000 Prepayments for acquisitions of investments 61,648 91,131 (Reclassified) Transferred to investments in subsidiary (4,280) (19,874) Opening balance 5,024 310 57,368 71,257 Increase in the year, net (*) 13,244 4,714 Allowance for loss on prepayments for Closing balance 18,268 5,024 (5,160) (5,160) acquisitions of investments (*) The increase in the year of USD13.2 million arose from provision for tax losses on fair value 52,208 66,097 adjustments of investment properties during the year. These prepayments are payments made by the Group to property vendors Deferred tax assets are the amounts of income taxes recoverable in future where the final transfer of the property is pending the approval of the relevant periods in respect of deductible temporary differences and the carry forward of authorities and/or is subject to either the Group or the vendor completing certain unused tax losses and credits. performance conditions set out in agreements. 18. Trade and other receivables During the year, the Group disposed of the right to invest in a project with a carrying value of USD10.5 million which resulted in a gain on disposal of 30 June 2010 30 June 2009 investment rights of USD7.5 million which has been included in the Statement USD’000 USD’000 of Income for the year. Trade receivables 566 294 16. Other long-term financial assets Loans to third parties (*) 31,467 42,922 Advances to property vendors and contractors 9,665 20,644 30 June 2010 30 June 2009 Receivable as compensation for property 27,004 10,723 exchanged (**) USD’000 USD’000 Receivables from minority shareholders 10,752 16,366 Deposits in banks 4,042 25 Receivable from disposal of subsidiary (***) 18,227 - Loans to non-controlling interest shareholders 5,252 1,087 Interest receivables 6,482 7,132 Others 1,050 - Other receivables 9,978 13,318 10,344 1,112 Other current assets 47 56 Allowance for impairment of long-term (364) - 114,188 111,455 financial assets Receivables allowance (1,551) (1,554) 9,980 1,112 112,637 109,901
  • 73. VNL Annual Report 2010 7318. Trade and other receivables (cont.) 19. Receivables from related parties(*) This represents short-term loans to third parties, which are to be repaid in the next 12 months. The loans are unsecured, 30 June 2010 30 June 2009 interest free or bear interest rates ranging from 7.5% to 15% per annum. Their carrying value is considered a reasonable Relationship Transactions USD’000 USD’000 approximation of their expected recovery. VinaCapital Vietnam Under common Expenses paid for 3,644 1,863(**) Receivable as compensation for property exchanged Opportunity Fund Limited management projects represents: Romana Resort and Spa JSC Associate Shareholder loan 710 709 - an amount of USD12.5 million comprising USD1.3 million VinaCapital Real Estate Under common Expenses paid for 35 - relating to prepayments for leasehold land and USD11.2 million Vietnam Co. Ltd. management projects relating to construction costs incurred by SAS Hanoi Royal Hotel Ltd.. As at 30 June 2010, the Group owned 52.5% of SIH 4,389 2,572 Investment Ltd. which has a 70% interest in SAS Hanoi Royal Hotel Ltd.. The planned project was to build and manage a four-star hotel on 10,331 square metres of land in Hanoi, All receivables from related parties are short-term in nature. Their carrying value is considered a reasonable Vietnam. However, as the site has been reserved as a public approximation of their fair value at reporting date. area, the Hanoi People’s Committee requested the Group swap the land for another site. On 28 August 2009, the Group 20. Short-term investments received a letter from the Hanoi People’s Committee granting it an alternative site. The Investment Manager is considering 30 June 2010 30 June 2009 this offer and has estimated that the value and future potential USD’000 USD’000 benefits of the new land and any other compensation granted is not less than costs incurred on the properties which will be Short-term deposits at banks 10,466 21,865 exchanged. Bank secured deposit (*) 4,749 13,023 - an amount of USD17.4 million relating to the Binh Khanh 15,215 34,888 project. The Ho Chi Minh People’s Committee required the land for development as a public residential area and request the Group to swap the land for another site and negotiations are As short-term deposits have terms to maturity between than three months and one year, their carrying at an advanced stage. The Investment Manager has estimated value is considered a reasonable approximation of their fair value as at reporting date. that the value and future potential benefits of the new land and any other compensation and benefits granted is not less than (*) On 8 December 2007, the Group deposited VND560.8 billion (equivalent to USD35 million) with East Asia Commercial Joint costs incurred on the property which will be exchanged. Refer Stock Bank (EAC). Under the terms of the original agreement, the deposit would earn interest at 13% and was repayable within to Note 9 for further information. one year. Under the terms of the agreement, the deposit could be withdrawn by Thai Thinh Capital Joint Stock Company (TTC), provided that it was fully replenished before the due date. The bank guaranteed to ensure the full repayment of the deposit and(***) Receivable from disposal of investment in subsidiary associated accrued interest thereon to the Group upon expiry of the deposit term. represents the amounts due from the disposal of an 85% in Golden Gain Vietnam Limited (Note 7). On expiry of the deposit term, TTC was unable to replenish the deposit account and associated accrued interest. By 30 June 2010 VND470.4 billion (equivalent to USD27.2 million) had been repaid to the Group under this arrangement and the parties had heldAll other trade and other receivables are formal negotiations to enable the full recovery of the remaining outstanding balance. On 26 November 2010 the Group, TTC andshort-term in nature. Their carrying value is the principal shareholder of TTC, signed a Repayment Agreement to facilitate the recovery of the remaining outstanding amount.considered a reasonable approximation of their Under the agreement and the subsequent guarantee waiver agreement signed with EAC on 3 December 2010 the remainingfair value at reporting date. outstanding principal balance was paid to the Group on 7 December 2010 in return for the Group waiving EAC from any liability under its bank guarantee obligations. The Group expects to fully recover the outstanding accrued interest of VND115.6 billion (equivalent to USD6.1 million) included within Note 18 prior to 30 September 2011 in the form of cash and other assets with a fair value at least equal to the carrying value of the outstanding accrued interest. The Group has arranged for certain assets of TTC and TTC’s principal shareholder to be held as security until the outstanding accrued interest has been fully settled. The outstanding amount will be subject to 12% interest during the repayment period.
  • 74. 74 VNL Annual Report 2010 21. Financial assets held at fair value through Statement of Income 30 June 2010 30 June 2009 USD’000 USD’000 Designated at fair value through Statement of Income: Financial assets in Vietnam Trustee loans 16,690 41,266 Ordinary shares - unlisted (Note 7) 11,073 - Ordinary shares - unlisted 5,033 5,032 Total financial assets designated at fair value 32,796 46,298 through Statement of Income These financial assets are denominated in the following currencies: 30 June 2010 30 June 2009 USD’000 USD’000 United States Dollars 16,690 41,266 Vietnam Dong 16,106 5,032 32,796 46,298 The carrying amounts disclosed above are the Group’s maximum possible credit risk exposure in relation to these instruments. See Note 46 for further information on the Group’s exposure to credit risk. 22. Cash and cash equivalents 30 June 2010 30 June 2009 USD’000 USD’000 Cash on hand 337 139 Cash at banks 57,219 33,972 Cash equivalents 22,423 16,163 79,979 50,274
  • 75. VNL Annual Report 2010 7523. Categories of financial assets and liabilities 23. Categories of financial assets and liabilities (cont.)The carrying amounts presented in the statement of financial position relate to Note 30 June 2010 30 June 2009the following categories of assets and liabilities: USD’000 USD’000 Note 30 June 2010 30 June 2009 Financial liabilities USD’000 USD’000 Financial liabilities measured at amortised cost: Financial assets Non-current: Financial assets held for trading (carried at fair value through - Debts and borrowings 28 69,792 20,360 Statement of Income) - Debts payable to non-controlling 28 1,203 1,481 interests shareholders - Ordinary shares - unlisted 21 5,033 5,032 - Payable to related parties 31 76,856 65,018 - Ordinary shares - unlisted, selling - Other liabilities 879 912 price determined subsequent to 21 11,073 - reporting date 148,730 87,771 Current: - Trustee loans 21 16,690 41,266 - Debts and borrowings 28 21,090 20,584 32,796 46,298 - Trade and other payables 30 116,466 74,354 - Payable to related parties 31 26,145 49,943 Loans and receivables 163,701 144,881 Non-current: 312,431 232,652 - Other long-term financial assets 16 9,980 1,112 Current: The fair values are presented in the related notes. A description of the Group’s risk - Trade and other receivables 18 112,637 109,901 management objectives and policies for financial instruments is given in Note 46. - Receivable from related parties 19 4,389 2,572 - Short-term investments 20 15,215 34,888 - Cash and cash equivalents 22 79,979 50,274 222,200 198,747 254,996 245,045
  • 76. 76 VNL Annual Report 2010 24. Assets and liabilities classified as held for sale Summary of the assets/(liabilities) held for sale at the reporting date is as follows: 30 June 2009 Attributable to Net assets Equity Assets classified as Liabilities classified Non-controlling classified as held shareholders of held for sale as held for sale interests for sale the parent USD’000 USD’000 USD’000 USD’000 USD’000 Opera Holel Ltd. 85,321 (33,892) 51,429 24,429 27,000 Long-term loan in Opera Hotel Ltd. transferred to the Purchaser (*) - 15,834 15,834 - 15,834 85,321 (18,058) 67,263 24,429 42,834 There were no assets and liabilities classified as held for sale at 30 June 2010. 25. Share capital 30 June 2010 30 June 2009 Number of shares USD’000 Number of shares USD’000 Authorised: Ordinary shares of USD0.01 each 500,000,000 5,000 500,000,000 5,000 Issued and fully paid: Opening balance 499,967,622 4,999 499,967,622 4,999 Closing balance 499,967,622 4,999 499,967,622 4,999 26. Additional paid-in capital Additional paid-in capital represents the excess of consideration received over the par value of shares issued. 30 June 2010 30 June 2009 USD’000 USD’000 Opening balance 588,870 588,870 Closing balance 588,870 588,870
  • 77. VNL Annual Report 2010 7727. Revaluation reserve 30 June 2010 30 June 2009 USD’000 USD’000 Opening balance 10,799 13,844 Revaluation gains/(reversal) on buildings 1,826 (5,589) Share of revaluation (gain)/reversal attributable to (1,387) 2,544 non-controlling interests Disposal of subsidiary (*) (7,755) - Closing balance 3,483 10,799The Group’s share of valuation gains/(losses) resulting from the revaluation of subsidiaries’ hospitalityproperties has been recorded directly in the Group’s revaluation reserve under shareholders’ equity.(*) The amount represents the transfer of the revaluation reverse surplus arising on Opera Hotel Ltd. to retained earnings when control of the subsidiary transferred to the buyer in the year.28. Borrowings and debts 30 June 2010 30 June 2009 USD’000 USD’000 Non-current financial liabilities carrying at amortised cost at the reporting date: Bank borrowings (*) 79,204 40,944 Debts borrowed from non-controlling interest shareholders 1,203 1,481 80,407 42,425 Less: Current portions of long-term borrowings and debts (9,412) (20,584) 70,995 21,841 Current Bank borrowings (*) 11,678 - Current portions of long-term borrowings (*) 9,412 20,584 21,090 20,584 Total borrowings and debts 92,085 42,425(*) Details of the bank borrowings at the reporting date are as follows:
  • 78. 78 VNL Annual Report 2010 28. Borrowings and debts (cont.) Lenders USD’000 Loan period Repayment term Interest Non-current Eximbank - Ho Chi Minh City branch, Vietnam 37,128 Fifteen years Quarterly 12-month lender saving rate plus a 4% margin for VND and 2% margin for USD SeaBank - Ho Chi Minh City branch, Vietnam 29,813 Five to six years Repayable in 7-12 semi-annual 12-month lender saving rate plus a amounts 2.5% margin Dong A bank - Ho Chi Minh City branch, Vietnam 7,354 Three years Quarterly from March 2010 at base rate of State Bank of Vietnam BIDV - Ho Chi Minh branch, Vietnam 4,909 Five years Repaid in 12 instalments from 27th USD reference interest rate and month from the first drawdown 3% for loan in US Dollar and VND reference interest rate and fee loan in Vietnamese Dong 79,204 Current Bank borrowings SHB bank - Da Nang branch, Vietnam 11,607 One year 20 October 2010 0.875%/month Eximbank - Nha Trang branch, Vietnam 71 One year 22 January 2010 1%/month 11,678 Current portions of long-term borrowings: Seabank - Ho Chi Minh City branch, Vietnam 3,700 One year Monthly 12-month lender saving rate plus a 2.5% margin Dong A bank - Ho Chi Minh City branch, Vietnam 5,712 One year Quarterly from March 2010 at base rate of State Bank of Vietnam 9,412 21,090 For all borrowings, the lenders have security over the assets of the respective Group subsidiary. During the year, the Group’s subsidiaries borrowed USD70.3 million from banks and non-controlling interests shareholders to finance working capital and property development activities.
  • 79. VNL Annual Report 2010 7929. Deferred tax liabilities 30. Trade and other payables 30 June 2010 30 June 2009 30 June 2010 30 June 2009 USD’000 USD’000 USD’000 USD’000 (Reclassified) Trade payables 12,987 8,549 Opening balance 19,367 29,959 Payables for property acquisitions 41,873 37,739 Increased/(utilised) during the and land compensation year from fair value adjustments of 31,476 (15,354) Advances from property buyers - 8,967 investment properties Payables to minority shareholders (*) 18,288 6,471 Reclassified to deferred tax assets Tax payables 12,346 1,015 - 4,738 (Note 5) Payables to suppliers 238 728 (Decrease)/addition (20) 24 Deposits from customers on Closing balance 50,823 19,367 17,812 - residential projects Other accrued liabilities 7,207 8,020On recognition of investment properties, leasehold land and buildings at their Other payables 5,715 2,865fair value, the future recovery of the carrying amount of these assets may resultin a taxable flow of economic benefits to the entity and the amount that will 116,466 74,354be deductible for tax purposes will differ from the amount of those economic (*) Included in this balance is an amount of USD11.0 million due to the vendors for the purchase ofbenefits. The difference between the carrying amount of the revalued asset and an additional 30% in Viet Land Development Corporation (Note 7).its tax base is a temporary difference and gives rise to a deferred tax liability. All trade and other payables are short-term in nature. Their carrying values are considered a reasonable approximation of their fair values as at reporting date.
  • 80. 80 VNL Annual Report 2010 31. Payables to related parties 30 June 2010 30 June 2009 Relationship Transactions USD’000 USD’000 Non-current VinaCapital Investment Management Ltd. Investment Manager Management fees and 13,000 - performance fee VinaCapital Vietnam Opportunity Fund Limited Under common management Shareholder loans payable (*) 63,856 65,018 76,856 65,018 Current VinaCapital Vietnam Opportunity Fund Limited Under common management Dividends from a subsidiary 613 613 Advances for real estate projects - 2,971 VinaSecurities Co. Ltd. Affiliate of Investment Manager Professional fee 55 - VinaCapital Investment Management Ltd. Investment Manager Management fees 981 2,158 Performance fees 20,218 43,218 Advances for real estate projects 4,278 983 26,145 49,943 (*) This represents shareholder loans granted by VinaCapital Vietnam Opportunity Fund Limited (VOF) to subsidiaries of the Group. VOF is a minority shareholder in these subsidiaries. The loans are to finance real estate projects which are co-invested with VOF. The amount of each loan is based on the respective ownership of VOF and the Group in each subsidiary. The loans are carried at amortised cost in the Statement of Financial Position. 32. Cost of sales, operation, selling and administration expenses Year ended Year ended 30 June 2010 30 June 2009 USD’000 USD’000 Management fees 13,472 14,889 Professional fees 11,804 4,578 Depreciation and amortisation (*) 7,856 9,364 General and administration expenses (*) 10,657 7,912 Staff costs (*) 6,075 7,331 Outside service costs (*) 4,769 4,777 Material costs (*) 1,773 2,471 56,406 51,322 (*) These costs primarily relate to the operating activities of the Group’s subsidiaries.
  • 81. VNL Annual Report 2010 8133. Net gains/(losses) on fair value adjustments of investment properties Year ended Year ended 30 June 2010 30 June 2009 USD’000 USD’000By real estate sector: Commercial 6,704 13,136 Undetermined use 27,091 (81,594) Hospitality 777 (5,522) Mixed use 60,915 (79,564)Net gains/(losses) on fair value adjustments of investment properties 95,487 (153,544)34. Other net changes in fair value of financial assets at fair value through Statement of Income Year ended Year ended 30 June 2010 30 June 2009 USD’000 USD’000Gains on fair value adjustments of held for sale asset and valuations of corporate bonds 7,673 1,084Unrealised gains/(losses) from trustee loans’ revalued 22 (5,838) 7,695 (4,754)35. Other income Year ended Year ended 30 June 2010 30 June 2009 USD’000 USD’000Gain on bargain purchase (Note 7) 4,986 941Gain on disposals of investments 20,358 -Gain on disposals of fixed assets 96 99Other income 20,369 1,551 45,809 2,59136. Other expenses Year ended Year ended 30 June 2010 30 June 2009 USD’000 USD’000Allowances for impairments of assets 5,110 31,402Goodwill impairments - 3,511Losses from liquidation of investment property, net 662 1,618Losses on disposals of investments and property, plant and equipment - 1,040Other expenses 1,938 496 7,710 38,067
  • 82. 82 VNL Annual Report 2010 37. Finance income Year ended Year ended Year ended Year ended 30 June 2010 30 June 2009 30 June 2010 30 June 2009 USD’000 USD’000 USD’000 USD’000 Interest income 6,227 10,874 Group profit/(loss) before tax 91,159 (215,187) Realised gains on foreign exchange differences 633 850 Group profit/(loss) multiplied by applicable - - Other finance income - 248 tax rate (0%) 6,860 11,972 Current income tax expenses on Vietnamese (1,372) (1,790) subsidiaries 38. Finance expenses Deferred income tax income/(expense) (*) (13,795) 15,354 Year ended Year ended Tax (expense)/income (15,167) 13,564 30 June 2010 30 June 2009 (*) This amount represents the deferred income tax income/(expense) which arose from the USD’000 USD’000 (losses)/gains on fair value adjustments of investment properties in the year. Realised losses on foreign exchange differences 1,490 3,069 Under the law of Vietnam, tax losses can be carried forward to offset Unrealised losses on foreign exchange differences 3,309 1,983 against future taxable income for five years from the year a loss is incurred. Interest expense 3,407 1,683 Unrecognised deferred tax assets for the current year tax losses of Other finance expenses 38 - USD26,526,000 (30 June 2009: USD10,402,000) relating to losses carried forward 8,244 6,735 have not been recognised due to uncertainties as to their recoverability. 40. Earnings per share 39. Corporate income tax (a) Basic earnings per share VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of Basic earnings per share is calculated by dividing the profit attributable to the Cayman Islands, there is no income, state, corporation, capital gains or other shareholders of the Group by the weighted average number of ordinary shares taxes payable by the Company. on issue during the year. The majority of the Group’s subsidiaries are domiciled in the British Virgin Islands Year ended Year ended (BVI) and under BVI rules are not subject to Corporate Income Tax. A number 30 June 2010 30 June 2009 of subsidiaries are established in Vietnam and are subject to corporate income Profit/(loss) attributable to equity shareholders 48,451 (129,429) tax in Vietnam at the regular tax rate of 25% (30 June 2009: 25%). A current tax of the Company from continuing and total provision of USD1,372,000 has been made for these Vietnamese subsidiaries of operations (USD’000) the Group for the year ended 30 June 2010 (30 June 2009: USD1,790,000). Weighted average number of ordinary shares 499,967,622 499,967,622 The relationship between the expected tax expense based on the applicable tax on issue rate of 0% and the tax expense actually recognised in the Consolidated Statement Basic earnings/(loss) per share from continuing 0.10 (0.26) of Income can be reconciled as follows: and total operations
  • 83. VNL Annual Report 2010 83(b) Diluted earnings per share 41. Operating cash flowsDiluted earnings per share is calculated by adjusting the weighted average numberof ordinary shares outstanding to assume conversion of all dilutive potential The following non-cash flow adjustments have been made to the pre-tax resultordinary shares. The Group has no category of potential dilutive ordinary shares. for the year to arrive at operating cash flow:Therefore, diluted earnings per share are equal to basic earnings per share. 30 June 2010 30 June 2009(c) Net asset value per share USD’000 USD’000Net asset value (NAV) per share is calculated by dividing the net asset value Depreciation and amortisation 7,856 8,779attributable to ordinary shareholders of the Company to the number of Other net changes in fair value of financial assetsoutstanding ordinary shares as at the reporting date. Net asset value is (7,695) 5,838 at fair value through Statement of Incomedetermined as total assets less total liabilities and non-controlling interests. (Gains)/losses on fair value adjustments of (95,487) 153,544 30 June 2010 30 June 2009 investment properties Net asset value attributable to ordinary Gain on realisations of financial assets - (1,084) shareholders of the Company (USD’000) 681,644 660,529 Loss/(gains) from liquidations of investments (8,445) (128) Number of outstanding ordinary shares 499,967,622 499,967,622 and subsidiaries Net asset value per share (USD/share) 1.36 1.32 Losses from written-off/disposed investment - 1,618 properties Allowances for impairments of assets 5,813 31,402 Negative goodwill (4,986) (941) Goodwill impairments - 2,939 Losses from written-off account balances 660 267 Share of associates losses/(gains) 9,609 3,342 Losses on disposals and written-off property, - 268 plant and equipment Unrealised losses on foreign exchange differences 3,309 1,983 Interest expense 3,407 1,683 Interest income (6,227) (10,874) (92,186) 198,636
  • 84. 84 VNL Annual Report 2010 42. Directors and management remuneration Performance fees In accordance with the Management Agreement, the Investment Manager is also The directors’ fees payable to members of the Board of Directors during the year entitled to a performance fee equal to 20% of the annual increase in net asset were as follows: value over the higher of an realised returns over an annualised hurdle rate of 8% 30 June 2010 30 June 2009 (30 June 2009: hurdle rate of 8%) and a high water-mark. USD’000 USD’000 There was no performance fee charged for the year (30 June 2009: nil) with Nicholas Brooke 40 40 USD33,218,000 (30 June 2009: USD43,218,000) in outstanding accrued fees Robert Gordon 40 15 due to the Investment Manager at this date. Michael Arnold 40 12 Other related party transactions and balances Nguen Khoong Tong - 28 Mr. Don Lam, a director and the CEO of the Investment Manager, purchased Bruno Schoepfer - 8 50,000 shares in the year on the open market. As a result of this transaction, Nicholas Allen - - Mr. Don Lam has a direct and indirect interest of 2,457,250 and 122,649 shares bringing his total share holding to 0.52% at the reporting date. 120 103 Subsequent to the reporting date, Mr. Michael Arnold and Mr. Nicholas The Board of Management and certain other individuals who act on behalf of the Allen, directors of the Company, purchased 64,000 shares and 95,627 shares, Group are remunerated by the Investment Manager. However it is not possible respectively, bringing their total share holdings to 0.01% and 0.02% respectively. to specifically allocate their cost to the Group. Part of the management fees Subsequent to the reporting date, the Investment Manager of the Group, disclosed in Note 43 can be allocated to remuneration of these individuals. VinaCapital Investment Management Limited, purchased 660,000 shares on 43. Related party transactions the open market representing a 0.13% interest in the Group. As Mr. Don Lam and Mr. Horst Geicke are shareholders in this company, their shareholdings Management fees consequently increased to 0.56% and 0.65% respectively. The Group is managed by VinaCapital Investment Management Limited (the “Investment Manager”), an investment management company incorporated During the year, a local company owned by Mr. Don Lam and Mr. Horst Geicke, in the British Virgin Islands (“BVI”), under a management agreement dated the Company’s directors, paid a deposit to purchase a villa in the Ocean Villas 16 March 2006 (the “Management Agreement”). The Investment Manager Project in Danang, Vietnam at the market value in an arm’s length transaction. receives a fee based on the net asset value of the Group, payable monthly in During the year, VinaSecurities Joint Stock Company, a related party of the arrears, at an annual rate of 2% (30 June 2009: 2%). Group, provided advisory services to the Group and charged USD0.09 million. Total management fees for the year amounted to USD13,471,000 (30 June 2009: All services were conducted at arm’s length and charged accordingly. USD14,889,000), with USD981,000 (30 June 2009: USD2,158,000) in outstanding 44. Contingent liabilities accrued fees due to the Investment Manager at the reporting date. East Ocean Real Estate and Tourist Joint Stock Company In 2007 East Ocean Real Estate and Tourist Joint Stock Company (“East Ocean JSC”), a subsidiary of the Group, engaged AIC Management Co. Ltd. (“AIC”) to supply project management and associated services in respect of the Sheraton
  • 85. VNL Annual Report 2010 85Nha Trang Resort and Spa Project. The scope of work was expanded in 2008 to 46. Risk management objectives and policiesinclude construction management and associated services. During 2010, variousdisputes arose between East Ocean JSC and AIC relating to AIC’s performance, The Group invests in a diversified property portfolio in Vietnam and neighbouringthe scope of work and amounts payable to AIC. In March 2010 all contracts countries with the objective of providing investors with an attractive level ofbetween the two parties were terminated. Negotiations between the parties investment income, together with the potential for capital reach a settlement of the disputes have been unsuccessful and in June 2010 The Group is exposed to a variety of financial risks: market risk (includingAIC filed a Statement of Claim with the Vietnam International Arbitration Centre currency risk and interest rate risk); credit risk; and liquidity risk. The Group’s(“VIAC”) for alleged breach of contractual obligations and outstanding payments, overall risk management programme focuses on the unpredictability of financialwith total claimed amount of USD5.6 million. In September 2010 East Ocean markets and seeks to minimise potential adverse effects on the Group’s financialJSC filed a Statement of Defence denying all claims by AIC and also filed the performance. The Group’s risk management is coordinated by its InvestmentStatement of Counter-Claim against AIC for breach of contract and law with the Manager who manages the distribution of the assets to achieve the investmentcounter-claim amount of USD4.4 million. The outcome of the Statement objectives. The most significant financial risks to which the Group is exposed areof Claim, Statement of Defence and Statement of Counter-Claim is uncertain. described below:45. Commitments Foreign currency sensitivityAt the reporting date, the Group was committed under non-cancellable The Group’s exposure to risk resulting from changes in foreign currency exchangeoperating lease agreements to paying the following future amounts: rates is moderate as although transactions in Vietnam are settled in Vietnam Dong (VND), the value of the Vietnam Dong has historically been closely linked to 30 June 2010 30 June 2009 that of USD, the presentation currency. USD’000 USD’000 The Group’s financial assets and liabilities exposure to risk of fluctuations inWithin one year 906 919 foreign currency exchange rates at the reporting date are as follows:From two to five years 3,440 3,407Over five years 12,463 12,776 Short-term exposure Long-term exposure 16,809 17,102 VND Others VND Others USD’000 USD’000 USD’000 USD’000As at 30 June 2010, the Group was also committed under construction 30 June 2010agreements to paying USD14.1 million (30 June 2009: USD17.9 million) for Financial assets 144,252 100,764 9,980 -future construction works of the Group’s properties held by subsidiaries. Financial liabilities (54,823) (108,878) (44,400) (103,451)The Group has a broad range of commitments under investment licences it Net exposure 89,429 (8,114) (34,420) (103,451)has received, and other agreements it has entered into, to acquire and develop,or make additional investments in investment properties and leasehold land 30 June 2009in Vietnam. Further investment in any of these arrangements is at the Group’sdiscretion. Financial assets 103,131 140,802 1,112 - Financial liabilities (71,498) (73,383) (19,753) (68,018) Net exposure 31,633 67,419 (18,641) (68,018)
  • 86. 86 VNL Annual Report 2010 Sensitivity analysis to a reasonably possible change in exchange rates Credit risk analysis Assets valuations in Vietnam are based on a combination of factors linked to both Credit risk is the risk that a counterparty will be unable to pay amounts in full the USD and VND. Assuming all properties are valued based on VND cash flow, a when due. Impairment provisions are provided for losses that have been incurred 5% weakening of the VND against USD at the end of the year ended 30 June 2010 by the Group at the reporting date. and 30 June 2009 would have impacted net income of the Group’s equity by the amounts shown below. This analysis assumes that all other variables, in particular The Group’s exposure to credit risk is limited to the carrying amount of financial interest rates, remain constant. assets recognised at the reporting date, as summarised below: 30 June 2010 30 June 2009 30 June 2010 30 June 2009 USD’000 USD’000 USD’000 USD’000 Net loss Net loss Classes of financial assets - carrying amounts: 5% devaluation of the Vietnam Dong (2,750) (650) Ordinary shares - unlisted 5,033 5,032 Trustee loans 16,690 41,266 A 5% strengthening of the VND against USD would have had the equal but Held for sale asset 11,073 - opposite effect to the amount shown above, on the basis that all other variables remain constant. Other long-term financial assets 9,980 1,112 Short-term investments 15,215 34,888 Price risk sensitivity Cash and cash equivalents 79,979 50,274 Price risk is the risk that the value of the instrument will fluctuate as a result of Trade and other receivables 117,026 112,473 changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. 254,996 245,045 As the majority of the Group’s financial instruments are carried at fair value with The carrying amount of trade and other receivables and loans represent the fair value changes recognised in the Statement of Income, all changes in market Group’s maximum exposure to credit risk in relation to its financial assets. conditions will directly affect net investment income. At 30 June 2010, the amounts of trade receivables that are overdue but not The Group invests in real estate projects and is exposed to market price risk. impaired are insignificant. The Group has no other significant concentrations of If the prices of the real estate were to fluctuate by 10%, the impact on Statement credit risk. of Income and equity would amount to approximately USD46.5 million (2009: USD51.6 million). In accordance with the Group’s policy, the Investment Manager continuously monitors the Group’s credit position on a monthly basis, identified either Cash flow and fair value interest rate sensitivity individually or by group, and incorporates this information into its credit controls. The Group’s exposure to interest rate risk is related to interest bearing financial assets and financial liabilities. Cash and cash equivalents, bank deposits and The Group’s Investment Manager reconsiders the valuations of financial assets bonds are subject to interest at fixed rates. They are exposed to fair value that are impaired or overdue at each reporting date based on the payment changes due to interest rate changes. The Group currently has some financial status of the counterparties, recoverability of receivables, and prevailing liabilities with floating interest rates which are disclosed in the Notes to the market conditions. consolidated financial statements. This is the maximum exposure of the Group to cash flow interest rate risk.
  • 87. VNL Annual Report 2010 87Liquidity risk analysis This compares to the maturity of the Group’s financial liabilities in the previousLiquidity risk is the risk that the Group will experience difficulty in either realising year as follows:assets or otherwise raising sufficient funds to satisfy commitments associatedwith investments and financial instruments. There is an inherent liquidity risk Current Non-currentassociated with the Company’s primary business, being property investment. As Within 6 6 to 12 From 1 to 5 Over 5a consequence, the value of the majority of the Company’s investments cannot months months years yearsbe realised as quickly as other investments such as cash or listed equities. USD’000 USD’000 USD’000 USD’000Furthermore, the development and realisation of the Company’s property 30 June 2009investments will normally require access to debt financing at a reasonable cost Trade and otheror shareholder loans from the Company’s surplus funds and its co-investors. payables 74,354 - - -The Company seeks to minimise liquidity risk through: Short-term borrowings 20,584 - - -• Preparing and monitoring cash flow forecasts for each investment project and Payables to related the Company on a consolidated basis; parties (*) 49,943 - 65,018 -• Arranging financing to fund real estate developments as required; and Long-term borrowings and debts - - 5,765 14,595• Providing ample lead times for the disposal of assets and realisation of cash. Long-term payables toAt the reporting date, the Group’s financial liabilities have contractual maturities minority shareholders - - 1,481 -which are summarised follows: Other liabilities - - 912 - 144,881 - 73,176 14,595 Current Non-current Within 6 6 to 12 From 1 to 5 Over 5 (*) Payables to related parties are primarily shareholder loans from related parties to jointly owned months months years years subsidiaries. These loans are not repayable until the respective subsidiaries have sufficient cash to repay these obligations. USD’000 USD’000 USD’000 USD’000 30 June 2010 The above contractual maturities reflect the gross cash flows, which may differ to the carrying value of the liabilities at the reporting date. Trade and other payables 116,466 - - - Capital management Short-term borrowings 21,090 - - - The Group’s capital management objectives are: Payables to related • To ensure the Group’s ability to continue as a going concern; parties (*) 26,145 - 76,856 - • To provide investors with an attractive level of investment income; and Long-term borrowings and debts - - 39,603 31,392 • To preserve a potential capital growth level. Other liabilities - - 879 - The Group considers the capital to be managed as equal to the net assets 163,701 - 117,338 31,392 attributable to the holders of ordinary shares. The Group has engaged the Investment Manager to allocate the net assets in such a way so as to generate investment returns that are commensurate with the investment objectives outlined in the Group’s offering documents.
  • 88. 88 VNL Annual Report 2010 47. Fair value hierarchy The Group adopted the amendments to IFRS 7 Improving Disclosures about Financial Instruments effective from 1 January 2009. These amendments require the Group to present certain information about financial instruments measured at fair value in the Consolidated Statement of Financial Position. In the first year of application, comparative information need not be presented for the disclosures required by the amendment. Accordingly, the disclosure for the fair value hierarchy is only presented for the 30 June 2010 year end. The following table presents financial assets and liabilities measured at fair value in the Consolidated Statement of Financial Position in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels: - Level 1: quoted prices in active market for identical assets or liabilities; - Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie. as prices) or indirectly (ie. derived from prices); and - Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The level within which the financial assets or liability is classified is determined based on the lowest level of significant input to the fair value measurement. The financial assets and liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy as follows: Level 1 Level 2 Level 3 Total USD’000 USD’000 USD’000 USD’000 Financial assets at fair value through Statement of Income - Ordinary share - unlisted - 5,033 - 5,033 - Held for sale asset 11,073 11,073 - Trustee loans - 16,690 - 16,690 Other long-term financial assets - 9,980 - 9,980 Short-term investments - 15,215 - 15,215 Trade and other receivables - 117,026 - 117,026 - 175,017 - 175,015 There have been no transfers between Level 1 and 2 during the year.
  • 89. VNL Annual Report 2010 89Investing policy1. Investment objectives and structures that may be suitable to allow participation in selected investment opportunities.VinaLand Limited (“VNL” or “the Company”) is a These investments will be made directly orclosed-end investment company incorporated in through investee companies (which are specialthe Cayman Islands with the primary objective of purpose vehicles established specifically for eachachieving medium to long-term (3-5 years) capital project) or by way of joint venture partnershipsappreciation and providing an attractive level of with other reputable developers.income (from interest and dividends) throughinvesting in a diversified portfolio of mainly Geographical focus:Vietnamese property and development projects. At least 70 percent of the Gross Asset Value of the Company will be invested in Vietnam. Up to aInvestment manager: maximum of 30 percent of the Gross Asset ValueVNL is managed by VinaCapital Investment may also be invested in neighbouring Asian countriesManagement Ltd (“VCIM” or the “Investment (namely China, Cambodia and Laos), should theManager”), a BVI company. VCIM was established Directors consider that such investments would offerin 2003 and manages three listed and several potentially attractive returns.unlisted investment companies. In addition, VCIMemploys a Development Advisor, VinaCapital Sector focus:Real Estate Ltd (VCRE), to manage and develop The Company will target five property sectors:property assets, and employs a planning and office, retail, residential, industrial and hospitality/project management company, VinaProjects, a leisure. The Company’s primary focus will be50/50 joint venture with inProjects, a Hong Kong- Ho Chi Minh City, with a secondary focus on Hanoibased project and construction management firm. and key leisure areas, including but not limited to Nha Trang, Hoi An, and Danang.2. Investing policy Control of investments:The Company will adhere to the following The Company will seek to own a controllinginvestment policies and restrictions: interest in its investments, either by owning a direct controlling participating interest in theType of investment: project or by controlling the investee companiesThe Company is permitted to engage in all forms through which the investments are made. In theof property investment and property development event that the Company holds a minority interestas allowed under the laws of each jurisdiction in a project, it will seek to secure adequatein which it operates, utilising instruments minority protection rights.
  • 90. 90 VNL Annual Report 2010 Realisation of investments: Leverage: • In order to hedge against interest rate risks The Company is a publicly listed investment There is no limit in the Company’s articles or currency risk, the Company may, where company on the London Stock Exchange’s AIM of association to the amount of borrowings appropriate, also enter into forward interest Market. Investors are free to purchase and sell that it may incur. As is typical with real estate rate agreements, forward currency agreements, shares whenever they please. The Company development and investment, investee companies interest rates and bond futures contracts and will aim to realise individual investments when may use leverage for individual projects. All interest rate swaps and purchase and write (sell) the Board, with the advice of the Investment leverage will be non-recourse to the Company put or call options on interest rates and put or Manager, the Investment Committee and the and will be incurred by the investee companies. call options on futures on interest rates. Development Adviser, believes the realisation The level of the debt incurred will vary depending would be in the best interests of the Company on the laws and regulations pertaining to the 3. Valuation policy and fulfil its investment objectives. The Company debt market with regard to the particular type of The Investment Manager will present reports intends to affect exits through disposals of its project and the ability of the relevant Investee prepared by independent external valuers to the projects or interests in investee companies to Company to service the debt. valuation sub-committee (“Valuation Committee”) institutional and private investors. on at least an annual basis. The Valuation Other information: Investment size: Committee will accept, reject, apply a discount to • The Directors will review the investment policies asset valuations or may require the Investment No single investment may, at the time of on an annual basis. Manager to obtain other third party valuation investment, exceed 20 percent of the Gross Asset Value. • Changes to the investment policies may be reports if deemed necessary. Every real estate prompted, inter alia, by changes in government investment which is required to be recorded at Cross holdings: fair value will be revalued at least annually by two policies or economic conditions which alter or If the Investment Manager and the Directors independent appropriately qualified valuers. introduce additional investment opportunities. deem it appropriate, the Company may also In the event of a breach of any investment The Net Asset Value and the Net Asset Value per invest up to 20 percent of its Gross Asset Value restrictions, the Investment Manager shall share shall be calculated (and rounded to two in other property funds which themselves invest inform the Board upon becoming aware of the decimal places), in US dollars by the Administrator in property in the target region. All investments same and if the Board considers the breach (or such other person as the Directors may must be approved by the Investment Committee to be material, notification shall be made to a appoint for such purpose from time to time) on a and, where a project or investment exceeds ten Regulatory Information Service Provider. quarterly basis percent of the Net Asset Value, in addition, the approval of a majority of the Board must also • Cash pending investment, reinvestment or The Net Asset Value shall be the value of all be obtained. distribution will be placed in bank deposits, assets of the Company less the liabilities of the bonds, government-issued treasury securities Company determined in accordance with the or in local money market funds for the purpose valuation guidelines adopted by the Directors of protecting the capital value of the Company’s from time to time. cash assets.
  • 91. VNL Annual Report 2010 91Under current valuation guidelines adopted by • As regards unquoted securities; 4. Co-investmentsthe Directors, such values shall be determined - Unquoted investments will initially be valued The Investment Manager may from time to timeas follows: at cost price, which will include any expenses manage other funds which have a similar or different• The value of any cash in hand or on deposit, relating to their acquisition; investment objective and policy to that of the bills and demand notes and accounts receivable, Company. Nevertheless, circumstances may arise - A revaluation of unquoted investments to prepaid expenses, cash dividends and interest where investment opportunities will be available to a value in excess of or below cost may be declared or accrued as aforesaid and not yet, the Company and which are also suitable for one or made in the circumstances provided by and in received shall be deemed to be the full amount more of the other funds managed by the Investment accordance with the guidelines issued by the thereof, unless in any case the Directors shall Manager. Where a conflict arises in respect of an British Investment Fund Association or any have determined that the same is unlikely to investment opportunity, the Investment Manager successor body; be paid or received in full, in which case the will allocate the opportunity on a fair basis. In such value thereof shall be arrived at after making • All other assets and liabilities shall be valued event, the allocations will normally be made on a such discount as the Directors may consider at their respective fair values as determined in pro-rata basis between the Company and the other appropriate in such case to reflect the true good faith by the Directors and in accordance funds based on the amounts available for investment value thereof; with generally accepted valuation principles in each fund at the time the investment opportunity and procedures; arises. However, the Investment Manager will be• The value of securities which are quoted or dealt in on any stock exchange (including any • Any value other than in US dollars shall be entitled to recommend to the Board the allocation of securities traded on an “over the counter translated at any officially set exchange rate or investment opportunities on a basis otherwise than market”) shall be based on the last traded prices appropriate spot market rate as the Directors as set out above if it deems it appropriate. In those on such stock exchange, or if there is more than deem appropriate in the circumstances having circumstances the Board will determine what level of one stock exchange on which the securities regard, inter alia, to any premium or discount investment the Investment Manager may make on are traded or admitted for trading, that which which may be relevant and to costs of exchange. behalf of the Company. is normally the principal stock exchange for The Investment Manager may also from time to time If the Directors consider that any of the above such security, provided that any such securities manage one or more funds incorporated in Vietnam. bases of valuation are inappropriate in any which are not freely transferable, or which are If appropriate, therefore, the Company may be able to particular case or generally, they may adopt not regularly traded, or which for any other invest in local companies or projects up to the foreign such other valuation or valuation procedure as reason are subject to limited marketability, shall ownership restriction then existing with the local fund they consider is reasonable in the circumstances be valued at a discount (the amount of such making additional investment in order to gain control provided that such other valuation or valuation discount being determined by the Directors of that company or project. This facility would allow procedure has been approved by the Company’s in their absolute discretion or in a manner so the Company to benefit from majority participation auditors. The Directors may delegate to the approved by the Directors); in local projects thereby reducing the risks which Investment Manager any of their discretions under the valuation guidelines. may be associated with the use of locally established co-investors/partners and thereby also allowing effective overall control to be exercised by the Manager alone.
  • 92. 92 VNL Annual Report 2010 5. Ordinary Shares It is intended that the Company’s income will consist wholly or mainly of investment income. The Directors currently intend to reinvest a large part of income to take advantage of opportunities meeting the Company’s investment and return objectives, and where suitable opportunities are not available to distribute substantially all of the Company’s income and capital gains after administrative expenses and tax to holders of the Ordinary Shares, and aim to increase dividends over the life of the Company. 6. Distributions Until further notice, the Board of Directors of the Company has resolved to distribute approximately 50 percent of cash generated from divestments, after providing for tax and investment commitments. The Board will make distributions following the finalisation of the interim (six month) and annual financial statements. Distributions will be made in the form of a tender for the repurchase of shares. 7. Life of the Company The Company does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends that a special resolution will be proposed every seventh year that the Company ceases to continue as presently constituted. If the resolution is not passed, the Company will continue to operate. If the resolution is passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.
  • 93. VNL Annual Report 2010 93Historical financial informationYears ended 30 June 2006 2007 2008 2009 2010Income statement (USD000)Total income from ordinary activities 1,873 78,612 379,172 (157,130) 155,809Total expenses from ordinary activities (1,752) (28,390) (101,415) (58,057) (64,650)Operating profit before income tax 121 50,222 277,757 (215,187) 91,159Income tax expense - (245) (29,574) 13,564 (15,167)Profit for the year 121 49,976 248,183 (201,623) 75,992Minority interests - (15,341) (80,485) 72,194 (27,541)Profit attributable to ordinary equity holders 121 34,635 167,698 (129,429) 48,451Statement of financial position (USD000)Total assets 200,146 741,090 1,228,373 1,097,051 1,269,167Total liabilities (1,563) (112,218) (423,846) (436,522) (587,523)Net assets 198,583 628,872 804,527 660,529 681,644Share informationBasic earnings per share (cents per share) 0.00 0.12 0.34 (0.26) 0.10Share price at 30 June 0.98 1.49 1.22 0.68 0.77Ordinary share capital (thousand shares) 204,845 499,968 499,968 499,968 499,968Market capitalisation at 30 June (USD000) 200,748 744,952 609,960 339,978 384,975Net assets value per ordinary share (USD) 0.98 1.26 1.61 1.32 1.36RatioReturn on average ordinary shareholders funds 0.1% 11.6% 33.5% -25.9% 9.7%Investment management fees/avr. NAV 3.6% 7.8% 8.5% 2.0% 2.0%
  • 94. 94 VNL Annual Report 2010 VinaLand Limited (‘VNL’) is a closed-end fund trading on the AIM Market of the London Stock Exchange. Launched in 2006, VNL is the largest listed fund for investment in Vietnam’s emerging real estate sector. The fund invests in residential, office, retail, hospitality, and township/ industrial properties. The manager’s objective is to provide shareholders with an attractive level of income as well as creating a potential for capital growth.
  • 95. VNL Annual Report 2010 95VNL overview and detailsVNL DetailsFund size USD682 million (NAV as of 30 June 2010).Fund launch 22 March 2006.Term of fund Seven years subject to shareholder vote for liquidation.Fund domicile Cayman Islands.Legal form Exempted company limited by shares.Structure Single class of ordinary shares trading on the AIM market of the London Stock Exchange plc.Auditor Grant Thornton (Vietnam).Nominated advisor (Nomad) Grant Thornton Corporate Finance (UK).Custodian HSBC Trustee (HK).Broker LCF Edmond de Rothschild (UK)Lawyers Lawrence Graham (UK). Maples and Calder (Cayman Islands).Management and performance fee Management fee of 2 percent of NAV. Performance fee of 20 percent of total NAV increase over the higher of an 8 percent compound annual return and the high watermark.Investment manager VinaCapital Investment Management Ltd.Investment policy Medium to long-term capital gains with some recurring income through investment in the following real estate sectors: Office; Residential; Retail; Township/Industrial (large scale); and Hospitality and Leisure.Investment focus by geography Greater Indochina comprising: Vietnam (minimum of 70 percent), Cambodia, Laos, and southern China.Registered office PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.
  • 96. Ho Chi Minh City Hanoi Cambodia Singapore17th Floor, Sun Wah Tower 5th Floor, Sun City Building Canadia Tower, 20th floor 6 Temasek Boulevard115 Nguyen Hue Blvd., District 1 13 Hai Ba Trung Street, No. 315, Ang Duong Street #42-01 Suntec Tower 4Ho Chi Minh City, Vietnam Hoan Kiem Dist., Hanoi, Vietnam Phnom-Penh, Cambodia Singapore 038986Phone: +84-8 3821 9930 Phone: +84-4 3936 4630 Phone: +855 2399 6688 Phone: +65 6332 9081Fax: +84-8 3821 9931 Fax: +84-4 3936 4629 Fax: +855 2399 6050 Fax: +65 6333