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VINALAND LIMITED AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

VINALAND LIMITED AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 TABLE OF CONTENTS PAGE Report of the Board of Directors 1 Independent Auditor’s Report 4 Consolidated Balance Sheet 7 Consolidated Statement of Changes in Equity 9 Consolidated Income Statement 10 Consolidated Statement of Comprehensive Income 11 Consolidated Statement of Cash Flows 12 Notes to the Consolidated Financial Statements 14


2

REPORT OF THE BOARD OF DIRECTORS The Board of Directors (“the Board”) submits its report together with the consolidated financial statements of VinaLand Limited (“the Company”) and its subsidiaries (together, “the Group”) for the year ended 30 June 2019. The Group VinaLand Limited is incorporated in the Cayman Islands as a company with limited liability. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. Principal activities The Group’s original primary objective was to focus on key growth segments within Vietnam’s emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam to provide shareholders a potential capital growth, from investing in a diversified portfolio of mainly property investments. At an Extraordinary General Meeting (“EGM”) held on 21 November 2012 the shareholders approved a proposal that the Company make no new investments and dispose of a portion of its investments in a controlled and orderly manner so as to maximise returns to shareholders. At a subsequent EGM held on 18 November 2016 this strategy was expanded to include the disposal of all remaining investments. As at 30 June 2019, the entire investments of the Company have been sold out and the Company is in the process of being wound up. The principal activities of the subsidiaries are property investment and development. Results and dividends The results of the Group for the year ended 30 June 2019 and the state of its affairs as at that date are set out in the consolidated financial statements on pages 7 to 47. The Board of Directors does not recommend payment of a dividend for the year (the year ended 30 June 2018: nil). Share buy-back programme and capital distributions Details of ordinary shares repurchased and capital distributions to shareholders are contained in Note 9 of the consolidated financial statements. Board of Directors The members of the Board of Directors of the Company during the year and to the date of this report are as follows: Name

Position

Date of appointment Date of resignation

Michel Casselman Chairman 11 November 2011 - Ian Lydall Director 20 October 2016 - Charles Isaac Director 11 November 2011 14 December 2018 Tran Trong Kien Director 25 September 2015 14 December 2018 Auditor The Group’s auditor is PwC (Vietnam) Limited. Directors’ interests in the Company As at 30 June 2019, neither of the directors had any direct or indirect interest in the Company.


7

CONSOLIDATED BALANCE SHEET

30 June 2019 30 June 2018

Note USD’000 USD’000

ASSETS

Current

Trade and other receivables - 3,468

Receivables from and advances to related parties - 100

Short-term investments - 34

Cash and cash equivalents (excluding bank overdrafts) 6 4,433 29,079

───── ─────

Total current assets 4,433 32,681

Assets classified as held for sale 8 - 30,308

Total assets

─────

4,433

═════

─────

62,989

═════

The notes on pages 14 to 47 are an integral part of these consolidated financial statements.


8

CONSOLIDATED BALANCE SHEET (CONTINUED)

30 June 2019 30 June 2018


EQUITY AND LIABILITIES

EQUITY

Equity attributable to equity shareholders of the parent

Share capital 9 1,466 1,634

Additional paid-in capital 10 68,258 118,422

Equity reserve 76,455 76,283

Translation reserve - (4,327)

Accumulated losses (145,303) (145,324)

────── ──────

875 46,688

Non-controlling interests - 243

Total equity

─────

875

─────

─────

46,931

─────

LIABILITIES

Current

Trade and other payables 11 319 3,166

Payables to related parties 20 3,239 12,591

───── ─────

Total current liabilities 3,558 15,757

Liabilities classified as held for sale 8 - 301

Total liabilities

─────

3,558

─────

16,058

Total equity and liabilities

─────

4,433

─────

62,989

═════ ═════

Net assets per share attributable to equity

shareholders of the parent (USD per share)

16(c) 0.006 0.29

═════ ═══



9

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to equity shareholders of the Company

Share

capital

Additional paid-

in capital

Equity

reserve

Translation

reserve

Accumulated

losses

Total equity

attributable to

owners of the

Company

Non-

controlling

interests

Total

equity

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Balance at 1 July 2018 1,634 118,422 76,283 (4,327) (145,324) 46,688 243 46,931

Profit for the year - - - - 21 21 - 21

Currency translation - - - (245) - (245) - (245)

Reclassification of currency translation

reserves on disposal of subsidiaries - - - 4,572 - 4,572 - 4,572

Total comprehensive income

─────

-

─────

-

─────

-

──────

4,327

──────

21

──────

4,348

──────

-

──────

4,348

───── ───── ───── ────── ────── ────── ────── ──────

Transactions with owners in their

capacity as owners:

Repurchase and cancellation of shares

(Notes 9, 10) (168) (4,712) 171 - -

(4,709) - (4,709)

Distribution to shareholders (Note 10) - (45,452) - - - (45,452) - (45,452)

Distributions to non-controlling interests - - - - - - (243) (243)

Balance at 30 June 2019

────

1,466

════

──────

68,258

══════

─────

76,454

═════

─────

-

═════

──────

(145,303)

══════

─────

875

═════

─────

-

═════

─────

875

═════



10

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

Equity attributable to equity shareholders of the Company

Share

capital

Additional

paid-in capital

Equity

reserve

Other

reserve

Translation

reserve

Accumulated

losses

Total equity

attributable to

owners of the

Company

Non-

controlling

interests

Total

equity

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Balance at 1 July 2017 2,580 332,803 65,166 (10) (45,443) (113,612) 241,484 74,867 316,351

Loss for the year - - - - - (31,712) (31,712) 5,205 (26,507)

Currency translation - - - - (56) - (56) (13) (69)

Reclassification of currency translation

reserves on disposal of subsidiaries - - - - 41,172 - 41,172 3,480 44,652

Total comprehensive income/(loss)

─────

-

─────

-

─────

-

─────

-

──────

41,116

──────

(31,712)

──────

9,404

──────

8,672

──────

18,076

───── ───── ───── ───── ────── ────── ───── ────── ──────

Transactions with owners in their

capacity as owners:

Repurchase and cancellation of shares

(Notes 9, 10) (946) (83,146) 11,117 - - -

(72,975) - (72,975)

Distribution to shareholders (Note 10) - (131,235) - - - - (131,235) - (131,235)

Capital contributions in subsidiaries - - - - - - - 2,767 2,767

Distributions to non-controlling interests - - - - - - - (28,043) (28,043)

Disposals of subsidiaries - - - 10 - - 10 (58,020) (58,010)

Balance at 30 June 2018

────

1,634

════

──────

118,422

══════

─────

76,283

═════

────

-

════

─────

(4,327)

═════

──────

(145,324)

══════

─────

46,688

═════

─────

243

═════

─────

46,931

═════



11

CONSOLIDATED INCOME STATEMENT

Year ended

30 June 2019 30 June 2018


Revenue - 48

Cost of sales - (38)

── ──

Gross profit - 10

Net loss on fair value adjustments of investment

properties

- (319)

Selling and administration expenses 12 (2,910) (5,924)

Gain/(loss) on disposals of investments, net 13 4,438 (18,104)

Impairment of assets - (498)

Finance income 98 1,078

Finance expenses 14 (188) (780)

Shares of losses of associates - (1,260)

Shares of (losses)/gains of associates classified as held for sale (558) 165

Other income 1,153 30

Other expenses - (317)

───── ─────

Profit/(loss) before income tax from operations 2,033 (25,919)

Income tax 15 (2,012) (588)

───── ─────

Net profit/(loss) from operations 21 (26,507)

Attributable to equity shareholders of the parent 21 (31,712)

Attributable to non-controlling interests - 5,205

───── ─────

Net profit/(loss) for the year 21 (26,507)

═════ ═════

Profit/(loss) per share

- basic and diluted (USD per share)

16 0.00 (0.16)

──── ────



12

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended

30 June 2019 30 June 2018


Net profit/(loss) for the year 21 (26,507)

Other comprehensive income

Items that may be reclassified subsequently

to profit or loss:

Reclassification of currency translation reserve on disposal

of subsidiaries

4,572

44,652

Exchange differences on translating foreign operations (245) (69)

───── ─────

Other comprehensive income for the year 4,327 44,583

───── ─────

Total comprehensive income for the year 4,348 18,076

───── ─────

Attributable to equity shareholders of the parent 4,348 9,404

Attributable to non-controlling interests - 8,672

───── ─────

4,348 18,076

═════ ═════



13

CONSOLIDATED STATEMENT OF CASH FLOWS (Indirect method)

Year ended

30 June 2019 30 June 2018


Operating activities

Profit/(loss) before tax 2,033 (25,919)

Adjustments for:

Depreciation and amortisation - 14

Net loss on fair value adjustments of investment properties - 319

Losses on sales of subsidiaries 13 708 18,775

Gains on sales of assets classified as held for sales 13 (5,146) (671)

Impairment of assets - 498

Shares of losses of associates - 1,260

Shares of losses/(gains) of associates classified as held for sale 558 (165)

Unrealised foreign exchange losses, net - 7

Interest expense 43 771

Interest income (91) (985)

Net loss before changes in working capital

────

(1,895)

────

(6,096)

──── ────

Change in trade receivables and other current assets 3,559 (3,987)

Change in trade payables and other current liabilities (13,673) 26,863

Net cash (outflow)/inflow from operating activities

─────

(12,009)

─────

─────

16,780

─────

Investing activities

Interest received 91 995

Purchases of investment properties and prepayments for

acquisitions of investments

-

(13,041)

Proceeds from sales of subsidiaries 5 610 168,882

Proceeds from disposals of assets classified as held for sale 37,074 7,970

Proceeds from disposals of financial assets at fair value

through profit of loss

-

269

Investments in associates - (10,718)

Net proceeds from short-term investments 34 22

Net cash inflow from investing activities

──────

37,809

──────

──────

154,379

──────



14

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

Year ended

30 June 2019 30 June 2018


Financing activities

Additional capital contributions from non-controlling interests - 2,767

Ordinary shares acquired by the Company 9 (4,708) (72,975)

Distribution to shareholders 10 (45,452) (131,235)

Interest paid (43) (771)

Distributions to non-controlling interests (243) (28,043)

Net cash outflow from financing activities

──────

(50,446)

──────

──────

(230,257)

──────

Net changes in cash and cash equivalents for the year (24,646) (59,098)

Cash and cash equivalents at the beginning of the year 29,079 88,919

Cash and cash equivalents classified as held for sale - (742)

Cash and cash equivalents at the end of the year

6

─────

4,433

═════

─────

29,079

═════



15

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

VinaLand Limited (“the Company”) is a limited liability company incorporated in the Cayman

Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church

Street, George Town, Grand Cayman, Cayman Islands. The Company’s primary objective is to

focus on key growth segments within Vietnam’s emerging real estate market, namely residential,

office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia. The

Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNL.

At an Extraordinary General Meeting (“EGM”) held on 21 November 2012 the shareholders

approved a proposal that the Company make no new investments and dispose of a portion of its

investments in a controlled and orderly manner so as to maximise returns to shareholders. At a

subsequent EGM held on 18 November 2016 this strategy was expanded to include the disposal

of all remaining investments. The key changes impacting these financial statements were

summarised as follows:

The new strategy involved the orderly sell down of investments in conjunction with ongoing

development of selected projects to maximise returns to shareholders. All projects would be

realised over a period of approximately three years and the proceeds collected, less

operating costs, would be returned to shareholders.

The Third Amended and Restated Investment Management Agreement introduced a new fee

structure composed of disposal and alignment fees, prepayment advances and a retention

account to ensure that the Investment Manager was incentivised to meet the investing policy

(Note 20).

On 23 July 2018, the Company announced that it had disposed of substantially all of its assets.

In accordance with paragraph 5.6 of the AIM Note for Investing Companies, which forms part of

the AIM Rules, the Company had 12 months to begin an orderly wind up of the Company and

cancellation of its shares from trading on AIM, ultimately resulting in a voluntary liquidation. If this

was not fulfilled, the Company’s shares would be suspended from trading on AIM in July 2019. Since 24 July 2019, pursuant to AIM Rule 15, the Company’s shares have been temporarily

suspended from trading on AIM.

The consolidated financial statements for the year ended 30 June 2019 were approved for

issuance by the Company’s Board of Directors on 23 August 2019.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial

statements are set out below. These policies have been consistently applied to all the years

presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of the Group for the year ended 30 June 2019 comprise

the Company and its subsidiaries (together, the “Group”) and the Group’s interests in associates.

The consolidated financial statements of the Group have been prepared in accordance with

International Financial Reporting Standards (“IFRS”) and interpretations issued by the IFRS

Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The

consolidated financial statements of the Group comply with IFRS as issued by the International

Accounting Standards Board (“IASB”).


16

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.1 Basis of preparation (continued)

Going concern

On 23 July 2018, the Company announced that it had disposed of substantially all of its assets.

In accordance with paragraph 5.6 of the AIM Note for Investing Companies, which forms part of

the AIM Rules, the Company had 12 months to begin an orderly wind up of the Company and

cancellation of its shares from trading on AIM, ultimately resulting in a voluntary liquidation. If this

was not fulfilled, the Company’s shares would be suspended from trading on AIM in July 2019. Since 24 July 2019, pursuant to AIM Rule 15, the Company’s shares have been temporarily

suspended from trading on AIM. As a consequence, these consolidated financial statements

have been prepared using the liquidation basis, as the going concern basis is no longer

considered appropriate.

The consolidated financial statements have been prepared using the historical cost convention,

as modified by the revaluation of investment properties, property, plant and equipment, financial

assets and financial liabilities at fair value through profit or loss, the measurement bases of

which are described in the accounting policies below.

2.2 Changes in accounting policy and disclosures

(a) New and amended standards adopted by the Group

There are no standards, interpretations or amendments to existing standards that are effective

for the first time for the financial year beginning 1 July 2018 that have had a material impact on

the Group.

(b) New standards, amendments and interpretations issued but not yet effective and not early

adopted

At the date of authorisation of these consolidated financial statements, certain new standards,

amendments and interpretations to existing standards have been published but are not yet

effective, and have not been early adopted by the Group.

The Board anticipates that all such pronouncements will be adopted in the Group's accounting

policies for the first period beginning after the effective dates of these pronouncements.

Information on new standards, amendments and interpretations that are expected to be relevant

to the Group’s consolidated financial statements is provided below. Certain other new standards

and interpretations have been issued but are not expected to have a material impact on the

Group's consolidated financial statements.

IFRS 16, “Leases”, was issued in January 2016. It will result in almost all leases being

recognised on the balance sheet by lessees, as the distinction between operating and finance

leases is removed. Under the new standard, an asset (the right to use the leased item) and a

financial liability to pay rentals are recognised. The only exceptions are short-term and low-value

leases. The Group has reviewed all of the Group’s leasing arrangements over the last year in

light of the new lease accounting rules in IFRS 16. The standard will affect primarily the

accounting for the Group’s operating leases. There is no impact to the consolidated financial

statements of the Group as all of these lease arrangements are short-term and have low value.


17



2.2 Changes in accounting policy and disclosures (continued)

(b) New standards, amendments and interpretations issued but not yet effective and not early

adopted (continued)

The Group will apply the standard from its mandatory adoption period for the year ending 30

June 2020. The Group intends to apply the simplified transition approach and will not restate

comparative amounts for the year prior to first adoption. All right-of-use assets will be measured

at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease

expenses).

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be

expected to have a material impact on the Group.

2.3 Consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The

Group controls an entity when the Group is exposed to, or has rights to, variable returns from its

involvement with the entity and has the ability to affect those returns through its power over the

entity. Subsidiaries are fully consolidated from the date on which control is transferred to the

group. They are deconsolidated from the date that control ceases.

The majority of the Group’s subsidiaries have a reporting date of 30 June. For those subsidiaries

with a different reporting date, the Group consolidates management information prepared for the

year to 30 June.

The Group applies the acquisition method to account for business combinations. The

consideration transferred for the acquisition of a subsidiary is the fair values of the assets

transferred, the liabilities incurred to the former owners of the acquiree and the equity interests

issued by the Group. The consideration transferred includes the fair value of any asset or liability

resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities

and contingent liabilities assumed in a business combination are measured initially at their fair

values at the acquisition date. The Group recognises any non-controlling interest in the acquiree

on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s

proportionate share of the recognised amounts of acquiree’s identifiable net assets. Acquisition-

related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s

previously held equity interest in the acquiree is remeasured to fair value at the acquisition date

through profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the

acquisition date. Subsequent changes to the fair value of the contingent consideration that is

deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss

or as a change to other comprehensive income. Contingent consideration that is classified as

equity is not remeasured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and

the fair value of non-controlling interest over the net identifiable assets acquired and liabilities

assumed. If this consideration is lower than the fair value of the net assets of the subsidiary

acquired, the difference is recognised in profit or loss.


18



2.3 Consolidation (continued)

(a) Subsidiaries (continued)

Gain on bargain purchase is immediately allocated to the consolidated income statement as at

the acquisition date.

Inter-company transactions, balances, income and expenses on transactions between the

Group’s companies are eliminated. Profits and losses resulting from inter-company transactions

that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been

changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Changes in ownership interests in subsidiaries without change of control

Changes in ownership of interests in a subsidiary that do not result in loss of control of the

subsidiary are accounted for as equity transactions whereby the difference between the

consideration paid and the proportionate change in the parent entity’s interest in the carrying

value of the subsidiary’s net assets is recorded in equity and attributable to the owners. No

adjustment is made to the carrying value of the subsidiary’s net assets as reported in the

consolidated financial statements.

(c) Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its

fair value at the date when control is lost, with the change in carrying amount recognised in profit

or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting

for the retained interest as an associate, joint venture or financial asset. In addition, any amounts

previously recognised in other comprehensive income in respect of that entity are accounted for

as if the Group had directly disposed of the related assets or liabilities. This may mean that

amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Associates

Associates are all entities over which the Group has significant influence but not control,

generally accompanying a shareholding of between 20% and 50% of the voting rights.

Investments in associates are accounted for using the equity method of accounting, after initially

being recognised at cost. Under the equity method, the carrying amount of the investment is

increased or decreased to recognise the Group’s share of the profit or loss of the investee after

the date of acquisition. The Group’s investments in associates include goodwill identified on

acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a

proportionate share of the amounts previously recognised in other comprehensive income is

reclassified to profit or loss where appropriate.

The Group’s share of post-acquisition profit or loss of an associate is recognised in the

consolidated income statement, and its share of post-acquisition movements in other

comprehensive income is recognised in other comprehensive income with a corresponding

adjustment to the carrying amount of the investment. When the Group’s share of losses in an

associate equals or exceeds its interest in the associate, including any other unsecured

receivables, the Group does not recognise further losses, unless it has incurred legal or

constructive obligations or made payments on behalf of the associate.


19



2.3 Consolidation (continued)

(d) Associates (continued)

The Group determines at each reporting date whether there is any objective evidence that the

investment in the associates is impaired. If this is the case, the Group calculates the amount of

impairment as the difference between the recoverable amount of the associate and its carrying

value and recognises the amount as ‘share of profit/(loss) of associates’ in the consolidated

income statement.

Profits and losses resulting from upstream and downstream transactions between the Group and

its associates are recognised in the Group’s consolidated financial statements only to the extent

of unrelated investors’ interests in the associates. Unrealised losses are eliminated unless the

transaction provides evidence of an impairment of the asset transferred. Accounting policies of

associates have been changed where necessary to ensure consistency with the policies adopted

by the Group.

Dilution gains and losses arising in investments in associates are recognised in the consolidated

income statement.

2.4 Foreign currency translation

(a) Functional and presentation currency

The Group’s consolidated financial statements are presented in United States Dollars (“USD”)

(“the presentation currency”). The financial statements of each consolidated entity are initially

prepared in the currency of the primary economic environment in which the entity operates (“the

functional currency”), which for most of the Group’s investments is Vietnam Dong (“VND”). The

financial statements prepared using VND are then translated into the presentation currency of

USD. USD is used as the presentation currency because it is the primary basis for the

measurement of the performance of the Group (specifically changes in the net asset value of the

Group) and a large proportion of significant transactions of the Group are denominated in USD.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange

rates prevailing at the dates of the transactions or valuation where items are re-measured.

Foreign exchange gains and losses resulting from the settlement of such transactions and from

the translation at year-end exchange rates of monetary assets and liabilities denominated in

foreign currencies are recognised in the consolidated income statement.

Non-monetary items measured at historical cost are translated using the exchange rates at the

date of the transaction. Non-monetary items measured at fair value are translated using the

exchange rates at the date when fair value was determined.

Translation differences on non-monetary financial assets and liabilities such as equities held at

fair value through profit or loss are recognised in profit or loss as part of the fair value gain or

loss. Translation differences on non-monetary financial assets, such as equities classified as

available for sale, are included in other comprehensive income.


20



2.4 Foreign currency translation (continued)

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a

hyper-inflationary economy) that have a functional currency different from the presentation

currency are translated into the presentation currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate

at the date of that balance sheet;

(ii) income and expenses for each income statement are translated at average exchange

rates (unless this average is not a reasonable approximation of the cumulative effect of

the rates prevailing on the transaction dates, in which case income and expenses are

translated at the rate on the dates of the transactions); and

(iii) all resulting exchange differences are recognised in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as

assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences

arising are recognised in other comprehensive income.

2.5 Leases

Leases under the terms of which the Group assumes substantially all the risks and rewards of

ownership are classified as finance leases. Finance leases are capitalised at the leases’

commencement at the lower of the fair value of the leased property and the present value of the

minimum lease payments.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to

the group as lessee are classified as operating leases. Payments made under operating leases

(net of any incentives received from the lessor) are charged to profit or loss on a straight-line

basis over the period of the lease.

2.6 Non-current assets (or disposal groups) and liabilities held for sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying

amount is to be recovered principally through a sale transaction and a sale is considered highly

probable at the reporting date. They are presented separately in the consolidated balance sheet.

They are measured at the lower of their carrying amounts immediately prior to their classification

as held for sale and their fair values less costs to sell. Assets held for sale are not subject to

depreciation or amortisation subsequent to their classification as held for sale.

Liabilities are classified as held for sale and presented as such in the consolidated balance sheet

if they are directly associated with a disposal group.


21



2.7 Financial assets

(a) Classification

From 1 July 2018, the Group classifies its financial assets in the following measurement

categories:

those to be measured subsequently at fair value through profit or loss (“FVPL”), and

those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and

the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or

other comprehensive income (“OCI”). For investments in equity instruments that are not held for

trading, this will depend on whether the Group has made an irrevocable election at the time of

initial recognition to account for the equity investment at fair value through other comprehensive

income (“FVOCI”).

The Group reclassifies debt investments when and only when its business model for managing

those assets changes.

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on

which the Group commits to purchase or sell the asset. Financial assets are derecognised when

the rights to receive cash flows from the financial assets have expired or have been transferred

and the Group has transferred substantially all the risks and rewards of ownership.

(c) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a

financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the

financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or

loss. Financial assets with embedded derivatives are considered in their entirety when

determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments depends on the Group’s business model for

managing the asset and the cash flow characteristics of the asset. There are three measurement

categories into which the Group classifies its debt instruments:

Amortised cost: Assets that are held for collection of contractual cash flows where those

cash flows represent solely payments of principal and interest are measured at amortised

cost. Interest income from these financial assets is included in finance income using the

effective interest rate method. Any gain or loss arising on derecognition is recognised

directly in profit or loss and presented in other gains/(losses) together with foreign exchange

gains and losses. Impairment losses are presented as a separate line item in the

consolidated income statement.


22



2.7 Financial assets (continued)

(c) Measurement (continued)

FVOCI: Assets that are held for collection of contractual cash flows and for selling the

financial assets, where the assets’ cash flows represent solely payments of principal and

interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI,

except for the recognition of impairment gains or losses, interest income and foreign

exchange gains and losses which are recognised in profit or loss. When the financial asset

is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified

from equity to profit or loss and recognised in other gains/(losses). Interest income from

these financial assets is included in finance income using the effective interest rate method.

Foreign exchange gains and losses are presented in other gains/(losses) and impairment

expenses are presented as separate line items in the consolidated income statement.

FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at

FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is

recognised in profit or loss and presented net within other gains/(losses) in the period in

which it arises.

The Group had no investments in equity instruments during the year ended 30 June 2019.

(d) Impairment

From 1 July 2018, the Group assesses on a forward looking basis the expected credit losses

associated with its debt instruments carried at amortised cost and FVOCI. The impairment

methodology applied depends on whether there has been a significant increase in credit risk. For

trade receivables, the group applies the simplified approach permitted by IFRS 9, “Financial

instruments”, which requires expected lifetime losses to be recognised from initial recognition of

the receivables.

(e) Accounting policies applied until 30 June 2018

The Group has applied IFRS 9 retrospectively, but has elected not to restate comparative

information. As a result, the comparative information provided continues to be accounted for in

accordance with the Group’s previous accounting policy.

Classification

Until 30 June 2018, the group classified its financial assets in the following categories:

Financial assets at fair value through profit or loss: Financial assets at fair value through

profit or loss included financial assets that were either classified as held for trading or

designated by the Investment Manager to be carried at fair value through profit or loss at

inception. Financial assets at fair value through profit or loss held by the Group included

unlisted equity securities. Derivatives were also categorised as held for trading unless they

were designated as hedges. Assets in this category were classified as current assets if

expected to be settled within 12 months; otherwise they were classified as non-current.


23



2.7 Financial assets (continued)

(e) Accounting policies applied until 30 June 2018 (continued)

Classification (continued)

Loans and receivables: Loans and receivables were non-derivative financial assets with

fixed or determinable payments that were not quoted in an active market. They were

included in current assets, except for maturities greater than 12 months after the end of the

reporting period, which were classified as non-current assets. The Group’s loans and

receivables comprised ‘trade and other receivables’ and ‘cash and cash equivalents’ in the

consolidated balance sheet as at 30 June 2018.

Recognition and measurement

Purchases or sales of financial assets were recognised on the trade-date, being the date on

which the Group committed to purchase or sell the asset.

Investments were initially recognised at fair value plus transaction costs for all financial assets

not carried at fair value through profit or loss. Financial assets carried at fair value through profit

or loss were initially recognised at fair value, and transaction costs were expensed in the

consolidated income statement. Financial assets were derecognised when the rights to receive

cash flows from the investments had expired or had been transferred and the Group had

transferred substantially all risks and rewards of ownership. Loans and receivables were

subsequently carried at amortised cost using the effective interest method.

Net changes in fair value of financial assets at fair value through profit or loss included net

unrealised gains in fair value of financial assets and net gains from realisation of financial assets

during the year.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through

profit or loss’ category were presented in the consolidated income statement within ‘net changes

in fair value of financial assets at fair value through profit or loss’ in the period in which they

arose.

Impairment

The Group assessed at the end of each reporting period whether there was objective evidence

that a financial asset or group of financial assets was impaired. A financial asset or a group of

financial assets was impaired and impairment losses were incurred only if there was objective

evidence of impairment as a result of one or more events that occurred after the initial

recognition of the asset (a ‘loss event’) and that loss event (or events) had an impact on the

estimated future cash flows of the financial asset or group of financial assets that could be

reliably estimated. In the case of equity investments classified as available-for-sale, a significant

or prolonged decline in the fair value of the security below its cost was considered an indicator

that the assets were impaired.

2.8 Cash and cash equivalents

Cash and cash equivalents include cash in banks and on hand as well as short term highly liquid

investments such as money market instruments and bank deposits with original maturity terms of

not more than three months.


24



2.9 Share capital

Ordinary shares are classified as equity. Share capital is determined using the nominal value of

shares that have been issued. Additional paid-in capital includes any premiums received on the

initial issuance of the share capital. Incremental costs directly attributable to the issue of new

ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.10 Ordinary shares acquired by the Company

Shares which are repurchased by the Company are cancelled and whilst the amount of the

authorised share capital is not affected, the issued share capital is reduced accordingly.

If the cost of purchasing ordinary shares is less than the net asset value attributable to the shares

acquired, the difference is transferred to the Company’s equity reserve. If the cost of purchasing

ordinary shares is greater than the net asset value of the shares, i) the amount of any equity

reserve, additional paid-in capital account or fully paid share capital of the Company, and ii) any

amount representing unrealised profits of the Company for the time being standing to the credit of

any revaluation reserve maintained by the Company may be reduced by a sum not exceeding the

amount by which the repurchase payment exceeds the net asset value of the shares.

2.11 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the

ordinary course of business from suppliers. Trade payables are classified as current liabilities if

payment is due within one year or less (or in the normal operating cycle of the business if longer).

If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised

cost using the effective interest method.

2.12 Current and deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the

consolidated income statement, except to the extent that it relates to items recognised in other

comprehensive income or directly in equity. In this case, the tax is also recognised in other

comprehensive income or directly in equity, respectively.

Current income tax assets and/or liabilities comprise claims from or obligations to fiscal

authorities relating to the current or prior reporting periods that are not yet settled at the reporting

date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods

to which they relate based on the taxable profit for the year. All changes to current tax assets or

liabilities are recognised as a component of tax expense in the consolidated income statement.

Deferred income taxes are calculated using the liability method on temporary differences. This

involves the comparison of the carrying amounts of assets and liabilities in the consolidated

financial statements with their respective tax bases. In addition, tax losses available to be carried

forward as well as other income tax credits to the Group are assessed for recognition as deferred

tax assets.


25



2.12 Current and deferred income tax (continued)

However, deferred tax is not provided on the initial recognition of goodwill, or on the initial

recognition of an asset or liability unless the related transaction is a business combination or

affects tax or accounting profit. Deferred tax on temporary differences associated with shares in

subsidiaries and associates is not provided if reversal of these temporary differences can be

controlled by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the

extent that it is probable that they will be able to be offset against future taxable income.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are

expected to apply to their respective period of realisation, provided they are enacted or

substantively enacted at the reporting date. Most changes in deferred tax assets or liabilities are

recognised as a component of tax expense in the consolidated income statement. Only changes

in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is

charged directly to other comprehensive income are charged or credited directly to other

comprehensive income.

2.13 Provisions, contingent, liabilities and contingent assets

Provisions are recognised when the Group has a present legal or constructive obligation as a

result of past events; it is probable that an outflow of resources will be required to settle the

obligation; and the amount has been reliably estimated. Provisions are not recognised for future

operating losses.

Provisions are measured at the estimated expenditure required to settle the present obligation,

based on the most reliable evidence available at the reporting date, including the risks and

uncertainties associated with the present obligation and there is uncertainty about the timing or

amount of the future expenditure require in settlement. Where there are a number of similar

obligations, the likelihood that an outflow will be required in settlement is determined by

considering the class of obligations as a whole. Long-term provisions are discounted to their

present values, where the time value of money is material.

All provisions are reviewed at each reporting date and adjusted to reflect the current best

estimate of the Group’s management.

The Group does not recognise a contingent liability but discloses its existence in the financial

statements. A contingent liability is a possible obligation that arises from past events whose

existence will be confirmed by uncertain future events beyond the control of the Group or a

present obligation that is not recognised because it is not probable that an outflow of resources

will be required to settle the obligation. A contingent liability also arises in the rare circumstance

where there is a liability that cannot be recognised because it cannot be measured reliably. A

contingent asset is a possible asset that arises from past events, whose existence will be

confirmed by uncertain future events beyond the control of the Group. The Group does not

recognise contingent assets but discloses their existence when inflows of economic benefits are

probable, but not virtually certain.


26



2.14 Revenue recognition

(a) Interest income

Interest income is recognised using the effective interest method. When a loan and receivable is

impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated

future cash flow discounted at the original effective interest rate of the instrument, and continues

unwinding the discount as interest income. Interest income on impaired loan and receivables is

recognised using the original effective interest rate.

(b) Dividend income

Dividend income is recognised when the right to receive payment is established.

2.15 Related parties

Parties are considered to be related if one party has the ability to control the other party or

exercise significant influence over the other party in making financial or operational decisions.

Enterprises and individuals that directly, or indirectly through one or more immediately, control,

or are controlled by, or under common control with, the Company, including holding Company,

subsidiaries and fellow subsidiaries are related parties of the Company. Associates and

individuals owing directly, or indirectly, an interest in the voting power of the Company that give

them significant influence over the Company, key management personnel, including directors

and officers of the Company and the close members of the family. In considering each possible

related party relationship, attention is directed to the substance of the relationship, and not

merely the legal form.

2.16 Disposal fee and alignment fee

The disposal fee and alignment fee liabilities are designated as financial liabilities at fair value

through profit or loss, net of any prepayment advances received up to the date of the balance

sheet. Management estimates the fees’ fair value at each balance sheet date using a discounted

cash flow model based on the Company’s projected completion, collections of proceeds from

sales of the remaining properties and distributions to shareholders. The change in liabilities due

to the Investment Manager during the year is included as "disposal fee and alignment fee

(expense)/recovery" in the consolidated income statement and is further described in Note 20 to

these consolidated financial statements. An expense results from an increase in the liabilities to

the Investment Manager, and a recovery of previously expensed disposal fee and alignment fee

results from a decrease in the disposal fee and alignment fee liability to the Investment Manager

at the reporting date.

2.17 Loss per share and net asset value per share

The Group presents basic loss per share for its ordinary shares. Basic loss per share is

calculated by dividing the profit or loss attributable to the ordinary shareholders of the Company

by the weighted average number of ordinary shares outstanding during the year.

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares

outstanding during the year to assume conversion of all dilutive potential ordinary shares.


27



2.17 Loss per share and net asset value per share (continued)

Net asset value (“NAV”) per share is calculated by dividing the net asset value attributable to

ordinary shareholders of the Company by the number of outstanding ordinary shares as at the

reporting date. NAV is determined as total assets less total liabilities and non-controlling interests.

2.18 Segment reporting

An operating segment is a component of the Group:

that engages in investment activities from which it may earn revenues and incur expenses;

whose operating results are based on internal management reporting information that is

regularly reviewed by the Investment Manager to make decisions about resources to be

allocated to the segment and assess its performance; and

for which discrete financial information is available.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

When preparing the consolidated financial statements, the Group undertakes a number of

accounting judgements, estimates and assumptions about recognition and measurement of

assets, liabilities, income and expenses. The actual results may differ from the judgements,

estimates and assumptions made by management, and may not equal the estimated results.

There are no significant accounting estimates in the consolidated financial statements for the

year ended 30 June 2019.

4 SEGMENT ANALYSIS

In identifying its operating segments, management generally follows the Group’s sectors of

investment which are based on internal management reporting information for the Investment

Manager’s management, monitoring of investments and decision making. The operating

segments by investment portfolio include commercial, residential and office buildings, hospitality,

mixed-use segments and cash and deposits.

The activities undertaken by the commercial segment include the development and operation of

investment properties. Apartments and villas properties which are developed for sale, land and

office buildings are included in the residential and office buildings segment. The hospitality

segment includes the development and operation of hotels and related services. The mixed-use

segment includes multi-purpose projects. Strategic decisions are made on the basis of segment

operating results.

Each of the operating segments is managed and monitored separately by the Investment

Manager as each requires different resources and approaches. The Investment Manager

assesses segment profit or loss using a measure of operating profit or loss from the investment

assets. Although IFRS 8 requires measurement of segmental profit or loss, the majority of

expenses are common to all segments and therefore cannot be individually allocated. There

have been no changes from prior periods in the measurement methods used to determine

reported segment profit or loss.

There is no measure of segment liabilities regularly reported to the Investment Manager;

therefore, liabilities are not disclosed in the sector analyses.


28


4 SEGMENT ANALYSIS (CONTINUED)

Segment information can be analysed as follows for the reporting years:

(a) Consolidated income statement

Year ended 30 June 2019

Commercial

Residential

and office

buildings

Hospitality

Mixed

use

Total

USD’000 USD’000 USD’000 USD’000 USD’000

Revenue - - - - -

Cost of sales - - - - -

───── ─── ──── ─── ─── ───

Gross profit - - - - -

Net gain/(loss) from disposal of investments 5,146 - - (708) 4,438

Finance income - 7 - 91 98

Shares of losses of associates (558) - - - (558)

Other income 20 997 - 136 1,153

───── ───── ──── ──── ────

Total profit/(loss) before unallocatable

expenses 4,608 1,004 - (481) 5,131

Selling and administration expenses (2,910)

Finance expenses (188)

─────

Profit before tax 2,033

Income tax (2,012)

Net profit for the year

─────

21

═════


29


4 SEGMENT ANALYSIS (CONTINUED)

(a) Consolidated income statement (continued)

Year ended 30 June 2018

Commercial

Residential

and office

buildings

Hospitality

Mixed

use

Total


Revenue - 15 - 33 48

Cost of sales - (31) - (7) (38)

───── ─── ──── ─── ──── ─── ────

Gross (loss)/profit - (16) - 26 10

Net loss on fair value adjustments of

investment properties

-

-

-

(319)

(319)

Net (loss)/gain from disposal of investments (1,934) (7,430) 553 (9,293) (18,104)

Impairment of assets - - - (498) (498)

Finance income 30 262 - 786 1,078

Shares of losses of associates (1,260) - - - (1,260)

Shares of gains of associates classified as

held for sale

-

-

165

-

165

Other income - 28 - 2 30

───── ───── ──── ──── ────

Total (loss)/profit before unallocatable

expenses

(3,164)

(7,156)

718

(9,296)

(18,898)

Selling and administration expenses (5,924)

Finance expenses (780)

Other expenses (317)

─────

Loss before tax (25,919)

Income tax (588)

Net loss for the year

─────

(26,507)

═════


30

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 4 SEGMENT ANALYSIS (CONTINUED)

(b) Consolidated balance sheet

As at 30 June 2019

Commercial

Residential

and office

buildings

Hospitality

Mixed

use

Cash and

deposits

Total

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Cash and cash equivalents - - - - 4,433 4,433

Total assets

─────

-

═════

────

-

════

────

-

════

────

-

════

─────

4,433

═════

─────

4,433

═════

Total assets include:

- Addition to non-current assets

(other than financial

instruments and deferred tax

assets) - - - - - -

As at 30 June 2018

Commercial

Residential

and office

buildings

Hospitality

Mixed

use

Cash and

deposits

Total

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Trade, tax and other receivables - 424 - 3,144 - 3,568

Short-term investments - - - - 34 34

Cash and cash equivalents - - - - 29,079 29,079

Assets classified as held for sale 29,555 - - 753 - 30,308

Total assets

─────

29,555

═════

────

424

════

────

-

════

────

3,897

════

─────

29,113

═════

─────

62,989

═════

Total assets include:

- Addition to non-current assets

(other than financial

instruments and deferred tax

assets) 10,722 13,019 - 78 - 23,819


31


5 SUBSIDIARIES

As at 30 June 2018 and 30 June 2019, the Group had the following principal subsidiaries which are held through special purpose vehicles established outside of Vietnam:

30 June 2019 30 June 2018

Name

Country of

incorporation

and place of

business

Percentage

interest held by

the Group

Percentage interest

held by non-

controlling interests

Percentage

interest held by

the Group

Percentage interest

held by non-

controlling interests

Nature of business

Dien Phuoc Long Real Estate Company Limited Vietnam - - 100.0% - Property investment

VinaCapital Commercial Center Limited (Vietnam) Vietnam - - 38.2% 61.8% Property investment

SIH Real Estate Limited Company (Vietnam) Vietnam - - 75.0% 25.0% Property investment


32


5 SUBSIDIARIES (CONTINUED)

During the year, the Group sold all of its remaining principal subsidiaries, details of which are provided on the following pages. The major assets and liabilities in the subsidiaries disposed of were as follows:

As at the date of

disposal

USD'000

Current assets

Assets classified as held for sale 753

──────

Total current assets 753

Current liabilities

Trade payables (538)

Liabilities classified as held for sale (301)

──────

Total current liabilities (839)

──────

Net liabilities at the date when subsidiaries were sold 86 ──────

Net liabilities attributable to the Company 86

Net liabilities attributable to non-controlling interests -

──────

Total consideration 610

──────

Consideration received from sales of subsidiaries 610

Less: Cash and cash equivalents of disposed subsidiaries (742)

──────

Cash paid due to loss of control of subsidiaries (132)

══════

Details of the loss on disposals of subsidiaries were as follows:

Year ended

30 June 2019

USD'000

Total consideration 610

Carrying amount of net liabilities sold attributable to the Company 86

─────

Gain on disposals before reclassification of currency translation reserve 696

Reclassification of currency translation reserve (1,404)

─────

Loss on disposals of subsidiaries (Note 13) (708)

─────

Sale of VinaCapital Commercial Center Limited During the year, the Group sold its 38.2% equity interest in VinaCapital Commercial Center Limited for total consideration of USD0.6 million. The book value of the net assets at the sale date was USD0.2 million and the reclassification of translation reserve on disposal was USD0.8 million, resulting in a loss of USD0.4 million.


33

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5 SUBSIDIARIES (CONTINUED)

Sale of SIH Real Estate Limited Company During the year, the Group sold its 75% equity interest in SIH Real Estate Limited Company for total consideration of USD1. The book value of the net liabilities at the sale date was USD0.3 million and the reclassification of translation reserve on disposal was USD0.6 million, resulting in a loss of USD0.3 million.

6 CASH AND CASH EQUIVALENTS

30 June 2019 30 June 2018

USD’000 USD’000

Cash at banks 1,601 29,035

Cash equivalents 2,832 44

───── ─────

4,433 29,079

═════ ═════

Cash equivalents include short-term highly liquid investments with original maturities of three months or less. At 30 June 2019, cash and cash equivalents held at the Company level amounted to USD4.4 million (30 June 2018: USD27.8 million).

In accordance with the Third Amended Management Agreement, 20% of any disposal fee and

alignment fee payable to the Investment Manager is to be deposited into a separate bank

account under the Company’s name (“the Retention Account”). These funds will be distributed

upon the performance of certain milestones by the Investment Manager. The Company has no

specific rights to these funds. Included in cash and cash equivalents as at 30 June 2019 was

USD3.6 million transferred into the Retention Account (as at 30 June 2018: USD1.2 million). 7 FINANCIAL INSTRUMENTS BY CATEGORY

Financial assets

On 1 July 2018 (the date of initial application of IFRS 9), the Group assessed which business

models applied to the financial assets held by the Group and has classified its financial

instruments into the appropriate IFRS 9 categories as follows.

30 June 2019 30 June 2018

USD’000 USD’000

Financial assets at amortised cost

Trade receivables - 3,568


Cash and cash equivalents 4,433 29,079

───── ─────

4,433 32,681

═════ ═════


34


7 FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED)

Financial liabilities

30 June 2019 30 June 2018

USD’000 USD’000

Liabilities at amortised cost

Trade payables 319 3,154

Payables to related parties - 565

Other payables - 12

Liabilities at fair value through profit or loss 3,239 12,026

───── ─────

3,558 15,757

═════ ═════

8 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

As at 30 June 2019, the Group had no assets and liabilities classified as held for sale.

For the comparative balance sheet date:

30 June 2018

Attributable to

Assets

classified as

held for sale

Liabilities

classified as

held for sale

Net assets

classified as

held for sale

Non-

controlling

interests

Equity

shareholders of

the parent


Thang Loi Textile Garment Joint

Stock Company

29,555

-

29,555 -

29,555

VinaCapital Commercial Center

Limited (Vietnam)

726

(274)

452

243

209

SIH Real Estate Limited

Company (Vietnam)

27

(27)

-

-

-

─────

30,308

═════

───

(301)

═══

─────

30,007

═════

───

243

═══

─────

29,764

═════


35


8 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE (CONTINUED)

Management’s view is that all of the Group’s assets and liabilities classified as held for sale are

in Level 3 of the fair value hierarchy. The major classes of assets and liabilities and their

movements during the year are as follows:

1 July

2018

Change in

carrying

amount

Disposals

30 June

2019

USD’000 USD’000 USD’000 USD’000

Assets classified as held for sale

Trade and other receivables 11 - (11) -

Cash and cash equivalents 742 - (742) -

Investments in associates 29,555 (558) (28,997) -

───── ───── ────── ─────

30,308 (558) (29,750) -

───── ───── ────── ─────

Liabilities classified as held for sale

Trade and other payables 301 - (301) -

───── ───── ────── ─────

301 - (301) -

───── ────── ────── ─────

Net assets classified as held for sale 30,007

═════

(558)

══════

(29,449)

══════

-

═════

For the comparative year:

1 July 2017

Change in

carrying amount

Transferred

in

Disposals

30 June 2018


Assets classified as held for sale

Investment properties 287,058 8,474 - (295,532) -

Property, plant and equipment (net of

accumulated depreciation)

11

(1)

-

(10)

-

Prepayment for acquisitions 3,077 (10) - (3,067) -

Other non-current assets 14 - - (14) -

Other current assets 4 10 - (14) -

Inventories 29,584 8 - (29,592) -

Trade and other receivables 1,645 (131) 11 (1,514) 11

Cash and cash equivalents 4,283 (715) 742 (3,568) 742

Investments in associates 4,287 35 29,555 (4,322) 29,555

────── ──── ───── ────── ─────

329,963 7,670 30,308 (337,633) 30,308

────── ──── ──── ────── ─────

Liabilities classified as held for sale

Long-term borrowings and debts 78,247 2,742 - (80,989) -

Short-term borrowings and debts 18,828 1,114 - (19,942) -

Accruals and other current liabilities 35 247 - (282) -

Trade and other payables 27,405 4,994 301 (32,399) 301

────── ────── ───── ────── ─────

124,515 9,097 301 (133,612) 301

────── ────── ───── ────── ─────

Net assets classified as held for sale 205,448

══════

(1,427)

══════

30,007

═════

(204,021)

══════

30,007

═════


36


9 SHARE CAPITAL

30 June 2019 30 June 2018

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 163,399,888 1,634 257,987,620 2,580

Shares purchased and cancelled (16,780,000) (168) (94,587,732) (946)

Closing balance

────────

146,619,888

════════

────

1,466

════

────────

163,399,888

════════

────

1,634

════

The Company considers investors holding more than a 10% beneficial interest in the ordinary shares of the Company as major shareholders. As at 30 June 2019, four investors held more than 10% of the ordinary shares of the Company (30 June 2018: four). During the year, the Company purchased and cancelled 16,780,000 of its ordinary shares (30 June 2018: 94,587,732 shares) for total cash consideration of USD4.7 million (30 June 2018: USD73.0 million) at an average cost of USD0.28 per share (30 June 2018: USD0.772 per share). The difference between the cost of the shares repurchased and their net asset value has been recorded in an equity reserve. The Company announced on 23 August 2019 that it would make an additional distribution of USD875,378 or USD0.00597 per share, to be paid to shareholders on 6 September 2019.

10 ADDITIONAL PAID-IN CAPITAL

Additional paid-in capital represents the excess of consideration received over the par value of shares issued.

Year ended

30 June 2019 30 June 2018

USD’000 USD’000

Opening balance 118,422 332,803

Shares repurchased and cancelled (4,712) (83,146)

Distributions to shareholders (45,452) (131,235)

Closing balance

──────

68,258

══════

──────

118,422

══════

On 16 November 2018, the Company announced that it would make a distribution of capital from its additional paid-in capital of USD45.5 million or 31 cents per ordinary share. As at 30 June 2019, this amount had been fully distributed.


37

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 11 TRADE AND OTHER PAYABLES

30 June 2019 30 June 2018

USD’000 USD’000

Liquidation and professional fees 319 3,154

Other payables - 12

────

319

════

────

3,166

════

All trade and other payables are short-term in nature. Their carrying values approximate their fair values as at the date of the consolidated balance sheet.

12 SELLING AND ADMINISTRATION EXPENSES

Year ended

30 June 2019 30 June 2018 USD’000 USD’000 Disposal and alignment fee under the Third Amended and

Restated Investment Management Agreement (Note 20)

1,307

4,083 Accrued liquidation fees 319 274 Professional fees (*) 676 986 General and administration expenses (**) 608 332 Staff costs (**) - 162 Outside service costs (**) - 85 Depreciation and amortisation (**) - 2

──── 2,910

════

──── 5,924

════

(*) These expenses primarily relate to the operating activities of the Company such as legal and professional fees, audit fees, valuation fees, fund administrative and custodian fees, directors’ fees.

(**) These expenses primarily relate to the operating activities of the Group’s subsidiaries.

13 GAIN/(LOSS) ON DISPOSAL OF INVESTMENTS, NET

Year ended

30 June 2019 30 June 2018 USD’000 USD’000 Loss on sales of subsidiaries (Note 5) (708) (18,775) Gain on sales of assets classified as held for sale 5,146 671

───── 4,438

═════

───── (18,104) ═════


38

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14 FINANCE EXPENSES

Year ended

30 June 2019 30 June 2018

USD’000 USD’000

Realised foreign exchange losses 145 2

Interest expense 43 771

Unrealised foreign exchange losses - 7

───

188

═══

───

780

═══ 15 INCOME TAX

VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there are no income, corporation, capital gains or other taxes payable by the Company. The majority of the Group’s subsidiaries are domiciled in the British Virgin Islands (“BVI”) and so have a tax exempt status. A number of subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in those countries. Deferred tax assets/liabilities of these subsidiaries are estimated based on the tax legislation of each jurisdiction and included in the deferred income tax assets/liabilities on the consolidated balance sheet. As is the case with many other developing countries, Vietnam is in the process of implementing comprehensive tax regulations. As a result, the administration of tax regulations by government agencies may be subject to considerable discretion, and in many areas, the legal framework is uncertain and subject to interpretation. The Group has provided for all taxes expected to be payable by it under the current tax regulations in Vietnam. There is, however, an ongoing risk that government agencies might seek to impose additional taxes on the Group based on different interpretations of the regulations or through the retrospective application of new regulations.


39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 15 INCOME TAX (CONTINUED)

No provision has been made for corporate income tax payable by the Vietnamese subsidiaries for the year because these subsidiaries do not have taxable income in Vietnam (30 June 2018: nil).

The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense actually recognised in the consolidated income statement can be reconciled as follows:

Year ended

30 June 2019 30 June 2018 USD’000 USD’000

Current tax Group’s profit/(loss) before tax 2,033 (25,919) Group’s profit/(loss) multiplied by applicable tax rate (0%) - - Effect of higher tax rate in Vietnam - - Capital gains tax (2,012) (19,350) ───── ───── Total current tax expense (2,012) (19,350) ───── ───── Deferred income tax Decrease in deferred tax liabilities (*) - 18,762 ───── ───── Deferred income tax - 18,762 ───── ───── Tax expense (2,012) (588) ═════ ═════ (*) Those amounts represent the deferred income tax income which arises from the gains and

losses on fair value adjustments of investment properties and property, plant and equipment and the reversal of deferred income tax assets and liabilities as a result of changes to assumptions during the year.

16 PROFIT/(LOSS) AND NET ASSET VALUE PER SHARE

(a) Basic

Year ended 30 June 2019 30 June 2018 USD’000 USD’000 Profit/(loss) attributable to owners of the Company from

continuing and total operations (USD’000) 21 (31,712) Weighted average number of ordinary shares in issue 148,349,998 195,261,249 Basic profit/(loss) per share from continuing and total

operations (USD/share) 0.00 (0.16) ──── ────

(b) Diluted

Diluted profit/(loss) per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group has no category of potential dilutive ordinary shares. Therefore, diluted profit/(loss) per share is equal to basic profit/(loss) per share.


40


16 PROFIT/(LOSS) AND NET ASSET VALUE PER SHARE (CONTINUED)

(c) Net asset value per share

As at

30 June 2019 30 June 2018 Net asset value (USD’000) 875 46,688 Number of outstanding ordinary shares in issue 146,619,888 163,399,888 Net asset value per share (USD/share) 0.006 0.29 ──── ────

17 TOTAL EXPENSE RATIO

1 For the year ended

30 June 2019 30 June 2018 Total expense ratio 6.74% 0.95% ──── ──── The total expense ratio (“TER”) has been calculated in accordance with the Association of Investment Companies (“AIC”) recommended methodology dated May 2012, which excludes disposal and alignment fees from the calculation. It is the ratio of annualised ongoing charges over the average undiluted net asset value during the year.

The total expense ratio includes directors’ fees and expenses, recurring audit and tax services,

custody and fund administration services, fund accounting services, secretarial services, registrars’ fees, public relations fees, insurance premiums, regulatory fees and similar charges.

18 COMMITMENTS

As at 30 June 2019, the Group was not committed to any lease agreements (as at 30 June 2018:

USD6,000).

As at 30 June 2019 and 30 June 2018, there were no commitments for future construction work

for the Group’s properties held by subsidiaries.

19 DIRECTORS’ FEES AND MANAGEMENT’S REMUNERATION

The aggregate annual directors’ fees amounted to USD200,000 (year ended 30 June 2018:

USD260,000) of which there were no outstanding payables at the reporting date (30 June 2018: nil).

The details of annual remuneration by director are summarised below:

Year ended 30 June 2019 30 June 2018

USD’000 USD’000

Michel Casselman 75.0 75.0

Ian Lydall 65.0 65.0

Charles Isaac (*) 30.0 60.0

Tran Trong Kien (*) 30.0 60.0

──── 200.0

════

──── 260.0

════ (*) Charles Isaac and Tran Trong Kien resigned on 14 December 2018.


41


20 RELATED PARTY TRANSACTIONS AND BALANCES

Management, disposal and alignment fees The Group is managed by VinaCapital Investment Management Limited (the “Investment Manager”), an investment management company incorporated in the Cayman Islands. Under the Third Amended and Restated Investment Management Agreement effective from 14 December 2016, no further management fees shall be charged by the Investment Manager to the Company (30 June 2018: USD1.8 million). The Investment Manager receives a disposal fee and an alignment fee. The disposal fee is calculated at the rate of 3.00% of distributable funds realised in the year starting 22 November 2016, 2.75% in the second year and 2.25% in the third year. The alignment fee is calculated on distributions to shareholders over USD265.0 million during the 3-year period starting 22 November 2016. The Investment Manager will receive 10% of distributions over USD265.0 million and up to USD279.0 million, 15% of distributions over USD279.0 million, and up to USD313.0 million, and 20% of distributions over USD313.0 million. A non-refundable monthly advance of USD200,000 in the year starting 22 November 2016, USD150,000 in the second year, and USD100,000 in the third year, will be paid to the Investment Manager. These advances will be offset against disposal fees and alignment fees. During the year, advances of USD1.4 million (30 June 2018: USD2.0 million) were paid to the Investment Manager. Details of disposal fees and alignment fees accrued/payable at the balance date were as follows:

30 June 2019 30 June 2018 USD’000 USD’000 Disposal fees payable 1,436 733 Disposal fees accrued - 2,995 Alignment fees payable 1,803 532 Alignment fees accrued - 7,766 ───── ───── Total fees expensed/accrued during the year 3,239 12,026 Advance payments to be offset against fees payable - - ───── ───── Net accrual/payable of disposal and alignment fees 3,239 12,026 ═════ ═════

(*) Movement in accrual/payable disposal and alignment fees during the year were as follows:

Year ended

30 June 2019 30 June 2018

USD’000 USD’000

Opening balance 12,026 11,538

Charge for the year (Note 12) 1,307 4,083

Amounts settled (10,094) (3,595)

Closing balance

──────

3,239

══════

──────

12,026

══════


42


20 RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Management, disposal and alignment fees (continued) Details of payables and accruals to related parties at the date of the consolidated balance sheet are as below:

30 June 2019 30 June 2018 Relationship Balances USD’000 USD’000 VinaCapital Investment

Management Ltd. Investment Manager

Disposal fee and alignment fee payable 3,239 1,265

Accrued disposal fee and alignment fee - 10,761

VinaCapital Vietnam

Opportunity Fund Limited (“VOF”)

Under common management

Disposals of real estate projects - 565

───── ───── 3,239 12,591 ═════ ═════

The interests of the related parties in the shares, underlying shares and debentures of the Company are as follows:

As at

30 June 2019 30 June 2018

Number of shares

Asia Investment and Finance Limited 54,321,831 -

Vietnam Investment Partners Ltd (*) 22,286,457 22,286,457

VinaCapital Group Limited 608,553 608,553

─────── ───────

77,216,841 22,895,010

═══════ ═══════

(*) In accordance with the Second Amended and Restated Investment Management Agreement, the Investment Manager was required to use 50% of the realisation fee arising from the contracted divestment proceeds collected to make market purchases of the Company's ordinary shares within three months of the receipt of the realisation fee. The shares acquired are subject to lockups of between one and two years from the date of acquisition. As at 30 June 2019, there were no ordinary shares under lockup (as at 30 June 2018: 7,039,279 ordinary shares).

As at 30 June 2019, the Investment Manager and its related parties had an interest of 77,216,841 ordinary shares, representing 52.66% of the Company’s total voting rights.


43


21 FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group holds a diversified property portfolio in Vietnam. As a result the Group is exposed to a

variety of financial risks: market risk (including price risk, currency risk and interest rate risk);

credit risk; and liquidity risk. The Group’s overall risk management programme focuses on the

unpredictability of financial markets and seeks to minimise potential adverse effects on the

Group’s financial performance. The Group’s risk management is coordinated by its Investment

Manager who manages the distribution of the assets to achieve the investment objectives. Foreign exchange risk The Group’s exposure to risk resulting from changes in foreign currency exchange rates is moderate as although transactions in Vietnam are settled in the VND, the value of the VND has historically been closely linked to that of the USD, the presentation currency. The value of real estate in Vietnam is based on pricing that is a combination of VND, USD and gold. For this reason, a decline in the value of the VND against the USD does not necessarily mean proportionately lower prices will be obtained in USD. The Group has not entered into any other hedging mechanism as the estimated benefits of available instruments outweigh their cost. On an ongoing basis the Investment Manager analyses the current economic environment and expected future conditions and decides the optimal currency mix considering the risk of currency fluctuation, interest rate return differentials and transaction costs. The Investment Manager updates the Board regularly and reports on any significant changes for further actions to be taken. The functional currency of the Company is the USD. The functional currencies of the Group’s subsidiaries in the BVI and Singapore are the USD while those of its Vietnamese subsidiaries are the VND. The Group’s exposure to currency risk arises from VND denominated balances at the BVI and Singapore levels and USD denominated balances at the Vietnamese level. As at 30 June 2019, the Group was not exposed to foreign exchange risk as all of the Group’s financial assets and liabilities were denominated in USD. As at 30 June 2018, the Group’s financial assets’ and liabilities’ exposures to risk of fluctuations in exchange rates were as follows:

Short-term exposure Long-term exposure

VND USD VND USD

(USD as

functional

currency)

(VND as

functional

currency)

(USD as

functional

currency)

(VND as

functional

currency)

USD’000 USD’000 USD’000 USD’000

Financial assets 5,631 1 - -

Financial liabilities (565) - - -

──── ─── ─── ───

Net exposure 5,066 1 - -

════ ═══ ═══ ═══ At 30 June 2018, if the VND weakened/strengthened by 5%, post-tax loss for the year would have been USD0.25 million higher/lower.


44

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21 FINANCIAL RISK MANAGEMENT (CONTINUED)

Price risk sensitivity Price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. As the majority of the Group's financial instruments are carried at fair value with fair value changes recognised in the consolidated income statement, all changes in market conditions will directly affect net investment income.

As at 30 June 2019, the Group had no investment property or items of property plant and equipment carried at fair value.

Cash flow and fair value interest rate sensitivity The Group’s exposure to interest rate risk is not material as it did not have any loans or borrowings at year end. Credit risk analysis Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Impairment provisions are provided for losses that have been incurred by the Group at the reporting date.

The Investment Manager maintains a list of approved banks for holding deposits and set aggregate

limits for deposits or exposures to individual banks. While this list is formally reviewed at least monthly, it is updated to reflect developments in the market on a timely basis as information becomes available. As at 30 June 2019, the Group was not exposed to credit risk as there were no amounts payable from counterparties. The Group’s exposure to credit risk is limited to the carrying amounts of financial assets recognised at the reporting date, an analysis by credit quality is as follows:

30 June 2019 30 June 2018

USD’000 USD’000

Neither past due nor impaired 4,433 32,681

Past due but not impaired, less than 6 months - -

Past due but not impaired, more than 6 months - -

Past due and impaired - -

───── ─────

4,433 32,681

Less: Allowance for impairment - -

Total

─────

4,433 ═════

─────

32,681

═════


45

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21 FINANCIAL RISK MANAGEMENT (CONTINUED)

Credit risk analysis (continued)

30 June 2019 30 June 2018

USD’000 USD’000

Neither past due nor impaired:

Cash and cash equivalents 4,433 29,079


Receivable from a related party - 100

Trade receivables - 3,406

Other receivables - 62

─────

4,433

═════

─────

32,681

═════

Past due but not impaired:

Receivables from disposals of subsidiaries - -

────

-

════

────

-

════

Less: Allowance for impairment - -

Total financial assets, net of provision for impairment

─────

4,433

─────

32,681

═════ ═════

As at 30 June 2019, the Group has not set aside a provision for receivables from the disposal of subsidiaries (30 June 2018: nil) because there are no outstanding receivables from the disposals. The credit quality of financial assets that are neither past due nor impaired is assessed by management for each period end. This assessment takes into account the financial health of the buyers, or history of payments and defaults of existing buyers of the Group. Debtors and amounts due from a related party that are neither past due nor impaired are substantially companies with good collection track records with the Group. Bank deposits are mainly transacted with banks of high credit ratings assigned by international credit-rating agencies. Cash and cash equivalents and deposits are held at international and local banks and financial institutions which do not have histories of default.

The Group has no other significant concentrations of credit risk.

In accordance with the Group’s policy, the Investment Manager continuously monitors the Group’s credit position on a monthly basis, identified either individually or by group, and incorporates this information into its credit controls. The Investment Manager reconsiders the valuations of financial assets that are impaired or overdue at each reporting date based on the payment status of the counterparties, recoverability of receivables, and prevailing market conditions.


46


21 FINANCIAL RISK MANAGEMENT (CONTINUED)

Liquidity risk analysis

Liquidity risk is the risk that the Group will experience difficulty in either realising assets or

otherwise raising sufficient funds to satisfy commitments associated with investments and

financial instruments. The Company seeks to minimise liquidity risk through preparing and

monitoring cash flow forecasts.

At year end, the contractual undiscounted cash flows of the Group’s financial liabilities have

contractual maturities summarised as follows:

Current Non-current

30 June 2019

Within 6

months

6 to 12

months

From 1 to

5 years

Over 5

years

USD’000 USD’000 USD’000 USD’000

Trade and other payables 319 - - -

Payables to related parties 3,239 - - -

────

3,558

════

────

-

════

────

-

════

────

-

════

30 June 2018

Within 6

months

6 to 12

months

From 1 to 5

years

Over 5

years

USD’000 USD’000 USD’000 USD’000

Trade and other payables 3,166 - - -

Payables to related parties 12,591 - - -

────

15,757

════

────

-

════

────

-

════

────

-

════

The above contractual maturities reflect the gross cash flows, which may differ from the carrying

value of the liabilities at year end.

Capital management

The Group’s capital management objectives are to preserve cash and maximise the return of

capital to shareholders.


47

21 FINANCIAL RISK MANAGEMENT (CONTINUED)

Capital management (continued)

Capital as at year end is summarised as follows:

30 June 2019 30 June 2018

USD’000 USD’000

Net assets attributable to the equity shareholders of the parent 875 46,688

═════ ═════

Fair value estimation The table below analyses financial instruments carried at fair value, by valuation method. The difference levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The level within which the financial asset is classified is determined based on the lowest level of significant input to the fair value measurement. The financial assets and financial liabilities measured at fair value in the consolidated balance sheet are grouped into the fair value hierarchy as follows: Level 1 Level 2 Level 3 Total As at 30 June 2019 USD’000 USD’000 USD’000 USD’000 Financial liabilities - Disposal and alignment fees - - (3,239) (3,239) ═══ ══════ ═════ ═════ Level 1 Level 2 Level 3 Total As at 30 June 2018 USD’000 USD’000 USD’000 USD’000 Financial liabilities - Disposal and alignment fees - - (12,026) (12,026) ═══ ══════ ═════ ═════ There were no transfers between levels during the year.

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