TIDMASPL
RNS Number : 8543X
Aseana Properties Limited
28 April 2023
28 April 2023
Aseana Properties Limited
("Aseana" or the "Company")
Full Year Results for the year ended 31 December 2022
Aseana Properties Limited (LSE: ASPL), a property developer in
Malaysia, listed on the Main Market of the London Stock Exchange,
announces its full year results for the year ended 31 December
2022.
For further information:
Grant Thornton UK LLP
Philip Secrett / Samuel Littler +44(0)20 7383 5100
CHAIRMAN'S STATEMENT
Dear Shareholders,
INTRODUCTION
Asia began its recovery from the COVID-19 pandemic from the
middle of 2022 onwards, as both Malaysia and Vietnam (where we used
to own properties) steadily lifted their restrictions on population
movement and international travel. As a result, economic activity,
and most importantly, the movement of first the domestic
populations and then foreign tourists began to accelerate. These
are very important to the Company as our assets comprised a
hospital and development land in Vietnam (which have now been
sold), a 5-star hotel and luxury residential apartments in Kuala
Lumpur, a shopping mall and a hotel in Sandakan and undeveloped
beachfront land in Sabah.
COMMENTARY ON THE YEAR
Our focus has been to minimise operating costs and net cash
outflows at each of our properties whilst our Asset Divestment team
seeks to dispose of them at reasonable prices. The sale of our
Vietnam assets significantly reduced the project debts, reducing
our debt servicing costs.
I am pleased that shareholders are co-operating in the common
aim of selling the Group's assets and returning as much capital as
possible to all shareholders.
ECONOMIC OVERVIEW
In 2022, the Malaysian economy recorded growth of 8.7% (2021:
3.1%) according to the Malaysian government as the economy
rebounded from the easing of COVID-19 restrictions but this
forecast is expected to slow to 4.0% in 2023 according to the World
Bank.
PERFORMANCE REVIEW
During 2022, the Company recorded a net loss after finance costs
and before taxation of US$17.6 million compared to a net loss
before taxation of US$5.8 million (restated) for the previous
financial year. The Net Loss attributable to equity holders was
US$15.9 million for FY 2022, (2021 (restated): US$5.8 million), and
the loss per share was US cents 7.99 (2021 (restated): US cents
2.90).
Our NAV per Share as at 31 December 2022 fell to US cents 37
(2021 (restated): US cents 46).
Our net cash inflow for the year was US$0.1 million (2021
(restated): US$1.7 million) which reflected foreign exchange gain
effect of US$ 2.9 million (2021 (restated): US$1.1 million loss
effect), net cash outflows from operating activities of US$4.5
million (2021 (restated): US$9.8 million) offset by a cash inflow
from investing and financing activities of US$1.7 million (2021
(restated): US$12.7 million).
OUR ASSET DIVESTMENT PROGRAMME
Progress on asset sales had been very difficult during the Covid
restrictions but in March 2022, we completed the sale of our two
assets in Vietnam for a gross price of US$95 million. We received a
gross consideration of US$18.3 million in cash of which US$8.9
million was used to pay down project debts owed in Malaysia. The
balance was used for working capital purposes within the Group.
Although we had to terminate a conditional agreement to sell the
unsold apartments in The RuMa Residences in August 2022, other
potential buyers have since appeared, and progress is being made to
sell these and our other major assets. Announcements will be made
about these when such discussions convert into detailed sale terms
and signed commitments.
DIS-CONTINUATION VOTE IN MAY
The Company is required to hold another dis-continuation vote by
the end of May 2023 so that shareholders can vote on the future of
the Company. The Directors therefore intend to call an
Extraordinary General Meeting on 30 May 2023 and current
expectations are to also hold the Annual General Meeting on the
same date.
ACKNOWLEDGMENTS
Once again, I would like to thank my colleagues on the Company's
Board of Directors, the staff operating at the level of the Group
and the staff working at each of the properties that we own for
their tireless work on behalf of the Group and its shareholders. In
addition, our external advisors and service providers provide
invaluable assistance to the Company.
On 3 March 2023, Hock Chye Tan joined the Board of Directors and
the Audit Committee as an independent non-executive Director based
in Malaysia. He is a corporate and finance professional bringing
valuable expertise as a qualified accountant.
Thank you.
NICHOLAS JOHN PARIS
Chairman
28 April 2023
PROPERTY PORTFOLIO AS AT 31 DECEMBER 2022
Project Type Effective Approximate
Ownership Gross
Floor Approximate
Area Land Area
(sq m) (sq m)
------------------------------ -------------------- ----------- ------------ ------------
Completed projects
------------------------------ -------------------- ----------- ------------ ------------
The RuMa Hotel and Luxury residential
Residences tower and bespoke
Kuala Lumpur, Malaysia hotel 70.0% 40,000 4,000
------------------------------ -------------------- ----------- ------------ ------------
Sandakan Harbour Square Hotel and retail
Sandakan, Sabah, Malaysia mall 100.0% 126,000 48,000
------------------------------ -------------------- ----------- ------------ ------------
Undeveloped projects
------------------------------ -------------------- ----------- ------------ ------------
Land parcel
approved for
development
of: (i) Boutique
resort hotel
and resort
villas
Kota Kinabalu Seafront (ii) Resort
resort & residences homes 80.0% n/a 172,900
------------------------------ -------------------- ----------- ------------ ------------
Divested projects
------------------------------ -------------------- ----------- ------------ ------------
Phase 1: City International
Hospital, International
Healthcare Park, Private general
Ho Chi Minh City, Vietnam hospital 73.04% 48,000 25,000
------------------------------ -------------------- ----------- ------------ ------------
Other developments
in International Healthcare
Park,
Ho Chi Minh City, Vietnam Commercial
(formerly International development
Hi-Tech Healthcare with healthcare
Park) theme 73.04% 972,000 351,000
------------------------------ -------------------- ----------- ------------ ------------
PERFORMANCE SUMMARY
Year ended Year ended
31 December 31 December
2022 2021
------------------------------------------------------------------- ------------- -------------
Total Returns since listing
Ordinary share price -86.00% -80.00%
FTSE All-share index 22.31% -26.30%
FTSE 350 Real Estate Index -57.47% -33.88%
One Year Returns
Ordinary share price -30.00% -37.50%
FTSE All-share index -3.16% 14.55%
FTSE 350 Real Estate Index -35.67% 26.19%
Capital Values (2021 restated)
Total assets less current liabilities
(US$ million) 104.24 126.09
Net asset value per share (US$) 0.41 0.45
Ordinary share price (US$) 0.14 0.20
FTSE 350 Real Estate Index 398.93 620.13
Debt-to-equity ratio (2021 restated)
Debt-to-equity ratio (1) 102.21% 92.52%
Net debt-to-equity ratio (2) 91.50% 84.52%
(Loss)/ Earnings Per Share (2021
restated)
Earnings per ordinary share - basic
(US cents) -7.99 -2.90
- diluted (US cents) -7.99 -2.90
Notes:
(1) Debt-to-equity ratio = (Total Borrowings ÷ Total Equity) x
100%
(2) Net debt-to-equity ratio = (Total Borrowings less Cash and
Cash Equivalents ÷ Total Equity) x 100%
FINANCIAL REVIEW
INTRODUCTION
The Group recorded a consolidated comprehensive loss of US$20.4
million for the financial year ended 31 December 2022 (year ended
31 December 2021 (restated): US$12.6 million) , largely due to
impairment provided to inventory and amount due from a related
party.
STATEMENT OF COMPREHENSIVE INCOME
The Group recognised revenue of US$ 1.0 million (2021
(restated): US$0.6 million). Revenue of US$36.4 million has been
deferred until control of sold units in the leaseback program is
passed to the buyer.
The Group recorded a net loss before taxation of US$17.6 million
(2021 (restated): US$5.8 million). The loss was largely due to
impairment provided to inventory and amount due from a related
party.
Net loss attributable to equity holders of the parent company
was US$15.9 million (2021 (restated): US$5.8 million). Tax expenses
for the year was US$ 0.3 million (2021 (restated): US$0.1
million).
The consolidated comprehensive loss was US$ 20.3 million ( 2021
(restated): US$12.6 million), which included a loss of US$ 2.5
million (2021 (restated) : US$3.6 million) attributable to foreign
currency translation differences for foreign operations due to an
appreciation of the US Dollar against the Ringgit, during the
year.
Basic and diluted loss per share were both US cents 7.99 (2021
(restated): US cents 2.90).
STATEMENT OF FINANCIAL POSITION
Total assets were US$ 157.2 million (2021 (restated): US$190.4
million), representing a decrease of US$ 31.9 million. This was
mainly due to disposal of asset held for sale with a carrying
amount of US$14.5 million and a decrease of US$14.5 million in
inventories that includes an impairment of US$8.6 million.
Total liabilities were US$89.4 million (2021 (restated):
US$101.4 million), representing a decrease of US$12.0 million. This
was mainly due to a decrease of US$11.1 million in medium term
notes which was partially repaid during the year.
Net Asset Value per share was US$0.37 (31 December 2021
(restated): US$0.46).
CASH FLOW AND FUNDING
Cash generated from operations before interest and tax paid was
US$1.1 million (2021 (restated): US$6.2 million cash used).
The Group generated net cash flow of US$10.5 million from
investing activities (2021 (restated): US$0.7 million).
Some of the borrowings of the Group were repaid from divestment
proceeds. As at 31 December 2022, the Group's gross borrowings
stood at US$32.9 million (31 December 2021 (restated): US$44.0
million). Net debt-to-equity ratio was 91.50% (31 December 2021
(restated): 84.52%).
Finance income was US$2.0 million for financial year ended 31
December 2022 (2021 (restated): US$2.0 million) which included
accrued income of US$1.5 million (2021 (restated): US$1.3 million).
Finance costs were US$3.3 million (2021 (restated): US$3.6
million), which were mostly incurred by its operating assets.
DIVID
No dividend was declared or paid in the financial years 2022 and
2021.
PRINCIPAL RISKS AND UNCERTAINTIES
A review of the principal risks and uncertainties facing the
Group is set out in the Directors' Report of the Annual Report.
TREASURY AND FINANCIAL RISK MANAGEMENT
The Group undertakes risk assessments and identifies the
principal risks that affect its activities. The responsibility for
the management of each key risk has been clearly identified and has
been managed by the Board of Directors and the Board are closely
involved in the day-to-day operation of the Group.
A comprehensive discussion on the Group's financial risk
management policies is included in the notes to the financial
statements of the Annual Report.
NICHOLAS JOHN PARIS
Director
28 April 2023
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
Aseana Properties is committed to making a positive difference
in the world, whether it is for the local community or whether it
is building a better working environment. The Company believes that
being socially and environmentally responsible is good for people,
the planet and for business. The following six core principles
define the essence of corporate citizenship for the Company.
Managing Corporate Responsibility
The Board of Directors at Aseana Properties has oversight
mechanisms, through corporate-level policies and standards to
ensure an effective CSR programme is delivered in the interest of
its employees, shareholders and the community at large. It is
determined to ensure that its CSR programme acts legally and
responsibly on all matters and that the highest ethical standards
are maintained. The Board recognizes this as a key part of its
risk, management strategy to protect the reputation of Aseana
Properties and shareholders values are enhanced.
Employees
In the current changing economic environment, with competing
demands and stress, the welfare of employees is critical in order
to ensure they are productive, creative and innovative. This is
also in order to achieve the highest standard in the workplace. The
Board works hard to ensure that employees are treated fairly and
with dignity because it is the right thing to do and also to get
the best out of them.
Health and Safety
Aseana Properties considers Health and Safety to be important
because it protects the well-being of employees, visitors and
clients. Looking after Health and Safety makes good business sense
and the Company works hard to provide a healthy workplace
environment for its staff, contractors and visitors.
Some of the organized efforts and procedures for reducing
workplace accidents, risks and hazards, exposure to harmful
solutions include:
-- Paying particular attention to the regular maintenance of
equipment, plant and systems to ensure a safe working
environment.
-- Providing sufficient information, instruction, training and
supervision to enable all employees to avoid hazards and to
contribute positively to their own safety and safe performance at
work.
Stakeholders
Aseana Properties works collaboratively with its stakeholders to
improve services and to ensure client satisfaction. The Company is
committed to meaningful dialogue and encourages stakeholder
participation through stakeholder events, roadshows, briefings,
conference calls and timely release of annual reports. Aseana
Properties also maintains an updated and informative website,
www.aseanaproperties.com that is accessible to stakeholders and
members of the public.
Environmental Management
Aseana Properties believes that any commitment to a more
environmentally sustainable world has to start at home, and to this
end, it challenges itself to work in an environmentally responsible
manner and to find new ways to reduce its carbon footprint. It also
works with consultants such as architects to look at how they can
be more environmentally friendly by incorporating natural elements
such as water, greenery, light and air into its projects.
Maintaining and sustaining local Malaysian heritage is the essence
of the RuMa Hotel so decorative elements like batik prints
throughout are recycled from a local batik factory. The Kelelai (a
type of bamboo) ornaments and ceiling panels at the pool area of
Level 6 of the hotel are cultivated from a dying weaving art by
Kelantanese women.
The RuMa Hotel and Residences have both been separately awarded
the Green Building Index (GBI) Provisional Gold Rating having
successfully met all the GBI Criteria under each category for
Energy Efficiency, Indoor Environment Quality, Sustainable Site
Planning & Management, Materials & Resources, Water
Efficiency and Innovation. The GBI is Malaysia's industry
recognized green rating tool for buildings to promote
sustainability in the building industry.
The bathroom amenities at The RuMa Hotel were designed with
sustainability in mind and incorporated biodegradable materials
such as bamboo, corn starch, and recycled paper for dry amenities
like toothbrushes, cotton swabs, soap dishes, and shower caps.
Additionally, the wet amenities range was created exclusively for
The RuMa Hotel and is both eco-friendly and able to be disposed of
in an environmentally responsible manner. By opting for
biodegradable bathroom amenities, we can contribute to the
protection of our planet and the promotion of a more sustainable
future.
The RuMa Hotel recognizes that promoting gender equality is
crucial to our sustainability efforts, and we have incorporated the
promotion of gender equality in the workplace as a key component of
our sustainability initiatives. Our aim is to foster a more
diverse, inclusive, and equitable work environment by implementing
clear policies and guidelines that promote gender equality, such as
equal pay for equal work, flexible work arrangements, and a
workplace that is free from harassment and discrimination. We are
committed to providing our employees with training and education on
gender equality issues, including unconscious bias and gender
sensitivity, to ensure that everyone in our organization
understands the importance of this initiative.
Community
Aseana Properties understands the importance of community
engagement both for the communities themselves but also for giving
staff more meaningful experiences by tapping into their
professional skills and capabilities.
BOARD OF DIRECTORS
NICHOLAS JOHN PARIS
NON-EXECUTIVE INDEPENT CHAIRMAN
Nicholas (Nick) John Paris was re-appointed as a Non-Executive
Director of Aseana Properties Limited in September 2019 and became
Chairman on 29 July 2020 following the retirement of Gerald Ong. He
had previously been a Non-Executive Director of Aseana from 22 June
2015 to 20 March 2019.
Nick is a fellow of the Institute of Chartered Accountants
England & Wales and a Chartered Alternative Investment
Analyst.
Nick is currently Managing Director of Myanmar Investments
International Limited and a Managing Director of Dolphin Capital
Investors Limited of which both are quoted on the AIM market of the
London Stock Exchange and a Non-Executive Director of Fondul
Proprietatea, a fund listed on the Bucharest and London Stock
Exchanges.
THOMAS HOLLAND
NON-EXECUTIVE INDEPENT DIRECTOR
Thomas (Tom) Holland was appointed as a Non-Executive
Independent Director of Aseana Properties Limited on 23 November
2020. Tom has been based in Asia for 25 years with experience
working in leadership positions in a number of financial firms. Tom
has been active in Vietnam since 2006, having led the investments
in large real estate developments as well as privatising state
owned enterprises. Prior to founding his current platform,
Development Finance Asia, a boutique investment firm, Tom was head
of Asia for Cube Capital and a senior investment manager for Income
Partners Asset Management. Tom has a track record of successfully
managing private investments in Vietnam, Malaysia, China,
Indonesia, Myanmar, Mongolia and Cambodia.
He holds a number of non-executive director roles for financial
services, logistics and consumer companies across Asia.
MONICA LAI VOON HUEY
NON-EXECUTIVE NON-INDEPENT DIRECTOR
Monica Lai was appointed as a Non-Executive Non- Independent
Director of Aseana Properties Limited in September 2019. Monica is
the Group Chief Executive Officer of Eccaz Sdn Bhd which is
involved in property development and urban transportation
solutions.
Monica graduated from City University, London with a Bachelor of
Science (Hons) Degree in Accountancy and Economics and worked for
EY London and KPMG Hong Kong. Her professional qualifications
include The Institute of Chartered Accountants England & Wales,
The Malaysian Institute of Accountants and the Malaysian Institute
of Taxation.
HOCK CHYE TAN
NON-EXECUTIVE INDEPENT DIRECTOR
Hock Chye Tan was appointed as a Non-Executive Independent
Director of Aseana Properties in March 2023. Hock Chye is a
Chartered Global Management Accountant (CGMA) of the Association of
International Certified Professional Accountants, a Fellow Member
(FCMA) of the Chartered Institute of Management Accountants and a
Chartered Accountant (CA(M)) with the Malaysian Institute of
Accountants. He obtained an MBA from Oklahoma City University and
has attended a Harvard Premier Management Program. He also holds a
Diploma in Commerce from the TAR University College.
He has worked in Papua New Guinea, Singapore and Malaysia in
both private and public companies and held senior management and
Board positions. Currently, he is the CFO of SEATech Ventures
Corp., a start-up company listed on the US OTC Pink Market. He is
also the National Assistant Treasurer of SME Association of
Malaysia and Treasurer of the Malaysia Cross Border E-Commerce
Association.
HELEN WONG SIU MING
NON-EXECUTIVE INDEPENT DIRECTOR
Helen Wong Siu Ming was appointed as a Non-Executive Independent
Director of Aseana Properties in June 2019. Helen has over 28 years
of financial and operational experience in the United States and
Asia. She is Chief Executive Officer and founder of LAPIS Global
Limited, a Hong Kong based investment management and advisory firm.
She was formerly the CEO of Cushman & Wakefield Capital Asia
where she established the Asia Investment Management and Investment
Banking platform.
In addition, Helen has held numerous executive positions
including Chief Operating Officer of Lazard Asia Investment
Management HK Limited, Managing Director of IFIL Asia (renamed EXOR
S.p.A), where she was responsible for the Asian direct investment
activities and Chief Financial Officer of the Singapore listed
investment vehicle, Pacific Century Regional Developments
Limited.
Helen also has extensive experience in infrastructure and
transport through her prior roles at the Provisional Airport
Authority, Hong Kong and the Port Authority of New York & New
Jersey.
DIRECTORS' REPORT
The Directors present their report together with the audited
financial statements of Aseana Properties Limited (the "Company")
and its subsidiary undertakings (together with the "Group") for the
year ended 31 December 2022.
Principal Activities
The principal activities of the Group were the development of
upscale residential and hospitality projects in Malaysia and
Vietnam. The Group is now focused on carrying out its divestment
program which consists of selling the Group's remaining Malaysian
assets, repaying its debts and distributing the remaining proceeds
to its shareholders.
Business Review and Future Developments
The consolidated statement of comprehensive income for the year
is set out on page 40. A review of the development and performance
of the business has been set out in the Chairman's Statement and
the Financial Review reports.
Objectives and Strategy
When the Company was launched in 2007, the Board considered it
desirable that Shareholders should have an opportunity to review
the future of the Company at appropriate intervals. The Company
will hold another discontinuation vote at a general meeting in May
2023, meanwhile the Company continues to seek for disposal of its
assets in a measured manner.
To the extent that the Company has not disposed of all of its
assets by May 2023, Shareholders will be provided with an
opportunity to review the future of the Company, which would
include the option for shareholders to vote for the continuation of
the Company.
Principal Risks and Uncertainties
The Group's business was property development in Malaysia and
Vietnam. Since divesting its assets in Vietnam in 2022, its
principal risks are therefore related solely to the property market
in Malaysia. More detailed explanations of these risks and the way
they are managed are contained under the heading of Financial and
Capital Risk Management Objectives and Policies in Note 4.1 to the
financial statements.
Other risks faced by the Group in Malaysia include the
following:
Economic Inflation, economic recessions and movements
in interest rates could affect property
development activities.
Strategic Incorrect strategy, including timing, could
lead to poor returns for shareholders.
----------------------------------------------------
Regulatory Breach of regulatory rules could lead to
suspension of the Company's Stock Exchange
listing and financial penalties.
----------------------------------------------------
Law and regulations Changes in laws and regulations relating
to planning, land use, development standards
and ownership of land could have adverse
effects on the business and returns for
the shareholders.
----------------------------------------------------
Tax regimes Changes in the tax regimes could affect
the tax treatment of the Company and/or
its subsidiaries in these jurisdictions.
----------------------------------------------------
Management and control Changes that cause the management and control
of the Company to be exercised in the United
Kingdom could lead to the Company becoming
liable to United Kingdom taxation on income
and capital gains.
----------------------------------------------------
Operational The COVID-19 pandemic and many related
movement control measurements in Malaysia
lasted until 2022, which continued to affect
our key properties as our hotel suffered
closure and low occupancy rates and our
retail mall was also forced to close; at
times, only food operations were permissible
at our shopping mall. The overall effect
of low occupancy rates and reduced operating
income had a negative impact on our revenues,
costs and valuations. Failure of the Company's
accounting system and disruption to the
business, or to that of third party service
providers, could lead to an inability to
provide accurate reporting and monitoring
leading to a loss of shareholders' confidence.
----------------------------------------------------
Financial Inadequate controls by the Company or third
party service providers could lead to a
misappropriation of assets. Inappropriate
accounting policies or failure to comply
with accounting standards could lead to
misreporting or breaches of regulations
or a qualified audit report.
----------------------------------------------------
Going Concern Failure to sell the assets in a timely
manner may result in inadequate financial
resources to continue operational existence
and to meet financial liabilities and commitments.
----------------------------------------------------
The Board seeks to mitigate and manage these risks through
continual review, policy setting and enforcement of contractual
rights and obligations. It also regularly monitors the economic and
investment environment in Malaysia, its only remaining market.
Details of the Group's internal controls are described on page
29.
LITIGATION
Claim Against Ireka Corporation Bhd ("ICB")
A civil suit was filed in the Malaysian Courts on 21 October
2022 by ASPL M9 Limited, a subsidiary of the Company, against ICB.
The suit relates to the Joint Venture Agreement between ASPL M9
Limited, ICB and Urban DNA Sdn Bhd (an indirect subsidiary of the
Company) for the development and construction of the RuMa Hotel
& Residences.
Claim Against Ireka Engineering & Construction Sdn Bhd
("IECSB")
A civil suit was filed in the Malaysian Courts on 2 August 2022
by Amatir Resources Sdn Bhd ("ARSB", an indirect wholly owned
subsidiary of the Company) against IECSB (a wholly owned subsidiary
of ICB). Since filing the claim, an interim liquidator has been
appointed for IECSB according to the announcement at the Bursa
Malaysia dated 27 March 2023 with reference to a creditor's
voluntary winding up. For details, please refer to the
aforementioned announcement at:
https:/www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3339385
On 19 April 2023, ARSB obtained Judgment in Default against
IECSB for the sum of RM 7,198,890 (approximately US$1.6 million)
and interest thereon at the rate of 8% per annum calculated on a
daily basis from 1st January 2020 to the date of full payment.
Results and Dividends
The results for the year ended 31 December 2022 are set out in
the attached financial statements.
No dividends were declared nor paid during the financial year
under review.
Share Capital
No shares were issued in 2022. Further details on share capital
are stated in Note 23 to the financial statements.
Directors
The following were Directors of Aseana who held office
throughout the financial year and up to the date of this
report:
-- Nicholas John Paris - Chairman
-- Thomas Holland
-- Monica Lai Voon Huey
-- Hock Chye Tan (appointed 3 March 2023)
-- Helen Wong Siu Ming
Directors' Interests
The interests of the directors in the Company's shares as at 31
December 2022 and as at the date of this report were as
follows:
DIRECTOR ORDINARY SHARES OF US$0.05 EACH
As at 31 Dec 2021 As at 31 Dec 2022
Nicholas John Paris 26,644,192 -
Christopher Henry Lovell 48,000 -
Monica Lai Voon Huey 36,628,282 36,628,282
-------------------------- ------------------ ------------------
Notes: Nicholas John Paris is no longer associated with the
holdings of clients of LIM Advisors Limited. Christopher Henry
Lovell ceased to be a director during the year. Monica Lai Voon
Huey is associated with the holdings of Legacy Essence Limited.
None of the other directors in office at the end of the
financial year had any interest in shares in the Company during the
financial year.
Management
The routine operations of the Company are supervised by the
Chairman and the Board with a small team of finance professionals
were directly engaged to run our finances and operations. Ms Helen
Wong was nominated as the Divestment Director with a specific focus
to sell the Company's remaining assets, in line with the Divestment
Policy.
Employees
The Company had no executive Directors during the year, and a
team of four finance professionals were engaged to run our finances
and operations. The subsidiaries of the Group had a total of 239
employees as at 31 December 2022, of which 22 and 213 were employed
by (i) the Sandakan hotel asset and Harbour Mall Sandakan, and (ii)
The RuMa Hotel and Residences in Kuala Lumpur respectively.
going concern
The Company will continue until May 2023 at which time another
continuation vote will be held by shareholders. In connection with,
or at the same time as, the proposal that the Company be wound up
voluntarily the Board shall be entitled to make proposals for the
reconstruction of the Company. Until then, the Company will
continue to seek to dispose of its assets in a measured manner.
As disclosed in Note 2.1 to the financial statements, it refers
to the assumptions made by the Directors including the uncertainty
regarding the divestment of certain assets will be completed as
planned and the loans and borrowing can be discharged in a timely
manner when concluding that it remains appropriate to prepare the
financial statements on the going concern basis.
Creditors Payment Policy
The Group's operating companies are responsible for agreeing on
the terms and conditions under which business transactions with
their suppliers are conducted. It is the Group's policy that
payments to suppliers are made in accordance with all relevant
terms and conditions. Trade creditors at 31 December 2022 amounted
to 349 days (2021: 591 days) of property development cost and
interest expenses accrued by the Group.
Financial Instruments
The Group's principal financial instruments comprise cash
balances, balances with related parties, other payables,
receivables and loans and borrowings that arise in the normal
course of business. The Group's Financial and Capital Risk
Management Objectives and Policies are set out in Note 4.1 to the
financial statements.
Directors' Liabilities
Subject to the conditions set out in the Companies (Jersey) Law
1991 (as amended), the Company has arranged appropriate Directors'
and Officers' liability insurance to indemnify the Directors
against liability in respect of proceedings brought by third
parties. Such provisions remain in force at the date of this
report.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations. Companies (Jersey) Law 1991 requires the Directors to
prepare financial statements for each financial year. Under that
law the Directors are required to prepare the financial statements
in accordance with International Financial Reporting Standards
("IFRSs") as adopted by European Union.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the assets, liabilities, financial position and of the
profit or loss of the Group for that year. In preparing these
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable, relevant and reliable;
-- ensure that the financial statements comply with IFRSs; and
-- prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and to enable them to ensure that
the financial statements comply with the Companies (Jersey) Law
1991. The Directors are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are also responsible for the maintenance and
integrity of the Company's website on the internet. However,
information is accessible in many different countries where
legislation governing the preparation and dissemination of
financial statements may differ from that applicable in the United
Kingdom and Jersey.
The Directors of the Company confirm that to the best of their
knowledge that:
-- the financial statements have been prepared in accordance
with International Financial Reporting Standards as adopted by the
European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group;
and
-- the sections of this Report, including the Chairman's
Statement, Director's Review, Financial Review and Principal Risks
and Uncertainties, which constitute the management report include a
fair review of all information required to be disclosed by the
Disclosure and Transparency Rules 4.1.8 to 4.1.11 issued by the
Financial Services Authority of the United Kingdom.
Disclosure of Information to Auditor
So far as each person who was a Director at the date of
approving this report is aware, there is no relevant audit
information, being information needed by the auditor in connection
with preparing its report, of which the auditor is unaware. Having
made enquiries of fellow Directors, each Director has taken all the
steps that he is obliged to take as a Director in order to have
made himself aware of any relevant audit information and to
establish that the auditor is aware of that information.
Re-appointment of Auditor
The auditor, PKF Littlejohn LLP, has expressed their willingness
to continue in office. A resolution proposing their re-appointment
will be tabled at the forthcoming Annual General Meeting.
Board Committees
Information on the Audit Committee is included in the Corporate
Governance section of the Annual Report on pages 24 to 31.
Annual General Meeting
The tabling of the 2022 Annual Report and Financial Statements
to shareholders will be at an Annual General Meeting ("AGM") that
is currently expected to be held on 30 May 2023.
During the AGM, investors will be given the opportunity to
question the board and to meet with them thereafter. They will be
encouraged to participate in the meeting.
On behalf of the Board
THOMAS HOLLAND
Non-Executive Independent Director
28 April 2023
REPORT OF DIRECTORS' REMUNERATION
Directors' Emoluments
The Company has no executive Directors, solely a few employees
who are mainly focused on the divestment process. The Independent
Directors in the Board of Directors are responsible for setting the
framework and reviewing compensation arrangements for all
non-executive Directors before recommending the same to the Board
for approval. The Independent Directors assess the appropriateness
of the emoluments on an annual basis by reference to comparable
market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high calibre Board.
During the year, the Directors received the following emoluments
in the form of fees from the Company:
Year ended Year ended
31 December 2022 31 December 2021
Directors (US$) (US$)
------------------------------------ ------------------ ------------------
Nicholas John Paris
(Chairman of the Board) 70,000 70,000
Helen Wong Siu Ming
(Chairman of the Audit Committee) 77,000 77,105
Thomas Holland 48,000 48,058
Monica Lai Voon Huey 48,000 48,000
Christopher Henry Lovell(1) 22,286 48,082
(1) Christopher Lovell was not re-elected at the Company's 2022 Annual
General Meeting on 17 June 2022.
Share Options
The Company did not operate any share option schemes during the
years ended 31 December 2021 and 2022.
Share Price Information
-- High for the year - US$0.20
-- Low for the year - US$0.12
-- Close for the year - US$0.14
Pension SchemeS
No pension schemes exist in the Company.
Service Contracts
In view of the non-executive nature of the directorships, there
are no service contracts in existence between the Company and any
of the Directors. Each Director was appointed by a letter of
appointment that states his appointment subject to the Articles of
Association of the Company which set out the main terms of his
appointment.
THOMAS HOLLAND
Non-executive Independent Director
28 April 2023
CORPORATE GOVERNANCE STATEMENT
The Financial Conduct Authority requires all companies with a
Premium Listing to comply with The UK Corporate Governance Code
(the "Code"). Aseana Properties is a Jersey incorporated company
with a Standard Listing on the UK Listing Authority's Official List
and is therefore not subject to the Code. The following explains
how the principles of governance are applied to the Company.
THE BOARD
The Company currently has a Board of five non-executive
directors, including the non-executive Chairman.
The brief biographies of the following Directors appear on pages
14 to 15 of this Annual Report:
-- Nicholas John Paris (Non-Executive Chairman)
-- Thomas Holland
-- Monica Lai Voon Huey
-- Hock Chye Tan (appointed 3 March 2023)
-- Helen Wong Siu Ming
The routine operations of the Company are supervised by the
Chairman and the Board and a team of finance professionals were
directly engaged to run our finances and operations. Ms Helen Wong
was nominated as the Divestment Director with a specific focus to
sell the Company's remaining assets, in line with the Divestment
Policy.
Role of the Board of Directors
The Board's role is to provide entrepreneurial leadership to the
Company, within a framework of prudent and effective controls,
enabling risks to be assessed and managed. The Board sets the
Company's strategic objectives, monitors and reviews the Company's
operational and financial performance, ensures the Company has
sufficient funding, and examines and approves disposal of the
Company's assets in a controlled, orderly and timely manner. The
Board also sets the Company's values and standards and ensures that
its obligations to its shareholders and other stakeholders are met.
The Board has adopted a divestment strategy since 2015.
Appropriate level of directors' and officers' liability
insurance is maintained by the Company.
The Board currently has the power to make purchases on behalf of
the Company of its own Ordinary Shares provided up to a maximum
aggregate 29,783,780 Ordinary Shares (representing approximately
14.99 percent of the Company's issued ordinary share capital
(excluding ordinary shares held in treasury)).
Meetings of the Board of Directors
The Board meets at least four (4) times a year and at such other
times as the Chairman shall require. During the year ended 31
December 2022, the Board met ten (10) times and their respective
attendance are as follows:
Name of Directors Attendance
Nicholas John Paris 10/10
Thomas Holland 9/9 *
Monica Lai Voon Huey 9/9 *
Christopher Henry Lovell 5/5
Helen Wong Siu Ming 9/9 *
* Each of Thomas Holland, Monica Lai Voon Huey, Helen Wong Siu
Ming were excused from one of the meetings during the year due to
potential conflicts of interest
Hock Chye Tan was appointed to the Board in March 2023 and
therefore does not appear in the above.
To enable the Board to discharge its duties effectively, all
Directors receive accurate, timely and clear information, in an
appropriate form and quality, including Board papers distributed in
advance of Board meetings. The Board periodically will receive
presentations at Board meetings relating to the Company's business
and operations, significant financial, accounting and risk
management issues. All Directors have access to the advice and
services of the Company Secretary and advisers, who are responsible
to the Board on matters of corporate governance, board procedures
and regulatory compliance.
Board Balance and Independence
Following the resignation of our former Development Manager as
of 30 June 2019, ASEANA has been a self-managed company. The Board
consists solely of non-executive directors of which Nicholas Paris
is the non-executive Chairman. Monica Lai Voon Huey is a
representative of Legacy Essence Limited and she was a
representative of Ireka Corporation Berhad until her resignation
from the latter's Board in November 2021; she is therefore
classified as a Non-Independent Non-Executive Director of the
Company. The Board considers the majority of Directors to be
independent, being independent of management and also having no
business relationships which could interfere materially with the
exercise of their judgement.
The Chairman is responsible for leadership of the Board,
ensuring effectiveness in all aspects of its role and setting its
agenda. Matters referred to the Board are considered by the Board
as a whole and no individual has unrestricted powers of decision.
Together, the Directors bring a wide range of experience and
expertise in business, law, finance and accountancy, which are
required to successfully direct and supervise the business
activities of the Company.
Performance Appraisal
The Board undertakes an annual evaluation of its own performance
and that of its Committees and individual Directors. During 2022,
the evaluation concluded that the performance of the Board, its
Committees and each individual Director was and remains effective
and that all Directors demonstrate full commitment in their
respective roles. The Directors are encouraged to continually
attend training courses at the Company's expense to enhance their
skills and knowledge in matters that are relevant to their role on
the Board. The Directors also receive updates on developments of
corporate governance, the state of economy, management strategies
and practices, laws and regulations, to enable effective
functioning of their roles as Directors.
Re-election of Directors
The Company's Articles of Association states that all Directors
shall submit themselves for election at the first opportunity after
their appointment, and shall not remain in office for longer than
three years since their last election or re-election without
submitting themselves for re-election. At the Annual General
Meeting held on 17 June 2022, Christopher Lovell retired by
rotation and offered himself for re-election by the shareholders.
He was not re-elected at the AGM.
At the forthcoming Annual General Meeting, Hock Chye Tan will be
offering himself for re-election having recently been appointed,
and Nicholas John Paris will be retiring by rotation and offering
himself for re-election.
Board Committees
The Board has established Audit Committees which deals with the
specific aspect of the Company's affairs, under a written term of
reference which is reviewed annually. Necessary recommendations are
then made to the Board for its consideration and decision-making.
No one, other than the committee chairman and members of the
relevant committee, is entitled to be present at a meeting of board
committees, but others may attend at the invitation of the board
committees for presenting information concerning their areas of
responsibility. Copies of the terms of reference are kept by the
Company Secretary and are available on request at the Company's
registered office at Osprey House, Old Street, St. Helier, Jersey,
JE2 3RG, Channel Islands.
Audit Committee
The Audit Committee consists of three members and is currently
chaired by Helen Wong. The other members are Thomas Holland and
Hock Chye Tan (appointed in March 2023). The Committee members have
no links with the Company's external auditor and Helen Wong, Thomas
Holland and Hock Chye Tan are independent Directors. The Board
considers that collectively the Audit Committee has sufficient
recent and relevant financial experience with the ability to
discharge its duties properly, through extensive service on the
Boards and Audit Committees of other listed companies.
Meetings of THE AUDIT COMMITTEE
The Committee meets at least twice a year and at such other
times as the Chairman of the Audit Committee shall require. Any
member of the Audit Committee or the auditor may request a meeting
if they consider that one is necessary. The Committee met two times
during the year and their respective attendance are as follows:
Name Attendance
Helen Wong Siu Ming 2/2
Christopher Henry Lovell (Not re-elected
on 17 June 2022) 1/1
Thomas Holland 2/2
Hock Chye Tan was appointed to the Audit Committee in March 2023
and therefore does not appear in the above.
Representatives of the auditor may attend by invitation.
The Committee is responsible for:
-- monitoring, in discussion with the auditor, the integrity of
the financial statements of the Company, any formal announcements
relating to the Company's financial performance and reviewing
significant financial reporting judgements contained in them;
-- reviewing the Company's internal financial controls and risk management systems;
-- making recommendations to the Board in relation to the
appointment, re-appointment and removal of the external auditor and
approving the remuneration and terms of engagement of the external
auditor to be put to the shareholders for their approval in general
meetings;
-- reviewing and monitoring the external auditor's independence
and objectivity and effectiveness of the audit process, the Audit
Committee recognises that the Code and AIC Code provisions for FTSE
350 companies to put the external audit contract out to tender at
least every 10 years. Though the Company is not a member of the
FTSE 350, the Audit Committee considers this to be best practice
(the current auditor has been the auditor since 2020);
-- developing and implementing policy on engagement of the
external auditor to supply non-audit services; and
-- reporting to the Board any matters in respect of which it
considers that action or improvement is needed and making
recommendations as to the steps to be taken.
Since the start of the financial year ending 31 December 2022,
the Audit Committee performed its duties as set out in the terms of
reference. The main activities carried out by the Audit Committee
encompassed the following:
-- reviewing the audit plan with the Group's Auditor;
-- reviewing and discussing the Audit Committee Report with the Group's Auditor;
-- reviewing the draft Audited Financial Statements as contained
in the draft Annual Report together with the Group's Auditor before
tabling to the Board for consideration and approval;
-- reviewing other published financial information including the
half year results and results announcements before tabling to the
Board for consideration and approval;
-- considering the independence of the auditor; and
-- reviewing the auditor's performance and made a recommendation
for the reappointment of the Group's auditor by shareholders.
The Significant Issues
The Audit Committee considered the following key issues in
relation to the Group's financial statements during the year:
-- valuation of inventory assets - The Audit Committee
considered and discussed the valuation of the Group's inventory
assets as at 31 December 2022 and to identify potential
impairment.
-- impairment of receivables from a related party - The Audit
Committee noted that a related party to the Group, which the Group
maintained receivable balances with, had entered Judicial
Management due to financial distress. Consequently, the
recoverability of the balances was considered doubtful and full
impairment has been made on the balances.
-- going concern - The Audit Committee considered the Company's
financial requirements for the next 12 months and concluded that it
has sufficient resources to meet its commitments and any
outstanding loan covenants. Consequently, the financial statements
have been prepared on a going concern basis.
Nomination & REMUNERATION Committee ("NRC")
The Nomination & Remuneration Committee was chaired by
Christopher Lovell. The other committee members were Monica Lai
Voon Huey and Nicholas Paris. The responsibilities of the NRC are
stated below and upon Christopher Lovell's departure in June 2022
were integrated into the Board's responsibilities. Given the
Company is currently in its divestment phase, all Directors are
non-executive on fixed fees. For the same reason, a specific
diversity and inclusion policy has not been applied. However, it is
considered that the Board has suitable gender balance and is
suitably diverse.
During the year ended 31 December 2022, the Nomination &
Remuneration Committee carried out its functions as set out in its
terms of reference which are summarised below:
-- regularly reviewing the structure, size and composition
(including diversity, skills, knowledge and experience) of the
Board and making recommendations to the Board with regard to any
change;
-- considering succession plans for Directors and the
re-appointment or re-election of any Directors at the conclusion of
their specified term of office or retiring in accordance with the
Company's Articles of Association;
-- identifying and nominating for the approval of the Board,
candidates to fill Board vacancies as and when they arise;
-- considering any matter relating to the continuation in office
of any Director at any time;
-- determining and agreeing with the Board the framework for the
remuneration of the Directors; and
-- setting the remuneration for all Directors albeit since all
Directors are non-executive, the principles of the Code in respect
of executive directors' remuneration are not applicable and as such
there is no policy for executive compensation.
Financial Reporting
The Board aims to present a fair, balanced and understandable
assessment of the Company's position and prospects in all reports
to shareholders, investors and regulatory authorities. This
assessment is primarily provided in the half-yearly report and the
Annual Report through the Chairman's Statement, Financial Review
Statement and Directors' Report.
The Audit Committee has reviewed the significant reporting
issues and judgements made in connection with the preparation of
the Group's financial statements including significant accounting
policies, significant estimates and judgements. The Audit Committee
has also reviewed the clarity, appropriateness and completeness of
disclosures in the financial statements.
Internal Audit
The Board has confirmed that the systems and procedures
employed, provide sufficient assurance that a sound system of risk
management and internal control is maintained. An internal audit
function specific to the Company is therefore considered not
necessary given the Company is in divestment phase of its life.
However, the Directors will continue to monitor if such need is
required.
Auditor
The Audit Committee's responsibilities include monitoring and
reviewing the performance and independence of the Company's
Auditor, PKF Littlejohn LLP who had been re-appointed on 8 December
2022.
Pursuant to audit and ethical standards, the auditor is required
to assess and confirm to the Board their independence, integrity
and objectivity. The Auditor had carried out this assessment and
considered themselves to be independent, objective and in
compliance with the Ethical Standard for Auditors published by the
UK Financial Reporting Council and the Code of Ethics issued by the
Institute of Chartered Accountants in England and Wales.
RISK MANAGEMENT AND Internal Control
The Board is responsible for the effectiveness of the Company's
risk management and internal control systems and is supplied with
information to enable it to discharge its duties. Such systems are
designed to meet the particular needs of the Company and to manage
rather than eliminate the risk of failure to meet business
objectives and can only provide reasonable, and not absolute,
assurance against material misstatement or loss.
During the year, the Board discharged its responsibility for
risk management and internal control through the following key
procedures:
-- clearly defined delegation of responsibilities to employees
of the Company, including authorisation levels for all aspects of
the business;
-- regular and comprehensive information provided to the Board
covering financial performance and key business indicators;
-- a detailed system of budgeting, planning and reporting which
is approved by the Board and monitoring of results against budget
with variances being followed up and action taken, where necessary;
and
-- regular visits to operating units and projects by the Board.
The Board has established frameworks, policies and procedures to
comply with the requirement of the Bribery Act 2010 (the "Bribery
Act") and Market Abuse Regulation ("MAR"). In respect of the
former, the Company has a legal and compliance function for the
purposes of implementing the anti-corruption and anti-bribery
policy. Training and briefing sessions were conducted for the
senior management and employees. Compliance reviews are carried out
as and when required to ensure the effectiveness of the policy. In
respect of dealing by employees and Directors of the Company, the
Company has a Dealing Code which imposes restrictions on dealings
in its securities by Persons Discharging Managerial
Responsibilities ("PDMR") and certain employees who have been told
the clearance procedures apply to them. The Company also has a
Group-Wide Dealing Policy and a Dealing Procedures Manual. These
policies have been designed to ensure that the PDMR and other
employees of the Company and its subsidiaries do not misuse or
place themselves under suspicion of misusing information about the
Group which they
have and which is not public.
Relationship with Shareholders
The Board is committed to maintaining good communications with
shareholders and has designated the Chairman and certain members of
its Board as the principal spokespersons with investors, analysts,
fund managers, the press and other interested parties. The Board is
informed of material information provided to shareholders and is
advised on their feedback. The Board has also developed an
understanding of the views of major shareholders about the Company
through meetings and teleconferences conducted by the financial
adviser. In addition, the Company seeks to regularly update
shareholders through stock exchange announcements, press releases
and participation in roadshows.
To promote effective communication, the Company has a website,
www.aseanaproperties.com through which shareholders and investors
can access relevant information.
Substantial Shareholders
The Board was aware of the following direct and indirect
interests comprising a significant amount of more than 3% issued
share capital of the Company as at 31 December 2022:
NUMBER OF ORDINARY PERCENTAGE OF
SHARES HELD ISSUED SHARE CAPITAL
Ireka Corporation Berhad. 45,837,504 23.07%
Legacy Essence Limited and its related
parties 36,628,282 18.43%
LIM Advisors 26,644,192 13.41%
SIX SIS 18,366,118 9.24%
Progressive Capital Partners 14,393,372 7.24%
Dr. Thong Kok Cheong 12,775,532 6.43%
Credit Suisse 12,024,891 6.05%
Annual General Meeting ("AGM")
The AGM is the principal forum for dialogue with shareholders.
At and after the AGM, investors are given the opportunity to
question the Board and seek clarification on the business and
affairs of the Group. Mr. Nicholas John Paris, non-executive
Chairman and Mr. Christopher Lovell, non-executive independent
director, attended the 2022 AGM, either in person or by telephone,
which was held on 17 June 2022 at the Company's registered
office.
Notices of the AGM and related papers are sent out to
shareholders in good time to allow for full consideration prior to
the AGM. Each item of special business included is accompanied by
an explanation of the purpose and effect of a proposed resolution.
The Chairman declares the number of votes received for, against and
withheld in respect of each resolution after the shareholders and
proxies present have voted on each resolution. An announcement
confirming whether all the resolutions have been passed at the AGM
is made through the London Stock Exchange.
On behalf of the Board
NICHOLAS JOHN PARIS
Chairman
28 April 2023
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF ASEANA PROPERTIES
LIMITED
Opinion
We have audited the financial statements of Aseana Properties
Limited and its subsidiaries (the 'group') for the year ended 31
December 2022 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Cash Flows and notes to the financial
statements, including significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the group's affairs
as at 31 December 2022 and of its loss for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.1 in the financial statements, which
indicates that the success of the group relies on its ability to
raise sufficient funds through project divestments in order to
finance the operation of the group, as well as the result of the
members' dis-continuation vote to be held at the end of May
2023.
As at 31 December 2022, the group's loans, borrowings and medium
term notes amounted to USD $32.9 million, of which the entirety is
due for repayment by 8 December 2023.
The economic consequences of the global pandemic have continued
to adversely impact the interest of prospective buyers for the
group's remaining assets. Therefore, there is no certainty that the
sale of the remaining assets will be completed as planned and the
loans, borrowings including medium term notes can be repaid in a
timely manner.
As stated in note 2.1, these events or conditions indicate that
a material uncertainty exists that may cast significant doubt on
the group's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the group's ability to
continue to adopt the going concern basis of accounting included a
review of management's assessment of the going concern status of
the group, including a cash flow forecast for the twelve months
from the anticipated approval of the group financial statements.
Our audit procedures included challenging the integrity of the
underlying formulas and calculations within the going concern
model; and reviewing the reasonableness of the key assumptions used
by the directors to prepare the cash flow forecast.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate, on
the financial statements as a whole.
Group financial statements Group financial statements
2022 2021
Overall materiality USD $1,200,000 USD $1,400,000
--------------------------- ---------------------------
Performance materiality USD $720,000 USD $840,000
--------------------------- ---------------------------
Basis of materiality c. 0.7% of gross assets c. 0.7% of gross assets
--------------------------- ---------------------------
Rationale A key determinant of the group's value is property
assets held within inventory. Due to this, the
key area of focus in the audit is the valuation
of inventory. On this basis, we consider gross
assets to be a critical financial performance
measure for the group given that it is a key metric
used by management, investors, analysts and lenders.
--------------------------------------------------------
We use performance materiality to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes.
For each component in the scope of our group audit, we allocated
a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between USD
$5,000 (2021: USD $40,000) and USD $630,000 (2021: USD $720,000).
Certain components were audited to a local statutory audit
materiality that was also less than our overall group
materiality.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above USD $60,000 (2021:
USD $70,000) as well as misstatements below those amounts that, in
our view, warranted reporting for qualitative reasons.
Our approach to the audit
As part of designing our audit, we determined materiality and
assessed risk of material misstatement in the financial statements.
In particular, we looked at areas involving significant accounting
estimate and judgment by the directors and considered future events
that are inherently uncertain such as the carrying value of
inventory. We also addressed the risk of management override of
controls, including among other matters consideration of whether
there was evidence of bias that represented a risk of material
misstatement due to fraud.
The group has nine trading companies consolidated within in the
group financial statements, all of which are based in Malaysia. We
identified seven significant components, which were subject to a
full scope of audit. Significant Malaysian components were audited
by the PKF network firm in Malaysia. We reviewed component audit
working papers electronically. In addition to this, significant
components were subject to audits under our direction and
supervision.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the material uncertainty related to going
concern section we have determined the matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this matter
---------------------------------------------------- ------------------------------------------
Carrying value of inventory
------------------------------------------
Refer to note 20 Inventory. We performed testing of the inventory
valuation and critically assessed
The group owns a portfolio of land the key assumptions and estimates
held for property development and made. The procedures performed
completed property units in Malaysia. are summarised below:
The total carrying value of inventory
for the group was USD $132.6 million. We assessed the valuers' qualifications
Inventory amounted to USD $126.2 and expertise and read their terms
million was valued by third party of engagement with the group to
valuers C H Williams Talhar & Wong determine whether there are matters
Sdn Bhd ("CBRE WTW") and Knight that might have affected their
Frank Malaysia Sdn Bhd ("Knight objectivity or may have imposed
Frank"), together "the valuers" limitation of scope upon their
who are engaged by the directors. work. We also considered fees and
other contractual arrangements
The valuation report issued by that might exist between the group
Knight Frank dated 13 February and the valuers. We found no evidence
2023 shows a write down of c. USD to suggest that the objectivity
$13.8 million (2021: c. USD $14.7 of the valuers was compromised.
million) in the carrying value
of Sandakan Harbour Square located We read all valuation reports including
in Malaysia. The valuation report workings which support the net
issued by CBRE WTW dated 23 March realisable value assessment of
2023 shows a write down of c. USD inventory.
$1.8m in the carrying value of
RuMa Hotel (excluding Services Tested the underlying data used
Residences). by the valuers in forming their
valuation including benchmarking,
The directors had been in discussions validating key assumptions to supporting
with a party leading up to the third party evidence or market
year end and on 17 January 2023 activity and considering contrary
the directors of Aseana Properties evidence.
Limited received a signed Letter
of Intent ("LOI") to purchase Sandakan Assessed and challenged the key
Harbour Square and RuMa Hotel & estimates and assumptions used
Services Residences, subject to in the valuation methodology, noted
normal due diligence ("the Offer and performed analysis on changes
Price"). The Offer Price indicated from prior year where relevant.
an impairment of c. USD $8.6 million
to the carrying value of the Sandakan Evaluated a range of key estimates
Harbour Square and no impairment and assumptions used in the valuations
in respect of the RuMa Hotel & and profit and cash flow forecasts.
Services Residences. The directors
are of the opinion that the Offer In addition to the above work on
Price included in the LOI indicates the valuation reports, we reviewed
a fair price and that both parties the signed letter of intent stating
are actively seeking to agree contractual the potential buyer's interest
terms. The directors considered in purchasing Sandakan Harbour
the Offer Price as an appropriate Square and Ruma Hotel and Service
carrying value of the inventory Residences. Further, we assessed
at the year end. Directors do not the buyer's credentials using publicly
plan to dispose any of the inventory available information.
with a price lower that that indicated
by the LOI. As a result, an impairment In respect of the land located
charge of c. USD $8.6 million is in Kota Kinabalu, Sabah in Malaysia
recognised against the carrying with a carrying value of USD $6.3
value of the Sandakan Harbour Square. million as at 31 December 2022
where no third party valuation
At 31 December 2022, goodwill valued has been carried out, our comparison
at USD $578,000 arose from the to recent sales transactions of
acquisition of ICSD Ventures Sdn. land assets of similar characteristics
Bhd (the owner of the Sandakan resulted in the conclusion of no
Harbour Square) in 2009 was not indicator of impairment to the
impaired. Directors are of the year-end carrying value existed.
opinion that the value of goodwill
can be recovered via the disposal Except for the issues identified
of the Sandakan Harbour Square in relation to Sandakan Harbour
despite the impairment charge stated Square, RuMa Hotel and Service
above. Residences as well as the land
located in Kota Kinabalu, Sabah,
A parcel of land located in Kota we concluded that the directors'
Kinabalu, Sabah in Malaysia with year end carrying value is supportable
a carrying value of USD $6.3 million in light of the evidence. We note
as at 31 December 2022 was not that the LOI is not a contractual
valued by any third party valuer. document. Contractual terms (in
In addition to this, and consistent any) may differ materially from
with the market conditions observed, the Offer Price.
we note there continued to be a
higher level of judgement associated
with certain asset valuations,
notably those with a significant
retail and hospitality element.
The continuing economic consequences
of COVID-19 further increased judgment
in relation to assumptions around:
* occupier demand and solvency;
* asset liquidity; and
* the relative impact on the different sectors
including retail, hospitality and leisure.
In determining the carrying value
of inventory, the valuers take
into account property specific
information such as the current
lease agreements and occupancy
rates. They apply assumptions for
yields and expected future income
growth rates, which are influenced
by prevailing market yields and
comparable market transactions,
to arrive at final valuation.
The valuation of inventory requires
significant judgment and estimation
by management and their valuers.
Inaccuracies in inputs or unreasonable
bases used in these judgements
could result in a material misstatement
in the financial statements. There
is also a risk that management
may influence the significant judgments
and estimates in respect of inventory
valuations in order to meet market
expectations.
The significance of the estimates
and judgements involved, coupled
with the fact that only a small
percentage difference in individual
valuations, when aggregated, could
result in a material misstatement,
warranted specific audit focus
in this area.
------------------------------------------
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies (Jersey) Law 1991 requires us to
report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' report, the directors
are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and the sector in
which it operates to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through
discussions with management, industry research, application of
cumulative audit knowledge and experience of the sector. We also
communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members including the
significant component audit team, and remained alert to any
indicators of fraud or non-compliance with laws and regulations
throughout the audit.
-- We determined the principal laws and regulations relevant to
the group in this regard to be those arising from:
o The Companies (Jersey) Law 1991;
o Disclosure and Transparency Rules;
o The Bribery Act 2010;
o Market Abuse Regulations;
o Anti-Money Laundering Legislation;
o Local Tax and Employment Law; and
o International Financial Reporting Standards ("IFRSs") as
adopted by European Union ("EU")
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group with those laws and regulations. These procedures
included, but were not limited to:
o Making enquiries of management;
o Reviewing of minutes of board meetings;
o Reviewing of accounting ledgers; and
o Reviewing of RNS announcements
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the carrying value of
inventory could indicate potential management bias. The potential
for management bias was identified in relation to the carrying
value of the inventory and we addressed this by challenging the
assumptions and judgements made by management when auditing that
significant accounting estimate.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business; and
reviewing transactions through bank statements to identify
potentially large and unusual transactions that do not appear to be
in line with our understanding of the business operations.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the group's members, as a body, in
accordance with our engagement letter dated 8 December 2022. Our
audit work has been undertaken so that we might state to the
group's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the group and the group's members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Mark Ling (Engagement Partner) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Registered Auditor London E14 4HD
28 April 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
2021
Restated
2022 *
Notes US$'000 US$'000
Continuing operations
----------------------------------------- ------ --------- ----------
Revenue 5 980 595
Cost of sales 6 (640) (318)
----------------------------------------- ------ --------- ----------
Gross profit 340 277
Other income 7 10,971 5,677
Administrative expenses 11 (2,433) (1,408)
Other operating expenses 11 (26,085) (9,013)
Gain on sale of discontinued operations 34 2,702 -
Foreign exchange (loss)/gain 8 (1,695) 345
Operating loss (16,200) (4,122)
--------- ----------
Finance income 1,970 1,969
Finance costs (3,344) (3,621)
--------- ----------
Net finance costs 10 (1,374) (1,652)
Net loss before taxation
from continuing operations 11 (17,574) (5,774)
Taxation 12 (302) (141)
----------------------------------------- ------ --------- ----------
Loss for the year from continuing
operations (17,876) (5,915)
----------------------------------------- ------ --------- ----------
Discontinued operations
Loss for the year from discontinued
operations - (3,087)
----------------------------------------- ------ --------- ----------
Loss for the year (17,876) (9,002)
----------------------------------------- ------ --------- ----------
Other comprehensive income/(loss), net of tax
Items that are or may be reclassified subsequently to profit or
loss
Foreign currency translation differences
for foreign operations 13 (2,459) (3,584)
Total other comprehensive
income for the year 13 (2,459) (3,584)
Total comprehensive loss
for the year (20,335) (12,586)
------------------------------------------ --- --------- ---------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONT'D)
FOR THE YEARED 31 DECEMBER 2022
2021
Restated
2022 *
Notes US$'000 US$'000
Loss attributable to:
Equity holders of the parent
company
Loss for the year from continuing
operations (15,867) (4,122)
Loss for the year from discontinued
operations - (1,632)
--------------------------------------- ------ --------- ----------
Loss for the year attributable
to
equity holders of the parent
company 14 (15,867) (5,754)
--------------------------------------- ------ --------- ----------
Non-controlling interests
Loss for the year from continuing
operations (2,009) (1,793)
Loss for the year from discontinued
operations - (1,455)
--------------------------------------- ------ --------- ----------
Loss for the year attributable
to
non-controlling interests 15 (2,009) (3,248)
--------------------------------------- ------ --------- ----------
Loss for the year (17,876) (9,002)
--------------------------------------- ------ --------- ----------
Total comprehensive loss attributable
to:
Equity holders of the parent
company
Loss for the year from continuing
operations (18,451) (6,232)
Loss for the year from discontinued
operations - (2,719)
--------------------------------------- ------ --------- ----------
Total comprehensive loss attributable
to
equity holders of the parent
company (18,451) (8.951)
--------------------------------------- ------ --------- ----------
Loss for the year from continuing
operations (1,884) (1,736)
Loss for the year from discontinued
operations - (1,899)
--------------------------------------- ------ --------- ----------
Total comprehensive loss attributable
to
non-controlling interests (1,884) (3,635)
--------------------------------------- ------ --------- ----------
Total comprehensive loss for
the year (20,335) (12,586)
--------------------------------------- ------ --------- ----------
Loss per share
Basic and diluted (US cents) 14
- from continuing operations (7.99) (2.08)
- from discontinued operations - (0.82)
--------------------------------------- ------ --------- ----------
(7.99) (2.90)
--------------------------------------- ------ --------- ----------
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
The notes to the financial statements form an integral part of
the financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2022
2021 1 Jan 2021
2022 Restated* Restated*
Notes US$'000 US$'000 US$'000
Non-current assets
Property, plant and equipment 16 79 104 121
Intangible assets 17 578 578 578
Right of use 18 - 1 160
Deferred tax assets 19 4,723 4,979 5,111
------------------------------- ------ ---------- ----------- -----------
Total non-current assets 5,380 5,662 5,970
------------------------------- ------ ---------- ----------- -----------
Current assets
Inventories 20 132,573 147,048 157,133
Trade and other receivables 21 11,575 14,799 14,999
Prepayments 376 496 206
Current tax assets 10 781 956
Assets held for sale 34 - 14,466 10,344
Cash and cash equivalents 22 7,259 7,114 5,388
------------------------------- ------ ---------- ----------- -----------
Total current assets 151,793 184,704 189,026
------------------------------- ------ ---------- ----------- -----------
TOTAL ASSETS 157,173 190,366 194,996
------------------------------- ------ ---------- ----------- -----------
Equity
Share capital 23 10,601 10,601 10,601
Share premium 24 208,925 208,925 208,925
Capital redemption reserve 25 1,899 1,899 1,899
Translation reserve 26 (25,436) (22,852) (19,655)
Accumulated losses (122,781) (106,904) (101,160)
------------------------------- ------ ---------- ----------- -----------
Shareholders' equity 73,208 91,659 100,610
Non-controlling interests 15 (5,404) (2,646) (7,189)
------------------------------- ------ ---------- ----------- -----------
Total equity 67,804 89,013 93,421
------------------------------- ------ ---------- ----------- -----------
Non-current liabilities
Trade and other payable 27 36,440 38,339 39,789
Loans and borrowings - - 1
Total non-current liabilities 36,440 38,339 39,790
------------------------------- ------ ---------- ----------- -----------
Current liabilities
Trade and other payables 27 18,089 17,050 17,757
Amount due to non-controlling
interests 28 1,981 1,952 1,906
Loans and borrowings 29 1,595 1,695 1,922
Medium term notes 30 31,264 42,317 40,200
Total current liabilities 52,929 63,014 61,785
------------------------------- ------ ---------- ----------- -----------
Total liabilities 89,369 101,353 101,575
------------------------------- ------ ---------- ----------- -----------
TOTAL EQUITY AND LIABILITIES 157,173 190,366 194,996
------------------------------- ------ ---------- ----------- -----------
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
The financial statements were approved on 28 April 2023 and
authorised for issue by the Board and were signed on its behalf
by
THOMAS HOLLAND HELEN SIU MING WONG
Director Director
28 April 2023
The notes to the financial statements form an integral part of
the financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 december 2022
Total
Equity
Attributable
to Equity
Redeemable Capital Holders Non-
Ordinary Management Share Redemption Translation Accumulated of the Controlling Total
Shares Shares Premium Reserve Reserve Losses Parent Interests Equity
Consolidated US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------- ----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
Balance at 1
January 2021 10,601 -# 208,925 1,899 (19,655) (100,433) 101,337 (6,877) 94,460
Correction or
error (net
of tax) (See Note
2.3(f)) - - - - - (727) (727) (312) (1,039)
------------------- ----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
As at the
beginning of the
financial year
(restated
*) 10,601 -# 208,925 1,899 (19,655) (101,160) 100,610 (7,189) 93,421
Changes in
ownership
interests
in subsidiaries (341) (341)
Non-controlling
interests
contribution - - - - - - - 8,519 8,519
----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
Loss for the year
(restated
*) - - - - - (5,754) (5,754) (3,248) (9,002)
Total other
comprehensive
loss for the year - - - - (3,197) - (3,197) (387) (3,584)
----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
Total
comprehensive
loss
for the year
(restated *) - - - - (3,197) (5,754) (10,210) (3,635) (12,586)
Disposal of
subsidiaries - - - - - -
------------------- -----------
As at 31 December
2021/
1 January 2022 10,601 -# 208,925 1,899 (22,852) (106,914) 91,659 (2,646) 89,013
------------------- ----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
As at 31 December
2021 /
1 January 2022 as
originally
presented 10,601 -# 208,925 1,899 (22,852) (105,915) 92,658 (1,678) 90,980
Correction or
error (net
of tax) (See Note
2.3(f)) - - - - - (999) (999) (968) (1,967)
------------------- ----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
As at 31 December
2021
/
1 January 2022
(restated
*) 10,601 -# 208,925 1,899 (22,852) (106,914) 91,659 (2,646) 89,013
Loss for the year - - - - - (15,867) (15,867) (2,009) (17,876)
Total other
comprehensive
loss for the year - - - - (2,584) - (2,584) 125 (2,459)
----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
Total
comprehensive
loss
for the year - - - - (2,584) (15,867) (18,451) (1,884) (20,335)
Sale of
discontinued
operations - - - - - - - (874) (874)
------------------- ----------- ----------- -------- ----------- ------------ ------------ ------------- ------------ ---------
Shareholders'
equity at
31 December 2022 10,601 -# 208,925 1,899 (25,436) (122,781) 73,208 (5,404) 67,804
=================== =========== =========== ======== =========== ============ ============ ============= ============ =========
# Represents 2 management shares at US$0.05 each
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
The notes to the financial statements form an integral part of
the financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 december 2022
2021
Restated
2022 *
US$'000 US$'000
Cash Flows from Operating Activities
Net loss before taxation
- Continuing operations (17,574) (5,774)
- Discontinued operation - (3,087)
Impairment of amount due from a related
party 2,755 -
Impairment of inventory 8,620 -
Finance income (1,970) (1,969)
Finance costs 3,344 3,621
Loss on disposal of subsidiaries (2,702) -
Unrealised foreign exchange loss/(gain) 1,688 (346)
Depreciation of property, plant and
equipment and right-of-use asset 60 207
Operating loss before changes in
working capital (5,779) (7,348)
Changes in working capital:
(Increase)/Decrease in inventories (1,671) 4,660
Decrease/(Increase) in trade and
other receivables and prepayments 15,985 (3,341)
Decrease in trade and other payables (7,448) (137)
-------------------------------------------- --------- ----------
Cash (used in)/generated from operations 1,087 (6,166)
Interest paid (6,034) (3,618)
Tax (refunded)/paid 428 (46)
-------------------------------------------- --------- ----------
Net cash used in operating activities (4,519) (9,830)
-------------------------------------------- --------- ----------
Cash Flows From Investing Activities
Purchase of property, plant and equipment (39) (42)
Proceeds from the sale of discontinued
operations 10,045 -
Finance income received 508 710
-------------------------------------------- --------- ----------
Net cash from investing activities 10,514 668
-------------------------------------------- --------- ----------
CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D)
For the year ended 31 december 2022
2021
Restated
2022 *
US$'000 US$'000
-------------------------------------------- -------- ----------
Cash Flows From Financing Activities
Advances from non-controlling interests 129 121
Issuance of ordinary share of subsidiaries
to non-controlling interests - 8,519
Repayment of finance lease liabilities (14) (163)
Repayment of loans and borrowings (8,884) -
Drawdown of loans and borrowings and
Medium Term Notes - 3,559
Net cash generated from financing
activities (8,769) 12,036
--------------------------------------------- -------- ----------
Net changes in cash and cash equivalents
during the year (2,774) 2,874
Effect of changes in exchange rates 2,919 (1,148)
Cash and cash equivalents at the
beginning of the year 7,114 5,388
--------------------------------------------- -------- ----------
Cash and cash equivalents at the
end of the year (i) 7,259 7,114
--------------------------------------------- -------- ----------
(i) Cash and Cash Equivalents
Cash and cash equivalents included in the consolidated statement
of cash flows comprise the following consolidated statement of
financial position amounts:
2021
Restated
2022 *
US$'000 US$'000
----------------------------- -------- ----------
Cash and bank balances 4,786 4,644
Short term bank deposits 2,473 2,470
------------------------------ -------- ----------
7,259 7,114
Less: Deposits pledged (ii) (2,473) (2,470)
------------------------------ -------- ----------
Cash and cash equivalents 4,786 4,644
------------------------------ -------- ----------
(ii) Included in short term bank deposits and cash and bank
balance is US$2,473,000 (2021: US$2,470,000) pledged for loans and
borrowings and Medium Term Notes of the Group.
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
The notes to the financial statements form an integral part of
the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1 GENERAL INFORMATION
Aseana Properties Limited (the "Company") was incorporated in
Jersey as a limited liability par value company. The Company's
registered office is Osprey House, Old Street, St Helier, Jersey
JE2 3RG.
The consolidated financial statements comprise the financial
information of the Company and its subsidiary undertakings
(together the "Group"). Details of the entities of the Group are
described in Note 32.
The principal activities of the Group were the development of
upscale residential and hospitality projects, sale of development
land and operation and sale of hotel, mall and hospital assets in
Malaysia and Vietnam. It is currently carrying out its divestment
program which consists of selling the Group's remaining Malaysian
assets, repaying its debts and distributing the remaining proceeds
to its shareholders.
The financial statements are presented in US Dollar ("US$"),
which is the Group's presentation currency. All financial
information is presented in US$ and has been rounded to the nearest
thousand (US$'000), unless otherwise stated.
2 BASIS OF PREPARATION
The financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by European Union ("EU"), and IFRIC
interpretations issued, and effective, or issued and early adopted,
at the date of these financial statements.
As permitted by Companies (Jersey) Law 1991 only the
consolidated financial statements are presented.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of expenses during
the reporting period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates. The Board has
reviewed the accounting policies set out below and considers them
to be the most appropriate to the Group's business activities.
A disposal group qualifies as a discontinued operation if it is
a component of an entity that either has been disposed of, or is
classified as held for sale and:
(a) represents a separate major line of business or geographical area of operations;
(b) is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of operations;
or
(c) is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the income
statement. Comparatives are also re-presented to reclassify
disposed businesses or held for sale businesses which meet the
criteria for discontinued operations.
2.1 Going Concern
The financial statements have been prepared on the historical
cost basis and on the assumption that the Group is a going
concern.
The Directors expect to raise sufficient funds to finance the
operation of the Group's existing projects via the disposal of its
development assets in East Malaysia, its existing units of
residential apartment inventories at The RuMa Residences in West
Malaysia, and through the disposals of the Sandakan hotel asset
(formerly Four Points Sheraton Sandakan Hotel), the Harbour Mall
Sandakan and the RuMa Hotel.
The slow economic recovery after the COVID-19 pandemic and
re-opening up of society in Malaysia has had an ongoing impact
affecting the interest of prospective buyers for our remaining
assets. The slow recovery casts doubt on the outlook in tourism and
hospitality related businesses such as our hotel in Kuala Lumpur
and our retail mall in Sandakan which was negatively affected.
Additionally, the Malaysian political landscape in 2022 was
volatile until the general election in November 2022 when the
Pakatan Harapan formed a coalition government with other political
parties.
Given the challenges in engaging with prospective buyers during
a time of economic uncertainty, the Directors decided to
"roll-over" the medium term notes ("MTN's) related to the Sandakan
assets which were due to expire on 8 December 2022. The "roll-over"
of the MTN's was completed prior to the expiry date and now has a
maturity date of 8 December 2023. The notes are "AAA" rated and
secured by two completed inventories of the Group with carrying
amount of US$45.6 million as at 31 December 2022.
The Group has prepared and considered prospective financial
information based on assumptions and events that may occur for at
least 12 months from the date of approval of the financial
statements and the possible actions to be taken by the Group.
Prospective financial information includes the Group's profit and
cash flow forecasts for the ongoing projects.
In preparing the cash flow forecasts, the Directors have
considered the availability of cash, adequacy of bank loans and
medium term notes and also the refinancing of the medium term notes
(as described in Notes 29 and 30). The Directors believe that the
business will be able to realise its assets and discharge its
liabilities in the normal course of business for at least 12 months
from the date of the approval of these financial statements.
The Directors anticipate the sale of the Group's remaining
assets, comprising the hotel asset and shopping mall in Sandakan, a
plot of development land in Kota Kinabalu and the hotel and the
remaining unsold residential units in Kuala Lumpur, can be sold as
the economy gradually recovers in Malaysia. These asset sales will
collectively enable the repayment of the Group's bank debts as or
before they fall due.
In addition, as described in Note 2.1.1 below, o n 28 May 2021,
shareholders voted to extend the life of the Company by a further
two years to May 2023 and a further dis-continuation vote will be
put to shareholders by the end of May 2023.
After considering the forecasts and the business risks, there is
no certainty the divestment of certain assets will be completed as
planned and the loans and borrowing can be discharged in a timely
manner. These conditions indicate the existence of a material
uncertainty which may cast significant doubt about the Group and
the Company's ability to continue as a going concern.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. For these reasons, they continue to adopt the
going concern basis of accounting in preparing the annual financial
statements.
2.1.1 May 2021 Resolution
At a general meeting of the Company held on 28 May 2021,
Shareholders voted in favour of the Board's proposals to reject the
2021 Discontinuation Resolution and enabled the Company to continue
to pursue the new divestment strategy rather than placing the
Company into liquidation. This should enable the realisation of the
Company's assets in a controlled, orderly and timely manner, with
the objective of achieving a balance between periodically returning
cash to Shareholders and maximising the realisation value of the
Company's investments.
2.2 Statement of Compliance
A number of new standards and amendments to standards and
interpretations have been issued by International Accounting
Standards Board but are not yet effective and in some cases have
not yet been adopted by the EU. The Directors do not expect that
the adoption of these standards will have a material impact on the
financial statements of the Group in future periods.
2.3 Use of estimates and judgements and errors
The preparation of the consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
Information about critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the consolidated financial statements are discussed
below:
(a) Going concern
The Extraordinary General Meeting that was held on 28 May 2021
extended the Company's life until May 2023 and the Directors
anticipate holding a similar vote at that time. It is too early to
be able to forecast how the Company's shareholders will vote on a
continuation resolution which would be a special resolution needing
to be passed by two-thirds majority of those voting. The Company
and the Group continue to adopt the going concern basis in
preparing the financial statements.
As described in Note 2.1 the Directors consider the Company to
be a going concern while the Directors continue with the agreed
divestment and realisation process in an orderly manner under their
control and they expect to be able to continue to meet all finance
obligations as they fall due.
(b) Net realisable value of inventories
The Group assesses the net realisable value of inventories under
development, land held for development and completed properties
held for sale according to their recoverable amounts with reference
to the realisability of these properties, taking into account
estimated net sales based on prevailing market conditions supported
by external valuations, as well as indicative market transaction
prices on an arm's length basis. Provision is made when events or
changes in circumstances indicate that the carrying amounts may
exceed net realisable value. The assessment requires the use of
judgement and estimates in relation to factors such as sales
prices, comparable market transactions, occupancy levels, projected
growth rates, and discount rates.
The methods and key assumptions in relation to the calculation
of the net realisable value of inventories are described in Note
20. At 31 December 2022, the carrying value of inventories were
approximately US$133 million (31 December 2021: US$147
million).
(c) Revenue - sale and leaseback arrangements
The Group entered into agreements with the buyers of The RuMa
Hotel Suites in a sale and leaseback arrangement. The sold hotel
suites will be leased back to the Group for the hotel operation
over the lease term period of 10 years.
The Group considers that the control of the sold hotel suites,
under the sale and leaseback arrangement, has yet to be transferred
to the buyer and the transfer of the asset is therefore not a sale.
No revenue is recognised in the financial statements.
The nature of this leaseback transaction represents, in
substance, a temporary financing arrangement. Any contractual
payment made to the buyer was recognised as finance costs. The
proceeds of the revenue received from these buyers were recognised
as amounts owed to contract buyers, amounted to US$36.4 million and
is disclosed in Note 27.
(d) Classification of assets as inventory
The Directors apply judgements in determining the classification
of the properties held by the Group. As the Group's principal
activity was property development, the Group continues to classify
its completed developments, namely the two hotels, and mall as
inventories, in line with the Group's intention to dispose of these
assets rather than hold them for rental or capital appreciation.
The Group operates these inventories temporarily to stabilise its
operation while seeking a potential buyer.
As described in the Notes 3.3(c) and (d), as a result of this
classification all income generating from the operations of these
developments is recognised as other income in Note 6.
(e) Global economic uncertainty
Although many countries around the globe have eased their
COVID-19 pandemic responses during 2022, including the easing of
temporary movement controls, travel restrictions and quarantine
measures, the economic recovery remained vulnerable. The slow
economic recovery continued to affect supply chains and the
production of goods and services and lower economic activity which
is likely to result in reduced demand for the Group's goods and
services. Additionally with the ongoing Ukraine situation, high
inflation and continued disruption of supply chains there is
concern on the pace of the economic recovery.
The Group exercises judgement, in light of all facts and
circumstances, to assess what event in this series of events
provides additional evidence about the condition that existed at
the reporting date and therefore affects the recognition and
measurement of the Group's assets and liabilities at 31 December
2022.
(f) Correction of material error in expense accrual
In the post-year end period, the management became aware of the
following in relation to prior financial years:
(i) An understatement in accruing guaranteed rental return
("GRR") payable to the owners of certain sold and leased back hotel
suites. The error resulted in a material understatement of accrued
GRR expense recognised for the 2021 and prior financial years and a
corresponding understatement of net loss.
(ii) An understatement of accrued finance income from a related
party in relation to the Group's equity contribution to a
non-wholly owned subsidiary and pursuant to the relevant Joint
Venture Agreement (see Note 31). The error resulted in a material
understatement of finance income recognised for the 2021 financial
year and a corresponding overstatement of net loss.
The errors have been corrected by restating each of the affected
financial statement line items for the prior periods as
follows:
Consolidated Statement Increase 31 December Increase 1 January
of / 2021 / 2021
Financial Position 31 December 31 December
(Extract ) 2021 (Decrease) (Restated) 2020 (Decrease) (Restated)
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------- ------------- ------------- ------------- ------------- ------------- -------------
Trade and other
receivables 13,540 1,259 14,799 14,999 - 14,999
Total Assets 189,107 1,259 190,366 194,996 - 194,996
Accumulated losses (105,915) (999) (106,914) (100,433) (727) (101,160)
Non-Controlling
interests (1,678) (968) (2,646) (6,877) (312) (7,189)
Total Equity 90,980 (1,967) 89,013 94,460 (1,039) 93,421
Trade and other
payables 13,824 3,226 17,050 16,718 1,039 17,757
Total Equity and
Liabilities 189,107 1,259 190,366 194,996 - 194,996
Increase
/ 2021
Consolidated Statement of Comprehensive
Income (Extract) 2021 (Decrease) (Restated)
US$'000 US$'000 US$'000
------------------------------------------------ --------- ------------- -------------
Other operating expenses (6,826) (2,187) (9,013)
------------------------------------------------ --------- ------------- -------------
Operating loss (1,935) (2,187) (4,122)
------------------------------------------------ --------- ------------- -------------
Finance income 710 1,259 1,969
Finance costs (3,621) - (3,621)
------------------------------------------------ --------- ------------- -------------
Net finance costs (2,911) 1,259 (1,652)
Net loss before taxation from continuing
operations (4,846) (928) (5,774)
Taxation (141) - (141)
------------------------------------------------ --------- ------------- -------------
Loss for the year from continuing operations (4,987) (928) (5,915)
------------------------------------------------ --------- ------------- -------------
Loss for the year from discontinued operations (3,087) - (3,087)
------------------------------------------------ --------- ------------- -------------
Loss for the year (8,074) (928) (9,002)
------------------------------------------------ --------- ------------- -------------
Total other comprehensive income for
the year (3,584) - (3,584)
------------------------------------------------ --------- ------------- -------------
Total comprehensive loss for the year (11,658) (928) (12,586)
------------------------------------------------ --------- ------------- -------------
Loss attributable to:
Equity holders of the parent company
Loss for the year from continuing operations (3,850) (272) (4,122)
Loss for the year from discontinued operations (1,632) - (1,632)
--------------------------------------------------- --------- ------ ---------
Loss for the year attributable to equity
holders of the parent company (5,482) (272) (5,754)
--------------------------------------------------- --------- ------ ---------
Non-controlling interests
Loss for the year from continuing operations (1,137) (656) (1,793)
Loss for the year from discontinued operations (1,455) - (1,455)
--------------------------------------------------- --------- ------ ---------
Loss for the year attributable to non-controlling
interests (2,592) (656) (3,248)
--------------------------------------------------- --------- ------ ---------
Loss for the year (8,074) (928) (9,002)
--------------------------------------------------- --------- ------ ---------
Total comprehensive loss attributable
to:
Equity holders of the parent company
Loss for the year from continuing operations (5,960) (272) (6,232)
Loss for the year from discontinued operations (2,719) - (2,719)
--------------------------------------------------- --------- ------ ---------
Total comprehensive loss attributable
to equity holders
of the parent company (8,679) (272) (8,951)
--------------------------------------------------- --------- ------ ---------
Non-controlling interests
Loss for the year from continuing operations (1,080) (656) (1,736)
Loss for the year from discontinued operations (1,899) - (1,899)
--------------------------------------------------- --------- ------ ---------
Total comprehensive loss attributable
to non-controlling interests (2,979) (656) (3,635)
--------------------------------------------------- --------- ------ ---------
Total comprehensive loss for the year (11,658) (928) (12,586)
--------------------------------------------------- --------- ------ ---------
Loss per share
Basic and diluted (US cents)
- from continuing operations (1.94) (0.14) (2.08)
- from discontinued operations (0.82) - (0.82)
------------------------------------- ------- ------- -------
(2.76) (0.14) (2.90)
------------------------------------- ------- ------- -------
3 SIGNIFICANT ACCOUNTING POLICIES
3.1 Basis of Consolidation
(a) Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group. For new acquisitions, the
Group measures the cost of goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the acquiree; plus
-- if the business combination is achieved in stages, the fair
value of the existing equity interest in the acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss. The consideration
transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts generally are recognised
in profit or loss.
Transaction costs related to the acquisition, other than those
associated with the issue of debt or equity securities, that the
Group incurs in connection with a business combination are expensed
as incurred.
Any contingent consideration payable is measured at fair value
at the acquisition date. If the contingent consideration is
classified as equity, then it is not remeasured and settlement is
accounted for within equity.
Otherwise, subsequent changes in the fair value of the
contingent consideration are recognised in profit or loss.
(b) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial
information of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date that control ceases.
The accounting policies of subsidiaries have been changed when
necessary to align them with the policies adopted by the Group.
The Group controls an entity when it is exposed, 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. Potential voting rights are considered when assessing
control only when such rights are substantive. The Group also
considers it has de facto power over an investee when, despite not
having the majority of voting rights, it has the current ability to
direct the activities of the investee that significantly affect the
investee's return.
(c) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements. Unrealised
gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group's
interest in the investee. Unrealised losses are eliminated in the
same way as unrealised gains, but to the extent that there is no
evidence of impairment.
(d) Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as
transactions with owners in their capacity as owners and therefore
no goodwill is recognised as a result. Adjustments to
non-controlling interests arising from transactions that do not
involve the loss of control are based on a proportionate amount of
the net assets of the subsidiary.
3.2 Foreign Currencies
(a) Foreign currency transactions
The consolidated financial statements are presented in United
States Dollar ("US$"), which is the Group's presentation currency.
Each entity in the Group determines its own functional currency and
items included in the financial statements of each entity are
measured using that functional currency. Transactions in foreign
currencies are translated to the respective functional currencies
of the Group entities at exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in
foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair
value was determined. Non-monetary items in a foreign currency that
are measured in terms of historical cost are translated using the
exchange rate at the date of the transaction. Foreign currency
differences arising on retranslation are recognised in profit or
loss, except for differences arising on the retranslation of
available-for-sale equity investments, which are recognised in
other comprehensive income.
(b) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated to US$ at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to US$ at
exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other
comprehensive income and presented in the foreign currency
translation reserve ("translation reserve") in equity. However, if
the foreign operation is a non-wholly owned subsidiary, then the
relevant proportionate share of the translation difference is
allocated to the non-controlling interest. When a foreign operation
is disposed of such that control, significant influence or joint
control is lost, the cumulative amount in the translation reserve
related to that foreign operation is reclassified to profit or loss
as part of the gain or loss on disposal. When the Group disposes of
only part of its interest in a subsidiary that includes a foreign
operation while retaining control, the relevant proportion of the
cumulative amount is reattributed to non-controlling interest. When
the Group disposes of only part of its investment in an associate
that includes a foreign operation while retaining significant
influence or joint control, the relevant proportion of the
cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or
payable to a foreign operation is neither planned nor likely in the
foreseeable future, foreign exchange gains and losses arising from
such a monetary item are considered to form part of a net
investment in a foreign operation and are recognised in other
comprehensive income, and presented in the translation reserve in
equity.
3.3 Revenue Recognition and Other Income
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognised:
(a) Sale of completed properties
Revenue from sale of completed properties is recognised when
effective control of ownership of the properties is transferred to
the purchasers which is when the completion certificate or
occupancy permit has been issued.
(b) Sale of development properties
Revenue from sale of development properties is recognised as and
when the control of the asset is transferred to the buyer and it is
probable that the Group will collect the consideration to which it
will be entitled in exchange for the asset that will be transferred
to the buyer. In light of the terms of the contract and the laws
that apply to the contract, control of the asset is transferred
over time as the Group's performance does not create an asset with
an alternative use to the Group and the Group has an enforceable
right to payment for performance completed to date.
Revenue is recognised over the period of the contract by
reference to the progress towards complete satisfaction of that
performance obligation. This is determined based on the actual cost
incurred to date to estimated total cost for each contract.
Where the outcome of a contract cannot be reliably estimated,
revenue is recognised to the extent of contract costs incurred that
are likely to be recoverable. Contract costs are recognised as
expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total
contract revenue, the expected loss is recognised as an expense
immediately.
(c) Rental income
Rental income is recognised in profit or loss on a straight-line
basis over the lease term. Lease incentives granted are recognised
as an integral part of the total rental income, over the term of
the lease. Rental income is recognised as other income.
(d) Income from hotel and mall operations
Income from the hotel operations, which include provision of
rooms, food and beverage, other departments sales and laundry
service fees are recognised when services are rendered. Income from
hotel operations is recognised as other income.
Income from mall operations is recognised in profit or loss on a
straight-line basis over the term of the lease. Lease incentives
granted are recognised as an integral part of the total rental
income, over the term of the lease. Where a rent-free period is
included in a lease, the rental income foregone is allocated evenly
over the period from the date the lease commencement to the
earliest termination date. Income from mall operations is
recognised as other income.
(e) Interest income
Interest income is recognised as it accrues using the effective
interest method in profit or loss except for interest income
arising from temporary investment of borrowings taken specifically
for the purpose of obtaining a qualifying asset which is accounted
for in accordance with the accounting policy on borrowing
costs.
3.4 Property, Plant and Equipment
All property, plant and equipment are stated at cost less
depreciation unless otherwise stated. Cost includes all relevant
external expenditure incurred in acquiring the asset.
The estimates for the residual values, useful lives and related
depreciation charges for the property and equipment are based on
commercial factors which could change significantly as a result of
technical innovations and competitors' actions in response to the
market conditions. The Group anticipates that the residual values
of its property and equipment will be insignificant. As a result,
residual values are not being taken into consideration for the
computation of the depreciable amount. Changes in the expected
level of usage and technological development could impact the
economic useful lives and the residual values of these assets,
therefore future depreciation charges could be revised. The
carrying amount of property and equipment as at the reporting date
is disclosed in Note 16 to the financial statements.
The cost of property, plant and equipment recognised as a result
of a business combination is based on fair value at acquisition
date. The fair value of property is the estimates amount for which
a property could be exchanged between knowledgeable willing parties
in an arm's length transaction after proper marketing wherein the
parties had each acted knowledgeably, prudently and without
compulsion. The fair value of other items of plant and equipment is
based on the quoted market prices for similar items when available
and replacement cost when appropriate.
Depreciation of property, plant and equipment is calculated
using the straight-line method to allocate cost to their residual
values over their estimated useful lives, as follows:
-- Furniture, Fittings & Equipment 4 - 331/3%
-- Motor Vehicles 20%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's
carrying amount is greater than its estimated recoverable amount
as described in Note 3.10(b).
The gain or loss on disposal of an item of property, plant and
equipment is determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment and is
recognised net within "other income" and "other operating expenses"
respectively in profit or loss.
3.5 Income Tax
Income tax expense comprises current tax and deferred tax.
Current tax and deferred tax are recognised in profit or loss
except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive
income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted by
the end of the reporting period, and any adjustment to tax payable
in respect of previous years.
Deferred tax is recognised using the liability method, providing
for temporary differences between the carrying amounts of assets
and liabilities in the statement of financial position and their
tax bases. Deferred tax is not recognised for the following
temporary differences: the initial recognition of goodwill, and the
initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting
nor taxable profit or loss. Deferred tax is measured at the tax
rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to taxes levied by the same tax authority
on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at the end of each reporting date and are reduced to
the extent that it is no longer probable that the related tax
benefit will be realised.
3.6 Financial Instruments
(a) Non-derivative financial assets
The Group initially recognises loans and receivables and
deposits on the date that they are originated. All other financial
assets are recognised initially on the trade date, which is the
date that the Group becomes a party to the contractual provisions
of the instrument.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise the asset and settle
the liability simultaneously.
The Group classifies non-derivative financial assets into the
following categories: loans and receivables.
(i) Loans and receivables
Loans and receivables are held with an objective to collect
contractual cash flows which are solely payments of principal and
interest on the principal amount outstanding. Such assets are
recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective
interest method, less any impairment losses. Loans and receivables
comprise cash and cash equivalents and other receivables.
Trade receivables are recognised initially at the transaction
price and subsequently measured at amortised cost, less any
impairment losses.
(b) Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade
date, which is the date that the Group becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial liability when the
contractual obligations are discharged, cancelled or expire.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise the asset and settle
the liability simultaneously.
The Group classifies non-derivative financial liabilities into
other financial liability category. Such financial liabilities are
recognised initially at fair value plus any directly attributable
transaction costs.
Subsequent to initial recognition, these financial liabilities
are measured at amortised cost using the effective interest
method.
Other financial liabilities comprise loans and borrowings, bank
overdrafts, and trade and other payables.
Accounting for interest income and finance cost are discussed in
Notes 3.3(e) and 3.12 respectively.
(c) De-recognition
A financial asset or part of it is derecognised when, and only
when, the contractual rights to the cash flows from the financial
asset expire or the financial asset is transferred to another party
without retaining control or substantially all risks and rewards of
the asset. On de-recognition of a financial asset, the difference
between the carrying amount and the sum of the consideration
received (including any new asset obtained less any new liability
assumed) and any cumulative gain or loss that had been recognised
in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and
only when, the obligation specified in the contract is discharged
or cancelled or expire. On de-recognition of a financial liability,
the difference between the carrying amount of the financial
liability extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
3.7 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and at bank,
deposits held at call and short term highly liquid investments that
are subject to an insignificant risk of changes in value and are
used by the Group in the management of their short term
commitments. Bank overdrafts are included within borrowings in the
current liabilities section on the statement of financial position.
For the purpose of the statement of cash flows, cash and cash
equivalents are presented net of bank overdrafts and pledged
deposits.
3.8 Intangible Assets
Intangible assets comprise licence contracts and related
relationships and goodwill.
(a) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is
included in intangible assets. For the measurement of goodwill at
initial recognition, refer to Note 3.1(a). Goodwill is tested for
impairment when there is an indicator of impairment. The Group
assesses the recoverable amount of goodwill by reference to the
realisability of the properties of which the goodwill is attached
to (refer to Note 17).
Where it is not possible to estimate the recoverable amount of
an intangible asset, the impairment test is carried out on the
smallest Group of assets to which it belongs for which there are
separately identifiable cash flows; its Cash Generating Units
('CGUs'). Goodwill is allocated on initial recognition to each of
the Group's CGUs that are expected to benefit from a business
combination that gives rise to the goodwill. Impairment charges
would be included in profit or loss, except to the extent they
reverse gains previously recognised in other comprehensive income.
An impairment loss recognised for goodwill is not reversed.
The carrying values of assets, other than those to which IAS
36-Impairment of Assets does not apply, are reviewed at the end of
each reporting period for impairment when an annual impairment
assessment is compulsory or there is an indication that the assets
might be impaired. Impairment is measured by comparing the carrying
values of the assets with their recoverable amounts. When the
carrying amount of an asset exceeds its recoverable amount, the
asset is written down to its recoverable amount and an impairment
loss shall be recognised. The recoverable amount of an asset is the
higher of the asset's fair value less costs to sell and its value
in use, which is measured by reference to discounted future cash
flows using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group determines the recoverable
amount of the cash-generating unit to which the asset belongs.
An impairment loss is recognised in profit or loss immediately
unless the asset is carried at its revalued amount. Any impairment
loss of a revalued asset is treated as a revaluation decrease to
the extent of a previously recognised revaluation surplus for the
same asset. Any impairment loss recognised in respect of a
cash-generating unit is allocated first to reduce the carrying
amounts of the other assets in the cash-generating unit on a pro
rata basis.
3.9 Inventories
Inventories comprise land held for property development,
work-in-progress and stock of completed units.
Inventories are stated at the lower of cost and net realisable
value. Net realisable value represents the estimated net selling
price in the ordinary course of business, less estimated total
costs of completion and the estimated costs necessary to make the
sale (refer to Note 2.3(b)).
Land held for property development consists of reclaimed land,
freehold land, leasehold land and land use rights on which
development work has not been commenced along with related costs on
activities that are necessary to prepare the land for its intended
use. Land held for property development is transferred to
work-in-progress when development activities have commenced.
Work-in-progress comprises all costs directly attributable to
property development activities or that can be allocated on a
reasonable basis to these activities.
Upon completion of development, unsold completed development
properties are transferred to stock of completed units.
3.10 Impairment
(a) Loans and receivables
The Group considers evidence of impairment for loans and
receivables at a specific asset level. All individually significant
receivables are assessed for specific impairment.
An impairment loss in respect of loans and receivables is
recognised in profit or loss and is measured as the difference
between the asset's carrying amount and the present value of
estimated future cash flows (excluding future credit losses that
had not been incurred) discounted at the asset's original effective
interest rate. The carrying amount of the asset is reduced and the
loss is recognised in the statement of comprehensive income within
administrative expenses.
When a subsequent event (e.g. repayment by a debtor) causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss. The impairment loss is
reversed, to the extent that the debtor's carrying amount does not
exceed what the carrying amount would have been had the impairment
not been recognised at the date the impairment is reversed.
(b) Non-financial assets
The carrying amounts of non-financial assets (except for
inventories and deferred tax asset) are reviewed at the end of each
reporting date to determine whether there is any indication of
impairment.
If any such indication exists, then the asset's recoverable
amount is estimated. For the purpose of impairment testing, assets
are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets
(the "cash-generating unit"). The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to
cash-generating units that are expected to benefit from the
synergies of the combination. Goodwill is tested for impairment on
an annual basis.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an
asset or its cash-generating unit exceeds its recoverable
amount.
Impairment losses are recognised in profit or loss. Impairment
losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to
the units and then to reduce the carrying amount of the other
assets in the unit (groups of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For
other assets, impairment losses recognised in prior periods are
assessed at the end of each reporting period for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount since the last impairment loss was
recognised. An impairment loss is reversed only to the extent that
the asset's carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. Reversals
of impairment losses are credited to profit or loss in the year in
which the reversals are recognised.
(c) Equity instruments
Instruments classified as equity are measured at cost on initial
recognition and are not re-measured subsequently.
(i) Ordinary shares
Ordinary shares are redeemable only at the Company's options and
are classified as equity. Distributions thereon are recognised as
distributions within equity.
(ii) Management shares
Management shares are classified as equity and are
non-redeemable.
3.11 Employee Benefits
(a) Short-term employee benefits
Short-term employee benefit obligations in respect of salaries,
annual bonuses, paid annual leave and sick leave are measured on an
undiscounted basis and are expensed as the related service is
provided.
A liability is recognised for the amount expected to be paid
under short-term cash bonus or profit-sharing plans if the Group
has a present legal or constructive obligation to pay this amount
as a result of past service provided by the employee and the
obligation can be estimated reliably.
(b) State plans
Certain companies in the Group maintain a defined contribution
plan in Malaysia and Vietnam for providing employee benefits, which
is required by laws in Malaysia and Vietnam respectively. The
retirement benefit plan is funded by contributions from both the
employees and the companies to the employees' provident fund. The
Group's contributions to employees' provident fund are charged to
profit or loss in the year to which they relate.
3.12 Finance Costs
Finance costs directly attributable to the acquisition,
construction or production of qualifying assets, are capitalised to
the cost of those assets. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for
capitalisation.
Any unsold unit is not a qualifying asset because the asset is
ready for its intended sale in its current condition. The unsold
unit fails to meet the definition of qualifying asset under IAS 23
and accordingly, no capitalisation of borrowing costs.
All sold units are not a qualifying asset to the developer as
the control of the asset has been transferred to customers over
time. No capitalisation borrowing costs relating to assets that it
no longer controls and recognises.
All other finance costs are recognised in profit or loss in the
period in which they are incurred using the effective interest
method.
3.13 Commitments and Contingencies
Commitments and contingent liabilities are disclosed in the
financial statements and described in Note 33. They are disclosed
unless the possibility of an outflow of resources embodying
economic benefits is remote. A contingent asset is not recognised
in the financial statements but disclosed when an inflow of
economic benefits is probable.
3.14 Segment Reporting
Segmental information represents the level at which financial
information is reported to the Board of Directors, being the chief
operating decision makers as defined in IFRS 8. The Directors
determine the operating segments based on reports prepared by their
staff for strategic decision making and resource allocation. For
management purposes, the Group is organised into project units as
operation segments set out in Note 5.2.
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components
Segment capital expenditure is the total cost incurred during
the year to acquire property, plant and equipment, and intangible
assets other than goodwill.
3.15 Right-of-use assets and lease liabilities
A right-of-use asset and a lease liability are recognized at the
commencement date of a lease. The right-of-use asset is initially
measured at cost comprising the initial amount of the lease
liability plus payments made before the lease commenced and any
direct costs less any incentives received. The right-of-use asset
is subsequently depreciated using the straight-line method from the
commencement of the lease to the earlier of the end of the lease
term or the end of the useful life of the asset. The right-of-use
asset is also reduced for impairment losses, if any, and adjusted
for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value
of the lease payments at the commencement date discounted using the
Group's incremental borrowing rate of between 1% and 6%, and is
subsequently measured at amortised cost using the effective
interest method. The lease liability is re-measured when there is a
change in the future lease payments, and a corresponding adjustment
is made to the right-of-use asset.
The Group has elected not to recognise right-of-use assets and
lease liabilities for short term leases of plant and machinery that
have a lease term of 12 months or less and leases of low value
including leases of office equipment. The lease payments associated
with these leases are recognised as an expense on a straight-line
basis over the lease term.
3.16 Asset held for sale and discontinued operation
(a) Asset held for sale
An asset (or disposal group) is classified as held for sale if
it is highly probable that its carrying amount will be recovered
through a sale transaction rather than through continuing use and
the asset (or disposal group) is available for sale in its present
condition. A disposal group is a group of assets to be disposed of
together as a group in a single transaction, and liabilities
directly associated with those assets that will be transferred in
the transaction.
When the Group is committed to a sale plan involving loss of
control of a subsidiary, all the assets and liabilities of that
subsidiary are classified as held for sale when the above criteria
for classification as held for sale are met, regardless of whether
the group will retain a non-controlling interest in the subsidiary
after the sale.
Immediately before classification as held for sale, the
measurement of the assets (and all individual assets and
liabilities in a disposal group) is brought up-to-date in
accordance with the accounting policies before the classification.
Then, on initial classification as held for sale and until
disposal, the noncurrent assets (except for certain assets as
explained below), or disposal groups, are recognised at the lower
of their carrying amount and fair value less costs to sell. The
principal exceptions to this measurement policy so far as the
financial statements of the Group and the Company are concerned are
deferred tax assets, assets arising from employee benefits,
financial assets (other than investments in subsidiaries,
associates and joint ventures) and investment properties. These
assets, even if held for sale, would continue to be measured in
accordance with the policies set out elsewhere in Note 3.
Impairment losses on initial classification as held for sale,
and on subsequent remeasurement while held for sale, are recognised
in profit or loss. As long as a current asset is classified as held
for sale, or is included in a disposal group that is classified as
held for sale, the asset is not depreciated or amortised.
An asset held for sale (or disposal group) is derecognized from
the date that control ceases.
(b) Discontinued operation
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which represents a separate major
line of business or geographical area of operations, or is part of
a single co-ordinated plan to dispose of a separate major line of
business or geographical area of operations, or is a subsidiary
acquired exclusively with a view to
resale.
Classification as a discontinued operation occurs upon disposal
or when the operation meets the criteria to be classified as held
for sale (see (i) above), if earlier. It also occurs if the
operation is abandoned.
Where an operation is classified as discontinued, a single
amount is presented on the face of the statement of profit or loss,
which comprises:
- the post-tax profit or loss of the discontinued operation; and
- the post-tax gain or loss recognised on the measurement to
fair value less costs to sell, or on the disposal of the assets, or
disposal group(s) constituting the discontinued operation.
4 FINANCIAL INSTRUMENTS
The Group's principal financial instruments comprise cash and
cash equivalents, trade and other receivables, trade and other
payable, amount due to non-controlling interest, medium term notes,
loan and borrowings. The Group's accounting policies and method
adopted, including the criteria for recognition, the basis on which
income and expenses are recognised in respect of each class of
financial assets, financial liability and equity instrument are set
out in Note 3.6.
4.1 Financial Risk Management Objectives and Policies
The Group's operations and debt financing arrangements expose it
to a variety of financial risks: credit risk, liquidity risk and
price risk (including foreign exchange risk, and interest rate
risk). The Group's financial risk management policies and their
implementation on a group-wide basis are under the direction of the
Board of Aseana Properties Limited.
The Group's treasury policies are formulated to manage the
financial impact of fluctuations in interest rates and foreign
exchange rates to minimise the Group's financial risks. The Group
has not used derivative financial instruments, principally interest
rate swaps and forward foreign exchange contracts for hedging
transactions. The Group does not envisage using these derivative
hedging instruments in the short term as it is the Group's policy
to borrow in the currency to match the revenue stream to give it a
natural hedge against foreign currency fluctuation. The derivative
financial instruments will only be used under the strict direction
of the Board. It is also the Group's policy not to enter into
derivative transactions for speculative purposes.
4.2 Credit Risk
The Group's credit risk is primarily attributable to deposits
with banks and credit exposures to customers. The Group has credit
policies in place and the exposures to these credit risks are
monitored on an ongoing basis. The Group manages its deposits with
banks and financial institutions by monitoring credit ratings and
limiting the aggregate risk to any individual counterparty. At 31
December 2022, 100% (2021: 100%) of deposits and cash balances were
placed at banks and financial institutions with credit ratings of
no less than A (Moody's Rating Agency Malaysia). Management does
not expect any counterparty to fail to meet its obligations.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and
contract assets have been grouped based on shared credit risk
characteristics and the days past due. The contract assets relate
to unbilled work in progress and have substantially the same risk
characteristics as the trade receivables for the same types of
contracts. The Group has therefore concluded that the expected loss
rates for trade receivables are a reasonable approximation of the
loss rates for the contract assets.
In respect of credit exposures to customers, the Group receives
progress payments from sales of commercial and residential
properties to individual customers prior to the completion of
transactions. In the event of default by customers, the Group
companies undertake legal proceedings to recover the properties.
The Group has limited its credit exposure to customers due to
secured bank loans taken by the purchasers. At 31 December 2022,
there was no significant concentration of credit risk within the
Group.
The Group's exposure to credit risk arising from total debtors
was set out in Note 21 and totals US$ 11.3 million (2021: US$ 13.5
million). The Group's exposure to credit risk arising from deposits
and balances with banks is set out in Note 22 and totals US$ 7.3
million (2021: US$ 7.1 million).
Financial guarantees
The Company provides unsecured financial guarantee to banks in
respect of banking facilities granted to certain subsidiaries, as
set out in Note 30.
At the end of the reporting period, the maximum exposure to
credit risk as represented by the outstanding banking and credit
facilities of the subsidiaries is as follows:
2022 2021
Company US$'000 US$'000
------------------------------------------ -------- --------
Financial institutions for bank
facilities granted to its subsidiaries 32,859 43,998
------------------------------------------ -------- --------
At the end of the reporting period there was no indication that
any subsidiary would default on repayment.
4.3 Liquidity Risk
The Group raises funds as required on the basis of budgeted
expenditure and inflows for the next twelve months with the
objective of ensuring adequate funds to meet commitments associated
with its financial liabilities. When funds are sought, the Group
balances the costs and benefits of equity and debt financing
against the developments to be undertaken. At 31 December 2022 the
Group's borrowings to fund the developments had terms of less than
ten years.
Cash flows are monitored on an on-going basis. The Group manages
its liquidity needs by monitoring scheduled debt servicing payments
for long term and short term financial liabilities as well as cash
out flows due in its day-to-day operations while ensuring
sufficient headroom on its undrawn committed borrowing facilities
at all times so that borrowing limits and covenants are not
breached. Capital investments are committed only after confirming
the source of funds, e.g. securing financial liabilities.
Management is of the opinion that most of the bank borrowings
can be renewed or re-financed based on the strength of the Group's
earnings, cash flow and asset base.
It is not expected that the cash flows included in the maturity
analysis could occur significantly earlier, or at a significantly
different amount.
The maturity profile of the Group's financial liabilities at the
statement of financial position date, based on the contracted
undiscounted payments, were as follows:
Carrying Contractual Contractual Under More than
amount interest rate cash flows 1 year 1 - 2 years 2 - 5 years 5 years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- --------------- --------------- --------------- -------- ------------ ------------ ----------
At 31 December
2022
Finance lease
liabilities - - - - - - -
Interest bearing
loans and
borrowings 32,859 5.5%-12.0% 34,417 34,417 - - -
Trade and other
payables 18,089 - 18,089 18,089 - - -
Amount due to
non-controlling
interests 1,981 - 1,981 1,981 - - -
----------------- --------------- --------------- --------------- -------- ------------ ------------ ----------
52,929 - 54,487 54,487 - - -
----------------- --------------- --------------- --------------- -------- ------------ ------------ ----------
At 31 December
2021 (restated
*)
Finance lease
liabilities 14 2.50%-3.50% 14 14 - - -
Interest bearing
loans and
borrowings 43,998 4.5%-12.0% 46,122 46,122 - - -
Trade and other
payables
(restated *) 17,050 - 17,050 17,050 - - -
Amount due to
non-controlling
interests 1,952 - 1,952 1,952 - - -
63,014 - 65,138 65,138 - - -
----------------- --------------- --------------- --------------- -------- ------------ ------------ ----------
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
The above table excludes current tax liabilities and contract
liabilities.
4.4 Market Risk
(a) Foreign Exchange Risk
Entities within the Group are exposed to foreign exchange risk
from future commercial transactions and net monetary assets and
liabilities that are denominated in a currency that is not the
entity's functional currency. The foreign currency exposure is not
hedged.
The Group maintains a natural hedge, whenever possible, by
borrowing in the currency of the country in which the property or
investment is located or by borrowing in currencies that match the
future revenue stream to be generated from its investments.
Management monitors the foreign currency exposure closely and
takes necessary actions in consultation with the bankers to avoid
unfavourable exposure.
The Group is exposed to foreign currency risk on cash and cash
equivalents which are denominated in currencies other than the
functional currencies of the relevant Group entities.
The Group's exposure to foreign currency risk on cash and cash
equivalents in currencies other than the functional currencies of
the relevant Group entities at year end are as follows:
2022 2021
US$'000 US$'000
------------------ -------- --------
US Dollar 3,018 2,870
Ringgit Malaysia 4,241 4,244
Others - -
------------------- -------- --------
7,259 7,114
------------------ -------- --------
At 31 December 2022, if cash and cash equivalents denominated in
a currency other than the functional currencies of the Group
entities strengthened/ (weakened) by 10% and all other variables
were held constant, the effects on the Group's profit or loss and
equity expressed in US$ would have been US$424,000/ (US$424,000)
(2021: US$424,400/ (US$424,400)).
Currency risks as defined by IFRS 7 arise on account of monetary
assets and liabilities being denominated in a currency that is not
the functional currency. Differences resulting from the translation
of financial statements into the Group's presentation currency are
not taken into consideration.
Subsequent to year end, there are no significant monetary
balances held by group companies that are denominated in a
non-functional currency.
(b) Interest Rate Risk
The Group's policy is to minimise interest rate risk on bank
loans and borrowings using a mix of fixed and variable rate debts
that represent market rates. The Group prefers to maintain
flexibility on the desired mix of fixed and variable interest rates
as this will depend on the economic environment, the type of
borrowings available and the funding requirements of the project
when a decision is to be made.
The interest rate profile of the Group's significant
interest-bearing financial instrument, based on carrying amounts at
the end of the reporting period was:
2022 2021
US$'000 US$'000
---------------------------- -------- --------
Fixed rate instruments:
Financial assets 2,473 2,470
Financial liabilities 32,859 44,012
Floating rate instruments:
Financial liabilities - -
----------------------------- -------- --------
The Group's exposure to the risk of changes in market interest
rates relates primarily to the Group's liabilities with a floating
interest rate. The fixed and floating interest rates were not
hedged and would therefore expose the Group to cash flow interest
rate risk. Borrowings at fixed rate represent 100% (2021: 100%) of
the Group's total borrowings at 31 December 2022.
Interest rate risk is reported internally to key management
personnel via a sensitivity analysis, which is prepared based on
the exposure to variable interest rates for non-derivative
instruments at the statement of financial position date. For
variable rate borrowings, the analysis is prepared assuming that
the amount of liabilities outstanding at the statement of financial
position date will be outstanding for the whole year. A 100 basis
point increase or decrease is used and represents the management's
assessment of the reasonable possible change in interest rate.
Sensitivity analysis for floating rate instrument
At 31 December 2022, if the interest rate had been 100 basis
point lower/ higher and all other variables were held constant,
this would (decrease)/increase the Group loss for the year by
approximately (US$ Nil)/US$ Nil (2021: would (decrease)/ increase
the Group loss for the year by approximately (US$ Nil)/US$ Nil.
4.5 Fair Values
The carrying amount of trade and other receivables, deposits,
cash and cash equivalents, trade and other payables and accruals of
the Group approximate their fair values in the current and prior
years due to relatively short term nature of these financial
instruments.
The table below analyses financial instruments carried at fair
value and those not carried at fair value, along with their
carrying amounts shown in the statement of financial position:
Fair value of financial instruments Fair value of financial instruments Total
2022 carried at fair value not carried at fair value fair Carrying
----- ------------------------------------ ------------------------------------ ------ ---------
Level Level Level Level Level Level
US$'000 1 2 3 Total 1 2 3 Total value amount
-------------------- ------- ------- ------- ------- ------- ------- --------- --------- --------- ---------
Financial
liabilities
Amount due to
non-controlling
interests - - - - - - (1,981) (1,981) (1,981) (1,981)
Bank loans and
borrowings - - - - - - (1,595) (1,595) (1,595) (1,595)
Finance lease
liabilities - - - - - - - - - -
Medium term notes - - - - - - (31,264) (31,264) (31,264) (31,264)
------- ------- ------- ------- ------- ------- --------- --------- --------- ---------
- - - - - - (34,840) (34,840) (34,840) (34,840)
======= ======= ======= ======= ======= ============================ ========= ========= ========= =========
Fair value of financial instruments Fair value of financial instruments Total
2021 carried at fair value not carried at fair value fair Carrying
Level Level Level Level Level Level
US$'000 1 2 3 Total 1 2 3 Total value amount
-------------------- ------- ------- ------- ------- ------- ------- --------- --------- --------- ---------
Financial
liabilities
Amount due to
non-controlling
interests - - - - - - (1,952) (1,952) (1,952) (1,952)
Bank loans and
borrowings - - - - - - (1,681) (1,681) (1,681) (1,681)
Finance lease
liabilities - - - - - - (14) (14) (14) (14)
Medium term notes - - - - - - (42,317) (42,317) (42,317) (42,317)
------- ------- ------- ------- ------- ------- --------- --------- --------- ---------
- - - - - - (45,964) (45,964) (45,964) (45,964)
======= ======= ======= ======= ======= ============================ ========= ========= ========= =========
Policy on transfer between levels
The fair value on an asset to be transferred between levels is
determined as of the date of the event or change in circumstances
that caused the transfer.
Level 1 fair value
Level 1 fair value is derived from quoted price (unadjusted) in
an active market for identical financial assets or liabilities that
the entity can access at the measurement date.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted
prices included within Level 1 that are observable for the
financial assets or liabilities, either directly or indirectly.
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for
the financial assets and liabilities.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and 2 fair values
during the financial year (2021: no transfer in either
direction).
Transfers between Level 2 and Level 3 fair values
There has been no transfer in either direction during the
financial year (2021: no transfer in either direction).
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is
calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at
the end of the reporting period. At 31 December 2022, the interest
rate used to discount estimated cash flows of the medium term notes
is 7.48% (2021: 7.00%).
4.6 Capital Management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns to shareholders and benefits to other stakeholders
and to maintain an optimal capital structure to reduce cost of
capital.
The capital structure of the Group consisted of cash and cash
equivalents, loans and borrowings, medium term notes and equity
attributable to equity holders of the parent, comprising issued
share capital and reserves, were as follows:
2021
(Restated
2022 *)
US$'000 US$'000
---------------------------------------- --------- ------------
Cash and cash equivalents 7,259 7,114
Loans and borrowings and finance lease
liabilities (1,595) (1,695)
Medium term notes (31,264) (42,317)
Equity attributable to equity holders
of the parent (73,208) (91,659)
Total capital (98,808) (128,557)
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debts.
Consistent with others in the industry, the Group monitors
capital on the basis of net debt-to-equity ratio.
Net debt-to-equity ratio is calculated as a total of
interest-bearing borrowings less held-for-trading financial
instrument and cash and cash equivalents to the total equity.
The net debt-to-equity ratios at 31 December 2022 and 31
December 2021 were as follows:
2022 2021
US$'000 US$'000
------------------------------------------------ ---------------------- ----------------------
Total borrowings and finance lease liabilities 32,859 44,012
Less: Cash and cash equivalents (Note
22) (7,259) (7,114)
Net debt 25,600 36,898
Total equity 67,804 89,013
Net debt-to-equity ratio 0.38 0.41
5 REVENUE AND SEGMENTAL INFORMATION
The Group's operating revenue for the year was mainly
attributable to the sale of completed units in Malaysia.
Income earned from hotel, mall and hospital operations are
included in other income in line with management's intention to
dispose of the properties.
5.1 Revenue recognised during the year as follows:
2022 2021
US$'000 US$'000
------------------------- -------- --------
Sale of completed units 980 595
------------------------- -------- --------
980 595
5.2 Segmental Information
2022 2021
Timing of revenue recognition US$'000 US$'000
-------------------------------------- -------- --------
Properties transferred at a point in
time 980 595
Properties transferred over time - -
-------------------------------------- -------- --------
980 595
Segmental information represents the level at which financial
information is reported to the Board of Directors, being the chief
operating decision makers as defined in IFRS 8. The Directors
determine the operating segments based on reports reviewed and used
by their staff for strategic decision making and resource
allocation. For management purposes, the Group is organised into
project units.
The Group's reportable operating segments are as follows:
(i) Investment Holding Companies - investing activities;
(ii) Ireka Land Sdn. Bhd. - developed Tiffani ("Tiffani") by i-ZEN;
(iii) ICSD Ventures Sdn. Bhd. - owns and operates Harbour Mall
Sandakan ("HMS") and the Sandakan hotel asset (formerly Four Points
by Sheraton Sandakan Hotel) ("SHA");
(iv) Amatir Resources Sdn. Bhd. - developed SENI Mont' Kiara ("SENI"); and
(v) Urban DNA Sdn. Bhd.- developed The RuMa Hotel and Residences ("The RuMa").
Other non-reportable segments comprise the Group's development
projects. None of these segments meets any of the quantitative
thresholds for determining reportable segments in 2022 and
2021.
Information regarding the operations of each reportable segment
is in Note 5.3. The Directors monitor the operating results of each
segment for the purpose of performance assessments and making
decisions on resource allocation. Performance is based on segment
gross profit/(loss) and profit/(loss) before taxation, which the
Executive Management believes are the most relevant in evaluating
the results relative to other entities in the industry. Segment
assets and liabilities are presented inclusive of inter-segment
balances and inter-segment pricing is determined on an arm's length
basis.
The Group's revenue generating development projects are in
Malaysia.
5.3 Analysis of the Group's reportable operating segments is as follows:
Operating Segments - year ended 31 December 2022
Continuing operations
----------------------------------------------------------------
The
Ireka ICSD Amatir RuMa Urban
Investment Land Ventures Resources Hotel DNA Total
Holding Sdn. Sdn. Sdn. KL Sdn. Sdn. continuing Discontinued
Companies Bhd. Bhd. Bhd. Bhd. Bhd. operations Operations Total
US$'000 US$'000 US$'000 US$'000 US$'000 S$'000 US$'000 US$'000 US$'000
--------------- ----------- -------- --------- ---------- -------- -------- ----------- ------------- ---------
Segment
(loss)/profit
before
taxation 826 (5) (9,061) (1,789) (1,792) (4,898) (16,719) - (16,719)
=============== =========== ======== ========= ========== ======== ======== =========== ============= =========
Included in
the measure
of segment
(loss)/profit
are:
Revenue - - - - - 980 980 - 980
Other income
from hotel
operations - - - - 8,169 - 8,169 - 8,169
Other income
from mall
operations - - 2,098 - - - 2,098 - 2,098
Other income
from hospital
operations - - - - - - - - -
Expenses from
hotel
operations - - (310) - (9,859) - (10,169) - (10,169)
Expenses from
mall
operations - - (1,251) - - - (1,251) - (1,251)
Expenses from
hospital
operations - - - - - - - - -
Depreciation
of property,
plant and
equipment - - (10) - (50) - (60) - (60)
Finance costs - - (1,172) (192) - (1,933) (3,297) - (3,297)
Finance income 1,462 - 47 413 - 1 1,923 - 1,923
=============== =========== ======== ========= ========== ======== ======== =========== ============= =========
Segment assets 9,331 60 46,882 704 965 89,571 147,513 - 147,513
=============== =========== ======== ========= ========== ======== ======== =========== ============= =========
Segment
liabilities 459 3 1,294 2,511 6,758 45,205 56,230 - 56,230
=============== =========== ======== ========= ========== ======== ======== =========== ============= =========
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Profit or loss US$'000
------------------------------------ ---------
Total loss for reportable segments (16,719)
Other non-reportable segments (856)
Depreciation 1
Finance income (47)
Finance costs 47
Consolidated loss before taxation (17,574)
==================================== =========
Additions
Finance Finance Segment Segment to non-current
US$'000 Revenue Depreciation costs income assets liabilities assets
---------------------- -------- ------------- -------- -------- -------- ------------- ----------------
Total reportable
segment 980 (60) (3,297) 1,923 147,513 56,230 39
Other non-reportable
segments - 1 (47) 47 9,660 33,139 -
---------------------- -------- ------------- -------- -------- -------- ------------- ----------------
Consolidated total 980 (59) (3,344) 1,970 157,173 89,369 39
====================== ======== ============= ======== ======== ======== ============= ================
Operating Segments - year ended 31 December 2021 (restated
*)
Continuing operations
-----------------------------------------------------------------
The
Ireka ICSD Amatir RuMa Urban
Investment Land Ventures Resources Hotel DNA Total
Holding Sdn. Sdn. Sdn. KL Sdn. Sdn. continuing Discontinued
Companies Bhd. Bhd. Bhd. Bhd. Bhd. operations operations Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------- ----------- -------- --------- ---------- --------- -------- ----------- ------------- ----------
Segment
(loss)/profit
before
taxation (1.854)* (2) (580) 360 (3,825)* (2,030) (7,931)* (3,087) (11,017)*
=============== =========== ======== ========= ========== ========= ======== =========== ============= ==========
Included in
the measure
of segment
(loss)/profit
are:
Revenue - - - - - 595 595 - 595
Other income
from hotel
operations - - - - 2,679 - 2,679 - 2,679
Other income
from mall
operations - - 2,007 - - - 2,007 - 2,007
Other income
from hospital
operations - - - - - - - 12,768 12,768
Expenses from
hotel
operations - - (255) - (4,042) - (4,297) - (4,297)
Expenses from
mall
operations - - (1,072) - - - (1,072) - (1,072)
Expenses from
hospital
operations - - - - - - - (11,144) (11,144))
Depreciation
of property,
plant and
equipment - - (43) - (164) - (207) - (207)
Finance costs (172) - (1,290) (203) (2) (1,909) (3,576) (5,358) (8,934)
Finance income 1,259* - 45 600 - 20 1,924* 335 2,259*
=============== =========== ======== ========= ========== ========= ======== =========== ============= ==========
Segment assets 8,096* 78 58,322 3,212 703 95,243 165,654* 100,812 266,466*
=============== =========== ======== ========= ========== ========= ======== =========== ============= ==========
Segment
liabilities 3,659 3 1,589 2,785 5,050* 44,246 57,332* 86,347 143,679*
=============== =========== ======== ========= ========== ========= ======== =========== ============= ==========
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Profit or loss US$'000
------------------------------------------------- ---------
Total loss for reportable segments (restated *) (7,931)*
Other non-reportable segments 2,157
Depreciation -
Finance income (45)
Finance costs 45
Consolidated loss before taxation (restated *) (5,774)*
================================================= =========
Additions
Finance Finance Segment Segment to non-current
US$'000 Revenue Depreciation costs income assets liabilities assets
-------------------------- -------- ------------- -------- -------- --------- -------------- ----------------
Total reportable segment
(restated *) 595 (207) (3,576) 1,924* 165,654* 57,332* 42
Other non-reportable
segments - 109 (45) 45 24,712 44,021 -
-------------------------- -------- ------------- -------- -------- --------- -------------- ----------------
Consolidated total
(restated *) 595 (98) (3,621) 1,969* 190,366* 101,353* 42
========================== ======== ============= ======== ======== ========= ============== ================
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
Geographical Information - year ended 31 December 2022
Continuing
operations
------------
Total continuing Discontinued
Malaysia operations operation Total
US$'000 US$'000 US$'000 US$'000
-------------------- ------------ ----------------- ------------- --------
Revenue 980 980 - 980
Non-current assets 5,380 5,380 - 5,380
==================== ============ ================= ============= ========
In the financial year ended 31 December 2022, no single customer
exceeded 10% of the Group's total revenue.
Geographical Information - year ended 31 December 2021
Continuing
operations
------------
Total continuing Discontinued
Malaysia operations operation Total
US$'000 US$'000 US$'000 US$'000
-------------------- ------------ ----------------- ------------- --------
Revenue 595 595 - 595
Non-current assets 5,662 5,662 3,919 9,581
==================== ============ ================= ============= ========
In the financial year ended 31 December 2021, no single customer
exceeded 10% of the Group's total revenue.
6 COST OF SALES
2022 2021
US$'000 US$'000
------------------------------- -------- --------
Direct costs attributable to:
Completed units (Note 20) 640 318
7 OTHER INCOME
2022 2021
US$'000 US$'000
--------------------------------------- -------- --------
Rental income 121 78
Other income from hotel operations
(a) 8,169 2,679
Other income from mall operations (b) 2,098 2,007
Sundry income 583 913
10,971 5,677
(a) Other income from hotel operations
The income relates to the hotel operations of the Sandakan Hotel
Asset which is owned by a subsidiary of the Company, ICSD Ventures
Sdn. Bhd. The income earned from hotel operations is included in
other income in line with management's intention to dispose of the
hotel.
(b) Other income from mall operations
The income relates to the operation of Harbour Mall Sandakan
which is owned by a subsidiary of the Company, ICSD Ventures Sdn.
Bhd. The income earned from mall operations is included in other
income in line with management's intention to dispose of the
mall.
8 FOREIGN EXCHANGE GAIN/(LOSS)
2022 2021
US$'000 US$'000
----------------------------------------- -------- --------
Foreign exchange gain/(loss) comprises:
Realised foreign exchange loss (6) (1)
Unrealised foreign exchange gain/(loss) (1,689) 346
----------------------------------------- -------- --------
(1,695) 345
9 STAFF COSTS
2022 2021
US$'000 US$'000
-------------------------------------------- -------- --------
Wages, salaries and others (including
key management personnel) 5,259 2,817
Employees' provident fund, social security
and other pension costs 46 40
-------------------------------------------- -------- --------
5,305 2,857
The Company has no executive Directors or employees under its
employment. As of the year ended 31 December 2022, the subsidiaries
of the Group have a total of 235 (2021: 573) employees.
10 FINANCE INCOME/(COSTS)
2021
(Restated
2022 *)
US$'000 US$'000
------------------------------- -------- ------------
Interest income from banks 508 588
Accrued interest 1,462 1,381
Interest on bank loans (239) (841)
Lease interest - (2)
Interest on medium term notes (3,105) (2,778)
------------------------------- -------- ------------
(1,374) (1,652)
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
Accrued interest represents interest on a contract payment by a
subsidiary of Ireka Corporation Berhad. For more detailed
information see Note 31.
11 NET LOSS BEFORE TAXATION
Net loss before taxation is stated after
charging/(crediting):
2022 2021
US$'000 US$'000
----------------------------------------- -------- --------
Auditor's remuneration 96 171
Directors' fees/emoluments 265 291
Depreciation of property, plant and
equipment 58 54
Expenses of hotel operations 10,170 4,298
Expenses of mall operations 1,251 1,405
Unrealised foreign exchange loss/(gain) 1,689 (346)
Realised foreign exchange loss 6 1
Impairment of amount due from a related
party 4,778 -
Impairment of inventory 8,620 -
Gain on sale of discontinued operations (2,702) -
----------------------------------------- -------- --------
12 TAXATION
2022 2021
US$'000 US$'000
------------------------------------------------ -------- --------
Current tax expense - Current year 85 70
- Prior year 217 119
Deferred tax charge - Current year - -
- Prior year - (48)
------------------------------------------------ -------- --------
Total tax expense/(income) for the
year 302 141
The numerical reconciliation between the income tax
(income)/expense and the product of accounting results multiplied
by the applicable tax rate is computed as follows:
2021
(Restated
202 2 *)
US$'000 US$'000
-------------------------------------------- --------- ------------
Net loss before taxation (17,574) (5,774)
Income tax at a rate of 24% (2021: 24%) (4,218) (1,386)
Add:
Tax effect of expenses not deductible
in determining taxable profit 2,379 1,666
Current year losses and other tax benefits
for which no deferred tax asset was
recognised 3,670 1,312
Tax effect of different tax rates in
subsidiaries - -
Less:
Tax effect of income not taxable in
determining taxable profit (1,746) (1,522)
Under provision in respect of prior
period/year 217 71
-------------------------------------------- --------- ------------
Total tax expense/(income) for the
year 302 141
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
The applicable corporate tax rate in Malaysia is 24% (2021:
24%).
The Company is treated as a tax resident of Jersey for the
purpose of Jersey tax laws and is subject to a tax rate of 0%
(2021: 0%).
A Goods and Services Tax was introduced in Jersey in May 2008.
The Company has been registered as an International Services Entity
so it does not have to charge or pay local GST. The cost for this
registration is GBP200 per annum.
13 OTHER COMPREHENSIVE (LOSS)/INCOME
Items that are or may be reclassified
subsequently to profit or loss, net 2022 2021
of tax US$'000 US$'000
------------------------------------------ --------- ---------
Foreign currency translation differences
for foreign operations
Losses arising during the year (2,440) (3,584)
------------------------------------------ --------- ---------
(2,440) (3,584)
14 LOSS PER SHARE
Basic and diluted loss per ordinary share
The calculation of basic and diluted loss per ordinary share for
the year ended 31 December 2022 was based on the loss attributable
to equity holders of the parent and ordinary shares outstanding and
held by shareholders of the Company, calculated as below:
2021
(Restated
2022 *)
US$'000 US$'000
-------------------------------------- ------------------------ -----------------------
Loss attributable to equity holders
of the parent
* continuing operations (15,867) (4,122)
* discontinued operations - (1,632)
-------------------------------------- ------------------------ -----------------------
(15,867) (5,754)
-------------------------------------- ------------------------ -----------------------
Number of shares (thousand shares) * 198,691 198,691
-------------------------------------- ------------------------ -----------------------
Loss per share
Basic and diluted (US cents)
* continuing operations (7.99) (2.08)
* discontinued operations - (0.82)
-------------------------------------- ------------------------ -----------------------
(7.99) (2.90)
-------------------------------------- ------------------------ -----------------------
* The Company currently holds 13,334,000 Treasury Shares which
are deducted from the total number of shares for the purpose of
calculating loss per share. For details of the Treasury Shares,
please refer to the description at Note 24.
The diluted loss per share was not applicable as there were no
dilutive potential ordinary shares outstanding at the end of the
reporting period.
15 NON-CONTROLLING INTERESTS
Non-controlling interests in subsidiaries
The Group's subsidiaries that have material non-controlling
interests ("NCI") are as follows:
The RuMa Other individually
Urban DNA Hotel KL immaterial
Sdn. Bhd. Sdn. Bhd. subsidiaries Total
2022 US$'000 US$'000 US$'000 US$'000
----------------------- ----------- ----------- ------------------- --------
NCI percentage of
ownership interest
and voting interest 30% 30%
Carrying amount of
NCI (259) (5,180) 35 (5,404)
Loss allocated to NCI (1,536) (342) (6) (1,884)
----------------------- ----------- ----------- ------------------- --------
Summarised financial information before intra-group
elimination
The RuMa
Urban DNA Hotel KL
Sdn. Bhd. Sdn. Bhd.
US$'000 US$'000
As at 31 December 2022
Non-current assets 827 24
Current assets 84,833 941
Non-current liabilities (84,590) (11,518)
Current liabilities (3,957) (6,657)
----------------------------------------- -----------
Net assets (2,887) (17,210)
----------------------------------------- ----------- -----------
Year ended 31 December 2022
Revenue 980 -
Loss for the year (4,898) (1,792)
Total comprehensive loss (5,121) (1,142)
Cash flows used in operating activities (1,203) (63)
Cash flows from/(used in) investing
activities - (9)
Cash flows (used in)/from financing
activities 991 299
----------------------------------------- ----------- -----------
Net increase in cash
and cash equivalents (212) 227
----------------------------------------- ----------- -----------
The RuMa Other individually
Urban DNA Hotel KL immaterial
Sdn. Bhd. Sdn. Bhd. subsidiaries Total
2021 (Restated *) US$'000 US$'000 US$'000 US$'000
----------------------- ---------------- ---------------- ------------------- --------
NCI percentage of
ownership interest
and voting interest 30% 30%
Carrying amount of
NCI 1,277 (4,838) 915 (2,646)
Loss allocated to NCI (711) (1,020) (1,456) (3,248)
----------------------- ---------------- ---------------- ------------------- --------
Summarised financial information before intra-group
elimination
The RuMa
Urban DNA Hotel KL
Sdn. Bhd. Sdn. Bhd.
US$'000 US$'000
As at 31 December 2021 (restated
*)
Non-current assets 522 68
Current assets 94,212 635
Non-current liabilities (84,570) (11,779)
Current liabilities (5,907) (5,049)
----------------------------------------- -----------
Net assets 4,257 (16,125)
----------------------------------------- ----------- -----------
Year ended 31 December 2021 (restated
*)
Revenue 595 -
Loss for the year (2,149) (3,824)
Total comprehensive loss (2,371) (3,401)
Cash flows used in operating activities (532) (1,780)
Cash flows from/(used in) investing
activities 1,702 (37)
Cash flows (used in)/from financing
activities (1,107) 1,828
----------------------------------------- ----------- -----------
Net increase in cash and
cash equivalents 63 11
----------------------------------------- ----------- -----------
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
16 PROPERTY, PLANT AND EQUIPMENT
Furniture,
Fittings
& Equipment Motor Vehicles Total
US$'000 US$'000 US$'000
-------------------------- ------------- --------------- --------
Cost
At 1 January 2022 272 29 301
Exchange adjustments (13) (1) (14)
Addition 39 - 39
At 31 December 2022 298 28 326
-------------------------- ------------- --------------- --------
Accumulated Depreciation
At 1 January 2022 170 27 197
Exchange adjustments (8) (1) (9)
Charge for the year 59 - 59
At 31 December 2022 221 26 247
-------------------------- ------------- --------------- --------
Net carrying amount at
31 December 2022 77 2 79
-------------------------- ------------- --------------- --------
Cost
At 1 January 2021 239 30 269
Exchange adjustments (9) (1) (10)
Addition 42 - 42
At 31 December 2021 272 29 301
-------------------------- ------------- --------------- --------
Accumulated Depreciation
At 1 January 2021 120 28 148
Exchange adjustments (4) (1) (5)
Charge for the year 54 - 54
At 31 December 2021 170 27 197
-------------------------- ------------- --------------- --------
Net carrying amount at
31 December 2021 102 2 104
-------------------------- ------------- --------------- --------
17 INTANGIBLE ASSETS
Goodwill
US$'000
----------------------------------------------------- ---------
Cost
At 1 January 2021 (re-presented)/ 31 December 2021/
31 December 2022 6,479
----------------------------------------------------- ---------
Accumulated impairment
At 1 January 2021 (re-presented) 5,901
Disposals -
----------------------------------------------------- ---------
At 31 December 2021/
1 January 2022 5,901
Disposals -
----------------------------------------------------- ---------
At 31 December 2022 5,901
----------------------------------------------------- ---------
Carrying amount
At 31 December 2021 578
----------------------------------------------------- ---------
At 31 December 2022 578
----------------------------------------------------- ---------
For the purpose of impairment testing, goodwill is allocated to
the Group's operating divisions which represent the lowest level
within the Group at which the goodwill is monitored for internal
management purposes.
The aggregate carrying amounts of intangible assets allocated to
each unit are as follows:
2022 2021
US$'000 US$'000
------------------------- -------- --------
Goodwill
SENI Mont' Kiara 28 28
Sandakan Harbour Square 550 550
------------------------- -------- --------
578 578
The recoverable amount of goodwill has been tested by reference
to underlying profitability of the ongoing operations of the
developments using discounted cash flow projections (refer to Note
20).
18 RIGHT OF USE
Cost US$'000
At 1 January 2021 4,436
Exchange adjustments -
Disposal (12)
------------------------------------- --------
At 31 December 2021/ 1 January 2022 4,424
Exchange adjustments -
Disposal (3)
------------------------------------- --------
At 31 December 2022 4,421
Depreciation charges
At 1 January 2021 4,276
Charge for the year 157
Disposal (10)
------------------------------------- --------
At 31 December 2021/ 1 January 2022 4,423
Charge for the year 1
Disposal (3)
At 31 December 2022 4,421
NET BOOK VALUE
At 31 December 2021 1
------------------------------------- --------
At 31 December 2022 -
------------------------------------- --------
Lease liabilities include in the consolidated statement of
financial position
2022 2021
US$'000 US$'000
------------- -------- --------
Current - 14
Non-Current - -
------------- -------- --------
Total - 14
A mount recognized in the consolidated income statement
2022 2021
US$'000 US$'000
-------------------------------------- -------- --------
Depreciation charges on right-of-use 1 157
Interest on lease liabilities - 2
-------------------------------------- -------- --------
Total 1 159
A decrease in depreciation charges of right-of-use assets and
interest charges of lease liabilities by US$156,000 and US$2,000
respectively, for the financial year ended 31 December 2022.
19 DEFERRED TAX ASSETS
2022 2021
US$'000 US$'000
--------------------------------------------- -------- --------
At 1 January 4,979 5,111
Exchange adjustments (256) (180)
Deferred tax credit relating to origination
of
temporary differences during the year - 48
--------------------------------------------- -------- --------
At 31 December 4,723 4,979
The deferred tax assets comprise:
2022 2021
US$'000 US$'000
--------------------------------------- -------- --------
Taxable temporary differences between
accounting profit and taxable profit
of property development units sold 4,723 4,979
--------------------------------------- -------- --------
At 31 December 4,723 4,979
Deferred tax assets have not been recognised in respect of
unused tax losses of US$48 million (31 December 2021: US$42
million) which are available for offset against future taxable
profits. The unrecognised deferred tax asset at effective tax rates
of the Group would be approximately US$11.6 million (31 December
2021: US$10 million).
20 INVENTORIES
2022 2021
Notes US$'000 US$'000
-------------------------------------------- -------- --------
Land held for property development (a) 6,288 6,628
Stock of completed units, at
cost (b) 126,181 140,300
Consumables 104 120
--------------------------------------------- -------- --------
At 31 December 132,573 147,048
2022 2021
Notes US$'000 US$'000
----------------------------------------- -------- --------
Carrying amount of inventories
pledged as security for Loans
and borrowings and Medium Term
Notes 119,956 124,660
(a) Land held for property development
2022 2021
US$'000 US$'000
------------------------------------- -------- --------
At 1 January 6,628 6,871
Add:
Exchange adjustments (340) (243)
Additions - -
Disposals - -
------------------------------------- -------- --------
At 31 December 6,288 6,628
Less:
Costs recognised as expenses in
the consolidated statement of
comprehensive income during the
year - -
------------------------------------- -------- --------
At 31 December 6,288 6,628
(b) Stock of completed units, at cost
2022 2021
US$'000 US$'000
------------------------------------------------- -------- --------
At 1 January 140,300 150,120
Transfer (to)/from work in progress 2,321 -
Less:
Exchange adjustments (7,180) (5,292)
Disposals - -
Impairment (8,620) -
Costs recognised as expenses in
the consolidated statement of comprehensive
income during the year (640) (4,528)
At 31 December 126,181 140,300
------------------------------------------------- -------- --------
The net realisable value of completed units have been tested by
reference to underlying profitability of the ongoing operations of
the developments using discounted cash flow projections and/or
comparison method with the similar properties within the local
market which provides an approximation of the estimated selling
price that is expected to be achieved in the ordinary course of
business.
Included in the stock of completed units are SENI units as well
as the following completed units:
Sandakan hotel asset ("SHA") and Harbour Mall Sandakan
("HMS")
The aggregate recoverable amount of SHA and HMS was determined
based on indicative market transaction prices on an arm's length
basis. The aggregate recoverable amount of US$45,558,000
(RM200,000,000) (2021: US$57,142,000 (RM238,000,000)) for both
assets was determined to approximate with their carrying
amount.
The RuMa Hotel and Residences ("The RuMa")
The recoverable amount of The RuMa was determined based on a
valuation by an external, independent valuer with appropriate
recognised professional qualification. The recoverable amount
US$83,599,000 (RM367,000,000) (2021: US$101,322,000
(RM422,000,000)) of The RuMa was determined to be higher than its
carrying amount.
The valuation of The RuMa Hotel was determined by discounting
the future cash flows expected to be generated from the continuing
operations of The RuMa and was based on the following key
assumptions:
(1) Cash flows were projected based on the 10 years projection of The RuMa Hotel;
(2) The occupancy rate of The RuMa Hotel will improve to 78% in
year 10 which is when the hotel's operations are expected to
stabilise;
(3) Average daily rates of the hotel will improve to US$221.87
(RM974) in year 10 which is when the hotel's operations are
expected to stabilise;
(4) Projected gross margin reflects the industry average
historical gross margin, adjusted for projected market and economic
conditions and internal resources efficiency; and
(5) Pre-tax discount rate of 9% was applied in discounting the
cash flows. The discount rate takes into the prevailing trend of
the hotel industry in Malaysia.
The valuation of The RuMa Residences was determined based on the
Comparison Approach as the sole method of valuation.
21 TRADE AND OTHER RECEIVABLES
2021
(Restated
2022 *)
US$'000 US$'000
------------------- --- -------- ------------
Trade receivables 4,401 2,343
Other receivables 6,842 12,224
Sundry deposits 332 232
------------------------ -------- ------------
11,575 14,799
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
Trade receivables represent progress billings receivable from
the sale of completed units and land held for property development.
Progress billings receivable from the sale of completed units are
generally due for settlement within 30 days from the date of
invoice and are recognised and carried at the original invoice
amount less allowance for any uncollectible amounts. They are
recognised at their original invoice amounts on initial recognition
less provision for impairment where it is required.
The loss allowance as at 31 December 2022 and 31 December 2021
was determined as follows for both trade receivables and contract
assets:
Contract
Trade receivable asset Loss allowance Total
31 December 2022 US$'000 US$'000 US$'000 US$'000
-------------------- ----------------- --------- --------------- --------
Current 4,399 - - 4,399
Past due
0 - 60 days - - - -
61 -120 days - - - -
More than 120 days (2,035) - (2,033) 2
-------------------- ----------------- --------- --------------- --------
6,434 - (2,033) 4,401
Contract
Trade receivable asset Loss allowance Total
31 December 2021 US$'000 US$'000 US$'000 US$'000
-------------------- ----------------- --------- --------------- --------
Current 248 - - 248
Past due
0 - 60 days - - - -
61 -120 days - - - -
More than 120 days 2,095 - - 2,095
-------------------- ----------------- --------- --------------- --------
2,343 - - 2,343
The Group uses the simplified approach to estimate credit loss
allowance for all trade receivables and contract assets, which will
be based on the past payment trends, existing market conditions and
adjusts for qualitative and quantitative reasonable and supportable
forward-looking information. The loss allowances are also based on
assumptions about risk of default. The quantum of any probability
of an expected credit loss will occur to be low or not material. No
provision is recognised in these financial statements.
Included in trade receivables is US$ Nil representing 0% of the
Group's trade receivables which are due from a subsidiary of Ireka
Corporation Berhad for the acquisition of SENI units (31 December
2021: US$2,005,000, representing 86% of the Group's trade
receivables, for the acquisition of SENI units and expenses paid on
behalf), the amount was fully impaired in 2022 (refer to Note
31).
Included in other receivables was an amount due from Ireka
Corporation Berhad in relation to the interest owed on the unpaid
shareholder advances to the construction of The RuMa Hotel and
Residences, as described in Note 31.
The maximum exposure to credit risk is represented by the
carrying amount in the statement of financial position. The Group
monitors the repayment of the customers regularly and are confident
of the ability of the customers to repay the balance
outstanding.
22 CASH AND CASH EQUIVALENTS
2022 2021
US$'000 US$'000
--------------------------- -------- --------
Cash and bank balances 4,786 4,644
Short term bank deposits 2,473 2,470
---------------------------- -------- --------
7,259 7,114
Less: Deposits pledged (2,473) (2,470)
---------------------------- -------- --------
Cash and cash equivalents 4,786 4,644
Included in short term bank deposits and cash and bank balance
is US$2,473,000 ( 31 December 2021: US$2,470,000) pledged for loans
and borrowings and Medium Term Notes of the Group .
The interest rate on cash and cash equivalents, excluding
deposit pledged with licensed bank of US$2,473,000 ( 31 December
2021: US$2,470,000), pledged for loans and borrowings and Medium
Term Notes of the Group , ranges from 1.05% to 2.85% per annum ( 31
December 2021: 1.60% to 1.85% per annum).
The interest rate on short term bank deposits and cash and bank
balance pledged for loans and borrowings and Medium Term Notes of
the Group , ranges from 1.05% to 2.85% per annum ( 31 December
2021: 1.60% to 1.85% per annum).
23 SHARE CAPITAL
Number Number
of shares Amount of shares Amount
2022 2022 2021 2021
'000 US$'000 '000 US$'000
------------------------------ ----------- -------- ----------- --------
Authorised Share Capital
Ordinary shares of US$0.05
each 2,000,000 100,000 2,000,000 100,000
Management shares of US$0.05
each - * - * - * - *
----------- -------- ----------- --------
2,000,000 100,000 2,000,000 100,000
----------- -------- ----------- --------
Issued Share Capital
Ordinary shares of US$0.05
each 212,025 10,601 212,025 10,601
Management shares of US$0.05
each - # - # - # - #
----------- -------- ----------- --------
212,025 10,601 212,025 10,601
----------- -------- ----------- --------
* represents 10 management shares at US$0.05 each
# represents 2 management shares at US$0.05 each
In 2015, the shareholders of the Company approved the creation
and issuance of management shares by the Company as well as a
compulsory redemption mechanism that was proposed by the Board.
The Company increased its authorised share capital from
US$100,000,000 to US$100,000,000.50 by the creation of 10
management shares of US$0.05 each for cash.
The Company also increased its issued and paid-up share capital
from US$10,601,250 to US$10,601,250.10 by way of an allotment of 2
new management shares of US$0.05 each at par via cash
consideration.
In accordance with the compulsory redemption scheme, the
Company's ordinary shares were converted into redeemable ordinary
shares.
The ordinary shares and the management shares shall have
attached thereto the rights and privileges, and shall be subject to
the limitations and restrictions, as are set out below:
(a) Distribution of dividend:
(i) The ordinary shares carry the right to receive all the
profits of the Company available for distribution by way of interim
or final dividend at such times as the Directors may determine from
time to time; and
(ii) The management shares carry no right to receive dividends
out of any profits of the Company.
(b) Winding-up or return of capital:
(i) The holders of the management shares shall be paid an amount
equal to the paid-up capital on such management shares; and
(ii) Subsequent to the payment to holders of the management
shares, the holders of the ordinary shares shall be repaid the
surplus assets of the Company available for distribution.
(c) Voting rights:
(i) The holders of the ordinary shares and management shares
shall have the right to receive notice of and to attend and vote at
general meetings of the Company; and
(ii) Each holder of ordinary shares and management shares being
present in person or by a duly authorised representative (if a
corporation) at a meeting shall upon a show of hands have one vote
and upon a poll each such holder present in person or by proxy or
by a duly authorised representative (if a corporation) shall have
one vote in respect of every full paid share held by him.
24 SHARE PREMIUM
Share premium represents the excess of proceeds raised on the
issuance of shares over the nominal value of those shares. The
costs incurred in issuing shares were deducted from the share
premium.
In 2017, the Shareholders of the Company at an Extraordinary
General Meeting approved a proposal to return US$10,000,500 or
US$0.75 per share for 13,334,000 shares representing 6.29 per cent
of the Company's share capital to Shareholders. The capital
distribution was completed on 10 January 2017 and the repurchased
shares of 13,334,000 are currently held as Treasury Shares. The
issued and paid up share capital of the Company remains unchanged
at 212,025,002.
25 CAPITAL REDEMPTION RESERVE
The capital redemption reserve was incurred after the Company
cancelled its 37,475,000 and 500,000 ordinary shares of US$0.05 per
share in 2009 and 2013 respectively.
26 TRANSLATION RESERVE
The translation reserve comprises foreign currency differences
arising from the translation of the financial statements of foreign
operations.
27 TRADE AND OTHER PAYABLES
2021
(Restated
2022 *)
US$'000 US$'000
Non-current
Amount owed to contract buyers 36,440 38,339
-------------------------------------- -------- ------------
36,440 38,339
------------------------------------- -------- ------------
Current
Trade payables 5,609 3,219
Other payables 3,944 10,763
Deposits refundable 778 705
Accruals 7,758 2,363
18,089 17,050
------------------------------------- -------- ------------
54,529 55,389
------------------------------------- -------- ------------
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
Trade payables represent trade purchases and services rendered
by suppliers as part of the normal business transactions of the
Group. The credit terms granted by trade suppliers range from 30 to
90 days.
Included in the other payable comprise of the accrued costs for
the development of the RuMa project amounted to US$0.7 million ( 31
December 2021: US$1.0 million).
Contract liabilities represent proceeds received from purchasers
of development properties i.e. SENI and The RuMa Residences which
are pending transfer of vacant possession.
2022 2021
US$'000 US$'000
Revenue recognised in the period
from:
Amounts included in contract liability
at
the beginning of the period 980 596
Performance obligations satisfied
in
previous period - -
Amount owed to contract buyer is of funding received, by way of
non-refundable deposits, in advance of completion of the hotel
suites which are at 31 December 2022 still controlled by the
Group.
Deposits and accruals are from normal business transactions of
the Group.
28 AMOUNT DUE TO NON-CONTROLLING INTERESTS
2022 2021
US$'000 US$'000
----------------------------------------- -------- --------
Minority Shareholder of Bumiraya Impian
Sdn. Bhd.:
* Global Evergroup Sdn. Bhd. 1,129 1,190
Minority Shareholder of Urban DNA
Sdn. Bhd. and
The RuMa Hotel KL Sdn. Bhd.:
* Ireka Corporation Berhad 852 762
1,981 1,952
----------------------------------------- -------- --------
The current amount due to non-controlling interests amounting to
US$1,981,000 (31 December 2021: US$1,952,000) is unsecured,
interest free and repayable on demand.
29 LOANS AND BORROWINGS
2022 2021
US$'000 US$'000
------------------- -------- --------
Current
Bank loans 1,595 1,681
Lease liabilities - 14
1,595 1,695
------------------- -------- --------
LEASE LIABILITIES
2022 2021
Future minimum lease payment US$,000 US$'000
------------------------------ -------- --------
Within one year - 14
Between one and five years - -
Over five years - -
------------------------------ -------- --------
- 14
------------------------------ -------- --------
The effective interest rates on the bank loans for the year is
12% (31 December 2021: 12%) per annum.
Borrowings are denominated in Ringgit Malaysia.
Bank loans are repayable annually.
Bank loans are secured by land held for property development,
work-in-progress, operating assets of the Group, pledged deposits
and some are secured by the corporate guarantee of the Company.
Reconciliation of movement of loan and borrowings to cash flows
arising from financing activities:
Foreign As at 31
As at 1 Drawdown Repayment exchange December
January 2022 of loan of loan movements 2022
US$'000 US$'000 US$'000 US$'000 US$'000
Bank loans 1,681 - - (86) 1,595
Total 1,681 - - (86) 1,595
============== ========= ========== =========== ==========
Foreign As at 31
As at 1 Drawdown Repayment exchange December
January 2021 of loan of loan movements 2021
US$'000 US$'000 US$'000 US$'000 US$'000
Bank loans 1,742 - - (61) 1,681
Total 1,742 - - (61) 1,681
============== ========= ========== =========== ==========
Repayment Foreign As at 31
As at 1 of lease Interest exchange December
January 2022 payment expense movements 2022
US$'000 US$'000 US$'000 US$'000 US$'000
Lease liabilities 14 (13) - (1) -
Total 14 (13) - (1) -
============== ========== ========= =========== ==========
Repayment Foreign As at 31
As at 1 of lease Interest exchange December
January 2021 payment expense movements 2021
US$'000 US$'000 US$'000 US$'000 US$'000
Lease liabilities 181 (163) 3 (7) 14
Total 181 (163) 3 (7) 14
============== ========== ========= =========== ==========
30 MEDIUM TERM NOTES
2022 2021
US$'000 US$'000
------------------------------------ --------- ---------
Outstanding medium term notes 31,264 42,317
Less:
Repayment due within twelve months (31,264) (42,317)
Repayment due after twelve months - -
------------------------------------ --------- ---------
Reconciliation of movement of medium term notes to cash flows
arising from financing activities:
Foreign As at 31
As at 1 Drawdown Repayment exchange December
January 2022 of loan of loan movements 2022
US$'000 US$'000 US$'000 US$'000 US$'000
------------- -------------- --------- ---------- ----------- ----------
Medium Term
Notes 42,316 - (8,884) (2,168) 31,264
============== ========= ========== =========== ==========
Foreign As at 31
As at 1 Drawdown Repayment exchange December
January 2021 of loan of loan movements 2021
US$'000 US$'000 US$'000 US$'000 US$'000
------------- -------------- --------- ---------- ----------- ----------
Medium Term
Notes 40,200 3,559 - (1,443) 42,316
============== ========= ========== =========== ==========
The medium term notes ("MTNs") were issued pursuant to a
programme with a tenor of ten (10) years from the first issue date
of the notes. The MTNs were issued by a subsidiary, to fund two
development projects known as Sandakan Harbour Square and Aloft
Kuala Lumpur Sentral ("AKLS") in Malaysia.
Following the completion of the sale of the AKLS by the Group in
2016. The net adjusted price value for the sale of AKLS, which
included the sale of the entire issued share capital of ASPL M3B
Limited and Iringan Flora Sdn. Bhd. (the "Aloft Companies") were
used to redeem the MTN Series 2 and Series 3. Following the
completion of the disposal of AKLS, US$96.25 million (RM394.0
million) of MTN associated with the AKLS (Series 3) and the Four
Points Sheraton Sandakan (Series 2) were repaid on 19 August 2016.
The charges in relation to AKLS was also discharged following the
completion of the disposal.
The Group completed "roll-over" for the remaining MTNs of
US$24.43 million on their maturity dates on 10 December 2020,
2021.
Repayment of US$8.89 million (RM39.0 million) was made on 7
April 2022. Subsequently, they were further "rolled over" and now
repayable on 8 December 2023. The MTNs are rated AAA.
The weighted average interest rate of the MTN was 5.50% per
annum at the statement of financial position date. The effective
interest rates of the MTN and their outstanding amounts are as
follows:
As at 31 December
Interest rate 2022
Maturity Dates % per annum US$'000
------------------ ----------------- -------------- ------------------
Series 1 Tranche
FG 8 December 2023 5.50 7,973
Series 1 Tranche
BG 8 December 2023 5.50 5,922
13,895
------------------------------------ -------------- ------------------
The medium term notes are secured by way of:
(i) bank guarantee from two financial institutions in respect of the BG Tranches;
(ii) financial guarantee insurance policy from Danajamin
Nasional Berhad ("Danajamin") in respect to the FG Tranches;
(iii) a first fixed and floating charge over the present and
future assets and properties of Silver Sparrow Berhad and ICSD
Ventures Sdn. Bhd. by way of a debenture;
(iv) a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.'s assets and land;
(v) a corporate guarantee by the Company;
(vi) letter of undertaking from the Company to provide financial
and other forms of support to ICSD Ventures Sdn. Bhd. to finance
any cost overruns associated with the development of the Sandakan
Harbour Square;
(vii) assignment of all its present and future rights, interest
and benefits under the ICSD Ventures Sdn. Bhd.'s Put Option
Agreements in favour of Danajamin, Malayan Banking Berhad and OCBC
Bank (Malaysia) Berhad (collectively as "the guarantors") where
once exercised, the sale and purchase of HMS and SHA shall take
place in accordance with the provision of the Put Option Agreement;
and the proceeds from HMS and SHA will be utilised to repay the
MTNs;
(viii) assignment over the disbursement account, revenue
account, operating account, sale proceed account, debt service
reserve account and sinking fund account of Silver Sparrow Berhad,
revenue account of ICSD Ventures Sdn. Bhd. and escrow account of
Ireka Land Sdn. Bhd.;
(ix) assignment of all ICSD Ventures Sdn. Bhd.'s present and
future rights, title, interest and benefits in and under the
insurance policies; and
(x) a first legal charge over all the shares of Silver Sparrow
Berhad, ICSD Ventures Sdn. Bhd. and any dividends, distributions
and entitlements.
Potensi Angkasa Sdn. Bhd. ("PASB"), a subsidiary incorporated on
25 February 2019, has secured a commercial paper and/or medium term
notes programme of not exceeding US$21.99 million (RM90.0 million)
("CP/MTN Programme") to fund a project known as The RuMa Hotel and
Residences. PASB may, from time to time, issue commercial paper
and/or medium term notes ("Notes") whereby the nominal value of
outstanding Notes shall not exceed US$21.99 million (RM90.0
million) at any one time.
The details of the drawdown schedule were as follows:
Initial Issue First Roll-over Second Roll-over Third Roll-over
---------------------------- ---------------------------- ---------------------------- ----------------------------
Tranche RM Tranche Tranche Tranche Date
Number Date ('000) Number Date RM ('000) Number Date RM ('000) Number RM ('000)
--------- ------- -------- -------- ------ ---------- -------- ------ ---------- -------- ------ ----------
10 10
Tranche 10 Jun Tranche Jun Tranche Jun
1-23 2019 22,850 63-83 2020 20,950 124-142 2021 19,050
30
Tranche 30 Sep Tranche Sep Tranche 1 Oct Tranche 3 Oct
24-31 2019 9,600 84-91 2020 9,600 143-147 2021 4,750 180-184 2022 4,750
10
Tranche 7 Oct Tranche 7 Oct Tranche 8 Oct Tranche Oct
32-49 2019 17,100 92-109 2020 17,100 148-165 2021 17,100 185-202 2022 17,100
25 28
Tranche 25 Feb Tranche Feb Tranche Feb
50-62 2020 15,350 110-122 2021 15,350 166-178 2022 15,350
10
Tranche 9 Jun Tranche Jun
123 2021 18,100 179 2022 20,000
--------- ------- -------- -------- ------ ---------- -------- ------ ---------- -------- ------ ----------
The weighted average interest rate of the loan was 9.07% per
annum at the statement of financial position date. The effective
interest rates of the medium term notes and their outstanding
amounts were as follows:
As at 31 December
Interest rate 2022
Maturity Dates % per annum US$'000
------------------ ------------------ -------------- ------------------
Tranches 124-142 13 February 2023 7.00 4,339
Tranches 166-178 1 March 2023 8.50 3,497
Tranche 179 12 June 2023 11.00 4,556
Tranches 180-184 3 April 2023 9.50 1,082
Tranches 185-202 11 April 2023 9.50 3,895
17,369
------------------------------------- -------------- ------------------
Security for CP/MTN Programme
(a) A legal charge over the Designated Accounts by the PASB
and/or the Security Party (as defined below) (as the case may be)
and assignment of the rights, titles, benefits and interests of the
PASB and/or the Security Party (as the case may be) thereto and the
credit balances therein on a pari passu basis among all Notes,
subject to the following:
(b)
(i) In respect of the 75% of the sale proceeds of a Secured
Asset ("Net Sale Proceeds") arising from the disposal of a Secured
Asset, the Noteholders of the relevant Tranche secured by such
Secured Asset shall have the first ranking security over such Net
Sale Proceeds;
(ii) In respect of the insurance proceeds from the Secured
Assets ("Insurance Proceeds"), the Noteholders of the relevant
Tranche secured by such Secured Asset shall have the first ranking
security over such Insurance Proceeds;
(iii) In respect of the sale deposits from the Secured Assets
("Sale Deposits"), the Noteholders of the relevant Tranche secured
by such Secured Asset shall have the first ranking security over
such Sale Deposits;
(iv) In respect of the amount at least equivalent to an amount
payable in respect of any coupon payment of that particular Tranche
for the next six (6) months to be maintained by the Issuer
("Issuer's DSRA Minimum Required Balance"), the Noteholders of the
relevant Tranche shall have the first ranking security over such
Issuer's DSRA Minimum Required Balance;
(v) In respect of the proceeds from the Collection Account ("CA
Proceeds"), the Noteholders of the relevant Tranche shall have the
first ranking security over such CA Proceeds; and
(vi) In respect of any amount deposited by the Guarantor which
are earmarked for the purposes of an early redemption of a
particular Tranche of the Notes and/or principal payment of a
particular Tranche of the Notes ("Deposited Amount"), the
Noteholders of the relevant Tranche shall have the first ranking
security over such Deposited Amount;
(c) An irrevocable and unconditional guarantee provided by the
Urban DNA Sdn Bhd for all payments due and payable under the CP/MTN
Programme ("Guarantee"); and
(d) Any other security deemed appropriate and mutually agreed
between the PASB and the Principal Adviser/Lead Arranger ("PA/LA"),
the latter being Kenanga Investment Bank Berhad.
Security for each medium term note:
Each Tranche shall be secured by assets ("Secured Assets") to be
identified prior to the issue date of the respective Tranche.
Such Secured Assets may be provided by third party(ies), (which,
together with the Guarantor, shall collectively be referred to as
"Security Parties" and each a "Security Party") and/or by the PASB.
Subject always to final identification of the Secured Asset prior
to the issue date of the respective Tranche, the security for any
particular Tranche may include but not limited to the
following:
(a) Legal assignment and/or charge by the PASB and/or the
Security Party (as the case may be) of the Secured Assets;
(b) An assignment over all the rights, titles, benefits and
interests of the PASB and/or the Security Party (as the case may
be) under all the sale and purchase agreements executed by
end-purchasers and any subsequent sale and purchase agreement to be
executed in the future by end-purchaser (if any), in relation to
the Secured Assets;
(c) A letter of undertaking from Aseana Properties Limited to,
amongst others, purchase the Secured Assets ("Letter of
Undertaking"); and/or
(d) Any other security deemed appropriate and mutually agreed
between the Issuer and the PA/LA and/or Lead Manager prior to the
issuance of the relevant Tranche.
The security for each Tranche is referred to as "Tranche
Security".
31 RELATED PARTY TRANSACTIONS
Transactions between the Group with Ireka Corporation Berhad
("ICB") and its group of companies are classified as related party
transactions based on ICB's 23.07% shareholding in the Company.
In 2009, the Group entered into a Joint Venture Agreement (JVA)
with Ireka Corporation Berhad (ICB) for the construction of The
RuMa Hotel and Residences ("RuMa"). Under the terms of that JVA,
the joint venture partners are required to make equity contribution
in the proportion to their participating interest for the purpose
of the development and construction of the RuMa. In the opinion of
the directors, they have considered that the JVA allows for the
equity contribution to be deferred and paid upon the conclusion of
construction. At 31 December 2022, the total amount of equity
contribution owed by ICB was US$11.7 million (at 31 December 2021:
US$12.2 million). The recognition of these amount owed by ICB would
be offset by the corresponding entry of the amount owed to ICB,
which therefore has no net impact to the consolidated financial
statements.
The equity contributions are non-trade in nature and are
unsecured and interest bearing.
Furthermore, the Group was entitled to interest receivable from
ICB. The interest receivable was calculated based on an annual
interest rate of 2% above the Malaysia lending rate and applied to
the deferred equity contributions.
Related parties also include key management personnel defined as
those persons having authority and responsibility for planning,
directing and controlling the activities of the Group either
directly or indirectly. The key management personnel include all
the Directors of the Group, and certain members of senior
management of the Group.
2021
(Restated
2022 *)
US$'000 US$'000
------------------------------------------ ---------- ------------
ICB Group of Companies
Accrued interest on shareholders advance
payable by ICB 1,462 1,259
Accrued interest on a contract payment
by an ICB subsidiary 131 122
Key management personnel
Remuneration of key management personnel
- Directors' fees 265 291
Remuneration of key management personnel
-
Consulting fees 300 287
* See Note 2.3(f) for details regarding the restatement as a
result of an error.
Transactions between the Group with other significant related
parties are as follows:
2022 2021
US$'000 US$'000
--------------------------------- -------- --------
Non-controlling interests
Advances - non-interest bearing
(Note 28) 129 121
Other related parties
Disposal of subsidiaries - -
The above transactions have been entered into in the normal
course of business and have been established under negotiated
terms.
The outstanding amounts due from/(to) ICB and its group of
companies as at 31 December 2022 and 31 December 2021 are as
follows:
2021
(Restated
2022 *)
US$'000 US$'000
Net amount due from an ICB subsidiary
# - 2,005
Net amount due from ICB 5,461 4,416
# Amount was fully impaired in the year ended 31 December 2022
due to financial distressed encountered by the captioned
subsidiary; an interim liquidator was subsequently appointed on 27
March 2023.
The outstanding amounts due to the other significant related
parties as at 31 December 2022 and 31 December 2021 are as
follows:
2022 2021
US$'000 US$'000
--------------------------------- -------- --------
Non-controlling interests
Advances - non-interest bearing
(Note 28) (1,981) (1,952)
Transactions between the parent company and its subsidiaries are
eliminated in these consolidated financial statements. A list of
subsidiaries is provided in Note 32.
32 INVESTMENT IN SUBSIDIARIES
Effective
Country ownership
Name of incorporation Principal activities interest
2022 2021
-------------------------------------------------------------------- ------ -----
Subsidiaries
Ireka Land Sdn. Bhd. Malaysia Property development 100% 100%
Amatir Resources Sdn.
Bhd. Malaysia Property development 100% 100%
Hotel and mall
ownership and
ICSD Ventures Sdn. Bhd. Malaysia operation 100% 100%
Participating
in the transactions
contemplated under
Potensi Angkasa Sdn. the Guaranteed
Bhd Malaysia MTNs Programme 100% 100%
Participating
in the transactions
contemplated under
the Guaranteed
Silver Sparrow Berhad Malaysia MTNs Programme 100% 100%
Bumiraya Impian Sdn.
Bhd. Malaysia Property development 80% 80%
The RuMa Hotel KL Sdn.
Bhd. Malaysia Investment holding 70% 70%
Urban DNA Sdn. Bhd. Malaysia Property development 70% 70%
Aseana-BDC Co Ltd Vietnam Investment holding 65% 65%
33 COMMITMENTS AND CONTINGENCIES
Debt service reserve account
In 2017, Silver Sparrow Berhad obtained consent from the lenders
to utilise proceeds of US$4.89 million in the Sales Proceeds
Account and Debt Service Reserve Account ("DSRA") to partially
redeem the MTNs. Thereafter, amount equivalent to RM10.0 million
(US$2.40 million) (the "Minimum Deposit") is maintained in the DSRA
at all times and the amount is disclosed as deposit pledged (refer
to Note 22).
In the event the funds in the DSRA falls below the Minimum
Deposit, SSB shall within five (5) Business Days from the date of
receipt of written notice from the facility agent or upon SSB
becoming aware of the shortfall, whichever is earlier, deposit such
sums of money into the DSRA to ensure the Minimum Deposit is
maintained.
34 SALE OF DISCONTINUED OPERATIONS
On 23 August 2021, the Group entered into the sale agreement to
divest its operations and assets of the International Healthcare
Park ("IHP") and the City International Hospital ("CIH") (the
"Transaction"), held under Hoa Lam Services Company Limited ("HLS")
and Shangri-La Healthcare Investment Pte. Ltd. ("SHIPL"), and the
indirectly held subsidiaries under both companies (collectively,
the "Disposal Group"), for a gross consideration of approximately
US$18.3 million. The gross consideration comprised the repayment of
current account to the Group for approximately US$8.3 million and a
net consideration for transfer of equity interest for US$ 10.0
million. The conditions precedent for the divestment were met and
the Transaction was completed on 28 February 2022 (the "Disposal
Date") when the shares were transferred to the purchaser.
The subsidiaries were reported in 2021 as discontinued
operations and until the Disposal Date.
Details of financial position of the Disposal Group were as
follows:
2022 2021
US$'000 US$'000
-------------------------------- --------- ---------
Property, plant and equipment 400 400
Intangible Assets 3,519 3,519
Inventories 80,315 80,315
Trade and other receivables 1,250 1,250
Cash and cash equivalents 8,561 15,329
Trade and other payables (54,314) (54,314)
Loans and borrowings (32,016) (32,016)
Current tax liabilities (17) (17)
--------------------------------- --------- ---------
Net assets classified as Asset
held for Sale 7,698 14,466
--------------------------------- --------- ---------
There was no reported profit or loss from the discontinued
operations during the year up to the Disposal Date.
Analysis of the cash flows of discontinued operations are as
follows:
2022 2021
US$'000 US$'000
--------------------------------------- --------- ---------
Net cash generated from operating
activities - 32,537
Net cash used in investing activities - -
Net cash used in financing activities (6,768) (17,768)
Net cash (used in)/generated from
discontinued operations (6,768) 14,769
--------------------------------------- --------- ---------
Details of the sale of the discontinued operations are as
follows:
2022 2021
US$'000 US$'000
--------------------------------------- --------- ---------
Consideration received or receivable
Cash 10,045 -
--------------------------------------- --------- ---------
Total disposal consideration 10,045 -
-
Carrying amount of net asset sold (7,698) -
Non-controlling interests derecognized 874 -
Receivables derecognized (279) -
--------------------------------------- --------- ---------
Gain on sale before income tax and
reclassification of foreign currency
translation reserve 2,943 -
Reclassification of foreign currency
translation reserve (241) -
Income tax expense on gain - -
--------------------------------------- --------- ---------
Gain on sale after income tax (2,702) -
--------------------------------------- --------- ---------
COPIES OF THE ANNUAL REPORT
Copies of the annual report will be available on the Company's
website at and from the Company's registered office, Osprey House,
Old Street, St. Helier, Jersey, JE2 3RG, Channel Islands.
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END
FR EAKLPASLDEEA
(END) Dow Jones Newswires
April 28, 2023 02:59 ET (06:59 GMT)
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