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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sgl Vietnam | LSE:SGLV | London | Ordinary Share | KYG8059T1022 | ORD USD1 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:4425Q
SGL Vietnam Development Limited
19 March 2008
SGL Vietnam Development Limited - Interim Results
19 March 2007
SGL Vietnam Development Limited ('SGL' or the 'Company')
Interim Results for the six month period ended 31 December 2007
SGL Vietnam Development Limited, managed by SGL Investment Capital Management
Limited (the "Manager"), is pleased to announce its results for the six month
period ended 31 December 2007.
Highlights
* The Company was admitted to AIM on 18 October 2007 with the issue of
10,766,670 shares raising a total of US$32.3 million of capital.
* Initial project joint venture entered into on 16 January 2008, with
gross development cost ("GDC"), of US$20.3 million.
* Strong potential pipeline identified comprising 20 sites with GDC of
over US$2 billion.
* Offices established in Ho Chi Minh City ("HCMC") and Hanoi.
* Directors confident in the prospects for the Vietnamese property market
in 2008
For further information:
SGL Vietnam Development Limited
Susan Sim
Tel: +84 907 359 259
Website: http//www.sglvietnam.com
Collins Stewart
Adrian Hadden, Stewart Wallace
Tel: +44(0)20 7523 8350
Chairman's Statement
This is my first opportunity to report to shareholders on the performance of SGL
Vietnam Development Limited ("SGL" or the "Company") since the Company's shares
were admitted to trading on AIM on 18 October 2007. The report covers the six
month period ended 31 December 2007.
I am pleased to inform shareholders that SGL has made encouraging progress in
the execution of its investment strategy. In January 2008, post the interim
period, the Company committed to investments amounting to US$20.3 million in a
quality development project in Ho Chi Minh City, the largest city of Vietnam, of
which US$3 million will be paid in cash for the acquisition of an 80% stake in
the joint venture established to hold the investment.
On a pre-gearing basis, this commitment represents approximately 63% of the
capital raised on IPO, well within the expected 12-month investment period. The
Company will seek to partially finance this development with debt, at an
appropriate stage. In line with one of the Company's target investment segments,
the project is for development of residential and commercial properties and will
give us immediate penetration into these high growth sectors.
On 29 February 2008 the Company announced that its unaudited Net Asset Value ("
NAV") per issued share, for the period ended 31 December 2007, was US$2.64 per
share. Compared to the issued share price of US$3.00 per share, the decrease in
NAV of $0.36 reflects the expenses the Company incurred in relation to its IPO
as well as costs incurred in establishing the Company's current pipeline of
investment opportunities.
Consistent with its niche investment approach, the Company looks to enter into
cooperation to develop assets with distinctive characteristics and
sustainability of future demand. To date, the Company has assessed over 20
potential projects in Vietnam, with a gross development cost commitment of more
than USD$2 billion. The Company will continue to review and assess potential
projects in Hanoi and Ho Chi Minh City, including a number of promising
candidates which are undergoing active financial and legal due diligence by the
Manager.
The strong economic growth in the region and the rapid development of the
Vietnam real estate market are likely to create an attractive environment in the
years ahead for SGL to pursue its investment strategies of focusing on quality,
location and positioning in its target market sectors.
I am pleased with the quality and consistency of the investment proposals, which
the Manager is presenting to the Board, and I am confident that a number of
these opportunities will lead to further cooperation agreements and investment
in the near future.
In line with SGL's stated objective of delivering an attractive total return
primarily from capital appreciation, the Board has not elected to pay a
dividend.
Dr Richard Helfer
Chairman
SGL Vietnam Development Limited
Investment Manager's Report
SGL Vietnam Development Limited is a quoted property company focusing
exclusively on property investment opportunities principally in Vietnam. The
Company's investment objective is to provide shareholders with an attractive
overall total return, primarily from capital appreciation with the potential for
dividends over the medium to longer term.
The Company's core investment policy is to capitalise on the rapid development
of the property sector in Vietnam, which is supported by growth in employment
and the working population, increases in disposable incomes and extensive
infrastructure spending by public sectors.
The Company's strategy is to actively explore niche and high yield property
investment opportunities that are clearly differentiated by their value
proposition, location and the likely sustainability of end user demand available
in the growing real estate sectors. The Manager believes that through its
focused investment strategy, its well-established network and well planned
execution and development strategies, opportunities will exist to realise value
in the mid to long term for the Company's shareholders.
Review of SGL's Current Portfolio
Since its admission to trading on AIM on 18 October 2007, and subsequent to the
interim period end the Company has made one investment in Vietnam amounting to a
total gross development cost (on a pre-gearing basis) of US$20.3 million for a
residential and commercial development in Ho Chi Minh City ("HCMC") targeting
the middle income market segment. In addition, the Company has made good
progress in sourcing a strong and varied pipeline of investment opportunities,
achieved primarily via the Manager's well-established network, and also through
an expanding range of relationships with local developers, financial
institutions and agents.
Portfolio Summary
Project Sector Type Positioning Status Total Commitment
1 Residential and Development Mid end Planning US$20.3 million
Commercial
Project 1 - Thu Duc District (HCMC)
Project 1 was acquired through the direct purchase of the asset by an onshore
Vietnamese 80%:20% joint venture between SGL and a local partner, Dung Thanh Co,
to develop a residential and commercial building in Thu Duc District, HCMC. The
site is currently unoccupied and is ideally suited for a mid-rise residential
and commercial development targeted towards local residents seeking to upgrade
the quality of their existing accommodation and facilities. The initial
architectural design and planning processes for this site are currently under
way and, subject to planning approval, construction is planned to commence in
the second half of 2008. It is the Company's intention to sell all of the
residential units in this project either on a pre-sale basis or on completion,
with the commercial units, either being sold or leased out.
JV Agreement Date 16 January 2008
Sector Residential and commercial
Location Thu Duc district, HCMC
Current Status Application for JV licence
Title Freehold
Classification Residential/Commercial
Land Area 5,800 m(2)
Projected Gross Development Cost US$20.3 million
Initial Commitment US$3 million
Positioning Local middle-income residents
Proposed Development Apartment and commercial block with car parking
Expected pre-Sale Date 2H 2008
Estimated Completion Date End 2010
Additional Acquisition Pipeline
The potential for attractive investment opportunities in the Company's target
areas and sectors remains very strong. The Manager has identified an attractive
and sizeable deal pipeline for the Company across a variety of sectors and prime
locations on which detailed assessment and due diligence is currently being
carried out by the Manager. In line with the Company's investment strategy, the
investment focus remains on the target sectors and main cities of HCMC and Hanoi
in Vietnam, however, the Manager is also selectively assessing investment
opportunities across Vietnam.
In addition to the completed transaction, 20 sites with a combined estimated
project value of more than US$2 billion are currently being reviewed and
assessed by the Manager.
The Manager remains cautious of the lower end of the residential sector across
Vietnam, continuing to focus on its core areas:
* residential projects in well-established neighbourhoods
* luxury residential projects in prime locations
* retail projects in well-established neighbourhoods
* leisure/commercial projects in strategic locations
* affordable hotel and serviced apartment projects in key locations.
The Manager believes that the Company has sufficient capital at the present time
for the completion of its current portfolio and immediate pipeline, following
suitable debt financing on projects under-development. The Company intends to
seek additional financing in order to finance its broader pipeline of
opportunities in the year to come as housing supply is still limited while the
demand remains strong for well priced developments, both in the residential and
in the retail sectors.
Property Market Overview
The Directors believe that 2008 has the potential to be a very positive year for
the property market in Vietnam, on the back of the government real estate
reforms in 2006 and certain ownership concessions improving demand. In addition,
local economic growth has improved housing affordability and overseas investment
is increasing, due to ongoing efforts to improve the transparency in the
property sector.
The residential property market performed strongly in the fourth quarter of
2007, with activity driven largely by the launch of several key residential
projects both in Hanoi and HCMC with very strong pre-development/off-plan sales
to the public and a strong secondary market.
The highest profile of these recent launches were premium luxury second stage
developments in Hanoi (Ciputra), and in HCMC (Phu My Hung), by South East Asian
development partnerships. Other notable development projects include Saigon
Pearl, River Garden, and the Manor in HCMC, where the public sales have
surpassed all expectations and all units released to the public were reported to
have been sold within 10-14 days from public launch, despite an anticipated
two-year sales programme. In addition, in the secondary market, several
instances have been reported where on-sales have taken place at premium of
20-100% to the pre-sale price, further reinforcing the impact that these new
projects are having on overall strong demand and sentiment.
Investor demand appears to continue to be strong in Vietnam, both from investors
in search of Vietnamese residency as well as from financial investors from all
over the world. Local demand has also been increased with increased willingness
by local banks to provide reasonably priced mortgages to first time property
purchasers. In the residential leasing market, expatriate numbers continue to
swell in Vietnam, putting upward pressure on rentals, and gradually adjusting
yields to more realistic levels as the rents achieved catch up with capital
values.
The Manager believes that there are many investment opportunities for the
Company in the year to come as supplies are still limited while the demand
remains strong for well priced developments.
In the retail sector, demand is still strong, while the supply is tight, and the
sector is forecast to grow 25% in the year to come. Local shopping habits are
changing from old-style outdoor markets to more modern supermarkets,
hypermarkets and shopping malls. This is expected to drive the strong
anticipated growth in the sector.
As anticipated, the office sector in Vietnam remains strong, with demand
exceeding existing supply - driving rental rates upwards, especially in prime
locations.
On the political front, the government of Vietnam continue to encourage changes
to meet expectations through reduction in red tape to promote transparency,
fairness and efficiency in the planning and regulatory processes. In the short
term, the uncertainty created by such changes may slow down certain approval
processes within the government, although the Company has not experienced any
such delay to date.
Infrastructure
Vietnam infrastructure projects continue apace in order to keep up with the
rapid development of the economy. Many highways and bridges are being planned
and are under construction. Proposed international airport, port and light rail
projects are under government consideration for approval and planning. The
Manager believes these projects are an important part of the overall public
infrastructure plan and will contribute greatly towards easing current and
future traffic congestion, as well as creating value in new locations connected
by the expanded transport network.
Economic Overview
In 2007, Vietnam continued to achieve strong improvement in terms of social
development, the economy and environment. The Vietnamese economy's growth rate
of 8.5%, the highest figure in a decade, was the striking feature in 2007. This
was driven by a high growth in the industrial and construction sector, which
registered an increase of 10.6%, and services, with 8.7% growth.
In 2007, Vietnam's investment environment witnessed a significant improvement.
Vietnam has emerged as a reliable destination for business and investment.
According to the first quarter report in 2007 by the Japan External Trade
Organisation (JETRO), Vietnam ranked third in Asia, behind China and Thailand,
in terms of the investment environment.
Macro-economic balance was achieved in 2007, creating favourable conditions for
the Vietnamese economy to develop stably.
Budget balances were stable in 2007 with budget revenues and expenditures
reaching or exceeding the yearly plan. State budget revenues accounted for 25%
of GDP while the budget deficit was limited to 5% of GDP.
International balance of payment witnessed a high surplus, resulting in
relatively stable foreign exchange rates and increasing reserves. Government
debt remained at a safe level. Total national foreign debt was equal to 30% of
GDP, much lower than the limit of 50%, while the Government's debt accounted for
36% of GDP.
Source: Vietnam Social-Economic Achievement in 2007 and Solutions for 2008,
Ministry of Foreign Affairs of the Socialist Republic of Vietnam
Inflation
The country's inflation rate in 2006 was 6.6% and it was reported that the rate
increased to 12.6% in 2007. The annualised inflation rate for the first two
months of 2008 was 6% while the government has targeted 8% to 9% for the full
year.
Source: Institute of Statistics of Vietnam
Financial Review and Commentary
The Company's interim financial statements as at 31 December 2007 have been
prepared in accordance with International Financial Reporting Standards (IFRS).
The Company was incorporated on 3 January 2007 in the Cayman Islands as an
investment vehicle to be admitted to trading on AIM, a market for the London
Stock exchange. The Company was admitted to AIM on 18 October 2007. The
principle activity of the Company is to carry out property investment and
development, primarily in Vietnam.
Commentary on Profit and Loss Account for the 6 months ended 31 December 2007
The Company recorded a loss of US$1.131 million for the six month period ended
31 December 2007. The loss from date of incorporation to 30 June 2007 amounted
to US$0.263 million. Expenses for the period were mainly due to:
a) Expenses such as salary and fees for staff/directors, and pre-IPO expenses
and administration costs (excluding professional fees) of approximately US$1.053
million incurred in connection with the IPO of the Company.
b) Expenses incurred post-IPO including directors' fees, the management fee
paid to the Manager, staff salaries and other costs incurred in establishing the
Company's current investment pipeline, which amounted approximately US$0.359
million.
c) The loss is partially set off by interest income of approximately US$0.281
million.
The Group loss was approximately US$1.138 million of which US$1.131 million from
the Company and the balance from subsidiary companies.
Commentary on Balance Sheet for the 6 months ended 31 December 2007
The Company's share capital increased from US$100 at 30 June 2007 to
US$10,766,770 with the issuance of 10,766,670 new shares pursuant to the IPO.
The gross share premium amounted to US$21.533 million and was partially set off
against professional fees/expenses of approximately US$2.462 million incurred as
professionals cost.
The Company's current assets increased from US$0.324 million at 30 June 2007 to
US$28.795 million at 31 December 2007, mainly as a result from the funds raised
at the IPO. The cash balance was US$28.378 million at 31 December 2007. Other
current assets balances representing deposits and prepayments amounted to
US$0.185 million and interest income accrued of US$0.225 million.
The Company's current liabilities are mainly accruals of expenses and
professional fees for the day to day operation of the Company. The Company's
current liabilities decreased from US$0.586 million at 30 June 2007 to US$0.351
million at 31 December 2007 with payments made from IPO proceeds.
The Group's current assets and current liabilities at 31 December 2007 were
US$28.792 million and US$0.355 million respectively.
Valuation
No valuation of the Company's property holdings was carried out as at 31
December 2007 as the Company's first development project was secured in January
2008.
Outlook
Since admission to trading on AIM, SGL has capitalized on its advantages to
secure its position as one of the leading investor in the Vietnam property
market.
Looking ahead, the Company continues to identify a strong flow of attractive
investment opportunities which the Directors believe should further contribute
to NAV growth and expand the Company's investment portfolio.
Financial statements
SGL Vietnam Development Limited
Consolidated and company statements of operations
Group Company
1.7.07 3.1.07 1.7.07 3.1.07
to to to to
31.12.07 30.6.07 31.12.07 30.6.07
Notes US$ US$ US$ US$
Interest income 281,446 - 281,446 -
Administrative expenses (1,419,181) (262,686) (1,412,660) (262,686)
Loss for the period 3 (1,137,735) (262,686) (1,131,214) (262,686)
Weighted Average Loss per share 4 0.51 5,254 0.51 5,254
SGL Vietnam Development Limited
Consolidated and company balance sheets
Group Company
31.12.07 30.6.07 31.12.07 30.6.2007
Notes US$ US$ US$ US$
Non-current assets
Investment in subsidiaries 5 - - 4 -
Total non-current assets - - 4 -
Current assets
Cash and short term deposits 6 28,381,105 100 28,377,540 100
Amount due from subsidiaries 7 - - 6,766 -
Deposits and prepayments 8 184,949 323,462 184,949 323,462
Interest receivable 225,455 - 225,455 -
Total current assets 28,791,509 323,562 28,794,710 323,562
Current liabilities
Amount due to related parties 9 174,667 230,376 172,175 230,376
Accrued expenses 179,899 355,772 179,075 355,772
Total current liabilities 354,566 586,148 351,250 586,148
Net assets/ (liabilities) 28,436,943 (262,586) 28,443,464 (262,586)
Equity
Share capital 10 10,766,770 100 10,766,770 100
Share premium 19,070,594 - 19,070,594 -
Retained loss 11 (1,400,421) (262,686) (1,393,900) (262,686)
Total equity/ 28,436,943 (262,586) 28,443,464 (262,586)
(shareholders' deficit)
Net Asset Value ("NAV") per Share (US$) 2.64
SGL Vietnam Development Limited
Consolidated and company statements of changes in equity
Share Share Retained Total
Capital Premium Loss Equity
Group US$ US$ US$ US$
At 3 January 2007 1 - - 1
Issuance of ordinary shares for cash 99 - - 99
Loss for the period - - (262,686) (262,686)
At 30 June 2007 100 - (262,686) (262,586)
Loss for the period - - (1,137,735) (1,137,735)
Issuance of ordinary shares for cash 10,766,670 19,070,594 - 29,837,624
At 31 December 2007 10,766,770 19,070,594 (1,400,421) 28,436,943
Share Share Retained Total
Capital Premium Loss Equity
Company US$ US$ US$ US$
At 3 January 2007 1 - - 1
Issuance of ordinary shares for cash 99 - - 99
Loss for the period - - (262,686) (262,686)
At 30 June 2007 100 - (262,686) (262,586)
Loss for the period - - (1,131,214) (1,131,214)
Issuance of ordinary shares for cash 10,766,670 19,070,594 - 29,837,264
At 31 December 2007 10,766,770 19,070,594 (1,393,900) 28,443,464
SGL Vietnam Development Limited
Consolidated statement of cash flows
1.7.2007 3.1.2007
to to
31.12.2007 30.6.2007
US$ US$
Operating activities
Net loss for the period (1,137,735) (262,686)
Operating cash flows before working capital changes (1,137,735) (262,686)
Decrease (Increase) in deposits and prepayments 138,513 (323,462)
Increase in interest receivable (225,455) -
(Decrease) Increase in amounts due to related parties (55,709) 230,376
(Decrease) Increase in accrued expenses (175,873) 355,772
Net cash used in operating activities (1,456,259) -
Financing activities
Proceeds on issue of shares 32,300,210 100
Payments of share issuance costs (2,462,946) -
Net cash provided by financing activities 29,837,264 100
Net increase in cash and cash equivalents 28,381,005 100
Cash and cash equivalents, beginning of period 100 -
Cash and cash equivalents, end of period 28,381,105 100
Notes to the consolidated and company financial information
1. General information
SGL VIETNAM DEVELOPMENT LIMITED is a Cayman Islands exempted Company, which is
incorporated in the Cayman Islands and publicly traded on AIM.
The registered office of the Group is at 802 West Bay Road, Grand Pavilion
Commercial Centre, P.O. Box 2003, Grand Cayman KY1-1104, Cayman Islands.
The principal activity of the Group is to engage in property investment and
development, primarily in Vietnam. The nature of the Group's operations and its
principal activities are set out in the Investment Manager's Report and
Financial Review and Commentary.
2.1 Adoption of new and revised Standards
In the current financial period, the Group has adopted International Financial
Reporting Standards (IFRS) 7, Financial Instruments: Disclosures, (IFRS 7) which
is effective for annual reporting periods beginning on or after 1 January 2007,
and the consequential amendments to International Accounting Standard (IAS) 1,
Presentation of Financial Statements (IAS 1).
The adoption of IFRS 7 and the changes to IAS 1 have had no material impact to
the financial statements.
The Group and the Company have not applied the following Standards and
Interpretations which have been issued but are not yet effective:
IFRS 8 Operating Segments, effective for periods beginning on or after 1 January
2009 with early adoption permitted; and IFRIC 12 Service Concession
Arrangements, effective for periods beginning on or after 1 January 2008 with
early adoption permitted.
The directors anticipate that the adoption of these Standards and
Interpretations will have no material impact on the financial statements of the
Group in the period of initial application.
2.2 Accounting policies
(a) Basis of preparation
The financial statements have been prepared in accordance with IFRS. The
financial statements are expressed in United States Dollars and have been
prepared on the historical cost basis, except for the revaluation of investment
and development properties, certain financial assets and derivatives and
deferred tax thereon. The Group's fiscal year end is 30 June 2008.
The accounting policies have been consistently applied by the Group and the
Company from its inception on 3 January 2007.
(b) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Group and entities (including special purpose entities) controlled by the
Group (its subsidiaries). Control exists when the Group has the power directly
or indirectly, to govern the financial and operating policies of an entity so as
to obtain benefits from its activities. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that
commences until the date that control ceases.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with those used by
other members of the Group.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
In the Company's separate financial statements, investments in subsidiaries are
accounted for at cost less any impairment losses.
(c) Segment reporting
Segment information is required to be presented in respect of the Group's
business and geographical segments under IFRS. As of December 31, 2007, the
Group had not commenced operations and accordingly there is no asset, liability
and operating information which is required to be disclosed on a segmental
basis. Expenditures to date relate solely to start-up and initial public
offering costs and were incurred primarily in Vietnam and the United Kingdom.
(d) Taxation
The Company is incorporated in the Caymans Islands and its subsidiaries are
incorporated in the British Virgin Islands and Vietnam and are subject to the
tax regulations of the respective countries. No provision for tax and deferred
taxation have been provided as the Company is tax exempt within the Cayman
Islands and the Company's subsidiaries are tax exempt within the British Virgin
Islands, and no operations have commenced within the Vietnam entity.
(e) Foreign Currency Translation
The individual financial statements of each Group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each entity are expressed in United States
Dollars, which is the functional currency of the Company and the reporting
currency for the Group's consolidated financial statements.
At entity level, transactions denominated in foreign currencies are translated
into United States Dollars at the exchange rate ruling on the date the
transaction is recorded. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the exchange rate ruling at the balance sheet
date or, if hedged, at the exchange rate under the related hedging transaction
and the resultant exchange differences are dealt with in the profit or loss
statement. Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value
was determined.
Exchange differences arising on the settlement of monetary items or on
translating monetary items at the balance sheet date are recognised in the
profit and loss account except for exchange differences arising on monetary
items that form part of the Group's net investment in foreign subsidiaries,
which are recognised initially in a separate component of equity as foreign
currency translation reserve in the consolidated balance sheet and recognised in
the consolidated profit and loss account on disposal of the subsidiary. In the
Company's separate financial statements, such exchange differences are
recognised in the profit and loss account.
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group's foreign operations are expressed in United States
Dollars using exchange rates prevailing at the balance sheet date. Income and
expense items are translated at the average exchange rate for the period, unless
exchange rates fluctuated significantly during that period, in which case the
exchange rates at the dates of the transactions are used. Exchange differences
arising, if any, are classified as equity and transferred to the Group's
translation reserve. Such exchange differences are recognised in profit and loss
in the period in which the foreign operation is disposed of.
(f) Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will be
required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
3. Loss for the period
Group Company
1.7.07 3.1.07 1.7.07 3.1.07
to to to to
31.12.07 30.6.07 31.12.07 30.6.07
US$ US$ US$ US$
Loss for the period is stated after
charging the following significant
expenses:
Staff costs (including 203,434 117,541 203,434 117,541
directors' remuneration)
Investment manager fee 162,384 - 162,384 -
Directors' fee 110,248 - 110,248 -
4. Basic earning/loss per share
Basic earnings/loss per share amount are calculated by dividing profit/loss for
the period that is attributable to ordinary equity holders of the Group by the
weighted average number of ordinary shares outstanding during the period.
The calculation of loss per share for the period ended 31 December 2007 was
based on the Group and Company's net loss of US$1,137,735 and US$1,131,214
respectively divided by the weighted average number of ordinary shares of
2,212,405 shares for the period from 3 January 2007 (date of inception) to 31
December 2007.
The calculation of loss per share for the period ended 30 June 2007 was based on
the Group and Company's net loss of US$262,686 for the period ended 30 June 2007
and the 100 shares in issue for the period ended 30 June 2007.
5. Investments in subsidiaries
Company
31.12.07 30.6.07
US$ US$
Unquoted equity shares, at cost 4 -
Name of Company Country of Principal Proportion of ownership Cost of investment
incorporation activities interest
31.12.07 30.6.07 31.12.07 30.6.07
Held by the Company % US$ US$
SGL Vietnam BVI Investment 100 - 1 -
Property holding
Limited (1)
SGL Vietnam BVI Investment 100 - 1 -
Asset Limited holding
(1)
SGL Vietnam BVI Investment 100 - 1 -
Real Estate holding
Limited (1)
SGL Vietnam BVI Investment 100 - 1 -
Land Limited holding
(1)
4 -
Held by subsidiary Company
Name of Company Country of Principal activities Proportion of ownership
incorporation interest
31.12.07 30.6.07
%
SGL Vietnam Vietnam Project Management 100 -
Property Company
Limited (1)
(1) Incorporated during the financial period ended 31 December 2007. Not audited
as the Company is currently dormant.
6. Cash and short term deposits
Included in cash and short term deposits are fixed deposits of US$28,100,000
placed with the Company's principal banker earning interest rates ranging from
4.8% to 4.9% per annum.
7. Amount due from subsidiaries
The amounts due to the Company from subsidiaries of US$6,766 at 31 December 2007
are non-trade, unsecured, interest free and repayable on demand.
8. Deposit and Prepayments
Group Company
31.12.07 30.06.07 31.12.07 30.06.07
US$ US$ US$ US$
Deposit - 4,000 - 4,000
Prepaid expenses 184,949 319,462 184,949 319,462
184,949 323,462 184,949 323,462
9. Amount due to related parties
These amounts due are related to expenses which the Group has had to pay in cash
have been settled by the Investment Manager, SGL Capital Investment Management
Limited ("SGLC"), and a related party, World of Sports Pte Ltd ("WOS"). Mr
George Goh and Ms Susan Sim, directors of the Group, are key management
personnel of SGLC. Mr George Goh is the majority shareholder of SGLC and a
director of WOS.
These amounts due to related parties are non-trade, unsecured, interest free and
repayable on demand. See further information of related party transactions at
Note 14.
10. Share capital
Authorised share capital
Group and Company
No. of shares
31.12.07 30.6.07
On incorporation 50,000 50,000
Addition for the period 14,985,000 -
At period end 15,000,000 50,000
Group and Company
31.12.2007 30.06.2007
No. of US$ No. of US$
shares shares
Issued and fully paid-up capital
On incorporation 1 1 1 1
Addition for the period 10,766,769 10,766,769 99 99
At period end 10,766,770 10,766,770 100 100
The Company was incorporated with 50,000 ordinary shares authorised with a par
value of US$1 per share. On October 14, 2007, the Company increased its
authorised shares from 50,000 ordinary shares to 15,000,000 ordinary shares with
a par value of US$1 per share.
The holders of ordinary shares are entitled to receive dividends as and
when declared by the Company. All ordinary shares carry one vote per share
without restriction.
11. Retained loss
Group Company
31.12.2007 31.12.2007
US$ US$
On incorporation - -
Loss for the period (262,686) (262,686)
At 30 June 2007 - (262,686)
Loss for the period (1,137,735) (1,131,214)
At 31 December 2007 (1,400,421) (1,393,900)
12. Commitments
Other than as disclosed in Note 13, the Group did not have any material
commitments at 31 December 2007. See Note 16 for a description of commitments
entered into after 31 December 2007.
13. Financial instruments
At the balance sheet dates, the Group has no significant concentration of credit
risk. The maximum exposure to credit risk is represented by the carrying amount
of each financial asset in the balance sheet.
14. Related party Disclosure
a) Purchase of services
In addition to the related party information disclosed elsewhere in the
financial statements, the following significant transactions between the Group
and related parties who are not members of the Group took place during the year
at terms agreed between the parties and are substantially the same as terms
agreed at arms length:
Group Company
1.7.2007 3.1.2007 1.7.2007 3.1.2007
to To To to
31.12.2007 30.06.2007 31.12.2007 30.06.2007
US$ US$ US$ US$
Investment Manager fees expenses paid 162,384 - 162,384 -
to SGLC (Note 8)
Reimbursement of expenses paid on 82,895 230,376 82,895 230,376
behalf of the Company by SGLC (Note
8)
Reimbursement of expenses paid on 89,280 - 89,280 -
behalf of the Company by WOS (Note 8)
334,559 230,376 334,559 230,376
In the course of the Company's IPO, as highlighted in the Company's admission
document, SGLC made certain payments for and on behalf of the Company for IPO
related expenses amounting to US$1,295,000. The Company settled these advances
through the issuance of 333,334 of the Company's shares valued at US$1,000,000
and the balance of US$295,000 was paid in cash.
During the six month period ended 31 December 2007, the Company paid a total of
US$323,003 as investment manager fees to SGLC for the services rendered from
October 2007 to March 2008, of which US$162,384 has been expensed during the
period and US$160,619 is included in prepaid expenses. The advance payment of
the quarterly fees was set out in the Company's admission document and was
calculated based on a 2.0 percent annual rate on the gross proceeds of the IPO.
In accordance with the Management Agreement, the investment manager fees are
calculated at 2.0 percent. per annum of the Company's NAV as of the end of the
prior quarter. Any over or under payment of the management fee will be adjusted
by the Company's Administrator in the next management fee due.
b) Compensation of key management personnel
Group Company
1.7.2007 3.1.2007 1.7.2007 3.1.2007
to To To to
31.12.2007 30.06.2007 31.12.2007 30.06.2007
US$ US$ US$ US$
Short-term benefits 205,696 85,872 205,696 85,872
15. Dividends
The Group and Company did not declare or distribute dividends during the
financial periods ended 31 December 2007 and 30 June 2007.
16. Status of Pre- listing Projects
In its admission document the Group disclosed having entered into five Memoranda
of Understanding (MOUs) related to potential development projects. The name and
proposed location of the development projects was as follows:
Hongai, Ha Long;
Lang Ha, Hanoi;
Thong Nhat, Dong Nai;
Binh Khanh, Ho Chi Minh City; and
Long Truong B, Ho Chi Minh City.
Subsequent to being admitted to trading on AIM on 18 October 2007 the Group
determined it would no longer pursue the projects contemplated by the Hongai,
Thong Nhat, Binh Khanh, and Long Truong B MOUs. The Group did not incur any
penalties related to ceasing to pursue these MOUs. The Lang Ha, Hanoi project is
still in the negotiation stage.
17. Subsequent Events
Thu Duc project
A joint-venture agreement was entered into on 16 January 2008 by one of the
subsidiaries of the Company with a local partner, Dung Thanh Manufacturing,
Construction & Trading Company, Ltd. (DTMC) for the purpose of developing a
residential and commercial mid-rise property in the Thu Duc district of Ho Chi
Minh City. The joint-venture is to be 80 percent funded by the Group and 20
percent funded by DTMC, with the Group's portion of the development cost
expected to be approximately US$20.3 million. The Group intends to fund the
development costs c.20 percent through cash and c.80 percent through future
borrowings. The Group expects to secure a construction permit and initiate
pre-construction sales in 2H 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KKLBFVXBLBBZ
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