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Aseana Properties Limited Half-year Results for 6 Months Ended 30 June 2020

23/09/2020 10:00am

UK Regulatory (RNS & others)


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TIDMASPL

RNS Number : 8731Z

Aseana Properties Limited

23 September 2020

23 September 2020

Aseana Properties Limited

("Aseana", the "Company" or, the "Group")

Half-Year Results for the Six Months Ended 30 June 2020

Aseana Properties Limited (LSE: ASPL), a property developer with investments in Malaysia and Vietnam, listed on the Main Market of the London Stock Exchange, announces its unaudited half-year results for the six-month period ended 30 June 2020.

Operational highlights:

-- The RuMa Residences achieved approximately 70% sales to date based on sale and purchase agreements signed.

-- Prior to the Movement Control Order ("MCO") issued on 18(th) March 2020 in Malaysia, The RuMa Hotel achieved an average occupancy rate of approximately 55% in January and about 40% in February. The hotel was closed in March 2020 and is targeted to re-open in October 2020.

-- As reported in our Annual Report issued 24(th) July, 2020, Four Points by Sheraton Sandakan Hotel was closed in early 2020 due to the MCO in Malaysia and the decision to permanently close was taken when Marriott International terminated its hotel management agreement.

-- The Harbour Mall Sandakan has slowly re-opened after the gradual lifting of the MCO, its performance has exceeded expectations with occupancy rates at about 94%, however the mall operator has had to rebate rental lease payments to tenants for the duration of the MCO when the mall was mostly closed.

-- The City International Hospital ("CIH") has shown a decline in its operational performance due to the impact of the COVID virus, with outpatient and inpatient volumes decreasing by approximately 12% and 26% respectively compared to the same period in 2019. Additionally, in late July CIH had a patient who tested positive for the COVID virus which led to a temporary closure of the hospital until the Ministry of Health issued a "clean bill of health". Unfortunately, this temporary closure will exacerbate the already negatively impacted financial performance. The hospital reopened on 11(th) August, 2020.

Financial highlights:

   --    Other Income of US$8.6 million (H1 2019: US$11.0 million) 
   --    Loss before tax of US$8.2 million (H1 2019: loss of US$5.2 million) 
   --    Loss after tax of US$8.3 million (H1 2019: loss of US$5.8 million) 
   --    Consolidated comprehensive loss of US$11.1 million (H1 2019: loss of US$5.9 million) 

-- Net asset value of US$100.3 million (31 December 2019 (audited): US$109.6 million) or US$0.50 per share (31 December 2019 (audited): US$0.55 per share)

Commenting on the results, Nick Paris, Chairman of Aseana, said:

"The H1 2020 results are reflective of the challenging market conditions in Malaysia and Vietnam resulting from the negative impact of COVID 19 and the actions taken by the respective governments to contain the spread of the virus. Nonetheless, the Company is focused on improving the operational performance and narrowing the losses of its operating assets to improve the sale prospects of the remaining assets and to realise the sale of those assets in a controlled, orderly and timely manner".

For further information:

 
 Aseana Properties Limited      Tel: 020 3325 7050 
 Nick Paris (Chairman)          Email: nick.paris@limadvisors 
                                 .com 
 
 Liberum Capital                Tel: 020 3100 2000 
 Gillian Martin/Owen Matthews   owen.matthews@liberum.com 
 
 
 
 
 

Notes to Editors:

London-listed Aseana Properties Limited (LSE: ASPL) is a property developer with investments in Malaysia and Vietnam which is in the process of realising its assets.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report on the results of Aseana Properties Limited and its Group of companies for the six months ended 30 June 2020.

The global economy experienced a significant growth shock during the first six months of 2020 triggered by the spread of the COVID virus around Asia and the measures put in place to control it. These severely curtailed the movement of people between and within countries which then impacted the hospitality and services businesses on which Aseana concentrates. Malaysia registered a GDP growth of 0.7% in Q1 2020 but a GDP decrease of 17.1% in Q2 2020 compared to growth of 4.7% for the six months period last year (1H 2019). Vietnam experienced two quarters of weak growth and overall 1H 2020 growth of 1.81% compared to growth of 6.7% in the same period last year.

Interim Results for the Half Year ended 30(th) June 2020

Our interim results in this period reflect the significant impact of the COVID virus on our businesses particularly after the governments of both Malaysia and Vietnam introduced movement controls on their citizens and on foreign visitors in March. As a result our two hotels had to shut, our shopping mall had to close for all but essential shopping and our hospital in Ho Chi Minh saw a reduction in elective surgeries and overall patient admissions. Our revenue on all of our assets was severely reduced and despite significant cost cutting initiatives which were undertaken by the Board, operating losses and increased cash outflows were inevitable. As a result the consolidated loss for Aseana for the half year increased to US$11.1 million (1H 2019 - US$5.9 million).

The movement controls also severely hampered our asset sale activities as prospective buyers were unable to carry out their on the ground due diligence. Nevertheless, we did sell two of our three plots of undeveloped beachfront land in Kota Kinabalu in July for a price representing 90% of their carrying value and completion of those sales is still expected in October. We are working hard to restart sale discussions on our other assets but as yet the movement controls have still not been relaxed sufficiently to permit prospective foreigner buyers to enter either Malaysia or Vietnam.

The Board undertakes annual revaluations of the Group's properties and this was last done in connection with the Annual Report for the year ended 31(st) December 2019. The next full valuation will be carried out at this financial year end and your Directors have not made any impairments to the carrying value of the assets in these Interim results as they believe that it is not yet possible to gauge the impact of the virus on their long term business models or the appetite of potential investors for our remaining assets. Nevertheless, the loss which we are reporting for the six months ended 30(th) June 2020 has reduced our Net Asset Value per Share from US$0.55 to US$0.50.

An update on our Assets

The RuMa Hotel has not yet been re-opened although preparations have been made to do so. However, an important component of its target market comprises foreign tourists and business people and they are still not permitted to enter Malaysia.

Local movement controls have recently been reduced within Malaysia and we have therefore fully re-opened our shopping mall in Sandakan and occupancy of it has been re-built to previous levels. Our hotel in Sandakan remains shut following the resignation of Marriott International as its operator and running costs have been cut to the minimum required to maintain the condition and security of the building. We now intend to re-market the hotel as a standalone entity which can be more easily absorbed by another hotel group without the need to remove an incumbent manager.

Our hospital in Ho Chi Minh remains open but recent virus outbreaks starting in central and southern Vietnam have made the local population wary of attending medical facilities. It will therefore take time to re-build business levels.

The Demerger Proposal

As Shareholders will know, we are proposing a demerger of the interests of Ireka and Legacy Essence and other related parties from those of Aseana and I thank our Shareholders for their support at our own EGM which was held on 18 August. We now await approval from the shareholders of Ireka and from our bankers and we hope to complete the demerger in October. Once the demerger completes, Aseana will divest two assets being The RuMa Hotel & Residences and the remaining plot of undeveloped land in Kota Kinabalu and will have four assets remaining. The Aseana shares owned by the demerging Shareholders will be bought back from them in exchange for demerging the nominated assets to a new investment vehicle and those Shares will then be cancelled by the Company. As a result, the number of Aseana Shares will be reduced by approximately half and our market capitalisation on the London Stock Exchange will fall by the same percentage.

Our Business Focus and Property Divestments

Our current business focus for the Group is on reducing our costs to preserve our cash balances and on improving the operational performances of our remaining assets. The sale of the land plots in July and completion of the demerger transaction should bring in some modest cash inflows and we will use these to finance the operations of the remaining assets whilst we seek to sell them.

The impact of the COVID virus stopped all active sale discussions on our assets in March and the ongoing effect on operating revenues and costs at our assets is difficult at this stage for prospective buyers to quantify. However, we have already restarted sale discussions on some of those assets in order to seek to realise them in a controlled, orderly and timely manner and to return surplus sale proceeds after repaying their attributable borrowings to our remaining Shareholders.

Acknowledgements

I would like to take this opportunity to thank my colleagues on the Board and throughout our Group and our external advisors, bankers and service providers for their tireless efforts on behalf of the Group and its Shareholders. This has been a very challenging period in the corporate life of Aseana and the proposed demerger transaction will mark a major watershed point. Assuming that it completes, our Group will undergo a significant transformation for the better - leaner but with significantly improved cash-flows and we can concentrate on the task of selling our remaining assets.

NICK PARIS

Chairman

23 September 2020

PROPERTY PORTFOLIO AS AT 30 JUNE 2020

 
 Project                            Type            Effective   Approximate 
                                                    Ownership         Gross 
                                                                      Floor   Approximate 
                                                                       Area     Land Area 
                                                                     (sq m)        (sq m) 
--------------------------  --------------------  -----------  ------------  ------------ 
 The RuMa Hotel &            Luxury residential 
  Residences                  tower and bespoke 
  Kuala Lumpur, Malaysia            hotel               70.0%        40,000         4,000 
--------------------------  --------------------  -----------  ------------  ------------ 
 Sandakan Harbour 
  Square 
  Sandakan, Sabah,                Hotel and 
  Malaysia                        retail mall          100.0%       126,000        48,000 
--------------------------  --------------------  -----------  ------------  ------------ 
 City International 
  Hospital, International 
  Healthcare Park, 
  Ho Chi Minh City,            Private general 
  Vietnam                          hospital            72.9%*        48,000        25,000 
--------------------------  --------------------  -----------  ------------  ------------ 
 Undeveloped projects 
--------------------------  --------------------  -----------  ------------  ------------ 
 Other developments 
  in International 
  Healthcare Park,               Commercial 
  Ho Chi Minh City,            and residential 
  Vietnam (formerly              development 
  International Hi-Tech        with healthcare 
  Healthcare Park)                  theme              72.9%*       972,000       351,000 
--------------------------  --------------------  -----------  ------------  ------------ 
                                (i) Boutique 
                                 resort hotel 
 Kota Kinabalu Seafront           and resort 
  resort & residences               villas             100.0% 
  Kota Kinabalu, Sabah,          (ii) Resort 
  Malaysia                          homes               80.0%           n/a       327,000 
--------------------------  --------------------  -----------  ------------  ------------ 
 

*Shareholding as at 30 June 2020

n/a: Not available/ Not applicable

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHSED 30 JUNE 2020

 
                                                     Unaudited       Unaudited        Audited 
                                                    Six months      Six months           Year 
                                  Notes                  ended           ended          ended 
                                                       30 June         30 June    31 December 
                                                          2020            2019           2019 
 Continuing activities                                 US$'000         US$'000        US$'000 
-------------------------------  ------  ---------------------  --------------  ------------- 
 Revenue                            3                        -           5,653          9,725 
 Cost of sales                      5                      (3)         (4,990)       (29,799) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 Gross profit/(loss)                                       (3)             663       (20,074) 
 Other income                                            8,581          11,045         26,989 
 Administrative expenses                                 (637)           (290)        (1,122) 
 Foreign exchange gain              6                  (1,023)            (67)            287 
 Management fees                                             -           (497)        (1,157) 
 Marketing expenses                                       (11)            (94)          (171) 
 Other operating expenses                             (11,647)        (12,748)       (29,688) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 Operating loss                                        (4,740)         (1,988)       (24,936) 
                                         ---------------------  --------------  ------------- 
 Finance income                                            882             492          5,793 
 Finance costs                                         (4,426)         (3,727)        (9,514) 
                                         ---------------------  --------------  ------------- 
 Net finance costs                                     (3,544)         (3,235)      ( 3,721 ) 
 Net loss before taxation                              (8,284)         (5,223)       (28,657) 
 Taxation                           7                      (4)           (602)        (1,349) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 Loss for the period/year                              (8,288)         (5,825)       (30,006) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 Other comprehensive (loss)/ income, net of tax 
  Items that are or may be reclassified subsequently to profit or loss 
  Foreign currency translation differences 
     for foreign operations                            (2,873)            (67)          (615) 
 Total other comprehensive 
   loss for the period/year                            (2,873)            (67)          (615) 
 Total comprehensive loss 
  for the period/year                                 (11,161)         (5,892)       (29,391) 
-------------------------------  -----------------------------  --------------  ------------- 
 
  Loss attributable to: 
  Equity holders of the parent                         (6,485)         (4,055)       (27,106) 
 Non-controlling interests                             (1,803)         (1,770)        (2,900) 
-------------------------------  -----------------------------  --------------  ------------- 
 Total                                                 (8,288)         (5,825)       (30,006) 
-------------------------------  -----------------------------  --------------  ------------- 
 
   Total comprehensive loss 
 attributable to: 
 Equity holders of the parent                          (9,345)         (4,095)       (26,485) 
 Non-controlling interests                             (1,816)         (1,797)        (2,906) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 Total                                                (11,161)         (5,892)       (29,391) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 (Loss)/Earnings per share 
  Basic and diluted (US cents)       8                  (3.26)          (2.04)        (13.64) 
-------------------------------  ------  ---------------------  --------------  ------------- 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

 
                                          Unaudited     Unaudited             Audited 
-------------------------------  ------ 
                                              As at         As at               As at 
                                            30 June       30 June         31 December 
------------------------------- 
                                               2020          2019                2019 
                                  Notes     US$'000       US$'000             US$'000 
-------------------------------  ------  ----------  ------------  ------------------ 
 Non-current assets 
 Property, plant and equipment                  593           664                 620 
 Intangible assets                            4,097         4,085               4,097 
 Right of use                                   360             -                 544 
 Deferred tax assets                          4,842         4,828               5,066 
-------------------------------  ------  ----------  ------------  ------------------ 
 Total non-current assets                     9,892         9,577              10,327 
-------------------------------  ------  ----------  ------------  ------------------ 
 
  Current assets 
 
   Inventories                              232,753       263,526             238,863 
 Trade and other receivables                 17,746        14,578              12,902 
 Prepayments                                    606           598                 524 
 Current tax assets                               3           143                   3 
 Cash and cash equivalents                    5,226         6,791               7,615 
-------------------------------  ------  ----------  ------------  ------------------ 
 Total current assets                       256,334       285,636             259,907 
-------------------------------  ------  ----------  ------------  ------------------ 
 
   TOTAL ASSETS                             266,226       295,213             270,234 
-------------------------------  ------  ----------  ------------  ------------------ 
 
   Equity 
 Share capital                               10,601        10,601              10,601 
 Share premium                              208,925       208,925             208,925 
 Capital redemption reserve                   1,899         1,899               1,899 
 Translation reserve                       (24,504)      (22,305)            (21,644) 
 Accumulated losses                        (96,630)      (66,841)            (90,135) 
-------------------------------  ------  ----------  ------------  ------------------ 
 Shareholders' equity                       100,291       132,279             109,646 
 Non-controlling interests                  (5,654)       (2,734)             (3,848) 
-------------------------------  ------  ----------  ------------  ------------------ 
 Total equity                                94,637       129,545             105,798 
-------------------------------  ------  ----------  ------------  ------------------ 
 
   Non-current liabilities 
 Trade and other payable                     37,518        38,638              39,253 
 Loans and borrowings               9        25,318        14,043              18,968 
 Total non-current liabilities               62,836        52,681              58,221 
-------------------------------  ------  ----------  ------------  ------------------ 
 
   Current liabilities 
 Trade and other payables                    30,681        28,676              23,549 
 Amount due to non-controlling 
  interests                                  10,923         9,728              10,587 
 Loans and borrowings               9        28,182        43,701              34,713 
 Medium term notes                 10        37,878        29,506              36,142 
 Current tax liabilities                      1,089         1,376               1,224 
-------------------------------  ------  ----------  ------------  ------------------ 
 Total current liabilities                  108,753       112,987             106,215 
-------------------------------  ------  ----------  ------------  ------------------ 
 Total liabilities                          171,589       165,668             164,436 
-------------------------------  ------  ----------  ------------  ------------------ 
 
  TOTAL EQUITY AND LIABILITIES              266,226       295,213             270,234 
-------------------------------  ------  ----------  ------------  ------------------ 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the SIX MONTHS ended 30 JuNE 2020 - Unaudited

 
                                                                                                    Total Equity 
                                                                                                    Attributable 
                                                                                                       to Equity 
                   Redeemable                               Capital                                      Holders           Non- 
                     Ordinary   Management      Share    Redemption    Translation    Accumulated         of the    Controlling 
                       Shares       Shares    Premium       Reserve        Reserve         Losses         Parent      Interests    Total Equity 
                      US$'000      US$'000    US$'000       US$'000        US$'000        US$'000        US$'000        US$'000         US$'000 
---------------  ------------  -----------  ---------  ------------  -------------  -------------  -------------  -------------  -------------- 
 1 January 2020        10,601            -    208,925         1,899       (21,644)       (90,135)        109,646        (3,848)      105,798 
 Loss for the 
  period                    -            -          -             -              -        (6,485)        (6,485)        (1,803)         (8,288) 
 Total other 
  comprehensive 
  loss                      -            -          -             -        (2,860)              -        (2,860)           (13)      (2,873) 
                 ------------  -----------  ---------  ------------  -------------  -------------  -------------  -------------  -------------- 
 Total 
  comprehensive 
  loss                      -            -          -             -        (2,860)        (6,485)        (9,345)        (1,816)     (11,161) 
---------------  ------------  -----------  ---------  ------------  -------------  -------------  -------------  -------------  -------------- 
 Change in 
  ownership 
  of 
  subsidiaries              -            -          -             -              -           (10)           (10)             10         - 
---------------  ------------  -----------  ---------  ------------  -------------  -------------  -------------  -------------  -------------- 
 
  Shareholders' 
  equity 
  at 30 June 
  2020                 10,601            -    208,925         1,899       (24,504)       (96,630)        100,291        (5,654)       94,637 
===============  ============  ===========  =========  ============  =============  =============  =============  =============  ============== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the SIX MONTHS ended 30 JuNE 2019 - Unaudited

 
                                                                                                    Total Equity 
                                                                                                    Attributable 
                                                                                                       to Equity 
                   Redeemable                               Capital                                      Holders           Non- 
                     Ordinary   Management      Share    Redemption    Translation    Accumulated         of the    Controlling 
                       Shares       Shares    Premium       Reserve        Reserve         Losses         Parent      Interests    Total Equity 
                      US$'000      US$'000    US$'000       US$'000        US$'000        US$'000        US$'000        US$'000         US$'000 
---------------  ------------  -----------  ---------  ------------  -------------  -------------  -------------  -------------  -------------- 
 1 January 2019        10,601            -    208,925         1,899       (22,265)       (62,786)        136,374          (937)      135,437 
 Loss for the 
  period                    -            -          -             -              -        (4,055)        (4,055)        (1,770)         (5,825) 
 Total other 
  comprehensive 
  loss                      -            -          -             -           (40)              -           (40)           (27)        (67) 
                 ------------  -----------  ---------  ------------  -------------  -------------  -------------  -------------  -------------- 
 Total 
  comprehensive 
  loss                      -            -          -             -           (40)        (4,055)        (4,095)        (1,797)      (5,892) 
 
  Shareholders' 
  equity 
  at 30 June 
  2019                 10,601            -    208,925         1,899       (22,305)       (66,841)        132,279        (2,734)      129,545 
===============  ============  ===========  =========  ============  =============  =============  =============  =============  ============== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2019 - audited

 
                                                                                                                  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 2018           10,601            -         208,925         1,899       (20,996)       (57,898)        142,531            331    142,862 
 Changes in 
  ownership 
  interests 
  in subsidiaries 
  (Note 32)                   -            -               -             -              -            (3)            (3)              3          - 
 Non-controlling 
  interests 
  contribution                -            -               -             -              -              -              -             63         63 
                   ------------  -----------  ---  ---------  ------------  -------------  -------------  -------------  -------------  --------- 
 Loss for the 
  year                        -            -               -             -              -        (4,885)        (4,885)        (1,521)    (6,406) 
 Total other 
  comprehensive 
  loss for the 
  year                        -            -               -             -        (1,269)              -        (1,269)            187    (1,082) 
                   ------------  -----------  ---  ---------  ------------  -------------  -------------  -------------  -------------  --------- 
 Total 
  comprehensive 
  loss for 
  the year                    -            -               -             -        (1,269)        (4,885)        (6,154)        (1,334)    (7,488) 
-----------------  ------------ 
 As at 31 
  December 2018/ 
  1 
  January 2019           10,601            -         208,925         1,899       (22,265)       (62,786)        136,374          (937)    135,437 
 Impact of change 
  in accounting 
  policy (Note 
  36)                         -            -               -             -              -          (219)          (219)           (29)      (248) 
 Adjusted balance 
  at 31 December 
  2018/ 1 January 
  2019                   10,601            -    #    208,925         1,899       (22,265)       (63,005)        136,155          (966)    135,189 
 Changes in 
  ownership 
  interests 
  in subsidiaries 
  (Note 32)                   -            -               -             -              -           (24)           (24)             24          - 
 Non-controlling 
 interests 
 contribution                 -            -               -             -              -              -              -              -          - 
                   ------------  -----------  ---  ---------  ------------  -------------  -------------  -------------  -------------  --------- 
 Loss for the 
  year                        -            -               -             -              -       (27,106)       (27,106)        (2,900)   (30,006) 
 Total other 
  comprehensive 
  loss for the 
  year                        -            -               -             -            621              -            621            (6)        615 
                   ------------  -----------  ---  ---------  ------------  -------------  -------------  -------------  -------------  --------- 
 Total 
  comprehensive 
  loss for 
  the year                    -            -               -             -            621       (27,106)       (26,485)        (2,906)   (29,391) 
 Shareholders' 
  equity at 31 
  December 2019          10,601            -    #    208,925         1,899       (21,644)       (90,135)        109,646        (3,848)    105,798 
=================  ============  ===========  ===  =========  ============  =============  =============  =============  =============  ========= 
 

#represents 2 management shares at US$0.05 each

 
 CONSOLIDATED STATEMENT OF CASH FLOWS 
 FOR THE SIX MONTHSED 30 JUNE 2020 
                                                                     Unaudited    Unaudited          Audited 
                                                                    Six months   Six months             Year 
                                                                         ended        ended            ended 
                                                                       30 June      30 June      31 December 
                                                                          2020         2019             2019 
                                                                       US$'000      US$'000          US$'000 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 Cash Flows from Operating Activities 
 Net loss before taxation                                              (8,284)      (5,223)       (28,657) 
 Finance income                                                          (882)        (492)        (5,793) 
 Finance costs                                                           4,426        3,727          9,514 
 Unrealised foreign exchange gain                                          998         (14)          (292) 
 Write down/Impairment of goodwill                                           -           62             51 
 Depreciation of property, plant 
  and equipment                                                             46           56            105 
 Net realisation value adjustments 
  of inventory                                                               -            -         23,287 
 Operating (loss)/profit before changes 
  in working capital                                                   (3,696)      (1,884)        (1,785) 
 Changes in working capital: 
 Decrease /(Increase) in inventories                                   (4,287)        3,387          6,931 
 Decrease /(Increase) in trade and 
  other receivables and prepayments                                    (5,442)        2,453          7,949 
 (Decrease) /Increase in trade and 
  other payables                                                         6,929      (4,911)       (10,794) 
-------------------------------------------------------------  ---------------  -----------  ------------- 
 Cash used in operations                                               (6,496)        (955)          2,294 
 Interest paid                                                         (4,426)      (3,727)        (9,514) 
 Tax paid                                                                (122)        (602)        (1,568) 
-------------------------------------------------------------  ---------------  -----------  ------------- 
 
   Net cash used in operating activities                              (11,044)      (5,284)        (8,788) 
-------------------------------------------------------------  ---------------  -----------  ------------- 
 
 Cash Flows From Investing Activities 
    Proceeds from disposal of property, 
     plant and 
     equipment                                                               6            6              6 
 Purchase of property, plant and 
  equipment                                                               (25)         (50)           (54) 
 Finance income received                                                   882          492          2,221 
-------------------------------------------------------------  ---------------  -----------  ------------- 
 Net cash from investing activities                                        863          448          2,173 
-------------------------------------------------------------  ---------------  -----------  ------------- 
 
 
 
   CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D) 
 FOR THE SIX MONTHSED 30 JUNE 2020 
                                                                     Unaudited    Unaudited          Audited 
                                                                    Six months   Six months             Year 
                                                                         ended        ended            ended 
                                                                          June      30 June      31 December 
                                                                          2020         2019             2019 
                                                                       US$'000      US$'000          US$'000 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 Cash Flows From Financing Activities 
 (Repayment)/Advances from non-controlling 
  interests                                                                578      (3,435)          (2,666) 
 Issuance of ordinary shares of subsidiaries 
  to non-controlling interests (i)                                           -            -                - 
 Finance lease liabilities                                                (40)            -            (873) 
 Repayment of loans and borrowings                                     (2,496)      (7,338)         (12,612) 
 Drawdown of loans and borrowings 
  and medium term notes                                                  9,603        9,820           17,448 
 Net (increase)/decrease in pledged 
  deposits for loans and borrowings 
  and Medium Term Notes                                                  1,703      (2,306)          (1,651) 
 
   Net cash from/(used in) financing 
   activities                                                            9,348      (3,259)               96 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 Net changes in cash and cash equivalents 
  during the period/year                                                 (833)      (8,095)          (6,519) 
 Effect of changes in exchange rates                                       322           11            (109) 
 Cash and cash equivalents at the 
  beginning of the period/year (i)                                       3,235        9,863            9,863 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 Cash and cash equivalents at the 
  end of the period/year (i)                                             2,724        1,779            3,235 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 
   (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: 
 
   Cash and bank balances                                                2,105        1,235            2,380 
 Short term bank deposits                                                3,121        5,556            5,235 
-------------------------------------------------------------  ---------------  -----------  --------------- 
                                                                         5,226        6,791            7,615 
 Less: Deposits pledged (ii)                                           (2,502)      (5,012)          (4,380) 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 Cash and cash equivalents                                               2,724        1,779            3,235 
-------------------------------------------------------------  ---------------  -----------  --------------- 
 
 

(ii) Included in short term bank deposits and cash and bank balance is US$2,502,000 (31 December 2019:US$4,380,000; 30 June 2019: US$5,012,000) pledged for loans and borrowings and Medium Term Notes of the Group.

The notes to the financial statements form an integral part of the financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHSED 30 JUNE 2020

   1          General Information 

The principal activities of the Group are the development of upscale residential and hospitality projects, sale of development land and operation and sale of hotels, a shopping mall and a hospital in Malaysia and Vietnam.

   2          Summary of Significant Accounting Policies 
               2.1       Basis of Preparation 

The interim condensed consolidated financial statements for the six months ended 30 June 2020 have been prepared in accordance with IAS 34, Interim Financial Reporting.

The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2019 which have been prepared in accordance with IFRS.

Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

The interim results have not been audited nor reviewed and do not constitute statutory financial statements.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2019 as described in those annual financial statements.

The interim report and financial statements were approved by the Board of Directors on 23 September 2020.

   3          SegmentAL Information 

The Group's assets and business activities were managed by Ireka Development Management Sdn. Bhd. ("IDM") as the Development Manager under a Management Agreement dated 27 March 2007. IDM resigned on 21 March 2019 and served out their notice period until 30 June 2019. Following that date, the Company has been managed by its Board of Directors with the assistance of certain staff seconded to the Company by Ireka and a Chief Executive Officer who resigned in January 2020. On 31 May 2020 the Company terminated the Services Agreement and also the staff secondment arrangements with Ireka and has engaged a few staff directly to run its finances and operations.

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 allocations. 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. - developed, owns and operates Harbour Mall Sandakan ("HMS") and Four Points by Sheraton Sandakan Hotel ("FPSS");

(iv) Amatir Resources Sdn. Bhd. - developed SENI Mont' Kiara ("SENI");

   (v)   The RuMa Hotel KL Sdn Bhd  - operates The RuMa Hotel 

(vi) Urban DNA Sdn. Bhd.- developed and owns The RuMa Hotel and Residences ("The RuMa") and

(vii) Hoa Lam-Shangri-La Healthcare Group - master developer of International Healthcare Park ("IHP"); developed, owns and operates the City International Hospital ("CIH").

Other non-reportable segments comprise the Group's other development projects. None of these segments meets any of the quantitative thresholds for determining reportable segments in 2020 and 2019.

Information regarding the operations of each reportable segment is included below. The Board of Directors monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. Performance is based on segment gross profit/(loss) and profit/(loss) before taxation, which the Directors believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets 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 located in Malaysia and Vietnam.

Operating Segments ended 30 June 2020 - Unaudited

 
 
                                                                                              Hoa 
                   Investment    Ireka       ICSD        Amatir       The RuMa    Urban       Lam-Shangri-La 
                   Holding       Land        Ventures    Resources    Hotel KL    DNA         Healthcare 
                   Companies     Sdn.        Sdn.        Sdn. Bhd.    Sdn.        Sdn. Bhd.   Group              Total 
                                 Bhd.        Bhd.                     Bhd. 
                      US$'000     US$'000     US$'000      US$'000     US$'000      US$'000          US$'000   US$'000 
---------------  ------------  ----------  ----------  -----------  ----------  -----------  ---------------  -------- 
 Segment 
  (loss)/profit 
  before 
  taxation            (1,660)           4     (1,470)           18     (1,518)      (1,227)          (2,397)   (8,250) 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 Included in 
 the measure 
 of segment 
 profit/(loss) 
 are: 
 Revenue                    -           -           -            -           -            -                -         - 
 Revenue from 
  hotel 
  operations                -           -         647            -       1,504            -                -     2,151 
 Revenue from 
  mall 
  operations                -           -         731            -           -            -                -       731 
 Revenue from 
  hospital 
  operations                -           -           -            -           -            -            5,615     5,615 
 Disposal of 
 intangible 
 assets                     -           -           -            -           -            -                -         - 
 Impairment of 
 goodwill                   -           -           -            -           -            -                -         - 
 Marketing 
  expenses                  -           -           -            -           -         (11)                -      (11) 
 Expenses from 
  hotel 
  operations                -           -     (1,744)            -     (2,814)            -                -   (4,558) 
 Expenses from 
  mall 
  operations                -           -       (473)            -           -            -                -     (473) 
 Expenses from 
  hospital 
  operations                -           -           -            -           -            -          (5,680)   (5,680) 
 Depreciation 
  of property, 
  plant and 
  equipment                 -           -           -            -        (23)            -             (23)      (46) 
 Finance costs              -           -       (701)        (169)           -      (1,383)          (2,173)   (4,426) 
 Finance income             -           1          49          209           -           21                7       287 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 Segment assets         3,833         351      57,231        6,025       1,486       82,387           86,754   238,067 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 Segment 
  liabilities             164         180       2,783        3,867       2,399        9,993           66,857    86,243 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 

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    (8,250) 
 Other non-reportable segments            (34) 
 Consolidated loss before taxation     (8,284) 
====================================  ======== 
 

Operating Segments ended 30 June 2019 - Unaudited

 
 
                                                                                              Hoa 
                   Investment    Ireka       ICSD        Amatir       The RuMa    Urban       Lam-Shangri-La 
                   Holding       Land        Ventures    Resources    Hotel KL    DNA         Healthcare 
                   Companies     Sdn.        Sdn.        Sdn. Bhd.    Sdn.        Sdn. Bhd.   Group              Total 
                                 Bhd.        Bhd.                     Bhd. 
                      US$'000     US$'000     US$'000      US$'000     US$'000      US$'000          US$'000   US$'000 
---------------  ------------  ----------  ----------  -----------  ----------  -----------  ---------------  -------- 
 Segment 
  (loss)/profit 
  before 
  taxation              (692)           -       (636)        1,059     (2,343)        (602)          (1,736)   (4,950) 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 Included in 
 the measure 
 of segment 
 profit/(loss) 
 are: 
 Revenue                    -           -           -        6,464           -        (811)                -     5,653 
 Revenue from 
  hotel 
  operations                -           -       1,761            -       1,098            -                -     2,859 
 Revenue from 
  mall 
  operations                -           -         931            -           -            -                -       931 
 Revenue from 
  hospital 
  operations                -           -           -            -           -            -            7,022     7,022 
 Disposal of 
  intangible 
  assets                    -           -           -      (1,154)           -            -                -   (1,154) 
 Impairment of 
  goodwill                  -           -           -         (62)           -            -                -      (62) 
 Marketing 
  expenses                  -           -           -          (1)           -         (94)                -      (94) 
 Expenses from 
  hotel 
  operations                -           -     (2,000)            -     (3,185)            -                -   (5,185) 
 Expenses from 
  mall 
  operations                -           -       (641)            -           -            -                -     (641) 
 Expenses from 
  hospital 
  operations                -           -           -            -           -            -          (6,475)   (6,475) 
 Depreciation 
  of property, 
  plant and 
  equipment                 -           -           -            -        (19)            -             (37)      (56) 
 Finance costs              -           -       (770)        (266)           -        (664)          (2,027)   (3,727) 
 Finance income             -           1          53          422           -            6               10       492 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 Segment assets           242         583      82,085        9,077         582       96,689           86,934   276,192 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 Segment 
  liabilities             270         220       2,420        4,905         918       14,942           64,736    88,411 
===============  ============  ==========  ==========  ===========  ==========  ===========  ===============  ======== 
 

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    (4,950) 
 Other non-reportable segments           (273) 
 Consolidated loss before taxation     (5,223) 
====================================  ======== 
 

Operating Segments - Year ended 31 December 2019 - Audited

 
                                                                                                   Hoa Lam 
                   Investment            Ireka        ICSD       Amatir       The       Urban   Shangri-La 
                      Holding        Land Sdn.    Ventures    Resources      RuMa         DNA   Healthcare 
                    Companies             Bhd.        Sdn.    Sdn. Bhd.     Hotel        Sdn.        Group       Total 
                                                      Bhd.                     KL        Bhd. 
                                                                             Sdn. 
                                                                             Bhd. 
                      US$'000          US$'000     US$'000      US$'000   US$'000     US$'000      US$'000     US$'000 
---------------  ------------  ---------------  ----------  -----------  --------  ----------  -----------  ---------- 
 Segment 
  (loss)/profit 
  before 
  taxation              1,354               94    (23,929)        1,205   (3,962)         491      (3,862)    (28,609) 
===============  ============  ===============  ==========  ===========  ========  ==========  ===========  ========== 
 Included in 
 the measure 
 of segment 
 (loss)/profit 
 are: 
 
 Revenue                    -                -           -        6,427         -       3,298            -       9,725 
 Other income 
  from hotel 
  operations                -                -       3,909            -     3,882           -            -       7,791 
 Other income 
  from mall 
  operations                -                -       1,880            -         -           -            -       1,880 
 Other income 
  from hospital 
  operations                -                -           -            -         -           -       15,092      15,092 
 Provision for 
  allowance 
  of inventory              -                -    (22,355)        (932)         -           -            -    (23,287) 
 Disposal of 
  intangible 
  assets                    -                -           -         (50)         -           -            -        (50) 
 Marketing 
  expenses                  -                -           -          (1)         -       (170)            -       (171) 
 Expenses from 
  hotel 
  operations                -                -     (3,879)            -   (6,970)           -            -    (10,849) 
 Expenses from 
  mall 
  operations                -                -     (1,326)            -         -           -            -     (1,326) 
 Expenses from 
  hospital 
  operations                -                -           -            -         -           -     (13,454)    (13,454) 
 Depreciation 
  of property, 
  plant and 
  equipment                 -                -           -            -      (35)           -         (70)       (105) 
 Finance costs          (180)             (14)     (1,634)        (678)      (40)     (1,009)      (5,960)     (9,515) 
 Finance income             -                1         104          708         -          45          969       1,827 
===============  ============  ===============  ==========  ===========  ========  ==========  ===========  ========== 
 Segment assets         3,973              481      60,217        6,318     1,085      85,571       86,511     244,156 
===============  ============  ===============  ==========  ===========  ========  ==========  ===========  ========== 
 Segment 
  liabilities             251              196       2,735        4,099     1,626       5,379       65,222      79,508 
===============  ============  ===============  ==========  ===========  ========  ==========  ===========  ========== 
 

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    (28,609) 
 Other non-reportable segments            (441) 
 Finance income                             393 
 
 Consolidated loss before taxation     (28,657) 
====================================  ========= 
 
 
 Six months ended 30 
 June 2020 -                                                                                 Segment 
 Unaudited                                                                               liabilities          Addition 
                                                  Finance   Finance                                     to non-current 
 US$'000                 Revenue   Depreciation     costs    income    Segment assets                           assets 
---------------------  ---------  -------------  --------  --------  ----------------  -------------  ---------------- 
 Total reportable 
  segment                      -           (46)   (4,426)       287           238,067         86,243                 - 
 
   Other 
   non-reportable 
   segments                    -              -         -       595            28,159         85,346                25 
---------------------  ---------  -------------  --------  --------  ----------------  -------------  ---------------- 
 Consolidated total            -           (46)   (4,426)       882           266,226        171,589                25 
=====================  =========  =============  ========  ========  ================  =============  ================ 
 
 
 Six months ended 
 30                                                                                            Segment 
 June 2019 -                                                                               liabilities        Addition 
 Unaudited                                                                                                          to 
                                             Finance   Finance                                             non-current 
 US$'000            Revenue   Depreciation     costs    income      Segment assets                              assets 
-----------------  --------  -------------  --------  --------  ------------------  ------------------  -------------- 
 Total reportable 
  segment             5,653           (56)   (3,485)       492             276,192              88,411               - 
 
   Other 
   non-reportable 
   segments               -              -     (242)         -              19,021              77,257              50 
-----------------  --------  -------------  --------  --------  ------------------  ------------------  -------------- 
 Consolidated 
  total               5,653           (56)   (3,727)       492             295,213             165,668              50 
=================  ========  =============  ========  ========  ==================  ==================  ============== 
 
 
 Year ended 31 December 
  2019 -Audited                                                                                        Additions 
                                                      Finance   Finance   Segment       Segment      to non-current 
  US$'000                    Revenue   Depreciation    costs     income    assets     liabilities        assets 
--------------------------  --------  -------------  --------  --------  ---------  -------------  ---------------- 
 Total reportable segment      9,725          (105)   (9,514)     1,827    244,156         79,508                 - 
 Other non-reportable 
  segments                         -              -         -       394     26,078         84,928                54 
--------------------------  --------  -------------  --------  --------  ---------  -------------  ---------------- 
 Consolidated total            9,725          (105)   (9,514)     2,221    270,234        164,436                54 
==========================  ========  =============  ========  ========  =========  =============  ================ 
 

Geographical Information - six months ended 30 June 2020 - Unaudited

 
                       Malaysia   Vietnam   Consolidated 
                        US$'000   US$'000        US$'000 
--------------------  ---------  --------  ------------- 
 Revenue                      -         -              - 
 Non-current assets       5,907     3,985          9,892 
====================  =========  ========  ============= 
 

Geographical Information - six months ended 30 June 2019 - Unaudited

 
                       Malaysia   Vietnam   Consolidated 
                        US$'000   US$'000        US$'000 
--------------------  ---------  --------  ------------- 
 Revenue                  5,653         -          5,653 
 Non-current assets       5,536     4,041          9,577 
====================  =========  ========  ============= 
 

Geographical Information - year ended 31 December 2019 - Audited

 
                       Malaysia   Vietnam   Consolidated 
                        US$'000   US$'000        US$'000 
--------------------  ---------  --------  ------------- 
 Revenue                  9,725         -          9,725 
 Non-current assets       6,319     4,008         10,327 
====================  =========  ========  ============= 
 

In the financial period/year ended 30 June 2020; 30 June 2019; 31 December 2019, no single customer exceeded 10% of the Group's total revenue.

   4    Seasonality 

The Group's business operations were not materially affected by seasonal factors for the period

under review but was affected by the MCO resulting from the Covid 19 pandemic.

   5    Cost of Sales 
 
                                     Unaudited    Unaudited        Audited 
                                    Six months   Six months           Year 
                                         ended        ended          ended 
                                       30 June      30 June    31 December 
                                          2020         2019           2019 
                                       US$'000      US$'000        US$'000 
 Direct costs attributable to: 
 Completed Units                             3        3,774          6,461 
 Impairment of inventory                     -           62              - 
 Impairment of intangible assets             -        1,154             51 
 Net realisable value adjustment 
  of inventories                             -            -         23,287 
---------------------------------  -----------  -----------  ------------- 
                                             3        4,990         29,799 
---------------------------------  -----------  -----------  ------------- 
 
   6    Foreign exchange (LOSS)/GAIN 
 
                                             Unaudited    Unaudited        Audited 
                                            Six months   Six months           Year 
                                                 ended        ended          ended 
                                               30 June      30 June    31 December 
                                                  2020         2019           2019 
                                               US$'000      US$'000        US$'000 
-----------------------------------------  -----------  -----------  ------------- 
 Foreign exchange (loss)/gain 
  comprises: 
 Realised foreign exchange gain/(loss)            (25)         (81)            (6) 
 Unrealised foreign exchange gain/(loss)         (998)           14            293 
                                               (1,023)         (67)            287 
-----------------------------------------  -----------  -----------  ------------- 
 
   7    Taxation 
 
                                    Unaudited    Unaudited         Audited 
                                   Six months   Six months            Year 
                                        ended        ended           ended 
                                      30 June      30 June     31 December 
                                         2020         2019            2019 
                                      US$'000      US$'000         US$'000 
 Current tax expense                        4          241             172 
 Deferred tax credit                        -          361           1,177 
--------------------------------  -----------  -----------  -------------- 
 Total tax expense/(income) for 
  the period/year                           4          602           1,349 
--------------------------------  -----------  -----------  -------------- 
 

The numerical reconciliation between the income tax expense and the product of accounting results multiplied by the applicable tax rate is computed as follows:

 
                                           Unaudited    Unaudited        Audited 
                                          Six months   Six months           Year 
                                               ended        ended          Ended 
                                             30 June      30 June    31 December 
                                                2020         2019           2019 
                                             US$'000      US$'000        US$'000 
 
   Net loss before taxation                  (8,284)      (5,223)       (28,657) 
---------------------------------------  -----------  -----------  ------------- 
 
  Income tax                                 (1,988)      (1,253)        (6,878) 
 
 Add : 
 Tax effect of expenses not deductible 
  in determining taxable profit                3,274        1,223          1,327 
 Current year losses and other tax 
  benefits for which no deferred 
  tax asset was recognised                       687        1,899          4,911 
 Tax effect of different tax rates 
  in subsidiaries                                476          370            713 
 Less : 
 Tax effect of income not taxable 
  in determining taxable profit              (2,064)        (949)        (2,997) 
 (Under)/Over provision in respect 
  of prior period/year                         (381)           81          4,273 
---------------------------------------  -----------  -----------  ------------- 
 Total tax expense for the period/year             4          518          1,349 
---------------------------------------  -----------  -----------  ------------- 
 

The applicable corporate tax rate in Malaysia is 24%.

The applicable corporate tax rates in Singapore and Vietnam are 17% and 20% respectively.

A subsidiary of the Group, CIH is granted preferential corporate tax rate of 10% for the results of the hospital operations. The preferential income tax is given by the government of Vietnam due to the subsidiary's involvement in the healthcare industry.

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%. The Company is also registered as an International Services Entity so it does not have to charge or pay local Goods and Services Tax. The cost for this registration is GBP200 per annum.

The Directors intend to conduct the Group's affairs such that the central management and control is not exercised in the United Kingdom and so that neither the Company nor any of its subsidiaries carries on any trade in the United Kingdom. The Company and its subsidiaries will thus not be residents in the United Kingdom for taxation purposes. On this basis, they will not be liable for United Kingdom taxation on their income and gains other than income derived from a United Kingdom source.

   8    (LOSS)/EARNINGS Per Share 

Basic and diluted (loss)/earnings per ordinary share

The calculation of basic and diluted (loss)/earnings per ordinary share for the period/year ended was based on the (loss)/profit attributable to equity holders of the parent and a weighted average number of ordinary shares outstanding, calculated as below:

 
                                               Unaudited            Unaudited            Audited 
                                              Six months           Six months               Year 
                                                   ended                ended              ended 
                                                 30 June              30 June        31 December 
                                                    2020                 2019               2019 
 (Loss)/earnings attributable 
  to equity holders of the parent 
  ( US$'000)                                     (6,485)              (4,055)           (27,106) 
 Weighted average number of shares      198,691,000          198,691,000          198,691,000 
 (Loss)/earnings per share 
 Basic and diluted (US cents)                     (3.26)               (2.04)            (13.64) 
-----------------------------------  -------------------  -------------------  ----------------- 
 
   9    Loans and Borrowings 
 
                               Unaudited   Unaudited              Audited 
                                   As at       As at                As at 
                                 30 June     30 June          31 December 
                                    2020        2019                 2019 
                                 US$'000     US$'000              US$'000 
---------------------------   ----------  ----------  ------------------- 
 Non-current 
 Bank loans                       25,165      14,043               18,789 
 Finance lease liabilities           153           -                  179 
                                  25,318      14,043               18,968 
 ---------------------------  ----------  ----------  ------------------- 
 
 Current 
 Bank loans                       27,949      43,701               34,281 
 Finance lease liabilities           233           -                  432 
----------------------------  ----------  ----------  ------------------- 
                                  28,182      43,701               34,713 
 ---------------------------  ----------  ----------  ------------------- 
                                  53,500      57,744               53,681 
 ---------------------------  ----------  ----------  ------------------- 
 

The effective interest rates on the bank loans and finance lease arrangement for the period ranged from 5.55% to 11.30% (30 June 2019: 5.25% to 12.50%; 31 December 2019: 5.55% to 11.30%) per annum and 2.50% (30 June 2019: 2.50%; 31 December 2019: 2.50%) per annum respectively.

Borrowings are denominated in Malaysian Ringgit, United States Dollars and Vietnamese Dong.

Bank loans are repayable by monthly, quarterly or semi-annual instalments.

Bank loans are secured by land held for property development, work-in-progress, operating assets of the Group, pledged deposits and some by the corporate guarantee of the Company.

Reconciliation of movement of loans and borrowings to cash flows arising from financing activities:

 
                    As at                             Foreign      As at 
                1 January   Drawdown   Repayment     exchange    30 June 
                     2020    of loan     of loan    movements       2020 
 Unaudited        US$'000    US$'000     US$'000      US$'000    US$'000 
------------  -----------  ---------  ----------  -----------  --------- 
 Bank loans        53,070      6,998     (2,496)      (4,072)     53,500 
 Total             53,070      6,998     (2,496)      (4,072)     53,500 
              ===========  =========  ==========  ===========  ========= 
 
 
                    As at                             Foreign      As at 
                1 January   Drawdown   Repayment     exchange    30 June 
                     2019    of loan     of loan    movements       2019 
 Unaudited        US$'000    US$'000     US$'000      US$'000    US$'000 
------------  -----------  ---------  ----------  -----------  --------- 
 Bank loans        61,272      4,293     (7,338)        (483)     57,744 
 Total             61,272      4,293     (7,338)        (483)     57,744 
              ===========  =========  ==========  ===========  ========= 
 
 
                    As at                             Foreign          As at 
                1 January   Drawdown   Repayment     exchange    31 December 
                     2019    of loan     of loan    movements           2019 
 Audited          US$'000    US$'000     US$'000      US$'000        US$'000 
------------  -----------  ---------  ----------  -----------  ------------- 
 Bank loans        61,272      5,343    (12,162)      (1,383)         53,070 
 Total             61,272      5,343    (12,162)      (1,383)         53,070 
              ===========  =========  ==========  ===========  ============= 
 
 
                                                                                    As at 
                      As at                  Repayment                  Foreign        30 
                  1 January        Initial    of lease    Interest     exchange      June 
                       2020    Application     payment    expenses    movements      2020 
                    US$'000        US$'000     US$'000     US$'000      US$'000   US$'000 
 Lease 
  Liabilities           611              -       (224)           -          (1)       386 
 Total                  611              -       (224)           -          (1)       386 
                ===========  =============  ==========  ==========  ===========  ======== 
 
 
                                                                                     As at 
                     As at                  Repayment                    Foreign        30 
                 1 January        Initial    of lease    Interest       exchange      June 
                      2019    Application     payment    expenses      movements      2019 
                   US$'000        US$'000     US$'000     US$'000        US$'000   US$'000 
 Lease 
  Liabilities            -              -           -           -              -         - 
 Total                   -              -           -           -              -         - 
               ===========  =============  ==========  ==========    ===========  ======== 
 
 
 
                       As at                  Repayment                  Foreign          As at 
                   1 January        Initial    of lease    Interest     exchange    31 December 
                        2019    Application     payment    expenses    movements           2019 
                     US$'000        US$'000     US$'000     US$'000      US$'000        US$'000 
 Lease 
  Liabilities              -          1,491       (873)          59         (66)            611 
 Total                     -          1,491       (873)          59         (66)            611 
                ============  =============  ==========  ==========  ===========  ============= 
 
   10     Medium Term Notes 
 
                                  Unaudited   Unaudited                   Audited 
                                      As at       As at                     As at 
                                    30 June     30 June               31 December 
                                       2020        2019                      2019 
                                    US$'000     US$'000                   US$'000 
-------------------------------  ----------  ----------  ------------------------ 
 Outstanding medium term notes     (38,060)      29,717                    36,535 
 Net transaction costs                (182)       (211)                     (393) 
 Less: 
 Repayment due within twelve 
  months*                          (37,878)    (29,506)                  (36,142) 
-------------------------------  ----------  ----------  ------------------------ 
 Repayment due after twelve               -           -                         - 
  months 
-------------------------------  ----------  ----------  ------------------------ 
 

Reconciliation of movement of medium term notes to cash flows arising from financing activities:

 
                             As at                             Foreign 
                         1 January   Drawdown   Repayment     exchange     As at 30 
                              2020    of loan     of loan    movements    June 2020 
 Unaudited                 US$'000    US$'000     US$'000      US$'000      US$'000 
---------------------  -----------  ---------  ----------  -----------  ----------- 
 
   Medium Term Notes        36,142      2,605           -        (869)       37,878 
                       -----------  ---------  ----------  -----------  ----------- 
 
 
                             As at                             Foreign      As at 
                         1 January   Drawdown   Repayment     exchange    30 June 
                              2019    of loan     of loan    movements       2019 
 Unaudited                 US$'000    US$'000     US$'000      US$'000    US$'000 
---------------------  -----------  ---------  ----------  -----------  --------- 
 
   Medium Term Notes        23,761      5,527           -          218     29,506 
                       -----------  ---------  ----------  -----------  --------- 
 
 
                             As at                             Foreign    As at 31 
                         1 January   Drawdown   Repayment     exchange    December 
                              2019    of loan     of loan    movements        2019 
                           US$'000    US$'000     US$'000      US$'000     US$'000 
---------------------  -----------  ---------  ----------  -----------  ---------- 
 
   Medium Term Notes        23,761     12,105           -          276      36,142 
                       ===========  =========  ==========  ===========  ========== 
 

* Includes net transaction costs in relation to medium term notes due within twelve months of US$0.18 million. (30 June 2019: US$0.21million; 31 December 2019: US$0.39 million)

The tenure of the medium term notes programme relating to the hotel and mall in Sandakan is ten (10) years which expires on 7 December 2021. SSB secured a "roll-over" of the remaining medium term notes of US$23.35mil (RM100 million) on 10 December 2019 and these are due for repayment on 10 December 2020 but are expected to be rolled over for one last year.

The medium term notes are rated AAA.

No repayments were made in the current financial period.

The weighted average interest rate of the medium term notes was 5.85% per annum at the statement of financial position date. The effective interest rates of the medium term notes and their outstanding amounts are as follows:

 
                                             Interest rate 
                           Maturity Dates     % per annum      US$'000 
----------------------  ------------------  --------------  ---------- 
 Series 1 Tranche FGI    10 Dec 2020             5.85           10,041 
 Series 1 Tranche BG     10 Dec 2020             5.85           13,310 
                                                                23,351 
 -----------------------------------------  --------------  ---------- 
 

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 Aseana Properties Limited; 

(vi) a letter of undertaking from Aseana Properties Limited to provide financial and other forms of support to ICSD Ventures Sdn. Bhd. to finance any cost overruns associated with the development of the Sandakan Harbour Square;

(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 FPSS shall take place in accordance with the provision of the Put Option Agreement; and the

proceeds from HMS and FPSS 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 Venture 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$21.02 mil (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$21.02 mil (RM90.0 million) at any one time. As at 31 December 2019, a total of US$11.58mil (RM49.6 million) was issued. Subsequently an additional of US$3.58mil (RM15.35 million) was issued on 25 February 2020.

As at 10 June 2020, the initial tranches of US$5.35mil (RM22.9 million) matured and two tranches amounting to US$0.44mil (RM1.90 million) were redeemed. The remaining tranches of US$4.90mil (RM21.0 million) are subsequently rolled-over for another one year.

The weighted average interest rate of the loan was 6.0% 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:

Maturity

 
                                      Interest rate 
                    Maturity Dates     % per annum      US$'000 
---------------  ------------------  --------------  ---------- 
 Tranche 24-31    29 Sep 2020              6.0            2,241 
 Tranche 32-49    6 Oct 2020               6.0            3,993 
 Tranche 50-62    25 Feb 2021              6.0            3,584 
 Tranche 50-61    10 Jun 2021              6.0            4,891 
                                                         14,709 
 ----------------------------------  --------------  ---------- 
 

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:

(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;

(b) 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

(c) 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".

11. 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.

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.

 
                                              Unaudited    Unaudited              Audited 
                                             Six months   Six months                 Year 
                                                  ended        ended                ended 
                                                30 June      30 June          31 December 
                                                   2020         2019                 2019 
                                                US$'000      US$'000              US$'000 
-------------------------------------  ----------------  -----------  ------------------- 
 ICB Group of Companies 
  Accounting and financial reporting 
   services fee charged by an ICB 
   subsidiary                                       208           25                   96 
 Accrued interest on shareholders 
  advance payable by ICB                              -            -                3,572 
 Construction progress claim charged 
  by ICB subsidiary                                 604            -                4,733 
 Reversal of liquidated ascertained 
  damages ("LAD") claims                              -            -              (1,209) 
 Provisions for construction delay 
  claims by ICB subsidiary                            -            -              (2,052) 
 Hosting and IT support services 
  charged by an ICB subsidiary                       38           29                   66 
 Management fees charged by an 
  ICB subsidiary                                      -          497                1,157 
 Marketing commission charged 
  by an ICB subsidiary                                8           22                  139 
  Project staff costs reimbursed 
   to an ICB subsidiary                               -          248                  280 
  Rental expenses charge by an 
   ICB subsidiary                                    36           11                   16 
 Rental expenses paid on behalf 
  of ICB                                              -          253                  489 
 Secretarial and administrative 
  services fee charged by an ICB 
  subsidiary                                        371           25                   85 
 
 Key management personnel 
 Remuneration of key management 
  personnel - Directors' fees                       312           48                  186 
 Remuneration of key management 
  personnel - Salaries                               47           47                   95 
-------------------------------------  ----------------  -----------  ------------------- 
 

The above transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

Transactions between the Group and other significant related parties are as follows:

 
                                     Unaudited    Unaudited        Audited 
                                    Six months   Six months           Year 
                                         ended        ended          ended 
                                       30 June      30 June    31 December 
                                          2020         2019           2019 
                                       US$'000      US$'000        US$'000 
---------------------------------  -----------  -----------  ------------- 
 Non-controlling interests 
 Advances - non-interest bearing           578      (3,435)        (2,666) 
---------------------------------  -----------  -----------  ------------- 
 

The outstanding amounts due from/ (to) ICB and its group of companies as at 30 June 2020, 30 June 2019 and 31 December 2019 are as follows:

 
                               Unaudited   Unaudited        Audited 
                                   As at       As at          As at 
                                 30 June     30 June    31 December 
                                    2020        2019           2019 
                                 US$'000     US$'000        US$'000 
----------------------------  ----------  ----------  ------------- 
 Net amount due from an ICB 
  subsidiary                       4,555       3,361          5,120 
 
 Net amount due from ICB           3,692         185          3,807 
----------------------------  ----------  ---------- 
 
 

The outstanding amounts due from/ (to) the other significant related parties as at 30 June 2020, 30 June 2019 and 31 December 2019 are as follows:

 
                                    Unaudited   UnauditedAs        Audited 
                                        As at            at          As at 
                                      30 June       30 June    31 December 
                                         2020          2019           2019 
                                      US$'000       US$'000        US$'000 
---------------------------------  ----------  ------------  ------------- 
 Non-controlling interests 
 Advances - non-interest bearing     (10,923)       (9,728)       (10,587) 
---------------------------------  ----------  ------------  ------------- 
 

Transactions between the parent company and its subsidiaries are eliminated in these consolidated financial statements.

   12        Dividends 

The Company has not paid or declared any dividends during the financial period ended 30 June 2020.

   13        Interim Statement 

Copies of this interim statement are available on the Company's website www.aseanaproperties.com or from the Company's registered office at 12 Castle Street, St. Helier, Jersey, JE2 3RT, Channel Islands.

Principal Risks and Uncertainties

The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.

   --    Economic 
   --    Strategic 
   --    Regulatory 
   --    Law and regulations 
   --    Tax regimes 
   --    Management and control 
   --    Operational 
   --    Financial 
   --    Going concern 

For greater detail, please refer to page 16 of the Company's Annual Report for 2019, a copy of which is available on the Company's website www.aseanaproperties.com .

RESPONSIBILITY STATEMENT

The Directors of the Company confirm that to the best of their knowledge that:

a) The condensed consolidated financial statements have been prepared in accordance with IAS 34 (Interim Financial Reporting);

b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

On behalf of the Board

Nicholas John Paris

Director

23 September 2020

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END

IR FIFSTAVIVFII

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September 23, 2020 05:00 ET (09:00 GMT)

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