Trading Update (7637F)

TIDMJSM

RNS Number : 7637F

JSM Indochina Ltd

03 May 2011

JSM Indochina Ltd.

3 May 2011

2010 Financial Results and Tax Liabilities

The Company wishes to provide an update following the 2 March 2011 announcement regarding the adoption of liquidation accounting, and the subsequent announcements regarding the conditional disposal of the Cambodian portfolio.

As the disposal of the Cambodian portfolio is comprised of asset sales rather than sales of the land owning companies, the Board have been conducting a comprehensive review of the tax position of the Company's Cambodian subsidiaries in the context of considering the steps for an orderly liquidation, with a view to minimising the amount of tax for which they may be liable. As part of this review, and as indicated in the Company's announcements on 7 April and 13 April 2011, the Board and the Company's advisers have been considering the options available to deal with the Company's Cambodian subsidiaries following completion of the disposal of the Cambodian Portfolio, whether by liquidation, disposal or other means the Board may see fit.

The Company has now identified further tax liabilities for which the Company's Cambodian subsidiaries may be liable. This in addition to amounts currently provided for in the 2 March 2011 estimate of liquidation accounting NAV per share.However, the actual amount of tax for which the Company's subsidiaries may be liable in Cambodia may be significantly higher or lower than the total amount provided for. The taxation system in Cambodia is relatively new and is characterised by frequently changing practices by the tax authorities. Tax rules are often unclear, contradictory and subject to different interpretation by taxpayers, advisory firms and tax authorities. Taxes with severe fines and interest charges may be imposed by authorities without any independent administrative or judicial review for taxpayers to challenge assessments. In addition, the Board of Directors, in consultation with the Group's advisers, agree that certain tax liabilities are more likely to occur in a liquidation scenario. Accordingly, the risks of additional taxes through reassessment, fines, penalties and interest charges, particularly in a liquidation scenario are substantially more significant in Cambodia than in other countries. The Board of Directors believes that the amount of liabilities provided are adequate based on currently available information. However, due to certain inherent difficulties in estimating the amounts, there is no certainty that additional costs will not be incurred beyond the amounts accrued.

As indicated in the 1 February 2011 announcement in relation to Peninsula (the Company's remaining asset in Vietnam), the Board have advised that there will be additional amounts payable in respect of tax on the sale of Peninsula to a third party. It is not possible to determine the exact aggregated tax provision at the present time, but the Company is working with local tax advisers to minimise this where possible. An estimate was provided for as part of the 2 March 2011 estimate of liquidation accounting NAV per share. The Board will provide an update to shareholders in due course.

Accordingly, the Company has reassessed its estimate of the liquidation accounting NAV per share to be $0.16 (after the February 2011 $0.05 dividend) and $0.21 (before the February 2011 $0.05 dividend).

Scott Verges, Chairman of JSM Indochina Ltd. commented:

"We continue to work with our advisors to maximise value for shareholders in accordance with the Company's investing policy. Clarification of the tax liabilities of the Company's subsidiaries, combined with completion of the remaining asset disposals, are important steps towards further returns of capital by the Company."

For further information:

 
 JSM Indochina Ltd.              +1 415 400 2461 
 Scott Verges, Chairman 
 
 Panmure Gordon (UK) Limited     +44 20 7459 3600 
 Edward Farmer / Andrew Potts 
 
 Buchanan Communications         +44 20 7466 5000 
 Lisa Baderoon

This information is provided by RNS

The company news service from the London Stock Exchange

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