TIDMJSM
RNS Number : 9306O
JSM Indochina Ltd
26 September 2011
JSM INDOCHINA LIMITED
Unaudited interim results for the period ended 30 June 2011
JSM Indochina Ltd. ("JSM", or "JSM Indochina" or the "Company")
(AIM: JSM.L) is pleased to present its interim results for the
six-month period ended 30 June 2011 as detailed below.
Financial Highlights
-- Net Asset Value ("NAV") of $0.1597 per ordinary share at
30 June 2011 (31 December 2010:$0.2102), using liquidation
accounting, after the $0.05 distribution per share paid on
25 February 2011
-- Value of the Company's share of investment properties of
$36.5 million (31 December 2010: $34.9 million), including
monies pledged for properties
-- Loss before tax for H1 2011 was $0.1 million (H1 2010:
loss of $20.7 million)
-- Loss per share for H1 2011 was $0.0005 (H1 2010: loss $0.09)
-- Cash and bank balances at 30 June 2011 stood at $9.8 million
(excluding $21.5 million pledged for projects, before impairment
provisions) (31 December 2010: $27.4 million (excluding $21.5
million pledged for projects, before impairment provisions)
-- Distribution of $0.05 per share ($11.474 million) made
to shareholders in H1 2011
-- Total distributions to shareholders since 27 April 2010
AGM of $0.50 per share ($114.74 million)
-- Cash balance as at end of August 2011 was $20.4 million,
which includes proceeds from the completion of the sale of
the Peninsula land use rights, release of the cash pledge
and repayment of the UOB loan facility
Notes:
1. Based on a share capital of 229,477,574 shares
Operational Highlights
-- Cambodian portfolio: conditional disposal to Hongkong Land
(Singapore) Pte. Ltd ("Hongkong Land") announced in April
2011 for a gross consideration of $35.65 million. Completion
of the disposal of the whole of the Cambodian portfolio is
now expected to occur during the fourth quarter.
-- Peninsula: completed disposal to Sao Sang Saigon Joint
Stock Company for gross consideration of $11 million; completion
in August 2011
-- Peninsula: repayment of UOB loans and release of cash pledge,
resulting in a net $10.6 million being received by JSM
-- Acquisition of shares in Quang Minh Joint Stock Company
("QSpace") by Trinity Structure and Finance Ltd ("Trinity")
following completion of sale of Peninsula land use rights
-- Construction of Colonial Mansion II is now complete and
construction closing site certificate received, marketing
has commenced and tenants are in occupation
-- Conditional disposal of all subsidiaries of the Company
to Trinity announced on 17 June 2011, to expedite further
returns of capital to shareholders
-- The consultancy agreement between the Company and JSM Capital
Indochina Ltd was terminated on 27 May 2011
Scott Verges, Chairman of the Company, commented:
"I am very pleased that since the start of 2011 we have been
able to announce the conditional disposal of our Cambodian assets
to Hongkong Land in April, and the disposal of the Peninsula asset
in May which completed in August. We also returned to shareholders
an additional $0.05 per share in February, bringing the total
distributions paid since the April 2010 EGM to $0.50 per share.
We were also very pleased to announce the conditional disposal
of the Company's subsidiaries to Trinity in June, which the Board
believes is the most efficient means of expediting further returns
of capital to shareholders. The first stage of this was the
acquisition of the shares in QSpace by Trinity following completion
of the sale of the Peninsula land use rights. We continue to work
toward completion of the asset disposals, and are working closely
with our advisers and HongKong Land on the various matters for
completion. The Board are focused on returning capital to
shareholders and we will provide an update on a return of capital
in due course following completion of the disposal of the Cambodian
portfolio and the Company's subsidiaries to Trinity.
Once the Company has completed the disposal of all of its real
estate assets and interests and satisfied its liabilities, it is
the intention of the Board of Directors to put forward a proposal
for shareholders' approval to liquidate the Company."
For further information:
JSM Indochina Ltd. +1 415 400 2461
Scott Verges, Chairman
Panmure Gordon (UK) Limited +44 20 7459 3600
Andrew Potts
Buchanan Communications +44 20 7466 5000
Lisa Baderoon
About JSM Indochina
JSM Indochina Ltd. was originally established for the purpose
of investing in Vietnamese and Cambodian real estate, focusing
on the development and management of high specification retail
and serviced apartment assets in leading urban areas within
Indochina
Following a shareholders' resolution on 27 April 2010, the
Company's investing policy was changed to that of an orderly
realisation of the Company's portfolio over the medium term
with a view to maximising returns for shareholders.
All references to $ are references to US$, the functional
currency of the Company.
Chairman's Report
This is my fourth report as Chairman of the Company.
The Company convened an Extraordinary General Meeting on 27
April 2010 (the "April 2010 EGM") to consider the outcome of the
review of the Company's investment strategy which was undertaken
following the resolutions approved by shareholders on 7 December
2009. It was proposed to change the Company's investing policy to
an orderly realisation of the Company's portfolio over the medium
term with a view to maximising returns for shareholders. A
resolution was also proposed that, if the change of investing
policy was approved, the Company would pay a dividend of US$0.25
per share to shareholders. Shareholders unanimously voted in favour
of the revised investing policy and the payment of the dividend of
US$0.25 per share.
During the period under review, the Company made significant
progress in the execution of its revised investing policy,
announcing the conditional sale of the Company's remaining real
estate assets and subsequent completion of the Peninsula disposal,
as well as the conditional disposal of all the Company's
subsidiaries.
As previously disclosed, once the Company has completed the
disposal of all its real estate assets and interests and satisfied
its liabilities, it is the intention for the Board of Directors to
put forward a proposal for shareholders' approval to liquidate the
Company.
Financial Overview
As announced on 2 March 2011, given the Company's investing
policy is an orderly realisation of the Company's portfolio over
the medium term with a view to maximising returns for shareholders,
and that CBRE were then marketing all of the Company's assets, the
Board resolved to adopt liquidation accounting rather than going
concern accounting in the preparation of its 31 December 2010
financial statements. The Directors have continued to adopt
liquidation accounting in the preparation of its 30 June 2011
financial statements.
Liquidation accounting involves the use of estimates of the
realisable value of all of the Company's assets based on the latest
expressions of interest, less the estimated costs of disposal, tax
and any other costs related to the relevant investment property, as
well as an estimate of the forecast running costs up to an
estimated date of liquidation. In addition, it includes a prudent
estimate for contingencies. The Board feels the adoption of the
liquidation accounting basis provides more comprehensive and
meaningful information to shareholders than the going concern
accounting basis.
The Company's NAV at 30 June 2011 was $36.65 million resulting
in a NAV of $0.1597 per share, compared to the 31 December 2010 NAV
of $48.23 million or US$0.2102 per share. Since 31 December 2010, a
further distribution of $0.05 per share was paid.
As described above, the Board adopted liquidation accounting in
its financial statements for the year ended 31 December 2010. The
change in NAV since 31 December 2010 reflected the payment of
distributions to shareholders of $0.05 per share, rental income
from Colonial Mansion and adjustment to certain balance sheet
assets and provisions.
The date of possible liquidation cannot be assessed with
accuracy at this stage, and cannot be considered until the Company
has obtained shareholder approval to liquidate JSM following
disposal of the Company's assets, and therefore the estimates may
not reflect the actual running costs or sales proceeds.
The Company recorded a loss before tax of $0.1 million for the
period ended 30 June 2011, compared to a loss before tax of $20.7
million for the period ended 30 June 2010, with a loss per share
for H1 2011 of $0.0005 (H1 2010: loss of $0.0902).
Cash Balances
The Company's cash and bank balances at 30 June 2011 were $9.8
million (31 December 2010: $27.4 million), excluding $21.5 million
set aside as pledged monies for the $21.0 million United Overseas
Bank loan facility for the Peninsula project, which was required in
order to effect the acquisition of JSM's interest in Peninsula. The
monies are principally held with United Overseas Bank.
Following the half year, as part of the completion process for
the sale of the Peninsula land use rights, the Company used part of
the proceeds of disposal, together with some of the $21.5 million
set aside as pledged monies to repay the $21 million United
Overseas Bank facility. In August 2011, a net amount of $11.6m was
released to the Company from the cash pledge previously held with
United Overseas Bank after repayment of the United Overseas Bank
loan facility. After payment of Peninsula transaction related
expenses, a net amount of $10.6 million was received by the
Company.
The cash balance at the end of August 2011 following completion
of the Peninsula disposal, release of the cash pledge and repayment
of the United Overseas Bank facility was $20.4 million.
Executive Committee
The Executive Committee of John Duggan and Paul Kaju have
continued to work diligently in executing the Company's revised
investing policy, overseeing the Company's operations when not in
Vietnam/Cambodia as well as visiting Vietnam/Cambodia.
The key areas of focus of the Executive Committee during H1 2011
included:
-- Ongoing review of budgeting, cash flow management and
reporting processes;
-- Continuing the review and settlement of outstanding claims
relating to consultants and contractors and endeavouring to settle
any disputes and resolve any contingent liabilities;
-- Overseeing progress and completion of construction on
Colonial Mansion II, and supervising the process to ensure that the
Company obtained the construction closing site certificate and
resolving disputes with neighbours;
-- Supervising and overseeing CBRE and the Company's local
lawyers in the marketing and related due diligence of the Company's
assets;
-- Reviewing and negotiating of all offers for purchases of the
Company's assets and reporting on the sales process to the Board,
including in particular Hongkong Land and Sao Sang Saigon Joint
Stock Company;
-- Working closely with Hongkong Land on the various matters
required for completion of the disposal of the Cambodia
portfolio;
-- Working closely with the Company's local legal advisors in
negotiating the conditional disposal of the Company's subsidiaries
to Trinity;
-- Working closely with the Company's tax advisors to structure
favourable resolutions to the Company's various local tax and
structuring issues;
-- Overseeing the transfer of the financial accounting
administration from JSM Capital Indochina to TMF Vietnam Company
Limited ("TMF");
-- Overseeing and supervising the work of JSM Capital Indochina
and its staff and TMF; and
-- Generally liaising with and reporting to the full Board all
developments relating to the Company
Marketing of the Company's assets
The Board appointed CBRE in both Cambodia and Vietnam to market
the property portfolio on the Company's behalf. The Company's real
estate portfolio at 1 January 2011 consisted of 4 properties in
Cambodia (Colonial Mansion, Embassy Center, JSM Ounalom and JSM
Siem Reap), and the right to acquire the Peninsula land in Ho Chi
Minh City, Vietnam.
The Company announced on 7 and 13 April 2011 the conditional
disposal of the whole of the Cambodian portfolio to Hongkong Land
(namely the Colonial Mansion I&II land and buildings, the
Embassy land, the Ounalom land and JSM's Siem Reap leasehold
interest), for a gross consideration of $35.65 million. Completion
of the disposal is conditional upon, amongst other things,
obtaining all necessary consents from, and making relevant
notifications to, the relevant Cambodian authorities. Subject to
satisfaction of these conditions, completion of the disposal of
Colonial Mansion, Embassy Center and JSM Ounalom is now expected to
occur during the fourth quarter of 2011, as is Siem Reap. We
continue to work closely with our advisers and HongKong Land to
work on the various matters for completion.
The Company also announced on 6 May 2011 the conditional
disposal of Peninsula to Sao Sang Saigon Joint Stock Company, an
affiliate of Nam A Bank for a gross consideration of $11 million.
Completion of the disposal occurred on 15 August 2011, and the
Company received a gross consideration of $11 million. In August
2011, all amounts outstanding under QSpace's $21 million loan
facility with United Overseas Bank were repaid. A net amount of
$11.6 million was released to JSM from the cash pledge previously
held with United Overseas Bank after repayment of the United
Overseas Bank loan facility. After payment of transaction related
expenses, a net amount of $10.6 million was received by JSM, before
monies to be set aside in JSM Indochina Properties Limited for the
Trinity transaction.
Valuations
Given that as at 30 June 2011 the Company's real estate assets
were conditionally disposed of, the Board has not obtained external
property valuations from CBRE for the preparation of the 30 June
2011 condensed consolidated interim financial statements. The
valuations adopted by the Board for the Company's real estate
assets are based on the disposal announcements, in relation to the
Cambodian portfolio, less the estimated costs of disposal and
including tax and any other costs related to the investment
property, and in relation to the Peninsula asset, the total
proceeds received less the estimated costs of disposal and
including tax and any other costs related to the investment
property.
Conditional disposal of subsidiaries
On 17 June 2011, the Board announced that the Company entered
into an agreement with Trinity for the conditional disposal of all
of the Company's subsidiaries (the "Trinity Transaction").
Following the conditional disposals of the Company's real estate
assets, the Board believes that the Trinity Transaction is the most
efficient means of expediting further returns of capital to
shareholders. The alternative would be for the Company to carry out
liquidations in Cambodia, Vietnam, Singapore and the Cayman
Islands. In order to carry out those liquidations, various legal
processes would need to be undertaken and tax obligations and other
liabilities would need to be settled. These actions would be
expected to take a long period of time to complete and involve the
Company incurring significant costs.
Under the terms of the Trinity Transaction, Trinity will acquire
all the issued share capital in the Company's direct subsidiary,
JSM Indochina Properties Limited ("JSM Properties"), for a nominal
consideration of US$1. JSM Properties owns all of the Company's
other subsidiaries.
The Company has agreed with Trinity that if the Trinity
Transaction completes on or before 31 December 2011, US$7,196,525
in cash will be retained by JSM Properties and its subsidiaries.
Should the Trinity Transaction complete after this date in 2012,
US$8,238,225 in cash will be retained. Following payment of certain
taxes in respect of the Peninsula transaction, the cash required to
be retained has reduced to $6,623,525 (assuming completion of the
Trinity Transaction prior to 31 December 2011), and $7,665,225
(assuming completion of the Trinity Transaction after 31 December
2011). The cash will be retained to allow JSM Properties and its
subsidiaries to comply with their legal and regulatory
requirements, satisfy their tax obligations and settle their other
liabilities following completion of the Trinity Transaction. The
Trinity Transaction therefore enables the Company to avoid the
complexities and expense of liquidating multiple entities in four
jurisdictions.
The cash has been retained in respect of all liabilities,
including actual and potential tax liabilities. These include: (i)
prior year tax obligations; (ii) tax liabilities which would be
triggered on a liquidation of the relevant entity and (iii) taxes
arising from the disposals of the Company's real estate assets. The
amount of cash retained will reduce if the Company pays any such
tax liabilities prior to completion of the Trinity Transaction.
The amount of cash retained will increase if any new liabilities
arise and are not settled prior to completion of the Trinity
Transaction and the Company and Trinity agree the amount of such
liabilities. If the Company and Trinity cannot agree such an
amount, the agreement will terminate.
Following completion of the disposal of the Peninsula land use
rights, Trinity acquired the shares in QSpace (which, together with
its subsidiary Promise Land, was the former owner of the Peninsula
land use rights). The registration of the transfer of the shares in
QSpace to Trinity's shareholders was completed in September
2011.
Completion of the Trinity Transaction is conditional upon
completion of the disposal of the Company's Cambodian
portfolio.
Consultancy Agreement
On 27 May 2011, the Board announced that the Company had served
notice terminating the Company's consultancy agreement (the
"Consultancy Agreement") with JSM Capital Indochina Ltd (the
"Consultant") with immediate effect. The Consultancy Agreement has
been terminated in accordance with its terms.
Following the termination of the Consultancy Agreement, the
monthly payments of $222,222.22 (the last of which would have been
payable on 1 September 2011) are no longer being paid. In addition,
the Company is no longer reimbursing the Consultant for continuing
salaries and office and operational expenses, except such expenses
as are incurred to ensure an orderly handover of the administration
of the Company. Total expenses paid to the Consultant for the
period ended 30 June 2011 were $1.62 million (H1 2010 $2.12
million).
The Company engaged the services of TMF in Vietnam to provide
outsourced book-keeping support as well as administrative support
in relation to payment of expenses.
In accordance with the terms of the Consultancy Agreement, JSM
requested the Consultant return all JSM documentation held by the
Consultant. To date, no such documentation has been received by
JSM.
Contingent Liabilities
As previously disclosed, the Company was served with two
California lawsuits that relate to Mr. Jones' California business
activities. The Company was named as a defendant in each lawsuit
along with various companies associated with Mr. Jones' California
business activities. The Board engaged California counsel to
address these two lawsuits. California counsel advises that
California courts should have no jurisdiction over the Company and
that both lawsuits appear to lack merit as to the claims against
the Company. Nonetheless, as a matter of expediency, California
counsel has negotiated a settlement of both lawsuits for a total
payment to the plaintiffs of $20,000. This settlement will be
finalized as soon as the California court confirms that this will
qualify as a good faith settlement protecting the Company against
indemnity claims from co-defendants in these two lawsuits. A good
faith settlement application has been filed with the Court and to
date no objections to the settlement have been received. California
counsel expects that determination will likely be obtained before
the end of October 2011.
Outlook
The Board and the Executive Committee continue to work
diligently on resolving the outstanding issues. We have had made
substantial progress in a challenging business environment in
preparing and optimising the Company's remaining assets for sale
and have been successful in returning $0.50 per share to
shareholders.
The Board is pleased to have announced the conditional disposal
of the whole of the Cambodian portfolio to Hongkong Land for a
gross consideration of $35.65 million, and completed the disposal
of Peninsula to Sao Sang Saigon Joint Stock Company for a gross
consideration of $11 million. The Board is also pleased to have
agreed the conditional disposal of the Company's subsidiaries, as
it believes this to be the most efficient means of expediting
further returns of capital to shareholders.
The Board are focused on returning capital to shareholders and
we will provide an update on a return of capital in due course
following completion of the disposal of the Cambodian portfolio and
completion of the disposal of the Company's subsidiaries to
Trinity. Once the Company has completed the disposal of all of its
real estate assets and interests and satisfied its liabilities, it
is the intention of the Board of Directors to put forward a
proposal for shareholders' approval to liquidate the Company.
In closing, I would like to take this opportunity of thanking my
fellow Board members for their ongoing work since my appointment to
the Board, in what has been a challenging period. I would like to
particularly thank the Executive Committee and the Panmure Gordon
team and our legal advisers for their tireless and high quality
work and services. Finally, I would also like to thank our
shareholders for their patience while the Board conducts the work
necessary to implement the new investing policy, return capital to
shareholders and maximise returns for shareholders.
Scott C. Verges
Chairman
JSM Indochina Ltd.
26 September 2011
JSM Indochina Ltd. and its subsidiaries
Report of the Board of Directors
STATEMENT OF THE BOARD OF DIRECTORS' RESPONSIBILITY IN RESPECT
OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
The Board of Directors is responsible for the condensed
consolidated interim financial information of each financial period
which give a true and fair view of the state of affairs of JSM
Indochina Ltd. ("the Company") and its subsidiaries (together
referred to as "the Group") at the reporting date and of its
financial performance and cash flows for the relevant period. In
preparing those condensed consolidated interim financial
information, the Board of Directors is required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgments and estimates that are reasonable and prudent;
and
-- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the condensed consolidated interim financial
information.
The Board of Directors is also responsible for ensuring that
proper accounting records are kept which disclose, with reasonable
accuracy at any time, the financial position of the Group. It is
also responsible for safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
Until 30 June 2010, the consolidated financial statements of the
Group were prepared on a going concern basis. Subsequent to 30 June
2010, the Board of Directors appointed CB Richard Ellis (Cambodia)
Co., Ltd. and CB Richard Ellis (Vietnam) Co., Ltd. ("CBRE") to
market the Company's assets. Although the Board of Directors do not
currently have the approval from the shareholders to liquidate the
Company following the disposal of the Company's assets, the Board
of Directors believes that the adoption of the liquidation
accounting basis would provide more comprehensive and meaningful
information to shareholders, and accordingly, the Board of
Directors has decided that the consolidated financial statements
for the periods ended 30 June 2011 and 31 December 2010 are not
prepared on a going concern basis ("liquidation basis").
The Board of Directors confirms that they have complied with the
above requirements in preparing the condensed consolidated interim
financial information.
APPROVAL OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
We hereby approve the accompanying condensed consolidated
interim financial information which give a true and fair view of
the financial position of the Group as of 30 June 2011 and of the
consolidated financial performance and the consolidated cash flows
for the six-month period ended 30 June 2011 in accordance with IAS
34, Interim Financial Reporting.
On behalf of the Board of Directors
Scott Verges
Chairman
INDEPENDENT AUDITORS' REPORT ON REVIEW OF CONDENSED CONSOLIDATED
INTERIM FINANCIAL INFORMATION
To the Shareholders
JSM Indochina Ltd. and its subsidiaries
Introduction
We have reviewed the accompanying condensed consolidated
statement of financial position of JSM Indochina Ltd. ("the
Company") and its subsidiaries (together referred to as "the
Group") as at 30 June 2011 and the condensed consolidated
statements of comprehensive income, changes in equity and cash
flows for the six-month period then ended as set out on pages 10 to
31. Management is responsible for the preparation and presentation
of this condensed consolidated interim financial information in
accordance with IAS 34, Interim Financial Reporting. Our
responsibility is to express a conclusion on this condensed
consolidated interim financial information based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements 2410, Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. A
review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying condensed consolidated
interim financial information as at 30 June 2011 is not prepared,
in all material respects, in accordance with IAS 34, Interim
Financial Reporting.
Emphasis of Matter
We draw attention to Note 2 to the condensed consolidated
interim financial information which describes that the going
concern basis of preparing the condensed consolidated interim
financial information for the period ended 30 June 2011 is not used
because the Group is in the process of an orderly realisation of
all of its assets, in accordance with its investing policy. Once
the Company has completed the disposal of all of its real estate
assets and interests and satisfied its liabilities, it is the
intention of the Board of Directors to put forward a proposal for
shareholders' approval to liquidate the Company. As of the date of
this report, the Board of Directors has not sought approval from
the shareholders to liquidate the Company as the Company's assets
have not been sold; however, the Board of Directors believes that
the adoption of the liquidation accounting basis would provide more
comprehensive and meaningful information to shareholders, and
accordingly, the Board of Directors has decided that the condensed
consolidated interim financial information for the period ended 30
June 2011 are not prepared on a going concern basis.
KPMG Limited
Ho Chi Minh City,
Vietnam
Date: 26 September 2011
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of financial position as at 30
June 2011
30/6/2011 31/12/2010
Note USD USD
Assets
Investment property 5 29,789,971 28,567,041
Trade and other receivables 6 1,666,169 811,676
Cash pledged with banks 7 6,695,757 6,319,682
Cash and cash equivalents 7 9,838,796 27,363,347
Total current assets 47,990,693 63,061,746
------------- -------------
Total assets 47,990,693 63,061,746
============= =============
Equity
Ordinary share capital 8 229 229
Share premium 8 113,342,918 124,816,797
Accumulated losses (76,696,462) (76,587,289)
Total equity attributable to equity
holders 36,646,685 48,229,737
------------- -------------
Non-controlling interests 9 4,070 4,070
Total equity 36,650,755 48,233,807
============= =============
Liabilities
Trade and other payables 10 11,339,938 14,827,939
Total current liabilities 11,339,938 14,827,939
------------- -------------
Total liabilities 11,339,938 14,827,939
------------- -------------
Total equity and liabilities 47,990,693 63,061,746
============= =============
Net asset value per share, based
on shares outstanding 0.1597 0.2102
============= =============
The accompanying notes are an integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of comprehensive income for the
period from
1 January 2011 to 30 June 2011
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
Note USD USD
Income
Rental income 311,815 263,485
Reversal of cash pledged impairment 7 364,628 -
Other income 10,213 -
686,656 263,485
-------------- --------------
Expenses
Management fees 11 - (2,125,064)
Professional fees - (4,432,846)
Directors' fees - (1,010,121)
Staff cost - (33,669)
Bank charges - (45,860)
Depreciation - (6,866)
Write-off of property, plant and
equipment - (114,965)
Impairment loss of trade and other
receivables 6 (351,391) -
Impairment loss of cash pledged
with banks 7 - (7,100,000)
Increase in provision for
liquidation costs 10 (458,985) -
Other operating expenses - (361,786)
(810,376) (15,231,177)
-------------- --------------
Result from operating activities (123,720) (14,967,692)
Financial income
Interest and dividend income 12 20,441 376,423
Financial expenses
Loss on foreign exchange (5,894) -
Change in fair value of investment
property - (5,756,131)
Share of loss in an associate - (328,243)
Loss before tax (109,173) (20,675,643)
Income tax expense 13 - (28,000)
Net loss after tax (109,173) (20,703,643)
-------------- --------------
Other comprehensive income
Foreign currency translation
differences - 235,036
Total comprehensive loss (109,173) (20,468,607)
-------------- --------------
Loss per share 14 (0.0005) (0.0902)
============== ==============
The accompanying notes are an integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of changes in equity for the
period from 1 January 2011 to 30 June 2011 (continued)
Attributable to shareholders of the Company
Foreign
Ordinary currency
share Treasury translation Accumula-ted Non-controlling
capital Share shares reserve losses Total interests Total equity
USD premium USD USD USD USD USD USD USD
Balance at 1
January 2010 247 233,647,733 (5,566,046) (1,400,897) (99,556) 226,581,481 4,070 226,585,551
Total
comprehensive
loss for the
period
Net loss for
the period - - - - (20,703,643) (20,703,643) - (20,703,643)
Other
comprehensive
income
Foreign
currency
translation
differences - - - 235,036 - 235,036 - 235,036
Total
comprehensive
loss for the
period - - - 235,036 (20,703,643) (20,468,607) - (20,468,607)
Transactions with
shareholders,
recorded directly
in equity
Distribution of
capital - (57,369,394) - - - (57,369,394) - (57,369,394)
Balance at 30
June 2010 247 176,278,339 (5,566,046) (1,165,861) (20,803,199) 148,743,480 4,070 148,747,550
--------- ------------- ------------ ------------ ------------- ------------- ---------------- -------------
The accompanying notes are an integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of changes in equity for the
period from 1 January 2011 to 30 June 2011 (continued)
Attributable to shareholders of the Company
Foreign
Ordinary currency
share Treasury translation Accumula-ted Non-controlling
capital Share shares reserve losses Total interests Total equity
USD premium USD USD USD USD USD USD USD
Balance at 30
June 2010 247 176,278,339 (5,566,046) (1,165,861) (20,803,199) 148,743,480 4,070 148,747,550
Total
comprehensive
loss for the
period
Net loss for
the period - - - - (55,784,090) (55,784,090) - (55,784,090)
Other
comprehensive
income
Disposals of
investments - - - 1,165,861 - 1,165,861 - 1,165,861
Total
comprehensive
loss for the
period - - - 1,165,861 (55,784,090) (54,618,229) - (54,618,229)
Transactions
with
shareholders,
recorded
directly in
equity
Distributions
of capital - (45,895,514) - - - (45,895,514) - (45,895,514)
Cancellation
of treasury
shares (18) (5,566,028) 5,566,046 - - - - -
Balance at 31
December 2010 229 124,816,797 - - (76,587,289) 48,229,737 4,070 48,233,807
--------- ------------- ------------ ------------ ------------- ------------- ---------------- -------------
The accompanying notes are an integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of changes in equity for the
period from 1 January 2011 to 30 June 2011 (continued)
Attributable to shareholders of the Company
Foreign
Ordinary currency
share Treasury translation Accumula-ted Non-controlling
capital Share shares reserve losses Total interests Total equity
USD premium USD USD USD USD USD USD USD
Balance at 1
January 2011 229 124,816,797 - - (76,587,289) 48,229,737 4,070 48,233,807
Total
comprehensive
loss for the
period
Net loss for
the period - - - - (109,173) (109,173) - (109,173)
Transactions
with
shareholders,
recorded
directly in
equity
Distribution
of capital - (11,473,879) - - - (11,473,879) - (11,473,879)
Balance at 30
June 2011 229 113,342,918 - - (76,696,462) 36,646,685 4,070 36,650,755
========= ============= ========= ============ ============= ============= ================ =============
The accompanying notes are an integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of cash flows for the period
from
1 January 2011 to 30 June 2011
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
Note USD USD
Cash flows from operating activities
Loss before tax (109,173) (20,675,643)
Adjustments for:
Depreciation - 6,866
Amortisation - 5,966
Write-off of property, plant and
equipment - 114,965
Change in fair value of investment
properties - 5,756,131
Share of loss in an associate - 328,243
Impairment loss of cash pledged
with banks - 7,100,000
Impairment loss of trade and other
receivables 6 351,391 -
Reversal of cash pledged impairment 7 (364,628) -
Net interest income 12 (20,441) (318,828)
Dividend income - (57,595)
(142,851) (7,739,895)
Changes in working capital
Change in trade and other receivables 207,616 (342,590)
Change in trade creditors and
other payables (5,396,847) (491,944)
(5,332,082) (8,574,429)
Income tax paid (91,154) -
Net cash used in operating activities (5,423,236) (8,574,429)
-------------- --------------
The accompanying notes arean integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Condensed consolidated statement of cash flows for the period
from
1 January 2011 to 30 June 2011 (continued)
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
Note USD USD
Cash flows from investing activities
Payment for increase of prepayments - (14,721)
Deposit received from sale of
investment property 2,000,000 -
Payments related to disposal of
investment property (1,222,930) (1,643,520)
Loan repayment from a shareholder - 3,500,000
Interest received from a shareholder - 1,518,611
Loan disbursement to an entity in
the Group's acquisition pipeline (1,425,000) (220,000)
Cash pledged with a bank to secure
credit facilities granted to an
entity in the Group's acquisition
pipeline - (67,990)
Dividend received - 57,595
Other interest received 20,494 92,201
Net cash (used in)/generated from
investing activities (627,436) 3,222,176
-------------- --------------
Cash flows from financing activities
Distribution of capital (11,473,879) (57,369,394)
Net cash used in financing activities (11,473,879) (57,369,394)
-------------- --------------
Net cash flows during the period (17,524,551) (62,721,647)
Cash and cash equivalents at the
beginning of the period 27,363,347 120,045,123
-------------- --------------
Cash and cash equivalents at the
end of the period 7 9,838,796 57,323,476
============== ==============
The accompanying notes are an integral part of this condensed
consolidated interim financial information
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
These notes form an integral part of and should be read in
conjunction with the accompanying condensed consolidated financial
information.
1. Reporting entity
JSM Indochina Ltd., ("the Company") which was incorporated on 20
April 2007, is a closed-end Cayman Islands registered and exempted
company created to engage (through subsidiaries and joint ventures)
in property investment and development opportunities, located
mainly in Indochina.
The original investment objective of the Company was to provide
shareholders with attractive total returns over the mid-to-long
term, with an emphasis on capital growth. The Company was primarily
focused on the central urban districts of the main cities within
Indochina and operated initially in two property sectors, namely
retail and residential.
Following the result of the Company's extraordinary general
meeting dated 27 April 2010, the Company's investing policy is for
an orderly realisation of the Company's portfolio over the medium
term with a view to maximising returns to shareholders.
The Board of Directors appointed CB Richard Ellis (Cambodia)
Co., Ltd. and CB Richard Ellis (Vietnam) Co., Ltd. ("CBRE"), local
real estate agents, to market the Company's assets. Although the
Board of Directors do not currently have the approval from the
shareholders to liquidate the Company following the disposal of the
Company's assets, the Board of Directors believes that the adoption
of the liquidation accounting basis would provide more
comprehensive and meaningful information to shareholders, and
accordingly, the Board of Directors has decided that the
consolidated financial statements for the periods ended 30 June
2011 and 31 December 2010 are not prepared on a going concern basis
(see Notes 2(a) and 3).
The condensed consolidated interim financial information of the
Company as at and for the period ended 30 June 2011 comprise the
Company and its subsidiaries (together referred to as "the Group").
As at 30 June 2011, composition of the Group is as follows:
Country of Equity
Company Date of incorporation incorporation %
-------------------------- ----------------------- ---------------- -------
JSM Indochina Ltd. 20 Apr 2007 Cayman Islands N/A
JSM Indochina Properties
Ltd 24 Apr 2007 Cayman Islands 100%
JSM Indochina Properties
Pte. Ltd. 21 May 2007 Singapore 100%
JSM Holding (Cambodia)
Co., Ltd 15 Aug 2008 Cambodia 100%
JSM Ounalom Co., Ltd. 8 Sep 2005 Cambodia 49%
JSM Embassy Center Co.,
Ltd. 13 Sep 2006 Cambodia 49%
MM Colonial Mansion Co.,
Ltd. 20 Apr 2006 Cambodia 49%
JSM Colonial Mansion I,
Ltd. 2 May 2006 Cambodia 49%
JSM Colonial Mansion II,
Ltd. 2 May 2006 Cambodia 49%
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
Even though the Group holds 49% interests in JSM Ounalom Co.,
Ltd, JSM Embassy Center Co., Ltd, MM Colonial Mansion Co., Ltd, JSM
Colonial Mansion I, Ltd., and JSM Colonial Mansion II, Ltd. the
Board of Directors believes that the Group has control over these
companies because all operating and financial decisions relating to
these companies are governed by the Group, as provided by the
respective Articles of Incorporation and the Shareholder Protection
Documents (SPDs), which provide the Group with power to vote, as
well as power over the purchase, holding, transfer and sale of the
assets without the cooperation of the other shareholders.
As announced on 1 April 2010, the existing investment management
agreement between the Company and JSM Capital Indochina Ltd ("JSM
Capital Indochina" or the "former Investment Manager") was
terminated by mutual agreement. The Company and JSM Capital
Indochina instead entered into a new consultancy agreement under
which JSM Capital Indochina agreed to provide certain
administrative, financial and management functions and other
services to the Company at the request of and subject to the
direction of the Board of Directors. This consultancy agreement was
terminated on 27 May 2011.
2. Basis of preparation
(a) Statement of compliance
The condensed consolidated interim financial information have
been prepared in accordance with International Accounting Standard
("IAS") 34 Interim Financial Reporting. They do not include all of
the information required for full annual financial statements, and
should be read in conjunction with the annual consolidated
financial statements of the Group as at and for the year ended 31
December 2010.
Until 30 June 2010, the consolidated financial statements of the
Group were prepared on a going concern basis. Subsequent to 30 June
2010, the Board of Directors appointed CBRE to market the Company's
assets. Although the Board of Directors do not currently have the
approval from the shareholders to liquidate the Company following
the disposal of the Company's assets, the Board of Directors
believes that the adoption of the liquidation accounting basis
would provide more comprehensive and meaningful information to
shareholders, and accordingly, the Board of Directors has decided
that the consolidated financial statements for the periods ended 30
June 2011 and 31 December 2010 are not prepared on a going concern
basis.
The condensed consolidated interim financial information were
authorised for issue by the Board of Directors on 26 September
2011.
(b) Basis of measurement
All assets have been recorded at their estimated realisable
values. Provision has also been made for an estimate of the costs
to be incurred to continue operating the business until an
estimated date of liquidation.
On a regular basis, the Group evaluates its assumptions,
judgments and estimates that can have a significant impact on the
Group's reported net assets in liquidation based on the most recent
information available to the Group, and when necessary will make
changes accordingly.
Assets are recorded at the Director's best estimate of the cash
the Group will ultimately receive upon disposal of the assets.
Liabilities are recorded at management's best estimate of their
ultimate settlement amounts. Actual costs and income may differ
from the Group's estimates, which could reduce the net assets
available to be distributed to shareholders.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
The Group is organised and operates as one segment (both in
terms of business and geography). Consequently, no segment
reporting is provided in the Group's financial statements.
(c) Functional and presentation currency
The condensed consolidated interim financial information is
presented in United States Dollars ("USD"), the functional currency
of the Company.
(d) Use of estimates and judgements
The preparation of financial statements under the liquidation
basis of accounting requires judgments, estimates and assumptions
that affect the application of policies and amounts reported in the
financial statements and accompanying notes. The estimates and
associated assumptions are based on experience and various other
factors that are believed to be reasonable in circumstances, the
result of which forms the basis of making judgments about carrying
values of assets and liabilities that are not readily apparent from
other sources. Actual results could differ from these
estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any future
period affected.
The estimates and assumptions that have significant risk of
causing a material adjustment to the carrying value of assets and
liabilities within the next financial period are highlighted
below:
-- The adoption of the liquidation basis of accounting
-- The liquidation assumption adopted
-- Liquidation value of investment property
-- Measurement of current and deferred tax liabilities
Estimates and judgments are continually evaluated and are based
on best information available at the time of signing this condensed
consolidated interim financial information. This predominantly
incorporates the use of historical experience, external evidence
and the Director's best estimates of the outcome of future
events.
3. Summary of significant accounting policies
The accounting policies applied by the Group in this condensed
consolidated interim financial information are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 December 2010.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of this
condensed consolidated interim financial information.
Liquidation basis of accounting
In determining the appropriate accounting policies to adopt on a
liquidation basis, the Board of Directors have assumed that it
would be able to sell all the assets and put forward proposals for
shareholders' approval to liquidate the Company in due course, and
these assumptions are referred to as the liquidation assumptions
throughout this condensed consolidated interim financial
information.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
In adopting the liquidation basis, the Board of Directors has
modified the measurement basis and presentation for the following
assets and liabilities from that required under the relevant
International Financial Reporting Standards:
-- Investment property
-- Classification of assets and liabilities
Given the uncertainties in valuing assets on a liquidation
basis, it is likely that the valuation of assets included within
this condensed consolidated interim financial information may
differ from the actual results.
In adopting the liquidation basis, the Board of Directors has
continued to apply the disclosure requirements of International
Financial Reporting Standards to the extent they are relevant to
the liquidation basis, and modified them where considered
appropriate. In particular, the condensed consolidated interim
financial information do not include all of the disclosures
required by the following standards:
-- IAS 12 Income taxes with respect to disclosure of
unrecognised deferred tax assets
Comparative information has been provided where it is considered
appropriate to assist in the understanding of the current financial
position of the Group and movements in that financial position
since the previous reporting period. Comparative information for
the six-month period ended 30 June 2010 has not been restated, and
is on a going concern basis.
The following are the accounting policies which have been
adopted for the current period, together with the previous
accounting policy which was adopted in prior years:
(i) Investment property
31 December 2010 and 30 June 2011 - Liquidation value
Investment property is property held either to earn rental
income or for capital appreciation, or for both, but not for sale
in the ordinary course of business, use in the production or supply
of goods or services or for administrative purposes. Property held
under operating leases (including leasehold land) that would
otherwise meet the definition of investment property is classified
as an investment property.
Investment properties are valued using the Board of Directors'
best estimate of the future cash proceeds from disposal of the
properties determined based on the selling prices on sale and
purchase agreements, less estimated costs to sell, and including
tax and any other costs related to the investment property.
Estimated costs to sell and taxation costs have been deducted
from the liquidation value.
Any gain or loss from a change in the liquidation value is
recognised in profit or loss. Any gain or loss from the disposal of
an asset has been recognised in profit or loss.
As a result of adoption of the liquidation basis, all investment
properties have been classified as current assets.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
30 June 2010 - Fair value estimation
Investment property is property held either to earn rental
income or for capital appreciation or for both, but not for sale in
the ordinary course of business, use in the production or supply of
goods or services or for administrative purposes. Property held
under operating leases (including leasehold land) that would
otherwise meet the definition of investment property is classified
as an investment property.
Investment property comprises properties, properties that are
being constructed or developed for future use as investment
property and/or land use or lease rights.
The initial cost of a land use/lease right comprises the value
of the right as stated in the letter of undertaking or its purchase
price and any directly attributable costs incurred in conjunction
with securing the land use/lease right. Subsequently, land
use/lease right is measured at fair value less cost to sell with
any change therein recognised in profit or loss.
(ii) Provisions
A provision is recognised if, as a result of a past event, the
Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability.
In relation to the investing policy of the Company being that of
an orderly realisation, and although the Board of Directors do not
currently have the approval from the shareholders to liquidate the
Company following the disposal of the Company's assets, the Board
of Directors has provided for the provision for discharging any
outstanding contractual liabilities. The best estimate of this
provision has been determined by the Board of Directors' using
their experience and knowledge at the present time. This amount has
been recognised as a provision in the condensed consolidated
statement of financial position and an expense in profit or loss.
The provision has not been discounted as it is expected that the
expenses will be incurred in the short term.
The amount of the provision will be reassessed at each reporting
date based on the best estimate of future obligations. Any
adjustment will be recognised as an expense.
(iii) Classification of assets and liabilities
Each of the Group's assets and liabilities are classified as
current at 30 June 2011 and 31 December 2010, reflecting the fact
that the condensed consolidated interim financial information is
being prepared on a liquidation basis.
With respect to the Group's assets, the Board of Directors has
announced the conditional disposal of the Company's Cambodian
portfolio and Peninsula land use rights during the period. With
respect to liabilities, certain of the Group's liabilities are due
and payable in the ordinary course. With respect to all other
liabilities, the liabilities will be paid out of proceeds of asset
sales in accordance with the relevant security arrangements for
each asset and costs related to the disposal. As such, whilst there
is no certainty as to the timing of payment of the liabilities, the
liabilities have been classified as current.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
4. Financial risk management
The Group's financial risk management objectives and policies
are consistent with those disclosed in the consolidated financial
statements as at and for the year ended 31 December 2010.
5. Investment property
Movements in investment property during the period were as
follows:
30/6/2011 31/12/2010
USD USD
Carrying amount
Opening balance 28,567,041 45,419,794
Payments for construction costs to complete
investment property 1,222,930 -
Transferred from project under development - 3,245,033
Transferred from property, plant and equipment - 5,287,684
Net loss from liquidation value adjustments - (24,399,918)
Write off of development costs - (985,552)
Carrying amount - closing 29,789,971 28,567,041
=========== =============
Investment property comprises serviced apartments that are
leased to third parties and land use or lease rights. All of the
Group's investment properties are held under freehold interests
except for Siem Reap which has a leasehold term of 87 years.
The Group's investment properties, at 31 December 2010 and 30
June 2011, are valued using the Board of Directors' best estimate
of the future cash proceeds from disposal of the properties
determined based on the gross consideration in the conditional
disposal agreements with Hongkong Land (Singapore) Pte. Ltd
("Hongkong Land") as disclosed in the 7 and 11 April 2011
announcements, less estimated costs to sell, and including tax and
any other costs related to the investment property.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
6. Trade and other receivables
30/6/2011 31/12/2010
USD USD
Receivables from related parties 1,729,101 295,142
------------ -----------
-- JSM Capital, LLC. - non-trade 148,286 147,722
-- JSM Capital Indochina Ltd -
non-trade 147,722 141,512
-- JSM Indochina Services Pte., Ltd -
non-trade 5,908 5,908
-- JSM Indochina Services Ltd.-
non-trade 2,185 -
-- Linh Trang Trading and Investment
Consultancy Company Limited - non-trade 1,425,000 -
------------ -----------
Prepayments 151,117 480,027
Receivables from minority shareholders 3,570 3,570
Trade receivables 36,385 37,963
Sundry receivables 752,169 651,159
Interest receivable from banks - 53
2,672,342 1,467,914
Impairment for trade and other receivables (1,006,173) (656,238)
1,666,169 811,676
============ ===========
Movements in impairment loss of trade and other receivables
during the period were as follows:
USD
Opening balance 656,238
Additions 351,391
Utilisations (1,456)
Closing balance 1,006,173
==========
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
7. Cash and bank balances
30/6/2011 31/12/2010
USD USD
Cash on hand 1,026 1,661
Cash in banks 9,837,770 26,741,320
Cash equivalents - 620,366
Cash and cash equivalents 9,838,796 27,363,347
Cash pledged with banks 21,540,883 21,529,436
Impairment loss of cash pledged with
banks (14,845,126) (15,209,754)
------------- -------------
Cash pledged with banks 6,695,757 6,319,682
Cash and bank balances 16,534,553 33,683,029
============= =============
Cash pledged with banks includes term deposits which have been
pledged with United Overseas Bank Singapore ("UOB Singapore") to
secure credit facilities granted to entities in one of the Group's
projects (details below). Cash pledged with banks earned interest
at rates ranging from 0.05% to 0.15% per annum.
Peninsula
The Group pledged an amount of USD21,540,883 with UOB Singapore
as security for two credit facilities granted by UOB Vietnam to an
entity ("QSpace") in respect of the Peninsula project. The Group
had previously entered into a cooperation agreement with QSpace to
establish a joint venture to acquire land and develop a property in
District 2, Ho Chi Minh City, Vietnam.
The carrying amount of cash pledged with banks in respect of
Peninsula project as at 30 June 2011 represented an estimate of the
future cash proceeds the Group may ultimately receive upon sale of
the land interests, determined based on the gross consideration in
the conditional disposal agreement with Sao Sang Saigon Joint Stock
Company as disclosed in the 6 May 2011 announcement, less the costs
of disposal, tax and any other costs related to the investment
property.
Movements in impairment loss of cash pledged with banks during
the period were as follows:
USD
Opening balance 15,209,754
Written back (364,628)
Closing balance 14,845,126
===========
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from
1 January 2011 to 30 June 2011 (continued)
8. Ordinary share capital
The authorised and issued share capital of the Company was as
follows:
30/6/2011 31/12/2010
No. of shares USD No. of shares USD
Authorised share
capital with par
value of
USD0.000001 each 1,300,000,000 1,300 1,300,000,000 1,300
Issued and fully
paid capital 229,477,574 229 229,477,574 229
In 2007, the Company issued 247,313,574 new shares for
USD247,313,574. The excess of proceeds from share capital issuance
over its par value of USD247 and share issuance cost of
USD13,665,594 is presented as share premium in equity.
30/6/2011 31/12/2010
No. of shares USD No. of shares USD
Share in issue 229,477,574 229 247,313,574 247
Treasury share - - (17,836,000) (18)
Closing balance 229,477,574 229 229,477,574 229
============== ========== ============== ===========
On 29 December 2008 the Board of Directors passed a resolution
relating to the repurchase of up to 25 million shares of the
Company's shares. During January and February 2009, the Company
acquired 17,836,000 shares at the total cost of USD5,566,046. The
treasury shares were cancelled following a Board resolution dated
28 May 2010.
Movements in share premium during the period were as
follows:
30/6/2011 31/12/2010
USD USD
Opening balance 124,816,797 233,647,733
Distributions of capital (11,473,879) (103,264,908)
Treasury share cancellation - (5,566,028)
Closing balance 113,342,918 124,816,797
============= ==============
The distributions of capital represented payments of USD0.05 per
share distribution to shareholders pursuant to the Board of
Directors' announcements on 1 February 2011.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
(continued)
9. Non-controlling interests
30/6/2011 31/12/2010
USD USD
JSM Ounalom Co., Ltd
Minority share capital 51% 510 510
Share of (losses)/profit attributable
to minority shareholder 51% - -
51% 510 510
JSM Embassy Center Co., Ltd.
Minority share capital 51% 510 510
Share of (losses)/profit attributable
to minority shareholder 51% - -
51% 510 510
MM Colonial Mansion Co., Ltd, JSM
Colonial Mansion I, Ltd., JSM Colonial
Mansion II, Ltd.
Minority share capital 51% 2,550 2,550
Share of (losses)/profit attributable
to minority shareholder 51% - -
51% 2,550 2,550
JSM Indochina Properties Ltd
Minority share capital (management
shares) 500 500
Share of (losses)/profit attributable
to minority shareholder 51% - -
500 500
----
Net non-controlling interests 4,070 4,070
==== ========== ===========
According to the Memorandum and Articles of Association JSM
Ounalom Co., Ltd, JSM Embassy Center Co., Ltd., MM Colonial Mansion
Co., Ltd, JSM Colonial Mansion I, Ltd., and JSM Colonial Mansion
II, Ltd., minority shareholders are not entitled to receive
dividends nor proceeds from sale of these companies' assets.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
(continued)
10. Trade and other payables
30/6/2011 31/12/2010
USD USD
Accounts payable 514,925 785,990
Accrued liquidation cost (*) 8,451,135 13,334,507
Other accrued expenses 220,548 350,885
Corporate income tax payable - 91,154
Other taxes and obligations 43,790 11,425
Payables to related parties 43,714 43,714
----------- -----------
-- JSM Capital, LLC 2,481 2,481
-- JSM Indochina Services Ltd 33,156 33,156
-- JSM Construction Inc. 5,181 5,181
-- Payable to Craig Jones, a former
Director 2,896 2,896
Other payables 65,826 210,264
Deposit receipt for sale of investment
properties 2,000,000 -
11,339,938 14,827,939
=========== ===========
(*) Liquidation costs represent an estimate by the Directors of
the costs up to an estimated date of liquidation, and a prudent
estimate for contingencies, and this includes an estimate of the
legal fees, Director's fees, professional fees and other costs
estimated to be incurred until an estimated date of liquidation.
The date of possible liquidation cannot be assessed with accuracy
at this stage, and cannot be considered until the Company has
obtained shareholder approval to liquidate the Company following
completion of the disposal of the Company's assets and satisfaction
of liabilities, and therefore the estimates may not reflect the
actual operating costs or sales proceeds. Shareholders should also
refer to the items in the profit & loss statement.
11. Related party transactions
As announced on 1 April 2010, the Company and JSM Capital
Indochina Ltd. ("the former Investment Manager") agreed to
terminate the investment management agreement ("IMA) dated 22 June
2007 and entered into a new consultancy agreement (the "New
Consultancy Agreement") under which JSM Capital Indochina Ltd.
agreed to provide certain administrative, financial and management
functions and others services to the Company at the request of and
subject to the direction of the Board.
The New Consultancy Agreement had a term of up to 18 months from
1 April 2010. The Company paid, monthly in advance, equal sums
aggregating up to USD4 million to JSM Capital Indochina Ltd over
the potential 18 month term of the consultancy agreement. In the
event of a merger or disposal of all of the Company's assets prior
to the expiry of the 18 month term, the unpaid balances of any such
amounts were immediately due and payable to JSM Capital Indochina
Ltd. In addition, the Company could have (in its absolute
discretion) paid up to a USD1 million performance bonus at the end
of the New Consultancy Agreement. The Company also reimbursed JSM
Capital Indochina Ltd. for salaries (but not Mr. Craig D Jones')
and office and operational expenses which the former Investment
Manager incurred in providing the consultancy services to the
Company.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
(continued)
The New Consultancy Agreement was terminated on 27 May 2011.
In addition to the above, the following significant transactions
occurred with related parties during the period:
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
Related party transactions USD USD
Loan repayment from Craig Jones - 3,500,000
Interest income from loan to Craig Jones - 198,333
Receipt of monies for withholding tax
payment on behalf of Craig Jones - 455,583
Consultancy fee paid to JSM Capital
Indochina Ltd. 1,111,888 666,666
Reimbursements for operating expenses
to JSM Capital Indochina Ltd. 505,603 330,695
Management fee paid to JSM Capital Indochina
Ltd. - 1,127,702
Loan to Linh Trang Trading and Investment 1,425,000 -
Consultancy Company Limited
Directors' remuneration
Directors' fees represent fees incurred by the Directors in
relation to Board meetings, per diem for trips to Vietnam and
Cambodia and additional meetings (30 June 2010: also included fees
incurred in relation to legal review and strategic review). The
total Directors' fees paid during the period are as follows:
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
USD USD
Directors' fees 396,175 1,010,121
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
(continued)
12. Interest income
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
USD USD
Interest income from bank deposits 20,441 376,423
13. Income tax expense
(i) Recognised in the condensed consolidated statement of
comprehensive income
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
USD USD
Current tax expenses
Current period - -
Deferred tax expense
Origination and reversal of temporary
differences - 28,000
- 28,000
======================================================= ==============
(ii) Reconciliation of effective tax rate
Period from Period from
1/1/2011 1/1/2010
to 30/6/2011 to 30/6/2010
USD USD
Loss before tax (109,173) (20,675,643)
-------------- --------------
Tax at the Company's income tax rate - -
Effect of tax rates in foreign jurisdictions - 28,000
- 28,000
============== ==============
Recognised in profit or loss - 28,000
- 28,000
================================== =======
Companies in the Group that are incorporated in the Cayman
Islands are not liable for profit tax on either income or capital
gains.
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
(continued)
14. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to shareholders of the Group by the weighted average
number of ordinary shares on issue during the period.
Period from Period from
1/1/2011 to 1/1/2010 to
30/6/2011 30/6/2010
USD USD
Loss attributable to equity holders of
the Company (109,173) (20,703,643)
Weighted average number of ordinary shares
on issue 229,477,574 229,477,574
Basic loss per share (USD per share) (0.0005) (0.0902)
============ ============
Diluted loss per share
As at 31 December 2010 and 30 June 2011, the Group's capital
structure consists solely of ordinary shares. There are no share
options or warrants or other convertible instruments in issue that
have dilutive potential against ordinary shares. Accordingly,
diluted loss per share is equal to basic loss per share.
15. Commitments
(i) Capital commitments
The Group had the following outstanding capital commitments
approved but not provided for in the condensed consolidated
statement of financial position:
30/6/2011 31/12/2010
USD USD
Approved and contracted - 1,492,719
As at 31 December 2010, the approved and contracted capital
commitments relate to the construction of Colonial Mansion II,
which was completed in February 2011.
(ii) Lease commitments
The Group had the following outstanding lease commitments:
30/6/2011 30/6/2010
USD USD
Within one year 24,000 24,000
Within two to five years 96,000 96,000
More than five years 6,192,000 6,216,000
6,312,000 6,336,000
========== ==========
JSM Indochina Ltd. and its subsidiaries
Notes to the condensed consolidated interim financial
information for the period from 1 January 2011 to 30 June 2011
(continued)
Lease commitments represented the remaining rental payments
payable to the lessor of Siem Reap land with the lease term of
ninety years, commencing from 20 February 2009 to 19 February 2094.
These lease commitments will be transfered to the buyer following a
disposal of the Group's interest in the Siem Reap property.
16. Taxation contingencies
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, agrees 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.
17. Subsequent events
Peninsula
Subsequent to the financial period-end, the Board of Directors
completed the disposal of the Peninsula land use rights to Sao Sang
Saigon Joint Stock Company for a gross consideration of USD11
million.
Under the terms of the Company's agreement with Trinity
Structure and Finance Ltd. ("Trinity"), Trinity acquired the shares
in QSpace (which, together with its subsidiary Promise Land, was
the former owner of the Peninsula land use rights). The
registration of the transfer of the shares in QSpace to Trinity's
shareholders (the "Trinity Registration") completed in August 2011.
Until completion of the disposal of the Company's other
subsidiaries to Trinity (which is conditional upon completion of
the disposal of the Company's Cambodian portfolio), the Company
indemnifies Trinity for any liabilities of QSpace.
On completion of the Trinity Registration, all amounts
outstanding under QSpace's loan facility with United Overseas Bank
(the "Loan Facility") were repaid. A net amount of approximately
USD11.6 million was released to the Group from its USD21.5 million
cash pledge previously held with United Overseas Bank, after
repayment of the Loan Facility. After payment of transaction
related expenses, a net amount of USD10.6 million was received by
the Group, before monies to be set aside in JSM Indochina
Properties Limited for the Trinity transaction.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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