TIDMMPO
RNS Number : 9071O
Macau Property Opportunities Fund
06 October 2023
ANNOUNCEMENT
6 October 2023
MPO Announces 2023 Annual Results
Macau Property Opportunities Fund Limited announces its results for the year ended 30 June
2023. The Company, which is managed by Sniper Capital Limited, holds strategic property investments
in Macau.
FINANCIAL HIGHLIGHTS
Fund performance
* MPO's portfolio value(1) declined 1% over the year to
US$200.5 million.
* Adjusted NAV was US$ 90.4 million, which translates
to US$1.46 (116 pence(2) ) per share, a 12.6%
decrease year-on-year (YoY).
* IFRS NAV was US$65.7 million or US$1.06 (84 pence(2)
) per share, a 15.3% decrease YoY.
Capital management
* As at 30 June 2023, MPO's balance sheet held assets
worth a total of US$182.6 million, against combined
liabilities of US$116.9 million.
* The Company ended the financial year with a
consolidated cash balance (including deposits with
lenders) of US$6.7 million.
* As at 30 June 2023, gross borrowings stood at
US$105.6 million, which translates to a loan-to-value
ratio of 50.9%.
(1) Calculation was adjusted to reflect like-for-like comparisons to 30 June 2023 due to
the divestment of properties during the year.
(2) Based on the Dollar/Sterling exchange rate of 1.261 on 30 June 2023.
PORTFOLIO HIGHLIGHTS
* The Waterside
* Since the launch of The Waterside strata sales
programme in Q2 2022, the Company has achieved total
divestments of US$44.3 million (HK$348 million)
through the sale of 16 units.
* The units were sold at an average value of 65% above
cost, and an average 8% discount to their latest
average valuations.
* The completion of 13 units occurred during the period
under review. Of the three further sales of units,
two have settled and one completion is scheduled for
early October.
* Tenant occupancy increased by 19% YoY to 46%.
* The average rental remains at US$2.2 per square foot
per month.
* The Fountainside
* Two duplexes at the property have been reconfigured
into three smaller units and two car-parking spaces.
Occupancy permits are expected by the end of 2023,
clearing the way for sales.
* For the four villas, marketing efforts are expected
to increase investor interest as we enter 2024.
* Penha Heights
* During the period under review, Macau's zero-COVID
measures disrupted on-site viewings and weighed on
investor sentiment.
* Since Macau's zero-COVID measures were lifted in
early 2023, marketing activity for the property has
been stepped up.
Mark Huntley, Chairman of Macau Property Opportunities Fund, said:
"The financial year can be separated into two distinct periods. During the first six months,
Macau was subject to strict dynamic zero-COVID regulations, in lockstep with mainland China.
At the beginning of 2023, however, COVID controls were rapidly relaxed, triggering a dramatic
economic recovery which has seen both strong growth in gross gaming revenues and significantly
increased numbers of visitors to Macau.
The strata sales programme of selected apartments in the Waterside is delivering results and
has produced US$44.3 million of sale proceeds which has reduced our overall level of debt
from US$131 million to US$105 million in the last financial year. The environment in which
we operate has remained difficult; concerns have surfaced regarding China's economic performance
and inflationary pressures have driven global interest rates higher. Executing our divestment
strategy has therefore been challenging and we have had to be nimble and creative to deliver
this positive outcome.
We are continually assessing the market to apply the optimal divestment strategy for each
of our remaining property assets, including a whole portfolio disposal. Reducing our debt
levels continues to be the near term focus as we exercise patience and judgement in working
hard to realise the value of our remaining assets."
For more information, please visit http://www.mpofund.com for the Company's full 2023 Annual
Report.
The Manager will be available to speak to analysts and the media. If you would like to arrange
a call, please contact Investor Relations of Sniper Capital Limited at info@snipercapital.com
.
About Macau Property Opportunities Fund
Macau Property Opportunities Fund (MPO) is a closed-end investment fund and the only listed
company dedicated to investing in real estate in Macau, the world's largest gaming market
and the only city in China in which gaming is permitted.
Premium-listed on the London Stock Exchange, the Company has historically held multi-segment
property assets in Macau and Zhuhai, China. Its current portfolio comprises prime residential
assets valued at US$200.5 million, which are being progressively divested.
MPO is managed by Sniper Capital Limited, an Asia-based property investment manager with a
strong track record in fund management and investment advisory.
Stock Code
London Stock Exchange: MPO
LEI
213800NOAO11OWIMLR72
For further information, please contact:Manager Corporate Broker Company Secretary &
Sniper Capital Limited Liberum Capital Administrator
Group Communications Darren Vickers / Owen Ocorian Administration
Tel: +853 2870 5151 Matthews (Guernsey) Limited
Email: info@snipercapital.com Tel: +44 20 3100 2000 Kevin Smith
Tel: +44 14 8174 2742
MACAU PROPERTY OPPORTUNITIES FUND LIMITED
ANNUAL RESULTS & ACCOUNTS FOR THE YEARED 30 JUNE 2023
CORPORATE INTRODUCTION
M acau Property Opportunities Fund Limited, a closed-end
investment company, was incorporated and registered in Guernsey
under the Companies (Guernsey) Law, 2008 (as amended) on 18 May
2006, under registration number 44813. The Company is an authorised
entity under the Authorised Closed-Ended Investment Schemes Rules
2008. The Company is premium listed on the London Stock
Exchange.
Sniper Capital Limited, the Manager for Macau Property
Opportunities Fund, is responsible for the day-to-day management of
the Company's property portfolio and the identification and
execution of divestment opportunities.
The Company's entire remaining investment portfolio is allocated
to residential property investments in Macau. The Company is
managed with the objective of realising the value of all remaining
assets in its portfolio, individually, in aggregate or in any other
combination of disposals or transaction structures, in a prudent
manner, consistent with the principles of good investment
management with a view to making an orderly return of capital to
Shareholders. Its overriding aim is to deliver cost-effective and
timely divestments of the three remaining properties, to enable
further returns of capital to the shareholders. The Company has
ceased making any new investments and will not undertake additional
borrowings other than to refinance existing loans or for short-term
working capital purposes.
The Board reflects a diversity of ethnicity, gender and relevant
experience from a corporate, sectoral and geographical perspective,
coupled with a deep understanding of the unique features of Macau,
its property market and the Company's portfolio. The Board has
assessed that it has the capacity to fulfil its obligations in the
context of the latest corporate governance guidelines, taking full
account of the Company's late-stage divestment and its clearly
defined business objectives.
Pursuant to its Articles of Incorporation, MPO is subject to
annual continuation votes. At the annual general meeting (AGM) held
on 13 December 2022, Shareholders voted in favour of a Continuation
Resolution to extend the life of the Company for a further year
until the next continuation vote on 21 December 2023. The Board
will be recommending the Company's continuation of the Company at
the AGM, which is expected to be held in December.
KEY FACTS
Exchange
London Stock Exchange
Main Market
Symbol
MPO
Lookup
Reuters - MPO.L
Bloomberg - MPO:LN
Domicile
Guernsey
Shares in Issue
61,835,733
Shares Held in Treasury
Nil
Share Denomination
Pounds sterling; Reporting currency: US Dollars
Fee Structure
Realisation-focused fee structure that incentivises the Manager
to divest assets at realistic prices
Inception Date
5 June 2006
Net IPO Proceeds
GBP101 million (US$189 million)
Amount Returned to Shareholders Since Inception
US$173 million
(Distribution US$97.4m; Share buyback US$75.3m)
ADVISERS & SERVICE PROVIDERS
Company Secretary and Administrator
Ocorian Administration (Guernsey) Limited
Corporate Broker
Liberum Capital Limited
External Auditor
Deloitte LLP
CHAIRMAN'S MESSAGE
Our overriding priority remains optimising ways to deliver a
return of capital.
I present my report for the financial year ended 30 June 2023,
together with our perspective on the best way forward for the
Company.
The financial year can be separated into two distinct periods.
During the first six months, Macau was subject to strict dynamic
zero-COVID regulations, in lockstep with mainland China. At the
beginning of 2023, however, COVID controls were rapidly relaxed,
triggering a dramatic economic recovery. Yet the picture during the
financial year was nuanced and complex, with periods of optimism
during which we were able to advance our divestment strategy,
followed by severe setbacks. The environment in which we operate
has remained challenging as COVID-19 outbreaks prompted local
lockdowns, concerns surfaced regarding China's economic performance
and inflation concerns drove global interest rates higher.
Executing our divestment strategy has therefore been challenging
and we have had to be nimble and creative to deliver a positive
outcome for shareholders.
The Manager has worked successfully to exploit the periods of
opportunity and optimism, progressing the strata sales programme at
The Waterside. This programme yielded proceeds of approximately
US$44.3 million since commencement in July 2022 - a significant
achievement given the context in which those sales were made.
Correspondingly, debt levels have been reduced and the Company's
loan-to-value ratio has fallen. Repayment of debt remains the key
priority in the application of sales proceeds, as reducing interest
costs and meeting debt repayments are critical in the current
environment.
We are continually assessing the market to apply the optimal
divestment strategy for each of our remaining property assets,
including a whole portfolio disposal.
China and Macau
Mainland China experienced an economic rebound following the
relaxation of its COVID-19 restrictions, but as with other
jurisdictions where severe COVID measures were imposed, the length
of its closure, coupled with external factors - in particular the
global battle against inflation - has made that recovery brittle.
Weaker economic data has been widely reported, and although
specific details of the situation are difficult to ascertain, the
country's property-led economic woes are unmistakable, as is lower
consumer spending.
Mainland Chinese authorities appear willing to take targeted
action, with moves to support the country's currency and, more
recently, the property sector, in addition to a loosening of
monetary policy. Authorities may well seek to apply lessons learned
from other jurisdictions following the introduction of wide-ranging
economic stimulus measures. Any intervention by Chinese
authorities, however, is likely to be administered very carefully.
For such a large economy, this presents a significant challenge,
and one that could affect the Company's near-term opportunities. We
had anticipated that the economic recovery from the pandemic would
not be linear, and this has proved to be an accurate
assessment.
Against this somewhat uncertain backdrop and the widely reported
problems of some large Chinese developers, it is important to
distinguish between events affecting mainland Chinese property and
developers and the specific circumstances of Macau's economy and
real estate market. Macau's property sector was in a prolonged
downturn before the pandemic struck, and continued to flatline
ahead of the territory's economic recovery, particularly the luxury
property market. Relative to other regional cities therefore, our
portfolio can be seen as an exceptionally good investment
opportunity. However, accessing potential investors has taken time
as travel and the supporting transport infrastructure continue to
recover to pre-COVID levels. Many prospective purchasers remain
preoccupied with repairing the damage caused by COVID measures to
their investment and business operations before returning to the
market.
Macau's economy is driven by two main activities: gaming and
tourism. Under the territory's strict COVID-19 restrictions, both
were severely negatively affected. However, from a low base, a
recovery appears to be well under way. Visitor numbers have
increased significantly, and gross gaming revenue appears to be
holding up, with casinos revamping their offerings to meet the
demands of the new operating environment. It appears that the macro
situation in China is not affecting the recovery of tourism in
Macau, where many of the wealthy and middle class mainland Chinese
continue to spend on travel and entertainment. The renewal of
casino licences provided a welcome reminder that this key driver of
the economy and the associated tax revenue has a positive future.
We are already seeing that the return to more normal activity has
flowed through into new leasing enquiries relating to the remaining
apartments at The Waterside.
Although mainland Chinese authorities have relaxed certain
controls and enacted measures to stimulate the country's real
estate market, mainland capital control measures remain in place,
as do Macau's anti-speculation real estate policies. The latter
appears to serve a policy objective that has already been achieved,
and although property businesses and agents continue to lobby for
change, Macau's authorities are currently more focused on the
broader housing market than the high-end segment.
In the longer term, Macau's future looks promising, with
development initiatives on neighbouring Hengqin Island rivalling
MICE* destinations such as Orlando, Florida. Coupled with gaming,
these present compelling drivers for long-term growth. The return
of growth and investment opportunities is likely to attract
investors that are currently maintaining a "wait-and-see"
approach.
Our overriding priority remains optimising ways to deliver a
return of capital within a reasonable timeline for
shareholders.
* Meetings, incentives, conferences and exhibitions
Property portfolio
The Waterside
The commencement of the strata sales programme that we announced
earlier has delivered a combined total of US$44.3 million to date.
Sixteen units have now been divested to date, with buyers
originating from Macau, Hong Kong and mainland China. This leaves
43 units yet to be sold, including many on the development's
higher, more valuable floors. A carefully executed sales strategy
has been deployed to capitalise on current market dynamics and to
meet our debt repayment obligations. The active sales process
remains ongoing.
On a similarly positive note, The Waterside's leasing
performance has been encouraging, with 46% of the remaining units
leased. The tenant mix has improved alongside rental levels,
meaning that income has held up well in the face of competitive
market conditions.
The Fountainside
The Company is close to completing the process to enable the
three smaller units to be marketed and sold. Delays in receiving
the necessary consents and approvals affected the schedule for the
sale of these apartments. This segment of the market has held up
well and the sales process is now targeted for early 2024.
The Fountainside's four villas are still being marketed but no
sales have yet been completed.
Penha Heights
This property remains an exceptional asset in terms of both its
location and size. It has been maintained to appeal to a very
discerning target market. The Manager has adopted a focused
approach to reach prospective investors, with marketing timed to
the post-COVID recovery. Further patience will be required to
achieve a divestment, as the pool of buyers is limited, and
prospective purchasers seemingly remain preoccupied with their own
post-COVID issues.
Debt management and interest rates
Interest rates in Macau have increased significantly, in line
with those in other jurisdictions, notably the US, given the
currency linkage. Macau is not experiencing severe inflation,
meaning that the increased cost of debt is having a dampening
effect on the economy and the real estate market. This has been
exacerbated by the territory's ongoing mortgage restrictions.
Driven by events in mainland China, banks have continued to take
a cautious approach to lending and debt management. Ongoing and
active dialogue, driven by our Manager, is an essential part of
ensuring support from lenders. This has enabled the flexible
scheduling of our debt repayments, for example where sales proceeds
might overlap with repayments. This underscores the banks support
for our current approach of prudently managing the business and
producing results in challenging market dynamics.
During the year, the Company's debt was reduced from US$131
million to US$105.6 million. Our continued focus is on taking
pragmatic steps to dispose of sufficient assets to meet or exceed
scheduled debt repayments. Although there are signs that interest
rates may be close to their peak, troubling inflationary issues
remain in other parts of the world that may influence central
bankers' interest rate decisions. Overall, persistent high interest
rates are unhelpful to Macau and its real estate market.
It is important to highlight the divestment progress we have
made at The Waterside and in our focus on improving the Company's
financial position. At times, this has necessitated providing sales
incentives in order to generate cash to meet approaching debt
repayment obligations. In turn this has resulted in the need to
accept discounts to valuation levels on some disposals. On behalf
of the Board, I would like to commend the Manager for the way it
has handled both our sales programme and interactions with our
lenders. This approach informs our assessments of going concern and
viability. It will be a continuing requirement as we seek
opportunities to achieve our divestment objectives at realistic
prices and with a focus on our future debt repayment obligations.
Patience and judgement, however, are essential, as the disposals at
The Waterside represent a significant proportion of overall sales
in Macau's luxury property segment.
Financial performance
With Macau's economy on a path to recovery, our portfolio
valuation has stabilised, as reflected in the 1% decline from 30
June 2022 on a like-for-like comparison.
The Company's Adjusted Net Asset Value (NAV) was US$90.4 million
as of 30 June 2023. This is equivalent to US$1.46 (116 pence) per
share and represents a decline of 12.6% (16% in sterling terms)
compared to the previous year. NAV, which records inventory at cost
rather than market value, was US$1.06 per share, down 15.3% from
the previous year. The Company remained in compliance with its debt
covenants. Its shares closed at 58.5 pence at the end of the
reporting period, an increase of 53% over the year. The share price
discount to Adjusted NAV narrowed to 50% as of 30 June 2023 from
72% the previous year. The recent weakness in the share price,
which may be partly driven by wider market sentiment, has been
noted, together with trading volumes which remain very low. Whilst
we retain the option to buy back shares, we believe it is better to
apply proceeds to reduce current debt levels and deliver sales
which support the NAV.
ESG considerations
Our development activities have, of course, been concluded,
delivered in accordance with our environmental, social and
governance (ESG) approach, as previously reported. Where we carry
out minor works, such as the completion of apartments at The
Fountainside and general property maintenance, those policies and
processes remain in place. Where apartments have been refurbished
between tenancies at The Waterside, environmental considerations
have been actively applied.
In the context of governance, our three-person board reflects a
diversity of skills, gender and ethnicity, and our ongoing
appraisal process concluded that the Board, as it is currently
constituted, functions very effectively. As the Company is in a
very late stage of its life, we continue to carefully assess our
board composition, although further changes in the context of that
time horizon would likely be unhelpful.
Our strategy is clearly defined, and our objectives are being
implemented in the context of the external factors through which we
must navigate. Our experience with our assets, the market and the
reality of day-to-day operations is a vital factor in the context
of governance.
Non-executive Director Alan Clifton has exceeded the normal
tenure set out in external codes. He continues to demonstrate
independence through action, and his experience is important in the
context of our broad functions. This, coupled with the challenges
of finding a suitable director for what will be a comparatively
short tenure amid such challenging market circumstances, is why we
are proposing that Mr Clifton continues to serve as a director.
We have determined that we will continue without any increase in
directors' remuneration at this time.
Extension of life
Pursuant to its Articles of Incorporation, MPO is subject to
annual continuation votes. At the AGM held on 13 December 2022,
Shareholders voted in favour of a Continuation Resolution to extend
the life of the Company for a further year until the next
Continuation Vote on 21 December 2023. The Board has the continued
support of major shareholders and all historic continuation votes
have passed by an overwhelming majority. A forced sale of assets,
particularly under current market conditions and at current levels
of gearing, would realise significantly lower returns than a
continued, measured disposal of our remaining assets.
Subject to a positive outcome from the Continuation Vote, the
Board intends to agree a revised fee agreement with the Manager
that will be at a level no higher than that during the year under
review. Any terms will be consistent with, and wholly focused on,
achieving the Company's strategic objectives, within a shortened
time frame where practically possible.
Outlook
It is the Company's intention to press ahead with its pragmatic
approach to achieving its divestment objectives through carefully
managed sales. Debt reduction will be the primary application of
proceeds from near-term sales.
External influences, namely the economic downturn in mainland
China and the high interest rate scenario, will continue to
complicate the operating environment in the short-term. The
recovery of the tourism and gaming markets have both been
promising; however, it is also important to restate that we expect
that Macau's recovery will not be linear, and that periods of
slower activity will be interspersed with increased optimism.
Through determination and a disciplined approach, we have achieved
positive divestment outcomes in this market context. We will
continue to apply all of our energies to returning capital to our
shareholders at the earliest opportunity.
MARK HUNTLEY
CHAIRMAN
MACAU PROPERTY OPPORTUNITIES FUND LIMITED
4 October 2023
BOARD OF DIRECTORS
MARK HUNTLEY
Chairman
Mark Huntley has more than 40 years of experience of fund
management, administration and fiduciary operations. He began his
career at NatWest before moving to the First National Bank of
Chicago, where his portfolio included overseas-owned US real
estate. He worked in a variety of roles at Barings, primarily in
fund administration specialising in alternative investment funds,
and served on the executive management committee. In 2006, he
established an independent financial services business within the
Heritage Group, retiring from the role of CEO upon the sale of the
business in 2017. His involvement in funds and private assets has
spanned real estate, private equity and emerging market investment.
He has served on the boards of listed and private investment funds
and of management/general partner entities. Mr Huntley is a
resident of Guernsey.
ALAN CLIFTON
Chairman of the Audit and Risk Committee
Alan Clifton began his career at stockbroker Kitcat &
Aitken, first as an analyst, thereafter becoming a Partner and then
a Managing Partner, prior to the firm's acquisition by the Royal
Bank of Canada. He was subsequently invited to take up the role of
Managing Director of the asset management arm of Aviva, the UK's
largest insurance group. He has had a long non-executive career as
an Independent Director of numerous investment and finance sector
companies. Mr Clifton is a UK resident.
CARMEN LING
Non-executive Director
Carmen Ling has more than 25 years of banking experience. She
has served as a Managing Director at Citigroup and Standard
Chartered Bank, and she has extensive experience of client
coverage, real estate, transaction banking and network strategies.
Her role as global head of RMB Internationalisation/Belt & Road
at Standard Chartered Bank added to her unique knowledge and
experience as an international banker. Before beginning her banking
career, Ms Ling worked in the hospitality industry for hotel
project developments in North Asia, including China and Japan. She
is a resident of Hong Kong.
FINANCIAL REVIEW
2018 2019 2020 2021 2022 2023
NAV (IFRS) (US$ million) 212.8 131.1 100.6 97.9 77.6 65.7
----- -------- ----- ----- ----- -----
NAV per share (IFRS; US$) 2.78 2.12 1.63 1.58 1.25 1.06
----- -------- ----- ----- ----- -----
Adjusted NAV (US$ million) (a) 260.6 174.9(c) 136.5 128.8 103.4 90.4
----- -------- ----- ----- ----- -----
Adjusted NAV per share (US$) (a) 3.41 2.83 2.21 2.08 1.67 1.46
----- -------- ----- ----- ----- -----
Adjusted NAV per share (pence) (1, a) 258 223 179 150 138 116
----- -------- ----- ----- ----- -----
Share price (pence) 194.0 146.0 61.75 67.5 38.2 58.5
----- -------- ----- ----- ----- -----
Portfolio valuation (US$ million) (b) 338.4 311.1 275.6 265.4 242.0 200.5
----- -------- ----- ----- ----- -----
Loan-to-value ratio (%) 34.7 43.5 49.6 49.3 53.3 50.9
----- -------- ----- ----- ----- -----
(1) Based on the following US dollar/sterling exchange rates on
30 June: 2018: 1.321; 2019: 1.270; 2020: 1.231; 2021: 1.386; 2022:
1.212; 2023: 1.261
(a) Refer to Note 18 for calculation of Adjusted NAV and Adjusted NAV per share
(b) Refer to Notes 6 & 7 for independent valuations of the
Group's portfolio including investment property and inventories
(c) MPO returned US$50.5 million (50p per share) to shareholders in 2018
The two halves of this financial year stand in stark contrast to
one another. Macau's worst economic performance in more than a
decade was followed by the territory's tourism and gaming numbers
roaring back to life following the abrupt dismantling of zero-COVID
measures in January.
However, the recovery has to date been uneven.
Economic activity has been centred on tourism and gaming, a
dynamic highlighted by the recovery of both hotel performance as
well as the tourism focused retail real estate segment. Meanwhile,
the luxury residential market, in which the Company operates, has
remained subdued, impacted by a weak economic recovery in mainland
China and a markedly higher interest rate environment.
Despite these challenges, the Manager continued to progress its
divestment programme, generating total sales of US$44.3 million
through the sale of sixteen units at The Waterside since the
programme's commencement.
Financial results
The Company's portfolio, comprising three main assets, was
valued at US$200.5 million as at 30 June 2023. On a like-for-like
basis after adjusting for the units sold during the year, the
portfolio valuation declined by 1% from the previous year. Although
property values have stabilised, liquidity has remained low, and
the long-awaited revival of Macau's real estate market has remained
hindered by the high interest rate environment, restrictive
mortgage policies, and continued caution among potential buyers
following the effects of the pandemic in mainland China, where
draconian COVID measures were relaxed only in early 2023. The
Manager is maintaining a cautious stance on property values moving
forward.
MPO's Adjusted NAV was US$90.4 million at the end of the period,
which translates to US$1.46 (116 pence) per share, a 12.6% decrease
year on year (YoY). The primary reasons for the decline were
increased financing costs due to a significant rise in interest
rates and the impact of The Waterside divestment programme. IFRS
NAV, which records inventory at cost rather than market value, was
US$65.7 million, or US$1.06 (84 pence) per share, a 15.3% drop over
the one-year period.
Capital management
As at 30 June 2023, MPO's balance sheet listed assets valued at
a total of US$182.6 million, offsetting combined liabilities of
US$116.9 million, of which US$105.1 million represented bank
borrowings.
The Company ended the financial year with a consolidated cash
balance of US$6.7 million, of which US$5.6 million was pledged with
lenders and restricted as to its usage. During the year, c.US$27.9
million, representing 75% of the sales proceeds generated from
sales at The Waterside, was deployed for loan repayments that
became due over the year, and for the partial prepayment of
upcoming instalments. The Company's ongoing operating expenses are
expected to be covered by sales proceeds released as free cash.
The Company's gross borrowings stood at US$105.6 million,
translating to a loan-to-value ratio of 50.9%, compared to 53.3% at
the end of the previous financial year. Gross borrowings are
expected to decline further to c.US$96 million following
completions of sales at The Waterside that occurred post year end,
improving the Company's loan-to-value ratio to 48.8%.
Extension of Company life and fee revision
At the Company's Annual General Meeting in December 2022,
shareholders passed a resolution to extend its life for a further
year, until 31 December 2023. Although Macau's economy is on the
road to recovery, economic activity is concentrated in tourism and
gaming-related activities. The ultra-luxury property market has not
yet seen a spillover effect.
Given these circumstances, the timely completion of the
Company's divestment programme is expected to be extended to
maximise valuations in sales transactions. Therefore, even though
the Manager will deploy all possible strategies to secure further
sales, it is expected that an extension of the Company's life to
the end of 2024 will be necessary to enable the divestment
programme to progress in an orderly manner and to achieve the best
possible returns for shareholders.
The Board and Manager are in discussion on how future fees will
be allocated in the next year.
PORTFOLIO OVERVIEW
Project Project
No. Acquisition development Market Changes composition
of Commitment cost cost valuation (based on market (based on market
Property Segment units (US $ million) (US $ million) (US $ million) (US $ million) value) value)
Over
the Since
year acquisition
------------ ----- -------------- -------------- -------------- -------------- ----- ------------- ----------------
The Waterside
------------ ----- -------------- -------------- -------------- -------------- ----- ------------- ----------------
Tower Six at
One
Central Luxury
Residences*/** residential 45 78.6 67.7 10.9 141.0 -1.0% 108% 70.3%
------------ ----- -------------- -------------- -------------- -------------- ----- ------------- ----------------
The Low-density
Fountainside** residential 7 6.3 2.0 4.3 17.8 -2.8% 788% 8.9%
------------ ----- -------------- -------------- -------------- -------------- ----- ------------- ----------------
Luxury
Penha Heights residential N.A. 28.5 26.8 1.7 41.7 -1.1% 56% 20.8%
------------ ----- -------------- -------------- -------------- -------------- ----- ------------- ----------------
Total 113.4 96.5 16.9 200.5 -1.2% 108% 100%
----- -------------- -------------- -------------- -------------- ----- ------------- ----------------
* One Central is a trademark registered in Macau SAR under the
name of Basecity Investments Limited. Sniper Capital Limited, Macau
Property Opportunities Fund Limited, MPOF Macau (Site 5) Limited,
Bela Vista Property Services Limited and The Waterside are not
associated with Basecity Investments Limited, Shun Tak Holdings
Limited or Hongkong Land Holdings Limited.
** Information listed refers to the remaining units and parking
spaces available for sale.
PORTFOLIO UPDATES
Divestment progress
Although the reopening of Macau's borders in December led to a
major revival of its tourism and gaming industries, investor
interest in high-end residential properties has remained
subdued.
The luxury residential segment faces a particularly challenging
environment due to a weaker-than-expected economic recovery in
China, high interest rates, and legacy anti-speculation policy
measures imposed by Macau's government before the pandemic period
that continue to dampen demand.
Nevertheless, Macau's demographics remain favourable. In
general, the territory's residents remain cash-rich with low levels
of personal debt. Furthermore, Macau's luxury residential
properties are currently at their lowest valuations in a decade,
both in absolute terms and on a relative basis compared with
neighbouring Hong Kong, Guangzhou and Shenzhen, and with other
regional markets such as Singapore.
During the financial year, while sales efforts at The Waterside
produced results amid headwinds, investor interest in Penha Heights
and The Fountainside remained muted.
The Waterside
The Waterside is the Company's flagship luxury residential
asset, located in a prime district on the Macau Peninsula.
The marketing strategy for The Waterside sales campaign has been
to seek out cash-rich buyers who intend to retain apartments for
their own long-term use, typically as primary residences or holiday
homes. Among the reasons these buyers cite for selecting The
Waterside are its attractive, central location on the Macau
Peninsula, its premium design, which offers the exclusivity of only
two units per floor, extensive clubhouse facilities, and the
availability of spacious, three-bedroom layouts.
Since the launch of The Waterside strata sales programme in Q2
2022, the Company has achieved total divestments of US$44.3 million
(HK$348 million) through the sale of 16 units to mainland Chinese,
Macau and Hong Kong investors.
The completion of 13 units occurred during the period under
review, while the remaining three units completed following the
Company's year-end. The 16 units were sold at an average value of
65% above cost, at approximately HK$8,800 (US$1,126) per square
foot of gross floor area, an average 8% discount to their latest
average valuations.
Following these transactions, 43 units remain available for
sale.
Among the remaining units at The Waterside, 46% of the units
were tenanted as at end-June 2023. Although this occupancy rate
reflects a 19% increase YoY, it is a combination effect of a 16%
increase in new leases and a 24% reduction in units available for
lease during the financial year. As a testament to the appeal of
The Waterside, rents have remained steady at an average monthly
rate of HK$17.02 per square foot, despite average rents in the
immediate vicinity falling 8.3% in Q1 2023. In addition, occupied
units yielding a steady rental stream are potentially more
attractive to prospective buyers.
The Fountainside
The Fountainside is a low-density, freehold residential
development in Macau's Penha Hill district. Of its original 42
units, all 36 standard units have been sold. Four villas and three
reconfigured apartments remain available for sale, as do two
car-parking spaces.
As previously reported, as market demand for affordable units
among small families and young individuals remains strong, The
Fountainside's original two duplexes have been reconfigured as
three smaller units, with on-site work having been completed in
2022. Occupancy permits from Macau's Land and Urban Construction
Bureau (DSSCU) for the three smaller units remain pending, delaying
the commencement of the sales and marketing campaign. The DSSCU
conducted its initial inspection of the reconfigured units only in
January 2023 and made requests for minor alterations to the final
drawings, which have since been submitted and approved.
The delays have been unfortunate, but the occupancy permits are
now finally expected to be issued at the end of 2023, allowing
sales to be progressed. Meanwhile, the divestment strategy for the
four villas is expected to generate increased investor interest as
we enter 2024.
Penha Heights
Penha Heights is a prestigious, five-storey, colonial-style
villa covering an area of more than 12,000 square feet, nestled
amid lush greenery atop Penha Hill, an exclusive and highly
desirable residential enclave. This trophy home, with its sweeping
bay views, has been immaculately maintained and enhanced through
works undertaken throughout the pandemic, ensuring it is at its
most attractive to prospective purchasers.
During the second half of 2022, despite the Manager's targeted
marketing efforts and implementation of various strategies to
divest the asset, including a sales and marketing drive with
specialist property agents, Macau's zero-COVID measures disrupted
on-site viewings, weighed on investor sentiment, and weakened the
appetite among ultra-high net worth individuals for homes in the
territory.
Since Macau's zero-COVID measures were lifted in early 2023,
marketing activity for the property has been stepped up. Real
estate market activity among ultra-high net worth individuals is
expected to increase as we enter 2024.
MACROECONOMIC OUTLOOK
ECONOMY
GDP Forecast
+58.9%
2023 full year
+20.6%
2024
Source: The International Monetary Fund (IMF)
Unemployment rate (local residents)
3.5%
-1.3pp YoY
Source: DSEC
TOURISM
Visitors from Mainland China
64%
2023 H1
Recovered to 53% of 2019 level
Visitors from Hong Kong
30%
2023 H1
Recovered to 93% of 2019 level
Visitors from Others Regions
6%
2023 H1
Recovered to 29% of 2019 level
GAMING
Mass Gaming
74%
2023 H1
+22pp vs. 2019
VIP Gaming
26%
2023 H1
-22pp vs. 2019
Gaming operator's commitment to non-gaming investment over 10
years
US$15 billion
A 180-degree turnaround, but full recovery only by late 2024
Macau maintained its zero-COVID policy in lockstep with mainland
China throughout 2022, deploying strict dynamic zero-COVID
measures, including travel restrictions, lockdowns and closures of
non-essential businesses. A rapid reversal of those measures in
late December 2022 marked an abrupt exit from this uncompromising
approach.
By then, the three years of strict public health measures had
taken their toll on the economy. Macau's economy bottomed out with
a sharp decline of 27% in gross domestic product in 2022. This had
a spillover effect on all parts of the economy, including
property.
By contrast, H1 2023 saw a 180-degree turnaround in Macau's
economic performance, with the lifting of all zero-COVID
restrictions by January. Fuelled by tourism and gaming activity, in
H1 2023, GDP grew 71.5% YoY to reach approximately 71% of H1 2019
levels. The economic recovery had also reduced unemployment among
local residents to 3.5% in Q2 2023, compared to 4.8% in the same
period in 2022.
The Economist Intelligence Unit (EIU) expects Macau's economy to
return to its pre-pandemic size only in late 2024 due to the extent
of the shocks it suffered during 2020-22. That projection is ahead
of previous forecasts, which were for a full recovery only by early
2025, although the EIU also expects Macau's growth to moderate amid
China's recent slowing economic activity.
Tourism boom in H1 2023
Since the lifting of travel restrictions in January 2023,
visitor numbers have rebounded and totalled approximately 11.6
million visitors in the first half of 2022 - around 60% of
pre-pandemic tourist arrivals in 2019, and a stark contrast with
the 5.7 million visitors throughout the whole of 2022, a threshold
that was surpassed by April 2023.
Tourists from mainland China continue to account for the bulk of
visitors to Macau, at approximately 55% of 2019's numbers. By
contrast, the number of visitors from Hong Kong has reached 90% of
pre-pandemic levels. Visitor arrivals from elsewhere, however, have
recovered to only 30% of pre-pandemic levels due to the lead time
and resources required by airlines to restore international
connectivity to Macau, although numbers are expected to improve in
the second half of 2023.
With the opening of several new hotel properties, Macau's hotel
room supply has increased by 5,000 units compared to pre-pandemic
levels, with 47,000 rooms throughout the territory at the end of H1
2023. The hotel occupancy rate in H1 2023 was 82%, an improvement
of 42% YoY while average room rates leapt 58% to MPO1,247 (US$156),
an indication of the heightened demand. Nevertheless, a shortage of
labour remains, which has impacted the tourism industry's efforts
to scale up further.
Stability and recovery in the gaming sector
Macau's gaming operators endured an immensely difficult
operating environment during the pandemic, marked by low revenues,
unprecedented temporary casino closures, uncertainties over licence
renewals, and a crackdown on junket operators. Gross gaming revenue
(GGR) for 2022 stood at a dismal 14% of 2019's pre-pandemic figure.
Nevertheless, in H2 2022, industry players welcomed the
government's announcement of the renewal of all six licences for a
further 10 years, ushering in a period of greater stability and
certainty for the gaming industry.
The lifting of travel restrictions at the beginning of 2023 has
enabled GGR to grow rapidly, and in May and June 2023, gaming
revenues had recovered to approximately 64% of 2019 levels.
Analysts expect GGR to reach more than 60% of 2019's levels by
end-2023, but a full recovery is expected only in 2024. However,
given the dominance of the more profitable premium mass-market and
mass-market gaming segments following the demise of the junket
business, gaming operators are currently enjoying unprecedented
operating margins.
In addition, guided by the government's expectation that gaming
operators focus on diversification in expanding non-gaming tourism
and attracting customers from outside the region immediately
surrounding Macau, operators have committed to collectively
investing US$15 billion over their concession periods, of which 90%
is to be spent on non-gaming activities such as the conventions and
exhibitions business, entertainment and performances, sports
events, culture, art, healthcare and theme parks. They will also be
required to make further non-gaming investments for every year that
GGR exceeds an annual threshold of US$22.4 billion. In the long
term, this is likely to reduce Macau's dependency on gaming
revenues while also attracting a wider range of tourists.
PROPERTY MARKET OVERVIEW
Residential property volumes slowly recovering
With zero-COVID measures in place in H2 2022, sales of
residential properties declined 51% YoY to 1,318 units, according
to Macau's Financial Services Bureau. Residential prices also fell,
with the average price per square foot measured by gross floor area
dropping 4% YoY to HK$6,160 (US$787). During full-year 2022, a
total of 2,950 units were transacted, a decline of 51% YoY, marking
the territory's worst year for residential sales in two
decades.
In H1 2023, the residential property market appears to be slowly
recovering from this trough level. For 2023, available data until
June indicates that a total of 1,793 residential properties were
transacted, an increase of 10% YoY but still 54% lower than the
corresponding period in 2019. Price data available for H1 2023
indicates an increase of 2% YoY to HK$5,919 per square foot of
gross floor area, 14% lower than the corresponding quarter in
2019.
Luxury residential segment continues to face challenges
In the luxury residential segment, for units above 150 square
metres, just 85 sales were recorded in H1 2023, an increase of 8%
YoY and 2% higher than the corresponding quarter in 2019. In Q2,
prices for units above 150 square metres averaged HK$6,033 per
square foot, an increase of 7% YoY but 9% lower than Q2 2019
prices.
In July 2023, the Monetary Authority of Macau announced a
further increase in the prime lending rate, resulting in the base
rate reaching 5.75%. Its decision was in alignment with similar
interest rate hikes by the Hong Kong Monetary Authority and the
United States Federal Reserve. This interest rate hike - the 11th
since March 2022 - marks a 15-year high for Macau's base rate.
The high interest rate environment has added to the challenges
the luxury residential segment faces, driving potential investors
to seek increased yields when considering investment opportunities,
or to seek price reductions to compensate for lower expected
returns. But sellers are also exhibiting strong holding power, with
many reluctant to accept lower prices at a time when the tourism
sector is seeing such a strong rebound. The depreciation of the
Chinese yuan, which is currently at a 15 year low versus the US
dollar, has also dampened potential investor interest from mainland
China.
In addition, measures taken by the Macau government to curb real
estate speculation have a weighed heavily on the sector since the
pre-pandemic era. These include additional ad valorem stamp duty of
up to 20% if a property is resold within two years of purchase,
buyer's stamp duty of 10% for properties purchased by companies or
non-residents, and an additional stamp duty of up to 10% for those
owning more than one residential property. The residential mortgage
lending ratio for buyers, which was tightened in 2018, has resulted
in maximum financing levels of only 40-50% of purchase prices for
properties valued at more than MOP8 million (approximately US$1
million), which affects all the properties in the Company's
portfolio.
China's property woes have dampened investor sentiment
China's current difficulties, with its slowing economic growth
and troubled property sector, have dampened investor interest in
Macau real estate. In Q2 2023, China's economy expanded 6.3% YoY,
falling short of market expectations, weighed down by tepid export
demand and declining property prices. On a quarter-on-quarter
basis, growth slowed to 0.8% in Q2 2023 from 2.2% in the first
quarter.
The property sector in China is also facing a crisis resulting
from the lingering effects of the pandemic slowdown, a housing
market that depended on debt and pre-sales to fund construction, a
borrowing cap imposed by the government in 2020, and ensuing cash
crunches and debt defaults at several property giants. Despite the
lifting of zero-COVID restrictions, China's property market has
failed to sustain a rebound in sales, deepening the sector's
woes.
As real estate accounts for approximately one-quarter of China's
economy, the government has announced several policy measures to
aid property developers by boosting consumer demand. However, it is
uncertain whether these measures, which fall short of constituting
a clear stimulus package, will provide the necessary relief for the
ailing industry. More than US$100 billion of Chinese property bonds
have defaulted over the past two-and-a-half years, creating a
spillover effect on high net worth individuals in Macau, who have
seen a portion of their capital vanish.
LOOKING AHEAD
Macau's economy appears to be on a path to recovery, but
economic growth has been concentrated in the tourism and gaming
industries, with the property market continuing to face a unique
set of challenges; a deteriorating Chinese economy, high interest
rates, and Macau's outdated anti-speculation property measures.
Collectively, these have adversely impacted market sentiment,
limiting the progress of the Company's divestment programme.
Although a sustained improvement in investor sentiment and a
recovery in mainland China will most likely be required for the
Company to realise the full potential value of its portfolio, MPO's
assets remain among the most sought-after in Macau. The Manager
will continue to act decisively to identify potential pockets of
interest among investors through a wide range of marketing
initiatives with the aim of returning capital to shareholders as
soon as possible.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
1 About this report
This ESG report has been prepared with reference to the Ten
Principles of the United Nations Global Compact (UNGC). The report
elaborates the environmental and social responsibility measures and
the related performance of Macau Property Opportunities Fund
Limited.
1.1 Company core business
The Company is in the process of an orderly and managed
divestment of its three remaining portfolio properties. No new
construction or development activities will be undertaken aside
from a limited reconfiguration at The Fountainside.
The Company is focused on and exposed solely to the high-end
residential property market in Macau. It has never had any exposure
to any property or other investments in the gaming or associated
hospitality sectors, and each investment is in full compliance with
the parameters set out in the Company's prospectus.
1.2 Report boundary
The ESG report focuses on the environmental and social
responsibility performance of the Company's core business of
investment in properties in Macau, as listed below:
-- The Waterside
-- The Fountainside
-- Penha Heights
1.3 Overall ESG approach
The Board understands the significance of ESG and has
incorporated ESG-related risks into the Company's risk management
processes. The Company's overall ESG approach is aimed at
generating returns for shareholders in a responsible manner while
taking into consideration environmental and social responsibility
and supply chain management.
The Company's ESG approach has been developed based on the Ten
Principles of UNGC. The UNGC is a voluntary, multi-stakeholder
platform that convenes multinational companies to align with The
Ten Principles relating to human rights, labour, the environment
and anti-corruption standards. The Board is committed to the basic
concepts of fairness, honesty and respect for people and the
environment in its business activities.
2 Environment
2.1 Commitment principle
The Company aims at all times to adopt environment-friendly
practices in its business operations to minimise any potential
negative impacts on the environment and natural resources. It
complies strictly with all applicable environmental laws and
regulations in Macau. Different environmental protection measures
have been implemented at key stages of property development,
alongside the incorporation of green building designs and the
implementation of responsible construction practices at work sites.
The Company also upholds the principles of recycling and reuse at
its properties.
2.2 Initiatives and performance
Property design
The Company follows local green building requirements that take
into consideration green design principles relating to project
elements such as building materials, indoor air quality, site
selection and energy use. Examples of green building designs and
features are as follows:
- preservation and retention of cultural heritage such as façades of historic buildings;
- incorporation of passive building designs to improve ventilation and optimise natural light;
- use of water-efficient fixtures; and
- greening of rooftops.
Indoor air quality is improved through the introduction of air
purifying equipment. Measures for monitoring temperature and
humidity in residential units and thus enhancing living conditions
for residents have been implemented at One Central and The
Fountainside.
Property management
Various green measures have been adopted at our properties to
improve overall environmental performance, for example:
- Energy efficiency: Energy consumption has been reduced by (i)
replacing incandescent, halogen and fluorescent lighting with LED
lighting, (ii) reducing the amount of lighting used in common
areas, and (iii) installing air-conditioning systems with
energy-efficiency labelling, in accordance with local
requirements.
- Resident engagement: Residents are encouraged to minimise
their consumption of electricity, water and materials, and are
provided with recycling facilities to reduce waste.
- Rechargeable battery recycling: Collection points for
rechargeable battery recycling have been provided, and tenants are
encouraged to use these facilities for battery disposal. Certain
materials in rechargeable batteries, such as cadmium, are hazardous
to human health and the environment.
An effective environmental management system has been
implemented. Some of the Company's main environmental objectives in
its property management activities are as follows:
- using pesticides and cleansing agents in accordance with
relevant regulations, and aiming for zero adverse incidents
involving their use and storage; and
- managing community wastewater, waste and noise according to local standards.
Regulatory compliance
The Company is not aware of any non-compliance with
environmental regulatory requirements that may significantly impact
its business.
2.3 Climate risk
We have considered climate risk and concluded that there is no
material impact on the Annual Report.
3 Social responsibility and supply chain management
The Company strongly believes that quality property is a pathway
to quality living. It strives to provide a quality property
experience through innovation and sensitivity, and by operating
with integrity. Through such efforts, its aim is to enhance
residents' quality of life and become their trusted partner.
3.1 Supply chain management
During the process of property construction and redevelopment,
the Company carefully appoints external contractors by taking into
consideration factors such as human rights protection,
non-discrimination in employment and occupation, environmental
protection, construction safety and product safety. When selecting
contractors for property construction, the Company seeks
contractors that are familiar with environmental, social and safety
requirements, and which are committed to the abolition of child
labour and corruption. The Company maintains close relations with
contractors relating to all construction and sourcing activities,
holding regular meetings to facilitate two-way communication. It
also performs regular assessments of contractors based on
environmental and social risk considerations.
3.2 Quality services
To ensure consistently high quality in its property management
services, the Company aims to:
- develop quality properties that embrace innovation and enhance their locales;
- provide committed service and improve its property management offering on an ongoing basis;
- achieve high standards by through rigorous property management
practices to maximise customer satisfaction; and
- provide a tasteful living environment for residents.
3.3 Protection of privacy
To ensure residents' wellbeing, regular communication is
maintained through satisfaction surveys that help to identify
potential areas for improvement. Residents' identities are kept
confidential and access to information gathered is restricted.
Regulatory Compliance
The Company is not aware of any non-compliance with supply chain
management regulations that may significantly impact its
business.
4 Human rights and labour
The Company strongly believes that businesses should support and
respect the protection of internationally recognised human
rights.
4.1 Gender Equality and Diversity
To ensure that we have an equitable platform to perform, the
Company aims to:
- ensure the hiring process is performance-based despite gender;
- ensure there is diverse gender representation at all levels of
the Company (as of June 2023, one of our three board members is
female); and
- ensure our service providers embrace diversity in their workforces.
ABBREVIATIONS AND ACRONYMS
IMF INTERNATIONAL MONETARY FUND
DSEC STATISTICS AND CENSUS SERVICE (MACAU)
-------------------------------------------------
DICJ GAMING INSPECTION AND COORDINATION BUREAU (MACAU)
-------------------------------------------------
DSF FINANCIAL SERVICES BUREAU (MACAU)
-------------------------------------------------
MICE MEETINGS, INCENTIVES, CONFERENCES AND EXHIBITIONS
-------------------------------------------------
Manager and Adviser
Sniper Capital
Manager Investment Adviser
Sniper Capital Limited Sniper Capital (Macau) Limited
--------------------------------------------------------------------------------------------------------
Research & Transaction Project Development Asset Management Corporate Communications Finance & Administration
* Macro & micro analysis * Consultant appointment & coordination * Property & estate management * Investor & media relations * Administration & accounting
* Forecasting & modelling * Project monitoring & reporting * Sales & leasing * Marketing & product positioning * Compliance & reporting
* Sourcing * Project delivery & handover * Facilities management * Statutory & regulatory communication * Cash management & treasury
* Due diligence * Asset value enhancement
* Divestment
-------------------------------------------- ------------------------------------- ------------------------------------------- ----------------------------------
Manager
The day-to-day responsibility for the management of the Macau
Property Opportunities Fund's ("MPOF", "Company" or "Group")
portfolio rests with Sniper Capital Limited.
Founded in 2004, Sniper Capital Limited focuses on capital
growth from carefully selected investment, development and
redevelopment opportunities in niche and undervalued property
markets.
Sniper Capital Limited's team of over 25 professionals covers
all the required investment and development disciplines, including
research, site acquisition, project development, asset management,
divestment, investor relations and finance.
Working closely with Headland Developments Limited and Bela
Vista Property Services Limited, Sniper Capital Limited ensures
that all necessary project management skills and services are
provided in a way that will deliver each MPOF project to the right
standards and on budget.
With its 29 August 2023 holding of 12.08 million shares or
19.54% of the Company's issued share capital, Sniper Investments
Limited - an investment vehicle associated with Sniper Capital
Limited - is the largest shareholder in MPOF, which bears witness
to Sniper Capital Limited's belief in the Company.
The Manager is committed to the full disposal of the Company's
Portfolio within the current expected timeline while striving to
return maximum possible values to shareholders.
Adviser
The Company's Board of Directors and Manager are advised by
Sniper Capital (Macau) Limited, which has a highly developed
network of contacts and associates spanning Macau's financial and
business community.
The Investment Adviser's brief is to source, analyse and
recommend potential divestment opportunities, whilst providing the
Board with property investment and management advisory services in
relation to the Company's real estate assets.
For more information, please visit www.snipercapital.com
Investment Policy
The Company is managed with the objective of realising the value
of all remaining assets in the portfolio, individually, in
aggregate or in any other combination of disposals or transaction
structures, in a prudent manner consistent with the principles of
sound investment management with a view to making an orderly return
of capital to shareholders at the earliest opportunity.
The Company may sell or otherwise realise its investments
(including individually, or in aggregate or other combinations) to
such persons as it chooses, but in all cases with the objective of
achieving the best exit values reasonably available within shortest
acceptable time scales.
The Company has ceased to make any new investments and will not
undertake additional borrowing other than to refinance existing
borrowing or for short-term working capital purposes.
Any net cash received by the Company after discharging any
relevant loans as part of the realisation process will be held by
the Company as cash on deposit and/or as cash equivalents prior to
its distribution to shareholders.
The Company's Articles of Incorporation do not contain any
restriction on borrowings.
DIRECTORS' REPORT
The Directors present their report and audited financial
statements of the Group for the year ended 30 June 2023. This
Directors' report should be read together with Corporate Governance
Report.
Principal activities
Macau Property Opportunities Fund Limited (the "Company") is a
Guernsey-registered closed-ended investment fund traded on the
London Stock Exchange (the "LSE"). Following the passing of all
resolutions at the Extraordinary General Meeting held on 28 June
2010, the Company's shares obtained a Premium Listing on the LSE
Main Market on 30 June 2010.
The Company is an authorised entity under the Authorised
Closed-Ended Investment Schemes Rules and Guidance, 2021 and is
regulated by the Guernsey Financial Services Commission ("GFSC").
During the year, the principal activities of the Company and its
subsidiaries as listed in Note 4 to the Consolidated Financial
Statements (together referred to as the "Group") were property
investment in Macau.
Business review
A review of the business during the year, together with likely
future developments, is contained in the Chairman's Message on and
in the Manager's Report.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Manager's Report. The financial position of the
Group, its cash flows and its liquidity position are described in
the Capital Management section of the Manager's Report.
The financial risk management objectives and policies of the
Group and the exposure of the Group to credit risk, market risk and
liquidity risk are discussed in Note 2 to the Consolidated
Financial Statements.
In accordance with provision 30 of the 2018 revision of the UK
Corporate Governance Code, (the "UK Code"), and as a fundamental
principle of the preparation of financial statements in accordance
with IFRS, the Directors have assessed as to whether the Company
will continue in existence as a going concern for a period of at
least 12 months from signing of the financial statements, which
contemplates continuity of operations and the realisation of assets
and settlement of liabilities occurring in the ordinary course of
business.
The financial statements have been prepared on a going concern
basis for the reasons set out below and as the Directors, with
recommendation from the Audit and Risk Committee, have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the next twelve months after date of
approval of the Annual Report.
In reaching its conclusion, the Board have considered the risks
that could impact the Group's liquidity over the period to 30
September 2024. This period represents the period of at least 12
months from the date of signing of the Annual Report.
As part of their assessment the Audit and Risk Committee
highlighted the following key considerations:
1. Whether the Group can repay or refinance its loan facilities
to discharge its liabilities over the period to 30 September
2024
2. Extension of life of the Company
1. Whether the Group can repay or refinance its loan facilities
to discharge its liabilities over the period to 30 September
2024
As at 30 June 2023, the Group has major debt obligations to
settle during the going concern period being:
i) principal repayments for The Waterside loan facility of
approximately US$7.7 million, US$9.6 million and US$11.5 million
due for settlement in September 2023, March 2024 and September
2024, respectively;
ii) principal repayments for The Fountainside loan facility of
approximately US$1.9 million and US$3.7 million due for settlement
in September 2023 and March 2024, respectively;
iii) principal repayments for the Penha Heights Tai Fung Bank
loan facility of approximately US$1.6 million due for settlement in
quarterly instalment of US$318,900; and
iv) principal repayments for the Penha Heights BCM loan facility
of approximately US$0.4 million and US$7.6 million due for
settlement in September 2023 and December 2023, respectively.
The Fountainside US$1.9 million loan repayment due in September
has been settled in full. The Waterside US$7.7 million loan
repayment due in September 2023 has been partially settled in the
amount of US$4.4 million, with the remaining balance to be settled
upon completion of a confirmed sale as agreed with the lender. By
reference to the Company's comprehensive working capital
projections, it is anticipated that the remaining debt obligations
that are due over the going concern period would be settled from
sales proceeds that are to be generated from the ongoing
divestments of remaining units in The Waterside and The
Fountainside. The Board has considered stress-tested scenarios
which indicated that a conservative, modest sales programme would
provide sufficient working capital.
The Company has agreed in principle with lenders of the banking
facilities for Penha Heights to defer principal repayments that are
due in September and December 2023. The loan facility with BCM is
to be extended to mature in March 2025. As a result, the loan
repayments for the two Penha Heights facilities that would then
become due over the going concern period are reduced from US$9.7
million to approximately US$1.7 million. It is anticipated that
this US$1.7 million debt obligation would be settled from the sales
proceeds from The Waterside and The Fountainside units, in the
event that Penha Heights is not disposed of during the period.
The Manager is responsible for maintaining relationships with
the Group's lenders, monitoring loan terms and covenants to ensure
compliance, and reporting to the Board on regular basis for all key
matters arising. Throughout the year ended 30 June 2023 and up to
the financial statements issuance date, the Group has been in
compliance with all loan covenants. Over the years, the Manager
always maintains proactive dialogue with the lenders and in turn
receives their strong support to the Group, even during the very
challenging market environment amid the prolonged COVID period.
Post COVID, the existing lenders continue to indicate their support
for the Group as well as the underlying properties. Further, the
upcoming debt servicing obligations over the going concern period
are expected to be met by sales proceeds. Meanwhile, the Manager
has also started to explore financing options with other banks as
part of its contingency planning. Based on the Manager's proven
track record in executing property sales and managing lender
relationships, the Board is confident that the Group will be able
to meet its debt obligations during the going concern period
provided the sales velocity can be maintained.
Notwithstanding the above, given that it remains uncertain that
adequate proceeds could be generated from sales of properties to
settle payment obligations over the going concern period, and given
that any necessary refinancing of debt obligations would still be
subjected to lenders' approval, the Directors consider that there
is a material uncertainty that may cast significant doubt over the
Group's and Company's ability to continue as a going concern.
2. Extension of life of the Company
After the Ordinary Resolution was passed by an overwhelming
majority at the Annual General Meeting ("AGM") of the Company in
its 2022 AGM to extend the Fund's life until 31 December 2023, the
Directors assessed the impact of the Continuation Vote on the
Fund's ability to continue as a going concern. The Directors have
also considered the going concern assumption outside the primary
going concern horizon.
In line with Article 38 of the Articles of Incorporation, the
Company will put forward a resolution for its continuation at the
next AGM (to be held before 31 December 2023). If any continuation
resolution is not passed, the Directors are required to formulate
proposals to be put to Members to reorganise, unitise, reconstruct
or wind up the Company.
The Directors anticipate receiving continuation support from
major shareholders and note that 50% of shareholder support is
required to ensure continuation. The Board and the Company's broker
maintain ongoing communication with shareholders and the feedback
regarding the Continuation Vote is broadly positive. It is likely
that returns from the sale of properties would be significantly
lower if the Fund was forced to sell under some form of fire sale
arrangement as a result of a failed Continuation Vote and it is
therefore commercially sensible for the Fund to continue in
business.
Given that the Continuation Vote has not taken place at the date
of issue of the financial statements, the Directors consider that
there is a material uncertainty related to events or conditions
that may cast significant doubt over the Company's ability to
continue as a going concern and, therefore, that it may be unable
to realise assets and discharge liabilities in the normal course of
business.
Going Concern Conclusion
After careful consideration and based on the reasons outlined
above, including the Manager's continuing dialogue with lenders and
shareholders, whilst there is material uncertainty related to going
concern, the Board have a reasonable expectation that the Company
will continue in existence as a going concern for 12 months from
the date of signing the Annual report. They are therefore satisfied
that it is appropriate to adopt the going concern basis in
preparing the financial statements.
Viability Statement
The Board has carried out a robust assessment of the principal
risks facing the Company, including those that would threaten its
business model, future performance, solvency and liquidity. The
Directors consider each of the Company's principal risks and
uncertainties, during the quarterly Board meetings, supported by
the twice monthly reporting from the Manager. The Directors also
considered the Company's policy for monitoring, managing and
mitigating its exposure to these risks and the impact on the
Company's operations. This assessment involved an evaluation of the
potential impact on the Company of these risks occurring. Where
appropriate, the Company's financial model was subject to a
sensitivity analysis involving flexing a number of key assumptions
in the underlying financial forecasts in order to analyse the
effect on the Company's net cash flows and other key financial
ratios. A base case and adverse scenario where projections
calculated based upon flexing these key assumptions had both
resulted in positive cash held balances throughout the two-year
projection period with ending cash balances of over US$2 million
under both scenarios. The Board expects the payments obligation of
the loan facilities which will be due within the next 12 months
will be repaid while the Company continues to comply with the loan
covenants and that the Company's life will be further extended at
the 2023 AGM.
In accordance with provision 31 of the 2018 revision of the UK
Code, the Directors have assessed the prospects of the Company over
a longer period than the 12 months required by the going concern
provision. During the year, the Board conducted a review for a
period covering two years, including a review of a comprehensive
cash flow projection, together with adverse scenarios to stress
test the cash positions of the Company. The Board considered two
years to be an appropriate time horizon for its divestment plan,
being the period over which the majority of the Company's
properties should have been disposed of. This has remained the same
timeframe as the prior year due to the delay in divestment as a
result of the dynamic zero policy for COVID-19 which continued to
be adopted in Macau and China with restrictions that hindered
economic and business recovery until early 2023 and the post
restriction property market conditions that followed easing of
those constraints. Based on an assessment of the principal risks
facing the Company and the stress testing based assessment of the
Company's prospects, the Directors have a reasonable expectation
that the Company will be able to continue in operation (subject to
the Continuation Vote and projected sales) and meet its liabilities
as they fall due over the two-year period of their assessment. It
is expected that the timeframe for the disposal of the majority of
the assets will be within the remaining two-year period.
Share capital
Ordinary Shares
The Company has one class of ordinary shares, which carries no
rights to fixed income. On a show of hands, each member - present
in person or by proxy - has the right to one vote at general
meetings. On a poll, each member is entitled to one vote for every
share held.
The Company's Memorandum and Articles of Incorporation contain
details relating to the rules that the Company has regarding the
appointment and removal of Directors or amendment to the Company's
Articles of Incorporation.
Results and dividends
The results for the year are set out in the Consolidated
Financial Statements. There are no dividends proposed or declared
for the current year end (2022: US$ nil).
Authority to purchase own shares
Following the authority first granted in the Extraordinary
General Meeting on 28 June 2010 and subsequently renewed at each
AGM, the Board has publicly stated its commitment to undertake
share buybacks at attractive levels of discount of the share price
to Adjusted NAV. The Board intends to renew this authority at the
2023 AGM. No shares have been repurchased in the current or prior
financial year.
Significant shareholdings
As at 29 August 2023, a total of 8 shareholders each held more
than 3% of the issued ordinary shares of the Company, accounting
for a total of 45,484,753 shares (29 August 2022: 45,871,129) or
73.56% (29 August 2022: 74.19%) of the issued share capital.
Significant shareholdings as at 29 August 2023 are detailed
below:
Name of shareholder No. of shares %
Sniper Investments Limited 12,081,904 19.54
------------- ------
Universities Superannuation Scheme 8,494,683 13.74
------------- ------
Lazard Asset Management LLC 8,261,981 13.36
------------- ------
Fidelity International 5,080,233 8.22
------------- ------
Apollo Multi Asset Management 3,687,861 5.96
------------- ------
Premier Miton Investors 3,590,357 5.81
------------- ------
Banque de Luxembourg (PB) 2,288,485 3.70
------------- ------
Hargreaves Lansdown, stockbrokers (EO) 1,999,249 3.23
------------- ------
Subtotal 45,484,753 73.56
------------- ------
Other 16,350,980 26.44
------------- ------
Total 61,835,733 100.00
------------- ------
Directors
Biographies of the Directors who served during the year are
detailed above.
Date of
Name Function appointment
Mark Huntley Chairman, Chairman of the Management Engagement 3 October 2018
Committee and the Chairman of the Disclosure
and Communications Committee
-------------------------------------------------- --------------
Alan Clifton Director, Chairman of the Audit and Risk Committee 18 May 2006
and the Nomination and Remuneration Committee
-------------------------------------------------- --------------
Carmen Ling Director 24 February
2022
-------------------------------------------------- --------------
Directors' interests
Directors who held office during the year and had interests in
the shares of the Company as at 30 June 2023 were:
Ordinary Shares of US$0.01
----------------------------
Held at Held at
30 June 2023 30 June 2022
------------- ------------- -------------
Mark Huntley 200,000 200,000
------------- ------------- -------------
Alan Clifton 80,902 80,902
------------- ------------- -------------
Carmen Ling 50,000 -
------------- ------------- -------------
There have been no changes to the aforementioned interests since
30 June 2023.
Non-mainstream pooled investments
The Board notes the changes to the Financial Conduct Authority
(FCA) rules ("UK Listing Rules") relating to the restrictions on
the retail distribution of unregulated collective investments
schemes and close substitutes which came into effect on 1 January
2014.
Following the receipt of legal advice, the Board confirms that
it has conducted the Company's affairs in such a manner that the
Company would have qualified for approval as an investment trust if
it was resident in the United Kingdom, and that it is the Board's
intention that the Company will continue to conduct its affairs in
such a manner. Thus, the Company is, and the Board expects it will
continue to be, outside the scope of the new restrictions and
Independent Financial Advisors (IFAs) should therefore be able to
recommend ordinary shares in the Company to retail investors in
accordance with the FCA requirements relating to non-mainstream
investment products.
AIFM directive
The Directors have considered the impact of the EU Alternative
Investment Fund Managers Directive (no. 2011/61/EU) ("AIFM
Directive"), which was transposed into United Kingdom law on 22
July 2013 with the transitional period having ended in June 2014,
on the Company and its operations.
The Company is a non-EU domiciled Alternative Investment Fund
which does not currently intend to market its shares within Europe.
The Directors, therefore, consider that neither authorisation nor
registration is required.
Directors' remuneration
Directors of the Company are all non-executive and, by way of
remuneration, receive an annual fee. During the year, the Directors
received the following emoluments in the form of Directors' fees
from the Company. There has been no change in director remuneration
since 2017.
2023 2022
US$ US$
------- -------
Mark Huntley 69,949 74,865
------- -------
Alan Clifton 53,507 56,149
------- -------
Carmen Ling (Appointed on 24 February 2022) 43,063 15,432
------- -------
Wilfred Woo (Resigned on 22 December 2021) - 23,218
------- -------
Total 166,519 169,664
------- -------
Directors' Responsibilities to Stakeholders
Section 172 of the UK Companies Act 2006 applies directly to UK
domiciled companies. Nonetheless the AIC Code requires that the
matters set out in section 172 are reported on by all companies,
irrespective of domicile.
Section 172 recognises that directors are responsible for acting
in a way that they consider, in good faith, is the most likely to
promote the success of the Company for the benefit of its
stakeholders as a whole. In doing so, they are also required to
consider the broader implications of their decisions and operations
on other key stakeholders and their impact on the wider community
and the environment. Key decisions are those that are either
material to the Company or are significant to any of the Company's
key stakeholders. The Company's engagement with key stakeholders
and the key decisions that were made or approved by the Directors
during the year are described below.
Stakeholder Group Methods of Engagement Benefits of Engagements
Shareholders
----------------------------------- ------------------------------
The major investors in The Company engages Shareholders are aware
the Company's shares with its shareholders of any developments
are set out in the Directors' through the issue of and issues and through
Report. periodic portfolio updates engagement can be actively
in the form of Regulatory engaged in the process
Continued shareholder News Service ("RNS") of divestment.
support is vital to the announcements and half
Company's divestment yearly updates.
objectives, and therefore,
in line with its objectives, The Company provides
the Company seeks to in depth commentary
maintain shareholder on the investment portfolio
satisfaction through: and corporate outlook
in its semi-annual financial
* Net asset value preservation statements.
In addition, the Company
* Divestment of remaining properties, and directly and, through
its Manager undertake
periodic roadshows to
* Operating cost reduction meet with existing and
prospective investors
to solicit their feedback
and understand any areas
of concern.
The Manager and Board
have achieved a substantial
operating cost reduction.
In the financial year
the Company issued:
* 4 NAV updates by way of RNS
* 2 half yearly updates.
The Company directly
and through the Manager
interacts with major
shareholders. These
meetings have been largely
virtual during the period.
Such interaction provides
mutual understanding
of the Company's prospects
and outlook for divestment.
Independent valuation
reports confirm the
fair value of the Company's
properties.
----------------------------------- ------------------------------
Service Providers
----------------------------------- ------------------------------
The Company does not The Company's Management The Feedback given by
have any direct employees; Engagement Committee the service providers
however it works closely has identified its key is used to review the
with a number of service service providers. On Company's policies and
providers (the Manager, an annual basis it undertakes procedures to ensure
the Investment Adviser, a review of performance open lines of communication,
Administrators, Company based on a questionnaire operational efficiency
Secretary, Brokers and through which it also and appropriate pricing
other professional advisers) seeks feedback. for services provided.
whose interests are aligned
to the success of the Furthermore, the Board
Company. and its sub-committees
engage regularly with
The quality and timeliness its service providers
of their service provision on a formal and informal
is critical to the success basis.
of the Company.
The Management Engagement
Committee will also
regularly review all
material contracts for
service quality and
value.
----------------------------------- ------------------------------
Lenders
----------------------------------- ------------------------------
The Group has interest-bearing The Group's engagement The facilities have
loans with three banks. with its bankers is continued to operate
primarily through its throughout the year,
These facilities provides Manager who provides and based on the performance
the Group with the resources regular reports to the and delivery of the
which can be used to banks and has an open divestment programme,
finance capital expenditure line of communication no issues or concerns
or working capital and in respect of the ongoing have been raised by
therefore their availability operation and maintenance the banks.
is a key component of of the facilities.
the Company's ability
to operate.
----------------------------------- ------------------------------
Tenants
----------------------------------- ------------------------------
The Group has rental Formal lease agreements Positive feedback is
paying tenants in The are executed to safeguard received from residents
Waterside. the interests of the at The Waterside as
landlord, The Waterside, well as from the local
and tenants. In addition, market. Occupancy levels
top-class facilities have increased in real
and quality property terms and rental levels
management services have been maintained.
are provided at The
Waterside to help ensure
comfortable occupancy.
----------------------------------- ------------------------------
Community & Environment
----------------------------------- ------------------------------
As an Investment Company As discussed above the The ESG report provides
whose purpose is the Board actively engages further information
investment in real estate with the Company's service on the Manager's approach
in Macau, the Company's providers on a regular to this important subject.
direct engagement with basis.
the local community and
the environment is limited.
----------------------------------- ------------------------------
Change of control
There are no agreements that the Company considers significant
and to which the Company is party, that would take effect, alter or
terminate upon change of control of the Company, following a
takeover bid.
Annual General Meeting
The AGM of the Company will be held in December 2023 at Floor 2,
Trafalgar Court, Les Banques, St Peter Port, Guernsey. A notice of
Meeting and Agenda will be in December 2023.
Independent auditors
The Audit and Risk Committee reviews the appointment of the
external auditor, its effectiveness and its relationship with the
Group, which includes monitoring the use of the external auditor
for non-audit services and the balance of audit and non-audit fees
paid. Deloitte LLP have been appointed as external auditor for the
year to 30 June 2023. Each Director believes that there is no
relevant information of which the external auditor is unaware. Each
has taken all steps necessary, as a director, to be aware of any
relevant audit information and to establish that Deloitte LLP is
made aware of any pertinent information. This confirmation is given
and should be interpreted in accordance with the provisions of
Section 249 of the Companies (Guernsey) Law, 2008.
Subsequent events
Significant subsequent events have been disclosed in Note
25.
Financial risk management policies and objectives
Financial risk management policies and objectives are disclosed
in Note 2.
Principal risks and uncertainties
Principal risks and uncertainties are discussed in the Corporate
Governance Report.
On behalf of the Board
Mark Huntley
Chairman of the Board
4 October 2023
CORPORATE GOVERNANCE REPORT
The Board has put in place a framework for corporate governance
which it believes is appropriate for an investment company.
Paragraph 9.8.6R of the UK Listing Rules obliges Boards to report
upon their corporate governance arrangements against the UK Code
issued by the Financial Reporting Council (the "FRC"). The Company
is a member of the Association of Investment Companies (the "AIC")
and the Board has considered the principles and recommendations of
the 2019 AIC's Code of Corporate Governance ("AIC Code"). The Board
considers that reporting against the principles and recommendations
of the AIC Code provides better information to shareholders. The
FRC has provided the AIC with an endorsement letter to cover the
latest edition of the AIC Code. The endorsement confirms that by
following the AIC Code, investment company boards should fully meet
their obligations in relation to the UK Code and paragraph 9.8.6R
of the UK Listing Rules.
The AIC Code is available on the AIC's website,
www.theaic.co.uk. The UK Code is available on the FRC's website,
www.frc.org.uk.
Throughout the accounting period, the Company has complied with
the recommendations of the AIC Code and thus the relevant
provisions of Section 1 of the UK Code, except as set out
below.
The UK Code includes provisions relating to:
-- the role of the chief executive;
-- executive directors' remuneration;
-- the need for an internal audit function;
-- appointment of a senior independent director; and
-- whistleblowing policy.
The Board considers that the above provisions, where practical,
have been fully adhered to but many are not currently relevant to
the position of the Company, being an internally managed investment
company, which delegates most day-to-day functions to third
parties. There are areas of governance codes which present genuine
practical challenges for a company that is both in the late stage
of life, with a clearly defined but narrow strategic objective. All
Directors are non-executive and independent of the Investment
Adviser and therefore the Directors consider the Company has no
requirement for a Chief Executive or a Senior Independent Director
and the Board is satisfied that any relevant issues can be properly
considered by the Board. The absence of an internal audit function
is discussed in the Report of the Audit and Risk Committee.
The GFSC Finance Sector Code of Corporate Governance (the "GFSC
Code") came into force in Guernsey on 1 January 2012 and was
amended in February 2016, June 2021 and November 2021. The Company
is deemed to satisfy the GFSC Code provided that it continues to
conduct its governance in accordance with the requirements of the
AIC Code.
Except as disclosed below, the Company complied throughout the
year with the recommendations of the AIC Code and the relevant
provisions of the UK Code.
The Board
The Board consists of three non-executive directors, all of whom
are independent of the Company's Manager and Investment
Adviser.
Directors' details are listed above which set out the range of
investment, financial and business skills and experience
represented. Provision 14 of the AIC Code states that a Board
should consider appointing one independent non-executive director
to be the senior independent director. The Board, having taken into
account its small size and that all directors are each similarly
independent and non-executive, considers it unnecessary to appoint
a senior independent director.
All Directors will retire annually in accordance with the AIC
Code. A retiring director shall be eligible for reappointment. No
director shall be required to vacate his office at any time by
reason of the fact that they have attained any specific age.
The Board has considered the need for a policy regarding tenure
of office and a succession plan for the retirement of existing
officers; however, the Board believes that any decisions regarding
tenure should consider the need for continuity and maintenance of
knowledge and experience and to balance this against the need to
periodically refresh board's composition, with the limited expected
life of the Company in mind.
The Company has benefitted greatly from the knowledge, expertise
and skill mix of the Board as it has had to navigate through the
difficulties of the current situation. Whilst there are no concerns
about either stale behaviour or lack of vigour to deliver the
Company's strategy, any appointment of a director requires a sound
understanding of the market in Macau as well as broader experience
of the real estate market: to the contrary, the Board and Manager
dynamics have been most constructive and measured in the face of an
unprecedented challenges.
The majority of the Board is independent within the meaning of
the AIC Code.
The Board meets at least four times a year for regular scheduled
meetings and, should the nature of the activity of the Company
require it, additional meetings may be held, some at short notice.
At each meeting, the Board follows a formal agenda that covers the
business to be discussed. Since the easing of the COVID-19 pandemic
all board meetings have been held in Guernsey.
To fulfil the recommendation of AIC Code Provision 15 and to
give sufficient attention to strategy, the Board discusses strategy
at each of its regular scheduled meetings, but holds a separate
session annually devoted to this.
Between meetings, there is regular contact with the Manager and
the Administrator, and the Board requires to be supplied in a
timely manner with information by the Manager, the Company
Secretary and other advisers in a form and of a quality to enable
it to discharge its duties.
The terms and conditions of appointment of non-executive
directors are available for inspection from the Company's
registered office.
Performance and evaluation
Pursuant to Principle J of the AIC Code which requires a formal
and rigorous annual evaluation of its performance, the Board
formally reviews its performance annually through an internal
process. Internal evaluation of the Board, the Audit and Risk
Committee, the Nomination and Remuneration Committee, the
Management Engagement Committee, the Disclosure and Communications
Committee and individual Directors has taken the form of
self-appraisal questionnaires and detailed discussions to determine
effectiveness and performance in various areas, as well as the
Directors' continued independence. Given the late stage of life of
the Company, the Board considered it sufficient to undertake its
own evaluation rather than appointing, at cost, an external
facilitator.
During the year, a formal board performance appraisal was
carried out by the Nomination and Remuneration Committee. Following
review and collation of the results, the Board considered that the
overall performance of the Board during the year had been
satisfactory and that the Board is confident in its ability to
continue effectively to lead the Company and oversee its affairs.
The Board believes that the current mix of skills, experience,
knowledge and location of the Directors is appropriate to the
requirements of the Company.
Any new directors, were they to be appointed, would receive an
induction from the Manager as part of the familiarisation process
of candidates following appointment. All directors receive other
relevant training as necessary.
Duties and responsibilities
The Board is responsible to shareholders for the overall
management of the Company. The Board has adopted a Schedule of
Matters Reserved for the Board which sets out the particular duties
of the Board. Such reserved powers include decisions relating to
the determination of investment policy and approval of investments,
strategy, capital raising, statutory obligations and public
disclosure, financial reporting and entering into any material
contracts by the Company.
The Directors have access to the advice and services of the
Company Secretary and Administrator, who are responsible to the
Board for ensuring that Board procedures are followed and that it
complies with Guernsey Law and applicable rules and regulations of
the GFSC and the LSE. Where necessary, in carrying out their
duties, the Directors may seek independent professional advice at
the expense of the Company. The Company maintains appropriate
Directors' and Officers' liability insurance in respect of legal
action against its Directors on an on-going basis.
The Board has responsibility for ensuring that the Company keeps
proper accounting records, which disclose with reasonable accuracy
at any time the financial position of the Company, and which enable
it to ensure that the financial statements comply with the
Companies (Guernsey) Law, 2008.
The Board has responsibility for ensuring that the Annual Report
presents a fair, balanced and understandable assessment of the
Company's position and prospects. This responsibility extends to
interim and other price-sensitive public reports.
Committees of the Board
Nomination and Remuneration Committee
The Nomination and Remuneration Committee Report is below.
Management Engagement Committee
The Management Engagement Committee Report is below.
Audit and Risk Committee
The Audit and Risk Committee Report is below.
Meeting Attendance
Nomination and
Audit and Risk Committee Remuneration Committee Management Engagement
Scheduled Board Meeting Meeting Meeting Committee Meeting
Name (max 4) (max 3) (max 2) (max 2)
Mark Huntley 4 3 2 2
----------------------- ------------------------- ------------------------ -------------------------
Alan Clifton 4 3 2 2
----------------------- ------------------------- ------------------------ -------------------------
Carmen Ling 4 2 2 2
----------------------- ------------------------- ------------------------ -------------------------
In addition to the above, there were two additional Board
meetings and two other committee meetings held during the year.
Internal control and financial reporting
The Board is responsible for the Group's system of internal
control and for reviewing its effectiveness, and the Board has,
therefore, established a process designed to meet the particular
needs of the Group in managing the risks to which it is
exposed.
The process takes a risk-based approach to internal control
through a matrix which identifies the key functions carried out by
the Manager and other key service providers, the various activities
undertaken within those functions, the risks associated with each
activity and the controls employed to minimise those risks. A
residual risk rating is then applied. Regular reports are provided
to the Board, highlighting material changes to risk ratings and a
formal review of these procedures is carried out by the Audit and
Risk Committee and reported to the Board on an annual basis and has
been completed during the financial year. By their nature, these
procedures provide a reasonable, but not absolute, assurance
against material misstatement or loss.
At each board meeting, the Board also monitors the Group's
investment performance and activities since the last board meeting
to ensure that the Manager adheres to the agreed investment policy
and approved investment guidelines. Furthermore, at each board
meeting, the Board receives reports from the Company Secretary and
Administrator in respect of compliance matters and duties performed
on behalf of the Company.
The Board considers that an internal audit function specific to
the Group is unnecessary and that the systems and procedures
employed by the Administrator and Manager, including their own
internal control functions, provide sufficient assurance that a
sound system of internal control, which safeguards the Group's
assets, is maintained. The Administrator issues an ISAE 3402 Type
II report annually, setting out a description of controls and
detailed external testing of the controls over a year. The serving
auditor concluded in the most recent report that control objectives
were suitably designed and achieved during the period. Investment
advisory services are provided to the Group by Sniper Capital
(Macau) Limited. The Board is responsible for setting the overall
investment policy and monitors the action of the Manager at regular
board meetings. The Board has also delegated administration and
company secretarial services to Ocorian Administration (Guernsey)
Limited but retains accountability for all functions it
delegates.
Management agreement
The Company has entered into an agreement with the Manager. This
sets out the Manager's key responsibilities, which include
proposing the property investment strategy to the Board and
identifying property investments to recommend for divestment. The
Manager is also responsible to the Board for all issues relating to
property asset management.
The Company has delegated the provision of all services to
external service providers whose work is overseen by the Management
Engagement Committee at its regular scheduled meetings. Each year,
a detailed review of performance pursuant to their terms of
engagement is undertaken by the Management Engagement
Committee.
In accordance with Listing Rule 15.6.2(2)R and having formally
appraised the performance and resources of the Manager, in the
opinion of the Directors, the continuing appointment of the
Manager, on the terms agreed, is in the interests of shareholders
as a whole.
Relations with shareholders
The Company welcomes the views of shareholders and places great
importance on communication with its shareholders. Senior members
of the Manager are available at all reasonable times to meet with
principal shareholders and key sector analysts. The Manager,
Chairman and other Directors are not only available to meet with
shareholders, but have actively done so.
Reports on the views of shareholders are provided to the Board
on a regular basis. The Board is also kept fully informed of all
relevant market commentary on the Company by the Manager and the
Corporate Broker.
All shareholders can address their individual concerns to the
Company in writing at its registered address. The AGM of the
Company provides a forum for shareholders to meet and discuss
issues with the Directors and the Manager. The Manager and Board
also engage with shareholders on an ongoing basis. In addition, the
Company maintains a website (www.mpofund.com) which contains
comprehensive information, including company notifications, share
information, financial reports, investment objectives and policy,
investor contacts and information on the Board and corporate
governance.
Whistleblowing
The Board has considered the AIC Code recommendations in respect
of arrangements by which staff of the Administrator and Investment
Manager may, in confidence, raise concerns within their respective
organisations about possible improprieties in matters of financial
reporting or other matters.
It has concluded that adequate arrangements are in place for the
proportionate and independent investigation of such matters and,
where necessary, for appropriate follow-up action to be taken
within their organisation.
GDPR
The Board confirmed that the Company has considered GDPR and
taken measures itself and with its service providers to meet the
requirements of GDPR and the equivalent Guernsey law.
Cyber-security
The Board recognises the increased incidence of cyber-security
threats and regularly reviews its policies, procedures and defences
to mitigate associated risks, and receives confirmation on such
matters such as quarterly compliance reports, from the key service
providers.
Principal risks and uncertainties
The Group's assets consist of residential property investments
in Macau. Its principal risks are therefore related to the
residential property market in general, but also the particular
circumstances of the properties in which they are invested and
where relevant, their tenants. The Manager seeks to mitigate these
risks through active asset management initiatives and carrying out
due diligence work on potential tenants before entering into any
new lease agreements. All the properties in the portfolio are
insured.
Each Director is aware of the risks inherent in the Group's
business and understands the importance of identifying and
evaluating these risks. The Board has adopted procedures and
controls that enable it to manage these risks within acceptable
limits and to meet all its legal and regulatory obligations.
For each material risk, the likelihood and consequence are
identified, management controls and frequency of monitoring are
confirmed and results are reported and discussed at board
meetings.
The Company's principal risk factors are fully discussed in the
Company's prospectus, are available on the Company's website and
should be reviewed by shareholders. Note 2 further describes the
Group's risk management processes.
The principal risks and uncertainties faced by the Group are set
out below:
-- The global COVID-19 pandemic and the resulting uncertainty
which that placed on Macau's real estate market, the valuation of
the underlying assets and whether this could prevent the Group from
being able to realise its assets. During the second half of the
year travel restrictions to Macau have been eased and this has led
to an economic recovery with modest increased levels of
transactions in the luxury real estate market. The Manager provides
the Board with regular reports and updates on key local
developments. Working capital requirements and an analysis of loan
to value covenants are reported to the Board for monitoring. Stress
testing using various disposal scenarios will be incorporated into
this analysis and investors will be kept updated as to the impact
of the pandemic. The Manager and Administrator each have their own
business continuity plans, which are tested and effective to
prevent business disruptions.
-- Economic changes that have occurred in 2023 such as high
global inflation, interest rate increases and their impact on the
Macau economy and in particular, the luxury property market. The
Manager provides quarterly updates and ad-hoc analysis about such
economic related impact to the Board, to facilitate their informed
decisions making process;
-- There can be no guarantee that Macau will remain the only
centre in China where gambling is legal. It is, however, unlikely
in the expected remaining life of the Company. Changes in policies
of the government or changes in laws and regulations may result in
the legalisation of gambling in other parts of China. Other
regional centres may also provide increased competition to Macau.
This, in turn, may have an adverse effect on Macau's economy and
property market and the favourable treatment of gambling in Macau.
This is an inherent risk of investing in the Macau region and
therefore cannot be mitigated or managed by the Board.
-- The Group's loan refinancing may not be available in the
future due to reduced lending appetite from banks and a change in
market sentiment. The Board, through the Manager, has an ongoing
dialogue with all external lenders and closely monitors the loan
covenants of all facilities.
-- Inability to achieve the Group's strategic objectives, linked
to a widening of the discount between share price and Adjusted NAV
and the Continuation Vote in the AGM in December 2023, where a
concentrated shareholder base exists, the Board, the Manager and
the Company maintain good relationship with investors through
periodic contact, investor updates, addressing influences of the
share price and through provision of factual information to support
any resolutions requiring shareholders' approval.
-- New legislation or regulations, or different or more
stringent interpretation or enforcement of existing laws or
regulations, in any jurisdiction in which the Group operates, may
have a material adverse effect on the Group's financial performance
and returns to shareholders. The Manager provides the Board with
updates on any development on a regular basis.
-- Macau law governs the majority of the Group's agreements
which relate to property investments, property ownership rights and
securities. It cannot be guaranteed that the Group will be able to
enforce any such agreements or that remedies will be available
outside of Macau. The Manager provides the Board with updates on
any development on a regular basis.
-- The Group's return on its investments and prospects are
subject to economic, legal, political and social developments in
Macau and China, and the Asia Pacific region in general. The
Manager provides the Board with updates on any development on a
regular basis. In particular, the Group's return on its investments
may be adversely affected by:
-- changes in Macau's and China's political, economic and social
conditions including the long term effects of COVID-19;
-- changes in policies of the government or changes in laws and
regulations (including the revocation or modification by the
Chinese Government of Macau's SAR status and high autonomy levels),
or the interpretation of laws and regulations;
-- changes in foreign exchange rates or regulations;
-- measures that may be introduced to control inflation, such as
interest rate increases;
-- changes in the rate or method of taxation;
-- title and/or legal disputes with neighbouring land owners and
legal disputes with architects, project managers and suppliers;
and
-- changes to restrictions on or regulations concerning
repatriation of funds.
Emerging risks
Emerging risks have been identified by the Board through a
process of evaluating which of the principal risks or any
previously unidentified risks have increased materially through the
year and/or are expected to significantly grow and such evaluation
is completed at regular Board meetings. Any such emerging risks are
likely to cause disruption to the Group's business. If ignored,
there could be significant impact on the Group's financial
situation and future operating performance but, if recognised, they
could provide opportunities for transformation. In the current year
no further emerging risks have been identified.
There is a process for identifying, evaluating and managing the
principal and emerging risks faced by the Group. This process
(which accords with the FRC's "Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting") has
been regularly reviewed and has been in place throughout the
financial year and up to the date of approval of these annual
accounts.
The above principal risks are mitigated and managed by the Board
through continual review, policy setting and annual updating of the
Group's risk matrix to ensure that procedures are in place with the
intention of minimising the impact of the above mentioned risks
should they crystallise. The Board relies on reports periodically
provided by the Administrator and the Manager regarding risks that
the Group faces. When required, experts are employed to gather
information, including tax advisers, legal advisers and planning
advisers. Some risks are, however, beyond the Board or Managers'
ability to mitigate.
The Board relies on the Manager's close relationship with legal
and other professionals in Macau, Hong Kong and China to keep
abreast of any potential changes to the law and any possible impact
on the Group. The Board also regularly monitors the investment
environment and the management of the Group's property portfolio,
and applies the principles detailed in the internal control
guidance issued by the FRC. Details of the Group's internal
controls are described in more detail in the Corporate Governance
Report.
The Group's financial risks and uncertainties are further
discussed in Note 2 to the Consolidated Financial Statements.
On behalf of the Board
Mark Huntley
Chairman of the Board
4 October 2023
NOMINATION AND REMUNERATION COMMITTEE REPORT
Summary of the role of the Nomination and Remuneration
Committee
The Nomination and Remuneration Committee regularly reviews the
structure, size and composition (including the skills, knowledge,
gender, experience and diversity) of the Board and makes
recommendations to the Board with regard to any changes and also
considers the appropriate levels of the Board's remuneration. The
Board monitors the developments in corporate governance to ensure
the Board remains aligned with best practice. The Board
acknowledges the importance of diversity of experience, approach
and gender, for the effective functioning of a board and commits to
supporting diversity in the boardroom. The Board also values
diversity of business skills and experience because directors with
diverse skills sets, capabilities and experience gained from
different geographical backgrounds enhance the Board by bringing a
wide range of perspectives to the Company. The Board is satisfied
with the current composition and functioning of its members. It is
the Company's policy to give careful consideration to issues of the
Board's balance, including gender and ethnic diversity, when
appointing board members, but its priority is to appoint based on
merit, notwithstanding a strong desire to maintain the Board's
diversity. The Board's current ethnic diversity ratio is 33.33% and
current gender diversity ratio is 33.33%. The terms of reference
are considered annually by the Nomination and Remuneration
Committee and are then referred to the Board for approval and are
available on the Company's website. The Board's approach to
succession needs to take account of the fact that the Company is in
the final phase of its life.
Remuneration
The Nomination and Remuneration Committee determines and agrees
with the Board the remuneration of the Company's Chairman, and
non-executive directors. No director shall be involved in any
decisions as to their own remuneration. In determining such
remuneration, the Nomination and Remuneration Committee takes into
account all factors which it deems necessary including any relevant
legal requirements, the provisions and recommendations in the AIC
Code of Corporate Governance and the UK Listing Authority's Listing
Rules and associated guidance. The Nomination and Remuneration
Committee also obtains reliable, up-to-date information about
remuneration in other comparable companies. There has been no
changes to annual director remuneration since 2017.
Composition of the Nomination and Remuneration Committee
The members of the Nomination and Remuneration Committee are
listed below.
Meetings
The Nomination and Remuneration Committee shall meet at least
once a year and otherwise as required. Meetings of the Nomination
and Remuneration Committee shall be called by the Company Secretary
at the request of the Committee Chairman. Unless otherwise agreed,
notice of each meeting confirming the venue, time and date,
together with an agenda of items to be discussed, shall be
forwarded to each member of the Nomination and Remuneration
Committee, any other person required to attend and all other
non-executive directors, no later than five working days before the
date of the meeting. Supporting papers shall be sent to the
Nomination and Remuneration Committee and to other attendees as
appropriate, at the same time. Any non-executive director who is
not considered independent will not take part in the Nomination and
Remuneration Committee's deliberations regarding remuneration
levels.
Consideration of Directors for re-election
All Directors will retire annually in accordance with the AIC
Code. A retiring director shall be eligible for reappointment. No
director shall be required to vacate his office at any time by
reason of the fact that he has attained any specific age.
The Nomination and Remuneration Committee will consider the use
of external consultants to assist with the appointment of future
directors.
Overview
The Nomination and Remuneration Committee met two times in the
year ended 30 June 2023. Matters considered at the meeting included
but were not limited to:
-- the structure, size and composition (including the balance of
skills, knowledge, experience and diversity) of the Board and Audit
and Risk Committee and the need periodically to refresh
membership;
-- to note guidance set out in the AIC Code;
-- to consider key outcomes from the Board's evaluation
process;
-- to consider Board's tenure and succession planning;
-- consideration of Directors for re-election;
-- consideration of Directors' remuneration; and
-- consideration of the effectiveness of new Directors.
As a result of its work during the year, the Nomination and
Remuneration Committee has concluded that it has acted in
accordance with its terms of reference.
On behalf of the Nomination and Remuneration Committee
Alan Clifton
Chairman of the Nomination and Remuneration Committee
4 October 2023
MANAGEMENT ENGAGEMENT COMMITTEE REPORT
Summary of the role of the Management Engagement Committee
The Management Engagement Committee annually reviews the terms
of the Investment Management Agreement between the Company and the
Manager and reviews the performance and terms of engagement of any
other key service providers to the Company, as detailed in Appendix
1 of the Terms of Reference of the Committee. The terms of
reference are considered annually by the Management Engagement
Committee and are then referred to the Board for approval and are
available on the Company's website. During the year the Management
Agreement was amended to extend the Manager's entitlement to earn
fees into 2023 in reflection of the delays to the realisation of
assets arising as a consequence of the coronavirus pandemic and the
challenging subsequent trading conditions. The maximum fee that
could be paid to the manager in all circumstances is
US$1,780,000.
Composition of the Management Engagement Committee
The members of the Management Engagement Committee are listed
below.
Meetings
The Management Engagement Committee meets at least once a
calendar year and otherwise as required. Meetings of the Management
Engagement Committee shall be called by the Company Secretary at
the request of the Committee Chairman. Unless otherwise agreed,
notice of each meeting confirming the venue, time and date,
together with an agenda of items to be discussed, shall be
forwarded to each member of the Management Engagement Committee,
any other person required to attend, no later than five working
days before the date of the meeting. Supporting papers shall be
sent to the Management Engagement Committee and to other attendees
as appropriate, at the same time.
Performance of the Manager
Following discussion, it is the opinion of the Management
Engagement Committee that the performance of the Manager for the
year ended 30 June 2023 was satisfactory and the continuing
appointment of the Manager on the terms as currently agreed and,
following negotiation and an affirmative Continuation Vote, any
future ongoing extension is in the interests of the shareholders as
a whole.
Performance of key service providers
Following discussion, it is the opinion of the Management
Engagement Committee that the performance of the key service
providers (as detailed in Appendix 1 of the Terms of Reference of
the Committee) for the year ended 30 June 2023 was
satisfactory.
Overview
The Management Engagement Committee met two times during the
year and as a result of its work, the Management Engagement
Committee has concluded that it has acted in accordance with its
terms of reference.
On behalf of the Management Engagement Committee
Mark Huntley
Chairman of the Management Engagement Committee
4 October 2023
AUDIT AND RISK COMMITTEE REPORT
Summary of the role of the Audit and Risk Committee
The Audit and Risk Committee is appointed by the Board from the
non-executive directors of the Company. The Audit and Risk
Committee's terms of reference include all matters indicated by
Disclosure Guidance and Transparency Rule 7.1 and the UK Code. The
terms of reference are considered annually by the Audit and Risk
Committee and are then referred to the Board for approval and are
available on the Company's website.
The Audit and Risk Committee is responsible for:
-- reviewing and monitoring the integrity of the Annual Report
and Audited Consolidated Financial Statements, the Interim Report
and Interim Condensed Consolidated Financial Statements of the
Group, and any formal announcements relating to the Group's
financial performance, and reviewing significant financial
reporting judgements contained therein;
-- reporting to the Board on the appropriateness of the
accounting policies and practices including critical accounting
policies and practices;
-- advising the Board that the annual report and accounts, taken
as a whole, are fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
performance, business model and strategy;
-- reviewing the Group's internal financial controls and, unless
expressly addressed by the Board itself, the Group's internal
controls and principal risks;
-- making recommendations to the Board for a resolution to be
put to the shareholders, for their approval in general meetings, on
the appointment of the external auditor and the approval of the
remuneration and terms of engagement of the external auditor;
-- reviewing and monitoring the external auditor's independence
and objectivity and the effectiveness of the audit process, taking
into consideration relevant UK professional and regulatory
requirements;
-- developing and implementing a policy on the engagement of the
external auditor to supply non-audit services, taking into account
relevant guidance regarding the provision of any non-audit services
by the external audit firm;
-- reviewing the valuations of the Company's investments
prepared by the Investment Adviser, and providing a recommendation
to the Board on the valuation of the Company's investments;
-- meeting the external auditor to review their proposed audit
programme of work and the subsequent audit report and to assess the
effectiveness of the audit process and the levels of fees paid in
respect of both audit and any non-audit work;
-- considering annually whether there is a need for the Company
to have its own internal audit function; and
-- reviewing and considering the UK Code, the AIC Code and the
Stewardship Code.
The Audit and Risk Committee is required to report its findings
to the Board, identifying any matters on which it considers that
action or improvement is needed, and to make recommendations on the
steps to be taken.
The Audit and Risk Committee is also required to report to the
Board, identifying how it has discharged its responsibilities
during the current year.
The Board has taken note of the requirement that at least one
member of the Audit and Risk Committee should have recent and
relevant financial experience and is satisfied that the Audit and
Risk Committee is properly constituted in that respect, with all
members having relevant sector experience.
The Audit and Risk Committee reviews the information contained
in the other sections of the Annual Report including the Directors'
Report, Chairman's Message and the Manager's Report.
The Audit and Risk Committee is the formal forum through which
the external auditor reports to the Board. The external auditor is
invited to attend the Audit and Risk Committee meetings at which
the Annual Report and Audited Consolidated Financial Statements,
and at which they have the opportunity to meet with the Audit and
Risk Committee without representatives of the Investment Adviser
being present at least once per year.
Composition of the Audit and Risk Committee
The members of the Audit and Risk Committee are:
Date of appointment
Alan Clifton (Chairman) 23 May 2006
-------------------
Mark Huntley 12 November 2018
-------------------
Carmen Ling 24 February 2022
-------------------
Appointments to the Audit and Risk Committee will be for a
period of up to three years, which is extendable, depending upon
members continuing to be independent. Alan Clifton has been a
member of the Audit and Risk Committee for 17 years. However, the
Board and Audit and Risk Committee have satisfied themselves that
Alan Clifton continues to be independent in approach and judgement.
The Board are satisfied that Alan Clifton remains completely
independent of the Investment Manager and provides consistency and
continuity in the current realisation phase of the Company.
Accordingly, it has resolved to extend his appointment to the Audit
and Risk Committee for a further year. The Board has also
considered the inclusion of the Chairman within the Audit and Risk
Committee and, having taken into account that the Chairman is
independent and non-executive, believes it appropriate for the
Chairman to be a member. It is the intention to maintain the
majority board independence within the meaning of the AIC Code.
Financial Reporting
The primary role of the Audit and Risk Committee in relation to
the financial reporting is to review with the Administrator,
Investment Adviser and the external auditor on the appropriateness
of the Annual Report and Audited Consolidated Financial Statements
and Interim Report, concentrating on, among other matters:
-- the quality and acceptability of accounting policies and
practices;
-- the clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance reporting
requirements;
-- material areas in which significant judgement have been
applied or there has been discussion with the external auditor;
-- whether the Annual Report and Audited Consolidated Financial
Statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for the shareholders to
assess the Company's performance, business model and strategy;
and
-- any correspondence from regulators in relation to Company's
financial reporting.
To aid its review, the Audit and Risk Committee considers
reports from the Administrator, Manager and Investment Adviser and
also reports from the external auditor on the outcomes of their
annual audit. The Audit and Risk Committee supports Deloitte LLP in
displaying the necessary professional scepticism their role
requires.
Significant issues considered in relation to the financial
statements
The Audit and Risk Committee has had regular contact with the
Investment Adviser and the external auditor during the year end
audit process. The Committee's discussions have been broad ranging,
including the consideration of the Company's going concern status
and key areas of judgement.
The Audit and Risk Committee is satisfied, having received
advice from professional advisers which include external valuers,
tax advisers and lawyers, that these sensitivities have been
appropriately reflected and disclosed in the financial
statements.
During its review of the Group's financial statements for the
year ended 30 June 2023, the Audit and Risk Committee considered
the following significant issues:
-- continuing impact of the COVID-19 pandemic;
-- going concern and viability in relation to the Continuation
Vote in December 2023 and availability of loan refinancing;
-- valuation of investment properties and inventories;
-- existence and ownership of investments properties and
inventories;
-- accounting treatment for taxes incurred in multiple
jurisdictions;
-- interest rates and inflation;
-- income recognition for rental income; and
-- progress on divestment.
The risk relating to going concern and viability is mitigated
through ongoing management of cash resources, regular monitoring of
compliance with loan covenants and re-negotiation with lender banks
prior to loan maturities. Communications with major shareholders
lend support to the Company's continuation.
The risk relating to the valuation of investment properties and
inventories is mitigated through use of a professionally qualified
independent valuer to conduct the valuations in accordance with
current Royal Institution of Chartered Surveyors Appraisal and
Valuation Standards.
The valuation is overseen by the Investment Adviser to ensure
that the values are comparable to current market values of similar
properties. The valuation process and methodology are discussed
with the Investment Adviser regularly during the year and with the
external auditor as part of the year-end audit planning. These
valuations are reviewed, challenged and ultimately agreed by the
Board, who possesses knowledge and understanding of the markets
where the properties are situated. The Board ordinarily meets with
the valuer at least once a year. The factors that affect the value
and ownership of the investment property and inventory are further
discussed in Notes 3, 6 and 7.
The risk relating to the ownership and existence of investment
properties and inventories is mitigated through ensuring proper
title deeds for the properties are held. Asset reconciliations are
performed by the Administrator with the special purpose vehicle
("SPV") Administrator on a quarterly basis. Property searches
showing ownership of each of the assets are conducted to ascertain
that there are no changes in ownership.
The risk relating to taxation is mitigated through the setup of
the Group structure. When taxation queries arise, an independent
taxation adviser is employed to advise the Board on such issues.
The factors that affect the Group's taxation position are further
discussed in Note 9.
Meetings
The Audit and Risk Committee meets not less than twice a year
and at such other times as the Chairman requires. Any member of the
Audit and Risk Committee may request that a meeting be convened by
the Company Secretary. The external auditor may request that a
meeting be convened if they deem it necessary. Other Directors and
third parties may be invited by the Audit and Risk Committee to
attend meetings as and when appropriate.
Annual General Meeting
The Audit and Risk Committee Chairman, or other members of the
Audit and Risk Committee appointed for the purpose, shall attend
each AGM of the Company, prepared to respond to shareholders'
questions on the Audit and Risk Committee's activities.
Risk management
The Company's risk assessment process and the way in which
significant business risks are managed is a key area of focus for
the Audit and Risk Committee. The work of the Audit and Risk
Committee was driven primarily by the Company's assessment of its
principal risks and uncertainties as set out in the Corporate
Governance Report. The Audit and Risk Committee receives reports
from the Investment Adviser and Administrator on the Company's risk
evaluation process and reviews changes to the principal risks
identified, including emerging risks.
Primary Area of Judgement
The Audit and Risk Committee determined that the key risk of
misstatement of the Company's financial statements is the fair
value of the investment property held by the Group in the context
of the high degree of judgement involved in the assumptions and
estimates underlying the discounted cash flow calculations and any
resulting impairment.
As outlined in Note 6 of the financial statements, the fair
value of the Group's investment property as at 30 June 2023 was
US$141,045,000 (2022: US$181,520,000). The valuation process is
initiated by the Investment Adviser who appoints a suitably
qualified valuer to conduct the valuation of the investment
property. The results are overseen by the Investment Adviser. Once
satisfied with the valuations based on their expectations, the
Investment Adviser reports the results to the Board. The Board
reviews the latest valuation based on their knowledge of the
property market and compares these to previous valuations. The
Group's investment properties were revalued at 30 June 2023 by an
independent, professionally-qualified valuer, Savills.
Savills is required to make assumptions on establishing the
current market valuation. The most significant assumptions (as
described further in Note 6), relate to future income streams and
discount rates applicable to these estimates. The principal
technique deployed was the income capitalisation method and these
estimates are based on the local market conditions existing at the
reporting date.
The valuation of the Group's investment property as at 30 June
2023 has been determined by the Board based upon the information
provided by the Investment Adviser.
The properties accounted for as inventory under IFRS are
recorded at the lower of cost and net realisable value. The Company
also discloses an Adjusted NAV reporting what the Company's net
asset value would be if the inventory were recognised at fair value
(see Note 18) using the valuation prepared by Savills. As detailed
above, Savills is required to make assumptions on establishing the
current market valuation. The valuation of the Group's inventories
at fair value for the purpose of the Adjusted NAV as at 30 June
2023 has been determined by the Board based upon the information
provided by the Investment Adviser.
Internal audit
The Audit and Risk Committee considers at least once a year
whether or not there is a need for an internal audit function.
Currently, the Audit and Risk Committee does not consider there to
be a need for an internal audit function, given that there are no
employees in the Group and all outsourced functions are with
parties/administrators who have their own internal controls and
procedures. During the year, an ISAE 3402 report was produced for
the Administrator, Ocorian Administration (Guernsey) Limited. The
Audit and Risk Committee also considers the review of controls of
the service organisations.
External audit
Deloitte LLP have been appointed as external auditor for the
year to 30 June 2023. The external auditor is required to rotate
the audit partner every five years. The current Deloitte LLP lead
audit partner, David Becker, started his tenure for the financial
year ended 30 June 2021. The GFSC have indicated that no audit
rotation requirements are applicable to a Guernsey company.
Accordingly, paragraph 3.9 of the FCA guidance which cross refers
to the requirement included in UK legislation, is not relevant for
a Guernsey incorporated company.
During the year, the Audit and Risk Committee discussed the
planning, conduct and conclusions of the external audit as it
proceeded. At the May 2023 Audit and Risk Committee meeting, the
Committee discussed and approved the external auditor's Group plan
in which they identified the Group's going concern assumption,
valuation of the investment property and carrying value of
inventories as the key areas of risk of misstatement in the Group's
financial statements.
The Audit and Risk Committee discussed these issues at the May
2023 meeting to ensure that appropriate arrangements are in place
to mitigate these risks.
To fulfil its responsibility regarding the independence of the
external auditor, the Audit and Risk Committee will consider:
-- discussions with or reports from the external auditor
describing its arrangements to identify, report and manage any
conflicts of interest; and
-- the extent of any non-audit services provided by the external
auditor.
To assess the effectiveness of the external auditor, the Audit
and Risk Committee will review:
-- the external auditor's fulfilment of the agreed audit plan
and variations from it;
-- discussions or reports highlighting the major issues that
arose during the course of the audit;
-- feedback from other service providers evaluating the
performance of the audit team;
-- arrangements for ensuring independence and objectivity;
-- the robustness of the external auditor in handling key
accounting and audit judgements; especially with regard to the
external auditor's review of the following areas:
o Valuation of investment property: the external auditor
identified this as the main focus area of the audit and challenged
the underlying assumptions used to prepare the valuation of the
investment property by independent and professionally-qualified
valuer, Savills, using their regional market specialists in Hong
Kong and performed recalculations of assumptions to ensure within
their parameters.
o The going concern assumption: the external auditor noted
shareholder feedback in addition to rigorous testing of
management's cash flow forecasts and two-year viability period to
obtain comfort over the going concern assumption. A material
uncertainty paragraph has been included in the audit opinion in
relation to going concern.
o Carrying value of inventory: Deloitte LLP performed an
analysis of the cost of the properties classified as inventory
against the valuation prepared by Savills and challenged the
underlying assumptions that were used to prepare the valuations to
ensure that these were appropriate.
The Audit and Risk Committee also held private meetings with the
external auditor during 2023 and the Audit and Risk Committee
Chairman also maintained regular contact with the audit partner
throughout the year. These meetings provide an opportunity for open
dialogue with the external auditor without management being
present.
The Audit and Risk Committee is satisfied with Deloitte LLP's
effectiveness and independence as the external auditor having
considered the degree of diligence and professional scepticism
demonstrated by them. Having carried out the review described above
and having satisfied itself that the external auditor remains
independent and effective, the Audit and Risk Committee has
concluded that the external auditor implemented sufficiently robust
processes to deliver a high quality audit. Accordingly, the
Committee recommended to the Board that Deloitte LLP be reappointed
as external auditor for the year ending 30 June 2024.
The Audit and Risk Committee has provided the Board with its
recommendation to the shareholders on the re-appointment of
Deloitte LLP as external auditor which will be put to shareholders
at the AGM in December 2023.
Non-audit services
To safeguard the objectivity and independence of the external
auditor from becoming compromised, the Audit and Risk Committee has
a formal policy governing the engagement of the external auditor to
provide non-audit services. This precludes Deloitte LLP from
providing certain services, such as valuation work or the provision
of accounting services, and also sets a presumption that Deloitte
LLP should only be engaged for non-audit services where Deloitte
LLP is best placed to provide the non-audit service, for example,
the interim review service. Please see Note 23 for details of
services provided by Deloitte LLP.
Overview
The Audit and Risk Committee met three times in the year ended
30 June 2023. Matters considered at these meetings included but
were not limited to:
-- consideration and agreement of the terms of reference of the
Audit and Risk Committee for approval by the Board;
-- review of the accounting policies and format of the financial
statements;
-- review of the valuations of the properties held;
-- review of the 2022 Annual Report and Audited Consolidated
Financial Statements for the year ended 30 June 2022;
-- review of the 2022 Interim Report and unaudited Interim
Condensed Consolidated Financial Statements for the 6 months ended
31 December 2022;
-- review of the quarterly results announcements issued in
November 2022 and May 2023;
-- review of the audit plan and timetable for the preparation of
the 2023 Annual Report and Audited Consolidated Financial
Statements;
-- challenge of the 2023 Annual Report and Audited Consolidated
Financial Statements for the year ended 30 June 2023;
-- discussions and recommendation regarding the appointment of
the external auditor;
-- discussions and approval of the fee for the external
audit;
-- assessment of the effectiveness of the external audit process
as described above; and
-- review of the Company's principal risks, emerging risks and
internal controls.
As a result of its work during the year, the Audit and Risk
Committee has concluded that it has acted in accordance with its
terms of reference and has ensured the independence and objectivity
of the external auditor. The Audit and Risk Committee has
recommended to the Board that the Annual Report and Financial
Statements are considered to be fair, balanced and understandable.
The Audit and Risk Committee has recommended to the Board that the
external auditor is re-appointed.
On behalf of the Audit and Risk Committee
Alan Clifton
Chairman of the Audit and Risk Committee
4 October 2023
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report
and accounts in accordance with applicable laws and regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to
prepare financial statements for each financial year. The Directors
prepare the Group's financial statements in accordance with
International Financial Reporting Standards as approved by the
International Accounting Standards Board ("IFRS"). Under Company
Law, the Directors must not approve the accounts unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and of the financial performance and cash
flows of the Group for that period. In preparing these Group's
financial statements, the Directors are required to:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRS are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a
going concern.
The Directors confirm that they have complied with the above
requirements in preparing the Group's financial statements.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy, at any time,
the financial position of the Group and which enable them to ensure
that the financial statements comply with the Companies (Guernsey)
Law, 2008. They are also responsible for safeguarding the assets of
the Group and hence, for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The maintenance and integrity of the Company's website
(www.mpofund.com) is delegated to the Manager but is ultimately the
responsibility of the Directors. The work carried out by the
external auditor does not involve consideration of these matters
and, accordingly, the external auditor accepts no responsibility
for any changes that may have occurred to the financial statements
since they were initially presented on the website.
Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
All companies with a Premium Listing of equity shares in the UK
are required under the Listing Rules to report on how they have
applied the UK Code in their annual report and financial
statements.
Responsibility Statement of the Directors in respect of the
Annual Report and Accounts
Each of the Directors, whose names are set out above, confirms
that, to the best of their knowledge and belief that:
Directors' statement under the Disclosure and Transparency
Rules
-- The Group's financial statements, prepared in accordance with
IFRS, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole.
-- The management report, which is incorporated into the
Directors' Report, Manager's Report and Chairman's Message
contained in the Annual Report, includes a fair review of the
development and performance of the business and of the position of
the Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties they face.
Directors' statement under the UK Corporate Governance Code
-- The Directors are responsible for preparing the Annual Report
and Group's financial statements in accordance with applicable law
and regulations. Having taken advice from the Audit and Risk
Committee, the Directors consider the Annual Report and Group's
Financial Statements, taken as a whole, as fair, balanced and
understandable and that it provides the information necessary for
shareholders to assess the Group's performance, business model and
strategy.
So far as each Director is aware, there is no relevant audit
information of which the Company's external auditor is unaware, and
each Director has taken all the steps that he ought to have taken
as a Director in order to make himself aware of any relevant audit
information and to establish that the Company's external auditor is
aware of that information. This confirmation is given and should be
interpreted in accordance with the provisions of section 249 of the
Companies (Guernsey) Law, 2008 (as amended).
On behalf of the Board
Mark Huntley
Chairman of the Board
4 October 2023
Independent Auditor's Report to the Members of
Macau Property Opportunities Fund Limited
Report on the audit of the financial statements
1. Opinion
In our opinion the financial statements of Macau Property
Opportunities Fund Limited (the "Company"/"Fund") and its
subsidiaries (the "Group"):
-- give a true and fair view of the state of the Group's affairs
as at 30 June 2023 and of its loss for the year then ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as approved by the
International Accounting Standards Board;
-- have been prepared in accordance with the requirements of the
Companies (Guernsey) Law, 2008.
We have audited the financial statements which comprise:
-- the consolidated statement of financial position;
-- the consolidated statement of comprehensive income;
-- the consolidated statement of changes in equity;
-- the consolidated cash flow statement; and
-- the related notes 1 to 25.
The financial reporting framework that has been applied in their
preparation is applicable law and IFRSs as adopted by the European
Union.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
auditor's responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the Financial Reporting Council's
(the "FRC's") Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We confirm that we have not
provided any non-audit services prohibited by the FRC's Ethical
Standard to the Group.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Material uncertainty related to going concern
We draw attention to note 1 in the financial statements which
indicates that the Group has major debt obligations that fall due
within 12 months of the date of approval of the financial
statements, for which refinancing has not yet been formally agreed
and proceeds from sales expected to settle the debt obligations are
not committed at the date of approval of the financial statements.
Also, the Fund's life is due to expire in December 2023 and whilst
the Company will put forward a resolution for its continuation at
the next annual general meeting, the continuation vote has not been
passed at the date of approval of the financial statements. As
stated in note 1, these events or conditions, along with the other
matters as set forth in note 1 indicate that a material uncertainty
exists that may cast significant doubt on the Group's and Company's
ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the Group's and
Company's ability to continue to adopt the going concern basis of
accounting included:
-- Evaluated management's assessment of the potential issues
that may give rise to a material uncertainty, including mitigating
actions identified by the directors;
-- Evaluated the financial covenants currently in place and
whether sufficient headroom exists, particularly in the context of
decreased property valuations and the impact of the current
macro-economic environment including rising interest rates;
-- Evaluated the likelihood of renewal of external financing
arrangements at expiry, including consideration of history of
renewal of such arrangements;
-- Evaluated the assumption made by the directors related to
passing of the upcoming continuation vote for the extension of the
life of the Company;
-- Performed sensitivity analysis on the key assumptions and
inputs applied in the going concern assessment and cashflow model,
including the ability to sell the remaining properties given the
slow recovery of real estate market sector;
-- Assessed the reasonability of key assumptions in the cashflow
model and obtained supporting documentation from management;
and
-- Evaluated the appropriateness of the disclosures in the
financial statements.
In relation to the reporting on how the Group has applied the UK
Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors' statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
4. Summary of our audit approach
Key audit matters The key audit matters that we identified in the
current year were:
* Going Concern (see material uncertainty related to
going concern section)
* Key judgements in the valuation of investment
property
* Carrying value of inventory
---------------------------------------------------------
Materiality The materiality that we used for the group financial
statements in the current year was $652k which
was determined on the basis of 1% of net asset
value.
---------------------------------------------------------
Scoping The response to the risks of material misstatement
was performed directly by the Group audit engagement
team.
---------------------------------------------------------
Significant changes No significant changes in our approach compared
in our approach with the prior year.
---------------------------------------------------------
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the material uncertainty
related to going concern section, we have determined the matters
described below to be the key audit matters to be communicated in
our report.
5.1 Key judgements in the valuation of investment property
Key audit matter description The Group owns a high-end residential investment
property in Macau, China, as disclosed in note
6, that is valued at $141.0m as at 30 June 2023
(2022: $181.5m).
The property is valued by an independent, professionally
qualified valuer using the 'income capitalisation'
method of valuation.
Directors are required to make a number of significant
assumptions and judgements in determining the
fair value and therefore we have identified this
as a potential fraud risk.
The key inputs into the fair value model which
are subject to significant estimates include
future cash flows from assets, such as lettings,
as well as applicable comparable term yields
and market rent. Unreasonable assumptions could
give rise to a material misstatement.
The value of investment property declined by
1% as at 30 June 2023 in comparison to prior
year. Consistent with the market conditions observed
in the prior year, we note there continued to
be a higher level of judgement associated with
high-end residential properties. The valuation
of investment property is disclosed as one of
the key sources of estimation uncertainty in
note 3 of the financial statements.
How the scope of our To respond to the key audit matter, we have performed
audit responded the following audit procedures:
to the key audit
matter * Tested relevant controls in relation to the valuation
process;
* Performed tests over the completeness and accuracy of
the year end data provided to the valuers including
reconciling the information included in the valuation
report to supporting documentation such as lease
agreements;
* With involvement of our valuation specialists,
discussed and challenged the appropriateness of the
valuation methodology and the key inputs and
assumptions (such as comparable term yields, recent
sale transactions and market rent) with the valuers
and management with reference to independent market
data;
* Evaluated the competence, objectivity and
capabilities of the valuer; and
* Assessed whether the disclosures in the financial
statements are appropriate regarding the critical
accounting judgements and key sources of estimation
uncertainty.
------------------------------------------------------------
Key observations We have concluded that the assumptions applied
by management, in arriving at fair value, and
the resulting valuations of investment property
are appropriate.
------------------------------------------------------------
5.2. Carrying value of inventory
Key audit matter description The Group owns high-end residential properties
held as inventory in Macau, as disclosed in note
7, with carrying value of $34.7m as at 30 June
2023 (2022: $34.6m).
Properties held as inventory are carried at the
lower of cost or net realisable value ("NRV").
In order to determine the NRV, the properties
are valued by an independent, professionally
qualified valuer using the 'sales comparison'
method of valuation. The value indication is
derived by comparing the property being appraised
to similar properties that have been sold recently,
then applying appropriate units of comparison
and making adjustments to the sale prices of
the comparable properties based on the elements
of comparison. As disclosed in note 7, the NRV
has been estimated as $57.7m at 30 June 2023
(2022: $58.7m).
Directors are required to make a number of significant
assumptions and judgements in determining the
NRV such as comparable recent sales transactions,
which is necessary to assess the appropriate
carrying value in the financial statements. As
disclosed in note 18, the adjusted NAV includes
the uplift of inventories to their market value
which is utilised to calculate NAV based fees
and therefore we have identified this as a potential
fraud risk.
The key inputs into the fair value model which
are subject to significant estimates include
the weighted unit rate per square foot.
The valuation of inventory is disclosed as one
of the key sources of estimation uncertainty
in note 3 of the financial statements.
How the scope of our To respond to the key audit matter, we have performed
audit responded the following audit procedures:
to the key audit
matter * Tested relevant controls in relation to the valuation
process;
* Performed substantive tests of detail over the
completeness and accuracy of the year end data
provided to the valuers including reconciling the
information included in the valuation report to
supporting documentation;
* With involvement of our valuation specialists,
discussed and challenged the appropriateness of the
valuation methodology and the key inputs (such as
weighted unit rate per square foot, comparable sales
transactions) and assumptions with the valuer and
management with reference to independent market data;
* Assessed whether the valuers are independent of the
Group and evaluated the competence, capabilities and
objectivity of the valuer;
* Compared NRV and cost to determine the carrying value
of the property; and
* Assessed whether the disclosures in the financial
statements are appropriate regarding the critical
accounting judgements and key sources of estimation
uncertainty.
------------------------------------------------------------
Key observations We note that the weighted unit rate per square
foot determined by the independent valuer is
within the range noted in our research, albeit
at the higher end of the range. However, we have
concluded that the assumptions applied by management,
in arriving at the NRV of inventory were appropriate,
and that the resulting valuations were within
a reasonable range.
------------------------------------------------------------
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Group Materiality $652k (2022: $776k)
Basis for determining 1% of net asset value ("NAV") (2022: 1% of
materiality NAV)
------------------------------------------------
Rationale for the In determining the materiality, we considered
benchmark applied what the most important balances on which the
users of the financial statements would judge
the performance of the Group. We consider the
NAV of the Group to be an appropriate benchmark
as this is a key performance indicator for
shareholders.
------------------------------------------------
6.2. Performance materiality
We set performance materiality at a level lower than materiality
to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial
statements as a whole. Group performance materiality was set at 70%
of Group materiality for the 2023 audit (2022: 70%). In determining
performance materiality, we considered the following factors:
-- Our risk assessment, including our assessment of the quality
of the control environment including that present at the
administrator, Ocorian Administration (Guernsey) Limited;
-- Our past experience of the audit, which has indicated a low
number of corrected and uncorrected misstatements identified in
prior period;
-- The continued impact of macro - economic factors in Macau on
the Group's performance in the current year
6.3 Error reporting threshold
We agreed with the Audit Committee that we would report to the
Committee all audit differences in excess of $32k (2022: $38k), as
well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds. We also report to the
Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Scoping
Our audit was scoped by obtaining an understanding of the Group
and its environment, including internal control, and assessing the
risks of material misstatement for the Company and its
subsidiaries. Audit work to respond to the risks of material
misstatement was performed directly by the Group audit team and all
work was performed to Group materiality.
7.2. Our consideration of the control environment
We obtained an understanding of the information generated from
the IT systems in place. However, we did not test the operating
effectiveness of General IT Controls (GITCs) and IT controls.
In assessing the control environment, we also considered the
control environments of the key service providers, including the
administrators, to whom the Board have delegated certain functions
for the Company and its subsidiaries.
We tested relevant controls over investment properties and
inventory valuation.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact
of environmental related risks on the Group's business and its
financial statements.
The Group continues to develop its assessment of the potential
impacts of environmental, social and governance ("ESG") related
risks as outlined above. As a part of our audit, we have obtained
management's ESG policy and held discussions with management to
understand the process of identifying ESG related risks, the
determination of mitigating actions and the impact on the Group's
financial statements.
We performed our own qualitative risk assessment of the
potential impact of environmental related risks on the Group's
account balances and classes of transactions and noted that there
is no material impact.
8. Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
10. Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor's report.
11. Extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
-- the nature of the industry and sector, control environment
and business performance including the design of the Group's
remuneration policies, key drivers for directors' remuneration,
bonus levels and performance targets;
-- results of our enquiries of management and the Audit
Committee about their own identification and assessment of the
risks of irregularities including those that are specific to the
Group's sector;
-- any matters we identified having obtained and reviewed the
Group's documentation of their policies and procedures relating
to:
o identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances of
non-compliance;
o detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged fraud;
o the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations;
-- the matters discussed among the audit engagement team and
relevant internal specialists, including valuation specialists
regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the following
areas:
-- Key judgements in the valuation of investment property;
and
-- Carrying value of inventory
In common with all audits under ISAs (UK), we are also required
to perform specific procedures to respond to the risk of management
override.
We also obtained an understanding of the legal and regulatory
framework that the Group operates in, focusing on provisions of
those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this
context included the Companies (Guernsey) Law, 2008, the Listing
Rules and relevant tax legislation.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the
Group's ability to operate or to avoid a material penalty. These
included the Company's regulatory licence under The Protection of
Investors (Bailiwick of Guernsey) Law, 2020.
11.2. Audit response to risks identified
As a result of performing the above, we identified the key
judgements in the valuation of investment property and carrying
value of inventory as key audit matters related to the potential
risk of fraud. The key audit matters section of our report explains
the matters in more detail and also describes the specific
procedures we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks
identified included the following:
-- Reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect
on the financial statements;
-- Enquiring of management and the Audit Committee concerning
actual and potential litigation and claims;
-- Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
-- Reading minutes of meetings of those charged with governance,
reviewing internal audit reports and reviewing correspondence with
the Guernsey Financial Services Commission;
-- In addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members including
internal specialists, and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the
audit.
Report on other legal and regulatory requirements
12. Corporate Governance Statement
The Listing Rules require us to review the directors' statement
in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the Company's
compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
-- the directors' statement with regards to the appropriateness
of adopting the going concern basis of accounting and any material
uncertainties identified (set out above);
-- the directors' explanation as to its assessment of the
Group's prospects, the period this assessment covers and why the
period is appropriate (set out above);
-- the directors' statement on fair, balanced and understandable
(set out above);
-- the Board's confirmation that it has carried out a robust
assessment of the emerging and principal risks (set out above);
-- the section of the annual report that describes the review of
effectiveness of risk management and internal control systems (set
out above); and
-- the section describing the work of the audit committee (set
out above).
13. Matters on which we are required to report by exception
13.1. Adequacy of explanations received and accounting
records
Under the Companies (Guernsey) Law, 2008 we are required to
report to you if, in our opinion:
-- we have not received all the information and explanations we
require for our audit; or
-- proper accounting records have not been kept by the parent
company; or
--the financial statements are not in agreement with the
accounting records.
We have nothing to report in respect of these matters.
14. Other matters which we are required to address
14.1. Auditor tenure
Following the recommendation of the audit committee, we were
appointed by the Audit Committee on 19 February 2021 to audit the
financial statements for the year ending 30 June 2021 and
subsequent financial periods. The period of total uninterrupted
engagement including previous renewals and reappointments of the
firm is 3 years, covering the years ending 30 June 2021 to 30 June
2023.
14.2. Consistency of the audit report with the additional report to the audit committee
Our audit opinion is consistent with the additional report to
the audit committee we are required to provide in accordance with
ISAs (UK).
15. Use of our report
This report is made solely to the Company's members, as a body,
in accordance with Section 262 of the Companies (Guernsey) Law,
2008. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
David Becker (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Recognised Auditor
St Peter Port, Guernsey
5 October 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
2023 2022
Note US$'000 US$'000
---- ------- -------
ASSETS
---- ------- -------
Non-current assets
---- ------- -------
Investment property 6 141,045 181,520
---- ------- -------
Deposits with lenders 21 1,170 1,561
---- ------- -------
Trade and other receivables 16 16
---- ------- -------
142,231 183,097
---- ------- -------
Current assets
---- ------- -------
Inventories 7 34,775 34,635
---- ------- -------
Trade and other receivables 10 66 53
---- ------- -------
Deposits with lenders 21 4,438 1,895
---- ------- -------
Cash and cash equivalents 25 1,118 355
---- ------- -------
40,397 36,938
---- ------- -------
Total assets 182,628 220,035
---- ------- -------
EQUITY
---- ------- -------
Capital and reserves attributable to the Company's
equity holders
---- ------- -------
Share capital 12 618 618
---- ------- -------
Retained earnings 50,342 62,349
---- ------- -------
Distributable reserves 15,791 15,791
---- ------- -------
Foreign currency translation reserve (1,067) (1,182)
---- ------- -------
Total equity 65,684 77,576
---- ------- -------
LIABILITIES
---- ------- -------
Non-current liabilities
---- ------- -------
Deferred taxation provision 9 7,498 9,706
---- ------- -------
Taxation provision 9 1,158 579
---- ------- -------
Interest-bearing loans 8 81,913 104,852
---- ------- -------
90,569 115,137
---- ------- -------
Current liabilities
---- ------- -------
Trade and other payables 11 3,181 2,019
---- ------- -------
Interest-bearing loans 8 23,194 25,303
---- ------- -------
26,375 27,322
---- ------- -------
Total liabilities 116,944 142,459
---- ------- -------
Total equity and liabilities 182,628 220,035
---- ------- -------
Net Asset Value per share (US$) 18 1.06 1.25
---- ------- -------
Adjusted Net Asset Value per share (US$) 18 1.46 1.67
---- ------- -------
The accompanying notes are an integral part of these
Consolidated Financial Statements.
The Consolidated Financial Statements were approved by the Board
of Directors and authorised for issue on 4 October 2023.
Director Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 June 2023
2023 2022
Note US$'000 US$'000
---- -------- --------
Income
---- -------- --------
Income on sales of inventories 7 - 1,511
---- -------- --------
Rental income 1,122 1,082
---- -------- --------
Other income - 129
---- -------- --------
1,122 2,722
---- -------- --------
Expenses
---- -------- --------
Net loss on disposal of investment property 6 1,909 -
---- -------- --------
Net loss from fair value adjustment on investment
property 6 3,412 16,380
---- -------- --------
Cost of sales of inventories 7 - 521
---- -------- --------
Management fee 20 1,200 1,199
---- -------- --------
Realisation fees 20 98 23
---- -------- --------
Non-Executive Directors' fees 19 167 170
---- -------- --------
Auditors' remuneration: audit fees 23 162 131
---- -------- --------
Auditors' remuneration: other professional
services 23 9 9
---- -------- --------
Property operating expenses 15 1,277 1,372
---- -------- --------
Sales and marketing expenses 16 76 115
---- -------- --------
General and administration expenses 13 450 615
---- -------- --------
Gain on foreign currency translation 34 (298)
---- -------- --------
(8,794) (20,237)
---- -------- --------
Operating loss for the year (7,672) (17,515)
---- -------- --------
Finance income and expenses
---- -------- --------
Bank loan interest 8 (5,440) (2,985)
---- -------- --------
Other financing costs 14 (346) (431)
---- -------- --------
Bank interest received 8 -
---- -------- --------
(5,778) (3,416)
---- -------- --------
Loss for the year before tax (13,450) (20,931)
---- -------- --------
Taxation 9 1,443 1,840
---- -------- --------
Loss for the year after tax (12,007) (19,091)
---- -------- --------
Other Comprehensive Income
---- -------- --------
Items that may be reclassified subsequently
to profit or loss
---- -------- --------
Exchange difference on translating foreign
operations 115 (1,238)
---- -------- --------
Total comprehensive loss for the year (11,892) (20,329)
---- -------- --------
Loss attributable to:
---- -------- --------
Equity holders of the Company (12,007) (19,091)
---- -------- --------
Total comprehensive loss attributable to:
---- -------- --------
Equity holders of the Company (11,892) (20,329)
---- -------- --------
2023 2022
---- -------- --------
US$ US$
---- -------- --------
Basic and diluted loss per ordinary share
attributable to the equity holders of the Company
during the year 18 (0.1942) (0.3087)
---- -------- --------
The accompanying notes are an integral part of these
Consolidated Financial Statements.
All items in the above statement are derived from continuing
operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 30 June 2023
Foreign
currency
Share Retained Distributable translation
capital earnings reserves reserve Total
Note US$'000 US$'000 US$'000 US$'000 US$'000
---- -------- --------- ------------- ------------ --------
Balance brought forward
at 1 July 2022 12 618 62,349 15,791 (1,182) 77,576
---- -------- --------- ------------- ------------ --------
Loss for the year - (12,007) - - (12,007)
---- -------- --------- ------------- ------------ --------
Items that may be reclassified
subsequently to profit
or loss
---- -------- --------- ------------- ------------ --------
Exchange difference on
translating foreign operations - - - 115 115
---- -------- --------- ------------- ------------ --------
Total comprehensive loss
for the year - (12,007) - 115 (11,892)
---- -------- --------- ------------- ------------ --------
Balance carried forward
at 30 June 2023 12 618 50,342 15,791 (1,067) 65,684
---- -------- --------- ------------- ------------ --------
Foreign
currency
Share Retained Distributable translation
capital earnings reserves reserve Total
Note US$'000 US$'000 US$'000 US$'000 US$'000
---- -------- --------- ------------- ------------ --------
Balance brought forward
at 1 July 2021 12 618 81,440 15,791 56 97,905
---- -------- --------- ------------- ------------ --------
Loss for the year - (19,091) - - (19,091)
---- -------- --------- ------------- ------------ --------
Items that may be reclassified
subsequently to profit
or loss
---- -------- --------- ------------- ------------ --------
Exchange difference on
translating foreign operations - - - (1,238) (1,238)
---- -------- --------- ------------- ------------ --------
Total comprehensive loss
for the year - (19,091) - (1,238) (20,329)
---- -------- --------- ------------- ------------ --------
Balance carried forward
at 30 June 2022 12 618 62,349 15,791 (1,182) 77,576
---- -------- --------- ------------- ------------ --------
The accompanying notes are an integral part of these
Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 30 June 2023
2023 2022
Note US$'000 US$'000
---- -------- --------
Net cash used in operating activities 17 (2,341) (402)
---- -------- --------
Cash flows from investing activities
---- -------- --------
Capital expenditure on investment property 6 (27) (288)
---- -------- --------
Movement in pledged bank balances 21 (2,152) 3,376
---- -------- --------
Net sales proceeds from disposal of investment
property 6 35,384 -
---- -------- --------
Net cash generated from investing activities 33,205 3,088
---- -------- --------
Cash flows from financing activities
---- -------- --------
Proceeds from bank borrowings 6,512 9,457
---- -------- --------
Repayment of bank borrowings (32,025) (13,673)
---- -------- --------
Interest and bank charges paid (4,590) (3,013)
---- -------- --------
Net cash used in financing activities (30,103) (7,229)
---- -------- --------
Net movement in cash and cash equivalents 761 (4,543)
---- -------- --------
Cash and cash equivalents at beginning of year 355 5,003
---- -------- --------
Effect of foreign exchange rate changes 2 (105)
---- -------- --------
Cash and cash equivalents at end of year 1,118 355
---- -------- --------
The accompanying notes are an integral part of these
Consolidated Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
General information
Macau Property Opportunities Fund Limited (the "Company") is a
Company incorporated and registered in Guernsey under The Companies
(Guernsey) Law, 1994. This law was replaced by the Companies
(Guernsey) Law, 2008 on 1 July 2008. The Company is an authorised
entity under the Authorised Closed-Ended Investment Schemes Rules
and Guidance, 2021 and is regulated by the GFSC. The address of the
registered office is given below.
The Consolidated Financial Statements for the year ended 30 June
2023 comprise the financial statements of the Company and its
subsidiaries (together referred to as the "Group"). The Group has
investments in residential property in Macau.
These Consolidated Financial Statements have been approved for
issue by the Board of Directors on 4 October 2023.
1 Summary of significant accounting policies
The principal accounting policies applied in the preparation of
these Consolidated Financial Statements are set out below. These
policies have been consistently applied to all years presented,
unless otherwise stated.
Statement of compliance
The financial statements have been prepared in accordance with
the International Financial Reporting Standards ("IFRS"), which
comprise standards and interpretations approved by the
International Accounting Standards Board, together with applicable
legal and regulatory requirements of Guernsey Law and the GFSC.
Basis of preparation
The Consolidated Financial Statements have been prepared in
accordance with IFRS; applicable legal and regulatory requirements
of Guernsey Law and under the historical cost basis, except for
financial assets and liabilities held at fair value through profit
or loss ("FVPL") and investment properties that have been measured
at fair value. All other assets and liabilities are carried at
amortised cost.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statements, are disclosed in Note 3. The Consolidated Financial
Statements are presented in US Dollars and all values are rounded
to the nearest thousand ($'000), except where otherwise
indicated.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Manager's Report. The financial position of the
Group, its cash flows and its liquidity position are described in
the Capital Management section of the Manager's Report.
The financial risk management objectives and policies of the
Group and the exposure of the Group to credit risk, market risk and
liquidity risk are discussed in Note 2 to the Consolidated
Financial Statements.
In accordance with provision 30 of the 2018 revision of the UK
Corporate Governance Code, (the "UK Code"), and as a fundamental
principle of the preparation of financial statements in accordance
with IFRS, the Directors have assessed as to whether the Company
will continue in existence as a going concern for a period of at
least 12 months from signing of the financial statements, which
contemplates continuity of operations and the realisation of assets
and settlement of liabilities occurring in the ordinary course of
business.
The financial statements have been prepared on a going concern
basis for the reasons set out below and as the Directors, with
recommendation from the Audit and Risk Committee, have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the next twelve months after date of
approval of the Annual Report.
In reaching its conclusion, the Board have considered the risks
that could impact the Group's liquidity over the period to 30
September 2024. This period represents the period of at least 12
months from the date of signing of the Annual Report.
As part of their assessment the Audit and Risk Committee
highlighted the following key considerations:
1. Whether the Group can repay or refinance its loan facilities
to discharge its liabilities over the period to 30 September
2024
2. Extension of life of the Company
1. Whether the Group can repay or refinance its loan facilities
to discharge its liabilities over the period to 30 September
2024
As at 30 June 2023, the Group had major debt obligations to
settle during the going concern period being:
i) principal repayments for The Waterside loan facility of
approximately US$7.7 million, US$9.6 million and US$11.5 million
due for settlement in September 2023, March 2024 and September
2024, respectively;
ii) principal repayments for The Fountainside loan facility of
approximately US$1.9 million and US$3.7 million due for settlement
in September 2023 and March 2024, respectively;
iii) principal repayments for the Penha Heights Tai Fung Bank
loan facility of approximately US$1.6 million due for settlement in
quarterly instalment of US$318,900; and
iv) principal repayments for the Penha Heights BCM loan facility
of approximately US$0.4 million and US$7.6 million due for
settlement in September 2023 and December 2023, respectively.
The Fountainside US$1.9 million loan repayment due in September
has been settled in full. The Waterside US$7.7 million loan
repayment due in September 2023 has been partially settled in the
amount of US$4.4 million, with the remaining balance to be settled
upon completion of a confirmed sale as agreed with the lender. By
reference to the Company's comprehensive working capital
projections, it is anticipated that the remaining debt obligations
that are due over the going concern period would be settled from
sales proceeds that are to be generated from the ongoing
divestments of remaining units in The Waterside and The
Fountainside. The Board has considered Stress-tested scenarios
which indicated that a conservative, modest sales programme would
provide sufficient working capital.
The Company has agreed in principle with lenders of the banking
facilities for Penha Heights to defer principal repayments that
will be due in September and December 2023. The loan facility with
BCM is to be extended to mature in March 2025. As a result, the
loan repayments for the two Penha Heights facilities that would
then become due over the going concern period are reduced from
US$9.7 million to approximately US$1.7 million. It is anticipated
that this US$1.7 million debt obligation would be settled from the
sales proceeds from The Waterside and The Fountainside units, in
the event that Penha Heights is not disposed of during the
period.
The Manager is responsible for maintaining relationships with
the Group's lenders, monitoring loan terms and covenants to ensure
compliance, and reporting to the Board on regular basis for all key
matters arising. Throughout the year ended 30 June 2023 and up to
the financial statements issuance date, the Group has been in
compliance with all loan covenants. Over the years, the Manager
always maintains proactive dialogue with the lenders and in turn
receives their strong support to the Group, even during the very
challenging market environment amid the prolonged COVID period.
Post COVID, the existing lenders continue to indicate their support
for the Group as well as the underlying properties. Further, the
upcoming debt servicing obligations over the going concern period
are expected to be met by sales proceeds. Meanwhile, the Manager
has also started to explore financing options with other banks as
part of its contingency planning. Based on the Manager's proven
track record in executing property sales and managing lender
relationships, the Board is confident that the Group will be able
to meet its debt obligations during the going concern period
provided the sales velocity can be maintained.
Notwithstanding the above, given that it remains uncertain that
adequate proceeds could be generated from sales of properties to
settle payment obligations over the going concern period, and given
that any necessary refinancing of debt obligations would still be
subjected to lenders' approval, the Directors consider that there
is a material uncertainty that may cast significant doubt over the
Group's and Company's ability to continue as a going concern.
2. Extension of life of the Company
After the Ordinary Resolution was passed by an overwhelming
majority at the AGM of the Company in its 2022 AGM to extend the
Fund's life until 31 December 2023, the Directors assessed the
impact of the Continuation Vote on the Fund's ability to continue
as a going concern. The Directors have also considered the going
concern assumption outside the primary going concern horizon.
In line with Article 38 of the Articles of Incorporation, the
Company will put forward a resolution for its continuation at the
next AGM (to be held in December 2023). If any continuation
resolution is not passed, the Directors are required to formulate
proposals to be put to Members to reorganise, unitise, reconstruct
or wind up the Company.
The Directors anticipate receiving continuation support from
major shareholders and note that 50% of shareholder support is
required to ensure continuation. The Board and the Company's broker
maintain ongoing communication with shareholders and the feedback
regarding the Continuation Vote is broadly positive. It is likely
that returns from the sale of properties would be significantly
lower if the Fund was forced to sell under some form of fire sale
agreement as a result of a failed Continuation Vote and it is
therefore commercially sensible for the Fund to continue in
business.
Given that the Continuation Vote has not taken place at the date
of issue of the financial statements, the Directors consider that
there is a material uncertainty related to events or conditions
that may cast significant doubt over the Company's ability to
continue as a going concern and, therefore, that it may be unable
to realise assets and discharge liabilities in the normal course of
business.
Going Concern Conclusion
After careful consideration and based on the reasons outlined
above, including the Manager's continuing dialogue with lenders and
shareholders, whilst there is a material uncertainty related to
going concern, the Board have a reasonable expectation that the
Company will continue in existence as a going concern for 12 months
from the date of signing the Annual report. They are therefore
satisfied that it is appropriate to adopt the going concern basis
in preparing the financial statements.
New and amended standards and interpretations applied
The following amendments to existing standards and
interpretations were effective for the year ended 30 June 2023 and
therefore were applied in the current year but they did not have a
material impact on the Group:
- Annual Improvements to IFRSs 2018-2020
- Amendment to IAS 37: Onerous Contracts: Cost of fulfilling a Contract
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Interest Rate Benchmark Reform - Phase 2
New and amended standard and interpretation not applied
The following new and amended standards and interpretations in
issue are applicable to the Group but are not yet effective and
have not been adopted by the Group:
- IFRS 17: Insurance Contracts (effective 1 January 2023)
- Amendments to IAS 17: Insurance Contracts (effective 1 January 2023)
- Amendments to IAS 8: Accounting Policies, Changes in
Accounting Estimates and Errors (effective 1 January 2023)
- Amendments to IAS 12: Income Taxes (effective 1 January 2023)
- Amendments to IAS 1: Presentation of Financial Statements (effective 1 January 2023)
IFRS 17 Insurance Contracts
IFRS 17 establishes the principles for the recognition,
measurement, presentation and disclosure of insurance contracts
within the scope of the standard. The objective of IFRS 17 is to
ensure that an entity provide relevant information that faithfully
represents those contracts. This information gives a basis for
users of financial statements to assess the effect that insurance
contracts have on the entity's financial position, financial
performance and cash flows.
The Group has considered the IFRS standard that has been issued,
but is not yet effective. This standard will not have a material
effect on the Group as the Group does not have any material
insurance contracts or write any insurance contracts.
Consolidation
The Consolidated Financial Statements incorporate the financial
statements of the Company and all SPVs controlled by the Company
and its subsidiaries. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee. The financial statements of
subsidiaries are included in the Consolidated Financial Statements
from the date control commences until the date control ceases.
Certain of the Company's subsidiaries have non-coterminous
year-ends. These companies are consolidated on the basis of actual
transactions occurring within the financial year.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Segment reporting
A business segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns different from those of other business segments. A
geographical segment is engaged in providing products or services
within a particular economic environment that are subject to risks
and returns different from those segments operating in other
economic environments.
The Directors are of the opinion that the Group is engaged in a
single segment of business, being property investment and related
business. This segment includes residential properties in Macau.
Please refer to Note 5 for segment reporting.
Foreign currency translation
a) Presentation currency
The Consolidated Financial Statements are shown in US Dollars
("US$") which is the Group's presentation currency.
b) Transactions and balances
Foreign currency transactions are recorded in the respective
functional currencies of group entities, Macanese Patacas and Hong
Kong Dollars (the "functional currencies"), using the exchange
rates prevailing at the date of the transaction. Foreign exchange
gains and losses - resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the Consolidated Statement of Comprehensive
Income.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates at
the date of the initial transaction. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined. The gain or
loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of gain or loss on
change in fair value of the item (i.e. translation differences on
items whose fair value gain or loss is recognised in other
comprehensive income or profit or loss are also recognised in other
comprehensive income or profit or loss).
c) Group companies
The results and financial position of all the Group entities
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
i) assets and liabilities for each statement of financial
position are translated at the closing rate at the date of that
statement of financial position;
ii) income and expenses for each statement of comprehensive
income are translated at average exchange rates;
iii) all resulting exchange differences are recognised as a
separate component of other comprehensive income; and
iv) on disposal of a foreign operation, the component of other
comprehensive income relating to that particular foreign operation
is recognised in profit or loss.
Foreign currency translation reserve
Foreign currency differences arising on translation of foreign
operations into the Group's presentation currency are recognised in
other comprehensive income and presented in the foreign currency
translation reserve in equity.
Investment property
Property that is held for long-term rental yields or for capital
appreciation or both, and that is not occupied by companies in the
consolidated Group, is classified as investment property.
Investment property also includes property that is being
constructed or developed for future use as investment property.
Investment property is measured initially at its cost, including
related transaction costs.
Subsequent expenditure is capitalised to the asset's carrying
amount only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance
costs are charged to the Consolidated Statement of Comprehensive
Income during the financial period in which they are incurred.
After initial recognition, investment property is carried at fair
value.
The Group must be able to access the principal or the most
advantageous market at the measurement date. The fair value of an
asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming that market participants act in their economic best
interest.
There are no contractual obligations to purchase, construct or
develop investment property for repairs, maintenance or
enhancements.
An investment property is derecognised upon disposal or when the
investment property is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss
arising on derecognition of the property (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss in the period in
which the property is derecognised.
Fair value measurements
The Group measures certain financial instruments, and
non-financial assets such as investment property, at fair value at
the end of each reporting period.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- in the principal market for the asset or liability; or
-- in the absence of a principal market, in the most
advantageous market for the asset or liability.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use, or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs significant to
the fair value measurement as a whole:
Level - inputs that reflect unadjusted quoted prices in active
1 markets for identical assets or liabilities that the
Group has the ability to access at the measurement date;
Level - inputs other than quoted prices included in Level 1 that
2 are observable for the asset or liability, either directly
(that is, prices) or indirectly (that is, derived from
prices); and
Level - inputs for the asset or liability that are not based
3 on observable market data (that is, unobservable inputs).
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end
of each reporting period.
Fair value of investment property
Fair value is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition
of the specific investment property. If this information is not
available, the Group uses alternative valuation methods such as
recent prices on less active markets or discounted cash flow
projections. Valuations are prepared semi-annually by Savills
(Macau) Limited ("Savills"), whose valuers hold recognised and
relevant professional qualifications and have recent experience in
the location and category of the investment properties being
valued. Investment property that is being redeveloped for
continuing use as investment property continues to be measured at
fair value, if the fair value is considered to be reliably
measurable. Changes in fair values are recorded in the Consolidated
Statement of Comprehensive Income.
Inventories
Properties and land that are being held or developed for future
sale are classified as inventories. In the opinion of the Board,
inventories are held with a view to short term sale in the ordinary
course of business. They are individually carried at the lower of
cost and net realisable value ("NRV"). NRV is the estimated selling
price in the ordinary course of business less costs to complete
redevelopment and selling expenses. Cost is the acquisition cost
together with subsequent capital expenditure incurred, including
capitalised interest where relevant.
Disposals
Disposals are recognised when the risks and rewards of ownership
of an asset transfer to the purchaser.
Borrowing costs
Borrowing costs incurred for the purpose of acquiring,
constructing or producing a qualifying asset, such as investment
property or inventory, are capitalised as part of the cost.
Borrowing costs are capitalised while the acquisition or
construction is actively underway, and cease once the asset is
substantially complete, or suspended if the development is
suspended. All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of
funds. The interest capitalised is calculated using the Group's
weighted average cost of borrowing after adjusting for borrowing
associated with specific developments. Where borrowings are
associated with specific developments, the amount capitalised is
the gross interest incurred on those borrowings less any investment
income arising from their temporary investment.
Impairment
Financial assets
The Group holds only trade and other receivables with no
financing component and which have maturities of less than 12
months at amortised cost and deposits with lenders which represent
restricted cash in relation to borrowing. The liquidity of this
deposit with lenders follow the maturity of the borrowings. As
such, the Group has chosen to apply an approach similar to the
simplified approach for Expected Credit Losses (ECL) under IFRS 9
to all its trade and other receivables. Therefore, the Group does
not track changes in credit risk, but instead, recognises a loss
allowance based on lifetime ECLs at each reporting date.
The Group's approach to ECLs reflects a probability-weighted
outcome, the time value of money and reasonable and supportable
information that is available without undue cost or effort at the
reporting date about past events, current conditions and forecasts
of future economic conditions.
The Group uses the provision matrix as a practical expedient to
measuring ECLs on trade and other receivables and deposits with
lenders, based on days past due for groupings of receivables with
similar loss patterns. Receivables are grouped based on their
nature. The provision matrix is based on historical observed loss
rates over the expected life of the receivables and is adjusted for
forward-looking estimates.
Non-financial assets
The carrying amounts of the Group's non-financial assets, other
than investment property are reviewed at each reporting date to
determine whether there is any indication of impairment. If any
such indication exists, then the asset's recoverable amount is
estimated. The recoverable amount of an asset or cash-generating
unit is the greater of its value in use and its fair value less
costs to sell.
Leases
Leases in which the Group does not transfer substantially all
the risks and benefits of ownership to a lessee are classified as
operating leases. Initial direct costs incurred in negotiating an
operating lease are added to the carrying amount of the leased
asset and recognised over the term of the lease on the same basis
as rental income. Contingent rents are recognised as revenue in the
period in which they are earned. The Group regularly reviews and
assesses the risk associated with the leases of the underlying
assets.
Financial instruments
i) Classification
Financial assets
The Group classifies its financial assets as subsequently
measured at amortised cost or measured at fair value through profit
or loss on the basis of both:
-- The entity's business model for managing the financial
assets
-- The contractual cash flow characteristics of the financial
assets
Financial assets measured at amortised cost
Deposits with lenders and trade and other receivables are
measured at amortised cost if it is held within a business model
whose objective is to hold financial assets in order to collect
contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial liabilities
Financial liabilities measured at amortised cost
This category includes all financial liabilities, other than
those measured at FVPL. The Group includes in this category
interest-bearing loans and trade and other payables.
ii) Recognition
The Group recognises a financial asset or a financial liability
when it becomes a party to the contractual provisions of the
instrument.
Purchases or sales of financial assets that require delivery of
assets within the time frame generally established by regulation or
convention in the market place (regular way trades) are recognised
on the trade date, i.e., the date that the Group commits to
purchase or sell the assets.
iii) Initial measurement
Financial assets and liabilities (other than those classified as
at FVPL) are measured initially at their fair value plus any
directly attributable incremental costs of acquisition or
issue.
iv) Subsequent measurement
After initial measurement, the Company's deposits with lenders
and trade and other receivables are measured at amortised cost
using the effective interest method less any allowance for
impairment. Gains and losses are recognised in profit or loss when
the deposits with lenders and trade and other receivables are
derecognised or impaired, as well as through the amortisation
process.
Financial liabilities, other than those classified as at FVPL,
are measured at amortised cost using the effective interest method.
Gains and losses are recognised in profit or loss when the
liabilities are derecognised, as well as through the amortisation
process.
The effective interest method is a method of calculating the
amortised cost of a financial asset or a financial liability and of
allocating and recognising the interest income or interest expense
in profit or loss over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash
payments or receipts through the expected life of the financial
asset or financial liability to the gross carrying amount of the
financial asset or to the amortised cost of the financial
liability. When calculating the effective interest rate, the Group
estimates cash flows considering all contractual terms of the
financial instruments, but does not consider ECL. The calculation
includes all fees paid or received between parties to the contract
that are an integral part of the effective interest rate,
transaction costs and all other premiums or discounts.
Deposits with lenders
Deposits with lenders comprise cash held at bank that is pledged
for loan covenants and are recognised as current and non-current
assets.
Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement of
Financial Position comprise cash at bank and on hand and demand
deposits with an original maturity of three months or less and
other short-term, highly-liquid investments that are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. For the purpose of the
Consolidated Statement of Cash Flows, cash and cash equivalents
consist of cash and cash equivalents as defined above. Deposits
with lenders are excluded and not considered cash and cash
equivalents.
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation, and the amount can be reliably estimated.
Share capital
Shares are classified as equity when there is no obligation to
transfer cash or other assets. Shares issued by the Company are
recorded based upon the proceeds received, net of incremental costs
directly attributable to the issue of new shares.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable, and includes rental income and income from
property trading. Revenue from sales of completed properties and
properties under development is within the scope of IFRS 15 and
revenue from rental income is within the scope of IFRS 16. There
are no assumptions or judgements involved in revenue
recognition.
The Group earns revenue from acting as lessor in operating
leases which do not transfer substantially all of the risks and
rewards incidental to ownership of an investment property. No
subleases are currently held.
Rental income
Rental income from operating leases is recognised as income on a
straight-line basis over the lease term. When the Group provides
incentives to its customers, the cost of incentives is recognised
over the lease term, on a straight-line basis, as a reduction of
rental income.
For investment property held primarily to earn rental income,
the Group enters as a lessor into lease agreements that fall within
scope of IFRS 16.
Sale of completed property
Revenue from sale of completed properties is recognised when
effective control of ownership of the properties is transferred to
the buyer, which is on unconditional exchange of contracts and
change of title on the property. Where the sales contract
stipulates payments that cross over reporting period, revenue is
recognised over the period of the contract by reference to the
progress towards complete satisfaction of each performance
obligation. This is determined based on the actual cost incurred to
date to estimated total cost for each contract. The proceeds from
disposal are recognised in income and net assets disposed of are
recognised in cost of sales in expenses.
Sale of property under development
Where property is under development and an agreement has been
reached to sell such property when construction is complete, and
where the Directors determine the pre-sale to constitute the sale
of a completed property, revenue is recognised when the significant
risks and rewards of ownership of the real estate have been
transferred to the buyer, which is on the unconditional exchange of
contracts and change of title on the property. Where the sales
contract stipulates payments that cross over reporting periods,
revenue is recognised as the satisfaction of performance
obligations is completed.
Sale of subsidiary
Revenue from the sale of a subsidiary is recognised when
effective control of ownership of the subsidiary is transferred to
the buyer. The sale of the subsidiary is regarded as a loss of
control under IFRS 10 with all assets and liabilities of the
subsidiary derecognised at the date control is lost, the fair value
of the consideration received from the transaction compared to the
net assets of the subsidiary and the resulting net income or
expense of the transaction recorded in the income statement.
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down and are
subsequently measured at amortised cost using the effective
interest method.
Borrowings are classified as current liabilities, unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the date of the Consolidated
Statement of Financial Position.
Offsetting
Financial assets and financial liabilities are offset and the
net amount is reported in the statement of financial position if
there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net
basis, to realise the assets and to settle the liabilities
simultaneously.
Finance income and expenses
Interest income is recognised using the effective interest rate
method in the Consolidated Statement of Comprehensive Income.
Finance costs comprise interest expense on borrowings. Interest
expense is recognised using the effective interest rate method in
the Consolidated Statement of Comprehensive Income.
Distributable reserves
Distributable reserves may be legally paid out in the form of a
dividend. Payments to shareholders from reserves can be seen as a
distribution of accumulated profit.
Taxes
Current income tax
Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to taxation
authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the
reporting date. Current income tax relating to items recognised
directly in equity is recognised in equity and not in the
Consolidated Statement of Comprehensive Income. Management
periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
Deferred income tax
Deferred income tax is provided using the liability method on
all temporary differences at the reporting date between the tax
basis of assets and liabilities and their carrying amounts for
financial reporting purposes, except where the timing of the
reversal of the temporary differences can be controlled by the
Group and it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognised only to the extent
that it is probable that taxable profit will be available against
which deductible temporary differences, carried forward tax credits
or tax losses can be utilised.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
reporting date. Deferred income tax relating to items recognised
directly in equity is recognised in equity and not in the
Consolidated Statement of Comprehensive Income.
As a result of the discussion of the IFRS Interpretations
Committee in its July 2014 meeting relating to deferred taxation
for a single asset held by a corporate wrapper, the Group has
recognised the deferred tax liability for the taxable temporary
timing difference relating to the investment property carried at
fair value.
2. Financial risk management, policies and objectives
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange risk, cash flow and
fair value interest rate risk), credit risk and liquidity risk.
The Board of Directors provides written principles for overall
risk management, as well as written policies covering specific
areas, such as foreign exchange risk, interest rate risk and
liquidity risk.
Market risk
Market risk is the risk that the fair value of future cash flows
of a financial instrument will fluctuate as a result of changes in
market prices, whether caused by factors specific to an individual
financial instrument or all factors affecting all financial
instruments traded in the market including foreign exchange risk,
equity price risk and cash flow and fair value interest rate risk
as detailed below.
The Group's market risk is managed by the Manager in accordance
with policies and procedures in place. The Group's overall market
position is monitored on a quarterly basis by the Board of
Directors.
Sensitivities to market risks included below are based on a
change in one factor while holding all other factors constant. In
practice, this is unlikely to occur and changes in some of the
factors may be correlated, for example, changes in interest rates
and changes in foreign currency rates.
a) Foreign exchange risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures. Foreign
exchange risk arises from future commercial transactions,
recognised monetary assets and liabilities and net investments in
foreign operations. The Group's policy is not to enter into any
currency hedging transactions. The tables below summarise the
Group's exposure to foreign currency risk as at 30 June 2023 and 30
June 2022. The Group's financial assets and liabilities are
included in the table, categorised by their currency at their
carrying amount in US$'000. In the current economic climate,
management's assessment of a reasonable possible change in foreign
exchange rates would be up to a 1% increase/decrease for Hong Kong
Dollar ("HK$")/US$, due to the HK$ being pegged to the US$, and up
to a 10% increase/decrease for all other currencies.
The table below presents financial assets and liabilities
denominated in foreign currencies held by the Group as at 30 June
2023 and 30 June 2022, and can be used to monitor foreign currency
risk as at that date.
At 30 June 2023, if Sterling weakened/strengthened by 10%
against US$ with all other variables held constant, the loss for
the year would have been US$27,000 lower/higher (2022: US$21,000
lower/higher). The HK$ is pegged to the US$ with the Hong Kong
Monetary Authority pledging to keep the exchange rate within a
trading band of 5 Hong Kong cents either side of HK$7.80 per
dollar. At present the rate is HK$7.84 per dollar so no downward
risk while the currency peg remains in place. The foreign exchange
risk is considered minimal and as such the Company does not
actively manage against this risk. If the HK$ weakened/strengthened
by 1% against the US$ with all other variables held constant, the
net assets and movement in foreign currency translation reserve
would have been US$1,009,000 higher/lower (2022: US$1,282,000
higher/lower). Any movement would have no other effect on the
remaining equity components of the Group. There are no material
transactions that would have effect on the profit/loss for the
year.
The Macanese Patacas ("MOP") is fixed to the HK$ at a rate of
MOP:HK$ of 1.03. Due to the low level of assets held in this
currency, a 10% change in rate would not have a significant effect
on the Consolidated Financial Statements.
As the HK$ is pegged to the US$ and the MOP is fixed to the US$
the foreign exchange risk of these currencies is considered minimal
as under the normal course of business the Group has minor exposure
to other currencies.
Movements in other currencies would not have a significant
impact on the Consolidated Financial Statements.
Other
US$ GBP HK$ currencies Total
As at 30 June 2023 US$'000 US$'000 US$'000 US$'000 US$'000
------- ------- --------- ----------- ---------
Trade and other receivables
(excluding prepayments) - - - 16 16
------- ------- --------- ----------- ---------
Cash and cash equivalents 1 1 1,108 8 1,118
------- ------- --------- ----------- ---------
Deposits with lenders - - 5,608 - 5,608
------- ------- --------- ----------- ---------
Total financial assets 1 1 6,716 24 6,742
------- ------- --------- ----------- ---------
Trade and other payables 275 268 1,976 662 3,181
------- ------- --------- ----------- ---------
Interest-bearing loans - - 105,632 - 105,632
------- ------- --------- ----------- ---------
Total financial liabilities 275 268 107,608 662 108,813
------- ------- --------- ----------- ---------
Net financial position (274) (267) (102,892) (638) (102,071)
------- ------- --------- ----------- ---------
Other
US$ GBP HK$ currencies Total
As at 30 June 2022 US$'000 US$'000 US$'000 US$'000 US$'000
------- ------- --------- ----------- ---------
Trade and other receivables
(excluding prepayments) - - - 16 16
------- ------- --------- ----------- ---------
Cash and cash equivalents - 17 333 5 355
------- ------- --------- ----------- ---------
Deposits with lenders - - 3,456 - 3,456
------- ------- --------- ----------- ---------
Total financial assets - 17 3,789 21 3,827
------- ------- --------- ----------- ---------
Trade and other payables 121 228 1,004 666 2,019
------- ------- --------- ----------- ---------
Interest-bearing loans - - 130,992 - 130,992
------- ------- --------- ----------- ---------
Total financial liabilities 121 228 131,996 666 133,011
------- ------- --------- ----------- ---------
Net financial position (121) (211) (128,207) (645) (129,184)
------- ------- --------- ----------- ---------
b) Cash flow and fair value interest rate risk
The Group's interest rate risk is managed by the Manager, in
accordance with policies and procedures in place and can be
mitigated through the use of interest rate swaps. The Manager has
assessed the interest rate risk as not significant and therefore
there were no interest rate swaps held during the current or prior
years. The Group's overall positions and exposures are monitored on
a quarterly basis by the Board of Directors.
If interest rates had been 500 bps higher/lower and all other
variables were held constant, the Group's loss for the year would
have increased/decreased by US$4,945,000 (2022: loss for the year
increased/decreased by US$1,272,000 based on 1% movement) (based on
the interest bearing net financial liability per the table below).
This is mainly due to the Group's exposure to interest-bearing
loans. There was significant increase in interest rates between
2022 and 2023 so a 5% movement is reasonable.
The following table details the Group's exposure to interest
rate risks:
Interest Non-interest
As at 30 June 2023 bearing bearing Total
US$'000 US$'000 US$'000
-------- ------------ -------
Trade and other receivables (excluding prepayments) - 16 16
-------- ------------ -------
Cash and cash equivalents 1,118 - 1,118
-------- ------------ -------
Deposits with lenders 5,608 - 5,608
-------- ------------ -------
Total financial assets 6,726 16 6,742
-------- ------------ -------
Trade and other payables - 3,181 3,181
-------- ------------ -------
Interest-bearing loans 105,632 - 105,632
-------- ------------ -------
Total financial liabilities 105,632 3,181 108,813
-------- ------------ -------
Interest Non-interest
As at 30 June 2022 bearing bearing Total
US$'000 US$'000 US$'000
-------- ------------ -------
Trade and other receivables (excluding prepayments) - 16 16
-------- ------------ -------
Cash and cash equivalents 355 - 355
-------- ------------ -------
Deposits with lenders 3,456 - 3,456
-------- ------------ -------
Total financial assets 3,811 16 3,827
-------- ------------ -------
Trade and other payables - 2,019 2,019
-------- ------------ -------
Interest-bearing loans 130,992 - 130,992
-------- ------------ -------
Total financial liabilities 130,992 2,019 133,011
-------- ------------ -------
Credit risk
Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Group. The Group is exposed to credit
risks from both its leasing activities and financing activities,
including deposits with banks and financial institutions.
The Group's main exposure to credit risk is its cash balances
with banks. This risk is mitigated through using banks with a high
credit rating. The Group's cash and cash equivalents and deposits
with lenders are all held with investment grade banks and the
majority are held with a bank with a credit rating of A or
higher.
The Group's cash and cash equivalents have the following ratings
from Fitch and Moody's Ratings:
2023 2022
Credit Rating US$'000 US$'000
------- -------
AA- 1,102 218
------- -------
A+ 2 2
------- -------
A 13 110
------- -------
BBB+ 1 25
------- -------
1,118 355
------- -------
The Group's deposits with lenders with the following ratings
from Fitch and Moody's Ratings:
2023 2022
Credit Rating US$'000 US$'000
------- -------
AA- 5,480 3,329
------- -------
BBB+ 128 127
------- -------
5,608 3,456
------- -------
The Group is exposed to loss of rental income and increase in
costs, such as legal fees, if tenants fail to meet their payment
obligations under their leases. The Group seeks to mitigate default
risk by diversifying its tenant base and requiring deposits or
guarantees from banks or parent companies, where there is a
perceived credit risk or in accordance with prevailing market
practice.
All of the Group's major tenants have met their rental
requirements within the terms of arrangement and no material
receivables which are past due have been impaired.
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of financial asset.
The Group's financial assets subject to the ECL model within
IFRS 9 are cash and cash equivalents, deposits with lenders and
trade and other receivables. There is not considered to be any
concentration of credit risk within these assets. The amount of ECL
on cash and cash equivalents and deposit with lenders are
considered to be US$nil considering the credit quality as indicated
on the credit risk tables.
None of the Group's financial assets are past their due date as
at the current or prior year end.
Liquidity risk
The Group adopts a prudent approach to liquidity management and
maintains sufficient cash reserves and borrowings to meet its
obligations. The Group is able to obtain funding through credit
facilities to meet its current liabilities and property development
expenditure in addition to cash currently held.
It is anticipated that the remaining debt obligations that are
due over the going concern period will be settled from sales
proceeds that are to be generated from the ongoing divestments or
the Group will need to arrange refinancing if necessary, see the
Going Concern section.
The Manager is responsible for the relationship with the Group's
lenders for monitoring compliance with loan terms and covenants and
reporting to the Board on a regular basis all key matters arising.
The Manager also maintains good relationships with other banks and
explores refinancing options as part of its contingency planning.
Throughout the year ended 30 June 2023 and up to the date of issue
of the financial statements, the Group has continued to be in
compliance with loan covenants and has maintained frequent ongoing
dialogue with all lenders who have demonstrated strong support for
the Group over the years, including the distressed COVID periods.
Their indications are that this support will continue for the Group
and in respect of the loans on the underlying properties.
Given the fact that all banking facilities of the Group have
been successfully renewed previously, with the loan-to-value ratios
of the facilities maintained within the covenants required under
the respective loan agreements, the Board is confident that the
Group would be able to arrange refinancing for debt obligations
that exceed funding available from divestments.
Deposits amounting to US$5,608,000 (2022: US$3,456,000) have
been pledged to secure banking facilities, of which US$1,170,000
(2022: US$1,561,000) relates to long-term banking facilities, and
are, therefore, classified as non-current assets. Pledged bank
balances represent deposits pledged to the banks to secure the
banking facilities granted to the Group.
As at 30 June 2023, the Group has term loan facilities with Hang
Seng Bank, Banco Tai Fung and Banco Comercial de Macau, S. A. ("BCM
Bank") for its investments in The Waterside, The Fountainside, and
Penha Heights respectively. The Group's liquidity position is
monitored by the Manager and is reviewed quarterly by the Board.
Please refer to Note 8 for details of the facilities.
The table below analyses the Group's financial assets and
liabilities into relevant maturity profiles based on the remaining
period at the Consolidated Statement of Financial Position date to
the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows (including interest
payable).
Less 1 to 2 to
On than 3 to 2 5 Over
demand 3 months 12 months years years 5 years Total
As at 30 June 2023 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------- --------- ---------- -------- -------- -------- ---------
Trade and other receivables
(excluding prepayments) - - - 16 - - 16
------- --------- ---------- -------- -------- -------- ---------
Cash and cash equivalents 1,118 - - - - - 1,118
------- --------- ---------- -------- -------- -------- ---------
Deposits with lenders - 4,363 75 128 1,042 - 5,608
------- --------- ---------- -------- -------- -------- ---------
Total financial assets 1,118 4,363 75 144 1,042 - 6,742
------- --------- ---------- -------- -------- -------- ---------
Trade and other payables - 3,181 - - - - 3,181
------- --------- ---------- -------- -------- -------- ---------
Interest-bearing loans - 11,083 18,465 41,465 44,556 1,305 116,874
------- --------- ---------- -------- -------- -------- ---------
Total financial liabilities - 14,264 18,465 41,465 44,556 1,305 120,055
------- --------- ---------- -------- -------- -------- ---------
Net financial position 1,118 (9,901) (18,390) (41,321) (43,514) (1,305) (113,313)
------- --------- ---------- -------- -------- -------- ---------
Less 1 to 2 to
On than 3 to 2 5 Over
As at 30 June 2022 demand 3 months 12 months years years 5 years Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------- --------- ---------- -------- -------- -------- ---------
Trade and other receivables
(excluding prepayments) - - - 16 - - 16
------- --------- ---------- -------- -------- -------- ---------
Cash and cash equivalents 355 - - - - - 355
------- --------- ---------- -------- -------- -------- ---------
Deposits with lenders - 1,895 - 127 1,434 - 3,456
------- --------- ---------- -------- -------- -------- ---------
Total financial assets 355 1,895 - 143 1,434 - 3,827
------- --------- ---------- -------- -------- -------- ---------
Trade and other payables - 2,019 - - - - 2,019
------- --------- ---------- -------- -------- -------- ---------
Interest-bearing loans - 19,502 9,052 34,239 72,823 2,635 138,251
------- --------- ---------- -------- -------- -------- ---------
Total financial liabilities - 21,521 9,052 34,239 72,823 2,635 140,270
------- --------- ---------- -------- -------- -------- ---------
Net financial position 355 (19,626) (9,052) (34,096) (71,389) (2,635) (136,443)
------- --------- ---------- -------- -------- -------- ---------
The table below analyses the Group's changes in financial
liabilities arising from financing activities.
Foreign
1 July Exchange Profit 30 June
2022 Cashflows Movement Other and Loss 2023
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------- --------- --------- -------- --------- -------
Current interest-bearing
loans 25,616 (25,513) 35 23,325 - 23,463
------- --------- --------- -------- --------- -------
Non-current interest-bearing
loans 105,376 - 117 (23,325) - 82,168
------- --------- --------- -------- --------- -------
Loan arrangement fees (837) (26) - - 339 (524)
------- --------- --------- -------- --------- -------
Net interest-bearing loans 130,155 (25,539) 152 - 339 105,107
------- --------- --------- -------- --------- -------
Interest payable 84 (4,564) - - 5,447 967
------- --------- --------- -------- --------- -------
Total 130,239 (30,103) 152 - 5,786 106,074
------- --------- --------- -------- --------- -------
Foreign
1 July Exchange Profit 30 June
2021 Cashflows Movement Other and Loss 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------- --------- --------- -------- --------- -------
Current interest-bearing
loans 21,225 (21,001) (224) 25,616 - 25,616
------- --------- --------- -------- --------- -------
Non-current interest-bearing
loans 115,417 16,785 (1,210) (25,616) - 105,376
------- --------- --------- -------- --------- -------
Loan arrangement fees (1,212) (51) - - 426 (837)
------- --------- --------- -------- --------- -------
Net interest-bearing loans 135,430 (4,267) (1,434) - 426 130,155
------- --------- --------- -------- --------- -------
Interest payable 56 (2,962) - - 2,990 84
------- --------- --------- -------- --------- -------
Total 135,486 (7,229) (1,434) - 3,416 130,239
------- --------- --------- -------- --------- -------
The 'Other' column includes the effect of reclassification of
non-current portion of interest-bearing loans to current due to the
passage of time. The Group classifies interest paid as cash flows
from financing activities.
Fair value hierarchy
Financial investments measured at fair value
IFRS 13 requires disclosure of fair value measurements by level
as discussed in Note 1.
For all financial instruments, other than those recognised at
fair value or whose fair value is disclosed within these financial
statements, carrying value of the financial asset/liability is an
approximation of their fair value.
Capital risk management
The Group's objectives, when managing capital, are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders, and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debt.
The Group's objective is to provide shareholders with an
attractive total return, derived from the disposal of its remaining
real estate assets. The timing and amount of rental or other income
cannot be predicted.
Any cash received by the Company as part of the realisation
process will be held by the Company as cash on deposit and/or as
cash equivalents prior to its distribution to shareholders, which
shall be at such intervals as the Board considers appropriate.
During the year ended 30 June 2023, there were no borrowings
other than the Group's loan facilities in place which are
classified as interest bearing loans in the Consolidated Statement
of Financial Position.
Discount management policy
The Board closely monitors the discount to Adjusted Net Asset
Value (adjusted NAV) at which the Company's shares trade and has
sought shareholders' approval of powers to buy shares in the market
to moderate the volatility of the discount. These powers will be
sought again at the forthcoming AGM. The Board is also very mindful
of the working capital operating needs of the Company when
considering buying back its shares in the market.
During the year ended 30 June 2023, the Company did not purchase
any ordinary shares under the discount management policy.
Shares which are bought back by the Company may either be
cancelled or held in treasury and subsequently re-issued. Pursuant
to the Companies (Guernsey) Law, the number of shares of any class
held as treasury shares must not, at any time, exceed 10% of the
total number of issued shares of that class at that time. The
authority to buy back up to 14.99% per annum of shares in issue is
renewed at each AGM of the Company by special resolution.
The Board remains committed to its discount management
policy.
3. Critical accounting estimates, assumptions and judgements
The Directors' and Investment Adviser (the "management") make
estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the actual
results. Accounting estimates are monetary amounts that are subject
to measurement uncertainty. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are outlined below:
a) Fair value of the investment property, NRV and Adjusted NAV
are based on the current market valuation provided by Savills, an
independent valuer. Savills is required to make assumptions on
establishing the current market valuation. The most significant
assumptions (as described further in Note 6), relate to future
income streams and discount rates applicable to these estimates.
The valuation has been made on the assumption that the owner sells
the properties in the open market without a deferred term contract,
leaseback, joint venture, management agreement or any similar
arrangement, which could serve to affect the value of the
properties. The Board and management have reviewed the valuations
and are in agreement with the valuer's judgement. Some properties
have been sold at a discount in the current year but there were
particular reasons for this and it is not indicative of a lower
fair value. Some properties have been sold at a discount in the
current year but there were particular reasons for this and it is
not indicative of a lower fair value. This is an accounting
estimate and assumption.
b) Inventory is stated at the lower of cost and NRV. NRV for
completed inventory property is assessed with reference to market
conditions and prices existing at the reporting date, and is
determined by the Group, having taken suitable external advice and
in the light of recent market transactions. NRV in respect of
inventory property under construction (see Note 7), is assessed
with reference to market prices at the reporting date for similar
completed property, less estimated costs to complete construction
and less an estimate of the time value of money to the date of
completion. This is an accounting estimate.
c) The property at The Waterside is classified as Investment
Property under IAS 40 and is measured at fair value. The Board have
considered that IFRS 5 - Non-current Assets Held for Sale and
Discontinued Operations does not apply as the property are not
expected to be sold within one year from the statement of financial
position date.
The Group did not make any critical accounting judgements, other
than as described above, in the year ended 30 June 2023 or in the
year ended 30 June 2022.
4. Subsidiaries
All SPVs are owned 100% by the Company. There are no significant
restrictions on the ability to access or use the assets to settle
the liabilities of the Group. The following subsidiaries, active
for both the 30 June 2023 and 30 June 2022 year ends, have a year
end of 31 December to coincide with the Macanese tax year and are
the only subsidiaries which do not have the same year end as the
Company:
* MPOF Macau (Site 2) Limited * The Fountainside Company Limited
* The Waterside Company Limited
* MPOF Macau (Site 5) Limited
* Castelo Branco Companhia Limitada
The Consolidated Financial Statements include the financial
statements of the Company and the subsidiaries listed below:
Ownership Incorporation Ownership Incorporation
MPOF Macau (Site 2)
Limited(2) 100% Macau Cannonball Limited(1) 100% Guernsey
--------- ------------- ------------------------- --------- --------------------------
MPOF Macau (Site 5)
Limited(2) 100% Macau Civet Limited(1) 100% Guernsey
--------- ------------- ------------------------- --------- --------------------------
The Waterside Company Gorey Hills International British Virgin Islands
Limited 100% Macau Limited(1) 100% ("BVI")
--------- ------------- ------------------------- --------- --------------------------
The Fountainside Company Hillsleigh Holdings
Limited 100% Macau Limited(1) 100% BVI
--------- ------------- ------------------------- --------- --------------------------
Castelo Branco Companhia East Base Properties
Limitada 100% Macau Limited(2) 100% Hong Kong
--------- ------------- ------------------------- --------- --------------------------
Eastway Properties
MPOF (Jose) Limited(1) 100% Guernsey Limited(2) 100% Hong Kong
--------- ------------- ------------------------- --------- --------------------------
MPOF (Sun) Limited(1) 100% Guernsey
--------- ------------- ------------------------- --------- --------------------------
MPOF (Guia) Limited(1) 100% Guernsey
--------- ------------- ------------------------- --------- --------------------------
MPOF (Antonio) Limited(1) 100% Guernsey
--------- ------------- ------------------------- --------- --------------------------
1 Company is a holding company.
2 Company is an investment holding company.
5. Segment reporting
The Chief Operating Decision Maker (the "CODM") in relation to
the Company is deemed to be the Board itself. The factors used to
identify the Group's reportable segments are centred on asset class
and differences in both geographical area and regulatory
environment. Furthermore, foreign exchange and political risks are
identified, as these also determine where resources are
allocated.
Based on the above and a review of information provided to the
Board, it has been concluded that the Group is currently organised
into one reportable segment based on the geographical area,
Macau.
This segment refers principally to residential properties.
Furthermore, there are multiple individual properties that are held
within each property type. However, the CODM considers, on a
regular basis, the operating results and resource allocation of the
aggregated position of all property types as a whole, as part of
its ongoing performance review. This is supported by a further
breakdown of individual property groups only to help support their
review and investment appraisal objectives.
Information about major customers
The Group does not have any customers or rental agreements which
represent more than 10% of Group's revenues. Revenues represented
by rental income were US$1,122,000 for the year ended 30 June 2023
(2022: US$1,082,000).
6. Investment property
2023 2022
US$'000 US$'000
-------- --------
At the beginning of the year 181,520 199,629
-------- --------
Capital expenditure on property 27 288
-------- --------
Disposals (37,293) -
-------- --------
Fair value adjustment (3,412) (16,380)
-------- --------
Exchange difference 203 (2,017)
-------- --------
Balance at end of the year 141,045 181,520
-------- --------
Valuation gains/(losses) (fair value adjustment) from investment
property are recognised in profit and loss for the year. These are
attributable to changes in unrealised gains/losses relating to
completed investment properties held at the end of the reporting
period.
The valuation process is initiated by the Investment Adviser who
appoints a suitably qualified valuer to conduct the valuation of
the investment property. The results are overseen by the Investment
Adviser. Once satisfied with the valuations based on their
expectations, the Investment Adviser reports the results to the
Board. The Board reviews the latest valuations based on its
knowledge of the property market and compares these to previous
valuations. The Group's investment properties were revalued at 30
June 2023 by an independent, professionally-qualified valuer,
Savills. The valuation has been carried out in accordance with the
current Royal Institution of Chartered Surveyors (RICS) Appraisal
and Valuation Standards to calculate the market value of the
investment properties in their existing state and physical
condition, with the assumptions that:
-- The owner sells the property in the open market without any
arrangement, which could serve to affect the value of the
property.
-- The property is held for investment purposes.
-- The property is free from encumbrances, restrictions and
outgoings of any onerous nature which could affect its value.
The fair value of investment property is determined by Savills,
using recognised valuation techniques. The principal technique
deployed is the income capitalisation method. The determination of
the fair value of investment property requires the use of estimates
such as future cash flows from assets (such as lettings, tenants'
profiles, future revenue streams, capital values of fixtures and
fittings, any environmental matters and the overall repair and
condition of the property) and discount rates applicable to those
assets. These estimates are based on the local market conditions
existing at the reporting date.
Capital expenditure on property during the year relates to
fit-out costs for The Waterside.
During the year 13 units were sold at The Waterside with net
losses on disposal of investment properties of US$1,909,000
recognised. There were no disposals in the year ended 30 June
2022.
The market value as at 30 June 2023 as determined by the
independent, professionally-qualified valuer, Savills, was
US$141,045,000 (2022: US$181,520,000).
Rental income arising from The Waterside of US$1,114,000 (2022:
US$1,079,000) was received during the year. Direct operating
expenses of US$772,000 (2022: US$866,000) arising from rented units
were incurred during the year. Direct operating expenses during the
year arising from vacant units totalled US$279,000 (2022:
US$369,000).
The following tables show the most appropriate presentation of
the inputs used in valuing the investment property which is
classified as Level 3 in the fair value hierarchy:
Carrying
amount/fair Unobservable
value as and observable
at inputs used
Property 30 Jun 2023 Valuation in determination Other key
information US$'000 technique Input of fair values information
Name The Waterside 141,045 Term and Term rent HK$17.0 Age of building
Reversion (inclusive psf
Analysis of management
fee and furniture)
---------------------- ------------- ----------- ------------------- ----------------- ---------------
Type Residential/Completed Term yield 1.55%-2.2% Remaining
apartments (exclusive useful life
of management of building
fee and furniture)
---------------------- ------------- ----------- ------------------- ----------------- ---------------
Location One Central Reversionary HK$13.04
Tower 6 Macau rent (exclusive psf
of management
fee and furniture)
---------------------- ------------- ----------- ------------------- ----------------- ---------------
Reversionary
yield 1.55%
------------------------------------------------------------------------------ ----------------- ---------------
Carrying
amount/fair Unobservable
value as and observable
at inputs used
Property 30 Jun 2022 Valuation in determination Other key
information US$'000 technique Input of fair values information
Name The Waterside 181,520 Term and Term rent HK$17.5 psf Age of building
Reversion (inclusive
Analysis of management
fee and furniture)
---------------------- ------------- ----------- ------------------- ----------------- ---------------
Type Residential/Completed Term yield 1.4%-2.2% Remaining
apartments (exclusive useful life
of management of building
fee and furniture)
---------------------- ------------- ----------- ------------------- ----------------- ---------------
Location One Central Reversionary HK$13.16
Tower 6 Macau rent (exclusive psf
of management
fee and furniture)
---------------------- ------------- ----------- ------------------- ----------------- ---------------
Reversionary
yield 1.55%
------------------------------------------------------------------------------ ----------------- ---------------
There have not been any transfers in the fair value hierarchy
during the current and prior years.
The fair value of The Waterside is determined using the income
approach, more specifically a term and reversion analysis, where a
property's fair value is estimated based on the rent receivable and
normalised net operating income generated by the property, which is
divided by the capitalisation (discount) rate. The difference
between gross and net rental income includes the same expense
categories as those for the discounted cash flow method with the
exception that certain expenses are not measured over time, but
included on the basis of a time weighted average, such as the
average lease up costs. Under the income capitalisation method,
over-and under-rent situations are separately capitalised
(discounted).
If the estimated reversionary rent increased/decreased by 5%
(and all other assumptions remained the same), the fair value of
The Waterside would increase or decrease by US$6.9 million (2022:
increase or decrease by US$8.3 million).
If the term or revisionary yield increased/decreased by 5% (and
all other assumptions remained the same), the fair value of The
Waterside would decrease by US$6.5 million or increase by US$7.3
million (2022: decrease by US$7.9 million or increase by US$8.8
million).
The Waterside is currently valued at its highest and best use.
There is no extra evidence available to suggest that it has an
alternative use that would provide a greater fair value
measurement.
There have been no transfers between levels during the period or
a change in valuation technique since the last period.
7. Inventories
2023 2022
US$'000 US$'000
------- -------
Cost
------- -------
Balance brought forward 34,635 34,924
------- -------
Additions 100 595
------- -------
Disposals - (518)
------- -------
Exchange difference 40 (366)
------- -------
Balance carried forward 34,775 34,635
------- -------
In the year ended 30 June 2022, one residential unit of The
Fountainside was sold for a total consideration of US$1.5 million
(HK$11.8 million) against a total cost of US$0.6 million (HK$4.4
million) which resulted in a net profit of US$0.9 million (HK$7.4
million) after all associated fees and transaction costs. There are
no disposals which occurred in the year ended 30 June 2023.
Additions include capital expenditure, development costs and
capitalisation of financing costs.
Under IFRS, inventories are valued at the lower of cost and NRV.
The carrying amounts for inventories as at 30 June 2023 amounts to
US$34,775,000 (2022: US$34,635,000). The market value as at 30 June
2023 as determined by the independent, professionally-qualified
valuer, Savills, was US$59,503,000 (2022: US$60,479,000). The NRV
as at 30 June 2023 was US$57,718,000 (2022: US$58,661,000).
If the estimated unit rate increased/decreased by 5% (and all
other assumptions remained the same), the fair value of the
properties would increase by US$2.9 million or decrease by US$2.8
million (2022: increase by US$3.0 million or decrease by US$2.8
million).
8. Interest-bearing loans
2023 2022
US$'000 US$'000
------- -------
Bank loans - Secured
------- -------
- Current portion 23,194 25,303
------- -------
- Non-current portion 81,913 104,852
------- -------
105,107 130,155
------- -------
There are interest-bearing loans with three banks:
Hang Seng Bank
The Group has a term loan facility with Hang Seng Bank for The
Waterside which consisted of various tranches executed over the
years. During the year, the Group executed a new tranche for a
HK$50 million (US$6.4 million) nine month term loan facility to
partially finance the loan repayments that was due in September
2022.
As at 30 June 2023, outstanding loan balance was HK$661 million
(US$84.3 million) (2022: HK$845 million (US$107.7 million)). The
interest rate is 1.8% per annum over the 1-, 2-or 3-month HIBOR
rate, the choice of rate is at the Group's discretion. The
loan-to-value covenant is 60%. As at 30 June 2023, the
loan-to-value ratio was 56.9% (2022: 59.3%). The facility is
secured by means of a first registered legal mortgage over all
unsold units of The Waterside as well as a pledge of all income
from the units. The Company is the guarantor for the credit
facility. In addition, the Group is required to maintain a cash
reserve equal to six months' interest with the lender. The
principal is to be repaid in half yearly instalments with HK$60
million (US$7.7 million) due in September 2023; HK$75 million
(US$9.6 million) due in March 2024; HK$90 million (US$11.5 million)
due in September 2024; HK$125 million (US$15.9 million) due in
March 2024; and the remaining HK$311 million (US$39.7 million) due
upon maturity in September 2025.
The principal repayment due in September 2023 of HK$60 million
(US$7.7 million) has been partially settled subsequent to the year
end. Please refer to Note 25 for details.
The Group has a loan facility with Hang Seng Bank for The
Fountainside:
The Facility amount is HK$96 million (US$12.2 million) divided
into 2 tranches, with a tenor of 4 years to mature in March 2024.
Tranche A is a facility for an amount of HK$89 million (US$11.3
million). Tranche B is a facility for an amount of HK$7 million
(US$0.9 million) for financing the alteration costs of The
Fountainside. Tranche A facility has been fully drawn down while
amount of HK$5.2 million (US$0.7 million) has been drawn down for
Tranche B facility. The interest rates applicable to Tranche A and
Tranche B are 2.8% per annum and 3.3% per annum respectively over
the 1-, 2- or 3-month HIBOR rate. The choice of rate is at the
Group's discretion. The principal of Tranche A is to be repaid
half-yearly with HK$14.7 million (US$1.9 million) due in September
2023 and the remaining balance due upon maturity, while repayment
for Tranche B is due in full at maturity. The loan-to-value
covenant is 55%. The facility is secured by means of a first
registered legal mortgage over all unsold units and car parking
spaces of The Fountainside as at the loan facility date as well as
a pledge of all income from the units and the car parking spaces.
The Company is the guarantor for the credit facility. In addition,
the Group is required to maintain a cash reserve equals to six
months' interest with the lender.
As at 30 June 2023, the facility had an outstanding balance of
HK$43.9 million (US$5.6 million) (2022: HK$43 million (US$5.5
million)) and the loan-to-value ratio was 31.50% (2022:
29.86%).
Properties pledged under loan facilities for The Waterside and
The Fountainside cross-collateralised both facilities. The combined
loan-to-value ratio of the two facilities was 54.1%.
The principal repayment due in September 2023 of HK$14.7 million
(US$1.9 million) has been settled in full subsequent to the year
end. Please refer to Note 25 for details.
The Group has two loan facilities for Penha Heights:
Banco Tai Fung
The loan facility with Banco Tai Fung had a term of seven years
and the facility amount was HK$70 million (US$8.9 million).
Interest was Prime Rate minus 2.25% per annum. The principal is to
be repaid in 28 quarterly instalments of HK$2.5 million
(US$318,975) each, commencing in September 2022. As at 30 June
2023, the facility had an outstanding balance of HK$60 million
(US$7.7 million) (2022: HK$70 million (US$8.9 million)). This
facility is secured by a first legal mortgage over the property as
well as a pledge of all income from the property. The Company is
the guarantor for this term loan. Interest is paid quarterly for
the first six month and monthly thereafter on this loan facility.
As at 30 June 2023, the loan-to-value ratio was 40.27% (2022:
46.36%).
There is no loan-to-value covenant for this loan.
The principal repayment due in September 2023 has been deferred.
Please refer to Note 25 for details.
BCM Bank
The loan facility with BCM Bank had a term of 2 year and the
facility amount is HK$70 million (US$8.9 million). The interest
rate is 2.55% per annum over the 3-month HIBOR rate. The principal
is to be repaid in quarterly instalments commencing in March 2023
with 90% of the principal due upon maturity. As at 30 June 2023,
the facility had an outstanding balance of HK$63 million (US$8
million) (2022: HK$70 million (US$8.9 million)). This facility is
secured by a first legal mortgage over the property as well as a
pledge of all income from the property. The Company is the
guarantor for this term loan. In addition, the Group is required to
maintain a cash reserve equal to six months' interest with the
lender. Interest is paid monthly on this loan facility. The
loan-to-value covenant is 50%. As at 30 June 2023, the
loan-to-value ratio for this facility was 35.39% (2022:
38.89%).
The principal repayment due in September 2023 has been deferred.
Please refer to Note 25 for details.
Bank Loan Interest
Bank loan interest incurred during the year was US$5,440,000
(2022: US$2,985,000), including US$nil (2022: US$nil) capitalised
during the year (see Note 7).
Amortised loan arrangement fees for the year are disclosed in
Note 14.
Fair Value
Interest-bearing loans are carried at amortised cost. The fair
value of fixed rate financial assets and liabilities carried at
amortised cost are estimated by comparing market interest rates
when they were first recognised with current market rates for
similar financial instruments.
The estimated fair value of fixed interest bearing loans is
based on discounted cash flows using prevailing market interest
rates for debts with similar credit risk and maturity. As at 30
June 2023, the fair value of the interest-bearing loans was
US$100,000 higher than the carrying value of the financial
liabilities (2022: the fair value of the interest-bearing loans was
US$462,000 lower than the carrying value of the financial
liabilities).
The Group's interest-bearing loans have been classified within
Level 2, as they have observable inputs from similar loans. There
have been no transfers between levels during the period or a change
in valuation technique since the last period.
9. Taxation
The Company is exempt from taxation in Guernsey under the
provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinances,
1989 to 1992, and is charged an annual exemption fee of GBP1,200
(US$1,492) (2022: GBP1,200 (US$1,469)).
The Group would only be exposed to Hong Kong profits tax if it
is:
(i) not exempted under the Revenue (Profits Tax Exemption for Offshore Funds) Ordinance 2006 (the "Ordinance"); and
(ii) treated as carrying on a trade or business in Hong Kong
either on its own account or through any person as an agent.
No accrual has been made for Hong Kong profits tax, as the Board
believes that no such tax exposure exists at the end of the
reporting year (2022: US$nil).
The Group is not subject to any income, withholding or capital
gains taxes in the BVI. No capital or stamp duties are levied in
the BVI on the issue, transfer or redemption of shares. As a
result, no provision for BVI taxes has been made in the
Consolidated Financial Statements.
The Macanese SPVs are liable to Macau Property Tax in respect of
their ownership of Macau properties. Taxation will be charged at 8%
(2022: 8%) of any rent received for rental properties or 6% (2022:
6%) of the official ratable rentable value for self-use properties.
Newly built residential buildings or commercial buildings were
exempted from Property Tax for four years and six years,
respectively (such time running from the month after the occupancy
permit is issued) for properties located in Macau peninsula and
outlying islands. Macau Complementary Taxes ("MCT") are generally
levied on income and profits arising in or derived from commercial
and/or industrial activities carried on in Macau. There is no
distinction made between a "revenue profit" and "capital profit"
under the MCT regulations. Accordingly, income in accordance with
MCT regulations booked by a Macau corporate taxpayer, including
gains on sale of investment/immovable property, will be subject to
MCT. Under prevailing practice, gains on the disposal of shares in
a Macau company (such as an SPV of the Company) by a non-Macau
entity should generally not attract MCT.
The Board closely monitors and assesses the level of provisions
for Macanese tax taking into consideration factors such as the
Group's structure.
As at the year-end, the following amounts are the outstanding
tax provisions.
2023 2022
US$'000 US$'000
------- -------
Non-current liabilities
------- -------
Deferred taxation 7,498 9,706
------- -------
Provisions for Macanese taxations 1,158 579
------- -------
8,656 10,285
------- -------
Deferred taxation
The Group has recognised a deferred tax liability for the
taxable temporary difference relating to the investment property
carried at fair value and has been calculated at a rate of 12% as
relates to Macau taxation.
Provisions for Macanese taxations
The Group has made provisions for property tax and complementary
tax arising from its Macau business operations.
Major components of taxation
2023 2022
US$'000 US$'000
------- -------
Provision to property tax (note 15) (262) (291)
------- -------
Movement in deferred taxation provision 2,219 1,965
------- -------
Provision for MCT (776) (125)
------- -------
The differences between the taxation charge for the year and the
movement in taxation provisions are due to the foreign exchange
rate movements and Macanese taxation paid during the year.
10. Trade and other receivables
Current assets 2023 2022
US$'000 US$'000
------- -------
Prepayments 66 53
------- -------
11. Trade and other payables
Current liabilities 2023 2022
US$'000 US$'000
------- -------
Accruals 626 370
------- -------
Other payables 2,555 1,649
------- -------
3,181 2,019
------- -------
Other payables principally comprise outstanding amounts for
operating expenses.
12. Share capital
Ordinary shares 2023 2022
US$'000 US$'000
------- -------
Authorised:
------- -------
300 million ordinary shares of US$0.01 each 3,000 3,000
------- -------
Issued and fully paid:
------- -------
61.8 million (2022: 61.8 million) ordinary shares
of US$0.01 each 618 618
------- -------
The Company has one class of ordinary shares which carries no
rights to fixed income.
The Board has publicly stated its commitment to undertake share
buybacks at attractive levels of discount of the share price to
Adjusted NAV. In order to continue this strategy, the Board intends
to renew this authority at the 2023 AGM.
No redemption of shares was made during the current or prior
year.
There are no restrictions on the distribution of dividends and
repayment of capital.
13. General and administration expenses
General and administration expenses 2023 2022
US$'000 US$'000
------- -------
Legal and professional 41 200
------- -------
Holding Company administration 111 127
------- -------
Guernsey SPV administration 56 63
------- -------
BVI, Hong Kong, & Macanese SPV administration 46 52
------- -------
Insurance costs 14 15
------- -------
Listing fees 19 19
------- -------
Printing & postage 28 22
------- -------
Other operating expenses 135 117
------- -------
450 615
------- -------
14. Other financing costs
Financing costs 2023 2022
US$'000 US$'000
------- -------
Bank charges 7 5
------- -------
Loan arrangement fees 339 426
------- -------
346 431
------- -------
As at 30 June 2023, unamortised loan arrangement fees were
US$524,000 (2022: US$837,000). These have been netted off against
the interest bearing loans and also split between current and
non-current.
15. Property operating expenses
Property operating expenses 2023 2022
US$'000 US$'000
------- -------
Property management fees 502 601
------- -------
Leasing and property management service fee (Note
20) 351 350
------- -------
Property taxes 262 291
------- -------
Utilities 5 10
------- -------
Other property expenses 157 120
------- -------
1,277 1,372
------- -------
16. Sales and marketing expenses
Sales and marketing expenses 2023 2022
US$'000 US$'000
------- -------
Agent commission (note 20) 76 115
------- -------
17. Cash flows from operating activities
2023 2022
US$'000 US$'000
-------- --------
Cash flows from operating activities
-------- --------
Loss for the year before tax (13,450) (20,931)
-------- --------
Adjustments for:
-------- --------
Loss on disposal of investment property 1,909 -
-------- --------
Net loss from fair value adjustment on investment
property 3,412 16,380
-------- --------
Net finance costs 5,786 3,416
-------- --------
Operating cash flows before movements in working
capital (2,343) (1,135)
-------- --------
Effects of foreign exchange rate changes 34 (298)
-------- --------
Movement in trade and other receivables (13) 545
-------- --------
Movement in trade and other payables 243 775
-------- --------
Movement in inventories (100) (77)
-------- --------
Net change in working capital 130 1,243
-------- --------
Taxation paid (162) (212)
-------- --------
Net cash used in operating activities (2,341) (402)
-------- --------
Cash and cash equivalents (which are presented as a single class
of assets on the face of the Consolidated Statement of Financial
Position) comprise cash at bank and other short-term, highly-liquid
investments with a maturity of three months or less. For both year
ends, there are no cash equivalents held by the Group.
18. Basic and diluted loss per ordinary share and net asset
value per share
The basic and diluted loss per equivalent ordinary share is
based on the loss attributable to equity holders for the year of
US$12,007,000 (2022: loss of US$19,091,000) and on the 61,835,733
(2022: 61,835,733) weighted average number of ordinary shares in
issue during the year.
30 June 2023 30 June 2022
Weighted Weighted
Average Average
No. of Loss No. of Loss
Loss Attributable Shares Per Share Loss Attributable Shares Per Share
----------------- -------- ---------- ----------------- -------- ----------
US$'000 '000s US$ US$'000 '000s US$
----------------- -------- ---------- ----------------- -------- ----------
Basic and diluted (12,007) 61,836 (0.1942) (19,091) 61,836 (0.3087)
----------------- -------- ---------- ----------------- -------- ----------
Net asset value reconciliation 2023 2022
US$'000 US$'000
------- -------
Net assets attributable to ordinary shareholders 65,684 77,576
------- -------
Uplift of inventories held at cost to market value 24,728 25,844
------- -------
Adjusted NAV 90,412 103,420
------- -------
Number of ordinary shares outstanding ('000) 61,836 61,836
------- -------
NAV per share (IFRS) (US$) 1.06 1.25
------- -------
Adjusted NAV per share (US$) 1.46 1.67
------- -------
Adjusted NAV per share (GBP)* 1.16 1.38
------- -------
The NAV per share is arrived at by dividing the net assets as at
the date of the Consolidated Statement of Financial Position, by
the number of ordinary shares in issue at that date.
Under IFRS, inventories are carried at the lower of cost and NRV
(see Note 3 and Note 7). The NRV is determined by Savills and is
subject to significant estimation uncertainty. The Adjusted NAV
includes the uplift of inventories to their market values before
any tax consequences or adjustments.
The Adjusted NAV per share is arrived at by dividing the
Adjusted NAV as at the date of the Consolidated Statement of
Financial Position, by the number of ordinary shares in issue at
that date.
There are no potentially dilutive shares in issue.
* US$:GBP rate as at 30 June 2023 is 1.261 (2022: 1.212).
19. Related party transactions
Directors of the Company are all non-executive and by way of
remuneration, receive only an annual fee which is denominated in
Sterling.
2023 2022
US$'000 US$'000
------- -------
Directors' fees 167 170
------- -------
The Directors are considered to be the key management personnel
(as defined under IAS 24) of the Company. Directors' fees
outstanding as at 30 June 2023 were US$43,000 (2022:
US$41,000).
Sniper Capital Limited is the Manager to the Group and received
fees during the year, as detailed in the Consolidated Statement of
Comprehensive Income and on the basis described in Note 20.
Management fees for the year totalled US$1,200,000 (2022:
US$1,199,000). Management fees amounting to US$200,000 are
outstanding as at 30 June 2023 (2022: US$nil) (see Note 20).
Realisation fees for the year totalled US$98,000 (2022:
US$23,000) with US$98,000 outstanding as at 30 June 2023 (2022:
US$nil).
20. Material contracts
Management fee
Under the terms of an appointment made by the Board of Directors
of the Company on 23 May 2006, Sniper Capital Limited was appointed
as Manager to the Group. The original Management fee was calculated
at 2.0% of the net asset value, as adjusted to reflect the Property
Investment Valuation Basis, payable quarterly in advance. The
Property Investment Valuation Basis is the basis on which the
properties will be valued by an independent valuer being an open
market basis in accordance with RICS property valuation practice
and guidelines. It was reduced to 1.0% of the net asset value, as
adjusted to reflect the Property Investment Valuation Basis, from
the start of 2020 and further reduced to a quarterly fixed fee of
US$300,000 for the calendar year 2021 onwards. A management fee of
US$1,200,000 will be payable for 2023. Management fees for the year
totalled US$1,200,000 (2022: US$1,199,000) with US$200,000
outstanding as at 30 June 2023 (2022: US$nil).
Realisation fee
A realisation fee was payable on deals originated and secured by
the Manager in 2020 which was linked to the sales price achieved.
The realisation fee is currently active until 31 December 2023. The
realisation fee is payable upon the sale of individual properties
and becomes payable 10 business days after completion. Where the
sale price of the asset was 90% or more of the of the value of the
relevant asset as at 30 September 2019 (the "Carrying Value") a fee
of 2.5% of net proceeds (net of debt, costs and taxes) ("Net
Proceeds") was payable; where the sale price of an asset was more
than 80% but less than 90% of the Carrying Value of the relevant
asset, a realisation fee of 1.5% of Net Proceeds was payable; and
where the sale price of an asset is less than 80% of the Carrying
Value, no realisation fee was payable. In no circumstances will the
aggregate of the 2023 management fee and realisation fee exceed
US$1,780,000. Any realisation fee achieved on strata sales of units
at The Waterside will be subject to the retention of 50% until all
units have been sold. Realisation fees for the year totalled
US$98,000 (2022: US$23,000) with US$98,000 outstanding as at 30
June 2023 (2022: US$nil), of which US$49,000 (2022: US$nil) was
deferred until sale of all units at The Waterside.
The Manager's appointment is terminable by the Manager or the
Company on not less than 6 months' notice. The Company may
terminate the Management Agreement with immediate effect, if either
or both of the Principals are removed from their position of
full-time employment with the Manager or ceases to be available for
any reason beyond the Manager's reasonable control and the Manager
fails, within three months (or six months in the case of one only)
of such event, to cause to be made available the services of a
competent replacement(s) of equivalent skill and experience. The
Management Agreement may also be terminated with immediate effect
by either the Manager or the Company if the other party has gone
into liquidation, administration or receivership or has committed a
material breach of the Management Agreement.
Development Management Services Agreement
The Group and Headland entered into an Development Management
Services Agreement, under which Headland provides development
management services to the Group in respect of the Group's
properties that require development.
During the year, no development management services fees were
capitalised in investment property and inventories (2022: nil) and
none were outstanding (2022: nil).
Agency Services Agreement
The Group and Bela Vista entered into an Agency Services
Agreement, under which Bela Vista provides agency services to the
Group in respect of the sales of residential units and car and
motorbike parking spaces of The Fountainside as well as the
individual unit in One Central Residences. Bela Vista is paid an
agency services fee based on a percentage of the total sales
considerations.
During the year, no agency services fees (2022: US$30,000
(HK$236,000)) were paid. As at 30 June 2023, there was no
outstanding balance (2022: US$nil).
Leasing and Tenancy Management and Property Management Services
Agreement
The Group and Bela Vista entered into a Leasing and Tenancy
Management and Property Management Services Agreement, under which
Bela Vista provides property services to the Group in respect of
asset management, tenant management and leasing at The Waterside.
Bela Vista is paid a leasing and tenancy management fee based on a
percentage of the monthly rental receivable by The Waterside and
fixed fees for property management services and the staff costs and
overhead incurred.
During the year, leasing and tenancy management and property
management services fees of US$351,000 (HK$2,752,000) (2022:
US$350,000 (HK$2,792,000)) were paid. As at 30 June 2023, US$30,000
(2022: US$22,000) was outstanding.
21. Deposits with lenders
Pledged bank balances represent deposits pledged to the banks to
secure the banking facilities granted to the Group. Deposits
amounting to US$1.2 million (2022: US$1.6 million) have been
pledged to secure long-term banking facilities and are, therefore,
classified as non-current assets. There are no other significant
terms and conditions associated with these pledged bank
balances.
2023 2022
US$'000 US$'000
------- -------
Non-current 1,170 1,561
------- -------
Current 4,438 1,895
------- -------
Pledged for loan covenants 5,608 3,456
------- -------
22. Commitments and contingencies
As at 30 June 2023, the Group had agreed consultancy contracts
with an architectural firm, an engineering firm, an electrical
engineering firm and a quantity surveying consultancy firm and are
consequently committed to future capital expenditure in respect of
inventories of US$132,000 (2022: US$281,000).
23. Auditors' remuneration
All fees payable to the external auditor relate to audit
services except for US$9,000 (2022: US$9,000) that was payable to
Ernst & Young Macau in relation to non-audit services.
Auditors' remuneration was broken down as follows:
2023 2022
US$'000 US$'000
------- -------
Audit fees 162 131
------- -------
Other professional services 9 9
------- -------
171 140
------- -------
24. Operating leases - Group as lessor
The Group has entered into leases on its property portfolio.
Future minimum rentals receivable under non-cancellable
operating leases as at 30 June 2023 are as follows:
2023 2022
US$'000 US$'000
------- -------
Residential
------- -------
Within 1 year 733 625
------- -------
After 1 year, but not more than 5 years - -
------- -------
Total future rental income 733 625
------- -------
The majority of leases involve tenancy agreements with a term of
12 months. The Group has assessed the risks as minimal as the
leases held are all operating leases relating to the rental of
apartments in The Waterside to which the Group acts as lessor.
As at 30 June 2023, lease incentives on which the Group was
lessor amounted to US$51,000 (2022: US$48,000) with rent free
liabilities of US$36,000 (2022: US$30,000).
25. Subsequent events
Subsequent to the year end in September 2023, The Fountainside
US$1.9 million loan repayment due in September has been settled in
full.
The Waterside US$7.7 million loan repayment due in September
2023 has been partially settled in the amount of US$4.4 million,
with the remaining balance to be settled upon completion of a
confirmed sale as agreed with the lender.
The Company has agreed in principle with lenders of the banking
facilities for Penha Heights to defer principal repayments that
will be due in September and December 2023. The loan facility with
BCM would be extended to mature in March 2025.
Subsequent to the year end, two sales have been agreed at The
Waterside at a total consideration of US$4.8 million, one of which
has completed and the other is scheduled to complete in October
2023.
DIRECTORS AND COMPANY INFORMATION
Directors
Mark Huntley (Chairman)
Alan Clifton
Carmen Ling
Audit and Risk Committee
Alan Clifton (Chairman)
Mark Huntley
Carmen Ling
Management Engagement Committee
Mark Huntley (Chairman)
Alan Clifton
Carmen Ling
Nomination and Remuneration Committee
Alan Clifton (Chairman)
Mark Huntley
Carmen Ling
Disclosure and Communications Committee
Mark Huntley (Chairman)
Alan Clifton
Manager
Sniper Capital Limited
Vistra Corporate Services Centre
Wickhams Cay II
Road Town, Tortola
VG1110
British Virgin Islands
Investment Adviser
Sniper Capital (Macau) Limited
Largo da Ponte,
Nos. 51 e 57, Taipa
Macau
Solicitors to the Group as to English Law
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
Advocates to the Group as to Guernsey Law
Carey Olsen
Carey House
Les Banques
St Peter Port
Guernsey GY1 4BZ
Corporate Broker
Liberum Capital Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London EC2Y 9LY
Independent Auditors
Deloitte LLP
Regency Court
Glategny Esplanade
St Peter Port
Guernsey GY1 3HW
Property Valuers
Savills (Macau) Limited
Suite 1309-10
13/F Macau Landmark
555 Avenida da Amizade
Macau
Administrator & Company Secretary
Ocorian Administration
(Guernsey) Limited
PO Box 286
Floor 2, Trafalgar Court
Les Banques
St Peter Port, Guernsey
Channel Islands GY1 4LY
Macau and Hong Kong Administrator
Adept Capital Partners Services Limited
Unit B1, 25/F, MG Tower
133 Hoi Bun Road
Hong Kong
Registered Office
PO Box 286
Floor 2, Trafalgar Court
Les Banques
St Peter Port, Guernsey
Channel Islands GY1 4LY
Cautionary Statement (unaudited)
The Chairman's Statement, the Manager's Report and the Report of
the Directors have been prepared solely to provide additional
information for shareholders to assess the Company's strategies and
the potential for those strategies to succeed. These should not be
relied on by any other party or for any other purpose.
The Chairman's Statement, Manager's Report and the Report of the
Directors may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can
be identified by the use of forward-looking terminology, including
the terms "believes", "estimates", "anticipates", "expects",
"intends", "may", "will" or "should" or, in each case, their
negative or other variations or comparable terminology.
These forward-looking statements include all matters that are
not historical facts. They appear in a number of places throughout
this document and include statements regarding the intentions,
beliefs or current expectations of the Directors and the Manager,
concerning, amongst other things, the investment objectives and
investment policy, financing strategies, investment performance,
results of operations, financial condition, liquidity, prospects,
and distribution policy of the Company and the markets in which it
invests. By their nature, forward-looking statements involve risks
and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance.
The Company's actual investment performance, results of
operations, financial condition, liquidity, distribution policy and
the development of its financing strategies may differ materially
from the impression created by the forward-looking statements
contained in this document. Subject to their legal and regulatory
obligations, the Directors and the Manager expressly disclaim any
obligations to update or revise any forward-looking statement
contained herein to reflect any change in expectations with regard
thereto or any change in events, conditions or circumstances on
which any statement is based.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR DXBDGXXGDGXU
(END) Dow Jones Newswires
October 06, 2023 02:00 ET (06:00 GMT)
Macau Property Opportuni... (AQSE:MPO.GB)
Gráfico Histórico do Ativo
De Out 2024 até Nov 2024
Macau Property Opportuni... (AQSE:MPO.GB)
Gráfico Histórico do Ativo
De Nov 2023 até Nov 2024
