Annual Financial Report

RNS Number : 1811Q

VinaCapital Vietnam Opportunity Fd.

26 October 2021

 

VINACAPITAL VIETNAM OPPORTUNITY FUND LIMITED

Annual Report and Financial Statements for the year ended 30 June 2021

COMPANY STRUCTURE AND LIFE

VinaCapital Vietnam Opportunity Fund Limited (the "Company" or "VOF") is a Guernsey domiciled closed-ended investment company. The Company is classified as a registered closed-ended Collective Investment Scheme under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 and is subject to the Companies (Guernsey) Law, 2008 (the "Guernsey Law"). Prior to March 2016 the Company was a limited liability company incorporated in the Cayman Islands.

The Company is quoted on the Main Market of the London Stock Exchange ("LSE") with a Premium Listing (ticker: VOF).

The Company does not have a fixed life, but the Board considers it desirable that shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends that every fifth year a special resolution will be proposed that the Company ceases to continue. If the resolution is not passed, the Company will continue to operate as currently constituted. If the resolution is passed, the Directors will be required to formulate proposals to be put to shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up. The Board tabled such resolutions in 2008, 2013 and 2018 and on each occasion the resolution was not passed, allowing the Company to continue as currently constituted.

INVESTMENT POLICY

Investment Objective

The Company's objective is to achieve medium to long-term returns through investment in assets either in Vietnam or in companies with a substantial majority of their assets, operations, revenues or income in, or derived from, Vietnam.

Investment Policy

All of the Company's investments will be in Vietnam or in companies with at least 75% of their assets, operations, revenues or income in, or derived from, Vietnam at the time of investment.

No single investment may exceed 20% of the Net Asset Value ("NAV") of the Company at the time of investment.

The Company may from time to time invest in other funds focused on Vietnam. This includes investments in other funds managed by VinaCapital Investment Management Limited (the "Investment Manager" or "VinaCapital"). Any investment or divestment of funds managed by the Investment Manager will be subject to prior approval by the Board.

Since it listed on the London Stock Exchange Main Market, the Company had as part of its formal investment policy a statement that "No more than 10%, in aggregate, of the value of the Company's total assets may be invested in other listed closed-ended investment funds. The restriction on investment in other listed closed-ended investment funds does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds". This statement was included in the Investment Policy to confirm compliance with Listing Rule 15.2.5. In practice, the Company does not invest in other listed closed-ended funds and has no intention to do so. The Directors have therefore changed the formal investment policy to exclude investments in other listed closed-ended funds. As the Company has not invested in other listed closed-ended funds, there is no practical change to the approach to managing the portfolio and the Directors have been advised that this change to the investment policy is non-material and does not require formal shareholder approval.

The Company may from time to time make co-investments alongside other investors in private equity, real estate or similar assets. This includes, but is not restricted to, co-investments alongside other funds managed by the Investment Manager.

The Company may gear its assets through borrowings which may vary substantially over time according to market conditions and any or all of the assets of the Company may be pledged as security for such borrowings. Borrowings will not exceed 10% of the Company's total assets at the time that any debt is drawn down.

From time to time the Company may hold cash or low risk instruments such as government bonds or cash funds denominated in either Vietnamese Dong ("VND") or US Dollars ("USD"), either in Vietnam or outside Vietnam.

HISTORICAL FINANCIAL INFORMATION

Years ended 30 June					2017	2018	2019	2020	2021
Statement of Comprehensive Income (USD'000)
Total income/(loss) from ordinary activities^					230,366	195,365	(9,334)	(35,204)	633,220
Total expenses from ordinary activities					(39,817)	(42,625)	(18,763)	(15,254)	(92,436)
Operating profit/(loss) before income tax					190,549	152,740	(28,097)	(50,458)	540,784
Income tax expense					-	-	-	-	-
Profit/(loss) for the year					190,549	152,740	(28,097)	(50,458)	540,784
Profit(loss) attributable to ordinary equity holders					190,549	152,740	(28,097)	(50,458)	540,784
Statement of Financial Position (USD'000)
Total assets^					982,358	1,082,329	974,633	877,968	1,429,421
Total liabilities					(32,683)	(38,897)	(19,384)	(1,863)	(69,648)
Net assets					949,675	1,043,432	955,249	876,105	1,359,773
Share information
Basic earnings/(loss) per share (cents per share)^					93.00	77.00	(15.00)	(28.00)	315.00
Basic earnings/(loss) per share (pence per share)*^					73.00	57.00	(12.00)	(22.00)	228.00
Share price at 30 June (USD)					3.82	4.30	4.34	4.07	6.64
Share price at 30 June (GBP)*					2.94	3.26	3.41	3.29	4.82
Ordinary share capital (thousand shares)					200,621	194,058	184,809	176,128	168,418
Market capitalisation at 30 June (USD'000)					766,372	834,449	802,069	716,843	1,119,089
Market capitalisation at 30 June (GBP'000)*					589,826	632,629	630,197	579,462	810,934
Net asset value per ordinary share (USD)^					4.73	5.38	5.17	4.97	8.07
Net asset value per ordinary share (GBP)*^					3.64	4.07	4.06	4.01	5.85
Ratio
Ongoing charges excluding incentive income/(fee) ‡					1.9%	1.8%	1.7%	1.7%	1.6%
Incentive (income)/fee ₸					2.7%	2.1%	(0.3%)	(0.3%)	6.1%
Ongoing charges plus incentive fee ₹					4.6%	3.9%	1.4%	1.4%	7.7%

^ The figures for 2019 above include adjustments to the share prices of some investments at 30 June 2019 in order to  adjust for pricing anomalies identified by the Board. Please refer to the Annual Report and Financial Statements for the year ended 30 June 2019 for a complete explanation.

* Following the change of domicile to Guernsey in 2016, the Company's shares have been quoted in Pounds Sterling ("GBP"). USD NAV per share is translated to GBP using the rate of exchange at 30 June each year.

^‡ Calculated as general and administration expenses divided by average NAV for the year. Ongoing charges have been prepared in accordance with the Association of Investment Companies ("AIC") recommended methodology.

^₸ Calculated as total incentive fee divided by average NAV for the year.

^₹ Calculated as the sum of general and administration expenses and total incentive fee divided by average NAV for the year.

FINANCIAL HIGHLIGHTS

In the year to 30 June 2021, the Company's NAV per share increased in US Dollar terms by 62.4% to USD8.07, while the Company's share price increased by 63.1% to USD6.64, from the same date a year ago. Taking account of dividends paid in the year to 30 June 2021, the NAV Total Return* was 65.6%.

As at/years ended 30 June	2019	2020	2021
NAV per share total return*^ over the year (%)	(1.9)	(1.5)	65.6
Share price ($)	4.34	4.07	6.64
Increase/(decrease) in share price (%)	0.9	(6.2)	63.1
Discount to NAV per share**^ (%)	(16.0)	(18.1)	(17.7)
Dividend per share (US cents)	11.0	11.0	11.5

* Total return calculated as NAV per share as at the relevant year end and assumes that dividends paid out would be reinvested at the NAV per share on the ex-dividend date (and then the dividend would grow at the same rate of return as the NAV per share after re-investment).

** Calculated as NAV per share less share price divided by NAV per share.

^ The figures for 2019 above include adjustments to the share prices of some investments at 30 June 2019 in order to adjust for pricing anomalies identified by the Board. Please refer to the Annual Report and Financial Statements for the year ended 30 June 2019 for a complete explanation.

CHAIRMAN'S STATEMENT

Dear Shareholder,

We reported at the half year stage that returns had been very strong in the six months to the end of December 2020 and that strength continued into the second half. The Net Asset Value ("NAV") total return* for the accounting year was +65.6%, which is impressive by any standards.

This kind of result must, of course, be delivered with a health warning. As set out in the Investment Manager's Report the Vietnamese stock market is no longer "cheap" on accepted metrics such as price to earnings ratios but equally the valuation is not excessively high in absolute terms.

World news continues to be dominated by the effects of the COVID-19 pandemic. Early on, the Vietnamese government was widely praised for its ability to limit outbreaks of the disease. However, in recent months the number of cases has risen and it remains to be seen whether the current policies will continue to keep the disease in check as new variants are more transmissible than the early manifestations of the virus. Like most developing countries, Vietnam was slow in acquiring enough vaccine supplies to immunise a large part of its population but the roll out of vaccines has accelerated.

Dividend

The Board remains of the view that the discount to NAV at which the Company's shares trade means that it is efficient to return capital both through dividends and through buybacks, and that this acts as a discipline on the Investment Manager to focus on investment opportunities which offer high potential returns. Dividends also help to broaden the appeal of the Company to a wider group of potential shareholders.

On 25 October 2021, the Board declared a dividend of 8.0 US cents per share, payable to shareholders on or around 6 December 2021, which recognises the significant increase in NAV during the year.

I would note that the revenue received from the underlying portfolio holdings in the year under review was USD20.4 million compared with USD16.8 million in the previous year. As the Vietnamese market matures, so we expect the income account of the Company to become more predictable and to show growth which reflects the underlying earnings growth of the businesses in which we invest.

Introduction of gearing

One of the advantages of the closed-ended structure is that the Board and Investment Manager have more flexibility in managing the balance sheet than is typically the case in an open-ended structure. In the case of the Company, the terms on which borrowing could be secured have been prohibitive in the past. As the market has matured, we have now reached the point where we have been able to secure finance at reasonable cost.

We are in the process of negotiating the terms of a facility, which is expected to be in the region of USD40 million, and will make an announcement in due course.

Discount

The level of demand for VOF's shares is variable and this can have quite a substantial effect on the discount, which is a key area of focus for the Board. We receive daily updates from our Corporate Broker and full reports at each Board meeting and from these it is perhaps not surprising to note that the key driver of the discount is the balance between supply from shareholders wishing to sell shares and demand from investors. During the year ended 30 June 2021, the discount was as wide as 25% in September 2020 and briefly below 5% in January, reflecting volatility both in the market and in the level of interest from investors. The discount started the accounting year at 18.1% and ended it at 17.7%. Since the year end, the discount has widened. We believe that this reflects greater risk in the external environment.

^[1] Total return basis assumes that the dividend would be reinvested at the NAV per share (NAV total return) or share price (share price total return) on the ex-dividend date.

Our Investment Manager, supported by Corporate Broker Numis Securities, UK Marketing and Distribution partner Frostrow Capital and PR Agency Camarco, continues to invest much effort and resources into promoting VOF to a variety of audiences. We continue to emphasise frequent and clear communication with shareholders and with the international press and other media. Our Investment Manager provides a wide variety of information on the economy and investment in Vietnam alongside detailed information about VOF's portfolio. The Board was pleased to see that our factsheets won the AIC's Annual Shareholder Communication Award this year and we encourage investors to visit our website regularly, where we have a variety of both written and video content.

During the year, approximately 7.7 million shares were bought back. The discounts at which these shares were bought resulted in an increase in the NAV per share of some 14 cents per share, to the benefit of continuing shareholders. The Board continues to believe that our active share buyback programme is a key tool in seeking to balance supply and demand for the shares and we will again seek to renew our powers to buy back shares at this year's Annual General Meeting.

Investment Management Fees

The very high investment returns which I describe above have resulted in our accruing a substantial incentive fee. The amount of incentive fees which can be paid out in any one year is capped at 1.5% of the average month-end assets and a fee of USD16.6 million was accrued as a current liability at the year end. As in previous years where investment performance would have resulted in a higher fee but for the effect of the cap, we have made a further accrual for incentive fees which are potentially payable in future years and which is based, inter alia, on the assumption that the level of NAV at the accounting year end at least being maintained at subsequent year ends.

The Board

As previously reported, I am the longest serving director, having joined the Board in February 2013, and I will stand down after the AGM in December 2021. Huw Evans, who joined the Board in May 2016 and has been the Chair of the Audit Committee since the AGM in December 2016, will become the Chairman of the Company after this year's AGM. At that point, Julian Healy, who joined the Board in July 2018, will become Chairman of the Audit Committee.

We announced on 24 June 2021 that Peter Hames had accepted an invitation to join the Board, as a non-executive Director and a member of its committees. Peter spent 18 years of his investment career in Singapore, where in 1992 he co-founded Aberdeen Asset Management's Asian operation and as Director of Asian Equities he oversaw regional fund management teams responsible for running a number of top-rated and award-winning funds.  He is also director of MMIP Investment Management Limited, an independent member of the operating board of Genesis Investment Management, LLP and is a director of The Genesis Emerging Markets Investment Company. Peter is a former director of Polar Capital Technology Trust plc. and of Syncona Ltd (formerly BACIT Ltd). I would urge you to support his election alongside the re-election of the other directors.

When I joined the Board, Vietnam had all the characteristics of a frontier market, but it was clear that the economic path it had chosen would allow the economy to grow and capital markets to develop. Today, Vietnamese investments, while still something of a niche subject, can be found not just in specialist portfolios but also in individuals' accounts. Increasing interest in the country and a solid underpinning for its economic prospects suggest to me that over the next decade the country will become a mainstream investment destination. My involvement with the Company has given me a front row seat on developments over the last nine years, and I believe the next decade will be just as exciting.

As I retire, I would like to record my thanks to current and former colleagues on the board, to the Board's advisers and to the team at VinaCapital for their support over the last nine years. A Company like VOF requires all of these elements to work together and a Chairman's job is much easier when they do. Mostly, that has been true during my tenure.

I would like to wish the Company and its shareholders every success in the future.

Annual General Meeting

This year's AGM is due to take place at 11:00 a.m. on 2 December 2021 at Aztec Group, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3PP.

I am pleased to report that the meeting will take place in person. However, due to quarantine requirements, our Investment Manager will not be able to attend the meeting physically.

Whether or not you intend to come to the AGM, shareholders are asked to participate in the AGM by appointing a proxy to vote on the resolutions set out in the notice of AGM as soon as possible.

Shareholder engagement remains very important to the Directors. As well as setting out a comprehensive report on their management of the portfolio in this Annual Report, the Investment Manager is holding a virtual conference in Vietnam and a video presentation on the Company will be available at https://vinacapital.com.

Shareholders are invited to participate in the AGM by submitting questions in advance. Any questions on the business of the AGM, on the resolutions or to the Investment Manager can be submitted ahead of the AGM by email to the Company Secretary at [e-mail] by 9:00 a.m. on 30 November 2021. Replies to any questions raised will be posted on the Company's website as soon as practicable after the AGM.

Outlook

Very low interest rates and strong fiscal support continue to provide a tailwind to developed markets even as these economies bounce very strongly from the COVID doldrums. Sometimes markets fret about overheating and the return of inflation; sometimes the worry is about a resurgence of COVID taking the steam out of things. At the moment, though, consumers are flush with cash and companies are hugely profitable and this has been the dominant theme amid the angst.

For developing economies, the picture is more nuanced. Many have been unable to roll vaccines out quickly enough to prevent a new wave of infections. By the same token, there is understandable reluctance (and often no ability) to shut down economic activity as was the norm in developed countries. The result is that the economic outlook remains largely unchanged even as the COVID situation worsens.

In Vietnam, the measures put in place to control the spread of the virus were originally very effective, although with the greater transmissibility of the Delta variant, the recent picture has been more difficult. Nevertheless, as you will see in the Investment Manager's Report, economic activity is expected still to be favourable in the year ahead. Corporate earnings have been robust but are likely to be under short term pressure and it would be rash to expect the level of the stock market returns from last year to be repeated in the next. 

Steve Bates

Chairman

25 October 2021

INVESTMENT MANAGER'S REPORT

Performance Highlights

As at years ended 30 June	2021	2020
NAV	USD1.36 billion	USD876.1 million
NAV per share	USD8.07	USD4.97
Share price	USD6.64	USD4.07
Discount to NAV	(17.7)%	(18.1)%
NAV per share total return	65.6%	(1.5)%
Share price total return over the year (%)	66.9%	(3.2)%

● As of 30 June 2021, the NAV was USD1.36 billion or USD8.07 per share, with a total market capitalisation of USD1.12 billion or a share price of USD6.64 per share, representing a discount of 17.7%.

● Accounting for dividends paid to shareholders, VOF delivered 65.6% on a total return basis^[1] in USD terms ($TR) over the financial year ending 30 June 2021 ("FY2021").

● VOF paid a total of USD19.6 million in dividends (or 11.5 US cents per share), equivalent to a yield of 2.3% of the NAV per share and 2.8% of the share price as at 30 June 2020.

● Over the previous four financial years to 30 June 2017, 2018, 2019, and 2020, VOF delivered total returns of 25.5%,16.9%, -1.9%, and -1.5% on a total return basis¹ in USD terms, respectively.

● Through the share buyback programme, the Company acquired 7.7 million shares at a cost of USD37.5 million.

Vietnam: It's always darkest before the dawn

As we enter the second year of the global health pandemic, we remain cautiously optimistic that there are signs of green shoots pointing the way to a recovery. The Vietnamese economy, while deeply integrated with the global economy which was hit by the ongoing COVID-19 pandemic, nevertheless still showed remarkable resilience posting GDP growth of 2.9% in 2020.

In last year's update, we lauded Vietnam's early efforts to control the COVID-19 outbreak within its borders, which enabled it to re-open its domestic economy within a month of restricted movement orders imposed during April 2020. In fact, we specifically wrote: "…it is important that we view Vietnam's success in containing the pandemic's impact as a commendable short-term achievement, but that the long-term health of the economy requires all nations to have COVID-19 under control and a vaccine to become widely available. This will help significantly to stabilise the economic uncertainty that we are facing today."

[1] Total return basis assumes that the dividend would be reinvested at the NAV per share (NAV total return) or share price (share price total return) on the ex-dividend date.

Fast forward twelve months and the situation is different. By the end of June 2021, Vietnam had for two months been struggling with a rampant outbreak of the highly contagious Delta-variant of the virus, which caused infection and mortality numbers to increase, and the government re-introduced restricted movement orders similar to those a year earlier. By August 2021, these lockdown measures had escalated, particularly in Ho Chi Minh City ("HCMC"), the economic centre of the south, where overnight citywide curfews and a sharp lockdown of the city extended through to the end of September, saw one of the strictest measures introduced in South-East Asia. The objective is to stop the community spread, while an aggressive vaccination program is rolled out.

As of 1 October, HCMC began to lift many of these strict lockdown measures that were putting a stranglehold on economic growth. Vietnam's GDP contracted by 6.17% during the third quarter of 2021 from a year earlier, the sharpest quarterly decline on record according to Vietnam's General Statistics Office. Importantly, the government has recently acknowledged that Vietnam could no longer pursue a "zero-COVID" strategy and would instead embrace a "new normal" that moves toward living safely with the virus while adopting guidelines that allow for flexibility and effective control of the disease.

Like many other emerging countries, Vietnam is trying to source the appropriate quantum of vaccines whether they be from the USA, Europe, Russia, Cuba and China, to allow society to return to normality or at least live with COVID-19. Vaccination levels across the country have risen, and specifically in HCMC have improved considerably, from close to nil at the start of June 2021 to almost 100% of the adult population having received at least one dose by mid-October 2021 (and almost 80% being fully vaccinated). This gives us confidence that there will be a return to some semblance of normal economic and social activity in the fourth quarter of the calendar year, a welcome relief for all.

While we started the calendar year with a solid 6.5% GDP growth forecast from the government, the disruptions to manufacturing, supply chains and logistics from the extended lockdown has prompted Vietnam's Ministry of Planning and Investment to recently revise their estimates for the country's GDP growth in 2021 to 3-3.5%. We note that this estimate is based on some optimistic assumptions for fourth quarter growth and our in-house research team estimate that achieving last year's 2.9% GDP growth rate may be challenging for 2021. While Vietnam is in a far better place than most countries, we must acknowledge how highly integrated it is with the global economy, as evidenced by one of the highest trade-to-GDP ratios in the world. As a predominantly export-focused economy, Vietnam relies heavily on the stability and growth of other economies like the United States, China, and Europe to sustain its own economic growth in the long term.

Investment Philosophy and Strategy

Before we move onto a review of our portfolio and performance over the past financial year, this next section provides a recap of our investment philosophy and strategy, as well as our approach to environmental, social, and corporate governance ("ESG") and how this has played an important role in our investment process over the years.

Our investment approach is unique among Vietnam-focused funds, providing broad exposure to Vietnam's robust economic growth from investments across listed and private equity asset classes. We believe that having a diversified strategy that invests in public and private equity opportunities will deliver superior risk-adjusted returns in the medium to long term.

Our team takes a fundamental, bottom-up approach and invests with a medium to long term view that finds many private equity investments migrating to public listings while held in the portfolio. Having invested in over 200 businesses since the fund's inception in 2003, this approach has consistently delivered superior risk-adjusted returns to shareholders.

Our investment focus is on sectors that contribute to and benefit from the growing domestic economy and we actively work with our portfolio companies to help them to increase earnings and improve governance with a view to ultimately seeking opportunities to sell to a strategic buyer or list via an IPO.

VinaCapital as a firm is uniquely positioned to ensure that VOF delivers superior returns through many years of experience, a scalable asset management operation and multiple funds, and most importantly, having a well-respected brand not only in Vietnam but around the world, which enables us to access a range of investment ideas and opportunities.

VOF provides capital to private and publicly listed companies and State-Owned Enterprises ("SOEs") to support their expansion and growth. Our investments focus on sectors benefiting from the growing domestic economy, such as real estate, banks, construction materials and healthcare. Our return expectations are based on growth and transformation and are not based on trading or short-term opportunities. Hence, we invest for the medium to long term to realise returns in excess of the market.

● We seek significant minority stakes that enable us to participate at the board and/or managerial level to enhance growth and shareholder value. As a minority investor, we seek strong downside protection coupled with clear exit mechanisms since we operate in a frontier market where volatility and weak corporate governance are pervasive.

● Prior to investing, we seek full due diligence rights (where possible on listed as well as private equities), performance commitments and valuation adjustments, minority protections (via tag along/drag along rights) and put options are standard in our investment agreements. We actively engage with our investee companies and provide access to management expertise.

● Participating at the board level where desirable and possible, along with owning meaningful stakes, gives us the opportunity to command a premium on exit. We work with international buyers including strategic investors, investment bankers and business leaders who seek large stakes in both private and listed companies.

● We have a strong sell discipline and investments are sold when they fall below the minimum targeted investment returns and have the potential to dilute the performance of the underlying portfolio.

● Responsible investing has been and continues to be a core tenet of our investment philosophy and process. VinaCapital, as a firm, has long recognised that ESG issues can have a significant impact on value creation across the investment cycle. We have adopted a Responsible Investment policy to formalize our approach to incorporating environmental, social, and corporate governance considerations across our investment activities. In developing this policy, we have considered a range of codes and standards, including the United Nations-supported Principles for Responsible Investment, the International Finance Corporation's ("IFC's") Performance Standards on Environmental and Social Sustainability, and our internal policies.

Responsible Investing

As more institutional investors invest into Vietnam and Vietnamese businesses expand, ESG related matters have taken on greater importance. In recent years, we have witnessed situations in which shareholder value declined significantly when businesses polluted the environment, ignored global standards, relocated families from land without paying adequate compensation, or did not adhere to international best practices with respect to corporate governance.

Using guidelines from development finance institutions such as the FMO (the Dutch development bank) and the IFC, VinaCapital has developed a framework to identify ESG risks at potential investee companies, and helps businesses improve their practices, where appropriate, by incorporating ESG terms as part of our overall terms of investment in private opportunities. We engage expert advisors and consultants to evaluate ESG risks as part of our due diligence activities prior to investing, as well as monitoring any applicable remediation actions post-investment.

VinaCapital has committed to adopting and implementing the Principles of Responsible Investment (PRI), which VinaCapital believes is in the best long-term interests of its investors, and which contributes to a more long-term oriented, transparent, sustainable, and well-governed investment market. While we target to adopt best practices of ESG in our investment activities and among our portfolio companies, we also take a pragmatic approach, while realising the limitations of investing in developing markets. We therefore focus less on screening companies solely on ESG issues, and more on stewardship activities where we believe a patient timeframe and active engagement can improve outcomes.

VinaCapital believes ESG considerations materially impact long term value creation and has therefore integrated ESG considerations into the investment decision making process. This is typically done through a combination of screening and integration strategies, where possible. As stewards of our investors' capital, we systematically engage with our investee companies on ESG matters. Our engagement takes various forms including proxy voting, direct discussions with management, and educational initiatives, among others.

Specifically, ESG forms a core part of the due diligence and investment activities that VOF carries out, particularly when it comes to making private equity investments, as this is an area in which we can exert influence within our portfolio companies. Through our private equity investment approach, we have an opportunity to carry out ESG due diligence using external consultants such as the internationally recognised firm, ERM.

The due diligence review typically identifies weaknesses relative to local and international standards. Such weaknesses do not necessarily deter us from an investment but rather provide a clear roadmap for improvement. Importantly, with the recommendations for change, we can gauge whether a sponsor is motivated to make these improvements to their business. We feel that the most value-add to the business and in society comes from the motivation for change and the actions that a company takes to improve ESG weaknesses and, thus, we gravitate more towards these types of opportunities and sponsors.

When it comes to publicly listed companies in the portfolio, we follow a framework to assess ESG risks and encourage listed companies to improve their practices when warranted. Furthermore, our in-house research team has developed and implemented a grading system for each company against a bank of over 120 ESG-related questions. We apply this to the listed part of the VOF portfolio to determine the weighted average results of the portfolio at the current point in time. With this understanding, we can set a benchmark as to where we would like VOF's portfolio to be in the next twelve to twenty-four months. Actions such as encouraging management teams to make impactful improvements or divesting holdings that rank poorly by ESG standards will be taken to achieve our objectives.

We have published our ESG Policy on the VinaCapital website and encourage investors to review the policies and principles that guide our approach to responsible investing and stewardship.

Portfolio Review

Overall, VOF's NAV ended the year up by 65.6% (all performance figures quoted in USD, total return, see Glossary), with the public equity component of the portfolio, which makes up 77.8% of NAV (listed equities 69.0% of NAV, and unlisted equities 8.8% of NAV) increasing 99.8% (on a gross return basis, before VOF fees and expenses). In comparison, the Vietnam Index ("VN Index") returned 75.3% during this financial year, and while not a benchmark for the fund, it does serve as a useful measure. With the strong market performance, on a valuation basis, the VN Index is reverting to its historical average and now trades at 16.9x on a forward price-to-earnings ratio ("PER"), with consensus earnings growth for 2021 remaining at around 31% but we are sceptical about these forecasts. Nevertheless, Vietnamese stocks are not as cheap as they used to be versus regional peers, with the PER discount to Thailand, Indonesia, and the Philippines now being less than 10% (versus the long-term average discount of 30%).

The increase in VOF's NAV owes much to the performance of the public equity component of the portfolio which has benefited from rising stock markets. Stock market performance has been driven by domestic investors' enthusiasm for stocks as interest rates have declined, property prices are subdued, and gold prices have plateaued, leaving them with few other investment alternatives. It has been widely reported that the market's current bull run has been fuelled by record levels of liquidity amidst a prevailing low interest rate environment, with local Vietnamese retail investors now making up almost 90% of market turnover. The year-to-date average daily turnover for the VN Index has surpassed stock markets in Singapore, Malaysia, and the Philippines (and Indonesia too, if the HNX and UPCoM exchanges are included). The recent systems glitches which held back daily trading volumes seem to have been fixed with an interim solution provided by technology services company FPT (HOSE: FPT) - which incidentally is a VOF portfolio holding - and seems to have appeased retail and institutional investor concerns.

The quality of VOF's public equity portfolio, which if measured by the average Earnings Per Share ("EPS") growth, has been 41% per annum over the last three years, has allowed us to deliver the strong overall performance. Based on our latest earnings forecast revisions as of September 2021, we expect it to increase by approximately 37% for 2021, versus the VN Index for which consensus earnings growth for 2021 is trending down to a range of 15% to 20%, although we are mindful that the extended lockdown measures to control the pandemic may have a further downward impact on earnings.

Investors today are enjoying the fruits of investments made from as early as 2007 in high-quality companies across sectors like construction materials (Hoa Phat Steel Group, HOSE:  HPG), consumers (Phu Nhuan Jewelry, HOSE: PNJ), to real estate development (Khang Dien House, HOSE: KDH), and more recent investments into financials (Orient Commercial Bank, HOSE: OCB) in 2018, and healthcare, including Thu Cuc International Hospital (TCI Hospital), a private equity investment made in 2020. We discuss these investments in the update below.

Over the long term, VOF continues to perform well against the VN Index on both a NAV per share and share price basis, as highlighted in the table below for 10-year, 5-year, 3-year, 2-year, and FY2021 (1-year).

Performance ($TR) for the period ending 30 June	FY211	2 YR2	3 YR2	5 YR2	10 YR2
VOF NAV per share	65.6%	62.9%	59.9%	134.7%	281.5%
Share price	66.9%	61.5%	66.7%	165.5%	373.8%
VN Index	75.3%	55.5%	54.1%	140.9%	293.4%
MSCI VN Index	60.0%	38.3%	36.7%	103.7%	96.0%

Source: Bloomberg, VinaCapital. Annualised returns, USD terms.

Notes:

1.  FY21 is for the financial year ending 30 June 2021.

2.  Period end is for the financial years ending 30 June. Rolling 2 year, 3 year , 5 year and 10 year performance up to 30 June 2021.

Sector Allocation and Asset Class Movements

The portfolio's targeted sector allocation indicates that from a risk-adjusted return perspective, we have a high level of confidence with the financial and real estate development sectors, and less confidence in the consumer sector given weak consumer spending because of the pandemic's impact. Periodically we review the target sector allocation for the entire portfolio based on the potential return and perceived associated risks in each of these sectors. Our internal research team performs a fundamental, bottom-up assessment of the current earnings and growth potential for both private and public companies, along with associated macroeconomic and domestic economic risks. The result of the review provides us a sense of the targeted sector allocation for VOF over the next twelve to twenty-four months.

Our optimism for the financial and real estate sectors over the next two years reflects an economy recovering from a pandemic with ample support from regulators through prudent fiscal and monetary policies. Meanwhile, our less optimistic view of the consumer sector, and in particular food and beverage, reflects an increase in competition in both production and distribution, particularly as foreign players like CJ from South Korea, Nestlé, and Central Group from Thailand make deeper inroads into the economy through manufacturing and domestic consumption.

During this financial year, we have sold our position in Vinamilk (HOSE: VNM). Some investors may recall that VOF entered Vinamilk during its equitisation/privatisation in 2003 through 2005 at valuations that ranged from USD400 million to USD500 million and, at one stage, it was one of the largest holdings in the portfolio at approximately 20% of NAV at the time. Today, the leading dairy company has a market capitalisation in excess of USD8 billion, and while earnings growth in 2020 was 4.9%, it is expected to slip into negative growth for 2021. VOF invested a total of USD63 million over the early years and has realised almost USD320 million in proceeds up to 30 June 2021. This represents a return of 409% on our invested capital, or an IRR of 48%, over almost 18 years of investing.

During the financial year, VOF has taken on more banking sector exposure with investments in a leading commercial bank, Asia Commercial Bank (HOSE: ACB), and state-owned commercial bank, Vietcombank (HOSE: VCB), which at a USD16 billion market capitalisation is the largest bank in Vietnam. Furthermore, we participated in several structured investments, including in the second largest residential real estate developer, Novaland, through a structure that provides a clear entry and exit time frame, downside protections, and equity upside, with terms that are akin to a private equity investment.

Other notable movements in the portfolio during the financial year include the migration of what was initially a private equity investment into Orient Commercial Bank (HOSE: OCB) onto the Ho Chi Minh City Stock Exchange ("HOSE") via a listing in January 2021. In July 2017 VOF purchased a 5% stake in OCB at a market valuation of the company of slightly less than USD300 million. As of 30 June 2021, OCB trades at a market capitalisation of USD1.5 billion. Since we invested in OCB, we have helped the bank recover from a distressed state, brought on Aozora Bank from Japan as a strategic investor, and took them public in early 2021. As with many other companies that we have taken public, we still believe that OCB's growth potential remains attractive in the coming years, and VOF will continue to hold onto OCB as part of its public equity portfolio.

Investors may recall that during the early stage of the pandemic in 2020, we witnessed a significant decline in the stock market, particularly in early April and May 2020. This was followed by a dramatic rise in valuations to the end of the calendar year ending 2020 and well into 2021. As an opportunity fund, VOF took full advantage of weak market conditions during this period of volatility and acquired meaningful stakes in blue chip businesses that historically trade at valuations reflective of earnings two to three years out. These investments made include:

● The Public Equities part of the portfolio saw an appreciation of USD574 million over the year, and in total we deployed USD90 million into the public markets during this period of volatility. VOF invested USD44 million in Asia Commercial Bank (HOSE: ACB), one of the leading private commercial banks in Vietnam and USD31 million into Vinhomes (HOSE: VHM), the largest real estate development company in Vietnam. As of 30 June 2021, our holding in ACB and VHM are worth USD86 million and US68 million, respectively. At the same time we divested USD205 million, including Impexpharm (HOSE: IMP), Cenland (HOSE: CRE), and Vinamilk (HOSE: VNM) which was mentioned earlier. In May 2021, VOF fully divested from IMP, one of the leading home-grown pharmaceutical manufacturers, to a regional strategic investor. With this exit, we were able to deliver a 66% return on our invested capital, or an IRR of 16% after three years of investment.

● The Private Equity part of the portfolio also saw activity, with USD62 million in investments including a USD22 million investment into TCI Hospital, a leading chain of private hospitals and clinics in Hanoi, and a USD35 million investment into Dat Xanh Services (HOSE: DXS), the largest real estate services company in the country, through a pre-IPO opportunity which subsequently listed in July 2021. We divested USD87 million during the period, including long-term investment International Dairy Products (HOSE: IDP), and Saigon Pearl Group, both to local investors.

● The Structured Investment part of the portfolio, which represents Bonds that have privately negotiated terms similar to private equity investments, similarly saw activity, with USD43 million invested, while we divested USD27 million from this asset class.

Top Holdings

As of 30 June 2021, our top ten holdings in the public equity portfolio make up 68.0% of NAV, and reflect the disciplined, long-term investment approach that we have taken over the years. Names such as Vinamilk are no longer held in the portfolio, while high-quality companies such as ACB, VHM and FPT Corporation (HOSE: FPT) have risen to be core holdings. In the private equity portfolio, two companies have listed post year-end onto one of the three main bourses in Vietnam. Dat Xanh Services (HOSE: DXS) listed in July 2021, and An Cuong Wood-Working (UPCoM: ACG) listed in early August 2021. We entered these companies through the private equity path, and we have seen them mature and welcome a wider shareholder base through their public listings.

Top 10 Public Equity Holdings1	NAV USDm	%NAV		Top Private Equity Holdings	NAV USDm	%NAV
1.  Hoa Phat Group (HPG)	265.6	19.5%		1.  An Cuong Wood-Working (ACG)2	40.2	3.0%
2.  Khang Dien House (KDH)	123.4	9.1%		2.  Dat Xanh Services (DXS)2	35.5	2.6%
3.  Asia Commercial Bank (ACB)	86.3	6.3%		3.  Thu Cuc International Hospital	29.8	2.2%
4.  Eximbank (EIB)	80.6	5.9%		4.  Ngoc Nghia Industry Service Trading	25.1	1.8%
5.  Airports Corporation of Vietnam (ACV)	71.9	5.3%		5.  Tam Tri Medical	20.6	1.5%
6.  Vinhomes (VHM)	67.5	5.0%		6.  IN Holdings	19.7	1.4%
7.  Phu Nhuan Jewelry (PNJ)	66.3	4.9%		7.  Thai Hoa International Hospital	16.7	1.2%
8.  Orient Commercial Bank (OCB)	66.0	4.9%		8.  Petrolimex Aviation (PAV)	10.3	0.8%
9.  FPT Corporation (FPT)	54.6	4.0%
10. Quang Ngai Sugar (QNS)	41.6	3.1%
Total	923.8	68.0%		Total	197.9	14.5%

Source: VinaCapital

1.  Includes Listed Equity (HOSE and HNX listed) and Unlisted Equity (UPCoM listed and OTC) holdings.

2.  An Cuong Woodworking listed on the Hanoi Stock Exchange's Unlisted Public Companies Market ("UPCoM") on 4 August 2021. DXS listed on Hanoi Stock Exchange ("HNX") on 14 July 2021. Both companies will subsequently move to VOF's Public Equity part of the portfolio.

Looking ahead, we remain focused on three core sectors:

● Real Estate: While sluggish sales amid the current outbreak appear to have dampened sales prices, consensus expectations are for a recovery and increase in real estate business activity in the latter quarters of the year and into 2022, with most developers concentrating their efforts to plan for launches in the second half of 2021 (2H21), which is usually the peak season for the real estate market.

Vinhomes (HOSE: VHM, 5.0% of NAV) , the nation's leading residential real estate developer, will book significant bulk sales in 2H21 after a dearth of activity in the first half of the year. Overall, for 2021 the sector is expected to post 66% year on year (y-o-y) pre-sales growth to USD9 billion, driven mainly by demand in tier-two cities, while net profit could rise by 28% y-o-y to USD2 billion. The VOF portfolio holds 21.8% in Real Estate companies, with Khang Dien House (HOSE: KDH, 9.1% NAV) and VHM (HOSE: VHM, 5.0% NAV) making up the core public equity holdings.

Khang Dien House (HOSE: KDH, 9.1% of NAV), which is the second largest public equity holding in the portfolio, increased by 90.8% over the financial year and the company posted strong 2Q21 results, with net revenues up 42% y-o-y and net profit up 5% y-o-y, supported by the handover of over 470 units at their Lovera Vista project in the Binh Chanh District of HCMC. This project includes 1,300 high- and mid-rise units, over 88% of which had been pre-sold as of the end of the first quarter (1Q) 2021, with the handovers starting in May 2021.

Dat Xanh Services (HSX: DXS, 2.6% of NAV). In early May 2021 we were able to close on our latest private equity investment, a private placement into Dat Xanh Services, the number one real estate brokerage and services company in Vietnam, and a subsidiary of listed company Dat Xanh Group (HOSE: DXG). DXS listed in July 2021. VOF led a consortium that deployed USD40 million in total into this placement with privately negotiated terms (VOF took a USD35 million stake). We look forward to working with the company as it embarks on an exciting phase of expansion, including rolling out an innovative digital platform to boost real estate brokerage services.

● Financials: The sector has shown strong profitability and high growth despite the pandemic, on the back of resilient margins and lower provisions (due to lower legacy non-performing loans) as well as stricter credit policies which have helped to improve loan quality. Furthermore, lower deposit rates have helped banks' net interest margins to improve and profitability to grow. Nevertheless, risks revolve around asset quality and, looking over the horizon, we are wary that the sector may not be out of the woods just yet, as the potential extension of the State bank's  Circular 03 (which allows for loan restructuring to help COVID-impacted borrowers) and the fact that approximately 40% of all loans have received some form of payment restructuring or interest waiver (as of April 2021) may weigh on higher non-performing loans and provisions. As of the time of this report, the State Bank has approved new credit quotas for most of the top-tier commercial banks, as most banks have used their credit quota allowance. While our research team have increased their 2021 profit before tax forecast to grow 30% y-o-y due to better margins, fees, and provision recovery, this still implies that a more tempered growth can be expected in 2H21 as the pandemic grinds on. VOF currently has 21.5% exposure to the sector, with Asia Commercial Bank (HOSE: ACB, 6.3% NAV), Eximbank (HOSE: EIB, 5.9% NAV), and Orient Commercial Bank (HOSE: OCB, 4.9%) making up our top publicly listed holdings.

● Construction Materials: The Vietnamese government remains committed to infrastructure spending, which is supportive of construction activities and thus construction materials volume growth.

Hoa Phat Group (HOSE: HPG, 19.5% of NAV) is the largest steel company in Vietnam and the leading player in this sector. HPG has gained significant market share from greater efficiencies, while the recent correction of China's steel prices prompted by that government's efforts to control steel speculation activities has had a minor impact on the industry. China steel-related product prices plunged in late May 2021 but have subsequently recovered, and we believe that the Chinese steel price correction had only a minor impact on Vietnam's steel sector, as companies saw only a slight cut in their selling prices. For HPG, we expect sales volumes and selling prices to recover in 3Q21. For 2021, we forecast HPG to deliver 134% net profit growth, thanks to additional capacity of 3 million tons from the fourth and latest blast furnace at the Dung Quat Steel Complex that came online in early 2021, bringing total capacity for the year to 8 million tons of crude steel as the company reaches maximum production capacity. The company is currently trading at a FY21E PER of 6.4x (below its 5-year historical mean) and an EV/EBITDA of 5.3x (lower than its 5-year historical mean). Calendar year-to-date, the share price has risen by 61.1% on the back of a good 1Q21 net profit (USD304 million, +206% y-o-y), a surge in selling prices, and high expectations on its new Australian iron ore mine.

An Cuong Wood Working (UPCoM: ACG 3.0% of NAV) , another holding in the Construction Materials sector, was initially a private equity investment that VOF entered in 2016. In July 2021 the company received approval from the Hanoi Stock Exchange to list 87.6 million shares on the UPCoM-Index under the ticker "ACG", and the shares were listed on 4 August. The reference price for ACG shares on their first trading day was VND90,000/share, equivalent to a market capitalisation of approximately USD345 million, and shares traded up 40% on their first day of trading, implying a market capitalisation of USD480 million. VOF (alongside our co-investment partner) continues to hold our stake in this company and continues to exert influence over the governance and business enhancement activities that ACG are embarking on. The company expects to significantly improve their net profit for 2021 and, since our investment in 2016, we have seen profits almost triple over that period. Furthermore, with 10 showrooms in HCMC and a 90,000 square meter factory in Binh Duong, ACG provides interior wood working solutions and a wide range of products for offices, homes, condominiums, schools, hospitals, hotels, and restaurants. The doubling of manufacturing capacity in late 2019 will position the company for strong growth as the recovery takes hold.

ACG represents a core tenet in our investment strategy: to invest into quality companies with market leadership, strong management, and a defensible "moat" for their business, and we work alongside them to grow and eventually take them public or sell to a strategic buyer. The terms of our private equity investment allowed us to lock in strong performance from the business, and the market price of the company upon listing validates our approach to investing in Vietnam.

Outlook

The economy, although facing headwinds from the fourth wave of COVID-19 infection, is still showing signs of strength and growth, but there are risks on the horizon for us to keep an eye on. The biggest risk is that Vietnam remains in a state of uncertainty because of the growing COVID-19 communal infection rate and as a result continues to significantly restrict commercial activities and travel. This will certainly dampen GDP growth for 2021 and maybe even 2022.

Vietnam's GDP grew 5.6% year-on-year (y-o-y) during the first half of the calendar year, from January to June 2021, which was quite a strong performance given that the country's fourth COVID outbreak emerged at the end of April 2021, prompting stringent social distancing measures, especially in HCMC.

Three factors supported GDP growth in the first half of this year:

1.  Resilient domestic consumption;

2.  Strong manufacturing growth; and

3.  The base effects caused by the very weak economic conditions at the peak of Vietnam's first COVID outbreak in April 2020.

These factors led to an acceleration in the country's quarterly GDP growth rate from 4.7% y-o-y in 1Q21 to 6.6% in 2Q21 despite the above-mentioned fourth COVID outbreak during 2Q21. However, 3Q21 saw GDP contract by 6.17% y-o-y as the strict lockdown measures that gripped the country severely hampered economic activity. We remain hopeful that the easing of lockdown measures starting 1 October in HCMC will continue to lift nationwide, and as social mobility improves, we will see a recovery in growth.

The current Delta variant COVID outbreak is having a major impact on consumption (~ 66% of GDP), and a modest impact on manufacturing (~20% of GDP), prompting foreign investment banks to revise down their 2021 GDP growth forecasts. Vexing quarantine and social distancing rules continued to bear down on economic activity during August and September, and 3Q21 economic data is shaping up to be disappointing. Nevertheless, a surprisingly strong domestic currency (despite a widening trade deficit) and better-than-expected manufacturing data for 8M21 (vs 8M20) hint at a possible manufacturing-led recovery. Current and new FDI projects continue to flow into Vietnam, notwithstanding some recent negative headlines in the international media regarding the country's handling of the latest COVID outbreak.

Furthermore, vaccination rates have steadily improved, with priority given to HCMC as it continues to aggressively roll-out the first dose of vaccines, with an increasing number of people receiving a second dose. Complementing this vaccine roll-out is the adoption of electronic vaccine passports, which will be useful as part of the reopening strategy. Overall, these measures, while perhaps a little late, seek to restore Vietnam's regional and global competitiveness, and not lag in economic recovery.

Although trade will still be recovering in 2021, Vietnam is expected to remain one of the fastest-growing ASEAN economies over the long term. The country has succeeded in positioning itself as the main low-cost regional alternative to China for export-oriented manufacturing. This should also ensure that investment growth remains strong in the coming years despite current disruptions to supply chain and manufacturing capabilities for low-cost products. Importantly, Vietnam is also expected to continue to gain ground in higher value-added manufacturing, such as electronics. Meanwhile, the country's participation in several major free trade agreements will help to slow the erosion of its competitiveness against other countries in the region in some longer established industries, such as footwear and garment production. This will drive growth in exports and investment throughout the forecast period. Medium-term gross fixed investment will be boosted by government-funded construction of new infrastructure that will be needed to support the expansion of new export-oriented manufacturing industries.

When investing in Vietnam, global investors will look for returns commensurate with the development of the economy and the associated macro and micro risks, while accounting for the limited liquidity available. VOF provides access to investors who seek the best of both worlds - access to a diversified portfolio invested across the capital structure in attractive private and public companies, while offering a highly liquid and substantial London listed investment trust. Furthermore, the active share buyback programme that has been in place since 2011, as well as the Board's commitment to maintain an ongoing, semi-annual dividend pay-out, are other strong differentiators for investors to consider amongst available Vietnam-focused funds.

While the outlook for global stock markets will remain volatile influenced by sluggish economic growth and highly uncertain prospects, we believe that private deal sourcing will be important in generating attractive returns to shareholders.

These are indeed interesting times, but we remain resilient, steadfast, and focused on delivering on our strategy. We believe VOF's medium to long term investment perspective enables us to weather the current challenging environment and, with your support, hopefully we will see brighter days to come. We aim to keep shareholders regularly informed and therefore please refer to our website for further updates. 

As you will have read in the Chairman's Statement, Steve Bates will be retiring from the Board at the AGM this December. Under Steve's leadership as Chairman of the fund these past nine years we have seen significant improvements to the fund in terms of governance, shareholder engagement, and listing venue, amongst countless other achievements - all of which have been for the benefit of our shareholders and consequently, VinaCapital. Steve's sharp insight, volumes of patience and candid engagement with our team over the years will be sorely missed. On behalf of VinaCapital, I sincerely thank Steve for his leadership, guidance and friendship over these past years and we wish him well on his retirement from the fund.

Andy Ho

Chief Investment Officer and Managing Director

25 October 2021

VINACAPITAL MANAGEMENT TEAM

Don Lam

Group Chief Executive Officer

Don Lam is a founding partner of the Investment Manager and has more than 20 years' experience in Vietnam. He has overseen the Investment Manager's growth from the manager of a single USD10 million fund in 2003 into a leading investment management and real estate development firm in Southeast Asia, with a diversified portfolio of more than USD 3 billion in assets under management. Before founding the Investment Manager, Mr Lam was a partner at PricewaterhouseCoopers (Vietnam), where he led the corporate finance and management consulting practices throughout the Indochina region. Additionally, Mr Lam set up the VinaCapital Foundation whose mission is to empower the children and youth of Vietnam by providing opportunities for growth through health and education projects. He is active in the World Economic Forum and is a member of several business task forces and committees in Vietnam. He has a degree in Commerce and Political Science from the University of Toronto and received an honorary doctorate from the Royal Melbourne Institute of Technology Vietnam. He is a Chartered Accountant and is a member of the Institute of Chartered Accountants of Canada. He also holds a Securities License in Vietnam.

Brook Taylor

Chief Executive Officer, VinaCapital Asset Management

Brook Taylor is the Chief Executive Officer of the Investment Manager. Mr Taylor has more than 20 years of management experience, including more than eight years as a senior partner with major accounting firms. Previously, he was deputy managing partner of Deloitte in Vietnam and head of the firm's audit practice. He was also managing partner of Arthur Andersen Vietnam and a senior audit partner at KPMG. Mr Taylor has lived and worked in Vietnam since 1997. Mr Taylor's expertise spans a broad range of management and finance areas including accounting, business planning, audit, corporate finance, taxation, and risk management. He holds an Executive MBA from INSEAD and a Bachelor of Commerce and Administration from Victoria University of Wellington.

Andy Ho

Managing Director and Group Chief Investment Officer

Andy Ho is Managing Director and Group Chief Investment Officer of the Investment Manager, where he oversees the capital markets, fixed income and private equity investment teams. Previously, Mr Ho was Director of Investment at Prudential Vietnam's fund management company, where he managed the capital markets portfolio and Prudential's investment strategy. He has also held management positions at Dell Ventures (the investment Company of Dell Computer Corporation) and Ernst & Young. Mr Ho is a leading authority on capital markets investment, privatisations, and private equity deals and structures in Vietnam, where he has led private placement deals totaling almost USD1 billion. He holds an MBA from the Massachusetts Institute of Technology and is a Certified Public Accountant in the United States.

Dieu Phuong Nguyen

Deputy Managing Director

Dieu Phuong joined VinaCapital in 2005 and is responsible for the Company's private equity investments and deal sourcing. Ms Phuong has led several private equity and private placement investments for the Company and holds board positions at several of the Company's investee companies including Khang Dien House (HOSE: KDH). Ms Phuong has previous experience at KPMG Vietnam where she covered international and local banks and holds a BA from the Banking University of Vietnam and is a fellow member of the ACCA (UK).

Khanh Vu

Deputy Managing Director

With over ten years at VinaCapital, Khanh Vu is responsible for the Investment Manager's capital markets, portfolio management, investor relations and communication activities for the Company. He is also an active member of the fund's Investment Committee, involved in deal sourcing, investment execution and monitoring. Mr Vu has over 15 years of investment experience and has been based in Vietnam for the last eight years. Mr Vu has held managerial positions in corporate finance, asset management, investment banking, and professional services. Prior to VinaCapital, he was at Macquarie Bank based in New York and Sydney, with his last posting on the buy-side infrastructure asset management team. Prior to that, he held various positions with Deloitte & Touche and Arthur Andersen, based in Sydney. Mr Vu holds both master's and bachelor's degrees from the University of New South Wales, Sydney, and a Graduate Diploma of Applied Finance granted by the Financial Services Institute of Australia where he is a Fellow.

Michael Kokalari

Chief Economist

Michael Kokalari, CFA serves as VinaCapital's Chief Economist, and is responsible for providing thought leadership and technical acumen on a wide range of global and local macroeconomic issues with a view to maximising the firm's investment performance. Mr Kokalari has worked in Vietnam for eight years, and was previously the Head of Research at CIMB Securities Vietnam, and the CIO of Saigon Asset Management. Earlier in his career, Mr Kokalari was a derivatives trader in Tokyo & London where he ran multi-billion dollar trading books for Lehman Brothers, JP Morgan Chase, Credit Suisse First Boston, BNP Paribas and West LB. Mr Kokalari co-authored the CFA guide to Credit Derivatives, and was a contributor to "Risk Management: Foundations for a Changing Financial World" (published in 2010), along with Nobel Prize winners Myron Scholes and William Sharpe of Stanford University. Mr Kokalari holds an MS Engineering in Computational Mathematics from Stanford University, an MS Mathematics from Stanford, an MS Management from the Graduate School of Business at Stanford, and a BA Mathematics from Clark University, where he was a Gryphon and Pleiades Scholar.

BOARD OF DIRECTORS

Steve Bates

Non-executive Chairman (Independent)

(Appointed 5 February 2013)

Steve Bates is an experienced investor in emerging markets, spending 18 years with the Fleming Group and its successor JPMorgan Asset Management, where he led the emerging markets team. Over the past 17 years Mr Bates has been the Chief Investment Officer of GuardCap Asset Management (and its predecessor company) and is also a non-executive director of a number of investment companies. He holds an MA in Law from the University of Cambridge and is a CFA. Mr Bates will retire at the conclusion of this year's Annual General Meeting.

Thuy Bich Dam

Non-executive Director (Independent)

(Appointed 7 March 2014)

Ms Thuy Bich Dam began her career at Vietnam's Ministry of Science, Technology and Environment, responsible for coordinating treaties between the government and the World Intellectual Property Organisation (WIPO) and the European Patent Office (EPO). From 1996 to 2005, Ms Dam worked as the Natural Resources Director of ANZ Investment Bank (Singapore). Following this, Ms Dam was appointed as the CEO Vietnam, CEO Greater Mekong Region and Vice Chairwoman for the Greater Mekong Region for ANZ Bank Vietnam over a span of nearly eight years. Ms Dam was also the Chief Representative for the National Australia Bank, Vietnam from November 2013 to September 2016. She is currently the Founding President of Fulbright University Vietnam. She holds a bachelor's degree in English from Hanoi University, an MBA Finance from The Wharton School of Business and completed the Advanced Management Program at Harvard Business School.

Huw Evans

Non-executive Director (Independent)

(Appointed 27 May 2016)

Huw Evans is a Guernsey resident and qualified in London as a Chartered Accountant with KPMG (then Peat Marwick Mitchell) in 1983. He subsequently worked for three years in the Corporate Finance Department of Schroders before joining Phoenix Securities Limited in 1986. Over the next twelve years he advised a wide range of companies in financial services and other sectors in the UK and overseas on mergers and acquisitions and more general corporate strategy. Since moving to Guernsey in 2005 he has acted as a Director of a number of Guernsey based companies and funds. He holds an MA in Biochemistry from Cambridge University.

Peter Hames

Non-executive Director (Independent)

(Appointed 24 June 2021)

Peter Hames spent 18 years of his investment career in Singapore, where in 1992 he co-founded Aberdeen Asset Management's Asian operation and, as director of Asian Equities, he oversaw regional fund management teams responsible for running a number of top-rated and award-winning funds.  Peter is a former director of Polar Capital Technology Trust plc. and Syncona Ltd (formerly BACIT Ltd). Mr Hames is also director of MMIP Investment Management Limited, an independent member of the operating board of Genesis Investment Management, LLP and is a director of The Genesis Emerging Markets Investment Company.

Julian Healy

Non-executive Director (Independent)

(Appointed 23 July 2018)

Julian Healy has over thirty years' experience of banking, private equity and investment management in emerging and frontier markets. He holds an MA in Modern Languages from Cambridge University and is a member of the Institute of Chartered Accountants in England and Wales. He acts as a non-executive director for a number of companies.

Kathryn Matthews

Non-executive Director (Independent)

(Appointed 10 May 2019)

Kathryn Matthews has been involved in financial services for the last 40 years. Her last executive role was as Chief Investment Officer, Asia Pacific (ex Japan), for Fidelity International. Prior to that, Kathryn held senior appointments with William M Mercer, AXA Investment Managers, Santander Global Advisers and Baring Asset Management. She has previously been on the Board of Directors of a number of investment companies including Fidelity Asian Values and JPMorgan Chinese Investment Trust. She is currently on the Board of Directors of Barclays UK Plc, Pendal Group in Australia and CDC Group.

DISCLOSURE OF DIRECTORSHIPS IN OTHER PUBLIC COMPANIES LISTED ON RECOGNISED STOCK EXCHANGES

Directorships		Stock Exchange
Company Name
Steve Bates
The Biotech Growth Trust PLC		London
Third Point Investors Limited		London
JP Morgan Elect PLC		London
Thuy Bich Dam
None		-
Huw Evans
Standard Life Investments Property Income Trust Limited		London
Third Point Investors Limited		London
Peter Hames (Appointed 24 June 2021)
The Genesis Emerging Markets Investment Company		Luxembourg
Julian Healy
None		-
Kathryn Matthews
Pendal Group Ltd		Australia

The Board are required to declare any potential conflicts at each meeting. During the year no Director reported any potential conflicts that may affect their independence.

CORPORATE GOVERNANCE STATEMENT

To comply with the UK Listing Regime, the Company must comply with the requirements of the UK Corporate Governance Code issued in July 2018 (the "UK Code"). The Company is also required to comply with the Guernsey Code of Corporate Governance (the "Guernsey Code").

The Company is a member of the Association of Investment Companies (the "AIC") and by complying with the AIC Code of Corporate Governance which was issued in February 2019 (the "AIC Code") is deemed to comply with both the UK Code and the Guernsey Code.

The Board has considered the Principles and Provisions of the AIC Code. The AIC Code addresses the Principles and Provisions set out in the UK Code, as well as setting out additional Provisions on issues that are of specific relevance to the Company as an investment company.

The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the Financial Reporting Council and the Guernsey Financial Services Commission provides  relevant information to shareholders.

The AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies.

The Board is of the view that throughout the year ended 30 June 2021 the Company complied with the recommendations of the AIC Code. Key issues affecting the Company's corporate governance responsibilities, how they are addressed by the Board and application of the AIC Code are presented below.

Provision 1 of the AIC Code requires the annual report to set out the following information:

How opportunities and risks to the future success of the business have been considered and addressed	An overview of the Company's performance is set out in the Chairman's Statement, and a more detailed review is set out in the Investment Manager's Report. A detailed review of risk management is set out below.
The sustainability of the company's business model	The sustainability of the business model is set out in the Viability Statement below.
How its governance contributes to the delivery of its strategy	The approach to governance is set out in this section of the Annual Report, in particular the section 172 statement below and the description of the board structure.

There is no information that is required to be disclosed under Listing Rule 9.8.4.

Section 172 Statement

Section 172 of the Companies Act 2006 ("UK Companies Act") applies directly to UK domiciled companies. Nonetheless, the intention of the AIC Code is that the matters set out in section 172 are reported on by all London listed investment companies, irrespective of domicile, provided that this does not conflict with local company law.

Section 172 states that: A director of a company must act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following six items:

(a) the likely consequences of any decision in the long term,	In managing the Company, the aim of the Board and the Investment Manager is always to ensure the long-term sustainable success of the Company and, therefore, the likely long-term consequences of any decision are a key consideration. In managing the Company during the year under review, the Board acted in the way which it considered, in good faith, would be most likely to promote the Company's long-term sustainable success and to achieve its wider objectives for the benefit of shareholders as a whole, having had regard to the Company's wider stakeholders and the other matters set out in section 172 of the UK Companies Act.
(b) the interests of the company's employees,	The Company does not have any employees.
(c) the need to foster the company's business relationships with suppliers, customers and others,	The Board's approach is described under "Stakeholders" below.
(d) the impact of the company's operations on the community and the environment,	The Board's approach is described under "Environmental, Social and Corporate Governance" below.
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and	The Board's approach is described under "Culture" below.
(f) the need to act fairly as between members of the company.	The Board's approach is described under "Stakeholders" below.

Purpose

The Company is an investment company and its purpose is to provide non-Vietnamese investors with the opportunity to achieve medium to long-term returns through investment in Vietnam.

Culture and Values

The Directors' overarching duty is to promote the success of the Company for the benefit of investors, with due consideration of other stakeholders' interests. The Company's approach to investment is explained in the Investment Manager's Report. The Board applies various policies and practices to ensure that the Board's culture is in line with the Company's purpose, values and strategy. The Directors aim to achieve a supportive business culture combined with constructive challenge.

The Company has a number of policies and procedures in place to assist with maintaining a culture of good governance including those relating to diversity, bribery (including the acceptance of gifts and hospitality), tax evasion, conflicts of interest, and dealings in the Company's shares. The Board assesses and monitors compliance with these policies regularly through Board meetings and the annual evaluation process. The Board seeks to appoint the most appropriate service providers for the Company's needs and evaluates the services on a regular basis. The Board considers the culture of the Investment Manager and other service providers through regular reporting and by receiving regular presentations as well as through ad hoc interaction.

The Board also seeks to control the Company's costs, thereby enhancing performance and returns for the Company's shareholders. The Directors consider the impact on the community and environment. The Board and Investment Manager work closely together in developing and monitoring the Company's approach to Environmental, Social and Corporate Governance matters.

ESG

The Board takes a close interest in ESG issues and sets the overall strategy. As management of the portfolio is delegated to the Investment Manager, the practical implementation of policy rests with the Investment Manager. The Board has resolved that it will in future donate to an environmental charity in Vietnam to offset the environmental effects of its international travel on Company business. A description of the Investment Manager's approach to ESG issues is set out in the Investment Manager's Report.

Stakeholders

The Company is an externally managed investment company whose activities are all outsourced. It does not have any employees. The Board has identified its key stakeholders, and how the Company engages with them, in the table below:

Stakeholder	Key Considerations	Engagement
Shareholders	As an investment company, VOF's shareholders are, in effect, both its owners and its customers, obtaining investment returns from the Company. A well-informed and supportive shareholder base is crucial to the long-term sustainability of the Company. Understanding the views and priorities of shareholders is, therefore, fundamental to retaining their continued support. In considering shareholders, the Board's key considerations are: - Overall investment returns; - The ability to maintain, and potentially grow, the dividend; - Controlling the discount (and potentially the premium) at which shares trade to net asset value; - Control of costs.	A detailed explanation of the Company's approach is set out under Relations With Shareholders, included later in the Corporate Governance Statement. The Board receives regular reports from the Investment Manager and also independent reports from the Corporate Broker and UK Marketing Partner on relations with, and any views expressed by, shareholders. The Board provides shareholders with the opportunity to review the future of the Company every five years.
Investment Manager	Management of the investment portfolio is delegated to the Investment Manager. Investment performance is crucial to the long-term success of the Company.	The Board engages in regular, open and detailed communication with the Investment Manager. It reviews in detail the overall performance of the Company and of individual investments. The relationship with and performance of the Investment Manager is monitored and reviewed by the Management Engagement Committee. Julian Healy, one of the directors of the Company, regularly attends meetings of the Investment Manager's Investment Committee as a non-voting Observer. In setting investment management fees, the Board seeks to achieve an appropriate balance between value for money and an incentive to retain a strong and capable portfolio management team along with supporting staff and infrastructure.
Administrator & Corporate Secretary and other key service providers.	The Administrator and Corporate Secretary are key to the effective running of the Company. The Company has a number of other key service providers, each of which provides an important service to the Company and ultimately to its shareholders.	The Administrator and Corporate Secretary attend all Board meetings. The Management Engagement Committee undertakes an annual review of the key service providers, encompassing performance, level of service and cost. Each provider is an established business and each is required to have in place suitable policies to ensure that they maintain high standards of business conduct, treat customers fairly, and employ corporate governance best practice. All bills and expense claims from suppliers are paid in full, on time and in compliance with the relevant contracts.

While portfolio investments are not stakeholders in the conventional sense, the Board acknowledges its responsibility to ensure where possible that investee companies adhere to good standards of conduct with regard to their own stakeholders. In some cases, the Investment Manager may have the capacity to affect these matters directly; in others, the scale of the Company's investment gives it the ability to influence the management of its investee holdings.

Re-election and Tenure of Directors

As set out in the AIC Code Directors should submit themselves for annual re-election and in any event as soon as it is practical after their initial appointment to the Board. It is a further requirement that non-executive Directors be appointed for a specific period. The Board has adopted a formal policy requiring that Directors should stand down at the AGM following the ninth anniversary of their initial appointment and Steve Bates, the Chairman, will be doing so at the AGM on 2 December 2021.

The individual performance of each Director standing for election or re-election has been evaluated by the other members of the Board and a recommendation will be made that shareholders vote in favour of their election or re-election at the AGM.

Board Proceedings and Relationship with the Investment Manager

The Chairman encourages open debate to foster a supportive and co-operative approach for all participants.

The Board is required by the AIC Code to explain in the annual report the areas of decision making reserved for the Board and those over which the manager has discretion. Investment performance is discussed in the Chairman's Statement, and management of risk is described below. A description of the approach to ESG matters is set out above.

The Board meets regularly throughout the year and representatives of the Investment Manager are in attendance, when appropriate, at each meeting and most Committee meetings. In the past most meetings have been held in person but, following the imposition of global travel restrictions, meetings have been held via video conference.

The Board is responsible for strategy and has established an annual programme of agenda items under which it reviews the objectives and strategy for the Company at each meeting.

The Board, at its regular meetings, undertakes reviews of: key investment and financial data, revenue projections and expenses, analyses of asset allocation, transactions, share price and NAV performance, marketing and shareholder communication strategies, the risks associated with pursuing the investment strategy, peer company information and industry issues.

The Board has agreed a schedule of matters specifically reserved for decision by the Board. This includes establishing the investment objectives, strategy and benchmarks, the permitted types or categories of investments, the markets in which transactions may be undertaken, the level of permitted gearing and borrowings, the amount or proportion of the assets that may be invested in any category of investment or in any one investment, and the Company's treasury and share buyback policies.

The Investment Management Agreement between the Company and the Investment Manager sets out the limits of the Investment Manager's authority, beyond which Board approval is required. The Board has also agreed detailed investment guidelines with the Investment Manager, which are considered at each Board meeting. The Investment Manager is generally responsible for routine announcements of information but the Board is responsible for communications regarding major corporate issues.

Representatives of the Investment Manager attend each meeting of the Board to address questions on specific matters and to seek approval for specific transactions which the Investment Manager is required to refer to the Board.

The Board has delegated discretion to the Investment Manager to exercise voting powers in investee companies on the Company's behalf, other than for contentious or sensitive matters which are referred to the Board.

At Board meetings the Company Secretary provides a report in which the Directors are given key information on the Company's regulatory and statutory requirements as they arise, including information on the role of the Board, matters reserved for its decision, the terms of reference for the Board Committees, the Company's corporate governance practices and procedures and the latest financial information. It is the Chairman's responsibility to ensure that the Directors have sufficient knowledge to fulfil their role and Directors are encouraged to participate in training courses where appropriate.

The Directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that the Directors are aware of the procedures to be followed. The Company Secretary is also responsible for ensuring good information flows between all parties.

Board Committees

There are four Board committees in operation: the Audit Committee, Management Engagement Committee, Remuneration Committee and Nomination Committee. The chairmanship and membership of each Committee throughout the year, and the number of meetings held during the year, are shown in the table below. A summary of the duties of each of the Committees is provided below. The terms of reference can be obtained from the Company's Administrator.

Audit Committee

The Audit Committee, which meets at least three times a year, comprises all of the Directors and is chaired by Huw Evans. The Chairman of the Company is a member of the Audit Committee but does not chair it. His membership of the Audit Committee is considered appropriate given the Chairman's extensive knowledge of the Company and its investments. Following the AGM in December 2021, Julian Healy will take over the chairmanship of the Audit Committee. The Directors (with the exception of Steve Bates) have resolved that Huw Evans should remain a member of the Audit Committee for the reasons set out above.

The Audit Committee is responsible for monitoring the process of production and ensuring the integrity of the Company's Financial Statements and advises the Board whether the Annual Report and Financial Statements are fair, balanced and understandable.

One of the key responsibilities of the Audit Committee is to oversee the relationship with the External Auditor. In discharging its responsibility to oversee the External Auditor's independence, the Audit Committee considers whether any other engagements provided by the External Auditor will have an effect on, or perception of, compromising the External Auditor's independence and objectivity. The provision of services in addition to external audit must be specific and approved by the Audit Committee.

The Audit Committee is also responsible for recommending to the Board the valuation of investments. In seeking to determine the fair value of the Company's operating asset, structured and private equity investments, the Committee reviews the reports of independent valuation specialists as well as reviewing the Investment Manager's valuation process and recommendations. Each individual valuation is reviewed in detail and, where an Independent Valuer has been retained, their recommendation may be accepted or modified. Refer to note 3 to the Financial Statements for further information on the valuation of investments held by the Company.

As set out under Internal Controls and Risk within the Corporate Governance Statement, the Company's risk exposure and the effectiveness of its risk management and internal control systems are reviewed by the Audit Committee and considered by the Board at each scheduled meeting. An internal audit function specific to the Company is considered unnecessary as all operations are outsourced to third parties.

A report of the Audit Committee detailing responsibilities and activities is presented after the Statement of Directors' Responsibilities.

The Audit Committee Chairman presents the Committee's findings to the Board at the next Board meeting following each meeting of the Audit Committee.

Management Engagement Committee

The Management Engagement Committee comprises all of the Directors and is chaired by Julian Healy. The Committee's responsibilities include reviewing the performance of the Investment Manager under the Investment Management Agreement and considering any variation to the terms of the agreement. The Management Engagement Committee also reviews the performance of the Company Secretary, Corporate Brokers, Custodian, Administrator, Registrar and other service providers and any matters concerning their respective agreements with the Company.

Remuneration Committee

The Remuneration Committee comprises all of the Directors and is chaired by Thuy Bich Dam. As the Board consists entirely of non-executive directors, and committee meetings are generally arranged to coincide with Board meetings, the Board has decided that it is appropriate that all Directors should be members of the Remuneration Committee. The Committee's responsibilities include recommending to the Board the policy for the remuneration of the Company's Chairman, the Audit Committee Chairman and the remaining non-executive directors, and reviewing the ongoing appropriateness and relevance of the remuneration policy; determining the individual remuneration of each non-executive director; and the selection and appointment of any remuneration consultants who advise the Committee.

The Directors' Remuneration Report is presented after the Report of the Audit Committee.

Nomination Committee

The Nomination Committee comprises all of the Directors and is chaired by Steve Bates. Following his retirement at the AGM in December 2021, Huw Evans will take over the role of the chair of this committee. As the Board consists entirely of non-executive directors, and committee meetings are generally arranged to coincide with Board meetings, the Board has decided that it is appropriate that all Directors should be members of the Nomination Committee. The Committee's responsibilities include reviewing the structure, size and composition of the Board and making recommendations to the Board in respect of any changes; succession planning for the Chairman and the remaining non-executive directors; making recommendations to the Board concerning the membership and chairmanship of the Board committees; identifying and nominating for the approval of the Board candidates to fill Board vacancies; and, before any new appointment is recommended, evaluating the balance of skills, knowledge, experience and diversity within the Board and preparing an appropriate role description. The Chairman absents himself from discussions on succession to his own role.

Board Composition

As at the date of this report the Board consists of six non-executive directors, each of whom is independent of the Investment Manager. No member of the Board is a Director of another investment company managed by the Investment Manager, nor has any Board member been an employee of the Company, its Investment Manager or any of its service providers.

The Chairman will retire at the conclusion of the AGM on 2 December 2021. Huw Evans will succeed Steve Bates as Chairman and Julian Healy will succeed Huw Evans as Chair of the Audit Committee.

Huw Evans was appointed as the Senior Independent Directors ("SID") at a meeting of the Board on 10 May 2019. When Huw Evans assumes the role of Chairman on the conclusion of the AGM, Julian Healy will take over the position of SID . The SID provides shareholders with someone whom they can contact if they have concerns which cannot be addressed through the normal channels. The SID is also available to act as an intermediary between the other Directors and the Chairman (if required). The role serves as an important check and balance in the governance process.

The Board reviews the independence of the Directors at least annually.

The Board believes that each Director has appropriate qualifications, industry experience and expertise to guide the Company and that the Board as a whole has an appropriate balance of skills, experience, background and knowledge. Following Steve Bates's retirement, the Board will comprise three men and two women, one of whom is Vietnamese and resident in Vietnam. The Directors' biographies can be found within the Board of Directors section.

Appointment of new Directors

The Board seeks to ensure that any vacancies arising are filled by the best qualified candidates. The Board is committed to ensuring that the Company's Directors bring a wide range of skills, knowledge, experience, backgrounds and perspectives to the Board. All appointments are made on merit, and in the context of the skills, knowledge and experience that are needed for the Board to be effective. Part of the remit of the Board's Nomination Committee is, before any new appointment is recommended, evaluating the balance of skills, knowledge, experience and diversity within the Board.

For new appointments to the Board, nominations are sought from the Directors and from other relevant parties, and independent search consultants are appointed. Candidates are then interviewed by members of the Nomination Committee. The Board has a breadth of experience relevant to the Company, and the Directors believe that any changes to the Board's composition can be managed without undue disruption. An induction programme is provided for newly-appointed Directors. An independent consultant, OSA Recruitment, was employed for the search which resulted in the appointment of Peter Hames.

Board and Committee Meetings

During the year ended 30 June 2021, the number of scheduled Board and Committee meetings attended by each Director was as follows:

		Board Meetings	Audit Committee Meetings	Management Engagement Committee Meetings	Nomination Committee Meetings	Remuneration Committee Meetings
Number of meetings		6	6	2	1	2
Attendance
Steve Bates		6	6	2	1	2
Thuy Bich Dam		6	6	2	1	2
Huw Evans		6	6	2	1	2
Peter Hames 1		1	1	1	-	1
Julian Healy		6	6	2	1	2
Kathryn Matthews		6	6	2	1	2

¹ Peter Hames was appointed to the Board on 24 June 2021.

In addition to the scheduled meetings noted above, a number of ad hoc meetings of the Board were held during the year which were attended by those Directors available at the time.

Board Performance

The Board has a formal process to evaluate its own performance and that of its Chairman annually.   The provisions of the AIC Code require a FTSE 350 company to have its annual evaluation carried out in conjunction with an independent agency every three years. The last review was carried out in 2019 by the Company's external evaluator, Lintstock Ltd. There are no other connections between Lintstock Ltd, the Company and any members of the Board. Following this review, the Board was satisfied that the structure, mix of skills and operation of the Board continue to be effective and relevant for the Company.

The Board must ensure that the Annual Report and Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy. In seeking to achieve this, the Directors have set out the Company's investment objective and policy and explain how the Board and its delegated Committees work and how the Directors review the risk environment in which the Company operates and set appropriate risk controls. Furthermore, throughout the Annual Report the Board has sought to provide comprehensive information to enable shareholders to understand the Company's business and financial performance.

Internal Controls and Risk

(i) Risk Management System

Day to day management of risk is the responsibility of the Investment Manager, whose Enterprise Risk Management ("ERM") framework provides a structured approach to managing risk across all of its managed funds by establishing a risk management culture through education and training, formalised risk management procedures, defining roles and responsibilities with respect to managing risk, and establishing reporting mechanisms to monitor the effectiveness of the framework. The Audit Committee works closely with the Investment Manager on the application, consideration and review of the ERM framework to the Company's risk environment.

Regular risk assessments and reviews of internal controls are undertaken by the Audit Committee in the context of the Company's investment policy. At each meeting, the Board considers both previously identified and emerging risks. The Administrator and Corporate Secretary and other service providers are also encouraged to provide their views on emerging risks.  The reviews cover the strategic, investment, operational and financial risks facing the Company. In arriving at its judgement of the risks which the Company faces, the Board has considered the Company's operations in light of the following factors:

· the nature and extent of risks which it regards as acceptable for the Company to bear within its overall business objective;

· the threat of such risks becoming reality;

· the Company's ability to reduce the incidence and impact of risk on its performance; and

· the cost to the Company and benefits related to the Company of third parties operating the relevant controls.

(ii) Internal Control Assessment Process

Responsibility for the establishment and maintenance of an appropriate system of internal control rests ultimately with the Board. However, the Board is dependent on the Investment Manager and other service providers to achieve this and a process has been established which seeks to:

· review the risks faced by the Company and the controls in place to address those risks;

· identify and report changes in the risk environment;

· identify and report changes in the operational controls;

· identify and report on the effectiveness of controls and errors arising; and

· ensure no override of controls by the Investment Manager or Administrator or any other service providers.

The key procedures which have been established to provide effective internal financial controls are as follows:

· investment management is provided by the Investment Manager. The Board is responsible for the overall investment policy and monitors the investment performance, actions and regulatory compliance of the Investment Manager at regular meetings;

· accounting for the Company and subsidiaries is provided by Aztec Group;

· fund administration is provided by Aztec Group;

· custody of those assets which can be held by a third party custodian is undertaken by Standard Chartered Bank;

· the Management Engagement Committee monitors the contractual arrangements with each of the key service providers and their performance under these contracts;

· mandates for authorisation of investment transactions and expense payments are set by the Board and documented in the Investment Management Agreement;

· the Board receives financial information produced by the Investment Manager on a regular basis. Board meetings are held at least four times per year to review such information; and

· actions are taken to remedy any significant failings or weaknesses, if identified.

(iii) Risk management

For the purposes of making the Viability Statement, the Board has undertaken a robust review of the principal risks and uncertainties (and monitors emerging risks at each quarterly board meeting) facing the Company including those that would threaten its business model, future performance, solvency or liquidity. The risk matrix and heat map prepared by the Investment Manager and subject to detailed scrutiny by the Audit Committee are the key tools in this review, along with a mechanism at each quarterly Board meeting to consider and monitor any emerging risks. The principal risks are described in the following table together with a description of the mitigating actions taken by the Board.

COVID-19 pandemic

Description The novel COVID-19 virus was first identified in China in late 2019 and, despite efforts to contain the spread of COVID-19, outbreaks occurred around the world during 2020. The developing pandemic was identified as an emerging risk by the Investment Manager in late 2019. The pandemic has affected both (i) the management and operations of the Company and (ii) the Company's investments. While the pandemic may now be a lesser risk in some countries, Vietnam is currently suffering major social and economic disruption. Furthermore, there is a continuing risk of variants of the virus causing further outbreaks.

Mitigating Action In seeking reassurance on the continuing operation of the Company, the Board worked closely with the Investment Manager and the Administrator to ensure that the portfolio has continued to be managed effectively and the Company has continued to operate despite restrictive measures on movement imposed to contain the outbreak. During the year under review, the Board arranged additional briefings from the Investment Manager to ensure regular communication and oversight as the COVID-19 outbreak developed. The Board notes that the Investment Manager has continued to be able to execute purchases and sales of both listed and of privately owned companies and was reassured by the Investment Manager's ability to continue to operate "business as usual". The Audit Committee, as part of its regular risk monitoring activity, also received reassurances that the operations of its other key service providers were able to continue and that appropriate controls were in place despite travel and other restrictions. While the Company and its key service providers have, to date, dealt well with the effects of the pandemic, the Board remains alert to the continuing risks and will continue to monitor the situation closely and will take action if and when necessary.

Vietnamese Market Risk
Description	Mitigating Action
Opportunities for the Company to invest in Vietnam have come about through the liberalisation of the Vietnamese economy. Were the pace or direction of change to the economy to alter in the future, for example as the result of the COVID-19 pandemic, the interests of the Company could be damaged. Changes in the equilibrium of international trade caused, for example, by the imposition of tariffs could affect the Vietnamese economy and the companies in which the Company is invested. As Vietnam becomes increasingly connected with the rest of the world, significant world events will have a greater impact on the country. The consequences of these events are not always known and in the past have led to increased uncertainty and volatility in the pricing of investments. The economy could also be affected by any escalation in geopolitical tensions in the region and elsewhere.	The Board is regularly briefed on political and economic developments by the Investment Manager. The Investment Manager publishes a monthly report on the Company which includes information and comment on macroeconomic and, where relevant, political developments relating to Vietnam. In the year under review, as well as at its regular scheduled meetings the Board held additional ad hoc meetings with the Investment Manager to discuss the potential effects of the COVID-19 pandemic on Vietnamese market risk. At these meetings it reviewed with the Investment Manager any tactical changes to the investment portfolio which may be necessary.
Changing investor sentiment
Description	Mitigating Action
As a Company investing mainly in Vietnam, changes in investor sentiment towards Vietnam and/or frontier markets may lead to the Company becoming unattractive to investors leading to reduced demand for its shares and a widening discount.	The Investment Manager has an active Investor Relations programme, keeping shareholders and other potential investors regularly informed on Vietnam in general and on the Company's portfolio in particular. At each Board meeting the Board receives reports from the Investment Manager, from the Broker and from the UK Marketing and Distribution partner, Frostrow Capital LLP, and is updated on the composition of, and any movements in, the Shareholder register. The Board also communicates regularly with major shareholders directly, independent of the Investment Manager. In seeking to make the Company attractive to investors seeking an income the Board has resolved to pay regular dividends. In seeking to close the discount, the Board has also approved and implemented an extensive share buy-back programme, the details of which are set out in note 11 of the Financial Statements. The COVID-19 pandemic has continued to preclude meetings in person with existing and potential shareholders but a number of telephone and video conferences were arranged.
Investment Performance
Description	Mitigating Action
The performance of the Company's investment portfolio could be poor, either absolutely or in relation to the Company's peers.	The Board monitors the allocation of the Company's portfolio to the various sectors and classes of assets and receives regular reports on the performance of the portfolio and on those underlying assets. The Investment Manager attends all Board meetings and, in previous years, the Board has visited Vietnam for more detailed meetings, including with investee companies, twice each year. Since the Board's last visit in October 2019, in-person contact has been suspended as a result of travel restrictions imposed by the COVID-19 pandemic, but the Investment Manager has provided more frequent reports to the Board by video conference.
Fair Valuation
Description	Mitigating Action
The risks associated with the fair valuation of the portfolio could result in the NAV of the Company being misstated. The quoted companies in the portfolio are valued at market price but many of the holdings are of a size which would make them difficult to liquidate at these prices in the ordinary course of market activity. The unlisted securities are valued at their quoted prices on UPCoM or using quotations from brokers, but many of the holdings are of a size which would make them difficult to liquidate at these prices in the ordinary course of market activity. The fair valuation of operating assets, structured and private equity investments is carried out according to international valuation standards but the investments are not readily liquid and may not be immediately realisable at the stated carrying values. The values of the Company's underlying investments are, in the main, denominated in Vietnamese Dong whereas the Company's accounts are prepared in US Dollars. The Company does not hedge its Vietnamese Dong exposures, so exchange rate fluctuations could have a material effect on the NAV.	The Board reviews the fair valuation of the listed and unlisted investment portfolio with the Investment Manager at each Board meeting and focuses in particular on any unexpected or sharp movements in market prices. The weekly, monthly and year-end NAV calculations are prepared by the Company's Administrator and reviewed by the Investment Manager. The Board has appointed independent external valuers to assist in determining fair values of certain of the operating asset, structured and private equity investments in accordance with International Financial Reporting Standards. The independent external valuers determine the fair value of the operating asset and certain private equity and structured investments at the year end. The remaining valuations are estimated by the Investment Manager using pricing analysis and discounted cash flows  and, in all cases, valuations are reviewed by the Audit Committee and approved by the Board. The fair values of the investments as at 30 June each year are reviewed by the external auditor as part of their audit process.
Investment Management Performance
Description	Mitigating Action
The Investment Management Agreement requires the Investment Manager to provide competent, attentive, and efficient services to the Company. If the Investment Manager was not able to do this or if the Investment Management Agreement were terminated, there could be no assurance that a suitable replacement could be found and, under those circumstances, the Company would suffer.	The Board maintains close contact with the Investment Manager and key personnel of the Investment Manager attend each Board meeting. In the past either the Board has visited Vietnam or representatives of the Investment Manager have travelled to Board meetings in Europe. Travel has been suspended as a result of the global COVID-19 pandemic, but the Investment Manager has provided regular reports to the Board by video conference. The Board reviews the performance of the Investment Manager annually and provides feedback to the Investment Manager on matters that could be improved.
Operational
Description	Mitigating Action
The Company is dependent on third parties for the provision of all systems and services (in particular, those of the Investment Manager and the Administrator) and any control failures or gaps in these systems and services could result in a loss or damage to the Company.	The Board receives regular reports from the Investment Manager on its internal policies, controls and risk management. It also receives an annual assurance from the Investment Manager on the adequacy and effectiveness of its internal controls, including those concerning cyber risk. The Board has taken measures to ensure segregation of functions by appointing Aztec Group as the Company's independent administrator and Standard Chartered Bank as custodian for those assets which can be held by a third party custodian. Further details of the internal controls which are in place are set out within the Report of the Board of Directors.
Legal and Regulatory
Description	Mitigating Action
Failure to comply with relevant regulation and legislation in Vietnam, Guernsey, Singapore, the British Virgin Islands or the UK may have an impact on the Company. Although there are anti-bribery and corruption policies in place at the Company, the Investment Manager and all other service providers, the Company could be damaged and suffer losses if any of these policies were breached.	The laws and regulations in Vietnam continue to develop. The Investment Manager maintains a risk and compliance department which monitors compliance with local laws and regulations as necessary. Locally based external lawyers (typically members of major international law firms) are engaged to advise on portfolio transactions where necessary. As to its non-Vietnamese regulatory and legal responsibilities: (i) the Company is administered in Guernsey by Aztec Group which reports to the Board at each Board meeting on Guernsey compliance matters and more general issues applicable to Guernsey companies listed on the LSE, and (ii) the Investment Manager monitors legal, regulatory and tax issues in Singapore and the BVI, where the Company owns subsidiaries. The Investment Manager and other service providers confirm to the Board at least annually that they maintain anti-bribery and corruption policies and would disclose if there had been any breaches of these policies.

(iv) Internal Audit Function

The Audit Committee has reviewed the need for an internal audit function for the Company itself. The  Committee has concluded that the systems and procedures employed by the Investment Manager and the Administrator, including their own internal audit functions, currently provide sufficient assurance that a sound system of internal control, which safeguards the Company's assets, is maintained. As all operations of the Company are outsourced to third parties, an internal audit function specific to the Company is therefore considered unnecessary. The Investment Manager has appointed KPMG Vietnam as its internal auditor.

Directors' Dealings  

The Company has adopted a Code of Directors' Dealings in Securities.

Relations with Shareholders  

A detailed analysis of the substantial shareholders of the Company is provided to the Directors at each Board meeting. The Chairman and representatives of the Investment Manager are available to meet shareholders to discuss strategy and to understand any issues and concerns which they may have and, if appropriate, to discuss corporate governance issues. The results of such meetings are reported at the following Board meeting.

Regular reports from the Company's brokers on investor sentiment and industry issues are submitted to the Board.

Shareholders wishing to communicate with the Chairman, or any other member of the Board, may do so by writing to the Company, for the attention of the Company Secretary, at the Registered Office. The Directors welcome the views of all shareholders and place considerable importance on communications with them. Huw Evans is the SID of the Company, and Julian Healy will be the SID with effect from 2 December 2021. Shareholders can contact the SID via the Company Secretary or the Company's brokers if they have concerns which cannot be addressed through the normal channels.

The Company aims to provide shareholders with a full understanding of the Company's investment objective, policy and activities, its performance and the principal investment risks by means of informative Annual and Half Year reports. This is supplemented by the publication by the Investment Manager of a monthly fact sheet, both daily and weekly estimates of the NAV per share and a regular series of video presentations, all of which are available on the Company's website, https://vof.vinacapital.com.

The Annual General Meeting of the Company provides a forum for shareholders to meet and discuss issues with the Directors of the Company.

International Tax Reporting  

For purposes of the US Foreign Account Tax Compliance Act, the Company registered with the US Internal Revenue Service ("IRS") as a Guernsey reporting Foreign Financial Institution ("FFI"), received a Global Intermediary Identification Number (GUHZUZ.99999.SL.831), and can be found on the IRS FFI list.

The Common Reporting Standard ("CRS") is a global standard developed for the automatic exchange of financial account information developed by the Organisation for Economic Co-operation and Development ("OECD"), which was adopted in Guernsey and which came into effect on 1 January 2016.

The Company made its latest report for CRS to the Guernsey Director of Income Tax in June 2021.

The Board ensures that the Company is compliant with Guernsey regulations and guidance in this regard.

Share Capital and Treasury Shares

The number of shares in issue at the year-end is disclosed in note 11 to the Financial Statements.

Directors' Interests in the Company

As at 30 June 2021 and 30 June 2020, the interests of the Directors in shares of the Company are as follows:

	Shares held as at 30 June 2021	Percentage of total shares at 30 June 2021	Shares held as at 30 June 2020	Percentage of total shares at 30 June 2020
Steve Bates	25,000	0.015%	25,000	0.014%
Thuy Bich Dam	-	-	-	-
Huw Evans	35,000	0.021%	35,000	0.020%
Peter Hames (Appointed 24 June 2021)	-	-	-	-
Julian Healy	15,000	0.009%	15,000	0.009%
Kathryn Matthews	9,464	0.006%	9,464	0.005%

There have been no changes to any holdings between 30 June 2021 and the date of this report.

Substantial Shareholdings

As at 30 June 2021 and 30 September 2021, the Directors are aware of the following shareholders with holdings of more than 3% of the ordinary shares of the Company:

	30 June 2021		30 September 2021
	Number of ordinary shares	Percentage of issued share capital	Number of ordinary shares	Percentage of issued share capital
Shareholder
Lazard Asset Management	* 22,096,493	13. 18 %	* 22,096,493	13. 18 %
City of London Investment Management	17,664,026	10.47%	20,117,812	12.07%
Hargreaves Lansdown	10,082,129	5.97%	9,722,352	5. 83 %
Janus Henderson Investors	6,856,233	4.06%	6, 836,633	4. 10 %
Wells Capital Management	6,242,523	3.70%	7,586,523	4.55 %
Interactive Investor	6,210,457	3.68%	6, 189,802	3. 71 %
BlackRock	5,287,373	3.19%	5, 394,630	3. 24 %
UBS Wealth Management	5,121,451	3.03%	** N/A	** N/A

* This is the holding as at 26 August 2021

** UBS Wealth Management does not hold more than 3% of the ordinary shares of the Company at 30 September 2021

Annual General Meeting ("AGM")

The Company's next AGM is due to be held in Guernsey at the offices of Aztec Group at 11:00 a.m. on 2 December 2021.

Ongoing Charges

Ongoing charges are the recurring expenses incurred by the Company, excluding one-off expenses. Ongoing charges for the years ended 30 June 2021 and 30 June 2020 have been prepared in accordance with the AIC's recommended methodology. The ongoing charges excluding incentive fees for the year ended 30 June 2021 were 1.64% (30 June 2020: 1.70%). Ongoing charges including incentive fees for the year ended 30 June 2021 were 7.72% (30 June 2020: 1.39%). Percentages are calculated based on the average NAV during the financial year.

Going Concern and Viability Statement

As noted, the Directors have undertaken a robust review of the principal risks and uncertainties (including emerging risks) facing the Company and for the purposes of complying with the AIC Code, have assessed the viability of the Company over the three years to 30 June 2024. The Directors consider this period sufficient given the inherent uncertainty of the investment world and the specific issues which the Company faces in investing in Vietnam. In making their assessment the Directors confirmed that they have no reason to believe that shareholders would vote against the continuation of the Company at the AGM in 2023.

The Directors, having considered the above risks and other factors, have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment.

The Directors believe that, having considered the Company's investment objective (see Investment Policy), financial risk management and associated risks and in view of the liquidity of investments, the income deriving from those investments and its holding in cash and cash equivalents, the Company has adequate financial resources and suitable management arrangements in place to continue in operational existence for a period of at least twelve months from the date of approval of these financial statements and therefore the financial statements have been prepared on a going concern basis.

REPORT OF THE BOARD OF DIRECTORS

The Board of Directors (the "Board") submits its Annual Report together with the Audited Financial Statements (the "Financial Statements") of the Company for the year ended 30 June 2021.

The Company is a Guernsey domiciled closed-ended investment company. The Company is classified as a registered closed-ended Collective Investment Scheme under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 and is subject to the Companies (Guernsey) Law, 2008 (the "Guernsey Law").

The Company is quoted on the Main Market of the London Stock Exchange ("LSE") with a Premium Listing (ticker: VOF).

The Company's investments continue to be managed by the Investment Manager.

Principal Activities

Through its investments in subsidiaries and associates, the Company's objective is to achieve medium to long-term returns through investment in assets either in Vietnam or in companies with a substantial majority of their assets, operations, revenues or income in, or derived from, Vietnam.

Life of the Company

The Company does not have a fixed life but the Board considers it desirable that shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends that every fifth year a special resolution will be proposed that the Company ceases to continue. If the resolution is not passed, the Company will continue to operate as currently constituted. If the resolution is passed, the Directors will be required to formulate proposals to be put to shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up. The Board tabled such resolutions in 2008, 2013 and 2018 and on each occasion the resolution was not passed, allowing the Company to continue as currently constituted. The next such resolution will be put to shareholders in 2023.

Investment Policy

The Company has since it listed on the London Stock Exchange Main Market had as part of its formal investment policy a statement that "No more than 10%, in aggregate, of the value of the Company's total assets may be invested in other listed closed-ended investment funds. The restriction on investment in other listed closed-ended investment funds does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds". This statement was included in the Investment Policy to confirm compliance with Listing Rule 15.2.5. In practice, the Company does not invest in other listed closed-ended funds and has no intention to do so. The Directors have therefore changed the formal investment policy to exclude investments in other listed closed-ended funds. As the Company has not invested in other listed closed-ended funds, there is no practical change to the approach to managing the portfolio and the Directors have been advised that this change to the investment policy is non-material and does not require formal shareholder approval. The Company's investment policy with effect from the date of this Annual Report is as follows:-

All of the Company's investments will be in Vietnam or in companies with at least 75% of their assets, operations, revenues or income in, or derived from, Vietnam at the time of investment.

· No single investment may exceed 20% of the Net Asset Value ("NAV") of the Company at the time of investment.

· The Company may from time to time invest in other funds focused on Vietnam. This includes investments in other funds managed by VinaCapital Investment Management Limited (the "Investment Manager"). Any investment or divestment of funds managed by the Investment Manager will be subject to prior approval by the Board.

· The Company may from time to time make co-investments alongside other investors in private equity, real estate or similar assets. This includes, but is not restricted to, co-investments alongside other funds managed by the Investment Manager.

· The Company will not invest in other listed closed-ended funds.

The Company may gear its assets through borrowings which may vary over time according to market conditions and any or all of the assets of the Company may be pledged as security for such borrowings. Borrowings will not exceed 10% of the Company's total assets at the time that any debt is drawn down.

From time to time the Company may hold cash or low risk instruments such as government bonds or cash funds denominated in either Vietnamese Dong ("VND") or US Dollars ("USD"), either in Vietnam or outside Vietnam.

Valuation Policy

The accounting policy for valuations can be found in note 2 to the Financial Statements.

Performance

The Chairman's Statement and the Investment Manager's Report provide details of the Company's activities and performance during the year.

The key performance indicators ("KPIs") used to measure the progress of the Company during the year include:

· the movement in the Company's NAV;

· the movement in the Company's share price; and

· discount of the share price in relation to the NAV.

Information relating to the KPIs can be found in the Financial Highlights section.

A discussion of progress against the KPIs is included in the Chairman's Statement.

Distribution Policy

Dividend Policy

In August 2017, the Company declared its first dividend.

The Board stated that the Company intended to pay a dividend representing approximately 1% of NAV twice each year, normally declared in March and October.

The policy will be subject to shareholder approval at each annual general meeting.

Share Buybacks

The Company may also distribute capital by means of share buybacks when the Board believes that it is in the best interests of shareholders to do so. The share buyback programme will be subject to Shareholder approval at each annual general meeting.

Discount Management

The Board will continue to operate the share buyback programme in line with the objective of ensuring that the share price more closely reflects the underlying NAV per share.

The Board will continue to retain responsibility for setting the parameters for the discount management policy, for overseeing the management of the buyback programme and for ensuring that its policy is implemented. The Board intends to continue to seek to narrow the discount through the continued use of share buybacks and active marketing of the Company. The Board's objective is to achieve a narrowing of the discount in a manner that is sustainable over the longer term. The Board and the Investment Manager intend to consult regularly with shareholders with a view to assessing and improving the effectiveness of the buyback programme. Further comments on the buyback programme are set out in the Chairman's Statement.

Refer to note 11 of the Financial Statements for details of share buybacks during the year under review.

Subsequent Events after the Reporting Date

On 25 October 2021, the Board declared a dividend of 8.0 US cents per share. The dividend is payable on or around 6 December 2021 to shareholders on record at 5 November 2021.

On behalf of the Board

Steve Bates

Chairman

VinaCapital Vietnam Opportunity Fund Limited

25 October 2021

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Financial Statements for each financial period which give a true and fair view of the state of affairs of the Company and of its profit or loss for that period in accordance with International Financial Reporting Standards ("IFRS") and the Guernsey Law. International Accounting Standard 1 - Presentation of Financial Statements requires that financial statements present fairly for each financial period the Company's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's ("IASB") "Framework for the preparation and presentation of financial statements". In virtually all circumstances a fair presentation will be achieved by compliance with all applicable IFRS.

The Directors are also responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to ensure that the Financial Statements have been prepared in accordance with the Guernsey Law and IFRS. They are also responsible for safeguarding the assets of the Company and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the oversight of the maintenance and integrity of the corporate and financial information in relation to the Company's website; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept 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.

In preparing the Financial Statements the Directors are required to:

· ensure that the Financial Statements comply with the Company's Memorandum & Articles of Incorporation and IFRS;

· select suitable accounting policies and apply them consistently;

· present information including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

· make judgements and estimates that are reasonable and prudent;

· prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that the Company will continue in business; and

· provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company's financial position and financial performance.

The Directors confirm that they have complied with these requirements in preparing the Financial Statements.

Responsibility Statement of the Directors in Respect of the Financial Statements

The Directors consider that the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide information necessary for shareholders to assess the Company's position, performance, business model and strategy. Each of the Directors confirms to the best of each person's knowledge and belief that:

a)  the Financial Statements have been prepared in accordance with IFRS and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as at and for the year ended 30 June 2021; and

b)  the Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces as required by DTR 4.1.8R and DTR 4.1.11R.

Directors' Statement

So far as each of the Directors is aware, there is no relevant audit information of which the Company's External Auditor is unaware, and each Director has taken all of the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company's External Auditor is aware of that information. In the opinion of the Board, the Annual Report and Financial Statements taken as a whole, are fair, balanced and understandable and provide the information necessary to assess the Company's performance, business model and strategy.

On behalf of the Board

Steve Bates

Chairman

VinaCapital Vietnam Opportunity Fund Limited

25 October 2021

REPORT OF THE AUDIT COMMITTEE

On the following pages, we present the Report of the Audit Committee (the "Committee") for the year ended 30 June 2021, setting out the Committee's structure and composition, principal duties and key activities during the year. As in previous years, the Committee has reviewed the Company's financial reporting, the independence and effectiveness of the External Auditor and the internal control and risk management systems of the service providers.

Structure and Composition

The Committee is chaired by Huw Evans. Mr Evans will become Chairman of the Company following the AGM on 2 December 2021, at which time Julian Healy will become chair of the Audit Committee. All other Directors of the Company are members of the Committee. Peter Hames joined the Committee on his appointment to the Board on 24 June 2021.

Appointment to the Committee is for a period of up to three years which may be extended for two further three-year periods provided that the majority of the Committee remain independent of the Investment Manager.

The Committee conducts formal meetings at least three times a year. The table in the Report of the Board of Directors sets out the number of Committee meetings held during the year ended 30 June 2021 and the number of such meetings attended by each committee member. The External Auditor is invited to attend those meetings at which the audit plan for the year is reviewed and at which the annual and interim reports are considered. The External Auditor and the Audit Committee Chairman meet every year without the presence of either the Administrator or the Investment Manager and at other times if the Committee deems this to be necessary.

Principal Duties

The role of the Committee includes:

· monitoring the integrity of the published Financial Statements of the Company and advising the Board on whether, taken as a whole, the Annual Report and Financial Statements are (i) fair, balanced and understandable and (ii) provide the information necessary for shareholders to assess the Company's performance, business model and strategy;

· reviewing and reporting to the Board on the significant issues and judgements made in the preparation of the Company's Annual Report and Financial Statements, having regard to matters communicated by the External Auditor, significant financial returns to regulators and other financial information;

· monitoring and reviewing the quality and effectiveness of the External Auditor and their independence and making recommendations to the Board on their appointment, reappointment, replacement and remuneration;

· carrying out a robust assessment of the principal risks facing the Company and including in the Annual Report and Financial Statements a description of those risks and explaining how they are being managed or mitigated; and

· recommending valuations of the Company's investments to the Board.

External Auditor

PricewaterhouseCoopers CI LLP ("PwC CI") was appointed as the External Auditor with effect from 24 May 2016 following the change of domicile of the Company from the Cayman Islands to Guernsey. Prior to this date PricewaterhouseCoopers Hong Kong was the External Auditor.

The independence and objectivity of the External Auditor is reviewed by the Committee, which also reviews the terms under which the External Auditor is appointed to perform any non-audit services. The Committee has established policies and procedures governing the engagement of the External Auditor to provide non-audit services. These are that the External Auditor may not provide a service which:

· places them in a position to audit their own work;

· creates a mutuality of interest;

· results in the External Auditor functioning as a Manager or Employee of the Company; and

· puts the External Auditor in the role of Advocate of the Company.

The audit and any non-audit fees proposed by the External Auditor each year are reviewed by the Committee taking into account the Company's structure, operations and other requirements during the period and the Committee makes recommendations to the Board.

The Committee has examined the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the External Auditor, with particular regard to non-audit fees, and considers PwC CI, as External Auditor, to be independent of the Company.

The External Auditor is required to rotate the Audit Engagement Partner responsible for the Company's audit every five years. During the year, John Roche rotated from the position of Audit Engagement Partner and was succeeded by Evelyn Brady.

Key Activities

The following sections discuss the principal assessments made by the Committee during the year:

Risk Management

The Committee received and reviewed detailed reports on the principal risks facing the Company from the Investment Manager. The Committee's reviews focused on changes to the risks and also considered whether the Company was subject to any new or emerging risks, taking account of the views of the Investment Manager, of other service providers and of Committee members' own awareness of issues which may affect the Company. In the year under review, particular attention was paid to risk associated with the COVID-19 pandemic.

Significant Financial Statement Issues

(a) Valuation of Investments

The fair value of the Company's investments at 30 June 2021 was USD1,353 million accounting for 94.7% of the Company's assets (30 June 2020: USD870.5 million and 99.1%, respectively).

In relation to the listed investments and unlisted investments where an active market exists, the Committee confirmed that the Investment Manager has used the market values published by the relevant stock exchanges as at the Statement of Financial Position date.

In relation to the operating asset, structured and private equity investments , the Committee ensured that the Investment Manager and, where relevant, the Independent Valuer have applied appropriate valuation methodologies.

Members of the Committee meet the Independent Valuer and the Investment Manager at least annually to discuss the valuation process. The Committee gains comfort in the valuations produced by reviewing the methodologies used. The methodologies and valuations were discussed and subsequently approved by the Committee in meetings with the Independent Valuer and the Investment Manager in September and October 2021. In these meetings the Committee challenged the discount rates applied to projected future returns and in particular whether the rates take due account of the continuing effects of the COVID-19 pandemic.

The Independent Valuer was invited to justify the approach to these issues and confirmed that due account had been taken of the relevant risks.

The Committee regularly reviews the movement in valuations year on year including sensitivity factors affecting the valuations.

(a) Calculation of the incentive fee and determination of fair value of the liability

Due to the exceptional performance of the Company over the year under review, a substantial incentive fee has been accrued under the terms of the Investment Management Agreement. The incentive fee is calculated by the Administrator, which is independent of the Investment Manager.

The Committee sought assurance both that the incentive fee was correctly calculated in compliance with the investment management agreement, and that an appropriate discount rate was used and correctly applied in arriving at the present value of incentive fees which may potentially be paid in future years. As in previous years, the Committee instructed CES Investments Ltd to perform an independent, full review of the relevant calculations. Following this exercise, the Committee was satisfied that the assumptions used were appropriate and the calculations were accurate.

Effectiveness of the Audit

The Committee held formal meetings with PwC CI before the start of the audit to discuss formal planning, to discuss any potential issues, to agree the scope that would be covered and, after the audit work was concluded, to discuss the significant issues which arose.

Following evaluation, the Committee was satisfied that there had been appropriate focus and challenge on the significant and other key areas of audit risk and assessed the quality of the audit process to be good.

Audit fees and Safeguards on Non-Audit Services

The table below summarises the remuneration paid by the Company to PwC CI and to other PwC member firms for audit and non-audit services during the years ended 30 June 2021 and 30 June 2020.

			Year ended	Year ended
			30 June 2021	30 June 2020
			USD'000	USD'000
Audit and assurance services
- Annual audit			396	346
- Interim review			86	80
Total			482	426

The Committee considers PwC CI to be independent of the Company. Further, the Committee has obtained PwC CI's confirmation that the services provided by other PwC member firms to the wider VinaCapital organisation do not prejudice its independence with respect to its role as auditor of the Company.

Conclusion and Recommendation

On the basis of its work carried out over the year, and assurances given by the Investment Manager and the Administrator, the Committee is satisfied that the Financial Statements appropriately address the critical judgements and key estimates (both in respect of the amounts reported and the disclosures). The Committee is also satisfied that the significant assumptions used to determine the values of assets and liabilities have been appropriately scrutinised and challenged and are sufficiently robust. At the request of the Board, the Committee considered and were satisfied that the 30 June 2021 Annual Report and Financial Statements were fair, balanced and understandable and that they provided the necessary information for shareholders to assess the Company's performance, business model and strategy.

PwC CI reported to the Committee that no material misstatements, which required adjustment in the financial statements, were found in the course of its work. Furthermore, both the Investment Manager and the Administrator confirmed to the Committee that they were not aware of any material misstatements including matters relating to the presentation of the Financial Statements. The Committee confirms that it is satisfied that PwC CI has fulfilled its responsibilities with diligence and professional scepticism.

Following the review process on the effectiveness of the independent audit and the review of audit and non-audit services, the Committee has recommended that PwC CI be reappointed for the coming financial year.

Huw Evans

Audit Committee Chairman

25 October 2021

DIRECTORS' REMUNERATION REPORT

Introduction

An ordinary resolution for the approval of the Directors' Remuneration Report will be put to the shareholders at the AGM to be held on 2 December 2021.

Policy on Directors' Fees

The Board's policy is that the remuneration of the independent non-executive Directors should reflect the experience and time commitment of the Board as a whole, and is determined with reference to comparable organisations and available market information each year.

Independent Directors' Fees

The fees for the independent Directors are determined within the limit set out in the Company's Articles of Incorporation, which provide that the aggregate total remuneration paid to independent Directors shall not exceed USD500,000 (or such higher amount as may be approved by the Company in a general meeting) in respect of any 12-month period. At the AGM on 10 December 2018, a resolution was approved by shareholders to increase the maximum aggregate total remuneration to USD650,000.

The policy is to review the fee rates periodically, although such a review will not necessarily result in any changes.

For the year ended 30 June 2021, with one exception, Directors' individual annual remuneration remained the same as the previous year, the fees being USD95,000 for the Chairman and USD75,000 for the independent Directors, with USD5,000 for membership of the Audit Committee and USD15,000 for chairmanship of the same. Julian Healy receives an additional USD10,000 per annum to compensate for the additional work incurred as part of his role as an observer at meetings of the Investment Manager's Investment Committee, effective from 1 January 2020. Effective from 1 July 2021, the Chairman will receive an annual fee of USD105,000 but the fees of the other directors will remain unchanged.

There are no long-term incentive schemes provided by the Company and no performance fees are paid to Directors.

Directors' Emoluments for the Year

The Directors over the past two years have received the following emoluments in the form of fees:

			Year ended
		Annual fee	30 June 2021	30 June 2020
		USD	USD	USD
Steve Bates		95,000	95,000	95,000
Thuy Bich Dam		80,000	80,000	80,000
Huw Evans		90,000	90,000	90,000
Peter Hames (Appointed 24 June 2021)		80,000	1,315	-
Julian Healy		90,000	90,000	85,000
Kathryn Matthews		80,000	80,000	80,000
			436,315	430,000

On behalf of the Board

Thuy Bich Dam

Chair

Remuneration Committee

25 October 2021

Independent auditor's report to the members of VinaCapital Vietnam Opportunity Fund Limited

Report on the audit of the financial statements

Our opinion

In our opinion, the financial statements give a true and fair view of the financial position of VinaCapital Vietnam Opportunity Fund Limited (the "company") as at 30 June 2021, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and have been properly prepared in accordance with the requirements of The Companies (Guernsey) Law, 2008.

What we have audited

The company's financial statements comprise:

● the statement of financial position as at 30 June 2021;

● the statement of comprehensive income for the year then ended;

● the statement of changes in equity for the year then ended;

● the statement of cash flows for the year then ended; and

● the notes to the financial statements, which include significant accounting policies and other explanatory information .

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing ("ISAs"). 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements of the company, as required by the Crown Dependencies' Audit Rules and Guidance. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Our audit approach

Overview

Audit scope · The principal activity of the company comprises investing in a portfolio of investments in Vietnam (referred to as "underlying investments") through a structure of unconsolidated intermediate holding companies. · In establishing the overall approach to the company's audit, we determined the type of work that needed to be performed by us or by our assisting teams from other PwC network firms. · We tailored the audit scope taking into account the type of underlying investments held, the accounting processes and controls operated by the company and the overall market to which the company is exposed through its underlying investments. · We conducted our audit of the financial information and records provided by Aztec Financial Services (Guernsey) Limited (the "Administrator") to whom the Board of Directors has delegated the provision of administrative functions. The company and the unconsolidated intermediate holding companies are administered by the Administrator and as such all financial information and records are available in Guernsey. We, together with our assisting teams from other PwC network firms, also had significant interaction with the Investment Manager in completing aspects of our overall audit work.

Key audit matters ● Valuation of the underlying structured and private equity investments ● Recognition and measurement of non-current incentive fee payable ● Consideration of the impact of COVID-19

Materiality ● Overall materiality: USD20. 4 million (2020: USD8.8 million) based on 1.5% of net assets (2020: 1% of net assets). ● Performance materiality: USD15. 3 million (2020: USD6.6 million).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

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. These matters, and any comments we make on the results of our procedures thereon, 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. 

This is not a complete list of all risks identified by our audit.

Key audit matter	How our audit addressed the key audit matter
Valuation of the underlying structured and private equity investments	1.  We documented and evaluated the controls over the valuation process and the areas where significant judgements and estimates are made; 2.  We attended relevant valuation meetings to understand and observe the Company's process of challenging and approving the valuations prepared by the Investment Manager and those prepared by the independent valuation experts engaged by the Board; 3.  Obtained and reviewed the final reports issued by the Investment Manager and by the valuation experts to the Board so as to understand the critical accounting estimates, judgements and valuation methodologies adopted to determine the fair value of the underlying structured and private equity investments; 4.  Engaged PwC valuation experts to provide audit support reviewing, challenging and concluding on the fair valuations of the underlying private equity investments. With the assistance of the PwC valuation experts, we have (a) assessed and challenged the appropriateness of valuation methodologies and approaches and (b) challenged and commented on the computation of the discounted cash flow valuation models which were adopted by the Company's valuation experts, including significant estimates such as cash flow projections, discount rates and terminal growth rates; 5.  Obtained satisfactory explanations when challenging the assumptions made by the independent valuation experts and Investment Manager in the applicable valuation models. In testing and challenging the assumptions used, we corroborated the information provided by the valuation experts and Investment Manager against third party sources where applicable and our view and understanding of various economic indicators; 6.  Tested the mathematical accuracy of the valuation models and verified the significant inputs into the models by agreement to third party sources where applicable; 7.  Discussions and meetings were held with the Company's valuation experts to assess their ongoing and final valuation reports; 8.  Confirmed and assessed the independence, objectivity and competence of the Company's valuation experts; and 9.  Attended Audit Committee meetings and also read Audit Committee papers and minutes where the fair valuations provided by the Investment Manager and the Company's valuation experts were discussed, agreed and adopted by the Board. We have not identified any matters to report to those charged with corporate governance.
As detailed in notes 3 and 8 to the financial statements, the company's financial assets at fair value through profit or loss include underlying structured and private equity investments totalling to USD255.4 million (2020: USD221.4 million). The underlying private equity investments are valued on bases considered most appropriate by the Directors, including fair values derived from internal desktop valuations prepared by Investment Manager and fair values determined by valuation experts engaged by the Board, using industry standard private equity valuation techniques adjusted for the relevant unconsolidated intermediate holding companies' residual net assets. The fair values of the underlying structured investments were derived from internal desktop valuations prepared by the Investment Manager using industry standard valuation techniques. There is a risk that the fair valuation of the underlying structured and private equity investments may be materially misstated as these fair values rely on the proper determination of an appropriate valuation methodology, the use of judgemental inputs as well as the skill and knowledge of the Investment Manager and valuation experts engaged by the Board to develop and report on these model based valuations. There is also the inherent risk that the Investment Manager or the Board may unduly influence the independent experts in their determination of the fair valuations for these investments.
Recognition and measurement of non-current incentive fee payable	We documented and evaluated the controls over the calculation of incentive fees and the discounting of the non-current incentive fee payable, including the areas where significant judgements and estimates are made. We tested the mathematical accuracy of the incentive fee model and verified the inputs into the model by agreeing these to third party sources where applicable. We tested the key assumptions used and obtained satisfactory explanations when challenging these assumptions, particularly the probability of future payments and discount rate used. In testing and challenging the assumptions used, we corroborated the information provided by the company against third party sources where applicable and our view and understanding of various economic indicators. We have not identified any matters to report to those charged with corporate governance.
As detailed in notes 3 and 15(b) to the financial statements, as at 30 June 2021, the company has recognised a USD58.2 million (2020: USD nil) of incentive fee payable after one year, discounted to USD48.8million (2020: USD nil) to reflect the time value of money. The recognition and measurement of the non-current incentive fee payable, is subject to significant estimates and judgements, which increases the risk of misstatements.
Consideration of the impact of COVID-19	In assessing both the Investment Manager's and the Board's consideration of the impact of COVID-19, we have undertaken the following audit procedures: 1.  Obtained from the Investment Manager and the Board the updated papers supporting the Board's assessment and conclusions with respect to the going concern status of the company and viability statement as at 30 June 2021. We challenged the Investment Manager and the Board on the key assumptions supporting these assessments. 2.  We evaluated the critical estimates and judgements underpinning the fair valuation of the financial assets at fair value through profit or loss and our conclusions are set out in our first Key Audit Matter above. This additional work challenged the Investment Manager and the company's valuation experts on the achievability of the cash flow forecasts, in light of any downside risks relating to COVID-19 and, where relevant, we reviewed the historical accuracy of the previously produced cash flow forecasts against the actual cash flows achieved to assist in assessing the reliability of the forecasting processes. 3.  We assessed the disclosures presented in the Annual Report in relation to COVID-19 by reading the other information, including the principal risks and viability statement set out in the Corporate Governance Statement, and assessed its consistency with the financial statements and the evidence we obtained in our audit. We considered the appropriateness of the disclosures around the increased uncertainty on its accounting estimates and consider these to be adequate. 4.  We considered whether changes to working practices brought about by COVID-19 had any adverse impacts on the effectiveness of the company's operations and the business processes and IT controls at the Investment Manager and the Administrator. Based on our procedures and the information available at the time of the Board's approval of the financial statements, we have not identified any matters to report with respect to the Board's consideration and disclosure of the impact of COVID-19 on the current and future operations of the company, albeit we also acknowledge that the situation continues to evolve.
The Investment Manager and the Board have considered the impact of events that have been caused by the pandemic (COVID-19), on the current operations of the company. The extent of the negative impact of the pandemic on future performance is unclear and measurement of the impacts as they relate to the financial statements entails a significant degree of estimation uncertainty. In doing so, the Investment Manager has made estimates and judgements that are critical to the outcomes of these considerations in the valuation of financial assets at fair value through profit or loss as well as to underpin the Board's going concern and viability statements. As a result of the impact of COVID-19 on the specific industries where the company invests and the impact on the company's performance, we have determined both the Investment Manager's and the Board's consideration of the impact of COVID-19 to be a key audit matter.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which the company operates.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall materiality	USD20. 4 million (2020: USD8.8 million).
How we determined it	1.5% of net assets (2020: 1% of net assets)
Rationale for benchmark applied	We believe that net assets is the most appropriate benchmark because this is the key metric of interest to shareholders. It is also generally accepted measure used for companies in this industry. We have increased the overall materiality percentage to 1.5% of net assets from 1% in the previous year, as the company's exposure to Level 3 instruments such as the underlying structured and private equity instruments is becoming significant.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to USD15. 3 million (2020: USD6.6 million) for the company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end   of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above USD1 million (2020: USD0.4 million) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Reporting on other information

The directors are responsible for the other information. The other information comprises all the information included in the Annual Report and Financial Statements (the "Annual Report") but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. 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 based on these responsibilities.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards, the requirements of Guernsey law 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 company'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 intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

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 will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.

● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

● Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern over a period of at least twelve months from the date of approval of the financial statements. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.

● Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Use of this report

This report, including the opinions, has been prepared for and only for the members as a body in accordance with Section 262 of The Companies (Guernsey) Law, 2008 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Report on other legal and regulatory requirements

Company Law exception reporting

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;

● proper accounting records have not been kept; or

● the financial statements are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

Corporate governance statement

The Listing Rules require us to review the directors' statements 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. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information section of this report.

The company has reported compliance against the 2019 AIC Code of Corporate Governance (the "Code") which has been endorsed by the UK Financial Reporting Council as being consistent with the UK Corporate Governance Code for the purposes of meeting the company's obligations, as an investment company, under the Listing Rules of the FCA.

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, and we have nothing material to add or draw attention to in relation to:

· The directors' confirmation that they have carried out a robust assessment of the emerging and principal risks;

· The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated;

· The directors' statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;

· The directors' explanation as to their assessment of the company's prospects, the period this assessment covers and why the period is appropriate; and

· The directors' statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors' statement regarding the longer-term viability of the company was substantially less in scope than an audit and only consisted of making inquiries and considering the directors' process supporting their statements; checking that the statements are in alignment with the relevant provisions of the Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the company and its environment obtained in the course of the audit.

In addition, 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 that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the members to assess the company's position, performance, business model and strategy;

· The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

· The section describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors' statement relating to the company's compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.

Evelyn Brady

For and on behalf of PricewaterhouseCoopers CI LLP

Chartered Accountants and Recognised Auditor

Guernsey, Channel Islands

25 October 2021

STATEMENT OF FINANCIAL POSITION

			30 June 2021		30 June 2020
		Note	USD'000		USD'000
TOTAL ASSETS
Financial assets at fair value through profit or loss		8	1,353,108		870,482
Receivables and prepayments		10	88		29
Cash and cash equivalents		6	76,225		7,457
Total assets			1,429,421		877,968
TOTAL LIABILITIES
Accrued expenses and other payables		12	20,803		1,863
Deferred incentive fees		15(b)	48,845		-
Total liabilities			69,648		1,863
SHAREHOLDERS' EQUITY
Share capital		11	317,112		354,595
Retained earnings			1,042,661		521,510
Total shareholders' equity			1,359,773		876,105
Total Liabilities and shareholders' equity			1,429,421		877,968
Net asset value, USD per share		17	8.07		4.97
Net asset value, GBP per share			5.85		4.01

The Financial Statements were approved by the Board of Directors on 25 October 2021 and signed on its behalf by:

Steve Bates   Huw Evans

Chairman   Director

The accompanying notes are an integral part of these Financial Statements.

STATEMENT OF CHANGES IN EQUITY

				Share capital	Retained earnings	Total equity
For the year ended 30 June 2020			Note	USD'000	USD'000	USD'000
Balance at 1 July 2019				387,788	591,914	979,702
Loss for the year				-	(50,458)	(50,458)
Total comprehensive deficit				-	(50,458)	(50,458)
Transactions with shareholders
Shares repurchased			11	(33,193)	-	(33,193)
Dividends paid			9	-	(19,946)	(19,946)
Balance at 30 June 2020				354,595	521,510	876,105
For the year ended 30 June 2021
Balance at 1 July 2020				354,595	521,510	876,105
Profit for the year				-	540,784	540,784
Total comprehensive income				-	540,784	540,784
Transactions with shareholders
Shares repurchased			11	(37,483)	-	(37,483)
Dividends paid			9	-	(19,633)	(19,633)
Balance at 30 June 2021				317,112	1,042,661	1,359,773

The accompanying notes are an integral part of these Financial Statements.

STATEMENT OF COMPREHENSIVE INCOME

					Year ended
					30 June 2021		30 June 2020
				Note(s)		USD'000		USD'000
Dividend income				13	102,191		84,703
Net gains/(losses) on financial assets at fair value through profit or loss				14	521,601		(122,961)
General and administration expenses				15(a)	(17,595)		(14,884)
Finance expense				15(b)	-		(370)
Incentive (fee)/clawed back income				3, 15(b), 18	(65,413)		3,054
Operating profit/(loss)					540,784		(50,458)
Profit/(loss) before tax						540,784		(50,458)
Corporate income tax				16		-	-
Profit/(loss) for the year						540,784	(50,458)
Total comprehensive income/(deficit) for the year						540,784	(50,458)
Earnings per share
-  basic and diluted (USD per share)				17		3.15	(0.28)

All items were derived from continuing activities.

The accompanying notes are an integral part of these Financial Statements.

STATEMENT OF CASH FLOWS

				Year ended
				30 June 2021	30 June 2020
			Note	USD'000	USD'000
Operating activities
Profit/(Loss) before tax				540,784	(50,458)
Adjustments for:
Dividend income				(102,191)	(84,703)
Net (gains)/losses on financial assets at fair value through profit or loss			14	(521,601)	122,961
Finance expense				-	370
				(83,008)	(11,830)
(Increase)/decrease in receivables and prepayments				(59)	2
Increase/(decrease) in accrued expenses and other payables and deferred incentive fees				65,429	(17,891)
Dividend receipts				102,191	84,703
Net cash generated from operating activities				84,553	54,984
Investing activities
Purchases of financial assets at fair value through profit or loss			8	(143,419)	(141,919)
Return of capital from financial assets at fair value through profit or loss			8	182,394	131,519
Net cash generated/(used) from investing activities				38,975	(10,400)
Financing activities
Purchase of shares into treasury			11	(35,127)	(33,193)
Dividends paid			9	(19,633)	(19,946)
Net cash used in financing activities				(54,760)	(53,139)
Net change in cash and cash equivalents for the year				68,768	(8,555)
Cash and cash equivalents at the beginning of the year			6	7,457	16,012
Cash and cash equivalents at the end of the year			6	76,225	7,457

The accompanying notes are an integral part of these Financial Statements.

1. GENERAL INFORMATION

VinaCapital Vietnam Opportunity Fund Limited (the "Company") was incorporated on 22 March 2016 as a closed-ended investment scheme with limited liability under the Companies (Guernsey) Law, 2008 (the "Guernsey Law"). The Company is registered in Guernsey with registration number 61765. Prior to that date the Company was incorporated in the Cayman Islands as an exempted company with limited liability.

The Company is classified as a registered closed-ended Collective Investment Scheme under the Protection of Investors (Bailiwick of Guernsey) Law 1987 and is subject to the Guernsey Law.

The Company's objective is to achieve medium to long-term returns through investment either in Vietnam or in companies with a majority of their assets, operations, revenues or income in, or derived from, Vietnam.

On 30 March 2016, the Company's shares were admitted to the Main Market of the London Stock Exchange ("LSE") with a Premium Listing under the ticker symbol VOF. Prior to that date, the Company's shares were traded on the AIM market of the LSE.

The Company does not have a fixed life but the Board considers it desirable that shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends that every fifth year a special resolution will be proposed that the Company ceases to continue. If the resolution is not passed, the Company will continue to operate as currently constituted. If the resolution is passed, the Directors will be required to formulate proposals to be put to shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up. The Board tabled such resolutions in 2008, 2013 and 2018 and on each occasion the resolution was not passed, allowing the Company to continue as currently constituted. The next resolution will be tabled at the AGM in 2023.

The Financial Statements for the year ended 30 June 2021 were approved for issue by the Board on 25 October 2021.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these 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 International Financial Reporting Standards ("IFRS"), which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") together with applicable legal and regulatory requirements of the Guernsey Law.

2.1 Basis of preparation

The Financial Statements have been prepared using the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss, and financial liabilities at fair value through profit or loss. The Financial Statements have been prepared on a going concern basis.

The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires judgement to be exercised in the process of applying the Company'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.

2.2 Going concern

The Directors believe that the Company has adequate financial resources and suitable management arrangements in place to continue in operational existence for a period of at least twelve months from the date of approval of these Financial Statements and therefore the Financial Statements have been prepared on a going concern basis.

2.3 Changes in accounting policy and disclosures

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2021 reporting period and have not been early adopted by the Company. There is no expected material impact on, or any restatement of, the Company's Financial Statements as a result of new accounting standards and interpretations published but not yet adopted.

IFRS 3 - Business Combinations - effective for accounting periods beginning on or after 1 January 2020

IFRS 3 has been amended to clarify and simplify when an acquisition is a business combination or an acquisition of a group of assets. The determination continues to be driven predominantly by whether there are inputs and processes in place, therefore the Board's determination will remain the same for assets similar to which the Company has already acquired.

IFRS 9 - Financial Instruments - effective for accounting periods beginning on or after 1 January 2020

The amendments made provide temporary exemptions from applying specific hedge accounting requirements in IFRS 9 and IAS 39 to all hedging relationships directly affected by interest rate benchmark reform. The Board has considered the impact of this amendment and does not deem it to be material.

IAS 39, IFRS 4, IFRS 7, IFRS 9 and IFRS 16 - effective for accounting periods beginning on or after 1 January 2021

The Interest Rate Benchmark Reform - Phase 2 amends IAS 39, IFRS 4, IFRS 7, IFRS 9 and IFRS 16. The amendments address issues that might affect financial reporting during the reform of an interest rate benchmark, including the effects of changes to contractual cash flows or hedging relationships arising from the replacement of an interest rate benchmark with an alternative benchmark rate. The Board has considered the impact of this amendment and does not deem it to be material.

2.4 Subsidiaries and associates

The Company meets the definition of an Investment Entity within IFRS 10 and therefore does not consolidate its subsidiaries but measures them instead at fair value through profit or loss. The Company has also applied the exemption from accounting for its associates using the equity method as permitted by International Account Standard ("IAS") 28.

Any gain or loss arising from a change in the fair value of investments in subsidiaries and associates is recognised in the Statement of Comprehensive Income.

Refer to note 3 for further disclosure on accounting for subsidiaries and associates.

2.5 Segment reporting

In identifying its operating segments, management follows the subsidiaries' sectors of investment which are based on internal management reporting information. The operating segments by investment portfolio include: capital markets, operating asset, structured and private equity investments and other net assets (including cash and cash equivalents, bonds, and short-term deposits).

Each of the operating segments is managed and monitored individually by the Investment Manager as each requires appropriate resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the underlying investment assets of the subsidiaries. Refer to note 4 for further disclosure regarding allocation to segments.

2.6 Foreign currency translation

(a) Functional and presentation currency

The functional currency of the Company is the United States Dollar ("USD"). The Company's Financial Statements are presented in USD.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. 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 Statement of Comprehensive Income.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction. Non-monetary items measured at fair value are translated using the exchange rates at the date when the fair value was determined.

2.7 Financial instruments

(a)  Recognition and derecognition

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Company commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all of the risks and rewards of ownership. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

(b) Classification of financial assets

The Company classifies its financial assets based on the Company's business model for managing those financial assets and the contractual cashflow characteristics of the financial assets.

The Company has classified all investments in equity securities as financial assets at fair value through profit or loss ("FVPL") as they are managed and performance is evaluated on a fair value basis. The Company is primarily focused on fair value information and uses that information to assess the assets' performance and to make decisions. The Company has not taken the option to designate irrevocably any investment in equity as fair value through other comprehensive income.

The Company's receivables and cash and cash equivalents are classified as subsequently measured at amortised cost as these are held to collect contractual cash flows which represent solely payments of principal and interest.

(c) Initial and subsequent measurement of financial assets

Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, financial assets are initially measured at fair value plus, in the case of a financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets at FVPL are expensed in the Statement of Comprehensive Income.

Subsequent to initial recognition, investments at FVPL are measured at fair value with gains and losses arising from changes in the fair value recognised in the Statement of Comprehensive Income.

All other financial assets are subsequently measured at amortised cost using the effective interest rate method, less any impairment.

(d) Impairment of financial assets

At each reporting date, the Company measures the loss allowance on debt assets carried at amortised cost at an amount equal to the lifetime expected credit losses if the credit risk has increased significantly since initial recognition.

If, at the reporting date, the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses. The expected credit losses are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information.

(e) Classification and measurement of financial liabilities

Financial liabilities are initially measured at fair value plus transaction costs that are directly attributable to their acquisition or issue, other than those classified as at fair value through profit or loss in which case transaction costs are recognised directly in profit or loss.

Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial liabilities designated at fair value through profit or loss and held for trading, which are carried subsequently at fair value with gains or losses recognised in the Statement of Comprehensive Income.

The Company's financial liabilities only include trade and other payables which are measured at amortised cost using the effective interest method.

2.8 Cash and cash equivalents

In the Statement of Cash Flows, cash and cash equivalents includes deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the Statement of Financial Position, any bank overdrafts are shown within borrowings in current liabilities.

2.9 Share capital

Ordinary shares are classified as equity. Share capital includes the nominal value of ordinary shares that have been issued and any premiums received on the initial issuance of shares. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

When the Company purchases its equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company's equity holders.

When such treasury shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

2.10 Revenue recognition

The Company recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Company's activities, as described below.

Dividend income is recognised when the right to receive payment is established.

2.11 Operating expenses

Operating expenses are accounted for on an accrual basis.

2.12 Related parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Enterprises and individuals that directly, or indirectly through one or more intermediary, control, or are controlled by, or under common control with, the Company, including subsidiaries and fellow subsidiaries are related parties of the Company. Associates are individuals owning directly, or indirectly, an interest in the voting power of the Company that gives them significant influence over the entity, key management personnel, including directors and officers of the Company, the Investment Manager and their close family members. In considering related party relationships, attention is directed to the substance of the relationship and not merely the legal form.

2.13 Offsetting financial instruments

Financial assets and liabilities are offset, and the net amount is reported in the Statement of Financial Position, when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events, and it must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.

2.14 Dividend distribution

Dividend distributions to the Company's shareholders are recognised as a liability in the Company's Financial Statements and disclosed in the Statement of Changes in Equity in the period in which the dividends are approved by the Board.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

3.1 Critical accounting estimates and assumptions

(a) Fair value of subsidiaries and associates and their underlying investments

The Company holds its investments through a number of subsidiaries and associates which were established for this purpose. At the end of each half of the financial year, the fair values of investments in subsidiaries and associates are reviewed and the fair values of all material investments held by these subsidiaries and associates are assessed. As at 30 June 2021, 100% (30 June 2020: 100%) of the financial assets at fair value through profit and loss relate to the Company's investments in subsidiaries and associates that have been fair valued in accordance with the policies set out above.

The underlying investments include listed and unlisted securities, one operating asset, structured and private equity investments. Where an active market exists (for example, for listed securities), the fair value of the subsidiary or associate reflects the valuation of the underlying holdings, as disclosed below. Where no active market exists, valuation techniques are used.

The fair values of the operating asset and private equity investments are estimated by a qualified independent professional services firm (the "Independent Valuer") or, at times, are fair valued by the Investment Manager. The valuations by the Independent Valuer and Investment Manager are prepared using a number of methodologies such as adjusted net asset valuations, discounted cash flows, income-related multiples and price-to-book ratios.

The estimated fair values provided by the Independent Valuer and Investment Manager are used by the Audit Committee as the primary basis for estimating the fair value of the operating asset and private equity investments for recommendation to the Board. Information about the significant judgements, estimates and assumptions that are used in the valuation of the investments is discussed below.

The shares of the subsidiaries and associates are not publicly traded; return of capital to the Company can only be made by divesting the underlying investments of the subsidiaries and associates. As a result, the carrying value of the subsidiaries and associates may not be indicative of the value ultimately realised on divestment.

As at 30 June 2021 and 30 June 2020, the Company classified its investments in subsidiaries and associates as Level 3 within the fair value hierarchy because they are not publicly traded, even when the underlying assets may be readily realisable.

The carrying amounts of the investments in subsidiaries and associates are set out in note 8. The sensitivity analysis of these investments is shown in note 19(b).

(i) Valuation of assets that are traded in an active market

The fair values of listed securities are based on quoted market prices at the close of trading on the reporting date. The fair values of unlisted securities which are traded on UPCoM are based on published prices at the close of business on the reporting date.   For other unlisted securities which are traded in an active market, fair value is the average quoted price at the close of trading obtained from a minimum sample of five reputable securities companies at the reporting date. Other relevant measurement bases are used if broker quotes are not available or if better and more reliable information is available.

(ii) Valuation of private equity investments

The Company's underlying investments in private equities are fair valued by an Independent Valuer or by the Investment Manager using discounted cash flow models or pricing analysis with cross checks to a market comparison approach. The projected future cash flows are driven by management's business strategies and goals and its assumptions of growth in gross domestic product ("GDP"), market demand, inflation, etc. For the principal investments, the Independent Valuer and, where relevant, the Investment Manager selects appropriate discount rates that reflect the level of certainty of the quantum and timing of the projected cash flows. Refer to note 19(b) which sets out a sensitivity analysis of the significant observable inputs used in the valuations of the private equity. The Independent Valuer and the Investment Manager have adjusted estimates to take account of the effects of the COVID-19 pandemic on the prospects for these investments. These adjustments may take the form of increasing discount rates used, reducing estimates of revenue, profit or cash flow and extending the time period over which business development is expected.

(iii) Valuation of the operating asset

At each year-end the fair value of any underlying operating asset is based on valuations by an independent specialist appraiser. These valuations are based on certain assumptions which are subject to uncertainty and might result in valuations which differ materially from the actual results of a sale. The estimated fair values provided by the independent specialist appraisers are then used by the Independent Valuer as the primary basis for estimating fair value of the Company's subsidiaries and associates that hold these properties in accordance with accounting policies set out in note 2.7. Refer to note 19(b) which sets out a sensitivity analysis of the significant unobservable inputs used in the valuation of the operating asset. As at the year end, the Company was in negotiation to sell the operating asset and the estimated sales price was used as the basis of the valuation.

(b) Incentive Fee

The incentive fee is calculated as follows:

· To the extent that the NAV as at any year end commencing 30 June 2019 is above the higher of an 8% compound annual return and the high water mark initially set in 2019, having accounted for any share buy backs, share issues and/or dividends, the incentive fee payable on any increase in the NAV with effect from 30 June 2019 above the higher of the high water mark and the 8% annual return target is calculated at a rate of 12.5%;

· The maximum amount of incentive fees that can be paid in any one year is capped at 1.5% of the weighted average month-end NAV during that year.

· Any incentive fees earned in excess of this 1.5% cap will be accrued if they are expected to be paid out in subsequent years.

Any incentive fees payable within 12 months are classified under accrued expenses and other payables in the Statement of Financial Position. The fair values of any additional incentive fees potentially payable beyond 12 months after the end of the reporting period are classified as deferred incentive fees in the Statement of Financial Position.

At the end of each financial year, the Board makes an estimation in considering the total amount of any accrued incentive fees which are likely to be settled beyond 12 months after the end of the reporting period. In determining the fair value of the non-current liability at a Statement of Financial Position date the Board may apply a discount to reflect the time value of money and the probability and phasing of payment. An annualized discount rate of 8% has been applied to the deferred incentive fees.

For further details of the incentive fees earned and accrued at the period end please refer to note 15(b).

3.2 Critical judgements in applying the Company's accounting policies

(a) Eligibility to qualify as an investment entity

The Company has determined that it is an investment entity under the definition of IFRS 10 as it meets the following criteria:

i. The Company has obtained funds from investors for the purpose of providing those investors with investment management services;

ii. The Company's business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

iii. The performance of investments made by the Company are substantially measured and evaluated on a fair value basis.

The Company has the typical characteristics of an investment entity:

· It holds more than one investment;

· It has more than one investor;

· It has investors that are not its related parties; and

· It has ownership interests in the form of equity or similar interests.

As a consequence, the Company does not consolidate its subsidiaries and accounts for them at fair value through profit or loss. The Company has applied the exemption from accounting for its subsidiaries using the equity method as permitted by IAS 28.

(b) Judgements about active and inactive markets

The Board considers that the Ho Chi Minh Stock Exchange, the Hanoi Stock Exchange and UPCoM are active markets for the purposes of IFRS 13. Consequently, the prices quoted by those markets for individual shares as at the balance sheet date can be used to estimate the fair value of the Company's underlying investments. 

Notwithstanding the fact that these stock exchanges can be regarded as active markets, the size of the Company's holdings in particular stocks in relation to daily market turnover in those stocks would make it difficult to conduct an orderly transaction in a large number of shares on a single day. However, the Board considers that, if the Company were to offer a block of shares for sale, the price which could be achieved in an orderly transaction is as likely to be at a premium to the quoted market price as at a discount.

Consequently, when taken across the whole portfolio of the Company's underlying quoted investments, the Board considers that using the quoted prices of the shares on the various active markets is generally a reasonable determination of the fair value of the securities.

In the absence of an active market for quoted or unquoted investments which may include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information, and in determining the fair value one or more valuation techniques may be utilised.

4. SEGMENT ANALYSIS

Dividend income is allocated based on the underlying investments of subsidiaries which declared dividends.  Net gains/losses on financial assets at fair value through profit or loss are allocated to each segment (excluding Other Assets) with reference to the assets held by the subsidiary. General and administration expenses are allocated based on the investment sector. Finance costs and accrued incentive fees are allocated to each segment (excluding Other Assets) with reference to the percentage allocation on the net gains/losses on financial assets at fair value through profit or loss.

The financial assets at fair value through profit or loss are measured based on the investment sector. Other assets and liabilities are classified as other net assets.

Segment information can be analysed as follows:

Statement of Comprehensive Income

			Capital	Operating	Private	Other
			Markets*	Asset	Equity	Assets**	Total
			USD'000	USD'000	USD'000	USD'000	USD'000
Year ended 30 June 2021
Dividend income			73,395	-	28,796	-	102,191
Net gains/(losses) on financial assets at fair value through profit or loss			506,407	493	14,701	-	521,601
General and administration expenses (note 15)			(13,028)	(154)	(3,144)	(1,269)	(17,595)
Finance expense			-	-	-	-	-
Incentive (fee)/clawed back income			(63,506)	(62)	(1,845)	-	(65,413)
Profit/(loss) before tax			503,268	277	38,508	(1,269)	540,784
Year ended 30 June 2020
Dividend income			84,703	-	-	-	84,703
Net (losses)/gains on financial assets at fair value through profit or loss			(172,792)	867	48,964	-	(122,961)
General and administration expenses (note 15)			(10,193)	(204)	(3,753)	(734)	(14,884)
Finance expense			(519)	3	146	-	(370)
Incentive (fee)/clawed back income			4,292	(22)	(1,216)	-	3,054
Profit/(loss) before tax			(94,509)	644	44,141	(734)	(50,458)

* Capital markets include listed securities and unlisted securities, valued at their prices on UPCoM or using quotations from brokers, and options.

** Other assets include cash and cash equivalents, interest, put option and other net assets of the subsidiaries and associates at fair value.

Statement of Financial Position

					Capital		Operating	Private		Other Net
					Markets*		Asset	Equity		Assets**	Total
					USD'000		USD'000	USD'000		USD'000	USD'000
As at 30 June 2021
Financial assets at fair value through profit or loss					1,058,428		12,530	255,407		26,743	1,353,108
Receivables and prepayments					-		-	-		88	88
Cash and cash equivalents					-		-	-		76,225	76,225
Total assets					1,058,428		12,530	255,407		103,056	1,429,421
Total liabilities
Accrued expenses and other payables					-		-	-		20,803	20,803
Deferred incentive fees					-		-	-		48,845	48,845
Total liabilities					-		-	-		69,648	69,648
Net asset value					1,058,428		12,530	255,407		33,408	1,359,773
				Capital Markets*		Operating Asset			Private Equity	Other Net Assets**		Total
				USD'000		USD'000			USD'000	USD'000		USD'000
As at 30 June 2020
Financial assets at fair value through profit or loss				601,268		12,036			221,363	35,815		870,482
Receivables and prepayments				-		-			-	29		29
Cash and cash equivalents				-		-			-	7,457		7,457
Total assets				601,268		12,036			221,363	43,301		877,968
Total liabilities
Accrued expenses and other payables				-		-			-	1,863		1,863
Total liabilities				-		-			-	1,863		1,863
Net assets value				601,268		12,036			221,363	41,438		876,105

* Capital markets include listed securities and unlisted securities. The unlisted securities are comprised of securities valued at their prices on UPCoM or using quotations from brokers.

** Other net assets of USD26.7 million (30 June 2020: USD35.8 million) include cash and cash equivalents, and other net assets of the subsidiaries and associates at fair value.

5. INTERESTS IN SUBSIDIARIES AND ASSOCIATES

There is no legal restriction to the transfer of funds from the British Virgin Islands ("BVI") or Singapore subsidiaries to the Company. Cash held in directly-owned as well as indirectly-owned Vietnamese subsidiaries and associates is subject to restrictions imposed by co-investors and the Vietnamese government and therefore it cannot be transferred out of Vietnam unless such restrictions are satisfied. As at 30 June 2021, the restricted cash held in these Vietnamese subsidiaries and associates amounted to USD nil (30 June 2020: USD nil).

The Company has not entered into a contractual obligation to, nor has it committed to provide, current financial or other support to an unconsolidated subsidiary during the year..1 Directly-owned subsidiaries

The Company had the following directly-owned subsidiaries as at 30 June 2021 and 30 June 2020:

				As at
				30 June 2021	30 June 2020
Subsidiary			Country of incorporation	% of Company interest	% of Company interest	Nature of the business
Allwealth Worldwide Limited			British Virgin Islands ("BVI")	100.00	100.00	Holding company for investments
Asia Value Investment Limited			BVI	100.00	100.00	Holding company for listed and unlisted securities
Belfort Worldwide Limited			BVI	100.00	100.00	Holding company for investments
Clipper One Limited *			BVI	-	100.00	Holding company for investments
Clipper Ventures Limited			BVI	100.00	100.00	Holding company for investments
Foremost Worldwide Limited			BVI	100.00	100.00	Holding company for unlisted securities
Fraser Investment Holdings Pte. Limited			Singapore	100.00	100.00	Holding company for listed securities
Hospira Holdings Limited			BVI	100.00	100.00	Holding company for private equity
Longwoods Worldwide Limited			BVI	100.00	100.00	Holding company for listed securities
Navia Holdings Limited			BVI	100.00	100.00	Holding company for private equity
Portal Global Limited			BVI	100.00	100.00	Holding company for listed securities
Preston Pacific Limited			BVI	100.00	100.00	Holding company for listed securities
Rewas Holdings Limited			BVI	100.00	100.00	Holding company for unlisted securities
Sharda Holdings Limited *			BVI	-	100.00	Holding company for private equity
Turnbull Holding Pte. Ltd.			Singapore	100.00	100.00	Holding company for investments
Victory Holding Investment Limited *			BVI	-	100.00	Holding company for listed securities and private equity
Vietnam Enterprise Limited			BVI	100.00	100.00	Holding company for investments
Vietnam Investment Limited			BVI	100.00	100.00	Holding company for listed and unlisted securities
Vietnam Investment Property Holdings Limited			BVI	100.00	100.00	Holding company for listed and unlisted securities
Vietnam Investment Property Limited			BVI	100.00	100.00	Holding company for listed securities
Vietnam Master Holding 2 Limited			BVI	100.00	100.00	Holding company for listed securities
Vietnam Ventures Limited			BVI	100.00	100.00	Holding company for listed and unlisted securities
VinaSugar Holdings Limited			BVI	100.00	100.00	Holding company for investments
VOF Investment Limited			BVI	100.00	100.00	Holding company for listed and unlisted securities, an operating asset and private equity
VOF PE Holding 5 Limited			BVI	100.00	100.00	Holding company for listed securities
Windstar Resources Limited			BVI	100.00	100.00	Holding company for listed securities

* Clipper One Limited, Sharda Holdings Limited and Victory Holding Investment Limited became subsidiaries of Clipper Ventures Limited during the year. 

5.2 Indirect interests in subsidiaries

The Company had the following indirect interests in subsidiaries at 30 June 2021 and 30 June 2020:

								As at
								30 June 2021	30 June 2020
								% of	% of
								Company's	Company's
			Country of				Immediate	indirect	indirect
Indirect subsidiary			incorporation	Nature of the business			Parent	interest	interest
Abbott Holding Pte. Limited			Singapore	Holding company for private equity			Hospira Holdings Limited	100.00	100.00
Aldrin One Pte. Ltd.			Singapore	Holding company for private equity			Halley One Limited	81.31	81.31
Aldrin Two Pte. Ltd.			Singapore	Holding company for investments			Halley Two Limited	83.46	83.46
Aldrin Three Pte. Ltd.			Singapore	Holding company for private equity			Halley Three Limited	80.07	80.07
Allright Assets Limited *			BVI	Holding company for listed securities			Halley Five Limited	50.00	100.00
Chifley Investments Pte. Ltd			Singapore	Holding company for investments			Belfort Worldwide Limited	100.00	100.00
Clipper One Limited **			BVI	Holding company for investments			Clipper Ventures Limited	100.00	-
Gorton Investments Pte. Ltd			Singapore	Holding company for investments			Belfort Worldwide Limited	100.00	100.00
Halley One Limited			BVI	Holding company for private equity			Clipper Ventures Limited	81.31	81.31
Halley Two Limited			BVI	Holding company for investments			Clipper Ventures Limited	83.46	83.46
Halley Three Limited			BVI	Holding company for private equity			Clipper Ventures Limited	80.07	80.07
Halley Four Limited			BVI	Holding company for private equity			Clipper Ventures Limited	79.40	79.40
Halley Five Limited *			BVI	Holding company for listed securities			Clipper Ventures Limited	50.00	100.00
Halley Six Limited			BVI	Holding company for investments			Clipper Ventures Limited	100.00	100.00
Hawke Investments Pte. Limited ***			Singapore	Holding company for investments			Belfort Worldwide Limited	-	100.00
Howard Holdings Pte. Limited			Singapore	Holding company for investments			Allwealth Worldwide Limited	100.00	80.56
International Dairy Products Joint Stock Company ****			Vietnam	Milk, yoghurt and dairy products			Howard Holdings Pte. Limited and Turnbull Holding Pte. Ltd.	-	66.49
Menzies Holding Pte. Ltd			Singapore	Holding company for investments			Belfort Worldwide Limited	100.00	100.00
PA Investment Opportunity II Limited			BVI	Holding company for investments			Vietnam Enterprise Limited	100.00	100.00
Sharda Holdings Limited **			BVI	Holding company for private equity			Clipper Ventures Limited	89.64	-
Tempel Four Limited			BVI	Holding company for private equity			Halley Four Limited	79.40	79.40
Thai Hoa International Hospital JSC			Vietnam	Medical and healthcare services			Abbott Holding Pte. Limited	81.07	81.07
Victory Holding Investment Limited **			BVI	Holding company for listed securities and private equity			Clipper Ventures Limited	87.58	-
Vietnam Opportunity Fund II Pte. Ltd.			Singapore	Holding company for private equity			Belfort Worldwide Limited	68.00	68.00
Whitlam Holding Pte. Limited			Singapore	Holding company for private equity			Navia Holdings Limited	61.26	61.26

* Allright Assets Limited and Halley Five Limited entered into a joint ventures arrangement during the year.

** Clipper One Limited, Sharda Holdings Limited and Victory Holding Investment Limited became subsidiaries of Clipper Ventures Limited during the year.

*** Hawke Investments Pte. Limited was liquidated during the year.

**** International Dairy Products Joint Stock Company was disposed of during the year.

5.3 Direct interests in associates

The Company did not have any directly-owned associates as at 30 June 2021 or 30 June 2020.

5.4 Indirect interests in associates

The Company had the following indirect interests in associates at 30 June 2021 and 30 June 2020:

							As at
								30 June 2021	30 June 2020
								% of	% of
								Company's	Company's
		Country of			Company's subsidiary or associate			indirect	indirect
Indirect associate		incorporation	Nature of the business		Holding direct interest in the associate			interest	interest
Hung Vuong Corporation		Vietnam	Operating asset investment		VOF Investment Limited			31.04	31.04
Ngoc Nghia Industry Service Trading		Vietnam	Packaging materials		Tempel Four Limited			28.54	28.54
Thu Cuc Medical & Beauty Care Joint Stock Company *		Vietnam	Medical and healthcare services		Aldrin One Pte. Ltd			24.39	-

* Thu Cuc Medical & Beauty Care Joint Stock Company was purchased during the year.

5.5 Financial risks

At 30 June 2021 the Company owns a number of subsidiaries and associates for the purpose of holding investments in listed and unlisted securities, operating asset, structured and private equity investments. The Company, via these underlying investments, is subject to financial risks which are further disclosed in note 19. The Investment Manager makes investment decisions after performing extensive due diligence on the underlying investments, their strategies, financial structure and the overall quality of management.

6. CASH AND CASH EQUIVALENTS

					30 June 2021	30 June 2020
					USD'000	USD'000
Cash at banks					76,225	7,457

As at 30 June 2021, cash and cash equivalents were denominated in USD and GBP.

The Company's overall cash position including cash held in directly held subsidiaries as at 30 June 2021 was USD100.7million (30 June 2020: USD30.9 million). Please refer to note 8 for details of the cash held by the Company's subsidiaries. As mentioned in note 5, the restricted cash held in the Vietnamese subsidiaries and associates amounted to USD nil (30 June 2020: USD nil).

7. FINANCIAL INSTRUMENTS BY CATEGORY

				Financial assets at amortised cost	Financial assets at fair value through profit or loss		Total
				USD'000		USD'000	USD'000
As at 30 June 2021
Financial assets at fair value through profit or loss				-	1,353,108		1,353,108
Cash and cash equivalents				76,225	-		76,225
Receivables (excluding prepayments)				4	-		4
Total				76,229	1,353,108		1,429,337
Financial assets denominated in:
-  GBP				10	-		10
-  USD				76,219	1,353,108		1,429,327

As at 30 June 2020
Financial assets at fair value through profit or loss	-	870,482	870,482
Cash and cash equivalents	7,457	-	7,457
Total	7,457	870,482	877,939
Financial assets denominated in:
-  GBP	4	-	4
-  USD	7,453	870,482	877,935

As at 30 June 2021 and 30 June 2020, the carrying amounts of all financial assets approximate their fair values.

All financial liabilities, with the exception of the deferred incentive fees, are short term in nature and their carrying values approximate their fair values. The fair value of the deferred incentive fees do not materially differ from their carrying amount which is based on the discounted cash flows using an annualised rate of 8%. There are no financial liabilities that must be accounted for at fair value through profit or loss (30 June 2020: nil).

 

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit and loss comprise the Company's investments in subsidiaries and associates. The underlying assets and liabilities of the subsidiaries and associates at fair value are included in the following table.

	30 June 2021		30 June 2020
	Within 12 Months	Over 12 Months	Within 12 Months	Over 12 Months
	USD'000	USD'000	USD'000	USD'000
Cash and cash equivalents	24,512	-	23,490	-
Ordinary shares - listed	938,215	-	486,055	-
Ordinary shares - unlisted *	120,213	-	113,974	-
Private equity	-	255,407	-	221,363
Operating asset	-	12,530	-	12,036
Other net assets	2,231	-	13,564	-
	1,085,171	267,937	637,083	233,399

* Unlisted Securities include OTC (over-the-counter) traded securities and unlisted securities publicly traded on UPCoM of the Hanoi Stock Exchange.

The major underlying investments held by the direct subsidiaries and indirect subsidiaries and associates of the Company were in the following industry sectors.

					30 June 2021	30 June 2020
					USD'000	USD'000
Real estate and operating asset					318,859	159,300
Construction					305,820	148,767
Financial services					292,878	101,335
Consumer goods					110,722	193,589
Industrials and information technology					84,531	50,913
Infrastructure					71,882	59,974
Pharmaceuticals and healthcare					67,114	43,754
Energy, minerals and petroleum					33,693	26,518
Agriculture					21,030	23,579
Hospitality					19,703	19,678
Retailers					133	6,021

As at 30 June 2021, an underlying holding, Hoa Phat Group, within financial assets at fair value through profit or loss amounted to 19.5% of the NAV of the Company (30 June 2020: 13.0%).

There have been no changes in the classification of financial assets at fair value through profit or loss shown as Level 3 during the year ended 30 June 2021.

Changes in Level 3 financial assets at fair value through profit or loss

The fair values of the Company's investments in subsidiaries and associates are estimated using approaches as described in note 3.1. As observable prices are not available for these investments, the Company classifies them as Level 3 fair values.

	For the year ended
	30 June 2021	30 June 2020
	USD'000	USD'000
Opening balance	870,482	983,043
Purchases	143,419	141,919
Return of capital	(182,394)	(131,519)
Net gains/(losses) for the period	521,601	(122,961)
	1,353,108	870,482

9. DIVIDENDS

The dividends paid in the reporting period were as follows;

Year ended 30 June				Dividend rate	Net dividend
		2021		per share	payable
				(cents)	(USD'000)	Record date	Ex-dividend date	Pay date
Dividend				5.5	9,406	6 November 2020	5 November 2020	25 November 2020
Dividend				6.0	10,227	9 April 2021	8 April 2021	4 May 2021
					19,633

Year ended 30 June				Dividend rate	Net dividend
		2020		per share	payable
				(cents)	(USD'000)	Record rate	Ex-dividend date	Pay date
Dividend				5.5	10,115	1 November 2019	31 October 2019	27 November 2019
Dividend				5.5	9,831	14 April 2020	9 April 2020	1 May 2020
					19,946

On 25 October 2021, the Board declared a dividend of 8.0 US cents per share. The dividend is payable on or around 6 December 2021 to shareholders on record at 5 November 2021.

Under the Guernsey Law, the Company can distribute dividends from capital and revenue reserves, subject to the net asset and solvency test. The net asset and solvency test considers whether a company is able to pay its debts when they fall due, and whether the value of a company's assets is greater than its liabilities. The Board confirms that the Company passed the net asset and solvency test for each dividend paid.

10. RECEIVABLES AND PREPAYMENTS

					30 June 2021	30 June 2020
					USD'000	USD'000
Prepayments					84	29
Amounts receivable from third parties					4	-
					88	29

Due to the short-term nature of the receivables and prepayments, their carrying amount is considered to be the same as their fair value.

The Company exited Indochina Food Industries Pte. Ltd ("ICF") through the sale of 100% of VinaSugar Holding Limited in 2012 for a total consideration of USD28.45 million. As at 30 June 2021 and 30 June 2020, the Buyer had paid USD19.75 million with USD8.7 million remaining outstanding. In June 2014, the Company approved a loan of USD2.9 million to ICF to provide immediate relief for the business. Together with the existing receivable of USD8.7 million, the total USD11.6 million is receivable but has been fully impaired.

11. SHARE CAPITAL

The Company may issue an unlimited number of shares, including shares of no par value or shares with a par value. Shares may be issued as (a) shares in such currencies as the Directors may determine; and/or (b) such other classes of shares in such currencies as the Directors may determine in accordance with the Articles and the Guernsey Law and the price per Share at which shares of each class shall first be offered to subscribers shall be fixed by the Board. The minimum price which may be paid for a share is USD0.01. The Directors will act in the best interest of the Company and the shareholders when authorising the issue of any shares and shares will only be issued at a price of at least the prevailing Net Asset Value at the time of issue, so that the NAV per share is not diluted.

Issued capital

				30 June 2021		30 June 2020
				Number of		Number of
				shares	USD'000	shares	USD'000
Issued and fully paid at 1 July				192,311,125	491,301	200,991,258	491,301
Cancellation of treasury shares				(7,710,133)	-	(8,680,133)	-
Issued and fully paid at year end				184,600,992	491,301	192,311,125	491,301
Shares held in treasury				(16,182,716)	(174,189)	(16,182,716)	(136,706)
Outstanding shares at year end				168,418,276	317,112	176,128,409	354,595

Treasury shares

				30 June 2021	30 June 2020
				Number of	Number of
				shares	shares
Opening balance at 1 July				16,182,716	16,182,716
Shares repurchased during the year				7,710,133	8,680,133
Shares cancelled during the year				(7,710,133)	(8,680,133)
Closing balance at year end				16,182,716	16,182,716

In October 2011, the Board first sought and obtained shareholder approval to implement a share buyback programme. The share buyback programme was approved again at subsequent general meetings of the Company.

During the year ended 30 June 2021, 7.7 million shares (2020: 8.7 million) were repurchased at a cost of USD37.5 million (2020: USD33.2 million) of which USD2.4 million (2020: USD nil) was payable at the year-end (see note 12) and 7.7 million shares (2020: 8.7 million) were cancelled.

12. ACCRUED EXPENSES AND OTHER PAYABLES

				30 June 2021		30 June 2020
					USD'000	USD'000
Management fees payable to the Investment Manager (note 18)					1,481	1,001
Incentive fees payable to the Investment Manager (note 18)					16,568	511
Directors' fees payable (note 18)					1	5
Share repurchase payable (note 11)					2,360	-
Other payables					393	346
					20,803	1,863

All accrued expenses and other payables are short-term in nature. Therefore, their carrying values are considered a reasonable approximation of their fair values. Further details on the payables to other related parties are disclosed in note 18.

13. DIVIDEND INCOME

					Year ended
					30 June 2021	30 June 2020
					USD'000	USD'000
Dividend income					102,191	84,703

The above table sets out dividends received by the Company from its subsidiaries. These represent distributions of income received as well as the proceeds of disposals of assets by subsidiaries, and do not reflect the dividends earned by the underlying investee companies. During the year, the subsidiaries received a total amount of USD20.4 million in dividends from their investee companies (30 June 2020: USD16.8 million).

14. NET GAINS/(LOSSES) ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

				Year ended
				30 June 2021		30 June 2020
					USD'000	USD'000
Financial assets at fair value through profit or loss:
-  Unrealised gains/(losses), net					521,601	(122,961)
Total					521,601	(122,961)

15(a). GENERAL AND ADMINISTRATION EXPENSES

				Year ended
				30 June 2021		30 June 2020
					USD'000	USD'000
Management fees (note 18(a))					14,723	11,999
Expenses recharged by the Investment Manager					91	343
Directors' fees and expenses (note 18(c))					429	449
Custodian, secretarial and other professional fees					1,114	945
Audit fees					533	482
Other expenses					705	666
					17,595	14,884

15(b). ACCRUED INCENTIVE FEE

There was no deferred liability in respect of incentive fees carried forward from 30 June 2020. For the year ended 30 June 2021, USD74.8 million (30 June 2020: USD nil) incentive fee was earned by the Investment Manager. The amount of USD16.6 million was accrued as a current liability at the year end with the remaining USD58.2 million carried forward and is potentially due in future years. The amount of USD58.2 million has been discounted to USD48.8 million (30 June 2020: USD nil) to reflect the time value of money and is shown as deferred incentive fees in the Statement of Financial Position.

16. INCOME TAX EXPENSE

The Company has been granted Guernsey tax exempt status in accordance with the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as amended).

The majority of the subsidiaries are domiciled in the BVI and so have a tax exempt status whilst the remaining subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in those countries. The income tax payable by these subsidiaries is taken into account in determining their fair values in the Statement of Financial Position.

17. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE

(a) Basic

Basic earnings or loss per share is calculated by dividing the profit or loss from operations of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares (note 11).

				Year ended
				30 June 2021		30 June 2020
Profit/(loss) for the year (USD'000)					540,784	(50,458)
Weighted average number of ordinary shares in issue					171,509,881	181,910,786
Basic earnings/(loss) per share (USD per share)					3.15	(0.28)

The basic earnings per share in GBP was 2.28 at 30 June 2021 (30 June 2020: loss per share in GBP was 0.22).

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has no category of potentially dilutive ordinary shares. Therefore, diluted earnings per share is equal to basic earnings per share.

(c) NAV per share

NAV per share is calculated by dividing the net asset value of the Company by the number of outstanding ordinary shares in issue as at the reporting date excluding ordinary shares purchased by the Company and held as treasury shares (note 11). NAV is determined as total assets less total liabilities. The basic NAV per share is equal to the diluted NAV per share.

				30 June 2021	30 June 2020
Net asset value (USD'000)				1,359,773	876,105
Number of outstanding ordinary shares in issue (note 11)				168,418,276	176,128,409
Net asset value per share (USD per share)				8.07	4.97

18. RELATED PARTIES

(a) Management fees

The Investment Manager receives a fee at the annual rates set out below, payable monthly in arrears.

· 1.50% of net assets, levied on the first USD500 million of net assets;

· 1.25% of net assets, levied on net assets between USD500 million and USD1,000 million;

· 1.00% of net assets, levied on net assets between USD1,000 million and USD1,500 million;

· 0.75% of net assets, levied on net assets between USD1,500 million and USD2,000 million; and

· 0.50% of net assets, levied on net assets above USD2,000 million.

Total fees paid to the Investment Manager for the year amounted to USD14.8 million (30 June 2020: USD12.3 million), of which USD0.1 million (30 June 2020: USD0.3 million) was in relation to recharge of expenses incurred. In total USD1.5 million (30 June 2020: USD1.0 million) was payable to the Investment Manager at the reporting date.

(b) Incentive fees

As described in note 15(b), as at 30 June 2021, a total incentive fee of USD74.8 million (30 June 2020: USD0.5 million) was accrued on the basis of the current year performance of the Company's NAV, of which USD16.6 was accrued as a current liability at the year end. This amount is accounted for in accrued expenses and other payables in the Statement of Financial Position. The remaining balance of USD58.2 million has been carried forward and is potentially due in future years. The amount of USD58.2 million has been discounted to USD48.8 million (30 June 2020: USD nil) to reflect the time value of money and is shown as deferred incentive fees in the Statement of Financial Position.

(c) Directors' Remuneration

The Directors who served during the past two years received the following emoluments in the form of fees:

		Year ended
	Annual fee	30 June 2021	30 June 2020
	USD	USD	USD
Steve Bates	95,000	95,000	95,000
Thuy Bich Dam	80,000	80,000	80,000
Huw Evans	90,000	90,000	90,000
Peter Hames (Appointed 24 June 2021)	80,000	1,315	-
Julian Healy	90,000	90,000	85,000
Kathryn Matthews	80,000	80,000	80,000
		436,315	430,000

During the year, directors' expenses totaling USD7,439 (30 June 2020: USD nil) which had been paid prior to the beginning of the accounting year were reimbursed to the Company as costs of cancelled flights were refunded. Directors' expenses of USD nil were incurred during the year to 30 June 2021 (30 June 2020: USD19,274). The total amount earned by the Directors during the year was USD428,876 (30 June 2020: USD449,274), of which USD1,315 was outstanding at 30 June 2021 (30 June 2020: USD5,000).

(d) Shares held by related parties

	Shares held	Shares held
	as at 30 June 2021	as at 30 June 2020
Steve Bates	25,000	25,000
Thuy Bich Dam	-	-
Huw Evans	35,000	35,000
Peter Hames (Appointed 24 June 2021)	-	-
Julian Healy	15,000	15,000
Kathryn Matthews	9,464	9,464
Andy Ho	248,084	248,084
Don Lam	-	1,005,859

As at 30 June 2021, Stephen Westwood, the co-owner of CES Investments Ltd which provides consultancy services to the Company, owned 6,000 shares (30 June 2020: 6,000 shares) in the Company.

As at 30 June 2021, the Investment Manager owned 1,690,575 shares (30 June 2020: 2,545,575 shares) in the Company.

(e) Controlling party

In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate nor ultimate controlling party.

19. FINANCIAL RISK MANAGEMENT

(a) Financial risk factors

The Company has set up a number of subsidiaries and associates for the purpose of holding investments in listed and unlisted securities, operating asset, structured and private equity investments in Vietnam and overseas with the objective of achieving medium to long-term capital appreciation and providing investment income. The Company accounts for these subsidiaries and associates as financial assets at fair value through profit or loss.

The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potentially adverse effects on the Company's financial performance. The Company's risk management is coordinated by the Investment Manager which manages the distribution of the assets to achieve the investment objectives.

There have been no significant changes in the management of risk or in any risk management policies during the financial year to 30 June 2021.

The Company is subject to a variety of financial risks: market risk, credit risk and liquidity risk.

(i) Market risk

Market risk comprises price risk, foreign exchange risk and interest rate risk. Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, interest rates and/or foreign exchange rates.

The investments are subject to market fluctuations and the risk inherent in the purchase, holding or selling of investments and there can be no assurance that appreciation or maintenance in the value of those investments will occur.

The Company's subsidiaries and associates invest in listed and unlisted equity securities and are exposed to market price risk of these securities. The majority of the underlying equity investments are traded on either of Vietnam's stock exchanges, the Ho Chi Minh Stock Exchange or the Hanoi Stock Exchange, as well as UPCoM.

All securities investments present a risk of loss of capital. This risk is managed through the careful selection of securities and other financial instruments within specified limits and by holding a diversified portfolio of listed and unlisted instruments. In addition, the performance of investments held by the Company's subsidiaries is monitored by the Investment Manager on a regular basis and reviewed by the Board of Directors on a quarterly basis.

Market price sensitivity analysis

If the prices of the listed and unlisted securities had increased/decreased by 10%, the Company's financial assets held at fair value through profit or loss would have been higher/lower by USD105.8 million (30 June 2020: USD60.0 million).

See note 19(b) for a sensitivity analysis of the fair values of private equity.

Depending on the development stage of a project and its associated risks, the Independent Valuer uses discount rates in the range from 12% to 21% and terminal growth rates of 1.5% to 5% (30 June 2020: 14% to 20% and 2% to 14.5%, respectively).

Foreign exchange risk

The Company makes investments in USD and receives income and proceeds from sales in USD. As such, at the Company level, there is minimal foreign exchange risk. Nevertheless, investments are made in entities which are often exposed to the VND, and these entities are therefore sensitive to the exchange rate of the VND against USD. On a 'look-through' basis, therefore, the Company is exposed to movements in the exchange rate of the VND against the USD.

Interest rate risk

The Company's exposure to interest rate risk is considered to be limited as the Company does not have any directly held interest-bearing loans, receivables or payables.

(ii) 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 Company.

The Company's maximum credit exposure without taking into account any collateral held consists of the carrying amount of cash and receivables of the Company and its subsidiaries and associates at the year end. Cash and receivables of the Company's subsidiaries and associates is classified within financial assets at fair value through profit or loss.

	30 June 2021	30 June 2020
	USD'000	USD'000
Financial assets at fair value through profit or loss	25,733	37,590
Cash and cash equivalents	76,225	7,457
Receivables (excluding prepayments)	4	-
	101,962	45,047

At 30 June 2021 and 30 June 2020, USD11.6 million of receivables of the Company relating to the sale of a direct investment were fully impaired, as described in note 10. In determining the impairment the Directors have made judgements as to whether there is a probability of default or observable data available indicating that there has been a significant change to the debtor's ability to pay. The Investment Manager is also investigating the collateral against which the receivables may be secured and whether mechanisms exist to recover value from the collateral. The Investment Manager is examining the possibility of recovering the receivables in question; however it was concluded that there is still a reasonable expectation of recovery thus no write-off of the fully impaired receivables has been made.

Apart from the fully impaired receivables as described above, the Company has no significant concentration of credit risk. All cash is placed with a financial institution with a credit rating of A+ and the risk of default on the other receivables is considered minimal.

(iii) Liquidity risk

Liquidity risk is the risk that the Company may not be able to generate sufficient cash resources to settle its obligations in full as they fall due or can only do so on terms that are materially disadvantageous.

Listed securities held by the Company's subsidiaries are considered readily realisable, as the majority are listed on Vietnam's stock exchanges.

At the year end, the Company's non-derivative financial liabilities have contractual maturities which are summarised in the table below. The amounts in the table are the contractual undiscounted cash flows.

						30 June 2021		30 June 2020
						Within 12	Over 12	Within 12	Over 12
						Months	Months	Months	Months
						USD'000	USD'000	USD'000	USD'000
Payables to related parties (note 12)						1,482	-	1,517	-
Incentive fee payable/deferred						16,568	58,272	-	-
Other payables (note 12)						2,753	-	346	-

The Company manages its liquidity risk by investing predominantly in securities through its subsidiaries that it expects to be able to liquidate within 12 months or less. The following table analyses the expected liquidity of the assets held by the Company:

						30 June 2021		30 June 2020
						Within 12	Over 12	Within 12	Over 12
						Months	Months	Months	Months
						USD'000	USD'000	USD'000	USD'000
Cash and cash equivalents						76,225	-	7,457	-
Receivables and prepayments						88	-	29	-
Financial assets at fair value through profit or loss						1,085,171	267,937	637,083	233,399
						1,161,484	267,937	644,569	233,399

(a) Capital management

The Company's capital management objectives are:

· To ensure the Company's ability to continue as a going concern;

· To provide investors with an attractive level of investment income; and

· To preserve a potential capital growth level.

The Company is not subject to any externally imposed capital requirements. The Company has engaged the Investment Manager to allocate the net assets in such a way so as to generate a reasonable investment return for its shareholders and to ensure that there is sufficient funding available for the Company to continue as a going concern.

Capital as at the year-end is summarised as follows:

	30 June 2021	30 June 2020
	USD'000	USD'000
Net assets attributable to equity shareholders	1,359,773	876,105

(b) Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

· Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

· Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

There are no financial liabilities of the Company which were carried at fair value through profit or loss as at 30 June 2021 and 30 June 2020.

The level into which financial assets are classified is determined based on the lowest level of significant input to the fair value measurement.

Financial assets measured at fair value in the Statement of Financial Position are grouped into the following fair value hierarchy:

						Level 3	Total
						USD'000	USD'000
As at 30 June 2021
Financial assets at fair value through profit or loss						1,353,108	1,353,108
As at 30 June 2020
Financial assets at fair value through profit or loss						870,482	870,482

The Company classifies its investments in subsidiaries and associates as Level 3 because they are not publicly traded, even when the underlying assets may be readily realisable. There were no transfers between the Levels during the year ended 30 June 2021 and 30 June 2020.

If these investments were held at the Company level, they would be presented as follows:

											Level 1	Level 2	Level 3	Total
											USD'000	USD'000	USD'000	USD'000
As at 30 June 2021
Cash and cash equivalents											24,512	-	-	24,512
Ordinary shares - listed											938,215	-	-	938,215
- unlisted *											113,504	6,709	-	120,213
Structured and private equity investments											-	-	255,407	255,407
Operating asset											-	-	12,530	12,530
Other net assets											-	-	2,231	2,231
											1,076,231	6,709	270,168	1,353,108
											Level 1	Level 2	Level 3	Total
											USD'000	USD'000	USD'000	USD'000
As at 30 June 2020
Cash and cash equivalents											23,490	-	-	23,490
Ordinary shares - listed											486,055	-	-	486,055
- unlisted*											84,429	29,545	-	113,974
Structured and private equity investments											-	-	221,363	221,363
Operating asset											-	-	12,036	12,036
Other net (liabilities)/assets											-	-	13,564	13,564
											593,974	29,545	246,963	870,482

* Unlisted securities are valued at their prices on UPCoM or using quotations from brokers.

Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include actively traded equities on Ho Chi Minh City Stock Exchange, Hanoi Stock Exchange or UPCoM at the Statement of Financial Position date.

Financial instruments which trade in markets that are not considered to be active but are valued based on prices dealer quotations are classified within Level 2. These include investments in OTC equities. As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Structured and private equities, the operating asset, and other assets that do not have an active market are classified within Level 3. The Company uses valuation techniques to estimate the fair value of these assets based on significant unobservable inputs as described in note 3.2. There were no movements into or out of the Level 3 category during the period.

The Company considers the appropriateness of the valuation model inputs, as well as the valuation results using various valuation methods and techniques which are generally recognised as standard within the industry. The change in the significant unobservable inputs shown in the table below shows the impact which a reasonable potential shift in the input variables would have on the valuation result.

Set out below is the sensitivity analysis which shows the changes in the Company's net asset value, on a look through basis, based on the significant unobservable input assumptions used in the valuation of Level 3 investments as at 30 June 2021, keeping all other assumptions constant. The changes in discount rates by +/- 1% is considered appropriate for the market in which the Company is operating.

At 30 June 2021, the operating asset was valued at USD12.5 million (30 June 2020: USD12.0 million) by reference to its expected sale price and any changes in unobservable input assumptions such as discount rate and cap rate are not considered to be relevant.

Segment	Valuation	Valuation	Discount	Cap	Terminal	Multiples	Sensitivities in discount rates and cap rates/terminal
	technique	(USD'000)	rate	rate	growth rate		growth rate (USD'000)
							Change in sales growth rate
Private equity	Multiples	10,345	N/A	N/A	N/A	2.32x	-1% 0% 1% Change in -1% 10,181 10,266 10,346 EBITDA 0% 10,305 10,345 10,388 margin 1% 10,339 10,425 10,507
Structured	Discounted	169,368 *	12% -	N/A	1.5% -	N/A	Change in discount rate
and private equity	cash flows		21%		5%		-1% 0% 1% Change in -1% 174,413 163,032 153,295 terminal 0% 182,138 169,368 158,323 growth rate 1% 191,854 176,728 164,343

* The above sensitivity analysis includes those underlying Level 3 structured and private equity investments that have been valued using the valuation methodologies noted above. The difference between the balance of USD255.4 million recorded as Level 3 structured and private equity investments earlier in note 19 and the two above balances of USD179.7 million relates to two underlying investments that were valued using the post-year end listing prices and are thus not subject to the same sensitivities.

Set out below is the sensitivity analysis which shows the changes in the Company's net asset value, on a look through basis, based on the significant unobservable input assumptions used in the valuation of Level 3 investments as at 30 June 2020, keeping all other assumptions constant. The changes in discount rates by +/- 1% is considered appropriate for the market in which the Company is operating.

Segment	Valuation	Valuation	Discount	Cap	Terminal	Sensitivities in discount rates and cap rates/terminal
	technique	(USD'000)	rate	rate	growth rate	growth rate (USD'000)
						Change in discount rate
Operating asset	Disocunted cash flows	12,036	15%	14.5%	N/A	-1% 0% 1% Change in -1% 12,654 12,164 11,711 cap rate 0% 12,514 12,036 11,594 1% 12,386 11,918 11,486
Private	Discounted	112,299 *	14% -	N/A	2% -	Change in discount rate
equity	cash flows		20%		5%	-1% 0% 1% Change in -1% 116,397 107,146 99,317 terminal 0% 122,883 112,299 103,489 growth rate 1% 130,833 118,509 108,431

* The difference between the balance of USD221.4 million reflected as Level 3 private equity earlier in note 19 to the above balance of private equity of USD112.3 million, is due to the fact that different valuation methodologies are used in the Level 3 valuations which reflect other unobservable inputs such as price to book methodologies used in desktop valuations.

Specific valuation techniques used to value the Company's underlying investments include:

· Quoted market prices or dealer quotes;

· Use of discounted cash flow technique to present value the estimated future cash flows; and

· Other techniques, such as the latest market transaction price.

20. SUBSEQUENT EVENTS

This Annual Report and Financial Statements were approved by the Board on 25 October 2021. Subsequent events have been evaluated until this date.

On 25 October 2021, the Board declared a dividend of 8.0 US cents per share. The dividend is payable on or around 6 December 2021 to shareholders on record at 5 November 2021.

MANAGEMENT AND ADMINISTRATION

Directors		Registrar
Steve Bates		Computershare Limited
Thuy Bich Dam		13 Castle Street
Huw Evans		St Helier
Peter Hames (Appointed 24 June 2021)		Jersey, JE1 1ES
Julian Healy		Channel Islands
Kathryn Matthews
Registered Office		Independent Auditor
PO Box 656		PricewaterhouseCoopers CI LLP
Trafalgar Court		PO Box 321
Les Banques		Royal Bank Place
St Peter Port		1 Glategny Esplanade
Guernsey, GY1 3PP		St Peter Port
Channel Islands		Guernsey, GY1 4ND
		Channel Islands
Investment Manager		Investment Advisor
VinaCapital Investment Management Ltd		VinaCapital Fund Management JSC
(From 2 November 2020)		17th Floor, Sun Wah Tower
Elizabeth House		115 Nguyen Hue Blvd, District 1
Les Ruettes Brayes		Ho Chi Minh City
St Peter Port		Vietnam
Guernsey, GY1 4N
Channel Islands
VinaCapital Investment Management Ltd (To 1 November 2020)
PO Box 309
Ugland House
Grand Cayman KY1-1104
Cayman Islands
Administrator and Corporate Secretary		UK Marketing and Distribution Partner
Aztec Financial Services (Guernsey) Limited		Frostrow Capital LLP
PO Box 656		25 Southampton Buildings
Trafalgar Court		London WC2A 1AL
Les Banques		United Kingdom
St Peter Port
Guernsey, GY1 3PP
Channel Islands
Corporate Broker
Numis Securities Limited
45 Gresham Street
London EC2V 7BF
United Kingdom
Custodian
Standard Chartered Bank (Vietnam) Limited
Unit 1810-1815, Keangnam Cau Giay New Urban Area
Me Tri Com Hanoi
Vietnam

Investment Manager's Offices:

Ho Chi Minh City

17th Floor, Sun Wah Tower

115 Nguyen Hue Blvd., District 1

Ho Chi Minh City

Vietnam

Phone: [phone]

Fax: [phone]

Hanoi

Room 1, 6^th Floor, International Center Building

17 Ngo Quyen, Hoan Kiem District

Hanoi

Vietnam

Phone: [phone]

Fax: [phone]

Singapore

6 Temasek Boulevard

# 42-01 Suntec Tower 4

Singapore 038986

Phone: [phone]

Fax: [phone]

GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES

Term	Definition
EBITDA	Earnings before interest, tax, depreciation and amortisation. A measure of the gross profit of a company.
EPS	Earnings per share.
Equitisation	The process of selling a company from public ownership to private investors. Known as privatisation in other countries.
FDI	Foreign direct investments.
FY	Financial year. The Company's financial year runs from 1 July to 30 June.
GBP	British Pound Sterling.
GDP	Gross Domestic Product. GDP is a monetary measure of the market value of all the final goods and services produced in a specific time period in a country or wider region.
HNX	The Hanoi Stock Exchange
HOSE	The Ho Chi Minh Stock Exchange.
IPO	Initial public offering - the means by which most listed companies achieve their stock market listing.
IRR	The internal rate of return. A measure of the total return on an investment taking account of the amount and timing of all amounts invested and amounts realised. The IRR is expressed as an annualised percentage. The use of IRR enables different investments with differing cash flow profiles to be compared on a like for like financial basis.
LSE	The London Stock Exchange.
Net Asset Value Per Share (NAV)	The total value of the Company's assets less its liabilities (the net assets) divided by the number of shares in issue.
NAV Total Return	A measure of the investment return earned by the Company, taking account of the change in NAV over the period in question and assuming that any dividends paid in the period are reinvested at the prevailing NAV per share at the time that the shares begin to trade ex-dividend.
Ongoing Charges Ratio	The Ongoing Charges Ratio represents the annualised ongoing charges (excluding finance costs, transaction costs and taxation) divided by the average daily net asset values of the Company for the period and has been prepared in accordance with the AIC's recommended methodology. Ongoing charges reflect expenses likely to recur in the foreseeable future.
Share Price Total Return	A measure of the investment return to shareholders, taking account of the change in share price over the period in question and assuming that any dividends paid in the period are reinvested at the prevailing share price at the time that the shares begin to trade ex-dividend.
SOE	State owned enterprise
UPCoM	UPCoM listing of the Hanoi Stock Exchange
USD	United States Dollar.
VN Index	The Ho Chi Minh Stock Exchange Index, a capitalisation-weighted index of all companies listed on the Ho Chi Minh Stock Exchange.

 

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END

 

 

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