Final Results
Vietnam Opportunity Fund Limited
06 October 2005
Vietnam Opportunity Fund Limited ('VOF' or 'The Company')
Final results
30 June 2005
Auditors' report
To the Directors
Vietnam Opportunity Fund Limited
We have audited the accompanying balance sheet of Vietnam Opportunity Fund
Limited as of 30 June 2005, and the related statements of income, changes in
shareholders' equity and cash flows for the year ended 30 June 2005. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with International Standards on Auditing.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements give a true and fair view of the
financial position of the Company as of 30 June 2005, and of the results of its
operations and its cash flows for the year ended 30 June 2005, in accordance
with International Financial Reporting Standards.
Balance sheet
Notes 30 June 2005 30 June 2004
Consolidated Company Consolidated Company
US$ US$ US$ US$
ASSETS
Cash and cash
equivalents 52,405,365 8,571,605 1,210,419 -
Term deposit 12,155 - 440,417 440,417
Deposits and 3,931,174 - 1,099,065 -
advances
Dividends and other
receivables 320,979 70,343 1,483 1,405
Investments in
financial assets 3 30,118,442 - 5,590,332 -
Investments in
associates 4 7,441,013 - 2,644,276 -
Investments in
subsidiaries 5 2,413,587 88,207,302 - 10,502,787
Others 300,000 - - -
-------------------- ------ --------- -------- --------- --------
96,942,715 96,849,250 10,985,992 10,944,609
==================== ====== ========= ======== ========= ========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Liabilities
Custodian fees 408,727 408,727 - -
Trustee fee 36,775 36,775 - -
Accounts payable and
accrued expenses 256,617 163,152 197,796 156,413
-------------------- ------ --------- -------- --------- --------
702,119 608,654 197,796 156,413
Shareholders'
equity
Paid-in capital 6 92,385,989 92,385,989 9,500,000 9,500,000
Retained earnings 3,854,607 3,854,607 1,288,196 1,288,196
-------------------- ------ --------- -------- --------- --------
96,240,596 96,240,596 10,788,196 10,788,196
-------------------- ------ --------- -------- --------- --------
96,942,715 96,849,250 10,985,992 10,944,609
==================== ====== ========= ======== ========= ========
Statement of income
Notes For the year ended 30 June 2005 Period from 15 July 2003 to 30 June 2004
Consolidated Company Consolidated Company
US$ US$ US$ US$
Revenue
Gain on
investment in
financial
assets 3 1,333,352 - 458,690 -
Gain on
investments in
associates 4 1,054,499 - 1,247,276 -
Gain on sale
of investments 38,414 - 237,169 -
Foreign
exchange and
translation
gains
(losses), net (172,920) 153 94,227 90,328
Interest and
dividends 1,551,632 290,383 45,132 33,190
Other income 164,025 - 22,258 -
Equity in
earnings of
subsidiaries 5 423,587 3,944,514 - 1,952,788
------------------- ------ ---------- -------- --------- --------
4,392,589 4,235,050 2,104,752 2,076,306
Operating
expenses
Organisational
fees (700) - (461,992) (457,703)
Investment
advisory fees (1,048,079) (1,048,079) (189,460) (189,460)
Professional
fees (121,909) (99,199) (80,687) (65,974)
Directors'
fees and
expenses (46,070) (46,070) (39,514) (39,514)
Broker fees (35,751) - (22,472) (13,636)
Trustee fees (42,329) (42,329) (19,397) (19,397)
Other expenses (227,340) (128,962) (3,034) (2,426)
------------------- ------ ---------- -------- --------- --------
(1,522,178) (1,364,639) (816,556) (788,110)
------------------- ------ ---------- -------- --------- --------
Net income 2,870,411 2,870,411 1,288,196 1,288,196
=================== ====== ========== ======== ========= ========
Statement of changes in shareholders' equity
Notes For the year ended 30 June 2005 Period from 15 July 2003 to 30 June 2004
Consolidated Company Consolidated Company
US$ US$ US$ US$
Paid-in capital
At 1 July 2004 9,500,000 9,500,000 - -
Issue of
shares 6 82,885,989 82,885,989 9,500,000 9,500,000
-------------------- ------ --------- -------- --------- --------
Balance at end
of the year 92,385,989 92,385,989 9,500,000 9,500,000
-------------------- ------ --------- -------- --------- --------
Retained earnings
At 1 July 2004 1,288,196 1,288,196 - -
Net income 2,870,411 2,870,411 1,288,196 1,288,196
Dividend
payment (304,000) (304,000) - -
-------------------- ------ --------- -------- --------- --------
Balance at end
of the year 3,854,607 3,854,607 1,288,196 1,288,196
-------------------- ------ --------- -------- --------- --------
Total
shareholders'
equity 96,240,596 96,240,596 10,788,196 10,788,196
==================== ====== ========= ======== ========= ========
Statement of cash flows
For the year ended 30 June 2005 Period from 15 July 2003 to 30 June 2004
Consolidated Company Consolidated Company
US$ US$ US$ US$
Cash flows from
operating
activities
Net income 2,870,411 2,870,411 1,288,196 1,288,196
Adjustments for:
Gain on
investments in
associates (1,054,499) - (1,230,000) -
Gain on
investments in
financial
assets (1,333,352) - (458,690) -
Unrealised
foreign
exchange gain
(loss) 172,920 - (202,031) -
Gain on sale
of investment (38,414) - - -
Dividend
income (1,066,189) - - -
Interest
income (485,442) (290,383) (37,498) (33,190)
Dividend paid (304,000) (304,000) - -
Equity in
earnings of
subsidiaries (423,587) (3,944,514) (17,276) (1,952,788)
-------------------- --------- --------- --------- ---------
Net loss
before changes
in working
capital (1,662,152) (1,668,486) (657,299) (697,782)
Increase in
deposit,
advances and
other
receivables (3,451,604) (68,938) (1,100,547) (1,389)
Increase in
accounts
payable and
accrued
expenses 504,323 452,241 197,796 156,414
-------------------- --------- --------- --------- ---------
Net cash used
in operating
activities (4,609,433) (1,285,183) (1,560,050) (542,757)
Cash flows from
investing
activities
Interest
received 300,255 290,383 37,405 33,174
Dividend
received 1,066,189 - - -
Acquisition of
investments (37,752,964) (73,760,001) (8,069,568) -
Proceeds from
sales of
investments 10,866,648 - 2,843,048 -
Investment in
subsidiaries (1,990,000) - - (7,450,000)
-------------------- --------- --------- --------- ---------
Net cash used
in investing
activities (27,509,872) (73,469,618) (5,189,115) (7,416,826)
Cash flows from
financing
activities
Proceeds from
shares issued 82,885,989 82,885,989 8,400,000 8,400,000
-------------------- --------- --------- --------- ---------
Net cash from
financing
activities 82,885,989 82,885,989 8,400,000 8,400,000
Net increase
in cash and
equivalents
for the year 50,766,684 8,131,188 1,650,835 440,417
Cash at the
beginning of
the year 1,650,836 440,417 - -
-------------------- --------- --------- --------- ---------
Cash and cash
equivalents at
end of the
year 52,417,520 8,571,605 1,650,835 440,417
==================== ========= ========= ========= =========
Notes to the financial statements
1 Principal activity
Vietnam Opportunity Fund Limited was incorporated in the Cayman Island as a
company with limited liability. The registered office of the Company is PO Box
309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman
Islands. The Company holds a 100% interest in the following entities, which were
incorporated in the British Virgin Islands:
• Asia Value Investment Ltd
• Vietnam Enterprise Ltd
• Vietnam Investment Property Ltd
• Vietnam Investment Property Holdings Ltd
• Vietnam Investment Ltd
• Vietnam Ventures Ltd
• VOF Investment Ltd
The principal activity of the Company is to invest in listed and unlisted
companies, debt instruments, assets and other opportunities in Vietnam and
surrounding countries with objective of achieving medium to long-term (three to
five years) capital appreciation and providing investors with an attractive
level of investment income from interest and dividends.
As at 30 June 2005, the Company had no employees.
2 Transition to International Financial Reporting Standards
Basis of presentation
The financial statements expressed in United States Dollars have been prepared
under the historical cost convention and in conformity with International
Financial Reporting Standards.
Principles of Consolidation
The consolidated financial statements include the financial statements of the
Company and its subsidiaries. Subsidiaries are consolidated from the date the
Company obtains control until such time that such control ceases. All
inter-company balances and transactions have been eliminated. There is no
goodwill arising upon consolidation.
Cash and cash equivalents
Cash and cash equivalents include cash in bank and short-term, highly liquid
investments readily convertible to known amounts of cash and which are subject
to insignificant risk of changes in value.
Investments
Investments are initially recorded at their cost of acquisition, which generally
consists of the purchase price of the security or the fair value of the
consideration given in exchange and other costs directly related to the
acquisition. Subsequent to acquisition, the investments are carried at the
following values:
Financial assets
Financial assets consist of portfolio investments of listed and unquoted
marketable equity securities, which are carried at fair value. Fair value of a
listed security is determined by the quoted market price on the last trading day
of each quarter. Fair value of an unlisted security is determined by the price
of the most recent comparable transaction for that security, if any, before the
end of each quarter. Gains and losses are recorded in the statement of income.
The cost of securities sold is determined on a first-in first-out basis.
Associates
Investments in enterprises in which the Company has significant influence are
accounted for using the equity method, whereby the investment is originally
recorded at cost and adjusted for changes in the Company's share of the equity
of the associate since date of acquisition. The Company's share of the results
of operations of an associate is accounted for in the statement of income.
Investments in associates that have been acquired and are being held exclusively
for the purpose of disposing of them in the near future are carried at fair
value, determined by reference to an independent appraisals performed by a
professional appraisers. Gains and losses are recorded in the statement of
income.
Subsidiaries (parent company accounts)
Investments in subsidiaries are accounted for using the equity method. The
Company's share of the results of operations of a subsidiary is accounted for in
the statement of income.
Interest and dividend income
Interest income is recognized on an accrual or if applicable effective yield
basis. Dividend income is recorded when the stockholders' right to receive the
dividend is established.
Impairment of assets
The carrying amounts of the Company's assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If any such
indication exists, the asset's recoverable amount is estimated. An impairment
loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount
Foreign currency transactions
The accounting records of the Company are maintained in United States Dollars.
Foreign currency transactions during the year are translated at the exchange
rates that approximates those prevailing on transaction dates. Foreign currency
monetary assets and liabilities at the balance sheet date are translated into
United States Dollars at exchange rate that approximates those prevailing on
that date. Exchange gains and losses are recognized in income for the period.
Related parties
Related parties include companies which directly or indirectly hold significant
equity interests in the Company ('parent companies'), other investees of such
companies ('affiliated companies'), subsidiary companies, joint venture
partners, key management personnel of the Company or its parent, close relatives
of the foregoing, or parties which are significantly influenced or controlled by
any of these.
3. Investment in financial assets
Consolidated
Number of Type of Closing balance Gain (loss)
shares security
US$ US$
Listed securities
Ree Corporation
(REE) 946,715 Ordinary shares 1,594,178 86,585
Sacom (SAM) 395,250 Ordinary shares 959,708 11,823
Savimex (SAV) 220,140 Ordinary shares 412,346 (38,345)
Tribeco (TRI) 529,890 Ordinary shares 701,797 (35,063)
Chau Thoi
Concrete 620
Corporation
(BT6) 60,130 Ordinary shares 111,872 (14,323)
Gilimex (GIL) 123,380 Ordinary shares 239,663 (11,708)
Vietfund
Management
(VMFVF1) 880,880 Ordinary shares 483,328 (16,279)
Agifish (AGF) 8,120 Ordinary shares 16,285 (2,786)
Bien Hoa
Confectionary
Corporation
(BBC) 196,320 Ordinary shares 195,627 349
Cobovina Bach
Tuyet (BBT) 10 Ordinary shares 8 -
North Kinh Do
Food Joint
Stock Company 160,500 Ordinary shares 364,405 107,945
---------------------- ------- -------- ---------
----------
5,079,217 88,198
---------------------- ------- ---------- -------- ---------
Unlisted securities
Financial
Institutions 3,447,785 Ordinary shares 7,261,051 1,104,727
Bao Minh CMG
Life Insurance
Company 255,350 Ordinary shares 3,204,758 (131,843)
Vinamilk Joint
Stock Company 211,058 Ordinary shares 3,800,269 196,939
Phuong Nam Corp
Cultural Goods
Manufacturing
Joint Stock
Company 225,930 Ordinary shares 207,321 20,595
Sa Giang
Import Export
Corporation 10,000 Ordinary shares 104,062 (1,192)
Tuong An Oil
Joint Stock
Company 16,205 Ordinary shares 161,478 5,335
Hau Giang
Pharmacy
Company 19,195 Ordinary shares 264,512 47,378
Sohafarm 23,250 Ordinary shares 148,099 (959)
Bac Ninh
Agricultural
Company 27,200 Ordinary shares 188,698 11,093
Vinacafe Bien
Hoa Joint Stock
Company 14,470 Ordinary shares 158,790 21,737
Bien Hoa
Electricity
Company 3,000 Ordinary shares 20,557 650
Bien Hoa Sugar
Joint-stock
Company 38,280 Ordinary shares 263,151 (258)
Saigon Housing
Corporation 49,760 Ordinary shares 469,168 (74,019)
Cho Lon Housing
Construction
and Business
Company 5,000 Ordinary shares 41,309 (4,481)
Sai Gon Postel
Corporation 40,000 Ordinary shares 413,010 14,376
Binh Minh
Plastic Company 2,050 Ordinary shares 22,626 (46)
Do Thanh
Plastic Joint
Stock Company 15,664 Ordinary shares 128,426 25,070
Ho Chi Minh
Infrastructure
Investment
Joint Stock
Company 60,000 Ordinary shares 501,387 5,330
Tien Phong
Technology
Company 300,000 Ordinary shares 236,504 (1,985)
Geology and
Mineral
Resources
Company 3,000 Ordinary shares 19,299 (162)
Saigon-Can Tho
Brewery 53,060 Ordinary shares 438,374 14,027
Taya Vietnam
Electric Wire
and Cable Co 5,000 Ordinary shares 67,798 10,707
Kinh Do
Corporation 2,000,000 Ordinary shares 5,517,093 (24,850)
Dongnai
Municipal Bond 220,000 Bond 1,401,485 6,985
--------------------- -------- ---------- -------- ---------
25,039,225 1,245,154
--------------------- -------- ---------- -------- ---------
30,118,442 1,333,352
===================== ======== ========== ======== =========
4. Investment in associates
Consolidated
Proportion of Closing balance Gain (loss)
ownership
interest US$ US$
AA Land Corporation
Limited 29% 525,885 (72,365)
Kido's Ice Cream
Corporation 30% 765,416 137,800
International School
Hochiminh City 42% 2,074,064 989,064
Nha Trang Project 30% 864,972 -
34 Ton Duc Thang
Project 30% 1,530,000 -
A&B Project 35% 1,050,000 -
Petrolimex Real
Estate Project 10% 630,676 -
--------------------- --------- -------- ---------
7,441,013 1,054,499
===================== ========= ======== =========
5. Investment in subsidiaries
Closing balance Consolidated
Gain (loss)
Saigon Water Park Ltd: US$ US$
Acquisition cost 1,990,000 -
Revaluation 840,000 840,000
Equity in net earnings for the year (416,413) (416,413)
---------------------------- -------------- ---------
2,413,587 423,587
============================ ============== =========
6. Paid-in capital
Consolidated
US$
Share capital: ordinary shares with nominal value of
US$0.01 per share.
Authorized 500,000,000 shares; issued 2005:
65,654,654 shares, 751,547 95,000
2004: 9,500,000 shares
Share premium 91,634,442 9,405,000
-------------------------------- ----------- -----------
92,385,989 9,500,000
================================ =========== ===========
7. Taxation
The Company is exempt from income tax pursuant to the Tax Concessions Law (1999
Revision) of the Cayman Islands.
8. Related party transactions
During the year, the following transactions with related parties were recorded:
Related party Relation Transaction US$
Vinacapital Investment
Management Limited Affiliate Investment advisory fees 1,048,079
---------------------- --------- ---------------- ---------
At 30 June 2005 the following balances were outstanding with related parties:
Related party Relation Payable
US$
Vinacapital Investment Management Limited Affiliate 197,831
---------------------- ---------------- -----------
9. Commitments
US$
Over 1 year 350,000
---------------------- --------------------
10. Approval of financial statements
The financial statements were approved by the Board of Directors.
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