Interim Results for the 6 mon

RNS Number : 2604J

VinaCapital Vietnam Opp. Fund Ld

26 March 2010

 



26 March 2010

VinaCapital Vietnam Opportunity Fund Limited

Interim results for the 6 months ended 31 December 2009

 
VinaCapital Vietnam Opportunity Fund Limited ("the Company" or "VOF") (VOF.L), an AIM-quoted investment vehicle focused on Vietnam, today announces its interim results for the six months ended 31 December 2009 ("the Period").

Financial highlights

·      Net profit of USD99.96 million (HY08: net loss of USD78.07 million)

·      Net profit per share of USD0.31 (HY08: loss of USD0.25 per share)

·      Cash and cash equivalents as at 31 December 2009 of USD63.22 million (30 June 2009: USD69.69 million)

·      Net asset value at 31 December 2009 USD780 million representing USD2.42 per share

Operational highlights

·      Sale of stake in the Hilton Hanoi Opera Hotel, resulting in an IRR of 23 percent and an exit at 10 percent above the carrying value of the asset

·      Sale of stake in the A&B Tower office project in Ho Chi Minh City, resulting in an IRR of 17.5 percent over the four years the asset was held

·      IPOs of several investees, including Eximbank, one of Vietnam's leading joint stock banks, and DIC Corp. one of Vietnam's leading real estate developers.

·      Investment in Hoan My Medical Corporation, Vietnam's top private hospital owner and operator. Hoan My expects earnings growth of over 40 percent yearly for the next three years.

Commenting, Andy Ho, VinaCapital Managing Director & Head of Investment said:

"Vietnam's economic growth looks set to continue into 2010, with our substantial capital position making us well placed for any new investment opportunities.   In particular we expect to see private equity deal activity increase significantly over the coming year as more private companies look for strategic investors in response to tightening bank lending.  We also hope to build on our gains from the healthy OTC market, which has benefitted from higher expectations of IPO activity."

Notes to Editors:

VinaCapital Groupis a leading asset management, investment banking and real estate consulting firm with unrivalled experience in the Vietnamese market. VinaCapital Group was founded in 2003 and has grown from a single USD10 million fund to a diversified investment firm with over USD1.7 billion in assets under management as of December 2009.

VinaCapital manages three closed-end funds trading on the London Stock Exchange's Alternative Investment Market (AIM). These are: VinaCapital Vietnam Opportunity Fund (VOF); VinaLand Limited (VNL); and Vietnam Infrastructure Limited (VNI).

VinaCapital also co-manages the DFJ VinaCapital technology venture capital fund with Draper Fisher Jurvetson. More information is available at www.vinacapital.com.

More information on VinaCapital Vietnam Opportunity Fund Limited is available at www.vinacapital.com/vof 

Enquiries:

Ms Chi Nguyen

VinaCapital Investment Management Limited

Investor Relations

[phone]

[e-mail]

Philip Secrett

Grant Thornton Corporate Finance, Nominated Adviser

[phone]

[e-mail]

Hiroshi Funaki [phone]

LCF Edmond de Rothschild Securities, Broker

[e-mail]

Alastair Hetherington

Financial Dynamics, Public Relations (Hong Kong)

[phone]

[e-mail]

Andrew Walton

Financial Dynamics, Public Relations (London)

[phone]

[e-mail]

 

Chairman's Statement

Dear shareholders,

We are pleased to present the interim financial statements of VinaCapital Vietnam Opportunity Fund Limited (AIM: VOF) for the six month period ended 31 December 2009.

In the second half of 2009, Vietnam continued its recovery from the 2008 and early 2009 economic crisis that saw GDP growth fall to a low of 3.9 percent annualised during Q1 2009. Under the impact of the government stimulus package, GDP growth for 2009 rebounded to 5.3 percent, including 6.8 percent annualised in the final quarter.

With liquidity returning to the economy, Vietnam's capital markets saw a strong performance in 2009, with the benchmark VN Index returning 56.8 percent for 2009.

For VOF, the first half of the 2009-10 financial year saw the fund grow increasingly active in response to the market recovery, including the close of several material real estate and private equity deals. The fund saw several key holdings IPO during the period, including Eximbank and DIC Corp. Over the 2009 calendar year, 14 VOF holdings listed on the Hanoi and Ho Chi Minh stock exchanges.

VOF's net asset value rose 14.4 percent to USD780 million (2.40 per share) at 31 December 2009, from USD682 million (2.10 per share) at 30 June 2009. VOF's share price at 31 December 2009 was USD1.51, up from USD1.43 at 30 June, resulting in a discount to NAV of 37.1 percent.

During the period, VOF sold its stakes in the Hilton Hanoi Opera Hotel and A&B office tower project in Ho Chi Minh City. The sales generated IRRs of 23.0 and 17.5 percent, respectively, and came as part of efforts to decrease the fund's exposure to illiquid real estate projects. With the proceeds, VOF invested in OTC and listed real estate equities, which were among Vietnam's top performing stocks in 2009.

In private equity, the period saw VOF invest in Hoan My Medical Corporation, Vietnam's top private hospital owner and operator. Hoan My expects earnings growth of over 40 percent yearly for the next three years given its strong market position and plans for expansion, and the intrinsic growth in per capita spending on healthcare.

Going forward for 2010, we expect to see private equity deal terms improve as bank lending tightens and potential investees look for strategic support prior to IPOs. We expect a significant rebalancing of the portfolio toward PE and OTC holdings. The fund manager will look to exit mature assets that no longer have high growth prospects or have not made significant progress with sustainable earnings growth.

Thank you for your continued support.

William Vanderfelt

Chairman

VinaCapital Vietnam Opportunity Fund Limited

26 March 2010

Consolidated Financial Statements

Condensed Consolidated Interim Balance Sheet

	Note	31 December 2009	30 June 2009
		USD'000	USD'000
ASSETS
Non-current
Investment properties		6,784	6,906
Investments in associates	6	179,871	148,435
Property, plant and equipment		61	321
Intangible assets		18	17
Long-term loan receivables from related parties		53,696	58,615
Long-term investments		7,005	2,331
Other long-term financial assets		12,524	15,314
Other non-current assets		141	249
Non-current assets		260,100	232,188
Current
Inventories		2,248	2,071
Trade and other receivables		9,428	8,012
Receivables from related parties		11,369	15,478
Financial assets at fair value through statement of income	7	443,481	352,389
Short-term investments		5,912	452
Cash and cash equivalents		63,219	69,691
Current assets		535,657	448,093
Assets classified as held for sale		2,543	37,742
Total assets		798,300	718,023

	Note	31 December 2009	30 June  2009
		USD'000	USD'000
EQUITY AND LIABILITIES
EQUITY
Equity attributable to shareholders of the parent:
Share capital	8	3,246	3,246
Additional paid-in capital	9	722,064	722,064
Revaluation reserve	10	23,724	25,958
Translation reserve		(3,107)	(2,088)
Retained earnings		34,388	(67,268)
		780,315	681,912
Non-controlling interests		6,272	13,676
Total equity		786,587	695,588
LIABILITIES
Non-current
Other long-term liabilities		483	484
Non-current liabilities		483	484
Current
Trade and other payables		6,815	8,167
Payables to related parties		4,415	3,118
Current liabilities		11,230	11,285
Liabilities classified as held for sale		-	10,666
Total liabilities		11,713	22,435
Total equity and liabilities		798,300	718,023
Net assets per share attributable to equity shareholders of the parent (USD per share)	15	2.40	2.10

Condensed Consolidated Interim Statement of Changes in Equity

	Equity attributable to shareholders of the parent						Non-controlling interests	Total equity
	Share capital	Additional paid-in capital	Revaluation reserve	Translation reserve	Retained earnings
	USD'000	USD'000	USD'000	USD'000	USD'000	USD'000		USD'000
Balance at 1 July 2008	3,246	722,064	18,463	(846)	(74,050)	34,117		702,994
Acquisition of subsidiaries	-	-	-	-	-	(16,153)		(16,153)
(Loss)/gain for the period from 1 July 2008 to 31 December 2008	-	-	-	-	(79,997)	1,860		(78,137)
Other comprehensive income
- Exchange differences on  translation of foreign operations	-	-	-	157	-	-		157
- Share of revaluation gains on associates' properties for the period	-	-	9,859	-	-	-		9,859
Total other comprehensive income	-	-	9,859	157	-	-		10,016
Total comprehensive income	-	-	9,859	157	(79,997)	1,860		(68,121)
Balance at  31 December 2008	3,246	722,064	28,322	(689)	(154,047)	19,824		618,720

Balance at 1 July 2009	3,246	722,064	25,958	(2,088)	(67,268)	13,676	695,588
Disposal of associate	-	-	(2,403)	-	2,403	-	-
Disposal of assets and liabilities held for sale	-	-	-	-	-	(7,978)	(7,978)
Profit for the period from 1 July 2009 to 31 December 2009	-	-	-	-	99,253	602	99,855
Other comprehensive income
- Exchange differences on translation of foreign operations	-	-	-	(1,019)	-	(28)	(1,047)
- Share of revaluation gains on associates' properties for the period (Note 10)	-	-	169	-	-	-	169
Total other comprehensive income	-	-	169	(1,019)	-	(28)	(878)
Total comprehensive income	-	-	169	(1,019)	99,253	574	98,977
Balance at 31 December 2009	3,246	722,064	23,724	(3,107)	34,388	6,272	786,587

Condensed Consolidated Interim Statement of Income

	Note	Six month period ended
		31 December 2009	31 December 2008
		USD'000	USD'000
			(Reclassified)
Revenue		6,281	5,714
Cost of sales		(4,518)	(4,955)
Gross profit		1,763	759
Selling, general and administration expenses	11	(10,978)	(9,768)
Net changes in fair value of financial assets at fair value through statement of income	12	97,612	(64,658)
Net gain from fair value adjustments of investment properties		-	2,938
Other income		64	3,159
Other expenses		(1,800)	(9,515)
Operating profit/(loss)		86,661	(77,085)
Finance income		7,236	15,234
Finance costs		(1,149)	(3,268)
Finance income - net	13	6,087	11,966
Share of profits/(losses) of associates		7,209	(12,949)
		13,296	(983)
Profit/(loss) before tax for the period from continuing and total operations		99,957	(78,068)
Withholding taxes imposed on investment income	14	(102)	(69)
Income tax	14	-	-
Net profit/(loss) for the period from continuing and total operations		99,855	(78,137)
Attributable to equity shareholders of the parent		99,253	(79,997)
Attributable to non-controlling interests		602	1,860
		99,855	(78,137)
Earnings/(loss) per share (continuing and total operations) - basic and diluted (USD per share)	15	0.31	(0.25)

Condensed Consolidated Interim Statement of Comprehensive Income

	Note	Six month period ended
		31 December 2009	31 December 2008
		USD'000	USD'000
Profit/(loss) for the period		99,855	(78,137)
Other comprehensive income
- Share of other comprehensive income of associates	10	169	9,859
- Exchange differences on translating foreign operations		(1,047)	157
Other comprehensive income for the period		(878)	10,016
Total comprehensive income for the period		98,977	(68,121)
Attributable to equity shareholders of the parent		98,403	(69,981)
Attributable to non-controlling interests		574	1,860
		98,977	(68,121)

Condensed Consolidated Interim Statement of Cash Flows

	Six month period ended
	31 December 2009	31 December 2008
	USD'000	USD'000
		(Reclassified)
Operating activities
Net profit/(loss) before tax	99,957	(78,068)
Adjustments for:
Depreciation and amortisation	242	192
Unrealised net (gain)/loss from revaluation of financial assets at fair value through statement of income	(71,540)	71,974
Net gains from realisation of financial assets at fair value through statement of income	(26,072)	(7,316)
Impairment and write-off of assets	1,794	9,400
Gain on revaluation of investment properties	-	(2,938)
Gain on acquisition of a non-controlling interest	-	(2,779)
Share of (profits)/losses of associates	(7,209)	12,949
Unrealised foreign exchange losses	178	1,389
Dividend income	(5,757)	(9,361)
Interest income	(1,121)	(5,849)
Net loss before changes in working capital	(9,528)	(10,407)
Change in trade and other receivables	1,102	6,258
Change in inventories	(177)	817
Change in trade and other payables	2,034	(6,779)
Withholding taxes imposed on investment income paid	(102)	(69)
	(6,671)	(10,180)
Investing activities
Interest received	1,282	5,938
Dividends received	6,313	9,421
Purchases of property, plant, equipment and other non-current assets	(144)	(331)
Acquisition of a non-controlling interest, net of cash	-	(13,340)
Purchases of financial assets	(72,947)	(8,728)
Additions of investment property	-	(2,531)
Acquisitions of long-term investments	(1,910)	(2,263)
Investments in associates	(14,319)	(1,789)
Proceeds from disposals of financial assets	75,512	53,609
Deposits/(proceeds) from short-term investments	(5,460)	1,653
Proceeds from shareholder loans refunded	4,579	-
Proceeds from disposals of investments	12,751	3,087
Shareholder loans provided	(5,458)	(17,751)
	199	26,975

	Six month period ended
	31 December 2009	31 December 2008
	USD'000	USD'000
Financing activities
Loan proceeds from bank	-	1,989
Loan repayments to bank	-	(64)
	-	1,925
Net (decrease)/increase in cash and cash equivalents for the period	(6,472)	18,720
Cash and cash equivalents at the beginning of the period	69,691	24,286
Cash and cash equivalents at the end of the period	63,219	43,006

Notes to the Condensed Consolidated Interim Financial Statements

1.  General information

VinaCapital Vietnam Opportunity Fund Limited ("the Company") is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The Company's primary objective is to undertake various forms of investment primarily in Vietnam, but also in Cambodia, Laos and Southern China.  The Company is listed on the AIM market of the London Stock Exchange under the ticker symbol VOF.

The condensed interim consolidated financial statements for the period from 1 July 2009 to 31 December 2009 were approved for issue by the Board of Directors on 25 March 2010.

2.  Basis of preparation of condensed consolidated interim financial statements

These condensed consolidated interim financial statements for the period from 1 July 2009 to 31 December 2009 (the "period") have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board (IASB). They do not include all of the information required in annual financial statements in accordance with International Financial Reporting Standards (IFRS). Accordingly, these reports are to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2009.

The revenue, cost of sales and a large proportion of expenses in the condensed consolidated interim statement of income results from the Group's operating subsidiaries. 

The condensed consolidated interim financial statements are presented in United States Dollars (USD), and all values are rounded to the nearest thousand ('000) unless otherwise indicated.

3.  Significant accounting policies

These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 30 June 2009, except for the adoption of:

IAS 1 Presentation of Financial Statements (Revised 2007)

IFRS 8 Operating Segments

IFRS 3 Business Combinations (Revised 2008)

IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

Amendment to IFRS 7 Financial Instruments: Disclosures: Improving disclosures about financial instruments

The adoption of IAS 1 (Revised 2007) makes certain changes to the format and titles of the primary financial statements and to the presentation of some items within these statements. It also gives rise to additional disclosures.  The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged. However, some items that were recognised directly in equity are now recognised in the Statement of comprehensive income, for example revaluations of property, plant and equipment and exchange differences on translation of foreign operations. IAS 1 affects the presentation of changes in owners' equity and introduces a "Statement of comprehensive income". 

As the changes in the requirements of IAS 1 only impact presentation aspects, there is no impact on the historic, current or future earnings per share ratio.  IAS 1 (Revised 2007) requires an entity to present the statement of financial position for two comparative periods in the following situations:  where the Group (i) applies an accounting policy retrospectively, (ii) makes a retrospective restatement of items in its financial statements, or (iii) reclassifies items in the financial statements.  There have been no such circumstances during the period therefore the Group presents only one comparative period (30 June 2009) in the condensed interim consolidated statement of financial position.

The adoption of IFRS 8 has not affected the identified operating segments for the Group. However, reported segment results are now based on internal management reporting information that is regularly reviewed by the Investment Manager. In the previous annual and interim financial statements, segments were identified by reference to the way the Investment Manager manages and monitors the risks and returns of the Group. As the change in accounting policy only results in additional disclosures, there is no impact on the historic, current or future earnings per share ratio.

The adoption of IFRS 3 Business Combinations (Revised 2008) continues to apply the acquisition method to business combinations, with some significant changes. For example, all acquisition related costs are expensed in the period in which the costs are incurred rather than included in the cost of investment. There is a choice on an acquisition by acquisition basis to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets. All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of income. The Group have applied IFRS 3 (Revised 2008) prospectively to all business combinations from 1 July 2009.

The adoption of IAS27 (Revised 2008) introduces the changes in accounting for additional acquisition interests in subsidiaries and for the loss control of a subsidiary. Where the Group increases or decreases its interest in subsidiaries but there is no change in control, the effects of all transactions between the Group with non-controlling interests no longer result in goodwill or any gains or losses, but are recorded in equity. When control is lost, any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in the statement of income.

The revaluation surpluses of disposed subsidiaries previously recognised in equity are transferred directly to retained earnings when control is lost. The Group applied IAS 27 (Revised 2008) prospectively to transactions with non-controlling interests and disposals of subsidiaries from 1 July 2009.

The adoption of IFRS 7 (Revised 2007) requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level of a fair value measurement hierarchy to be disclosed in the annual consolidated financial statements. As the change in accounting policy only results in additional disclosures, there is no impact on the historic, current or future earnings per share ratio.

The accounting policies have been applied consistently throughout the Group for the purposes of the preparation of these condensed interim consolidated financial statements.

4.  Critical accounting estimates and judgements

When preparing the condensed interim consolidated financial statements, the Group undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and may not equal the estimated results. Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:

Fair value of investment properties, land and buildings

The investment properties, leasehold land and buildings held by subsidiaries and associates of the Group are stated at fair value in accordance with accounting policy 3.11 of the annual consolidated financial statements. The fair values of investment properties, leasehold land and buildings have been determined by independent professional valuers including: CB Richard Ellis, Savills, Jones Lang LaSalle, Colliers, Sallmanns and HVS. These valuations are based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. Valuations are reviewed by the Valuation Committee and approved by the Board of Directors.  Discount rates in the range from 13% to 16% are considered appropriate for properties in different locations. Where the Valuation Committee considers the discount rate applied by the independent valuers to be too low or if there are factors that the external independent valuers have not considered in their determination of a property's fair value, they will adjust the discount rate and other assumptions in the discounted cash flow projections, whereby decreasing the property's valuation. In making its judgement, the Valuation Committee considers information from a variety of sources, including:

(i)         current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;

(ii)         recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices;

(iii)        recent developments and changes in laws and regulations that might affect zoning and/or the Group's ability to exercise its rights in respect to properties and therefore fully realise the estimated values of such properties; and

(iv)        discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of external evidence such as current market rents and sales prices for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

Fair value of financial assets

For unlisted securities which are traded in an active market, the fair value is the average quoted bid price obtained from a minimum sample of three reputable securities companies at the reporting date.

The fair value of financial assets that are not traded in an active market (for example, unlisted securities where market prices are not readily available) is determined by using valuation techniques. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each reporting date. Independent valuations are also obtained from appropriately qualified independent valuation firms to evaluate and adjust valuations. The outcomes may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

Impairment

Impairment of investment properties, leasehold land and buildings

Whenever there is an indication of impairment of an investment property, leasehold land and buildings, the Valuation Committee and Group's management will assess the need for an impairment adjustment.  The estimation of impairment adjustments is based on the same principles used to adjust the periodic independent valuations as mentioned above.

In the process of reviewing for impairment the Group's management makes assumptions about future cash flows and discount rates associated with market risk and asset specific risk factors. The impairment assessment is an estimate and consequently the actual results achieved if the assets were disposed at the reporting date may differ to the current carrying value recorded by the Group.

5.  Segment analysis

In identifying its operating segments, management generally follows the Group's investment portfolio and geographical segments. The investment portfolio segments are based on the Investment Manager's management and monitoring of investments and include capital markets (category by consumer staples construction, financial services, rubber and fertiliser, energy, minerals and petroleum, pharmaceuticals, post office and telecommunication), real estate (real estate and hospitality), private equity and cash (including cash and cash equivalents, bonds, and term deposits) sectors. The Group's geographical segments include Vietnam and the regions outside Vietnam.

These operating segments are managed and monitored individually by the Investment Manager. The adoption of IFRS 8 has not affected the identified operating segments for the Group compared to the recent annual consolidated financial statements but affects the presentation of the operating segments presented in the follow tables. Under IFRS 8, reported segments are based on internal management reporting information that is regularly reviewed by the Investment Manager, and is reconciled to Group profit or loss on the following page. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental profit or loss, expenses are common to all segments therefore cannot be individually allocated. The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its condensed interim consolidated financial statements.

	Six month period ended 31 December 2009
	Capital markets	Real estate	Private equity	Total
	USD'000	USD'000	USD'000	USD'000
Vietnam
Revenue	-	-	6,281	6,281
Finance income	7,170	-	66	7,236
Share of profits/(losses) of associates	-	5,847	1,362	7,209
Other income	60	-	4	64
Net changes in fair value of financial assets at fair value through statement of income
- Listed and unlisted  securities	93,601	-	-	93,601
- Corporate bonds	597	-	-	597
Outside Vietnam
Net changes in fair value of financial assets at fair value through statement of income
- Listed securities	3,414	-	-	3,414
Total	104,842	5,847	7,713	118,402
Cost of sales				(4,518)
Selling, general and administration expenses				(10,978)
Other expenses				(1,800)
Finance costs				(1,149)
Profit/(loss) before tax				99,957
Withholding taxes imposed on investment income				(102)
Net profit/(loss) for the period				99,855

For the comparative period:

	Six month period ended 31 December 2008
	Capital markets	Real estate	Private equity		Total
	USD'000	USD'000	USD'000		USD'000
Segment financial information
Vietnam
Revenue	-	-	5,714		5,714
Finance income	15,008	116	110		15,234
Other income	61	3,025	73		3,159
Share of profits/(losses) of associates	-	(13,120)	171		(12,949)
Net changes in fair value of financial assets at fair value through statement of income
- Listed and unlisted  securities	(64,198)	-	-		(64,198)
- Corporate bonds	(460)	-	-		(460)
Net gain from fair value adjustments of investment properties	-	2,938	-		2,938
Total	(49,589)	(7,041)	6,068		(50,562)
Cost of sales					(4,955)
Selling, general and administration expenses					(9,768)
Other expenses					(9,515)
Finance costs					(3,268)
Profit/(loss) before tax					(78,068)
Withholding taxes imposed on investment income					(69)
Net profit/(loss) for the period					(78,137)

	As at 31 December 2009
	Capital markets	Real estate	Private equity	Cash, corporate bonds and short-term investments	Total
	USD'000	USD'000	USD'000	USD'000	USD'000
Total assets
Vietnam
Financial assets at fair value through statement of income
- Consumer staples	91,816	-	-	-	91,816
- Construction	51,627	-	-	-	51,627
- Financial services	84,296	-	-	-	84,296
- Rubber and fertiliser	29,505	-	-	-	29,505
- Energy, minerals and petroleum	23,736	-	-	-	23,736
- Pharmaceuticals	8,668	-	-	-	8,668
- Post office and telecommunication	2,681	-	-	-	2,681
- Real estate	81,830	-	-	-	81,830
- Other securities	38,287	-	-	-	38,287
- Corporate bonds	-	-	-	4,673	4,673
Real estate and hospitality assets	-	235,133	27,510	-	262,643
Cash and cash equivalents	-	-	-	50,656	50,656
Short-term investments	-	-	-	5,912	5,912
Other assets	7,146	11,711	4,188	-	23,045
Outside Vietnam
Cash and cash equivalents	-	-	-	12,563	12,563
Financial assets at fair value through statement of income
- Listed securities	26,362	-	-	-	26,362
	445,954	246,844	31,698	73,804	798,300

In comparison with the last period end:

	As at 30 June 2009
	Capital markets	Real estate	Private equity	Cash, corporate bonds and short-term investments	Total
	USD'000	USD'000	USD'000	USD'000	USD'000
Total assets
Vietnam
Financial assets at fair value through statement of income
- Consumer staples	50,954	-	-	-	50,954
- Construction	58,390	-	-	-	58,390
- Financial services	100,526	-	-	-	100,526
- Rubber and fertiliser	30,162	-	-	-	30,162
- Energy, minerals and petroleum	8,427	-	-	-	8,427
- Pharmaceuticals	4,551	-	-	-	4,551
- Post office and telecommunication	1,420	-	-	-	1,420
- Real estate	57,940	-	-	-	57,940
- Other securities	21,766	-	-	-	21,766
- Corporate bonds	-	-	-	2,047	2,047
Real estate and hospitality assets	-	256,993	12,937	-	269,930
Cash and cash equivalents	-	-	-	56,708	56,708
Short-term investments	-	-	-	452	452
Other assets	6,277	15,547	3,737	-	25,561
Outside Vietnam
Cash and cash equivalents	-	-	-	12,983	12,983
Financial assets at fair value through statement of income
- Listed securities	16,206	-	-	-	16,206
	356,619	272,540	16,674	72,190	718,023

To determine the geographical segments for financial instruments the following rules have been applied:

·      Capital markets (listed shares) − place of primary listing;

·      Capital markets (unlisted shares) − place of incorporation of the issuer;

·      Private equity − place of incorporation of the issuer;

·      Real estate − location of property; and

·      Cash, corporate bonds and short-term investments − place of deposit.

6.  Investments in associates

	31 December 2009	30 June 2009
	USD'000	USD'000
Opening balance (1 July 2009/1 July 2008)	148,435	175,885
Additions	16,133	3,735
Share of associates' profits/(losses)	7,209	(35,059)
Share of associates' changes in revaluation reserves (Note 10)	169	7,495
Classified as held for sale assets	(2,543)	(4,059)
Reclassifications from shareholder loan receivables	11,393	2,032
Dividends received	(500)	(1,400)
Written-off on liquidation of associate	(364)	-
Translation differences	(61)	(194)
Closing balance	179,871	148,435

Acquisition of associate interest in Hoan My Medical Corporation JSC

During the period, the Group acquired a 28.88% interest in Hoan My Medical Corporation JSC, a general medical group operating throughout Vietnam. The Group's share in the fair value of the acquired net assets was USD10.1 million which included an intangible asset in the form of a brand name valued at USD4.6 million.

Acquisition of further interest in Thang Loi Textile and Garment JSC

During the period, the Group acquired a further 19% interest in Thang Loi Textile & Garment JSC bringing its total interest to 49%. The consideration paid was approximately equal to the fair value of the share of net assets acquired.

Acquisition of associate interest in Phu Hoi City Company Limited (Licogi 16 project)

The Group had previously paid a deposit of USD3 million in respect of this project which was classified as a prepayment for acquisitions of investments at 30 June 2009. In addition to 7.5% interest in the project held by the Group through the investment licence, in September 2009, the Group acquired a further 10% interest from a local partner which resulted in the deposit of USD1.7 million being reclassified to represent part of the consideration of USD5.3 million. This brings the Group's total interest in the project is 17.5% at the reporting date. The Group has significant influence over this entity through their representation in the project's Board of Management, therefore it is accounted for as an associate.

7.  Financial assets held at fair value through statement of income

	31 December 2009	30 June 2009
	USD'000	USD'000
Designated at fair value through statement of income:
Financial assets in Vietnam
Ordinary shares - listed	319,201	177,037
Ordinary shares - unlisted	93,245	157,099
Corporate bonds (*)	4,673	2,047
Financial assets in countries other than Vietnam:
Ordinary shares - listed (**)	26,362	16,206
Total financial assets at fair value through statement of income	443,481	352,389

⁽*⁾ Corporate bonds included USD2 million bonds having a fixed interest rate of 9.6% and maturing in 2012 and USD2.7 million interest free convertible bonds.

^(**) During the period, the Group purchased a further 8,492,839 ordinary shares of VinaLand Limited for USD6.7 million. As a result, the Group had a 4.65% interest in VinaLand Limited at 31 December 2009.

8.  Share capital

	31 December 2008		30 June 2008
	Number of shares	USD'000	Number of shares	USD'000
Authorised: Ordinary shares of USD0.01 each	500,000,000	5,000	500,000,000	5,000
Issued and fully paid:
Opening balance	324,610,259	3,246	324,610,259	3,246
Closing balance	324,610,259	3,246	324,610,259	3,246

9.  Additional paid-in capital

Additional paid-in capital represents the excess of consideration received over the par value of shares issued.

	31 December 2009	30 June 2009
	USD'000	USD'000
Opening balance	722,064	722,064
Closing balance	722,064	722,064

10.  Revaluation reserve

	31 December 2009	30 June 2009
	USD'000	USD'000
Opening balance (1 July 2009/1 July 2008)	25,958	18,463
Share of revaluation gains on associates' properties for the period/year	169	7,495
Disposal of an associate	(2,403)	-
Closing balance	23,724	25,958

The Group's share of valuation gains resulting from the revaluation of associates' properties have been recorded directly in the Group's revaluation reserve under shareholders' equity.

11.  Selling, general and administration expenses

	Six month period ended
	31 December 2009	31 December 2008
	USD'000	USD'000
		(Reclassified)
Management fees	7,938	6,710
Professional fees	1,507	723
Selling and general administration expenses (*)	1,533	2,335
	10,978	9,768

^(*) The majority of these expenses relate to operating expenses of subsidiaries of the Group.

In the prior year, withholding taxes imposed on investment income of USD69,000 were classified within this cost category, however for comparison purpose with the current period, these have been reclassified within the condensed interim consolidated statement of comprehensive income and are now included in Note 14.

12.  Net changes in fair value of financial assets at fair value through statement of income

	Six month period ended
	31 December 2009	31 December 2008
	USD'000	USD'000
Unrealised gain/(loss) in fair value of financial assets, net	71,540	(71,974)
Gains from realisation of financial assets during the year, net	26,072	7,316
	97,612	(64,658)

13.  Finance income and costs

	Six month period ended
	31 December 2009	31 December 2008
	USD'000	USD'000
Interest income	1,121	5,849
Dividend income	5,757	9,361
Realised gains on foreign currency exchange differences	358	24
Finance income	7,236	15,234
Realised losses on foreign currency exchange differences	(971)	(144)
Loan interests	-	(1,735)
Unrealised losses on foreign currency exchange differences	(178)	(1,389)
Finance costs	(1,149)	(3,268)
Net finance income	6,087	11,966

14.  Corporate income tax

VinaCapital Vietnam Opportunity Fund Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there is no income, state, corporation, capital gains or other taxes payable by the Company.

The majority of the Group's subsidiaries are domiciled in the British Virgin Islands (BVI) and so have a tax exempt status. Some of the subsidiaries are established in Singapore and have offshore operations in Vietnam. The income from these offshore operations is also tax exempt in Singapore.

A small number of subsidiaries are established in Vietnam and are subject to corporate income tax in Vietnam, however no provision for corporate income tax has been made for these Vietnamese subsidiaries of the Group for the period from 1 July 2009 to 31 December 2009 (period from 1 July 2008 to 31 December 2008: nil). All of the Vietnamese subsidiaries are in a position where there are no corporate income taxes payable because they either have incurred losses, or have recognized tax holidays, or have sufficient carry-forward tax losses to offset any taxable income.

The relationship between the expected income tax expense based on the applicable income tax rate (stated below) and the tax expense actually recognized in the consolidated statement of income can be reconciled as follows:

	Six month period ended
	31 December 2009	31 December 2008
	USD'000	USD'000
		(Reclassified)
Group profit/(loss) before tax	99,957	(78,068)
Group profit/(loss) multiplied by applicable tax rate (0%)	-	-
Withholding taxes imposed on investment income	(102)	(69)
Income tax on Vietnamese subsidiaries	-	-
Tax expense	(102)	(69)

15.  Earnings per share

(a)                 Basic

Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity shareholders of the Company from continuing and total operations by the weighted average number of ordinary shares in issue during the period.

	Six month period ended
	31 December 2009	31 December 2008
Profit/(loss) attributable to equity shareholders of the Company from continuing and total operations (USD'000)	99,253	(79,997)
Weighted average number of ordinary shares in issue	324,610,259	324,610,259
Basic earnings/(loss) per share from continuing and total operations (USD per share)	0.31	(0.25)

(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 Group has no category of potentially dilutive ordinary shares.  Therefore, diluted earnings per share is equal to basic earnings per share.

(c)        Net asset value per share

Net asset value (NAV) per share is calculated by dividing the net asset value attributable to ordinary shareholders of the Company by the weighted average number of outstanding ordinary shares in issue as at the reporting date.  Net asset value is determined as total assets less total liabilities and non-controlling interests.

	As at 31 December 2009	As at 30 June 2009
Net asset value attributable to equity shareholders of the Company (USD'000)	780,315	681,912
Weighted average number of ordinary shares in issue	324,610,259	324,610,259
Net asset value per share (USD/share)	2.40	2.10

16.  Seasonality

The Group's management believes that the impact of seasonality on the condensed financial information is not material.

17.  Contingent liabilities

Taxation

Although the Company and a majority of its subsidiaries are incorporated in the Cayman Islands and the British Virgin Islands where they are exempt from tax, the Group's activities are primarily focused on Vietnam. In accordance with the prevailing tax regulations in Vietnam, if an entity was treated as having a permanent establishment, or as otherwise being engaged in a trade or business in Vietnam, income attributable to or effectively connected with such permanent establishment or trade or business may be subject to tax in Vietnam. As at the date of this report the following information is uncertain:

·    Whether the Company and/or its subsidiaries are considered as having permanent establishments in Vietnam; and

·    The amount of tax that may be payable, if the income is subject to tax.

The implementation and enforcement of tax regulations in Vietnam can vary depending on numerous factors, such as the interpretation of the tax rules by the specific tax authority involved. The administration of laws and regulations by the local or provincial tax departments may be subject to considerable discretion. The Directors believe that it is unlikely that the Company and/or the subsidiaries incorporated in the Cayman Islands and the British Virgin Islands will be exposed to tax liabilities in Vietnam. 

As at 31 December 2009, due to the uncertainties mentioned above, except for the withholding taxes imposed on investment income as disclosed in Note 14, no liability in relation to corporate income taxation has been recognized in the interim financial information.

18.  Commitments

The Group has a broad range of commitments under investment licences it has received for the real estate projects jointly invested with VinaLand Limited, a related party under common management, and other agreements it has entered into, to acquire and develop, or make additional investments in investment properties and leasehold land in Vietnam. Further investments in any of these arrangements are at the Group's discretion.

19.  Subsequent events after the reporting date

Subsequent to the reporting date, the Group purchased 6,711,858 ordinary shares of Vietnam Infrastructure Limited, a related party under common management, for USD2.5 million which represents a 1.67% holding in Vietnam Infrastructure Limited.

 

END

 

 

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