Vietnam Infrastructure Regulatory News (VNI)

Vietnam Infrastructure Limited

Audited financial results for the twelve months ended 30 June 2014

Vietnam Infrastructure Limited ("VNI" or "the Company"), the first publicly traded fund to focus on investment into infrastructure assets in Vietnam, today announces its full year results for the twelve months ended 30 June 2014 ('the period').

Financial highlights:

· Net Asset Value ("NAV") of USD213.4 million (2013: USD196.9 million)

· NAV per share of USD0.61 (2012: USD0.53).

· Cash and equivalents at 30 June 2013 of USD9.8 million.

Operational highlights:

· Ba Thien II Industrial Park, outside Hanoi, has attracted four new tenants, with the potential to add two additional tenants by the end of the calendar year.

· The Company's base transceiver station (BTS) tower companies under SEATH are well-positioned to cater to expanding telecommunications infrastructure needs among competing operators. The Company is also well on track with its expansion strategy into related businesses, the first of which being In-Building Systems (IBS).

· Appointment of Rupert Carington as the Company's Independent Non-Executive Chairman and Robert Binyon as an Independent Non-Executive Director.

· Since the commencement of the share buyback programme up to 30 June 2014, the Company has spent USD17.6 million repurchasing 50.4 million shares, representing 12.5 percent of total shares in issue. 

Notes to Editors:

VinaCapital is the leading investment management and real estate development firm in Vietnam, with a diversified portfolio of USD1.5 billion in assets under management. VinaCapital was founded in 2003 and boasts a team of managing directors who bring extensive international finance and investment experience to the firm. Our mission is to produce superior returns for investors by using our experience and knowledge to identify the key trends and opportunities that emerge as Vietnam continues to develop its economy. To achieve this, VinaCapital has industry-leading asset class teams covering capital markets, private equity, fixed income, venture capital, real estate and infrastructure.

 VinaCapital manages three closed-end funds trading on the AIM Market of the London Stock Exchange. These funds are: VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL), and Vietnam Infrastructure Limited (VNI). VinaCapital also co-manages the USD32 million DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson.

 VinaCapital has offices in Ho Chi Minh City, Hanoi, Danang, Nha Trang, Singapore and Yangon. More information about VinaCapital is available at www.vinacapital.com.

The Annual Report and Notice of AGM will be posted to shareholders and will be available on the website at www.vinacapital.com/vni.

 More information on the Company is available at www.vinacapital.com/vni

Enquiries:

David Dropsey

VinaCapital Investment Management Limited

Investor Relations/Communications

+84 8 3821 9930

david.dropsey@vinacapital.com

Philip Secrett

Grant Thornton UK LLP, Nominated Adviser

+44 (0)20 7383 5100

philip.j.secrett@uk.gt.com

Hiroshi Funaki/ William Marle

Edmond de Rothschild Securities, Broker

+44 (0)20 7845 5960

funds@lcfr.co.uk

David Benda / Hugh Jonathan

Numis Securities Limited

+44 (0)20 7260 1000

funds@numis.com

Andrew Walton

FTI Consulting, Public Relations (London)

+44 20 7269 7204

andrew.walton@fticonsulting.com

Chairman statement

Dear Shareholders

At the end of the financial year VNI recorded an audited NAV of USD213.4 million or USD0.61 per share, representing a 15.4 percent year-on-year increase from a NAV per share of USD0.53 as at 30 June 2013. The result is 1.6 percent less than the announced unaudited NAV per share of USD0.62 as at 30 June 2014 resulting from the net effect of consolidation and valuation adjustments determined after year end. The Company's share price increased as a reflection of the increase in NAV, closing the year at USD0.41 per share, an increase of 14.2 percent above USD0.36 as at 30 June 2013. The Board believes this improvement in the Company's share price is the result of many factors, including the performance of the Company's listed equity portfolio and the continuation of the share buyback programme. VNI's share price to NAV discount widened slightly to 32.2 percent from 32.1 percent a year earlier. The closing of this discount remains one of the top priorities for the Board and the investment manager.

Proposed new strategy

The Board has announced that in light of the requirement to hold a continuation vote during 2017 and following consultations with a number of shareholders that it intends to bring forward proposals to restructure the Company. The proposals would allow long-term investors to retain an investment in Vietnam, whilst providing those shareholders in the Company who wish to realise their investment an opportunity for a phased exit. These proposals are more fully described in Note 31 (Subsequent Events) of the financial statements.

These proposals are subject to regulatory approval and the approval of shareholders at an extraordinary general meeting (EGM) of shareholders to be held later this year.

Corporate governance

The Board has decided to bring forward proposals to ensure that the corporate governance practices of the Company are brought into line with good practices for AIM listed investment companies. The Company will hold its first Annual General Meeting on Monday 24 November 2014. The resolutions include proposals relating to approving the financial statements, the re-election of directors and reducing the required number of votes to requisition an EGM. 

The Board

As you are all aware in April Mr Paul Cheng stepped down as Chairman of the Company and resigned as a director. On behalf of the Board, as your new chairman, I would again like to thank Paul for his three years of service as Chairman of the Company and seven years as a director. Paul led much of the drive to rebuild the Company after its very challenging start.

Early in the year the Company appointed Mr Robert Binyon as an independent non-executive director. Mr Binyon, who is based in Bangkok, brings considerable knowledge of closed ended investment companies in emerging markets in Asia as well as private equity experience.

The Board has also invited Mr Paul Garnett to become a non-executive director. Mr Garnett is a partner and fund manager of Ironsides Partners UK LLP, an affiliate of Ironsides Partners LLC, which is currently our largest investor. He also has considerable experience with closed ended funds. Mr Garnett's appointment will be confirmed and formally announced in the coming days.

I look forward to your continuing support.

Rupert Carington

Chairman

Vietnam Infrastructure Limited

9 October 2014

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CASH FLOWS

1. GENERAL INFORMATION

Vietnam Infrastructure 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 Group's and the Company's principal activity is to invest in a diversified portfolio of entities owning infrastructure projects and assets primarily in Vietnam. The Group mainly invests and holds equity and debt instruments in unquoted companies that themselves hold, develop or operate infrastructure assets. The Group may also invest in entities whose shares or other instruments are listed on a stock exchange, or traded on over-the-counter ("OTC") markets and in other funds that invest in infrastructure projects or assets. The Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNI.

The consolidated financial statements for the year ended 30 June 2014 were approved for issue by the Board of Directors on 9 October 2014.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented.

2.1 Basis of preparation

The consolidated financial statements of Vietnam Infrastructure Limited have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements have been prepared using the historical cost convention, as modified by the revaluation of the investment properties and financial assets at fair value through profit or loss and financial liabilities, the measurement bases of which are described in the accounting policies below.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

2.2 Changes in accounting policy and disclosures

(a) New and amended standards adopted by the Group

The group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 July 2013:

IFRS 10, 'Consolidated financial statements' and Amendments to IFRS 10: The standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The amendments to IFRS 10 define an investment entity and introduce an exception from the consolidation requirements for investment entities. The standard and its amendments have no material impact on the Group's financial statements.

IFRS 12, 'Disclosure of interests in other entities' and Amendments to IFRS 12: The standard requires entities to disclose significant judgments and assumptions made in determining whether the entity controls, jointly controls, significantly influences or has some other interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. Entities will also be required to provide more disclosures around certain 'structured entities'. The amendments also introduce new disclosure requirements related to investment entities. Adoption of the standard has impacted the Group's level of disclosures in certain of the noted areas, but has not impacted the Group's financial position or results of operations.

IFRS 13, 'Fair value measurement', aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP.

 (b) New standards, amendments and interpretations issued but not yet effective and not early adopted by the Group

At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been early adopted by the Group.

The Board anticipates that all such pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective dates of these pronouncements. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's consolidated financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's consolidated financial statements.

IFRS 9, "Financial instruments", addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group is yet to assess IFRS 9's full impact and intends to adopt IFRS 9 no later than the accounting year ending 30 June 2016. The Group will also consider the impact of the remaining phases of IFRS 9 when completed by the IASB.

IFRS 15, "Revenue from contracts with customers", establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle of this Standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Group is yet to assess IFRS 15's full impact and intends to adopt IFRS 15 no later than the accounting year ending 30 June 2017.

Amendments to IAS 36, 'Impairment of assets', on the recoverable amount disclosures for non-financial assets. This amendment removed certain disclosures of the recoverable amount of cash generating units which had been included in IAS 36 by the issue of IFRS 13. The Group is yet to assess the amendments to IAS 36's full impact and intends to adopt the amendments no later than the accounting year ending 30 June 2015.

There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

2.3 Consolidation

(a) Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity, along with contractual arrangements, are taken into consolidation. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are excluded from consolidation from the date that the control ceases. All of the Group's subsidiaries have a reporting date of 31 December. For subsidiaries with a different reporting date, the management information up to 30 June are used for consolidation purposes and are adjusted for compliance with the Group's accounting policies.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(b) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The Group's interest in associates includes goodwill identified on acquisition and long-term loans to associates which in substance form part of the Group's interest in the associate. Dividends received or receivable from associates are recognised as a reduction in the carrying amount of the investment.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group's share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment.

When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the interest in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of associates' in the consolidated income statement.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates are recognised in the income statement.

(c) Change in ownership interests

When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities.

This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

2.4 Foreign currency translation

(a) Functional and presentation currency

The Group's consolidated financial statements are presented in United States Dollars ("USD") ("the presentation currency"). The financial statements of each consolidated entity are initially prepared in the currency of the primary economic environment in which the entity operates ("the functional currency"), which for most investments is Vietnam Dong ("VND"). The financial statements prepared using VND are then translated into the presentation currency. USD is used as the presentation currency because it is the primary basis for the measurement of the performance of the Group and a large proportion of significant transactions of the Group are denominated 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 consolidated income statement.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction. Non-monetary items at fair value are translated using the exchange rate at the date when the fair value are determined. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

iii) all resulting exchange differences are recognised in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

2.5 Investment properties

Investment properties are properties owned or held to earn rentals or capital appreciation, or both, or land held for a currently undetermined use. Property held under operating leases (including leasehold land) that would otherwise meet the definition of investment property is classified as investment property on a property by property basis. Land held under operating leases is classified and accounted for by the Group as investment property when the rest of the definition of investment property is met.

Investment property is measured initially at its cost, including related transaction costs. After initial recognition, investment property is carried at fair value.

Investment property under construction is measured at fair value if the fair value is considered to be reliably determinable. Investment property under construction for which the fair value cannot be determined reliably, but for which the company expects that the fair value of the property will be reliably determinable when construction is completed, are measured at cost less impairment until the fair value becomes reliably determinable or construction is completed - whichever is earlier. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods, such as recent prices on less active markets or discounted cash flow projections. Valuations are performed as of the financial position date by professional valuers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the investment property being valued. These valuations form the basis for the carrying amounts in the financial statements. Investment property that is being redeveloped for continuing use as investment property or for which the market has become less active continues to be measured at fair value.

2.6 Leases

(a) A group company is the lessee in an operating lease

Leases which do not transfer substantially all the risks and rewards of ownership to the Group are classified as operating leases, unless they are treated as investment properties (Note 2.5). Where the Group has the use of an asset held under an operating lease, payments made under the lease are charged to the consolidated income statement on a straight line basis over the term of the lease. Prepayments for operating leases represent property held under operating leases where a portion, or all, of the lease payments have been paid in advance, and the properties cannot be classified as an investment property.

(b) A group company is the lessor in an operating lease

Properties leased out under operating leases are included in investment property in the consolidated statement of financial position

2.7 Financial assets

2.7.1 Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. The Group does not have any financial assets classified as available for sale or held to maturity.

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or designated by the management to be carried at fair value through profit or loss at inception. Financial assets at fair value through profit or loss held by the Group include listed and unlisted securities and bonds. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group's loans and receivables comprise "Trade and other receivables" and "Cash and cash equivalents" in the consolidated balance sheet.

2.7.2 Recognition and measurement

Purchases or sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset.

Investments are initially recognised at fair value plus transaction costs for all financial assets which are not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

If the investments do not have a quoted market price in an active market and whose fair value cannot be reliably measured, such investments shall be measured at cost, less provision for impairment.

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the income statement within "fair value gain/(loss) of financial assets at fair value through profit or loss" in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income statement when the Group's right to receive payments is established.

2.8 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet 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.

2.9 Prepayments for acquisitions of an investment property

Prepayments are made by the Group to vendors for land compensation and other related costs, and professional fees directly attributed to the projects, where the final transfer of the investment/property is pending the approval of the relevant authorities and/or is subject to either the Group or the vendor completing certain performance conditions set out in agreements. Such prepayments are measured initially at cost until such time as the approval is obtained or conditions are met, at which point they are transferred to appropriate investment accounts.

Pre-payments are carried at cost less any accumulated impairment losses.

2.10 Impairment of assets

a) Impairment of non-financial assets

Assets that have an indefinite useful life, for example, prepayments for acquisitions of investment properties, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

b) Impairment of financial assets

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future

cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.

The Group's trade and other receivables, prepayments for acquisitions of investments and interests in associates are subject to impairment testing.

2.11 Trade receivables

Trade receivables are amounts due from customers for services performed in the ordinary course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.12 Cash and cash equivalents

Cash and cash equivalents includes cash in bank and on hand, as well as short term highly liquid investments such as money market instruments and bank deposits with original terms of not more than three months.

2.13 Share capital

Ordinary shares are classified as equity. Share capital is determined using the nominal value of shares that have been issued. Additional paid-in capital includes any premiums received on the initial issuance of the share capital. 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. Any transaction costs associated with the issuing of shares are deducted from additional paid-in capital, net of any related income tax benefits.

2.14 Treasury shares

Where any Group company purchases the Company's 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 until the shares are cancelled or reissued.

Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/from accumulated losses.

2.15 Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.16 Current and deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, tax authorities relating to the current or prior reporting periods that are unpaid at the reporting date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year. All changes to current tax assets or liabilities are recognised as a component of tax expense in the consolidated income statement.

Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

Deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and associates is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that they will be able to be offset against future taxable income.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the reporting date. Most changes in deferred tax assets or liabilities are recognised as a component of tax expense in the consolidated income statement. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is charged directly to other comprehensive income are charged or credited directly to other comprehensive income.

2.17 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation and there is uncertainty about the timing or amount of the future expenditure require in settlement. Where there are a num-ber of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Long-term pro-vi-sions are discounted to their present values, where the time value of money is material.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate of the Group's management.

2.18 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services rendered, stated net of discounts, returns and value added taxes. The Group 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 meet for each of the Group's activities, as described below:

(a) Sale of services

The Group's revenue represents the rental income from base transceiver station ("BTS") towers leasing services, information rescue services and from lease of infrastructure in industrial park.

Revenue from BTS tower services is recognised in the accounting period in which the services are rendered and the rental income is due to be received.

Revenue from lease of infrastructure is recognised by the straight line basis over the entire lease term. Rental income received in advance over one year is recognised under long-term unearned revenue.

(b) Interest income

Interest income is recognised on the effective interest rate basis.

(c) Dividend income

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

2.19 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 immediately, control or are controlled by, or under common control with, the Company including holding company, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning directly, or indirectly, an interest in the voting power of the Company that give them significant influence over the entity, key management personnel, including directors and officers of the Company and close members of their families. When considering possible related party relationships, attention is directed to the substances of the relationship, and not merely the legal form.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

When preparing the consolidated financial statements, the Group undertakes a number of judgements, estimates and assumptions about 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.

3.1 Critical accounting estimates and assumptions

(a) Fair value of investment properties

The investment properties of the Group are stated at fair value in accordance with Note 2.5. The fair values of investment properties have been determined by independent professional valuers. These valuations are based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. The estimated fair values provided by the independent professional valuers are used by the Audit and Valuation Committee as the primary basis for estimating each property's fair value. In making its judgement, the 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) any other adjustments relevant to the property held by the Group but which were not factored into the valuation by the independent professional valuers, such as land compensation, costs and any other discount factors; 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 cash flows.

(b) Fair value of financial assets at fair value through profit or loss

Listed securities are quoted at the bid price at each reporting date. For unlisted securities which are traded over-the-counter, the fair value is the average brokers' 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 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 professional valuers 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.

(c) Impairment of prepayment for acquisition of an investment property

The prepayment for acquisition of an investment property reflects the Group's investment in the Long An Services project. The value of this asset was originally based on the sale and purchase agreement signed between the Group and the purchaser in June 2012, however, the buyer has defaulted on its obligations to settle the outstanding balance receivable, citing market conditions. The investment manager is negotiating with the buyer to recover the full amount, while reserving the right to take legal action if a satisfactory outcome is not achieved. In light of these developments the Group has estimated the recoverable amount at 30 June 2014 based on the two year payment terms proposed by the buyer discounted at the rate of 12%.

3.2 Critical judgements in applying the Group's accounting policies

(a) Equity investments

When the Group has an interest in the voting power of an investee of between 20% and 50%, significant influence over the investee is presumed. At the reporting date, the Group has interests in certain investees with more than 20% voting power but which are not accounted for as associates (Note 11). These are accounted for as financial assets at fair value through profit or loss based on management's judgement after considering that:

i) The Group has no representation on the board of directors of the investee;

ii) The Group does not participate in policy-making processes, including decisions about dividends or other distributions;

iii) There were no interchanges of managerial personnel; and

iv) The Group does not provide essential technical information.

(b) Classification of Base Transceiver Stations (BTS) towers as investment properties

Management has classified the Base Transceiver Station ('BTS') towers as investment properties measured at fair value. Management determined that BTS towers can be considered as similar to buildings and thus can be classified as investment properties. The towers also display similar characteristics to investment properties, in that space on the towers is let to telecommunication tenants to earn rentals.

(c) Investment in T&A Company Limited ("T&A")

Management assessed that its acquisition of T&A during the year (Note 5) is deemed an acquisition of assets and not that of a business acquisition. The assessment is based on the criteria of whether at the date of acquisition, a business existed. The assessment criteria is whether there were inputs, significant processes and outputs on the date the subsidiary was acquired. In the context of T&A, management determined that at the date of acquisition, the processes in place by the company were mainly ancillary services to maintain the towers. Consequently, the acquisition is not an acquisition of business but an acquisition of asset which are the BTS towers within T&A.

4 SEGMENT ANALYSIS

In identifying its operating segments, management generally follows the Group's sectors of investment which are based on internal management reporting information for the Investment Manager's management, monitoring of investments, and decision making. The operating segments by investment portfolio include energy, property and infrastructure developments, telecommunication, transportation and logistics, general infrastructure, environment, other capital markets and cash.

Each of the operating segments are managed and monitored individually by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses, as reported to the Board, segment profit or loss using a measure which is consistent with that in profit or loss. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.

Segment information can be analysed as follows:

5 SUBSIDIARIES

The operating subsidiaries of the Group are incorporated in Vietnam and the details are as follows:

(*) During the year, the Group acquired 100% equity interest in T&A for cash consideration of USD4.8 million. This acquisition is deemed an acquisition of assets and not that of a business acquisition (Note 3.2(c)).

6 INVESTMENT PROPERTIES

Fair value hierarchy of investment properties

There were no transfers between levels during the year.

Valuation process

The Group's investment properties were valued at 30 June 2014 by independent professional qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and segments of the investment properties being valued. Management reviews the valuations performed by the independent valuers for financial reporting purposes, and the valuations, as adjusted if appropriate, are approved by the Board for adoption after deliberation in the Audit and Valuation Committee.

Valuation technique and significant unobservable inputs

The valuation technique primarily used to determine the fair value of investment properties is discounted cash flow ("DCF") methods. The significant unobservable inputs used in the DCF calculation for the respective investment properties are as follows:

(a) BTS towers

- Future tower and tenancy growth to generate incremental rental cash inflows - such growth is funded by recurring cash inflows from existing leases while rental for new towers and tenants is based on the same terms as those of existing leases;

- Discount rates - reflecting current market assessment of the uncertainty in the amount and timing of cash flows; and

- Terminal value - reflecting management's view of long-term growth in the sector.

(b) Industrial park property

- Sale price per square metre - based on current market comparables;

- Costs to complete the development of the property - based on management's experience and knowledge of market conditions;

- Completion dates - expected completion dates based on management's experience and knowledge taking into account the need for approvals from oversight bodies at various times in the development process.; and

- Discount rates - reflecting the current market assessment of the uncertainty in the amount and timing of cash flows.

Sensitivity of significant unobservable inputs to fair value

The following table analyses the range of the significant unobservable inputs and the impact of changes of these to the fair value of investment properties:

7 PREPAYMENT FOR ACQUISITION OF AN INVESTMENT PROPERTY

As at 30 June 2014, an impairment allowance of USD 623 thousand has been made against the prepayment for the acquisition of the Long An Services project. Refer to Note 3(c) for further information.

8 INVESTMENTS IN ASSOCIATES

On 9 June 2014, the Group entered into Share Purchase Agreement for selling an associate with total cash consideration of USD 900,000, of which USD 100,000 was received.

(*) The movement in the allowance for impairment was as follows:

The unrecognised share of losses of the associate during the year was USD0.8 million. The cumulative share of losses of the associate at 30 June 2014 is USD USD1.3 million.

9 FINANCIAL INSTRUMENTS BY CATEGORY