Vietnam Infrastructure Regulatory News (VNI)

Vietnam Infrastructure Limited

Audited financial results for the twelve months ended 30 June 2016

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 2016 ('the period').

Financial highlights:

• Listed Portfolio Share Net Asset Value ("LPS NAV") of USD38.3 million

• Private Equity Share Net Asset Value ("PES NAV") of USD77.2 million (30 June 2015: USD202.5 million)

• LPS NAV per share of USD0.357

• PES NAV per share of USD0.220 (30 June 2015: USD0.578)

Operational highlights:

· The Company undertook and completed the restructuring of the fund, with the segregation of the Listed and PE portfolios.

Ø In July 2015, the Listed Portfolio was admitted to the London Stock Exchange AIM, trading under the ticker "VNIL", while the PE Portfolio continued to trade under the ticker "VNI". Also in July 2015, the Forum One - VCG Partners Vietnam Fund (VVF) was successfully launched.

Ø Two Listed Portfolio Share repurchase events occurred during the financial year: a tender offer in August 2015, followed by a tender offer in February 2016 and culminating in a compulsory repurchase in August 2016, after the close of the financial year.

Ø The Listed Portfolio Shares were then cancelled and delisted on 17 August 2016.

Ø In June 2016, USD11 million was distributed to PES holders.

· The investment manager made substantial progress in divesting assets, including:

Ø Vietnam Aircraft Leasing Corporation (VALC): VNI sold its 11.65% stake in the aircraft lessor for USD8.4 million in February 2016.

Ø Vina-CPK: Located in Vinh Phuc, Vietnam, Vina-CPK operates industrial park and infrastructure projects with an investment license of up to 49 years. VNI sold its stake in June 2016 for USD22.1 million.

· After the close of the financial year, the Company reported two other important developments:

Ø SEATH: In August 2016, VNI reached an agreement to sell the BTS portion of the portfolio to OCK Vietnam Towers Ltd. for USD50 million. This transaction is expected to close by the end of December 2016.

Ø Long An: On 2 November 2016, the Company received an out-of-court cash settlement of USD2.37 million, and the asset was transferred to the buyer.

About VinaCapital

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of USD1.4 billion in assets under management. The firm has three closed-ended funds that trade on the London Stock Exchange: VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, as well as VinaLand Limited and Vietnam Infrastructure Limited, which trade on the AIM. VinaCapital also manages the Forum One - VCG Partners Vietnam Fund, Vietnam's largest open-ended UCITS-compliant fund. VinaCapital's expertise spans a full range of asset classes including capital markets, private equity, real estate, venture capital, and fixed income.

More information on Vietnam Infrastructure Limited is available at www.vni-fund.com

Contacts:

Jonathan Viet Luu

VinaCapital Investment Management Limited

Investor Relations

+84 8 3821 9930

jonathan.luu@vinacapital.com

Joel Weiden

VinaCapital Investment Management Limited

Communications

+84 8 3821 9930

joel.weiden@vinacapital.com

Philip Secrett

Grant Thornton UK LLP, Nominated Adviser

+44 (0)20 7383 5100

philip.j.secrett@uk.gt.com

David Benda / Hugh Jonathan

Numis Securities Limited, Broker

+44 (0)20 7260 1000

funds@numis.com

Dear Shareholders,

During the financial year ended 30 June 2016, the Management and the Board of the Company

have been working to execute the restructuring of the Company and meet the plans that were

approved by shareholders in late 2014. I am pleased to report that we have made significant

headway during the year, and are well on track to meet the 2017 target deadline.

Fund Restructuring Completed

During the financial year, we undertook and completed the restructuring of the Company, with the

segregation of the Listed and Private Equity ("PE") portfolios. In July 2015, the Listed Portfolio was admitted to the London Stock Exchange AIM, trading under the ticker "VNIL", while the PE Portfolio continuing to trade under the ticker "VNI". Also in July 2015, the Forum One - VCG Partners Vietnam Fund (VVF) was successfully launched.

Two Listed Portfolio Share repurchase events occurred during the financial year: a tender offer in

August 2015, followed by a tender offer in February 2016 and culminating in a compulsory

repurchase in August 2016, after the close of the financial year. The Listed Portfolio Shares were

then cancelled and delisted on 17 August 2016.

Fund Performance

For the financial year ended 30 June 2016, the audited Net Asset Value (NAV) of the PE portfolio decreased from USD202.5 million, or USD0.58 per share, to USD77.2 million or

USD0.22 per share. The decline was primarily due to the segregation of the Listed and PE

portfolios, and a distribution to PE shareholders, as well as a downward valuation of the in-building

systems (IBS) assets of SEATH.

The audited NAV per share of the Listed Portfolio on 30 June 2016 increased USD0.29 per share, to USD0.36 per share. The rise was primarily due to the strong performance of VVF.

Performance Against Objectives

Our key objective is to realise the value of the Company's assets, and the investment manager

made substantial progress to that end during the financial year, including:

· Vietnam Aircraft Leasing Corporation (VALC): VNI sold its 11.65% stake in the aircraft lessor for USD8.4 million in February 2016.

· Vina-CPK: Located in Vinh Phuc, Vietnam, Vina-CPK operates industrial park and infrastructure projects with an investment license of up to 49 years. VNI sold its stake in June 2016 for USD22.1 million.

Subsequent to the close of the financial year, the Company reported two other important

developments:

· SEATH: In August 2016, VNI reached an agreement to sell the BTS portion of the portfolio to OCK Vietnam Towers Ltd. for USD50 million. This transaction is expected to close by the end of December 2016.

· Long An: On 2 November 2016, the Company received an out-of-court cash settlement of USD2.37 million, and the asset has been transferred to the buyer.

The IBS portion of the SEATH portfolio is the final asset to be divested, and the Board continues to

explore options to do so by June 2017.

Looking Ahead

Our top priority is to maximise shareholder value. In June 2016, we distributed USD11 million to

holders of the PE shares. We currently anticipate making another distribution during the first quarter of 2017 following the receipt of proceeds from the SEATH BTS sale. Subject to the sale of IBS, we would then anticipate making a further distribution either before, or in conjunction with, the commencement of the voluntary liquidation process towards the end of the 2017 financial year.

Furthermore, investors still holding VVF shares have benefitted from the fund's strong

performance. VVF continues to be Vietnam's largest open-ended UCITS-compliant fund, and it

continues to outperform the VN Index.

Vietnam's buoyant economy has received a great deal of international media attention this past

year, and with it, a growing flow of foreign investors interested in participating in this resilient

market. These and other factors have contributed to the solid progress we have made toward

completing the realisation process in an orderly and timely manner.

Given these positive developments, as well as consideration toward minimising administrative

expenses, the Board has decided to not hold an Annual General Meeting this year. Of course, I

invite shareholders with any issues or concerns to directly contact me or any of the other Directors.

On behalf of the entire Board, I thank you for your continued support.

Rupert Carington

Chairman

Vietnam Infrastructure Limited

19 December 2016

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARES

CONSOLIDATED INCOME STATEMENT

(*) See Note 14 for details regarding the restatement as a result of operation being classified as discontinued.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(*) See Note 14 for details regarding the restatement as a result of operation being classified as discontinued.

(**) These represent reserves provided on profit after tax of the Group's subsidiaries as required by local regulations.

CONSOLIDATED STATEMENT OF CASH FLOWS

Major non-cash transactions

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 original principal activity of the Group was to invest in a diversified portfolio of entities owning infrastructure projects and assets primarily in Vietnam. The Group could invest and hold equity and debt instruments in unquoted companies that themselves held, developed or operated infrastructure assets. The Group could also invest in entities whose shares or other instruments were listed on a stock exchange, or traded on over-the-counter ("OTC") markets and in other funds that invested in infrastructure projects or assets.

On 22 July 2015, following shareholder approval of a proposal to restructure the Company, the listed and private equity components of VNI's portfolio were separated into two distinct pools, the Listed Portfolio and the Private Equity Portfolio, through a bonus issue of new Listed Portfolio Shares on a one-for-one basis to existing ordinary shareholders. As a result the Listed Portfolio and the Private Equity Portfolio were represented by separate classes of shares which were listed on the London Stock Exchange's Alternative Investment Market ("AIM") under the tickers VNIL and VNI, respectively. The Listed Portfolio assets and any surplus cash in the Company were contributed to Forum One-VCG Partners Vietnam Fund ("VVF"), a newly established sub-fund of Forum One, a Luxembourg open-ended investment company or SICAV ("Forum One") for consideration of 10,242,351 Class A VVF shares at the subscription price of USD10 per Class A VVF share. VVF's particular focus is to invest in listed equities on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange; or other issuers that carry out a substantial part of their economic activity in Vietnam and are listed, traded or dealt on stock exchanges worldwide.

(i) Listed Portfolio Shares ("LPS")

LPS shareholders were given an opportunity to tender their shares in return for VVF units in August 2015 and February 2016. In August 2016 all the remaining outstanding LPS were compulsorily repurchased by the Company in return for VVF units. All shares repurchased by the Company were cancelled on the respective repurchase date so that after the date of the final repurchase no LPS remain in issue. The admission of the shares for trading on AIM was also cancelled that day.

(ii) Private Equity Shares ("PES")

The disposal proceeds from the sale of investments in the Private Equity Portfolio and surplus net cash-flows are distributed to the holders of the PES on a periodic basis. At such times holders of PES are given the option to either receive distributions in cash or have the funds invested by the Company in VVF Units (at the then current net asset value of a VVF Unit) and then to have the VVF Units distributed to them. Holders of PES who do not make an election are deemed to have elected to receive VVF Units.

The Company is seeking to fully realise the Private Equity Portfolio before 30 June 2017.

The consolidated financial statements for the financial year ended 30 June 2016 were approved for issue by the Board of Directors on 19 December 2016.

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 financial years presented.

2.1 Basis of preparation

(a) Compliance with International Financial Reporting Standards ("IFRS")

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").

Going concern

The Company is progressively realising its Private Equity Portfolio which it expected to complete by 30 June 2017. Following the realisation of the portfolio and return of proceeds to shareholders the Company will be wound up in accordance with the Amended and Restated Memorandum of Association dated 15 December 2014. As a consequence, these financial statements have been prepared using the liquidation basis, as the going concern basis is no longer considered appropriate. The Company continues to apply the same IFRS accounting policies as has been used in prior years as management do not believe there is a difference in the accounting measurement basis that would be applied using a going concern basis of accounting versus what would apply under a liquidation basis of accounting.

(b) Historical cost convention

The consolidated financial statements have been prepared using the historical cost convention, as modified by the revaluation of investment properties, and in-building cellular enhancement systems ("IBS") under property, plant and equipment, 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(i).

(c) New standards and interpretation effective 1 July 2015 adopted by the Group

There are no standards, interpretations and amendments to existing standards that are effective for the financial year beginning 1 July 2015 that have had a material impact on the Group.

2.2 New significant accounting policies

LPS and PES are classified as financial liabilities

Under IAS 32, both the LPS and PES are classified as financial liabilities as they both meet the definition of puttable instruments. That is, they are financial instruments that give the holders the right to put the instruments back to the issuer for cash or another financial asset or are automatically put back to the issuer on the occurrence of an uncertain future event.

2.3 Principles of consolidation and equity accounting

(a) Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidences of an impairment of the transferred asset. 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 consistency with the Group's accounting policies.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated financial statements of profit or loss, statement of comprehensive income, statement of changes in equity, statement of changes in net assets attributable to holder of redeemable shares and balance sheet respectively.

Business combination

The Group applies the acquisition method to account for all business combinations, regardless of whether equity instruments or other assets are acquired. 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 for the acquisition of a subsidiary comprises the:

· fair value of the assets transferred

· liabilities incurred to the former owners of the acquired business

· equity interests issued by the group

· fair value of any asset or liability resulting from a contingent arrangement, and

· fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the acquired entity's identifiable net assets.

Acquisition-related costs are expensed as incurred.

The excess of the consideration transferred, amount of any non-controlling interest in the acquired entity, and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.

(b) Change in ownership interests

When the group ceases to consolidate for an investment because of a loss of control, 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 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.

2.4 Segment reporting

Operating segments are reported in a manner consistent with the internal management reporting information for the Investment Manager's management, monitoring of investments, and decision making. The Investment Manager assesses the financial performance and position of the Group, and makes strategic decisions.

The operating segments by investment portfolio include energy, property and infrastructure development, telecommunications, transportation and logistics, general infrastructure, other capital markets and cash.

2.5 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 Vietnamese 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. 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. They are deferred in equity if they are attributable to part of the net investment in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in the consolidated income statement, within finance costs. All other foreign exchange gains and losses are presented in the consolidated income statement on a net basis within other income or other expenses.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary 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 consolidated income statement and consolidated statement of comprehensive income 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.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

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.

2.6 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.

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 the Company's independent professional valuer and/or internal investment officers who have relevant professional experience, and professional valuers who hold recognised 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.

2.7 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 2.6). 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 balance sheet.

2.8 Financial assets

2.8.1 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 designated by the management to be carried at fair value through profit or loss at inception. They are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the Company's documented investment strategy. Financial assets at fair value through profit or loss held by the Group include listed and unlisted securities. 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.

Trade and other receivables are amounts due from customers for services performed in the ordinary course of business.

2.8.2 Recognition and derecognition

Purchases or sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

2.8.3 Measurement

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 consolidated income statement. 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 consolidated 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 consolidated income statement when the Group's right to receive payments is established.

2.9 Offsetting financial instruments

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

2.10 Prepayments for acquisitions of Long An Industrial Service project

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.

2.11 Property, plant and equipment

SEATH In-Building Cellular Enhancement Systems ("IBS") under machinery are shown at fair value, based on valuation by independent professional valuer and/or the Company's internal investment officers, less subsequent depreciation. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. A revaluation surplus is credited to other comprehensive income and accumulated in shareholders' equity under the heading of revaluation surplus and is transferred to retained earning when the asset is sold. A revaluation decrease is charged against any related revaluation surplus to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same asset. Any remaining balance of the decrease then be recognised as an expense in profit and loss. All other property, plant and equipment are stated at cost less depreciation. The cost of self-constructed assets includes the cost of materials, direct labour, overheads and the initial estimate of the costs of dismantling and removing the items and restoring the site on which they are located.

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. The carrying values of any parts replaced as a result of such replacements are expensed at the time of replacement. All other costs associated with the maintenance of property, plant and equipment are recognised in the consolidated income statement as incurred.

Depreciation is charged to the consolidated income statement on a straight-line basis over the estimated useful lives of property, plant and equipment, and major components that are accounted for separately. The estimated useful lives are as follows:

Buildings 6 to 10 years

Plant and machinery 3 to 7 years

Office equipment 2 to 5 years

Motor vehicles 6 to 10 years

Material residual value estimates and estimates of useful lives are reviewed at least annually, irrespective of whether assets are revalued.

2.12 Non-current assets (or disposal groups) held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the consolidated balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the consolidated balance sheet.

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the consolidated income statement.

2.13 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, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested 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 of disposal 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 which are largely independent of the cash inflows from other assets or group of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting period.

(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.

Assets carried at amortised cost

(i) For loans and receivables, 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 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.

(ii) For trade receivables, individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The other receivables are assessed collectively to determine whether there is objective evidence that an impairment has been incurred but not yet been identified. For these receivables the estimated impairment losses are recognised in a separate provision for impairment. The group considers that there is evidence of impairment if any of the following indicators are present:

· significant financial difficulties of the debtor,

· probability that the debtor will enter bankruptcy or financial reorganisation, and

· default or delinquency in payments.

Receivables for which an impairment provision was recognised are written off against the provision when there is no expectation of recovering additional cash.

Impairment losses are recognised in profit or loss within other expenses. Subsequent recoveries of amounts previously written off are credited against other expenses.

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

2.14 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.

2.15 Share capital

Ordinary shares were 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.

On 22 July 2015, the ordinary shares were redesignated as PES and subsequently classified as financial liabilities. Refer to Note 15 for details.

2.16 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.

2.17 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the consolidated income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

2.18 Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.19 Current and deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated 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.

2.20 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.

2.21 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 met for each of the Group's activities, as described below:

(a) Sale of services

The Group's revenue represents the rental income from Southeast Asia Telecomunication Holdings ("SEATH") Base Transceiver Station ("BTS") tower network and SEATH In-Building Cellular Enhancement Systems ("IBS") leasing services, information rescue services and from lease of infrastructure in Ba Thien industrial park.

Revenue from SEATH BTS tower network and SEATH IBS 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 on 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.

2.22 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 2.6. The fair values of investment properties of Ba Thien Industrial Park and SEATH Base Transceiver Station ("BTS") tower network have been determined by independent professional valuers and the Company's internal investment officers respectively. 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 and/or the Company's internal investment officers 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.

Refer to sensitive analysis for key valuation inputs in Note 28(b)(v).

(b) Fair value of SEATH IBS under property, plant and equipment

The IBS of the Group are stated at fair value in accordance with Note 2.11. The fair values of IBS have been determined by independent professional valuers and/or the Company's internal investment officers. 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 and/or the Company's internal investment officers are used by the Audit and Valuation Committee as the primary basis for estimating IBS's fair value. In making its judgement, the committee considers information from a variety of sources, including 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 using discount rates that reflect current market assessments of the uncertainty in the amount and timing of cash flows. Refer to sensitive analysis for key valuation inputs in Note 28(b)(v).

(c) 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, or the published daily net asset value.

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. The valuations are also obtained from the Company's internal investment officers to evaluate and adjust valuations. The outcomes may vary from the actual prices that would be achieved in an orderly transaction between market participants at the reporting date. Refer to sensitive analysis for key valuation inputs in Note 28(a)(iv).

(d) Fair value of prepayment for acquisition of Long An Industrial Service project

The prepayment for acquisition reflects the Group's investment in the Long An Industrial Service 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 commenced legal procedures on 15 April 2015 to recover the outstanding balance. On 16 June 2016, the court ruling result is favourable to the Group which was appealed by the buyer to a higher court. A final settlement was agreed with the purchaser on 4 October 2016 and the defendant paid the finally agreed amount in October 2016. In light of these developments, the Group has estimated the recoverable amount at 30 June 2016 based on the amount actually received.

3.2 Critical judgements in applying the Group's accounting policies

(a) Classification of SEATH BTS tower network as investment properties

Management has classified the BTS tower network as investment properties measured at fair value. Management determined that BTS tower network can be considered as similar to buildings and thus can be classified as investment properties. The tower network also displays similar characteristics to investment properties, in that space on the tower network is let to telecommunication tenants to earn rentals.

(b) Investments in Southern Star Telecommunication Equipment Joint Stock Company ("SST") and Vien Tin Joint Stock Company ("Vien Tin")

Management assessed that its acquisitions of Southern Star Telecommunication Equipment Joint Stock Company ("SST") and Vien Tin Joint Stock Company ("Vien Tin") in pervious year were acquisitions of businesses and not acquisitions of assets. The assessment was 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 required. In the context of SST and Vien Tin, management determined that at the date of acquisitions, the businesses of SST and Vien Tin consist of their in-building cellular enhancement systems, and that they have the ability to create economic benefits to provide a return to their owners. Consequently, the acquisitions of SST and Vien Tin have been accounted for as business combinations.

4 SEGMENT INFORMATION

In identifying its operating segments, management generally follows the Group's sectors of investments 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 development, telecommunications, transportation and logistics, general infrastructure, 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 which are held through special purpose vehicles established outside of Vietnam and the details are as follows: