Vietnam Infrastructure Regulatory News (VNI)

Vietnam Infrastructure Limited

Audited financial results for the twelve months ended 30 June 2011

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 2011 ('the period').

Financial highlights:

·; Net loss attributable to shareholders for the period of USD56.2 million (2010: net loss of USD4.1 million).

·; Losses per share of USD0.14 (2010: losses per share of USD0.01).

·; Net Asset Value ("NAV") of USD199.6 million (2009: USD257 million), and NAV per share of USD0.50 (2010: USD0.64).

·; Cash and equivalents at 30 June 2010 of USD67.4 million.

·; No debt at the fund level.

Performance highlights:

·; Increased ownership stake in Ba Thien II Industrial Park and HNEM hydro power plant, and acquired controlling stakes in three BTS tower operators (MIS, GII and VNC-55).

·; Divestment from mature or weak outlook listed companies including ITA, PPC and GMD.

·; Investment in listed companies including PetroVietnam Fertilizer & Chemical JSC ("DPM"), Phuoc Hoa Rubber JSC ("PHR") and PetroVietnam Southern Gas JSC ("PGS"). DPM and PHR represent the fund's first investments in the agribusiness sector.

Commenting, Paul Cheng, Chairman of Vietnam Infrastructure Limited, said:

"The market backdrop in Vietnam of high inflation, tightened fiscal policies and a slowdown in GDP has proved a testing one for infrastructure investments, affecting projects in need of development financing and listed infrastructure companies which have seen their share prices fall. However there are sectors such as agriculture and logistics which still offer high growth potential, and VNI has adapted its investment strategy accordingly. We now have an excellent pipeline of deals in these new areas and aim to be fully deployed by the end of the calendar year."

Notes to Editors:

VinaCapital is the leading investment management and real estate development firm in Vietnam, with a diversified portfolio of USD1.7 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, Phnom Penh (Cambodia) and Singapore. More information about VinaCapital is available at www.vinacapital.com.

More information on Vietnam Infrastructure Limited is available at www.vinacapital.com/vni

Enquiries:

Michael L. Gray

VinaCapital Investment Management Limited

Investor Relations/Communications

+84 8 821 9930

michael.gray@vinacapital.com

Philip Secrett

Grant Thornton Corporate Finance, Nominated Adviser

+44 (0)20 7383 5100

philip.j.secrett@uk.gt.com

Hiroshi Funaki

LCF Edmond de Rothschild Securities, Broker

+44 (0)20 7845 5960

funds@lcfr.co.uk

David Benda / Hugh Jonathan

Numis Securities Limited, Broker 

+44 (0)20 7260 1000

Mark Walters

FTI Consulting, Public Relations (Hong Kong)

+852 3716 9802

mark.walters@fticonsulting.com 

Andrew Walton

FTI Consulting, Public Relations (London)

+44 (0)20 7269 7204

andrew.walton@fticonsulting.com

Chairman's statement

Dear shareholders,

After serving as Independent Director of VNI since the fund's inception, in March of this year I was appointed as Chairman. I accepted this post because I believe we now have the right management in place to deliver results over the longer term.

The 2011 financial year saw Vietnam's economy constrained by renewed high inflation, which required tightened fiscal and monetary policies. Credit growth was reined in, and GDP growth slowed to 5.6 percent year-on-year at 30 June 2011, down from 6.8 percent GDP growth in 2010. Domestic investors saw high VND deposit rates, and little reason to put their money in equities. The Vietnam Index fell 15.1 percent in USD terms over the first half of 2011.

In this environment, infrastructure investments were tested across many fronts. Projects with a need for development financing were affected by the tight liquidity in the market, as were listed positions that saw share prices fall - even as many continued to grow in terms of revenue and profits. Nonetheless, some sectors of the economy continued to perform well, including agriculture and commodities. Overall, Vietnam's export performance was strong and the country will have an estimated 2011 balance of payments surplus of USD4.5 billion.

During the year, VNI focused its efforts on restructuring its key assets to create improved exit opportunities, and on investing into new sectors that offer high-growth potential, particularly agriculture and logistics. Unfortunately, the poor market performance in Vietnam saw the fund's listed and OTC holdings decline in value, and also necessitated the write-down of one PE asset, Vietstar.

Portfolio developments during the year included significant progress at the Ba Thien II industrial park project, which has seen its value increase dramatically after the first lease was signed with an anchor tenant. VNI increased its stake in Ba Thien II during the year, and also increased its stake in BTS leasing firm Mobile Information Service JSC. The Fund was also active in the capital markets, acquiring positions in Binh Chanh Construction Investment Shareholding Company, Development Investment Construction JSC, Gemadept Corporation, and the PetroVietnam subsidiaries PetroVietnam Drilling and Well Services JSC and PetroVietnam Technical Service Corporation, among others.

While FY2011 did not see the Fund enter any significant new private equity investments, there was solid progress nonetheless in restructuring the portfolio and preparing key assets for eventual exits. The Industrial Park holdings are potential exits within the next 12-18 months, and the restructuring of the BTS holdings is nearly complete, including the Singapore-based holding company. The Fund has a significant pipeline of deals in its new focus areas - agriculture and logistics - and should reach full deployment of capital by the end of December 2011.

Thank you for your continued support.

Paul Cheng

Chairman

VinaCapital Vietnam Opportunity Fund Ltd

4 November 2011

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Income

Consolidated Statement of Other Comprehensive Income

Consolidated Statement of Cash Flows

Notes to the Consolidated Statements

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

The Company does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board will convene an extraordinary general meeting of the Company in 2017 where a special resolution will be proposed that the Company continue as presently constituted. If the resolution is passed, the Board intends that a similar resolution will be proposed at an extraordinary general meeting to be convened each fifth subsequent year thereafter. If the resolution is not passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.

The consolidated financial statements for the year ended 30 June 2011 were authorised for issue by the Company's Board of Directors on 4 November 2011

2. Statement of compliance with IFRS and adoption of new and amended standards and interpretations

2.1 Statement of compliance with IFRS

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2.2 Changes in accounting policies

2.2.1 Overall considerations

The Group has adopted the following new interpretations, revisions and amendments to IFRS issued by the IASB, which are relevant to and effective for the Group's financial statements for the annual period beginning 1 July 2010:

- IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

- Annual Improvements 2009

·; IAS 17 Leases

- Annual Improvements 2010

·; IFRS 3 Business Combinations

·; IFRS 7 Financial Instruments: Disclosure

·; IAS 1 Presentation of Financial Statements

·; IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 28 Investments in Associates

The significant effects on current, prior or future periods arising from the first-time application of these new requirements in respect of presentation, recognition and measurement are described in note 2.2.2. An overview of standards, amendments and interpretations to IFRSs issued but not yet effective is given in note 2.2.3.

2.2.2 Adoptions of revised and amended standards

Adoption of Annual Improvements to IFRSs 2009

The Improvements to IFRSs 2009 made several minor amendments to IFRSs. The only amendment relevant to the Group relates to IAS 17 Leases ("IAS 17"). The amendment requires that leases of land are classified as finance or operating by applying the general principles of IAS 17. Prior to this amendment, IAS 17 generally required a lease of land to be classified as an operating lease. The Group has reassessed the classification of the land elements of its unexpired leases at 1 July 2010 on the basis of information existing at the inception of those leases and has determined that none of its leases requires reclassification.

Adoption of Annual Improvements to IFRSs 2010

The IASB has issued Improvements to IFRS 2010. Most of these amendments become effective in annual periods beginning on or after 1 July 2010 or 1 January 2011. The Group has applied the amendments to IFRS 3 Business Combinations, IFRS 7 Financial instruments: Disclosure, IAS 1 Presentation of Financial Statements, IAS 21 The Effects of Changes in Foreign Exchange Rates, and IAS 28 Investments in Associates to the current consolidated financial statements.

The amendments to IFRS 3 Business Combinations ("IFRS 3") are effective for the periods beginning on or after 1 July 2010. In respect of transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS, the improvements clarify that contingent consideration balances arising from business combinations that occurred before an entity's date of adoption of IFRS 3 (Revised 2008) shall not be adjusted on the adoption date. Guidance is also provided on the subsequent accounting for such contingent balances. In respect of measurement of non-controlling interest ("NCI"), the choice of measuring NCI either at fair value or at the proportionate share in the recognised amounts of an acquiree's identifiable assets, is now limited to NCI that are present ownership instruments and entitle their holders to a proportionate share of the acquiree's net assets in the event of liquidation. This clarifies that all other components of NCI shall be measured at their acquisition date fair values, unless another measurement basis is required by IFRS. The Group has applied IFRS 3 Business Combinations prospectively to all business combinations from 1 July 2010.

The amendments to IFRS 7 Financial instruments: Disclosure ("IFRS 7") are effective for the periods beginning on or after 1 January 2011. The amendments to IFRS 7 were early adopted by the Group for the year ended 30 June 2010. This clarifies the disclosure requirement of the standards to remove inconsistencies, duplicative disclosure requirements and specific disclosures that may be misleading. The Group has made sufficient disclosure in compliance with IFRS 7 in the consolidated financial statements.

The amendments to IAS 1 Presentation of Financial Statements are effective for the periods beginning on or after 1 January 2011. The amendments to IFRS 1 were early adopted by the Group for the year ended 30 June 2010. This clarifies that entities may present the required reconciliations for each component of other comprehensive income either in the Consolidated Statement of Changes in Equity or in the notes to financial statements. The Group has presented the required reconciliations for each component of other comprehensive income in the Consolidated Statement of Changes in Equity.

The amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates ("IAS 21") and IAS 28 Investments in Associates ("IAS 28") are effective for the periods beginning on or after 1 July 2010. These amend the transition requirements to apply certain consequential amendments arising from the IAS 27 (2008) amendments prospectively, to be consistent with the related IAS 27 transition requirement. The adoptions have no impact on the consolidated financial statements.

2.2.3 Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group

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

Management anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's 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 financial statements.

IFRS 9 Financial Instruments (effective from 1 January 2013) ("IFRS 9")

The IASB aims to replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety. The replacement standard (IFRS 9) is being issued in phases. The chapters dealing with recognition, classification, measurement and derecognition of financial assets and liabilities have been issued. These chapters are effective for annual periods beginning 1 January 2013. IFRS 9 is the first part of Phase 1 of this project. The main phases are:

·; Phase 1: Classification and Measurement

·; Phase 2: Impairment methodology

·; Phase 3: Hedge accounting

Further chapters dealing with impairment methodology and hedge accounting are still being developed.

Management have yet to assess the impact that this amendment is likely to have on the consolidated financial statements of the Group. However, they do not expect to implement the amendments until all chapters of IFRS 9 have been published and they can comprehensively assess the impact of all changes.

IFRS 10 Consolidated Financial Statements (effective from 1 July 2013)

IFRS 10: "Consolidated Financial Statements" was issued by the IASB in May 2011 and replaces both the existing IAS 27: "Consolidated and Separate Financial Statements" and SIC 12: "Consolidation-Special Purpose Entities". The new standard revises the definition of control and related application guidance so that a single control model can be applied to all entities. This standard will apply to the Group from 1 July 2013 butis not expected to have a material impact on the Group's financial statements.

IFRS 12 Disclosure of Interests in other Entities (effective from 1 July 2013)

IFRS 12: "Disclosure of Interests in other Entities" was issued by the IASB in May 2011 and is a new and comprehensive standard on disclosure requirements for all forms on interests in other entities, including subsidiaries, joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. This standard is applicable from 1 July 2013 and management is currently assessing the impacts of the standard, which will be limited to disclosure impacts only. There have also been consequential amendments to IAS 28: "Investments in Associates" as a result of above new standard. These amendments are applicable from 1 July 2013.

Consequential amendments to IAS 27 and IAS 28 Investments in Associates and Joint Ventures (IAS 28)

IAS 27 now only deals with separate financial statements. IAS 28 brings investments in joint ventures into its scope. However, IAS 28's equity accounting methodology remains unchanged.

IFRS 13 Fair Value Measurements (effective from 1 July 2013)

IFRS 13: "Fair Value Measurements" was issued by the IASB in May 2011 and provides a precise definition of fair value, as a single source of fair value measurement and prescribes disclosure requirements for use across IFRS. The requirements 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 IFRS. The standard will apply to the Group from 1 July 2015 and at this stage it is believed there will be no impact.

Amendments to IAS 1 Presentation of Financial Statements (IAS 1 Amendments)

The IAS 1 Amendments require an entity to group items presented in other comprehensive income into those that, in accordance with other IFRSs: (a) will not be reclassified subsequently to profit or loss and (b) will be reclassified subsequently to profit or loss when specific conditions are met. It is applicable for annual periods beginning on or after 1 July 2012. The Group's management expects this will change the current presentation of items in other comprehensive income; however, it will not affect the measurement of recognition of such items.

3. Summary of significant accounting policies

3.1 Presentation of consolidated financial statements

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

The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarised below. These policies have been consistently applied to all the years presented unless otherwise stated.

The preparation of consolidated financial statements in accordance with IFRS requires the use of certain accounting estimates and assumptions. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. 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 4 to the consolidated financial statements.

3.2 Basis of consolidation

The consolidated financial statements of the Group for the year ended 30 June 2011 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interests in associates.

3.3 Subsidiaries

Subsidiaries are all entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from their activities. In assessing control, potential voting rights that presently are exercisable, along with contractual arrangements, are taken into account. 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. The majority of subsidiaries of the Group have a reporting date of 30 June. For those subsidiaries with a different reporting date the Group consolidate management information which is subject to audit for the period to 30 June.

In addition, acquired subsidiaries are subject to application of the purchase method. This involves the revaluation at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair value amounts, which are also used as the basis for subsequent measurement in accordance with the Group's accounting policies. Goodwill represents the excess of acquisition cost over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition. Gain on bargain purchase is immediately allocated to the Consolidated Statement of Income as at the acquisition date. All acquisition related costs are expensed in the period in which the costs are incurred and not included in the cost of investment.

All payments to purchase a business are recorded at fair value at the acquisition date. Some changes in the fair value of contingent consideration that the Group recognises after the acquisition date may be the result of additional information that the Group obtained after that date about facts and circumstances that existed at the acquisition date. Where the changes in fair value of the contingent consideration are not measurement period adjustments, contingent consideration classified as equity is not re-measured, contingent consideration classified as an asset or a liability which is a financial instrument within the scope of IAS 39 is measured at fair value with gains and losses recognised either in Consolidated Statement of Income or in other comprehensive income according to the requirements of IAS 39, and contingent consideration classified as an asset or a liability outside the scope of IAS 39 is accounted for in accordance with IAS 37 or other IFRS as appropriate.

Contingent consideration balances arising from business combinations whose acquisition dates prior to 1 July 2010 shall not be adjusted retrospectively. If a business combination provides for an adjustment to the cost of the combination contingent on future events, the Group shall include the amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

All inter-company balances and significant inter-company transactions and resulting unrealised profits or losses (unless losses provide evidence of impairment) are eliminated on consolidation.

A non-controlling interest represents the portion of the Statement of Income and net assets of a subsidiary attributable to an equity interest that is not owned by the Group. For each business combination, the acquirer shall measure at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation either at fair value or at the present ownership instruments' proportionate share in the recognised amounts of the acquiree's identifiable net assets. Non-controlling interest is based upon the non-controlling interest's share of post-acquisition fair values of the subsidiary's identifiable assets and liabilities. All other components of non-controlling interests shall be measured at their acquisition-date fair values, unless another measurement basis is required by other standards. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are accounted for as equity transactions whereby the difference between the consideration paid and the proportionate change in the parent entity's interest in the carrying value of the subsidiary's net assets is recorded directly in equity and attributable to the owners. No adjustment is made to the carrying value of the subsidiary's net assets as reported in the consolidated financial statements.

Where the business combination is achieved in stages, the Group shall re-measure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss or other comprehensive income, as appropriate. In prior reporting periods, the Group may have recognised changes in the value of its equity interest in the acquiree in other comprehensive income. If so, the amount that was recognised in other comprehensive income shall be recognised on the same basis as would be required if the Group had disposed directly of the previously held equity interest.

3.4 Associates

Associates are those entities over which the Group is able to exert significant influence, generally accompanying a shareholding of between 20% to 50% of voting rights, but which are neither subsidiaries nor investments in joint ventures. In the consolidated financial statements, investments in associates are initially recorded at cost and subsequently accounted for using the equity method.

Under the equity method, the Group's interest in an associate is carried at cost and the carrying amount is then increased or decreased to recognise the Group's share of profit or loss of the associate after the date of acquisition and any changes in the associate's other comprehensive income less any identified impairment loss, unless it is classified as held for sale or included in a disposal group that is classified as held for sale. The Consolidated Statement of Income includes the Group's share of the post-acquisition, post-tax results of the associate for the year, including any impairment loss on goodwill relating to the investment in associate recognised for the year.

Adjustments to the carrying value of the associate are necessary for changes in the associate's other comprehensive income that have not been recognised in their Consolidated Statement of Income, primarily those arising on the revaluation of plant, property and equipment. The Group's share of such changes are recognised specifically in other comprehensive come.

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

Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognised at the date of acquisition is treated as goodwill. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group.

Goodwill is included within the carrying amount of an investment and is assessed for impairment as part of the investment. After the application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group's investments in its associates. At each reporting date, the Group determines whether there is any objective evidence that an investment in an associate is impaired. If such indications are identified, the Group calculates the amount of impairment as being the difference between the recoverable amount of the associate and its respective carrying amount.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in an associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

3.5 Functional and presentation currency

The 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, which may be Vietnamese Dong ("VND") or USD ("the functional currency"). The financial statements prepared using Vietnamese Dong are then translated into the presentation currency of USD. USD is used as the presentation currency because it is the primary basis for the measurement of the performance of the Group (specifically changes in the Net Asset Value of the Group) and a large proportion of significant transactions of the Group are denominated in USD.

3.6 Foreign currency translation

In the individual financial statements of the consolidated entities, transactions arising in currencies other than the functional currency of the individual entity are translated at exchange rates in effect on the transaction dates. Monetary assets and liabilities denominated in currencies other than the functional currency of the individual entityare translated at the exchange rates in effect at the reporting date. Translation gains and losses and expenses relating to foreign exchange transactions are recognised in the Consolidated Statement of Income.

In the consolidated financial statements all individual financial statements of subsidiaries where the functional currency is different from the Group's presentation currency, are converted into USD. Assets and liabilities are translated into USD at the closing rate of the reporting date. Income and expenses are translated using the exchange rates at the dates of the transactions. Where the average rates approximate the exchange rates at the dates of the transactions, income and expenses are translated into the Group's presentation currency at the average rates over the reporting period. Any differences arising from this translation are recognised in other comprehensive income.

3.7 Revenue recognition

Rental income

Rental income from investment property is recognised in the Consolidated Statement of Income on a straight-line basis over the term of the operating lease.

Interest income

Interest income is recognised on the effective interest rate basis.

Dividend income

Dividend income is recorded when the Group's right to receive the dividend is established.

3.8 Expense recognition

All expenses, including management fees and custodian fees, are recognised in the Consolidated Statement of Income on an accruals basis.

3.9 Investment property

Investment properties are properties owned or held under finance leases 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 and fair value model is applied for the property is classified as investment property on a property by property basis. If a leased property does not meet this definition it is recorded as an operating lease.

Property under construction or development for future use as investment property is treated as investment property and is measured at fair value where the fair value of the investment property under construction or development for future use can be reliably determined.

Investment properties are stated at fair value. Independent valuation companies, with appropriately recognised professional qualifications and recent experience in the location and category being valued, value each property each year. On the valuation date, the fair value is estimated assuming that there is an agreement between a willing buyer and a willing seller in an arm's length transaction after proper marketing; wherein the parties had each acted knowledgeably, prudently and without compulsion. The valuations are prepared based upon direct comparison with sales of other similar properties in the area and the expected future discounted cash flows of a property using a yield that reflects the risks inherent in those cash flows. Valuations and fair value of the properties are reviewed and determined by the Valuation Committee and approved by the Board of Directors. Discount rates in the range from 13% to 20% are considered appropriate for properties in different locations. Where the Valuation Committee considers the discount rate applied by the independent valuers to be too low or if there are factors that the external independent valuers have not considered in their determination of a property's fair value, they will adjust the discount rate upwards in the discounted cash flow projections, whereby decreasing the property's net present valuation.

Any gain or loss arising from a change in fair value is recognised in the Consolidated Statement of Income.

3.10 Financial assets

Financial assets are divided into the following categories: loans and receivables, and financial assets at fair value through profit or loss.

Management determines the classification of its financial assets at initial recognition depending on the purpose for which the financial assets were acquired. Where allowed and appropriate management reclassifies this designation at each reporting date. The designation of financial assets is based on the investment strategy set out in the Group's Admission Document to the London Stock Exchange's AIM, dated 29 June 2007.

All financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at a fair value through profit or loss, directly attributable transaction costs.

Derecognition of financial assets occurs when the rights to receive cash flows from the investments expires or are transferred and substantially all of the risks and rewards of ownership have been transferred. At each reporting date, financial assets are reviewed to assess whether there is objective evidence of impairment. If any such evidence exists, any impairment loss is determined and recognised based on the classification of the financial assets.

The Group's financial assets consist primarily of listed and unlisted equities, bonds, loans and receivables.

Loans and receivables

All loans and receivables are non-derivative financial assets with fixed or determinable pay-ments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is recognised in the Consolidated Statement of Income. Discounting, however, is omitted where the effect of discounting is immaterial.

The Group's cash and cash equivalents, trade and other receivables, short term investments and prepayments for acquisition of investments fall into this category of financial instruments.

Significant receivables are considered for impairment when they are overdue or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and other available features of shared credit risk characteristics. The percentage of the write-down is then based on recent historical counterparty default rates for each identified group. Impairments of trade and other receivables are presented within "other expenses".

Financial assets at fair value through Profit and Loss

Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or are designated by the entity to be carried at fair value through profit or loss upon initial recognition. Financial assets at fair value through profit or loss held by the Group include listed and unlisted securities and bonds.

Purchase or sale of financial assets is recognised using trade date accounting. The trade date is the date that an entity commits itself to purchase or sale of an asset.

Net changes in fair value of financial assets at fair value through profit or loss includes net unrealised gains in fair value of financial assets and net gains from realisation of financial assets during the year.

3.11 Prepayments for acquisitions of investments

These represent prepayments made by the Group to property vendors for land compensation and other related costs, and professional fees directly attributed to the projects, where the final transfer of the 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 investment properties and accounted for accordingly.

3.12 Long-term prepayments

These prepayments represent the costs incurred for an establishment of a subsidiary. Such amounts are measured initially at cost and will be considered as contributed capital by the Group once the approval is obtained.

3.13 Impairment of assets

The amount of the impairment loss is the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. The Group's investment properties and interests in associates, plant and equipment, trade and other receivables and other assets are subject to impairment testing.

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

All individual assets or cash generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised in the Consolidated Statement of Income immediately for the amount by which the asset's carrying amount exceeds its recoverable amount unless the relevant asset is carried at a revalued amount under the Group's accounting policy. An impairment loss on a revalued asset is treated as a revaluation decrease, but only to the extent of the revaluation surplus for that same asset. Further impairment losses are recognised in the Consolidated Statement of Income. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets.

3.14 Income tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal 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. Current and deferred tax shall be recognised as income or an expense and included in Consolidated Statement of Income for the year. Current tax and deferred tax shall be charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity; and if the tax relates to items recognised in other comprehensive income, it is recognised in other comprehensive income.

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 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. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

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 Statement of Income. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is charged directly to equity are charged or credited directly to equity.

Withholding taxes imposed on investment income

The Group currently incurs withholding taxes imposed by local jurisdictions on investment income. Such income is recorded net of withholding taxes in the Consolidated Statement of Income.

3.15 Cash and cash equivalents

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

3.16 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. Any transaction costs associated with the issuing of shares are deducted from additional paid-in capital, net of any related income tax benefits.

Currency translation differences on net investments in foreign operations are included in the translation reserve.

Retained earnings include all current and prior period results of operations as disclosed in the consolidated statement of changes in equity.

Treasury shares represent the shares repurchased by the Group. These repurchased shares reduce total capital.

Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are accounted for as equity transactions and are recorded in other reserve in Equity.

3.17 Financial liabilities

The Group's financial liabilities include trade and other payables, payables to related parties and other liabilities.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognised as an expense in finance costs in the consolidated Statement of Income.

Trade and other payables, payables to related parties and other liabilities are recognised initially at their fair value and subsequently measured at amortised cost, using the effective interest rate method.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

3.18 Provisions, contingent liabilities and contingent assets

Provisions are recognised when present obligations will probably lead to an outflow of economic resources from the Group that can be reliably estimated. A present obligation arises from the presence of a legal or constructive obligation that has resulted from past events. Provisions are not re-cognised 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 any uncertainty about the timing or amount of the future expenditure required 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 Group's management.

The Group does not recognise a contingent liability but discloses its existence in the consolidated financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.

A contingent asset is a possible asset that arises from past events, the existence of which will be confirmed by uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses their existence when inflows of economic benefits are probable, but not virtually certain.

3.19 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. Parties are considered to be related to the Group if:

·; directly or indirectly, a party controls, is controlled by, or is under common control with the Group; has an interest in the Group that gives it significant influence over the Group; or has joint control over the Group;

·; a party is a jointly-controlled entity;

·; a party is an associate;

·; a party is a member of the key management personnel of the Group; or

·; a party is a close family member of the above categories.

3.20 Segment analysis

An operating segment is a component of the Group:

1. that engages in investment activities from which it may earn revenues and incur expenses;

2. whose operating results are based on internal management reporting information that is regularly reviewed by the Investment Manager to make decisions about resources to be allocated to the segment and assess its performance; and

3. for which discrete financial information is available.

3.21 Earnings per share and net asset value per share

The Group presents basic earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the Consolidated Statement of Income attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

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

4. Critical accounting estimates and judgements

When preparing the consolidated financial statements, management 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 the Company's management, and may not equal the estimated results. Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:

Fair value of financial assets

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

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

Fair value of investment properties

The investment properties of the Group and its undertakings and its associates are stated at fair value in accordance with accounting policy 3.9. The fair values of investment properties, leasehold land and buildings are based on valuations by independent professional valuers including: CB Richard Ellis, Savills, Jones Lang LaSalle, Colliers, Sallmanns and HVS. These valuations are based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. The estimated fair values provided by the independent valuation companies are used by the Valuation Committee as the primary basis for estimating each property' s fair value.

In making its judgement, the Valuation Committee considers information from a variety of sources, including:

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

(ii) recent prices of similar properties in less active markets, with adjustments to reflect any changes in

economic conditions since the date of the transactions that occurred at those prices;

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

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

Impairment

An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows (see note 3.13). In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group's assets within the next financial year.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

Impairment of investment properties

Whenever there is an indication of impairment of an investment property, the Valuation Committee and Group's management will assess the need for an impairment adjustment.

Trade and other receivables

The Group's management determines the provision for impairment of trade and other receivables on a regular basis. This estimate is based on the recoverability of the receivable depending on underlying security and timing of repayment, and credit history of its customers and prevailing market conditions.

Other assets

The Group's other assets and interests in associates are subject to impairment testingin accordance with the accounting policy 3.13.

Business combinations

On initial recognition, the assets and liabilities of the acquired business are included in the Consolidated Statement of Financial Position at their fair values. In measuring fair value management uses estimates about future cash flows and discount rates or independent valuation for investment properties and hotels.

5. 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 developers, telecommunications, transportation and logistics, general infrastructure, environment and others.

Each of the operating segments are managed and monitored separately by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental profit or loss, the majority of expenses are common to all segments therefore cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.

There is no measure of segment liabilities regularly reported to the Investment Manager therefore liabilities segment is determined not to be disclosed.

Segment information can be analysed as follows for the reporting periods under review:

The relevant segment information as at 30 June 2011 is presented below:

The relevant comparative information for the prior year is as presented below:

In comparison with the last year end:

The Group's revenues, investment income and non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax assets and post-employment benefit assets) are divided into the following geographical areas:

Revenues and investment income including revenue from operations, financial income and net gain/(loss) on fair value adjustments of investment properties and financial assets at fair value through profit or loss, have been identified on the basis of the location of operations and/or investments. Non-current assets are allocated based on their physical locations.

6. Subsidiaries

Particulars of principal subsidiaries of the Group as of 30 June 2011:

(*)On 7 August 2010, the Group's interest in Long An Industrial Park Joint Stock Company was reduced from 69% to 37.5% as a result of the additional investment from Dong Tam Joint Stock Company. The additional investment was recognised through the issuance of new shares. The Group did not lose control of the subsidiary because it still retains the power to govern the financial and operating policies of the company as it retains more than 50% of the voting rights on the Board.

(**) On 4 October 2011, the Group's interest in Long An Port Joint Stock Company was reduced from 50% to 47% when the Group sold a portion of its interest to Dong Tam Joint Stock Company for USD1.9 million. The Group retained control of the subsidiary because it still retains the power to govern the financial and operating policies of the company as it retains more than 50% of the voting rights on the Board.

Business combination achieved in stages

Additional acquisition of Global Infrastructure Investment Limited ("GII")

At 30 June 2010, the Group held 49% equity interest in GII which was previously an associate. The principal activity of this company is to build and lease out base transceiver station towers to local mobile phone operators. On 25 May 2011, the Group acquired a further 10% equity interest for USD0.8 million. The additional stake brought the Group's total interest in the entity to 59% at the reporting date.

The acquisition-date fair value of the equity interest in GII held by the Group immediately before the acquisition date was USD4.4 million. There was no gain or loss as a result of re-measuring to fair value of the equity interest in the GII held by the Group before the date of additional acquisition because its re-measured fair value was equal to its carrying value as at the date immediately before the additional investment. There is no goodwill recognised on the consolidated financial statements because the consideration paid and acquisition-date fair value of the Group's previously held equity interest in GII is equal to the fair value of the Group's share of the identifiable net assets of GII at the date of acquisition.

Additional acquisition of Mobile Information Service JSC ("MIS")

At 30 June 2010, the Group held 30% equity interest in MIS which was previously an associate. The principal activity of this company is to build and lease out base transceiver station towers to local mobile phone operators. On 25 May 2011, the Group acquired a further 45% equity interest for USD3.2 million. The additional investment increased the Group's total interest in the project to 75% at the reporting date.

The acquisition-date fair value of the equity interest in MIS held by the Group immediately before the acquisition date was USD2.1million. There was no gain or loss recognised as a result of re-measuring to fair value of the equity interest in the MIS held by the Group before the date of additional acquisition because its re-measured fair value was equal to its carrying value as at the date immediately before the additional investment. There is no goodwill recognised on the consolidated financial statements because consideration paid and the acquisition-date fair value of the Group's previously held equity interest in MIS is equal to the fair value of the Group's share of the identifiable net assets of GII at the date of acquisition.

Additional acquisition of Vina CPK Ltd.

On 1 July 2010, the Group acquired an additional 25% interest in Vietnam Infrastructure Civilis Limited from Vinaland Limited after the VinaLand Investment Committee decided not to participate as a co-investor in this project. No consideration was paid for this transfer as the Company had only recently established and had no operating activities.

7. Investment property

(*) This represents base transceiver station towers owned by GII and MIS. These properties are leased under operating leases. Rental income of USD1,168,506 has been included within revenue and direct operating expenses of USD831,248 were reported within cost of sales for the year.

The lease contracts are all non-cancellable for 10 years from the commencement of the lease. Future minimum lease rental income is as follows:

8. Prepayments for acquisitions of investments

9. Investments in associates

(*) Allowance for impairment of investment in associate represents the impairment of investment in Vietstar Joint Stock Company. The impaired investment in Vietstar Joint Stock Company Ltd is due from poor performance of the company because it is running out of cash and faces insolvency risk. The Management has considered the plan of turn-around business plan by the debt restructuring proposals to help the company stay afloat and complete its construction to reach full capacity.

The details of operating associates and their summarised financial information which were extracted from their reviewed financial statements as at 30 June 2011 are as follows: