Vietnam Infrastructure Regulatory News (VNI)

Vietnam Infrastructure Limited

Interim results for the six months ended 31 December 2011

Vietnam Infrastructure Limited (the "Company" or "VNI") (VNI.L), the first publicly traded fund to focus on infrastructure assets in Vietnam, today announces its interim results for the six months ended 31 December 2011 ("the Period").

Financial highlights

·; Net loss for the Period of USD16.8 million (HY10: USD26.7 million net loss).

·; Net loss per share of USD0.04 for the Period (HY10: USD0.07 net loss per share).

·; Cash and cash equivalents as at 31 December 2011 of USD57.1 million.

·; Net asset value at 31 December 2011 of USD182.6 million representing USD0.46 per share.

Operational highlights

·; VNI secured its first tenant at the Ba Thien II Industrial Park, just outside Hanoi, and commenced land-levelling in December.

·; South East Asia Telecommunications Holdings (SEATH), a fully owned subsidiary of VNI, gained controlling stakes in three portfolio companies and began the consolidation of these assets.

·; Nam Viet Oil, Vietnam's only private condensate refinery in which VNI holds a 23% stake, began building a retail distribution network in the Mekong Delta area with the aim of expanding its customer base.

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

"The macro economic conditions in Vietnam continue to present a challenging environment for investment activity. Having said this, currency stabilisation and decelerating inflation in the second half of 2011, driven by Vietnam's new monetary policies, give us cause for some optimism. Against this difficult backdrop, we are actively looking to diversify the scope of our investments, particularly in agribusiness, and hope to capitalise on the very attractive valuations of high quality distressed assets."

Notes to Editors:

VinaCapital is the leading investment management and real estate development firm in Vietnam, with a diversified portfolio of USD1.6 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:

David DropseyVinaCapital Investment Management LimitedInvestor Relations/Communications+84 8 821 9930david.dropsey@vinacapital.com

Philip Secrett

Grant Thornton Corporate Finance, Nominated Adviser

+44 (0)20 7583 5100

philip.j.secrett@uk.gt.com

 Hiroshi FunakiLCF Edmond de Rothschild Securities, Broker+44 20 7845 5960funds@lcfr.co.uk

David Benda / Hugh JonathanNumis Securities Limited, Broker+44 (0)20 7260 1000Mark WaltersFTI Consulting, Public Relations (Hong Kong)+852 3716 9802mark.walters@fticonsulting.com

Andrew WaltonFTI Consulting, Public Relations (London)+44 (0)20 7269 7204andrew.walton@fticonsulting.com

Chairman's Statement

Dear Shareholders,

We are pleased to present the interim results of Vietnam Infrastructure Limited (AIM: VNI) for the six month period ended 31 December 2011.

During the final six months of 2011, Vietnam's economic growth slowed to finish the year at 5.9 percent. More importantly though, inflation growth fell substantially, ending 2011 at 18.1 percent year on year, a result of tightening monetary policy, put in place during the middle of the year. Additionally, the Vietnam Dong (VND) remained very stable throughout this period, finishing December with an open market rate of VND21,300. However, despite these promising economic conditions, the Vietnam Index fell dramatically to close the year at a multi-year low of 350 points. For all of 2011, the VN Index lost 32.8 percent in USD terms.

VNI saw its net asset value decline 8.5 percent to USD183 million (USD0.46 per share) at 31 December 2011, from USD200 million (USD0.50 per share) at 30 June 2011. The loss was due primarily to the performance of listed holdings in the portfolio.

During the six months ended 31 December 2011, operational highlights included VNI securing its first tenant at the Ba Thien II Industrial Park, just outside Hanoi, and commenced land-levelling in December. Vietnam's only private condensate refinery, Nam Viet Oil, expanded its customer base from pure wholesale, to industrial and retail customers by building a retail distribution network in the Mekong Delta area. Additionally, Vietnam's largest private independent BTS provider, South East Asia Telecommunications Holdings (SEATH), a fully owned subsidiary of VNI, gained controlling stakes in three portfolio companies and began the consolidation of these assets.

For all of 2012, Vietnam's domestic economy will be dominated by the effects of monetary policy aimed at fighting inflation. We have already seen it take shape within a stabilized currency and decelerating rate on CPI during the final half of 2011. In fact, if the government's "crawling peg" policy continues to succeed, the need for future currency devaluation should be minor.

With this expected, improved landscape, we believe Vietnam can achieve GDP growth of 6 percent, lower inflation in the 10 to 12 percent range, and lending rates from the current 20 to 22 percent range to fall to the mid-teen levels. This will ultimately lead to lower borrowing costs and reduce interest expense pressure for companies.

For VNI in 2012, we look to continue developing infrastructure dependent land projects, such as industrial parks, as well as, expanding our BTS business through merger and acquisition activity. We will continue to look at pre-listing or listed agribusiness as a way to diversify the scope of our investments. VNI remains well placed to continue acquiring high potential distressed assets at very attractive valuations.

At 31 December 2011, VNI's shares traded at USD0.20, representing a 56.5 percent discount to NAV which the Board noted was achieved on very low trading volumes. However, over the last month, the share price for VNI has increased to approximately USD0.26, reducing the discount to 43.5 percent, as trading volumes have improved. The Board sees this as a positive sign and will continue to monitor the situation. Further action will be considered if there is not a continual closing of the discount over the next several months.

The Board welcomes shareholder feedback, and we hope to be in touch with many of you over the coming year. Thank you for your continued support.

Paul Cheng

Chairman

Vietnam Infrastructure Limited

16 March 2012

Condensed Interim Consolidated Statement of Financial Position

Condensed Interim Consolidated Statement of Changes in Equity

Condensed Interim Consolidated Statement of Income

Condensed Interim Consolidated Statement of Comprehensive Income

Condensed Interim Consolidated Statement of Cash Flows

Notes to the Condensed Interim Consolidated Financial 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 Asian countries. The Company mainly invests and holds equity, debt instruments in 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 is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNI.

The condensed interim consolidated financial statements for the six months ended 31 December 2011 were approved for issue by the Company's Board of Directors on 14 March 2012.

2. BASIS OF PREPARATION

The Company and its subsidiaries herein are referred as the Group.

These condensed interim consolidated financial statements are for the six months period ended 31 December 2011. They have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). They do not include all of the information required in the annual financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRS"). Accordingly, these financial statements are to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2011.

3. ACCOUNTING POLICIES

These condensed interim financial statements (the "interim financial statements") have been prepared in accordance with the accounting policies, methods of computation and presentation adopted in the last annual financial statements for the year ended 30 June 2011.

The AIM Rules for Companies require comparative figures for the balance sheet for the corresponding period end in the preceding financial year which differs to IAS 34 which requires comparative figures for the balance sheet for the immediately preceding financial year end. The Group continues to elect to report in accordance with IAS 34 and as such has agreed with the London Stock Exchange a derogation from the above requirement of the AIM Rules for Companies in order to comply with IAS 34.

4. ESTIMATES

When preparing the condensed interim 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 effect on recognition and measurement of assets, liabilities, income and expenses were the same as those that applied to the last annual financial statements for the year ended 30 June 2011.

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.

5. SEGMENT ANALYSIS (CONTINUED)

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

6. ACQUISITION OF A SUBSIDIARY

Acquisition of controlling interest in VNC- 55 Infrastructure Investment Joint Stock Company ("VNC - 55")

At 30 June 2011, the Group held a 40% equity interest in VNC-55 which was previously an associate. The principal activity of this company is to build and lease out base transceiver station towers to local mobile telephone operators. On 24 December 2011, the Group acquired a further 20% equity interest for USD4.3 million. The additional stake brought the Group's total interest in the entity to 60% at the reporting date.

The acquisition date fair value of the equity interest in VNC-55 held by the Group immediately before the acquisition date was USD9.8 million. There was no gain or loss as a result of re-measuring to fair value of the equity interest in the 40% 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 VNC-55 is equal to the fair value of the Group's share of the identifiable net assets of VNC-55 at the date of acquisition.

7. INVESTMENT PROPERTIES

(*) Included in the additions of USD16.285 million is USD11.5 million in respect of the acquisition of a controlling interest in VNC-55 in December 2011.

8. PREPAYMENT FOR ACQUISITIONS OF INVESTMENTS

9. INVESTMENT IN ASSOCIATES

(*) As at 31 December 2011 and 30 June 2011, an allowance of USD1.40 million has been made against the investment in Vietstar Joint Stock Company following its breach of loan covenants. The project is in default, but the banks have given management an opportunity to implement a turnaround plan.

An additional allowance of USD1.76 million as at 31 December 2011 has been made against the investment in the Mobile Infrastructure Development Co., Ltd. pending the negotiation of settlement of legal action against the local shareholder.

10. TRADE AND OTHER RECEIVABLES

As trade and other receivables are short-term in nature, their carrying values are considered a reasonable approximation of their fair values at the reporting date.

(*) Included in interest receivables is an amount of USD9.96 million representing receivables of interest from Thai Thinh Corporation which was fully provided for as at 30 June 2011.

(**) The deposit of USD3.47 million relates to a partial prepayment of the total amount required to acquire the remaining interest in VNC-55 of USD8.6 million (Note 23)

(***) Included in trade and other receivables of USD5.43 million is USD2.48 million arising from the new subsidiary, VNC-55, acquired during the period.

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

12. CASH AND CASH EQUIVALENTS

13. BORROWINGS

(*) Details of the borrowings at the reporting date are as follows:

14. PAYABLES TO RELATED PARTIES

As payables to related parties are short-term in nature, their carrying values are considered a reasonable approximation of their fair values at the reporting date.

15. NET CHANGES IN FAIR VALUE OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

16. ADMINISTRATION EXPENSES

(*) Total management fees for the period amounted to USD1,944,574 (31 December 2010: USD 413,963), with USD319,657 (31 December 2010: USD808,599) in outstanding accrued fees due to the investment manager, VinaCapital Investment Management Limited, as at the reporting date.

The investment manager receives a management fee based on the gross asset value of the Group, payable monthly in arrears, at an annual rate of 2%. It is also entitled to a performance fee equal to 20% of the realised returns over an annualised compounding hurdle rate of 8%. There was no performance fee payable for the six month period ended 31 December 2011 and 31 December 2010.

17. FINANCIAL INCOME

18. INCOME TAX EXPENSE AND DEFERRED TAX LIABILITY

Income tax expense

Deferred tax liabilities

As at 31 December 2011, the deferred tax liability of USD2.083 million arose from revaluation gains recognised by the Group on investment properties.

19. EARNINGS PER SHARE

(a) Basic

Basic earnings per share is calculated by dividing the loss attributable to shareholders of the Group by the weighted average number of ordinary shares on issue during the period.

 (b) Diluted

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group has no category of potentially dilutive ordinary shares. Therefore, diluted loss per share is equal to basic loss per share.

(c) Net asset value per share

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

20. FAIR VALUE HIERARCHY

The following table presents financial assets measured at fair value by valuation method. The different levels have been defined as below:

- Level 1: quoted prices (unadjusted) in active markets for identical assets;

- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices); and

- Level 3: inputs for the assets that are not based on observable market data (unobservable inputs).

There are no financial liabilities of the Group which were measured using the fair valuation method as at 31 December 2011 and 30 June 2011.

The level within which the financial asset is classified is determined based on the lowest level of significant input to the fair value measurement.

The financial assets measured at fair value in the statement of financial position are grouped into the fair value hierarchy as follows: