VNL.L Regulatory News (VNL)

15 Feb 2007 10:20

VinaLand Limited15 February 2007 Financial statements VinaLand Limited and its Subsidiaries Six months ending 31 December 2006 Chairman's Statement 3 Directors' Report Directors 4 Advisory Committee 7 Administration 8 Financial Statements Balance Sheet 9 Statement of Income 10 Statement of Changes in Shareholder's Equity 11 Statement of Cash flows 12 Notes to The Financial Statements 13 Chairman's statement Dear Valued Shareholders: We are pleased to present the interim report for VinaLand Limited ( "VNL" or the" Company") for the fiscal half year ended 31 December 2006. The past half year was a solid one for VNL, aided by Vietnam's positive economicdevelopments, government reforms, and a steady pipeline of investments. Vietnam's GDP growth continued its upward trajectory, achieving the highestgrowth rate in five years of 8.17 percent. Foreign investors have been keen tonotice the investment opportunities afforded by such growth, as foreign directinvestment (FDI) surged to approximately US$10bn over the full year. Since VNL's admission to trading on AIM in March 2006, its investment manager,VinaCapital Investment Management Limited ("VinaCapital") has created asubstantial pipeline of potential projects covering a wide geographical areaincluding Hanoi, Ho Chi Minh City, Da Nang and Nha Trang which focus on theresidential, retail, commercial office, and leisure property markets. Thefundamental economic and demographic circumstances in Vietnam, coupled with itsyoung and dynamic population as well as the development of real estate lawsprotecting local and foreign occupiers of landed property, are creatingsubstantial demand throughout the real estate sector. VNL's net asset value per share was US$0.98 as of 31 December 2006 and theportfolio now includes 14 projects, covering a wide array of projects fromhotels to mixed-use developments. Some projects are very large in scale,encompassing several types of developments in one site. Given Vietnam's strong economic performance, the government's increasingcommitment to reforms, and global interest in the Vietnamese real estatemarkets, we believe VNL will continue to perform well as the country movesforward Thank you for your continued interest and support. Horst Geicke Chairman VinaLand Limited 15 February 2007 Directors' report Directors Horst Geicke Chairman and Non-Executive Director Mr. Geicke is the Co-Founder and Chairman of VinaCapital Group Ltd., aninvestment banking and investment management company with over US$800 million inassets under management and owner of VinaCapital Investment Management Ltd., theCompany's Investment Manager. He has over 25 years of investing and operatingexperience in China and South East Asia with considerable experience in Vietnamprior to VinaCapital having established a manufacturing plant and completedseven direct private equity investments in the country. Mr. Geicke also servesas Director for the Ho Chi Minh International School, the Sofitel MetropoleHotel Hanoi, Thang Loi Textiles, and a number of other listed and privatecompanies in Asia and the United States. Mr. Geicke was the President of the German Chamber of Commence in Hong Kong forfour years, and in 2005 he was President of the European Chamber of Commence inHong Kong. Mr. Geicke is a founding and active Director of the Hong Kong -Thailand Business Council, and he has been a member of the Trade and IndustryAdvisory Panel of the Government of the Hong Kong Special Administrative Regionsince 2004. Mr. Geicke co-founder Pacific Alliance Investment Management Limited, aninvestment management business with over US$550 million in assets undermanagement. Mr. Geicke is a director and member of the investment committee forVietnam Opportunity Fund Limited, Pacific Alliance Asia Opportunity Fund Limitedand ARC Capital Holdings Limited, all of which are listed on AIM. Don Lam Non-Executive Director Mr. Lam is Co-Founder and Managing Partner of the VinaCapital Group. He hasoverseen the company's growth from manager of a single, $10 million fund in2003, into a full-featured investment house managing three funds worth $800million and offering a complete range of corporate finance and real estateadvisory services. In the last year, Mr. Lam has brought two new funds to themarket: the $205 million VinaLand Limited, which invests in Vietnamese realestate assets; and the DFJ VinaCapital Fund, a venture capital technology fundmanaged in cooperation with Draper Fisher Jurvetson. Mr. Lam recently concludeda sixth round of fundraising for VinaCapital's first fund, the VietnamOpportunity Fund, attracting over $300 million in subscriptions. Before founding VinaCapital, Mr. Lam was Partner at PricewaterhouseCoopers ("PwC") Vietnam, where he led the Corporate Finance and Management Consultingpractices throughout the Indochina region (Vietnam, Laos, and Cambodia). Amongthe transactions he directed while at PwC were equitisations by numerousstate-owned enterprises, market entrance acquisitions by foreign companies, andthe initiation of debt and equity placements for Vietnamese companies. Mr. Lamhas also held management positions at Deutsche Bank and Coopers & Lybrand inVietnam and Canada. With over 12 years of experience in Vietnam, Mr. Lam is an authority oninvestments, mergers & acquisitions, corporate restructuring, andprivatizations. He is a frequent speaker at international investment seminarsand was featured as "Mr. Wall Street" in Fortune Magazine. Mr. Lam holds a BAin Commerce and Political Science from the University of Toronto, Canada, and isa member of the Institute of Chartered Accountants of Canada. Nicholas Brooke Non-Executive Director Nicholas Brooke is a Chartered Surveyor and a Fellow of the Royal Institution ofChartered Surveyors and the Chairman of Professional Property Services Limitedwhich is a specialist real estate consultancy, based in Hong Kong, providing toclients a selected range of advisory services across the Asia Pacific Region.Mr. Brooke is a former President of the Royal Institution of Chartered Surveyorsand was the first overseas surveyor to be accorded that honour. Mr. Brooke is arecognised authority on land administration and planning matters and hasprovided advice in these areas to several Asian governments as well as the USState Department. He is also a Justice of the Peace, and a former DeputyChairman of the Hong Kong Town Planning Board and a former member of the HongKong Housing Authority. He also sits on the Boards of the Hong Kong Science andTechnology Parks Corporation, the Hong Kong Cyberport Management CompanyLimited, is a member of the Hong Kong Harbourfront Enhancement Committee, and isthe Chairman of the Hong Kong Coalition of Service Industries, which is thevoice of the service sector in Hong Kong. He is also a member of the ElectionCommittee responsible for the selection of the future Chief Executive of theHong Kong SAR. In 1999, Mr. Brooke was awarded the Bronze Bauhinia Star by theChief Executive of the Hong Kong SAR for his dedicated public service in HongKong, and in particular, his valuable contribution to the work of the HousingAuthority. He is a Member of the Board of Review (Inland Revenue Ordinance) andan active member of Vision 2047, a group of long term Hong Kong residentsdedicated to supporting and promoting Hong Kong and is the Chairman of ProjectChambers, a grouping from the various professions who are involved in manycommunity related initiatives. He is an Honorary Member of the AmericanInstitute of Architects and an Honorary Professor of the Universities of HongKong and Chongqing in China, an Honorary Fellow of the College of EstateManagement, University of Reading and on 6 September 2004 was admitted as aFreeman of the City of London. Mr. Brooke also sits as a Non-executive Directoron the Boards of a number of public companies including Shanghai Forte LandCompany Limited, one of China's largest residential developers and MAFProperties, one of Middle East's leading shopping centre developers. Mr. Brookehas a degree in Estate Management and a Post Graduate Diploma in BusinessAdministration from the University of London. Nguyen Khoong Tong Non-Executive Director Mr. Tong is the founder and Group Managing Director of Bukit Kiara Properties, apremier real estate developer of lifestyle homes in Kuala Lumpur, Malaysia. Asformer Executive Director of Sunrise Berhad, a publicly listed real estatedeveloper in Malaysia, he spearheaded the development of over 2,000 units ofhigh-end residential homes and the master planning of Mont'Kiara, the mostsought after expatriate suburb in Kuala Lumpur. He was strategic in creating theexit for his family shareholding at the end of 1996, just prior to the Asianfinancial crisis in 1997. Mr. Tong is also a founding partner of AcornCommunications Sdn. Bhd., a dynamic mid-size integrated brand communicationsconsultancy, a member of the investment committee and an independent director ofboth KSC Capital, a dynamic unit trust management company in Malaysia, andAccelera Ventures, a boutique Pacific Rim growth fund in Hong Kong. He alsoserves as a National Council Member of the Real Estate and Housing Developers'Association (REHDA), Malaysia and as an Executive Committee Member of the YoungPresidents' Organisation (YPO), Malaysian Chapter. Mr. Tong has a Bachelor ofArts degree in Architecture from the University of Manchester, United Kingdom,and a Masters of Business Administration degree, majoring in Real Estate, fromthe Wharton School, University of Pennsylvania, USA. Bruno Schoepfer Non-Executive Director Mr. Schoepfer joined Movenpick Holdings in 1997 as Managing Director of its AsiaPacific regional operations and was Chief Executive Officer and ManagingDirector of the Group from 1998 to 2003. Mr. Schoepfer is currently Chairman ofMovenpick Hotel and Resorts S.A., a Swiss premium hospitality company active inthe 5-star hotel and 4-star business and airport hotel markets, a well-knownhotel and restaurant brand in Europe. Prior to joining the Movenpick Group, Mr.Schoepfer already held a distinguished career for over 20 years in luxury hotelmanagement throughout Asia Pacific and Europe. He previously held seniorpositions in various leading international hotel groups including MandarinOriental, Shangri-la, and Radison-SAS. The Advisory Panel VinaCapital has established an advisory panel which consists of local investmentspecialists, business leaders and existing and former government officials as itdeems appropriate from time to time to supplement the expertise of managementteam. The current appointees are described below: Dr. Jonathan Choi Dr. Choi is President of Sun Wah Group, a Hong Kong based property, financialservices, technology, infrastructure and food-stuff conglomerate, and Chairmanof SW Kingsway, a Hong Kong listed investment bank and fund manager. He is alsothe Vice Chairman of the Chinese General Chamber of Commerce in Hong Kong and amember of the National Committee of the Chinese Peoples' Political ConsultativeConference (CPPCC) of the People's Republic of China. Dr. Choi has been anactive investor in Vietnam since 1971. Markus Winkler Mr. Winkler is Founder and Managing Director of VGZ, a Swiss wealth managementgroup. He has over 30 years of direct investment experience with a particularfocus on emerging market closed-ended funds and brings a wealth of experienceand relationships to the advisory committee. He is a founder-member and a formerVice-President of the Swiss Association of Asset Managers as well as a founderand Board member of the Swiss Investors' Association. Prior to founding VGZ, Mr.Winkler worked for UBS and Bank Leu. He graduated from the University of St.Gall. William Vanderfelt Mr. Vanderfelt is a highly experienced institutional investor with over 30 yearsof experience as Managing Partner of Petercam, the leading Benelux investmentbank, in charge of Institutional Research and Sales. Mr. Vanderfelt is anexperienced fund investor and acts as a board director of several listed funds.He is a passionate proponent of good corporate governance and will help theCompany ensure that it maintains best practice in its corporate governance. Hisappointment to the Board will also create an even balance between itsindependent and non-independent directors. The Company aims to add one furtherindependent director in the near future. Dennis Tan Mr. Tan is the founder and group general manager of Value Hospitality Group, ahotel and golf course management and consultancy company in Malaysia thatcurrently manages eight hotels, including the Everly Hotels in Miri and Bintulu,Sarawak, Beverly Hotel in Kota Kinabalu, Sabah, and the Prescott Hotels and Innsin Kuala Lumpur, Klang and Kajang. He was previously the chief executive officerof Pudu Sinar Sdn. Bhd., the owner of the Park Avenue Hotel (currently known asthe Melia Hotel) in Kuala Lumpur and managed various businesses in varioussectors, including financial leasing, construction and property development. Mr.Tan has successfully turned around seven hotels and a golf course. Mr. Tan has aMasters of Science and Bachelor of Science in Industrial Engineering from PurdueUniversity in Indiana, USA. Administration VinaLand Limited ("VNL" or the "Company") is listed on the AIM Market of theLondon Stock Exchange plc. VNL's share and price information is available onReuters and on Bloomberg The Company Investment Manager VinaLand Limited VinaCapital Investment Management Ltd. P.O. Box 309GT 17th Floor, Sun Wah Tower Ugland House 115 Nguyen Hue Boulevard, District 1 South Church Street Ho Chi Minh City George Town Vietnam Grand Cayman Cayman Islands Custodian, Administrator and Registrar/Receiving Agent Nominated Adviser HSBC Trustee (Cayman) Limited Grant Thornton Corporate Finance HSBC House Grant Thornton House Mary Street Melton Street Grand Cayman Euston Square Cayman Islands London, NW1 2EP United Kingdom Broker Auditors LCF Edmond De Rothschild Securities Limited Grant Thornton (Vietnam) Ltd. Orion House 28th Floor, Saigon Trade Center 5 Upper St. Martin's Lane 37 Ton Duc Thang Street, District 1 London, WC2H 9EA Ho Chi Minh City United Kingdom Vietnam Legal Advisers(English Law) Lawrence Graham LLP 190 Strand London, WC2R 1JN United Kingdom (Vietnamese Law)Baker and McKenzie 12/F Saigon Tower 29 Le Duan Boulevard, District 1 Ho Chi Minh City, Vietnam (Cayman Islands Law)Maples & Calder Ugland House P.O. Box 30967 South Church Street, George Town Grand Cayman Cayman Islands Consolidated balance sheet Notes 31 December 2006 30 June 2006 US$ US$ ( Unaudited )ASSETS Cash and cash equivalents 4 91,001,482 174,787,778Interest receivable 1,162,973 662,068Financial assets at fair value through profit or loss 5 7,654,941 4,382,670Prepayments 400,448 4,316,738Deposit for property project 20,000 -Short-term loans to property project 6 5,794,832 -Investment in associate 7 3,836,848 15,997,102Investments in subsidiaries 8 64,808,108 -Other investments 9 27,676,116 - 202,355,748 200,146,356 LIABILITIES AND SHAREHOLDERS' EQUITYLiabilitiesAccounts payable 2,489,035 1,563,235 Shareholders' equityShare capital 10 2,048,448 2,048,448Additional paid in capital 196,414,163 196,414,163Retained earnings 1,404,102 120,510 199,866,713 198,583,121 202,355,748 200,146,356 Number of shares in issue 204,844,779 204,844,779Net asset value per share 11 0.98 0.97 Consolidated statement of income For the period For the year from 1 July 2006 ended 30 June 2006 to 31 December 2006 US$ US$ ( Unaudited)RevenueInterest income 3,744,072 1,872,705 ExpensesManagement fee (1,994,700) (1,204,498)Custodian fee (149,603) (293)Director fee (49,998) (29,301)Professional fee (72,550) (469,784)Other organisational fee (193,629) (48,319) (2,460,480) (1,752,195)Net profit 1,283,592 120,510 Consolidated statement of changes in equity For the period For the year from 1 July 2006 ended 30 June 2006 to 31 December 2006 US$ US$ (Unaudited)Share capitalBalance as at 1 July 2006 2,048,448 -Issue of shares - 2,048,44831 December 2006 2,048,448 2,048,448 Additional paid in capitalBalance as at 1 July 2006 196,414,163 -Issue of shares - 202,796,331Transaction costs associated with the - (6,382,168)share issue31 December 2006 196,414,163 196,414,163 Retained earningBalance as at 1 July 2006 120,510 -Profit for the period 1,283,592 120,51031 December 2006 1,404,102 120,510Total shareholders' equity 199,866,713 198,583,121 Consolidated statement of cashflows For the period For the year ended from 1 July 2006 to 30 June 2006 31 December 2006 US$ US$ (Unaudited)Cash flows from operating activitiesNet profit 1,283,592 120,510Adjustment for: - -Interest income (500,905) (662,068)Net profit/(loss) before changes in working capital 782,687 (541,558)Increase in accounts receivable (3,237,259) (1,210,637)Increase in other assets 3,916,290 (4,316,738)Increase in accounts payable 925,800 1,563,235Net cash used in operating activities 2,387,518 (4,505,698) Cash flows from investing activitiesInterest received 3,237,259 1,210,637Investment in associate 12,160,254 (15,997,102)Investment in subsidiaries (64,808,108) -Other investments (27,676,116)Investment in financial assets at fair value through profit or loss (3,272,271) (4,382,670)Term-deposit and loans to property projects (5,814,832)Net cash used in investing activities (86,173,814) (19,169,135) Cash flows from financing activitiesProceeds from shares issued - 198,462,611Net cash from financing activities - 198,462,611 Net increase in cash and cash equivalents for the period (83,786,296) 174,787,778Cash at the beginning of the period 174,787,778 - Cash and cash equivalents at end of the period 91,001,482 174,787,778 Notes to financial statements 31 December 2006 1. Corporate information Vinaland Limited ("the Company") was incorporated in the Cayman Islands as acompany with limited liability. The registered office of the Company is PO Box309GT, Ugland House, South Church Street, George Town, Grand Cayman, CaymanIslands. As at 31 December 2006 the Company has the following subsidiaries andassociates: Proportion of ownership interest held - Onshine Investments Limited 100% - Vietnam Property Holdings Limited 100% - Vietnam Property Limited 100% - VinaCapital LongAn Industry Limited 100% - Proforma Asia Limited 100% - Greenstar Global Limited 100% - Cypress Assets Limited 100% - Bates Assets Limited 100% - TungShing International Investments Limited 100% - VinaCapital Danang Golf Course Limited 100% - Prosper Big Investments Limited 75% - Vina Properties Pte. Ltd 75% - VinaCapital Danang Resorts Limited 75% - VinaCapital Commercial Center Limited 75% - VinaCapital Danang Resort Limited 75% - Maplecity Investments Limited 75% - ThangLong TungShing Company 70% - Henry Enterprise Group Limited 62% - 21st Century International Development Company, Inc. 62% - Societe a Responsabilite Limitee Hoteliere de l'Opera 53% - Dong Hai Real Estate & Tourism Joint Stock Company 30% The principal activity of the Company is to engage in property investment anddevelopment in Vietnam and the surrounding Asian countries with the objective ofproviding shareholders with an attractive level of income, together with thepotential for income and capital growth, from investing in a diversifiedportfolio of mainly Vietnamese property. 2. Principal accounting policies Basis of presentation The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as developed and published by theInternational Accounting Standards Board (IASB) with an exception on theconsolidation method as described in the consolidation note below and in notes 7and 8 to the consolidated financial statements. The financial statements havebeen prepared on the historical cost convention, as modified by the revaluationof land and buildings, available-for-sale financial assets, and financial assetsand financial liabilities at fair value through profit or loss. The preparation of financial statements in accordance with IFRS requires the useof certain accounting estimates and assumptions. Although these estimates arebased on management's best knowledge of current events and actions, actualresults may ultimately differ from those estimates. Consolidation Subsidiaries are all entities over which the Group has the power to control thefinancial and operating policies. Company obtains and exercises control throughvoting rights. The consolidated financial statements of the Group incorporatethe financial statements of the parent company as well as those entitiescontrolled by the Group by full consolidation. In addition, acquiredsubsidiaries are subject to application of the purchase method. This involvesthe 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 ofthe subsidiary prior to acquisition. On initial recognition, the assets andliabilities of the subsidiary are included in the consolidated balance sheet attheir revalued amounts, which are also used as the bases for subsequentmeasurement in accordance with the Group accounting policies. Goodwillrepresents the excess of acquisition cost over the fair value of the Group'sshare of the identifiable net assets of the acquired subsidiary at the date ofacquisition. Associates are those entities over which the Group is able to exert significantinfluence but which are neither subsidiaries nor interests in a joint venture.Investments in associates are initially recognised at cost and subsequentlyaccounted for using the equity method. Acquired investments in associates arealso subject to purchase accounting. However, any goodwill or fair valueadjustment attributable to the share in the associate is included in the amountrecognised as investment in associates. All subsequent changes to the share ofinterest in the equity of the associate are recognised in the Group's carryingamount of the investment. Changes resulting from the profit or loss generated bythe associate are recorded in the Group's consolidated income statement andtherefore affect net results of the Group. These changes include subsequentdepreciation, amortisation or impairment of the fair value adjustments of assetsand liabilities. Items that have been directly recognised in the associate'sequity, for example, resulting from the associate's accounting foravailable-for-sale securities, are recognised in consolidated equity of theGroup. Any non-income related equity movements of the associate that arise, forexample, from the distribution of dividends or other transactions with theassociate's shareholders, are charged against the proceeds received or granted.No effect on the Group's net result or equity is recognised in the course ofthese transactions. However, when the Group's share of losses in an associateequals or exceeds its interest in the associate, including any other unsecuredreceivables, the Group does not recognise further losses, unless it has incurredobligations or made payments on behalf of the associate. Unrealised gains ontransactions between the Group and its associates are eliminated to the extentof the Group's interest in the associates. Unrealised losses are also eliminatedunless the transaction provides evidence of an impairment of the assettransferred. Accounting policies of associates have been changed where necessaryto ensure consistency with the policies adopted by the Group. As at the date of this financial statement the financial information ofsubsidiaries as at and for the half year ended 31 December 2006 are notavailable therefore full consolidation of these subsidiaries were not performed.Investments in these subsidiaries were accounted at costs in the Group'sfinancial statements. This is a non compliance with the IAS 27 - Consolidatedand Separate financial statements. Due to unavailability of financial information of associates as at 31 December2006, the investments in associates were accounted at costs in the Group'sfinancial statements. This is a non compliance with the IAS 28 - Investment inassociates. Functional and presentation currency The financial statements are presented in United States Dollars ("thepresentation currency"). The currency of the primary economic environment inwhich the Company operates ("the functional currency") is the Vietnamese Dong.The reasons for using the United States Dollar as the presentation currencyrather than the functional currency are that the shareholders are more familiarwith the United States Dollar and certain transactions of the Company are in theUnited States Dollar. Foreign currency translation The accounting records of the Company are maintained in United States Dollars.Transactions in currencies other than the United States Dollar are translated atthe exchange rates that approximate those prevailing on transaction dates.Monetary assets and liabilities denominated in currencies other than the UnitedStates Dollar are translated at the balance sheet date into United StatesDollars at exchange rates that approximate those prevailing on that date. Allexchange gains and losses are recognized separately in the statement of income. Financial assets The Company's financial assets include cash and financial instruments. Financialassets, other than hedging instruments, can be divided into the followingcategories: loans and receivables, financial assets at fair value through profitor loss, available-for-sale financial assets and held-to-maturity investments.Financial assets are assigned to the different categories by management oninitial recognition, depending on the purpose for which the investments wereacquired. The designation of financial assets is re-evaluated at every reportingdate at which a choice of classification or accounting treatment is available. All financial assets are recognized on their settlement date. All financialassets that are not classified as at fair value through profit or loss areinitially recognized at fair value, plus transaction costs. Derecognition offinancial instruments occurs when the rights to receive cash flows from theinvestments expire or are transferred and substantially all of the risks andrewards of ownership have been transferred. An assessment for impairment isundertaken at least at each balance sheet date whether or not there is objectiveevidence that a financial asset or a group of financial assets is impaired.Non-compounding interest and other cash flows resulting from holding financialassets are recognized in profit or loss when received, regardless of how therelated carrying amount of financial assets is measured. Held-to-maturity investments are non-derivative financial assets with fixed ordeterminable payments and a fixed date of maturity. Investments are classifiedas held-to maturity if it is the intention of the Company's management to holdthem until maturity. Held-to-maturity investments are subsequently measured atamortized cost using the effective interest method. In addition, if there isobjective evidence that the investment has been impaired, the financial asset ismeasured at the present value of estimated cash flows. Any changes to thecarrying amount of the investment are recognized in profit or loss. Financial assets at fair value through profit or loss include financial assetsthat are either classified as held for trading or are designated by the entityto be carried at fair value through profit or loss upon initial recognition. Inaddition, derivative financial instruments that do not qualify for hedgeaccounting are classified as held for trading. Subsequent to initialrecognition, the financial assets included in this category are measured at fairvalue with changes in fair value recognized in profit or loss. Financial assetsoriginally designated as financial assets at fair value through profit or lossmay not subsequently be reclassified. Available-for-sale financial assets include non-derivative financial assets thatare either designated to this category or do not qualify for inclusion in any ofthe other categories of financial assets. All financial assets within thiscategory are subsequently measured at fair value, unless otherwise disclosed,with changes in value recognized in equity, net of any effects arising fromincome taxes. Gains and losses arising from securities classified asavailable-for-sale are recognized in the income statement when they are sold orwhen the investment is impaired. In the case of impairment, any loss previouslyrecognized in equity is transferred to the income statement. Losses recognizedin the income statement on equity instruments are not reversed through theincome statement. Losses recognized in prior period income statements resultingfrom the impairment of debt securities are reversed through the incomestatement. Loans and receivables are non-derivative financial assets with fixed ordeterminable payments that are not quoted in an active market. They arise whenthe Company provides money, goods or services directly to a debtor with nointention of trading the receivables. Loans and receivables are subsequentlymeasured at amortized cost using the effective interest method, less provisionfor impairment. Any change in their value is recognized in profit or loss. Tradereceivables are provided against when objective evidence is received that theCompany will not be able to collect all amounts due to it in accordance with theoriginal terms of the receivables. The amount of the write-down is determined asthe difference between the assets' carrying amount and the present value ofestimated future cash flows. Other investmentsOther investments comprising legal and administrative expenditures forestablishment of legal entity in which is directly invested by the Company. Cash and cash equivalents Cash and cash equivalents include cash in bank and short-term, highly liquidinvestments readily convertible to known amounts of cash and which are subjectto insignificant risk of changes in value. Interest and dividend income Interest income is recognized on an accrual or if applicable effective yieldbasis. Dividend income is recorded when the stockholders' right to receive thedividend is established. Equity Share capital is determined using the nominal value of shares that have beenissued. Additional paid-in capital includes any premiums received on the initialissuing of the share capital. Any transaction costs associated with the issuingof shares are deducted from additional paid-in capital. Retained earnings include all current and prior period results as disclosed inthe income statement. 3. Risk management objectives and policies The Company invests in listed and unlisted equity instruments, debt instruments,assets and other opportunities in Vietnam and surrounding countries with theobjective of achieving medium to long-term capital appreciation and providinginvestors with an attractive level of investment income from interest anddividends. The Company is exposed to a variety of financial risks which result from bothits operating and investing activities. The Company's risk management iscoordinated by its Investment Manager who manages the distribution of the assetsto achieve the investment objectives. The most significant financial risks towhich the Company is exposed are described below: Foreign currency risk While the Company seeks to make investments which are US Dollar based whenpossible, the Company makes investments in and earns income denominated in localcurrencies. The Vietnamese Dong is not freely convertible into other currencies.Exchange rate fluctuations and local currency devaluation could have a materialeffect on the value of that portion of the Company's assets or liabilitiesdenominated in Vietnamese Dong. The Company may seek to hedge against a declinein the value of the Company's Dong denominated investments resulting fromcurrency fluctuations but only when suitable hedging instruments are availableon a timely basis and on acceptable terms. Price risk Price risk is the risk that value of the instrument will fluctuate as a resultof changes in market prices, whether caused by factors specific to an individualinvestment, its issuer or all factors affecting all instruments traded in themarket. As the majority of the Company's financial instruments are carried atfair value with fair value changes recognised in the income statement, allchanges in market conditions will directly affect net investment income. Pricerisk is mitigated by the Company's Investment Manager by constructing adiversified portfolio of listed and unlisted instruments. In addition, pricerisk may be hedged using derivative financial instruments such as options orfutures. Credit risk The carrying amounts of financial assets shown on the face of the balance sheetbest represent the maximum credit risk exposure at the balance sheet date. Therewere no significant concentrations of credit risk to counter-parties at 31December 2006. The Company's trade and other receivables are actively monitored to avoidsignificant concentrations of credit risk. In addition, for a significantproportion of sales, advance payments are received to mitigate credit risk. TheCompany has adopted a no-business policy with customers lacking an appropriatecredit history where credit records are available. Cash flow and fair value interest rate risks The majority of the Company's financial assets are non-interest-bearing. TheCompany currently has no financial liabilities with floating interest rates. Asa result, the Company is subject to limited exposure to cash flow and fair valueinterest rate risk. Cash flow and fair value interest rate risks are managed bymeans of derivative financial instruments, where necessary, to ensure short- tomedium term liquidity. 4. Cash and cash equivalents 31 December 2006 30 June 2006 US$ US$ Cash 25,228,383 102,033,955Time deposit 65,773,099 72,753,823 91,001,482 174,787,778 5. Financial assets at fair value through profit and loss 31 December 2006 30 June 2006 US$ US$ Bonds 7,499,294 4,382,670Unlisted share (200,000 shares of Baria Vung Tau Tourist Co.) 155,647 - 7,654,941 4,382,670 6. Short-term loans to property projects 31 December 2006 30 June 2006 US$ US$ Short-term loans to Vina Properties (for Omni Hotel project) 1,040,000 -Short-term loan to Kinh Do Real Estate (for Dong Hai Hotel) 4,754,832 - 5,794,832 - 7. Investments in associates As at 31 December 2006, the Company held 30% equity interest in Dong Hai RealEstate and Tourism Company, a company incorporated in Vietnam. The principalactivity of Dong Hai Company is to engage in hospitality. Ownership 31 December 2006 % US$ Dong Hai Real Estate & Tourism Joint Stock Company 30 3,836,848 3,836,848 Due to unavailability of financial information of Dong Hai Real Estate andTourism Company as at 31 December 2006, the investment in this associates wereaccounted at costs in the Group's financial statements. This is a non compliancewith the IAS 28 - Investment in associates. 8. Investments in subsidiaries Ownership 31 December 2006 % US$ Henry Enterprise Group Ltd. - Century 21 project 62 22,510,109VinaCapital Danang Golf Course Ltd. - Danang Golf 100 1,630,800VinaCapital Danang Resort Ltd. - Danang Resorts 75 1,630,800Vina Properties Pte. Ltd. - Hilton Hotel project 53 32,536,404TungShing International Investments Ltd. - Hanoi Opera 70 6,499,995 64,808,108 As at the date of this financial statement the financial information of theabove subsidiaries as at and for the half year ended 31 December 2006 are notavailable therefore full consolidation of these subsidiaries were not performed.Investments in these subsidiaries were accounted at costs in the Group'sfinancial statements. This is a non compliance with the IAS 27 - Consolidatedand Separate financial statements. 9. Other investments Ownership 31 December 2006 % US$ Onshine Investments Ltd - An Phu project 70 2,309,952VinaCapital LongAn Industry Ltd - Long An project 80 985,968Onshine Investments Ltd - Binh Duong project 70 404,687Onshine Investments Ltd - Central Garden project 100 3,940,225Onshine Investments Ltd - Eden Plaza project 70 227,037VinaCapital Commercial Center Ltd - 9ha Danang site 100 3,100,000Proforma Asia Ltd - Dien Phuoc Long, District 9 project 84 543,457Proforma Asia Ltd - Quoc Te project, District 9 84 603,978Greenstar Global Ltd - Vinh Thai, Nha Trang project 68 15,560,812 27,676,116 10. Paid-in capital 31 December 2006 US$ Authorized: 500,000,000 ordinary shares with par value of US$0.01; 2,048,448 issued and fully paid: 204, 844,779 sharesAdditional paid in capital 196,414,163 198,462,611 11. Net asset value per share The calculation of the net asset value per share is calculated based on the netasset attributable to the shares as at 31 December 2006 of US$199,866,713 orUS$0.98 per share. 12. Taxation The Company is exempt from income tax pursuant to the Tax Concessions Law (1999Revision) of the Cayman Islands. 13. Fees Management fee VinaCapital is entitled to receive an aggregate annual fee from the Companypayable monthly in arrears at the rate of 2.0 percent of the net asset value ofthe Company. Custodian, Administration fee HSBC is appointed as custodian of the assets of the Company and as administratorof the Company. HSBC is entitled to receive an annual fee from the Company atthe rate of 0.15 percent of the net asset value of the Company. Directors Fee The fees payable to the Chairman and the other Directors are subject to theamount of $10,000 each per annum. These fees may be waived at the discretion ofeach Director. This information is provided by RNS The company news service from the London Stock Exchange